form10ksb-033105

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D. C. 20549

                                   FORM 10-KSB

                   ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                    FOR THE FISCAL YEAR ENDED MARCH 31, 2005

Commission File Number 0-11740

                             MESA LABORATORIES, INC.
                      -------------------------------------
                 (Name of small business issuer in its charter)

            Colorado                                         84-0872291
            --------                                         -----------
(State or other jurisdiction of                       (I.R.S. Employer Identifica-
incorporation or organization)                               tion Number)

   12100 West Sixth Avenue  Lakewood, Colorado                 80228
   -------------------------------------------             ---------------
        (Address of principal executive offices)            (Zip Code)

Issuer's telephone number:  (303) 987-8000

Securities registered under Section 12(g) of the Exchange Act:

                           Common Stock, No Par Value
                           --------------------------
                                (Title of Class)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15 (d) of the  Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.

                        YES   X          NO
                            -----            ------

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not contained in this form, and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year:  $10,041,000.

State the  aggregate  market value of the voting and  non-voting  equity held by
non-affiliates of the Registrant: As of May 12, 2005: $24,415,344*.

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: No Par Value Common Stock-- 3,037,453
shares as of May 12, 2005.

Documents incorporated by reference: none.

Transitional Small Business Disclosure Format: Yes       ;  No    X  .
                                                    -----       -----

*    Aggregate  market  value  was  determined  by  multiplying  the  number  of
     outstanding  shares  (excluding  those  shares held of record by  officers,
     directors and greater than five percent  shareholders) by $12.00,  the last
     sales price of the Registrant's  common stock as of May 12, 2005, such date
     being within 60 days prior to the date of filing.


                                     PART I

 ITEM 1.  DESCRIPTION OF BUSINESS.

 Introduction

     Mesa  Laboratories,  Inc.  (hereinafter  referred  to as the  "Company"  or
"Mesa")  was  incorporated  as a Colorado  corporation  on March 26,  1982.  The
Company designs,  develops,  acquires,  manufactures and markets instruments and
systems  utilized in connection with industrial  applications  and  hemodialysis
therapy.  In August 1984, the Company  acquired  Western  Laboratories  Corp., a
manufacturer  and  marketer  of a line of  instruments  for  use in  calibrating
hemodialysis  proportioning  equipment.  In June 1989, the Company  acquired the
DATATRACE(R)product  line of Ball  Corporation.  In February  1993,  the Company
acquired the assets of NUSONICS,  Inc., a manufacturer of ultrasonic flow meters
and analyzers. In December 1999, the Company acquired Automata  Instrumentation,
Inc.,  a  manufacturer  and  marketer  of a  line  of  instruments  for  use  in
calibrating and verifying performance of hemodialysis equipment.

     The Company presently markets the DATATRACE(R)and ELOGG(R)recording systems
which  are used in  various  industrial  applications;  NUSONICS(R)Concentration
Analyzers,  Pipeline Interface  Detectors and Flow Meter products which are used
in  various  industrial  applications;  and two  product  lines  used in  kidney
dialysis [Dialysate Meters and the ECHO Reprocessing  Products].  The Company is
also  performing  research  and  development  to expand the  application  of its
technology.

     All statements  other than  statements of historical  fact included in this
annual  report  regarding  the  Company's  financial  position and operating and
strategic  initiatives and addressing industry  developments are forward-looking
statements.  Where,  in  any  forward-looking  statement,  the  Company,  or its
management,  expresses  an  expectation  or belief as to  future  results,  such
expectation  or  belief  is  expressed  in good  faith  and  believed  to have a
reasonable  basis,  but  there  can  be  no  assurance  that  the  statement  of
expectation or belief will result or be achieved or accomplished.  Factors which
could cause actual results to differ materially from those anticipated,  include
but are not limited to general  economic,  financial  and  business  conditions;
competition  in the data  logging  market;  competition  in the kidney  dialysis
market;  competition in the fluid measurement  market; the discontinuance of the
practice of dialyzer reuse;  the business  abilities and judgement of personnel;
the impacts of unusual  items  resulting  from ongoing  evaluations  of business
strategies; and changes in business strategy.

     Mesa's executive offices are located at 12100 West Sixth Avenue,  Lakewood,
Colorado 80228, telephone (303) 987-8000.

 Data Logging

     The world  market for  temperature  sensors,  indicators  and  recorders is
currently  estimated  at over $2 billion and is  projected  to grow at an annual
rate of 4-6% over the next several years. The  electronics-based  thermal sensor
market to which DATATRACE(R)products belong currently exceeds $100 million.

     The  temperature  and  humidity  recording  markets  are highly  segmented.
DATATRACE(R)products  have  developed  application  niches within major industry
segments  such  as  food  processing,   medical  sterilization,   pharmaceutical
processing,  transportation,  electronics,  aerospace,  storage  facilities  and
textile  manufacturing.  DATATRACE(R)  products are used in any  industry  where
temperature,  pressure or humidity  is  critical to the  manufacturing  process,
quality of the  product  or where  product  temperature,  pressure  or  humidity
profiles are required in a continuous or moving process environment.

 DATATRACE(R)Data Loggers

     The DATATRACE products are self-contained,  wireless, high precision,  data
loggers  that  are  used  in  critical   manufacturing,   quality  control,  and
transportation applications. They are used to measure temperature,  humidity and
pressure inside a process or inside a product during manufacturing. In addition,
the  DATATRACE  products  can be  used  to  validate  the  proper  operation  of
laboratory or  manufacturing  equipment,  either during its  installation or for
annual re-certifications.  The product line consists of individual tracers, a PC
interface, DTW reporting software and various accessories.  A customer typically
purchases a large  number of tracers  along with a single PC  interface  and DTW
software  package.  In practice,  using the PC interface,  the user programs the
tracers to collect environmental data at a pre-determined  interval,  places the
tracers in the product or process, retrieves the tracers and reads the data into
a PC with the interface.  After this, the user can prepare tabular and graphical
reports  using the DTW  software.  Different  models of tracers  are  available,
including the older  Micropack  II,  Flatpack,  and FRB tracers,  along with the
newest  Micropack  III line,  which was  introduced  in March  2002.  The latest
generation  Micropack  III  line is much  smaller,  has  improved  hardware  and
embedded software, includes a rapid optical interface, and operates over a wider
temperature range.  During Fiscal 2005 the discontinuance of the older Micropack
II and Flatpack lines was announced with an effective date in fiscal 2006. It is
anticipated  that product lines sales will be  concentrated  increasingly on the
new Micropack III line,  with FRB sales  primarily  being made only to customers
who are adding tracers to their current inventory.

     While  there are a variety of  different  types of  wireless  data  loggers
available on the market,  there are only a few that are rated as  "intrinsically
safe" and can operate at elevated  temperatures,  like the  DATATRACE  products.
These are important  differentiating  factors for the DATATRACE  products in the
marketplace, and consequently,  they are used by companies to control their most
critical processes.  Due to their higher accuracy and precision,  along with the
importance of the processes they are used to control,  an important component of
the DATATRACE product line is the calibration  service that is provided by Mesa.
Typically,  each DATATRACE tracer is calibrated by Mesa's calibration laboratory
prior to shipment and then annually,  for a re-certification  fee, to verify its
accuracy.  For instance, the Micropack III temperature tracers are calibrated to
+/- 0.1oC  over  their  operating  range of -20 oC to 140 oC.  This  allows  the
Micropack  III  tracers  to be used  to  conduct  quality  control  on  critical
sterilization operations, one of our most important applications.

