Mesa Reports Better - Analyst Blog
May 25 2012 - 12:57PM
Zacks
On May 23, 2012, testing instrument maker-Mesa
Laboratories Inc. (MLAB) reported its fourth quarter
fiscal 2012 adjusted (excluding one-time expenses such as
acquisition-related intangible amortizations) earnings of 76 cents
per share, up 7% from the year-ago earnings of 71 cents. The
earnings per share increased 20.6% on a sequential basis.
Profit rose 1% to $2.2 million (62 cents a share) from $2.18
million of the prior year quarter. The profit includes an
unfavorable impact of a non-cash expense of $0.35 million for
impairment of acquisitions during the fourth quarter.
For fiscal 2012, the adjusted earnings per share stood at $2.63,
up 26.4% from the prior fiscal year. Profit rose 28% to $7.9
million ($2.29 per diluted share) for fiscal 2012.
Revenues
Revenues increased by 6% year over year to $10.5 million, buoyed
by robust sales of its three largest product lines. The company
crossed the $10 million revenue mark for the very first time.
For the fiscal 2012, revenues improved 16% year over year to $38
million.
Segment Analysis
The company has two major business segments — Instruments and
Biological Indicators. The Instruments segment revenue increased 5%
and 10% during fourth quarter and full year, respectively.
The Biological Indicator segment revenue increased 6% and 21%
during fourth quarter and full year, respectively. The organic
growth of the products boosted segment revenue for the reported
quarter and for the year. The acquisition of Apex in December 2010
accounted for the robust sales growth of the segment during fiscal
2012.
The organic growth rate for three largest product lines of Mesa
Laboratories — Medical, Biological Indicators and DataTrace —
exceeded 10% for fiscal 2012. It reflects optimum use of internal
resources and enhanced sales.
Margins
Gross margin for the fourth quarter was 61.7% compared with
62.2% in the prior year quarter. Operating margin declined to
31.7% from 33.4% a year ago.
For fiscal 2012, gross margin of 61.9% increased slightly from
59.6% in the previous year. Operating margin increased to 32.9%
from 30.1% a year ago.
Financial Position
Mesa ended fiscal 2012 with a healthy balance sheet. Cash and
cash equivalents more than doubled from fiscal 2011 to $7.2
million.
Management expects healthy revenue growth for fiscal 2013 based
on synergies from the acquisition of Bios International
Corporation. The acquisition of the flow calibrator business of
Bios will enhance the instrumentation product portfolio of
Mesa.
Like Mesa, Bios also manufactures high margin products. The high
profit margins of Bios products coupled with its strong market
presence will benefit the company considerably. The acquisition
will also allow Mesa to focus on developing quality control
products for regulated industries. Mesa therefore expects the
acquisition to be accretive to its net income and earnings per
share.
Mesa, which competes with Cantel Medical Corp.
(CMN), Danaher Corp. (DHR) andThermo
Fisher Scientific, Inc (TMO), has a proven track record of
healthy growth boosted by new product development and acquisitions.
With the acquisition of Bios and a strong product pipeline,
management expects the company to be well positioned for long-term
growth.
The stock currently retains Zacks #1 Rank, which translates into
a short-term Strong Buy rating.
CANTEL MED CORP (CMN): Free Stock Analysis Report
DANAHER CORP (DHR): Free Stock Analysis Report
THERMO FISHER (TMO): Free Stock Analysis Report
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