{"url_path":"/sec/mlab/10-k/2026/item-7a","section_key":"item-7a","section_title":"Item 7A Quantitative and Qualitative Disclosures About Market Risk**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-03","source_url":"https://www.sec.gov/Archives/edgar/data/724004/0000724004-26-000047-index.html","accession_number":"0000724004-26-000047","cik":"0000724004","ticker":"MLAB","issuer_name":"MESA LABORATORIES INC /CO/","edgar_url":"https://www.sec.gov/Archives/edgar/data/724004/0000724004-26-000047-index.html","primary_entity_key":"0000724004","primary_entity_name":"MESA LABORATORIES INC /CO/"},"word_count":445,"has_tables":true,"body_markdown":"**Item 7A. Quantitative and Qualitative Disclosures About Market Risk**\n\n \n\nWe have no derivative instruments and minimal exposure to commodity market risks. \n\n \n\n***Foreign Currency Exchange Rates***\n\n \n\nWe face exchange rate risk from transactions with customers in countries outside the United States and from intercompany transactions between affiliates. Transactional exchange rate risk arises from the purchase and sale of goods and services in currencies other than our functional currency or the functional currency of the applicable subsidiary. We also face translational exchange rate risk related to the translation of financial statements of our foreign operations into U.S. dollars, our functional currency. Costs incurred and sales recorded by subsidiaries operating outside of the United States are translated into U.S. dollars using exchange rates effective during the respective period. As a result, we are exposed to movements in the exchange rates of various currencies against the U.S. dollar. Our Biopharmaceutical Development division is particularly susceptible to currency exposures since it incurs a substantial portion of its expenses in Swedish Krona, while most of its revenue contracts are in U.S. dollars and euros. Therefore, when the Swedish Krona strengthens or weakens against the U.S. dollar, operating profits are decreased or increased, respectively. The effect of a change in currency exchange rates on our international subsidiaries' assets and liabilities is reflected in the accumulated other comprehensive income component of stockholders’ equity.\n\n \n\nA hypothetical 10 percent change in currency exchange rates compared to the U.S. dollar (U.S. dollar strengthening) would have resulted in an approximate estimated $1.1 million decrease in net income over a one-year period. Actual changes in market prices or rates will likely differ from hypothetical changes.\n\n \n\n**Interest Rates**\n\n \n\nOur Credit Facility bears interest at either a base rate or a SOFR rate, plus an applicable spread. Based on our interest rates and balances outstanding as of March 31, 2026, adjusted for future required principal payments, we estimate that if interest rates increased 1 percentage point, we would incur approximately $1.5 million of additional cash interest expense in the next twelve months than we would if current rates remain unchanged. \n\n \n\n***Inflation Risk***\n\n \n\nInflation generally impacts us by increasing our costs of labor, materials, and freight. The rates of inflation experienced in recent years have not had a significant direct impact on our financial results, as inflationary cost increases have been largely offset by annual price increases. However, any price increases imposed may lead to declines in sales volume if competitors do not similarly adjust prices. Additionally, inflationary pressures may impact our customers' ability to purchase our products and services. We cannot reasonably estimate our ability to successfully recover any inflation cost increases into the future.\n\n \n\nPage 36\n\n[Table of Contents](#toc)"}