 ELOGG(R)Dataloggers

     The  Company  distributes  the  ELOGG(R)Datalogger  product  line in  North
America.  The  ELOGG(R)line  is  similar  in  concept  to the  DATATRACE(R)line,
featuring  different  benefits  to the  end-user  such as longer  battery  life,
extended   memory  and   humidity   logging  in  certain   models.   Unlike  the
DATATRACE(R)products,   the   ELOGG(R)is  a  larger   device  which  is  not  as
environmentally  resistant  and  is  ideally  suited  for  long-term  monitoring
applications,  such as  transportation  and warehousing.  The ELOGG(R)line  also
features a PC Interface Module and software for user programming.

 Sonic Fluid Measurement

     The Company's  sonic fluid  measurement  product line consists of two major
components: Sonic Flow Meters and Concentration Monitors. While the total market
for flow  meters is very  large,  the  NUSONICS(R)Sonic  Flow  Meters best serve
applications  where  cleanliness,  resistance to corrosives or  portability  are
required.  Specific applications where the  NUSONICS(R)products are particularly
well  suited  include  water   treatment,   chemical   processing  and  heating,
ventilation and air conditioning (HVAC) applications.

     The  Concentration  Monitor  component  of the  product  line  consists  of
Pipeline Interface Detectors and Concentration Analyzers. The Pipeline Interface
Detector serves a smaller market niche while the Concentration Analyzers serve a
wider variety of industry application,  such as chemical,  food,  pharmaceutical
and polymerization processes.

 NUSONICS(R)Sonic Flow Meters

     The Sonic  Flow  Meter  line is a range of  products  which  are  suited to
various fluid measurement applications.  The Model CM800 Sonic Flow Meter is the
Company's  main  wetted  transducer  meter.  With  transducers  that are mounted
through the pipe wall and in contact with the material flowing through the pipe,
it is the most accurate type of ultrasonic  flow meter.  The Model 90 Sonic Flow
Meter features  strap-on  transducers  and is sold in portable and fixed process
versions. This product offers flexibility and portability for measuring flow and
is totally noninvasive, measuring flow rates through the pipe wall. In addition,
the  Company  markets  doppler  flow  meters  in  both  permanent  and  strap-on
transducer models.  Unlike the transit-time  technology that the Company's other
flow products utilize to measure clean fluids with dissolved solids, the doppler
technology is utilized when the fluids to be measured  contain either  suspended
solids or entrained  gases.  Over the past five years, the ultrasonic flow meter
market has shifted preference to strap-on  transducer flow meters and has become
highly price  competitive.  While the Company  continues to sell its flow meters
for certain  applications,  demand for this product line has  contracted and the
contribution of this product line has declined to less than 5% of total revenues
in fiscal 2005.

 NUSONICS(R)Sonic Concentration Analyzers

     Liquid composition can be determined by measuring sound velocity. Since the
sound velocity of any liquid is unique, the relationship between sound velocity,
liquid  composition  and  temperature  is different for every  liquid.  Once the
relationship  is known,  sound velocity can be used to monitor changes in liquid
composition,  often with much greater  precision than can be realized with other
measuring devices.

     Composition  Analyzers  are  marketed to various  industrial  users and are
currently  used to monitor  more than 250  different  materials.  On a real time
basis,  the analyzer  will  monitor the  composition  of  materials  for process
control of blending  operations  or for tracking the progress of  polymerization
processes.   The  CP20  Analyzer  is  the  Company's  newest  analyzer  product.
Incorporating  state-of-the-art  electronic design and a new transducer  design,
this product offers advanced features,  smaller size, reduced manufacturing cost
and simpler installation.  In addition, the Company also offers its Model 86 and
Model 87 (a laboratory model) Composition Meters.

     Based on the same technology as the Composition Analyzers, the Company also
markets Pipeline Interface  Detectors to the petroleum  pipeline industry.  This
instrument is used to monitor the interface of similar  materials in a pipeline,
such as different  grades of unleaded fuel. By detecting these  interfaces,  the
pipeline  operator  can  accurately  perform  switching  operations  within  the
pipeline system.

 Kidney Hemodialysis Treatment

     Patients with kidney failure  (known as end stage renal  disease,  or ESRD)
require the removal of toxic waste products and excess water through  artificial
means.  This  process is  generally  performed  three times per week and is most
often accomplished through the use of hemodialysis.

     Hemodialysis  requires the treatment to be conducted on a dialysis  machine
through the use of a disposable cartridge known as a dialyzer.  Blood is brought
extracorporally  to the dialysis  machine for control and  monitoring and passes
through the dialyzer  where waste  products  and excess water are removed.  This
treatment  generally  lasts three to four hours and is conducted three times per
week. These  hemodialysis  procedures are performed in kidney dialysis  centers,
hospitals  and in the home.  The bulk of the  treatments  are  conducted in over
3,500 clinics and hospital centers.  Currently,  there are over 275,000 patients
in the U.S. undergoing dialysis therapy.

     In addition to the  reimbursement  policies of the United States Government
and state  agencies,  the Company's  revenues from its dialysis  products can be
expected to be dependent  upon the policies of  insurance  companies  and kidney
foundations.

 Dialysate Meters

     Mesa's  Dialysate  Meters  are  instruments  that are used to test  various
parameters of the dialysis fluid (dialysate).  Each measures some combination of
temperature,  pressure, pH and conductivity to ensure that the dialysate has the
proper  constituency to promote the transfer of waste products from the blood to
the dialysate. The meters are used to check the conductivity and other variables
of the  dialysate  before the  dialysis  process  begins.  The meters  provide a
digital  readout that the patient,  physician or technician  uses to verify that
the dialysis unit is working within prescribed limits.

     The Company's  Western Meter product,  Model 90DX,  measures  conductivity,
temperature,  pressure and pH. Model 90DX is  microprocessor-based  and features
improved accuracy and user convenience and field calibration capabilities.

     In December 1999, the Company acquired Automata  Instrumentation,  Inc. and
its line of Dialysate Meters. This line features the NEO-2, Phoenix,  Neo-Stat +
and Hydra  meters.  The NEO-2  Meter,  introduced  in  October  1999,  is a next
generation   meter  that  replaces  the  Company's   NEO-1  Meter  and  measures
conductivity,  pressure,  temperature  and pH. The remaining  meters are smaller
sample meters  utilizing a patented,  simple and unique syringe sampling system.
With its ease of  operation  and lower  cost,  this  group of meters is  usually
utilized by the patient care staff of hemodialysis facilities.

 The ECHO MM-1000 Dialyzer Reprocessor

     Dialyzer  reuse is a procedure  in which a  patient's  dialyzer is cleaned,
performance tested and disinfected before it is reused by the same patient. Each
patient requires approximately 156 dialyzers annually if no reuse is employed.

     The ECHO MM-1000 Dialyzer  Reprocessor is a fully automated  dialyzer reuse
machine for which the Company received permission to market from the FDA in June
1982. It  automatically  cleans,  rinses,  tests and delivers  disinfectants  to
dialyzers after dialysis therapy, thereby allowing the dialyzer cartridges to be
reused  rather than  disposed  of after each use. It is designed to  accommodate
virtually all manual reprocessing  procedures in use today and can be programmed
to automate them without  extensive  modification or rework.  Manual  procedures
have been used to reprocess dialyzers  effectively for over 30 years and are the
basis of most automated  systems in use today.  Additionally,  the system can be
programmed   to  use   prescribed   chemicals.   The  ECHO   System  is  totally
self-contained,   aside  from  water  and   chemicals,   and  requires  no  user
adjustments.  Due to wide  acceptance  of low cost,  single use only  dialyzers,
demand for new dialyzer  reprocessors  has declined  significantly in the United
States.

 The Reuse Data Management (RDM) System

     The Company  markets its Reuse Data  Management  (RDM)  System.  The system
consists of a custom database  management  software  package,  computer  system,
barcode scanner and label printer. The RDM System is stand alone, and is capable
of  operating  with any reuse  method  whether  automated  or manual.  Utilizing
barcode technology,  the RDM System automates much of the data entry involved in
the record keeping  process of managing  reuse,  and will provide record keeping
and reporting to satisfy both patient management and regulatory requirements.

