Mesa Labs Reports Higher First Quarter Sales and Earnings

Wednesday, August 13, 2008 General News
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LAKEWOOD, Colo., Aug. 12 Mesa Laboratories, Inc.(Nasdaq: MLAB) today reported higher sales and earnings for the fiscal firstquarter ended June 30, 2008.

For the first quarter of fiscal 2009, net sales increased 18 percent to$5,054,000 from $4,286,000 in the same quarter last year. Net income for thequarter increased less than one percent to $1,016,000 or $.31 per dilutedshare of common stock compared to $1,015,000 or $.31 per diluted share ofcommon stock last year.

"The new fiscal year started off very well for Mesa, with excellentrevenue growth over this quarter last year," said John J. Sullivan, Presidentand Chief Operating Officer. "All three core product lines turned indouble-digit growth, led by DataTrace data loggers, which posted a 33%increase over the first quarter last year. We have significantly expanded oursales, marketing, and R&D efforts in the DataTrace line and this is beginningto pay dividends. We have seen excellent customer acceptance of the new radiofrequency data logger, the Micropack RF, and during the quarter, we receivedan order for over 125 RF loggers from a major U.S. pharmaceutical customer.We expect sales of this product line to expand in the months ahead as werefine our sales and marketing efforts and continue to improve the product'scapabilities. Both the Raven and Medical product lines also posted solidquarterly growth, continuing the momentum that was established in the latterpart of last fiscal year. A key advantage for Mesa is its diversification.Our products are used in multiple markets and cover the whole range of capitalequipment, services and consumables. This diversification is a majorcontributing factor to Mesa's consistent growth in the recent past."

During the first quarter of fiscal 2009, sales of the Company's medicalproducts and services increased 14 percent compared to the prior year period.This increase was due to higher sales of dialysis meters, calibrationsolutions and dialysis meter service.

During the first quarter of fiscal 2009, sales of DataTrace data loggerproducts increased compared to the prior year. For the quarter, DataTracesales increased 33 percent compared to the same period last year. Theincrease in DataTrace sales during the quarter is the result of highershipments of our Micropack III products and accessories. While domestic salescontinue to enjoy the benefit from our change to a direct sales model severalyears ago, we are starting to see an improving trend in our internationalmarkets as we utilize Raven distributors for the DataTrace line in territoriesthat were previously under served.

Raven sales for the first quarter increased 11 percent compared to thefirst quarter of the prior year. The Raven biological indicator products sawsales gains in its core biological indicator strip business, which willcontinue to be aided by shipments throughout the year on a new OEM contract.We also saw a substantial increase in sales of our chemical indicator productsduring the first quarter.

Profitability for fiscal 2009 was essentially unchanged compared to theprior fiscal year due chiefly to a decrease in our gross margin percentage.Over the current fiscal quarter, our Company experienced an 18 percentincrease in sales with a substantial increase in sales of DataTrace products.This did not produce an increase in margins due to several factors. Thesefactors included a substantial increase in thermal barrier sales for hightemperature DataTrace applications which are passed through to customers withsubstantially no margin. We are currently addressing this problem, and expectto lower the cost of these products later in the year. Other factors thatimpacted margins included higher sales of lower margin OEM products anddistributed product in comparison to prior year in our Raven line of products.

Also suppressing profitability somewhat this quarter compa

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