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Mesa Laboratories Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 14, 2009 06:18PM
Mesa Laboratories Inc. (MLAB) filed Quarterly Report for the period ended 2009-06-30. MESA LABORATORIES INC. designs develops acquires manufactures and markets instruments and systems utilized in connection with industrial applications and hemodialysis therapy. Mesa Laboratories Inc. has a market cap of $73.1 million; its shares were traded at around $22.9672 with a P/E ratio of 15.5 and P/S ratio of 3.4. The dividend yield of Mesa Laboratories Inc. stocks is 1.7%. Mesa Laboratories Inc. had an annual average earning growth of 21.6% over the past 5 years.
Highlight of Business Operations:
Net sales for the first quarter of fiscal 2010 decreased two percent from fiscal 2009. In real dollars, net sales of $4,977,000 in fiscal 2010 decreased $77,000 from $5,054,000 in 2009.
Our revenues come from two main sources, which include product revenues and parts and service revenues. Parts and service revenues are derived from on-going repair and recalibration or certification of our products. The certification or recalibration of product is usually a key component of the customers own quality system and many of our customers operate in regulated industries, such as food processing or medical and pharmaceutical manufacturing. For this reason, these revenues tend to be fairly stable and grow slowly over time. Also, it is important to note that the Raven products are disposables and thus do not contribute to the Companys parts and service revenues. During the first quarter of fiscal years 2010 and 2009 our Company had parts and service revenue of $889,000 and $932,000, respectively. As a percentage of total revenue, parts and service revenues were 18% in 2010 and 18% in 2009.
General and administrative expenses tend to be fairly fixed and stable from year-to-year. To the greatest extent possible, we work at containing and minimizing these costs. In the first fiscal quarter of 2010, we have not incurred additional costs to address the regulatory requirements of the Sarbanes Oxley Act, although we do expect additional costs over the remainder of the year. For the fiscal first quarter, total administrative costs were $617,000 in the current quarter compared to $738,000 for the same quarter last year.
Company sponsored research and development cost was $152,000 during the first fiscal quarter and $173,000 during the previous year period. We are currently executing a strategy of increasing the flow of internally developed products. Late in the first quarter of the previous fiscal year we introduced our new Datatrace Micropack RF product. Unlike previous versions of the Micropack line, this product allows real time radio transmission of data in addition to logging of data as the instrument moves through a process. Currently, we continue to experience some on-going development cost for the Micropack RF and are continuing work that expands this radio frequency technology into new markets.
Net income remained stable at $1,026,000 or $.31 per share on a diluted basis during the quarter compared to $1,016,000 or $.31 per share on a diluted basis in the previous year period. As previously discussed, margins decreased during the quarter. Other factors impacting net income during the quarter included the decreases in general and administrative costs, sales and marketing costs, and research and development costs which we also discussed earlier in this report. A final factor impacting net income this quarter is lower interest income on the Companys surplus cash due to a softening of interest rates over the past three quarters, and an increase in the estimate of income tax expense as a percent of earnings before income tax.
On June 30, 2009, we had cash and short term investments of $10,759,000. In addition, we had other current assets totaling $8,719,000 and total current assets of $19,478,000. Current liabilities of our Company were $1,473,000 which resulted in a current ratio of 13:1.
Stocks Discussed: MLAB,