 Manufacturing

     The  Company  assembles  its  manufactured  products  at  its  facility  in
Lakewood, Colorado. The Company's manufacturing consists primarily of assembling
and testing materials and component parts purchased from others.

     Most of the materials and  components  used in the Company's  product lines
are available from a number of different  suppliers.  Mesa  generally  maintains
multiple  sources of supplies for most items but is dependent on a single source
for certain items. Mesa believes that alternative sources could be developed, if
required,  for present single supply sources.  Although the Company's dependence
on these single supply  sources may involve a degree of risk, to date,  Mesa has
been able to acquire sufficient stock to meet its production schedules.

 Marketing and Distribution

     The Company's  domestic sales of its dialysis products are generated by its
in-house sales and marketing  staff while the Company  maintains an organization
of field sales  personnel  and  independent  manufacturers'  representatives  to
distribute its DATATRACE(R)and ELOGG(R)product lines. For its NUSONICS(R)product
lines, a separate organization of manufacturers'  representatives is maintained.
International  sales are  conducted  through  over 50  distributors.  During the
fiscal year ended March 31, 2005,  approximately 71% of sales have been domestic
and  29%  have  been  international  to  countries  throughout  Europe,  Africa,
Australia, Asia and South America, as well as Canada and Mexico.

     Sales promotions include attendance by Mesa representatives at conventions,
the  continuation  of direct mail  campaigns  and trade journal  advertising  in
industry related publications.

     Customers of Mesa's dialysis  products  primarily  include dialysis centers
and dialysis  equipment  manufacturers.  The primary  emphasis of the  Company's
marketing  effort is to offer quality  products to the  healthcare  market which
will aid in cost containment and improved patient well-being.

     DATATRACE(R)and  ELOGG(R)customers include numerous industrial users in the
food,  pharmaceutical and medical device markets who utilize the products within
a  variety  of  manufacturing,  transportation  and  storage  applications.  The
emphasis of the Company's  marketing  effort is to offer a quality  product that
provides a unique and flexible solution to monitoring  temperature,  pressure or
humidity without  interfering with the processing,  transportation or storage of
the product.

     NUSONICS(R)customers  include various  industries such as water  treatment,
manufacturing,   HVAC  and  petroleum  product  transportation.   The  Company's
marketing  efforts are focused on offering flow  measurement  and  concentration
monitoring in difficult environments where noninvasive monitoring techniques are
required.

     During the fiscal  year ended  March 31,  2005,  one  customer  represented
approximately  15%  of  the  Company's  revenues  and  approximately  9% of  the
Company's accounts  receivable  balance.  During the fiscal year ended March 31,
2004 one customer  represented  approximately 12% of the Company's  revenues and
approximately 11% of the Company's account receivable balances.

 Competition

     Mesa competes with major medical and instrumentation companies as well as a
number  of  smaller  companies,  many  of  which  are  well  established,   with
substantially  greater  capital  resources and larger  research and  development
facilities.  Furthermore,  many of these  companies have an established  product
line and a significant operating history.  Accordingly,  the Company may be at a
competitive  disadvantage  due to such  factors  as its  limited  resources  and
limited marketing and distribution network.

     Companies with which Mesa's medical products compete include Cantel Medical
Corporation. Companies with which Mesa's DATATRACE(R)and ELOGG(R)instrumentation
products  compete  include GE Kaye,  Ellab and TMI Orion.  Companies  with which
Mesa's   NUSONICS(R)products   compete  include   Controlotron,   Badger  Meter,
Rosemount, and GE Panametrics.

     Mesa believes  that it is the largest  supplier of meters used to calibrate
hemodialysis  equipment,  although  it  has  not  conducted  independent  market
surveys.  The  DATATRACE(R)and   ELOGG(R)products   offer  unique  solutions  to
monitoring  temperature or humidity and  temperature or pressure and temperature
through  a  continuous  process  or  long-term  transportation  and  warehousing
applications.  Although there are other solutions to  temperature,  humidity and
pressure monitoring available,  the  DATATRACE(R)products  offer a miniaturized,
self-contained,      environmentally      resistant,      wireless     solution.
NUSONICS(R)products  offer  solutions to  monitoring  of clean fluids as well as
highly corrosive  materials,  which are either noninvasive or do not disturb the
flow of the product  through the pipe.  NUSONICS(R)products  also offer a unique
solution to monitoring variations in a fluid's concentration as the fluid passes
through a pipeline into or out of a process.

Government Regulation

     Medical  devices  marketed  by Mesa are  subject to the  provisions  of the
Federal Food, Drug and Cosmetic Act, as amended by the Medical Device Amendments
of 1976  (hereinafter  referred to as the "Act"). A medical device which was not
marketed prior to May 28, 1976, or is not  substantially  equivalent to a device
marketed  prior to that date,  may not be marketed  until  certain data is filed
with the FDA and the FDA has  affirmatively  determined that such data justifies
marketing under conditions  specified by the FDA. A medical device is defined by
the Act as an  instrument  which (1) is intended for use in the diagnosis or the
treatment of disease,  or is intended to affect the structure of any function of
the human body;  (2) does not  achieve its  intended  purpose  through  chemical
action;  and (3) is not dependent upon being  metabolized for the achievement of
its principal intended purpose. The Act requires any company proposing to market
a medical  device to notify the FDA of its intention at least ninety days before
doing so, and in such  notification must advise the FDA as to whether the device
is  substantially  equivalent to a device  marketed prior to May 28, 1976. As of
the date hereof, the Company has received  permission from the FDA to market all
of its medical products.

     Mesa's medical  products are subject to FDA  regulations  and  inspections,
which may be time-consuming and costly.  This includes on-going  compliance with
the FDA's current Good Manufacturing  Practices regulations which require, among
other things,  the systematic  control of manufacture,  packaging and storage of
products  intended for human use. Failure to comply with these practices renders
the product  adulterated  and could  subject the Company to an  interruption  of
manufacture and sale of its medical products and possible  regulatory  action by
the FDA.

     The  manufacture  and sale of  medical  devices is also  regulated  by some
states.  Although there is substantial overlap between state regulations and the
regulations  of the FDA,  some  state laws may apply.  Mesa,  however,  does not
anticipate  that complying with state  regulations  will create any  significant
problems.  Foreign  countries also have laws regulating  medical devices sold in
those  countries,   which  may  cause  us  to  expend  additional  resources  on
compliance.

 Employees

     On March 31,  2005,  the Company had a total of 47  employees,  of which 46
were full-time employees. Currently, 10 persons are employed for marketing, four
for research and development, 27 for manufacturing and quality assurance and six
for administration.

 Additional Information

     For the fiscal years ended March 31, 2005 and 2004, Mesa spent $358,000 and
$332,000,   respectively,   on   Company-sponsored   research  and   development
activities.

     Compliance with federal, state and local provisions which have been enacted
regarding the discharge of materials into the environment or otherwise  relating
to the protection of the  environment  has not had, and is not expected to have,
any  adverse  effect upon  capital  expenditures,  earnings  or the  competitive
position of the  Company.  Mesa is not  presently a party to any  litigation  or
administrative   proceedings   with   respect  to  its   compliance   with  such
environmental  standards.  In addition,  the Company does not  anticipate  being
required  to  expend  any  significant  capital  funds  in the near  future  for
environmental protection in connection with its operations.

