MESA LABORATORIES INC /CO/ Debt Disclosure

Note 8. Indebtedness

 

Credit Facility

 

Our secured credit agreement matures in  April 2029 and includes:

 

(i)	A revolving credit facility with an aggregate principal amount of up to $125,000 (the "Revolver"),
(ii)	A term loan with a maximum principal amount of $75,000, which is subject to escalating quarterly principal payments (the "Term Loan"),
(iii)	A swingline loan with an aggregate principal amount not exceeding $5,000, and,
(iv)	Letters of credit with an aggregate stated amount not exceeding $2,500 at any time.

 

We refer to the agreement in whole as the “Credit Facility.”

 

Borrowings under our Credit Facility bear interest at a SOFR rate or a base rate, plus an applicable spread that varies with our total net leverage ratio. On  October 10, 2025 we amended the Credit Facility to reduce the range of the spread from 1.5% - 3.0% to 1.25% - 2.50%. 

 

The weighted average interest rate on borrowings under the Credit Facility as of March 31, 2026 was 5.9%.

 

The financial covenants in the Credit Facility include a maximum leverage ratio of 4.00 to 1.00 on each of the quarterly testing dates between  March 31, 2025 and  March 31, 2026 and 3.5 to 1.0 on each testing date thereafter. The Credit Facility also stipulates a minimum fixed charge coverage ratio of 1.25 to 1.0. Other covenants include restrictions on our ability to incur debt, grant liens, make fundamental changes to our business as defined in the contract, engage in certain transactions with affiliates, or conduct asset sales. As of  March 31, 2026, we were in compliance with all required covenants under the terms of the Credit Facility.

 

Term Loan 

 

We are required to make quarterly principal payments on the Term Loan. During the year ended March 31, 2026, we made required principal payments on the Term Loan of $3,750. For the fiscal years ending March 31, required future principal debt payments on the Term Loan are as follows:

 

Fiscal Year		Amount
2027		$	5,625
2028			5,625
2029			7,500
2030			48,750
Total principal remaining		$	67,500

 

Unamortized debt issuance costs related to the Term Loan are reflected as a discount to the debt’s carrying value in our Consolidated Balance Sheets and are being amortized to interest expense through maturity. The net carrying amount of the Term Loan was as follows:

 

		March 31,2026				March 31, 2025
Term Loan (5.9% and 7.2% as of March 31, 2026 and 2025, respectively)		$	67,500			$	71,250
Less: debt issuance costs			(518	)			(598	)
Less: current portion			(5,625	)			(3,750	)
Noncurrent portion		$	61,357			$	66,902

 

Revolver

As of  March 31, 2026, the outstanding balance under our Revolver was $84,500, and $40,500 was available for borrowing. 

 

We are obligated to pay quarterly unused commitment fees of between 0.20% and 0.35% of the Revolver’s aggregate principal amount, based on our leverage ratio. We incurred unused commitment fees of $157 and $269 for the years ended March 31, 2026, and March 31, 2025, respectively.

 

The balance of unamortized customary lender fees related to the Revolver was $1,018 and $1,203 as of March 31, 2026 and 2025, respectively. The lender fees are being amortized to interest expense through maturity. 

 

Convertible Notes

On  August 12, 2019, we issued an aggregate principal amount of $172,500 of Notes bearing interest at a rate of 1.375%. Debt issuance costs related to the Notes, consisting of $2,925 of commissions payable to the initial purchasers and $152 of third-party offering costs, were recorded as a reduction to the carrying amount of the Notes and amortized to interest expense over the life of the Notes. 

 

During fiscal year 2025, we repurchased $75,000 principal amount of the Notes in privately negotiated transactions, which resulted in the recognition of a gain on extinguishment of $2,887 recorded in other income for the year ended March 31, 2025.

 

The Notes matured on August 15, 2025. Upon maturity, we settled the remaining aggregate principal balance of $97,500, as well as $670 of accrued interest, in cash by drawing $97,000 under our Revolver and using $1,170 of cash on hand. 

 

The historical net carrying amount of the Notes was as follows:

 

		March 31, 2025
Principal outstanding		$	97,500
Unamortized debt issuance costs			(203	)
Net carrying value		$	97,297

 

We recognized interest expense on the Notes as follows:

 

		Year Ended March 31,
		2026				2025				2024
Coupon interest expense at 1.375%		$	503			$	1,372			$	2,372
Amortization of debt issuance costs			203				546				926
Total interest on the Notes		$	706			$	1,918			$	3,298