     The  Company  has  been  issued  patents  for  its  DATATRACE(R)temperature
recording devices, its NUSONICS(R)sonic flow measurement and sonic concentration
monitoring products and its Phoenix, Hydra and NeoStat+ dialysis meters. Failure
to obtain  patent  protection  on the  Company's  remaining  products may have a
substantially  adverse  effect upon the Company  since there can be no assurance
that other companies will not develop functionally similar products, placing the
Company at a competitive  disadvantage.  Further, there can be no assurance that
patent  protection  will afford  protection  against  competitors  with  similar
inventions,  nor can  there  be any  assurance  that  the  patents  will  not be
infringed or designed around by others. Moreover, it may be costly to pursue and
to prosecute patent infringement  actions against others, and such actions could
interfere with the business of the Company.


 ITEM 2.  DESCRIPTION OF PROPERTY.

     Mesa owns its 39,616 square foot facility at 12100 W. 6th Avenue, Lakewood,
Colorado  80228.  All   manufacturing,   warehouse,   marketing,   research  and
administrative   functions  are  based  at  this   location.   The  facility  is
approximately 80% utilized and the Company currently utilizes only one shift.

     The Company does not invest in, and has not adopted any policy with respect
to  investments  in,  real  estate or  interests  in real  estate,  real  estate
mortgages or  securities  of or interests in persons  primarily  engaged in real
estate  activities.  It is not the Company's  policy to acquire assets primarily
for possible capital gain or primarily for income.


 ITEM 3.  LEGAL PROCEEDINGS.

     No material  legal  proceedings to which the Company is a party or to which
any of its  property is the subject are  pending,  and no such  proceedings  are
known by the Company to be contemplated. The Company is not presently a party to
any litigation or administrative proceedings with respect to its compliance with
federal,  state and local  provisions  which  have been  enacted  regarding  the
discharge  of  materials  into the  environment  or  otherwise  relating  to the
protection of the environment  and no such  proceedings are known by the Company
to be  contemplated.  No legal actions are  contemplated  nor judgments  entered
against any officer or director of the Company  concerning any matter  involving
the business of the Company.


 ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     No matter  was  submitted  during the  fourth  quarter  of the fiscal  year
covered by this report to a vote of security holders through the solicitation of
proxies or otherwise.



                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS
ISSUER PURCHASES OF EQUITY SECURITIES.

(a)  Mesa's  common  stock is traded on the  Nasdaq  National  Market  under the
     symbol "MLAB".  For the last two fiscal years,  the high and low last sales
     prices of the  Company's  common  stock as  reported  to the Company by the
     National Association of Securities Dealers, Inc. were as follows:

          Quarter Ended                        High           Low           Dividend
          -------------                       -------        ------          ------
          June 30, 2003                       $ 7.16         $ 6.06             -
          September 30, 2003                  $ 9.42         $ 7.09             -
          December 31, 2003                   $10.10         $ 7.74          $ .20*
          March 31, 2004                      $10.08         $ 8.53          $ .05

          June 30, 2004                       $10.20         $ 9.53          $ .05
          September 30, 2004                  $12.50         $ 9.72          $ .05
          December 31, 2004                   $14.50         $11.01          $ .26*
          March 31, 2005                      $13.75         $11.78          $ .06

     The Nasdaq National Market quotations set forth herein reflect inter-dealer
     prices,  without  retail  mark-up,  mark-down,  or  commission  and may not
     represent actual transactions.

(b)  As of March 31, 2005,  there were  approximately  900 record and beneficial
     holders of Mesa's  common  stock.

(c)  During the fiscal year ended March 31,  2005,  the Company did not sell any
     equity  securities  that were not  registered  under the  Securities Act of
     1933, as amended.

(d)  We made the following repurchases of our common stock, by month, within the
     fourth quarter of the fiscal year covered by this report:


                                          Total   Share Purchased   Total Shares Purchased     Remaining Shares
                                          Shares     Avg. Price       as Part of Publicly         to Purchase
                                         Purchased     Paid             Announced Plan             Under Plan
                                         ---------     ----             --------------             ----------
          January 1 - 31, 2005             3,094      $12.45                142,190                  157,810
          February 1 - 28, 2005           10,068      $12.46                152,258                  147,742
          March 1 - 31, 2005                 578      $13.16                152,836                  147,164
                                        ---------   -------
          Total Fourth Quarter            13,740      $12.49

     On June 19, 2003, the Board of Directors of Mesa Laboratories, Inc. adopted
     a share  repurchase  plan which allows for the  repurchase of up 300,000 of
     the Company's  common shares.  This plan will continue until the maximum is
     reached or the plan is terminated by further action of the Board.

*    On December  15,  2003,  the Company  paid an initial $.05 per common share
     quarterly  dividend and a $.15 per common share special dividend to holders
     of record on December 1, 2003.  On December  15,  2004,  the Company paid a
     regular  $.06 per common  share  quarterly  dividend  and a $.20 per common
     share special dividend to holders of record on December 1, 2004.

     For  information  regarding  securities  authorized  for issuance under our
equity compensation  plans,  please see Footnote 7 to the Financial  Statements.
Equity Compensation Plan Information as of March 31, 2005

 Plan Category                      No. of securities to be      Weighted-average        Number of securities
                                    Issued upon exercise of      exercise price of       remaining for future
                                    Outstanding options          outstanding options     issuance under plan

 Equity compensation
 plans approved by
 security holders                            241,767                    $7.82                     263,700

 Equity compensation
 plans not approved by
 security holders                                      -                   -                           -
                                             -----------               -------                   ----------
 Total                                       241,767                    $7.82                     263,700




 ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 Overview

     Mesa Laboratories, Inc. manufactures and distributes electronic measurement
systems  for  various  niche  applications,   including  renal  treatment,  food
processing,   medical   sterilization,   pharmaceutical   processing  and  other
industrial  applications.  Our Company  follows a philosophy of  manufacturing a
high quality  product and  providing a high level of on-going  service for those
products.  In order to optimize the  performance of our Company and to build the
value of the Company for its  shareholders,  we continually  follow the trend of
various key  financial  indicators.  A sample of some of the most  important  of
these indicators is presented in the following table.

                            Key Financial Indicators

                                         2005              2004              2003             2002
                                         ----              ----              ----             ----
 Cash and Investments               $6,882,000          $6,767,000        $4,761,000        $3,462,000

 Trade Receivables                  $2,017,000          $1,621,000        $2,299,000        $2,339,000
 Days Sales Outstanding                     62                  55                70                80

 Inventory                          $1,941,000          $2,099,000        $2,329,000        $2,443,000
 Inventory Turns                           1.8                 1.6               1.5               1.5

 Working Capital                   $10,141,000         $10,080,000        $9,017,000        $8,099,000
 Current Ratio                            11:1                16:1              16:1              17:1

 Average Return On:
   Stockholder Investment (1)             15.0%               14.3%             15.0%             15.1%
   Assets                                 14.1%               13.6%             14.4%             14.4%
   Invested Capital (2)                   26.4%               22.9%             21.0%             19.2%

 Net Sales                         $10,041,000          $9,126,000        $9,082,000        $9,044,000
 Gross Profit                       $6,320,000          $5,698,000        $5,685,000        $5,391,000
 Gross Margin                               63%                 62%               63%               60%
 Operating Income                   $3,475,000          $3,249,000        $3,186,000        $2,942,000
 Operating Margin                           35%                 36%               35%               33%
 Net Profit                         $2,312,000          $2,130,000        $2,127,000        $2,031,000
 Net Profit Margin                          23%                 23%               23%               22%
 Earnings Per Diluted Share         $      .74          $      .68        $      .64        $      .59

 Capital Expenditures (Net)         $   70,000          $   34,000        $   65,000        $   42,000

 Head Count                               46.5                48.5              46.5              51.0
 Sales Per Employee                 $  216,000          $  188,000        $  195,000        $  177,000


(1)  Average  return on  stockholder  investment is calculated by dividing total
     net  income  by the  average  of end of year and  beginning  of year  total
     stockholder's equity.

(2)  Average  return on  invested  capital  (invested  capital = total  assets -
     current  liabilities - cash and short - term  investments) is calculated by
     dividing  total net income by the average of end of year and  beginning  of
     year invested capital.

     While we continually  try to optimize the overall  performance  and trends,
the table above does highlight various exceptions.  These exceptions are usually
influenced  by a more  important  need. A review of the table above shows a very
high Trade  Receivables  balance and high Days Sales Outstanding in fiscal 2002.
At the time that these indicators were showing below average performance, we had
recently  completed the acquisition of Automata  Instruments,  Inc., and a large
amount of our  administrative  resources were being focused on  improvements  to
systems, work flows and new customer  satisfaction.  The Current Ratio in fiscal
2005, while very healthy,  decreased  significantly from prior year levels. This
change  is due to a number  of  factors  including  the  impact on cash of stock
buybacks and the special dividend;  lower inventory;  increased accounts payable
due to higher sales levels and accrued  moving costs;  and higher bonus accruals
due to the higher sales level.

 Results of Operations

 Net Sales

     Net sales for fiscal 2005  increased 10 percent  from fiscal 2004,  and net
sales for fiscal 2004  increased less than one percent from fiscal 2003. In real
dollars,  net  sales of  $10,041,000  in fiscal  2005  increased  $915,000  from
$9,126,000 in 2004, and net sales of $9,126,000 in fiscal 2004 increased $44,000
from $9,082,000 in 2003.

     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  customer's  own
quality system and many of our customers operate in regulated  industries,  such
as food processing or medical and  pharmaceutical  processing.  For this reason,
these revenues tend to be fairly stable and grow slowly over time. During fiscal
years  2005,  2004 and  2003 our  Company  had  parts  and  service  revenue  of
$2,893,000,  $2,644,000 and $2,511,000.  As a percentage of total revenue, parts
and service revenues were 29% in 2005, 29% in 2004 and 28% in 2003.

     The  performance  of new product  sales is  dependent  on several  factors,
including general economic  conditions in the United States and abroad,  capital
spending trends and the  introduction of new products.  Over the past two fiscal
years,  general  economic  conditions  have been  improving,  and more recently,
capital spending has also improved. New products released to the market over the
past three fiscal years include the Datatrace  Micropack III temperature loggers
during the middle of fiscal 2003 and the  Datatrace  Micropack  III humidity and
pressure  loggers at the end of fiscal  2004.  Introduction  of the humidity and
pressure  loggers  came too late in fiscal 2004 to have much of an  influence on
revenues.  All three  loggers,  temperature,  humidity and  pressure,  utilize a
common PC Interface system and operating  software.  For this reason, it was our
belief that some customer purchasing decisions were probably delayed into fiscal
2005,  as those  customers  awaited  introduction  of the  humidity and pressure
loggers. For fiscal years 2005, 2004 and 2003 product sales for our company were
$7,148,000, $6,482,000 and $6,571,000.


     During fiscal 2005, sales of the Company's  medical  products  increased 10
percent for the fiscal year  compared to the prior year period.  The major share
of this  increase  was due to  higher  sales of the  Company's  meter  products,
accessories and service.  Sales of the Company's dialyzer  reprocessing products
declined  slightly  during  the year as the trend  toward  usage of  single  use
dialyzers  leveled out in the domestic  marketplace.  A high  percentage  of the
Company's  reprocessor  revenues are generated from foreign  markets,  where the
trend of single use dialyzer usage  continues to have little impact.  Currently,
research and  development  efforts are in process to further enhance our line of
hand-held  dialysate meters with a new generation  full-featured meter currently
near completion.

     During fiscal 2005, sales of the Datatrace brand of products increased from
the prior year. For the year,  sales increased 10 percent  compared to the prior
year.  Datatrace sales benefited  during the year from increases in sales in the
Company's  humidity and pressure  sensors.  At the end of last fiscal year,  the
Company  released its Micropack III humidity and pressure  loggers to customers.
These new products have allowed customers who measure more than one parameter in
their  process to program and retrieve  data from the same PC  Interface  device
making all of the Company's  Micropack III products more  appealing to customers
with more complex logging needs.

     During  fiscal  2005,  sales  of the  Nusonics  line  of  ultrasonic  fluid
measurement systems increased by 11 percent. This is the second consecutive year
of annual increase for these products. Nusonics products contribute less than 10
percent of the Company's total sales, but these products are typically purchased
by large industrial users.  Increased sales activity for these products is being
brought about by improved economic conditions.

     Fiscal 2004 medical  products  increased four percent for the year compared
to the prior period. The major share of this increase was due to higher sales of
our meter products and accessories,  and an increase in service revenues.  Sales
of the company's dialyzer  reprocessing products declined during the year as the
trend toward  usage of single use  dialyzers  continued  in the domestic  market
place. A high percentage of our reprocessor  revenues are generated from foreign
markets  and it was not  expected  that this  trend  would  continue  to have an
appreciable negative effect on future sales.

     During fiscal 2004, sales of the Datatrace brand of products declined after
the increases  reported in the prior year. For the year,  sales  decreased seven
percent compared to the prior year. At the end of the last quarter,  we released
our latest  version of user software and shipped  initial units of the Micropack
III  humidity  and  pressure  loggers to  customers.  These new  products  allow
customers  who measure more than one  parameter in their  process to program and
retrieve data from the same PC Interface device.  During April, 2004 the company
began  introduction of its new 4-20 milliamp logger.  This user scalable logging
device is completely new and will allow users to log the 4-20 milliamp output of
various  fixed  monitors  within their  process and  correlate  that data to the
product data collected by our loggers. In this way the user may bring additional
data  parameters  into their  analysis  without  compromising  data integrity as
required by various regulatory bodies.

     During  fiscal  2004,  sales  of the  Nusonics  line  of  ultrasonic  fluid
measurement systems increased by 27 percent.  This was the first annual increase
for these products in several years.  Nusonics products  contribute less than 10
percent of our total sales.

 Cost of Sales

     Cost of sales as a percent of net sales in fiscal 2005  decreased  one half
of one percent from fiscal 2004 to 37.1  percent,  and in fiscal 2004  increased
two tenths of one percent from fiscal 2003 to 37.6 percent. Most of our products
enjoy gross  margins in excess of 55 percent.  Due to the fact that the dialysis
products have sales  concentrations  to several  companies  that maintain  large
chains of treatment centers, the products that are sold to the renal market tend
to be slightly more price sensitive than the data logging  products.  Therefore,
shifts in product mix toward  higher sales of Datatrace  logging  products  will
tend to produce  lower cost of good sold expense and higher gross  margins while
shifts  toward  higher  sales of medical  products  will  normally  produce  the
opposite effect on cost of goods sold expense and gross margins.

     Over fiscal year 2005,  our Company saw an increase in sales  levels  which
were fairly uniform  throughout the product lines. This increase in sales led to
a  decrease  in costs  of goods  sold as a  percent  of sales as fixed  overhead
decreased  as a percent of sales.  During  fiscal  year 2004,  our Company saw a
shift in its mix to higher medical sales, which led to a slight increase in cost
of goods sold expense as a percent of sales compared to fiscal 2003. Our logging
instruments  have a higher  gross  margin  over the other  instruments  which we
produce and sell.

 Selling, General and Administrative

     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.  Total  administrative  costs were $1,084,000 in fiscal
2005,  $906,000 in fiscal 2004 and $904,000 in fiscal 2003,  which  represents a
$178,000  increase from fiscal 2004 to fiscal 2005 and a $2,000 or less than one
percent  increase  from fiscal  2003 to fiscal  2004.  The  increase in selling,
general and administrative  expenses were directly attributable to compensation,
relocation and recruiting costs associated with the creation and hiring of a new
Vice President of Sales and Marketing position.  Approximately $115,000 of these
costs  would  not  be  expected  to  recur  in  the  next  fiscal  year.  Higher
compensation  costs during  fiscal 2004 were off-set by lower  consulting  fees,
while lower costs for business development  activities were partially off-set by
higher compensation costs during fiscal 2003.

     Our selling and marketing costs tend to be far more variable in relation to
sales,  although there are various exceptions.  Some of these exceptions include
the introduction of new products and the mix of international  sales to domestic
sales. For a product line experiencing introduction of a new product, costs will
tend to be higher as a percent  of sales due to higher  advertising  development
and sales  training  programs.  Our  Company's  international  sales are usually
discounted  and recorded at the net  discounted  price,  so that a change in mix
between  international  and domestic  sales may  influence  sales and  marketing
costs.  One other major  influence  on sales and  marketing  costs is the mix of
domestic  medical sales to all other domestic sales.  Domestic medical sales are
made by  direct  telemarketing  representatives,  which  gives  us a lower  cost
structure,  when  compared  to the  independent  representative  sales  channels
utilized by our other  products.  Going into fiscal 2006 the Company  expects to
continue to focus additional resources on its sales and marketing efforts.  This
plan calls for creation of a direct sales efforts in the domestic market for the
Company's  Datatrace  products during the first half of the new fiscal year, and
could lead to expense levels growing at a slightly faster rate than sales.

     In dollars,  selling costs were  $1,403,000  in fiscal 2005,  $1,211,000 in
fiscal 2004 and  $1,334,000 in fiscal 2003. As a percent of sales,  selling cost
were 14.0 percent in fiscal  2005,  13.3 percent in fiscal 2004 and 14.7 percent
in fiscal  2003.  The  increase in selling  expense  during  fiscal 2005 was due
chiefly to increased  compensation and bonus expense created by higher sales and
the  addition  of a new vice  president  of sales  and  marketing  position.  In
addition,  increases in variable costs,  such as commissions and travel expenses
increased during the year due to higher sales level. During fiscal 2004, most of
the decrease in selling  expense was due to a decrease in costs  associated with
the Datatrace  logging  products.  Part was due to decreased  commissions due to
lower sales and the remainder was due to lower bad debt expense. The decrease in
bad debt expense was due to higher receivables  collection in Europe,  which was
brought  about by the  increase  in the value of the Euro  compared  to the U.S.
Dollar.

 Research and Development

     Company  sponsored  research  and  development  cost was $358,000 in fiscal
2005,  $332,000 in fiscal 2004 and  $260,000 in fiscal  2003.  We are  currently
trying to execute a strategy  of  increasing  the flow of  internally  developed
products. This strategy has led to the introduction of two new Datatrace logging
products in fiscal 2004 and a third  Datatrace  logging  product early in fiscal
2005.  Currently,  research  and  development  efforts are in process to further
enhance  our  line  of  hand-held   dialysate   meters  with  a  new  generation
full-featured  meter  currently near  completion.  This has led to the increased
research and  development  spending  during fiscal 2005 and 2004.  During fiscal
2004,  besides  completing  the  Micropack  III  product for  temperature,  work
continued for humidity, pressure and 4-20 milliamp versions of the Micropack III
logger design.

 Net Income

     Net income  increased to $2,312,000 or $.74 per share on a diluted basis in
fiscal 2005 from $2,130,000 or $.68 per share on a diluted basis in fiscal 2004.
The  increase in net income  during  fiscal 2005 was due to higher  sales.  As a
percent of sales,  net income  increased at a rate  slightly less than the sales
increase  due to  increased  operating  expenses  during the second  half of the
fiscal year. The increase in operating  expenses were directly  attributable  to
compensation  and recruiting  costs associated with the creation and hiring of a
new Vice President of Sales and Marketing  position.  Approximately  $115,000 of
these  costs,  which were  incurred  during the second half of the fiscal  year,
would not be expected to recur in the next fiscal year.

     Net income increased to a record  $2,130,000 or $.68 per share on a diluted
basis in fiscal  2004 from  $2,127,000  or $.64 per share on a diluted  basis in
fiscal 2003.  Actual net income grew less than one percent  during  fiscal 2004,
but diluted  per share  profits  grew six  percent  from year to year due to the
higher  net  income  and lower  average  shares  outstanding.  The lower  shares
outstanding  were due to our  continuing  share buy back  program.  This program
continued  into the new  fiscal  year.  The  stock  repurchase  program  reduced
outstanding  common stock by 100,474  shares  during  fiscal  2004,  and allowed
diluted earnings per share to grow at a faster rate than net income.


 Liquidity and Capital Resources

     On March 31, 2005, we had cash and short term investments of $6,882,000. In
addition,  we had other current  assets  totaling  $4,241,000  and total current
assets of  $11,123,000.  Current  liabilities of our Company were $982,000 which
resulted in a current ratio of 11:1. For comparison  purposes at March 31, 2004,
we had cash and short term  investments of  $6,768,000,  other current assets of
$3,969,000, total current assets of $10,737,000, current liabilities of $657,000
and a current ratio of 16:1.

     Our Company has made capital acquisitions of $70,000 during fiscal 2005 and
$34,000  during  fiscal 2004.  We have  instituted a program to repurchase up to
300,000 shares of our outstanding  common stock.  Under the plan, the shares may
be  purchased  from time to time in the open market at  prevailing  prices or in
negotiated  transactions  off the market.  Shares purchased will be canceled and
repurchases  will be made with existing cash reserves.  We do not maintain a set
policy or schedule  for our buyback  program.  Most of our stock  buybacks  have
occurred  during  periods  when the  price to  earnings  multiple  has been near
historical low points, or during times when selling activity in the stock is out
of balance with buying demand.

     On November 12, 2003 our Board of  Directors  declared for the first time a
regular  quarterly  dividend of $.05 per share of common stock.  In addition the
Board of  Directors  declared a special  one time  dividend of $.15 per share of
common stock.  Both dividends were paid on December 15, 2003, to shareholders of
record on December 1, 2003.  For fiscal year 2004,  dividends  totaled  $.25 per
common share of stock. On December 15, 2004, the Company paid a regular $.06 per
common share quarterly  dividend and a $.20 per common share special dividend to
holders of record on  December  1, 2004.  The $.06  quarterly  dividend  paid in
December,  2004  represented  a $.01 per common share  increase to the quarterly
dividend rate. For fiscal year 2005,  dividends totaled $.42 per common share of
stock.

     Our  Company  invests  its  surplus  capital  in various  interest  bearing
instruments,  including money market funds,  short-term treasuries and municipal
bonds. All investments are fixed dollar investments with variable rates in order
to minimize the risk of principal loss. In some cases,  additional guarantees of
the investment principal are provided in the form of bank letters of credit.

     The Company does not currently  maintain a line of credit or any other form
of debt.  Nor does the  Company  guarantee  the debt of any  other  entity.  The
Company has maintained a long history of surplus cash flow from operations. This
surplus  cash  flow has been  used in the past to fund  acquisitions  and  stock
buybacks  and is  currently  being  partially  utilized  to  fund  our  on-going
dividend.  We are actively  investigating  opportunities  to acquire new product
lines or companies, for which we may utilize cash in the future.

 Contractual Obligations

     At March 31,  2005 our only  contractual  obligations  were  open  purchase
orders for routine  purchases of supplies and inventory,  which would be payable
in less than one year.

 Forward Looking Statements

     All statements  other than  statements of historical  fact included in this
annual  report  regarding  our  Company's  financial  position and operating and
strategic  initiatives and addressing industry  developments are forward-looking
statements.  Where,  in  any  forward-looking  statement,  the  Company,  or its
management,  expresses  an  expectation  or belief as to  future  results,  such
expectation  or  belief  is  expressed  in good  faith  and  believed  to have a
reasonable  basis,  but  there  can  be  no  assurance  that  the  statement  of
expectation or belief will result or be achieved or accomplished.  Factors which
could cause actual results to differ materially from those anticipated,  include
but are not limited to general  economic,  financial  and  business  conditions;
competition  in the data  logging  market;  competition  in the kidney  dialysis
market;  competition in the fluid measurement  market; the discontinuance of the
practice of dialyzer  reuse;  the business  abilities and judgment of personnel;
the impacts of unusual  items  resulting  from ongoing  evaluations  of business
strategies;  and changes in business strategy.  We do not intend to update these
forward looking statements. You are advised to review the "Additional Cautionary
Statements" section below for more information about risks that could affect the
financial results of Mesa Laboratories, Inc.



 Critical Accounting Policies and Estimates

     The  preparation of our financial  statements in conformity with accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and assumptions that affect the amounts reported in
our financial  statements and  accompanying  notes.  Actual results could differ
materially from those estimates.

     We believe that there are several accounting  policies that are critical to
understanding the Company's historical and future performance, as these policies
affect the reported amounts of revenue and the more significant  areas involving
management's  judgments and estimates.  These  significant  accounting  policies
relate to revenue  recognition,  research and  development  costs,  valuation of
inventory, and valuation of long-lived assets. These policies, and the Company's
procedures related to these policies, are described in detail below.

 Revenue Recognition

     We  sell  our  products  directly  through  our  sales  force  and  through
distributors.  Revenue  from  direct  sales of our  product is  recognized  upon
shipment to the  customer.  Revenue from ongoing  product  service and repair is
fully recognized upon completion and shipment of serviced product.

 Research & Development Costs

     Research  and  development  activities  consist  primarily  of new  product
development and continuing  engineering on existing  products.  Costs related to
research and development  efforts on existing or potential products are expensed
as incurred.

 Valuation of Inventories

     Inventories are stated at the lower of cost or market,  using the first-in,
first-out   method  (FIFO)  to  determine  cost.  The  Company's  policy  is  to
periodically evaluate the market value of the inventory and the stage of product
life cycle,  and record a reserve for any  inventory  considered  slow moving or
obsolete.  As of March 31, 2005 and 2004 the  Company had  recorded a reserve of
$90,000 and $55,000, respectively, against slow moving inventory.

 Valuation of Long-Lived Assets and Goodwill

     The Company assesses the realizable value of long-lived assets and goodwill
for  potential  impairment  at least  annually or when events and  circumstances
warrant such a review.  The carrying  value of a long-lived  asset is considered
impaired when the  anticipated  fair value is less than its carrying  value.  In
assessing the recoverability of our long-lived assets and goodwill, we must make
assumptions regarding estimated future cash flows and other factors to determine
the fair value of the respective  assets. In addition,  we must make assumptions
regarding the useful lives of these  assets.  As of March 31, 2005, we evaluated
our long-lived  assets for potential  impairment.  Based on our  evaluation,  no
impairment charge was recognized.

     The above listing is not intended to be a comprehensive  list of all of our
accounting  policies.  In many cases,  the accounting  treatment of a particular
transaction  is  specifically  dictated  by  accounting  principles,   generally
accepted in the United States of America, with no need for management's judgment
in their  application.  There are also areas in which  management's  judgment in
selecting  any  viable  alternative  would not  produce a  materially  different
result.  See our audited  financial  statements and notes thereto which begin at
"Item 7.  Financial  Statements"  of this  Annual  Report on Form  10-KSB  which
contain  accounting  policies  and  other  disclosures  required  by  accounting
principles, generally accepted in the United States of America.

 Additional Cautionary Statements

 We Face Intense Competition.

     The markets for some of our current and  potential  products are  intensely
competitive.  We face  competition from companies that possess both larger sales
forces and  possess  more  capital  resources.  In  addition,  there are growing
numbers of competitors for certain of our products.

Our Growth  Depends on  Introducing  New Products and the Efforts of Third Party
Distributors.

     Our growth  depends on the  acceptance of our products in the  marketplace,
the  penetration  achieved  by the  companies  which we sell to, and rely on, to
distribute  and  represent  our  products,  and our ability to introduce new and
innovative  products that meet the needs of the various markets we serve.  There
can be no  assurance  that we will be able  to  continue  to  introduce  new and
innovative products or that the products we introduce, or have introduced,  will
be widely accepted by the  marketplace,  or that the companies which we contract
with to distribute  and  represent  our products  will continue to  successfully
penetrate our various markets. Our failure to continue to introduce new products
or gain wide  spread  acceptance  of our  products  would  adversely  affect our
operations.

 We Depend on Attracting New Distributors and Representatives for Our Products.

     In order to successfully commercialize our products in new markets, we will
need  to  enter  into   distribution   arrangements   with  companies  that  can
successfully distribute and represent our products into various markets.

Our Products are Extensively Regulated Which Could Delay Product Introduction or
Halt Sales.

     The process of obtaining and maintaining  required regulatory  approvals is
lengthy,  expensive  and  uncertain.   Although  we  have  not  experienced  any
substantial  regulatory  delays to date,  there is no assurance that delays will
not occur in the future,  which could have a significant  adverse  effect on our
ability  to  introduce  new  products  on a timely  basis.  Regulatory  agencies
periodically  inspect our manufacturing  facilities to ascertain compliance with
"good  manufacturing  practices" and can subject approved products to additional
testing and surveillance programs.  Failure to comply with applicable regulatory
requirements can, among other things, result in fines,  suspension of regulatory
approvals, product recalls, operating restrictions and criminal penalties. While
we  believe  that we are  currently  in  compliance,  if we fail to comply  with
regulatory  requirements,  it could  have an  adverse  effect on our  results of
operations and financial condition.

 We May be Unable to Effectively Protect Our Intellectual Property.

     Our  ability  to compete  effectively  depends  in part on  developing  and
maintaining the proprietary  aspects of our technology and processes.  We cannot
assure you that the patents we have obtained, or any patents we may obtain, will
provide any competitive  advantages for our products.  We also cannot assure you
that  those  patents  will  not  be  successfully  challenged,   invalidated  or
circumvented in the future. In addition,  we cannot assure you that competitors,
many of which have substantial  resources and have made substantial  investments
in competing technologies, have not already applied for or obtained, or will not
seek to apply for or obtain,  patents that will prevent, limit or interfere with
our ability to make, use and sell our products either in the United States or in
international  markets.  Patent  applications  are  maintained  in secrecy for a
period  after  filing.  We may not be aware  of all of the  patents  and  patent
applications potentially adverse to our interests.

 We May Have Product Liability Claims.

     Our  products  involve a risk of  product  liability  claims.  Although  we
maintain  product  liability  insurance at coverage  levels which we believe are
adequate,  there is no assurance that, if we were to incur substantial liability
for product liability claims,  insurance would provide adequate coverage against
such liability.

Our  Company  faces  challenges  in  complying  with  certain  sections  of  the
Sarbanes-Oxley Act.

     Like many  smaller  public  companies,  our  Company  faces  challenges  in
complying  with  the  internal  control   requirements   (Section  404)  of  the
Sarbanes-Oxley  Act.  Under current  frameworks,  compliance  in areas,  such as
separation of duties,  information  system controls,  etc. may prove problematic
for a smaller  company with  limited  human  resources.  Our Company may also be
forced  to incur  significant  expense  in order to  comply  with the law  under
current control frameworks and deadlines for implementation.

 Changing Accounting Regulation May Affect Operating Results.

     Our Operating results may be adversely  affected by new laws and accounting
regulations   that  have  either  been  recently  enacted  or  which  are  under
consideration and may include the following:

*    various regulations of the Sarbanes-Oxley Act, and
*    the  mandatory  expensing  of  employee  stock  options as  proposed by the
     Financial Accounting Standards Board.

 Our Operating Results May Fluctuate.

     Our results of  operations  may  fluctuate  significantly  from  quarter to
quarter based on numerous factors including the following:
*    the introduction of new products;
*    the level of market acceptance of our products;
*    achievement of research and development milestones;
*    timing of the  receipt  of  orders  from,  and  product  shipment  to major
     customers;
*    timing of expenditures;
*    delays in educating  and training our  distributors'  and  representatives'
     sales forces;
*    manufacturing or supply delays;
*    product returns;
*    receipt of necessary regulation approval;
*    costs  associated with  implementing  and  maintaining  compliance with the
     Sarbanes-Oxley Act; and
*    costs associated with expansion of the Company's direct sales capabilities.

 Changing Industry Trends May Affect Operating Results.

     Various  changes within the industries we serve may limit future demand for
our products and may include the following:

*    increasing usage of single use dialyzers;
*    changes in dialysis reimbursements;
*    increased availability of donated organs; and
*    mergers  within the  dialysis  provider  industry may make the Company more
     dependent upon fewer large customers for its sales.


 ITEM 7.  FINANCIAL STATEMENTS.



                                TABLE OF CONTENTS


 Report of Independent Registered Public Accounting Firm

 Financial Statements:

Balance Sheets

Statements of Income

Statement of Stockholders' Equity

Statements of Cash Flows

Notes to Financial Statements





             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



 Board of Directors and Stockholders
 Mesa Laboratories, Inc.
 Lakewood, Colorado

We have audited the accompanying balance sheets of Mesa Laboratories, Inc. as of
March 31, 2005 and 2004,  and the related  statements  of income,  stockholders'
equity, and cash flows for the years then ended. These financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements  are free of material  misstatement.  The Company is not  required to
have,  nor were we engaged to perform,  an audit of its  internal  control  over
financial reporting.  Our audit included  consideration of internal control over
financial  reporting  as  a  basis  for  designing  audit  procedures  that  are
appropriate  in the  circumstances,  but not for the  purpose of  expressing  an
opinion on the  effectiveness  of the Company's  internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a  test  basis,  evidence  supporting  the  amounts  and  disclosures  in the
financial statements. An audit also includes assessing the accounting principles
used and  significant  estimates made by  management,  as well as evaluating the
overall financial statement  presentation.  We believe that our audits provide a
reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Mesa Laboratories,  Inc. as of
March 31, 2005 and 2004,  and the results of its  operations  and its cash flows
for the years then ended,  in conformity with  accounting  principles  generally
accepted in the United States of America.

                                         /s/ Ehrhardt Keefe Steiner & Hottman PC
                                             Ehrhardt Keefe Steiner & Hottman PC
 April 29, 2005
 Denver, Colorado




                             MESA LABORATORIES, INC.
                                 BALANCE SHEETS

                                     ASSETS
                                                              March 31,
                                                     ---------------------------
                                                         2005            2004
                                                     -----------     -----------
CURRENT ASSETS:
  Cash and cash equivalents ....................     $ 4,978,000     $ 4,670,000
  Short-term investments .......................       1,904,000       2,098,000
  Accounts receivable -
    Trade, net of allowance for doubtful
      accounts of $45,000 (2005) and
      $40,000 (2004) ...........................       1,972,000       1,581,000

    Other ......................................          20,000          22,000
  Inventories, net .............................       1,941,000       2,099,000
  Prepaid expenses and other ...................         184,000         158,000

  Deferred income taxes ........................         124,000         109,000
                                                     -----------     -----------
TOTAL CURRENT ASSETS ...........................      11,123,000      10,737,000

PROPERTY, PLANT AND EQUIPMENT, net .............       1,265,000       1,285,000


OTHER ASSETS:
    Goodwill ...................................       4,208,000       4,208,000
                                                     -----------     -----------
                                                     $16,596,000     $16,230,000
                                                     ===========     ===========

                       See notes to financial statements.



                             MESA LABORATORIES, INC.
                                 BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                  March 31,
                                                         ---------------------------
                                                             2005            2004
                                                         -----------     -----------
CURRENT LIABILITIES:
  Accounts payable, trade ............................   $   262,000   $   110,000
  Accrued salaries and payroll taxes .................       558,000       409,000
  Accrued warranty expense ...........................        15,000        15,000
  Other accrued liabilities ..........................        75,000        53,000
  Taxes payable ......................................        72,000        70,000
                                                         -----------   -----------
TOTAL CURRENT LIABILITIES ............................       982,000       657,000

LONG TERM LIABILITIES:
  Deferred income taxes ..............................       235,000       189,000

COMMITMENTS

STOCKHOLDERS' EQUITY:
  Preferred stock, no par value;
    authorized 1,000,000 shares; none
    issued ...........................................          --            --
  Common stock, no par value; authorized
    8,000,000 shares; issued and
    outstanding, 3,038,822 (2005) and 3,072,815 (2004)     1,335,000     1,330,000
  Retained earnings ..................................    14,044,000    14,054,000
                                                         -----------   -----------
  TOTAL STOCKHOLDERS' EQUITY .........................    15,379,000    15,384,000
                                                         -----------   -----------
                                                         $16,596,000   $16,230,000
                                                         ===========   ===========

                       See notes to financial statements.



                             MESA LABORATORIES, INC.
                              STATEMENTS OF INCOME


                                                 Years Ended March 31,
                                              -------------------------
                                                  2005         2004
                                              -----------   -----------

Sales .....................................   $10,041,000   $ 9,126,000
Cost of sales .............................     3,721,000     3,428,000
                                              -----------   -----------
Gross profit ..............................     6,320,000     5,698,000
                                              -----------   -----------

Operating expenses:
  Selling .................................     1,403,000     1,211,000
  General and administrative ..............     1,084,000       906,000
  Research and development ................       358,000       332,000
                                              -----------   -----------
Total operating expenses ..................     2,845,000     2,449,000
                                              -----------   -----------

Operating income ..........................     3,475,000     3,249,000
Interest income ...........................        98,000        50,000
                                              -----------   -----------
Earnings before income taxes ..............     3,573,000     3,299,000

Income taxes ..............................     1,261,000     1,169,000
                                              -----------   -----------

Net income ................................   $ 2,312,000   $ 2,130,000
                                              ===========   ===========

  Net income per share (basic) ............   $       .76   $       .70
                                              ===========   ===========

  Net income per share (diluted) ..........   $       .74   $       .68
                                              ===========   ===========

Average common shares outstanding - basic .     3,060,000     3,055,000
                                              ===========   ===========

Average common shares outstanding - diluted     3,136,000     3,138,000
                                              ===========   ===========

                       See notes to financial statements.






                             MESA LABORATORIES, INC.
                        STATEMENT OF STOCKHOLDERS' EQUITY

                                          Common Stock
                                  ----------------------------
                                                                                     Total
                                    Number of                       Retained      Stockholders'
                                     Shares          Amount         Earnings         Equity
                                  ------------    ------------    ------------    ------------

BALANCE, March 31, 2003 .......      3,078,168    $  1,286,000    $ 13,201,000    $ 14,487,000

Common stock issued for the
  conversion of incentive
  stock options net of 38,582
  shares returned to Company
  as payment ..................         95,121         297,000            --           297,000

Purchase and retirement of
  treasury stock ..............       (100,474)       (293,000)       (507,000)       (800,000)

Dividends paid ($.25 per share)           --              --          (770,000)       (770,000)

Tax benefit on exercise of
  nonqualified stock options ..           --            40,000            --            40,000

Net income for the year .......           --              --         2,130,000       2,130,000
                                  ------------    ------------    ------------    ------------

BALANCE, March 31, 2004 .......      3,072,815       1,330,000      14,054,000      15,384,000

Common stock issued for the
  conversion of incentive
  stock options net of 31,534
  shares returned to Company
  as payment ..................         65,169         120,000            --           120,000

Purchase and retirement of
  treasury stock ..............        (99,162)       (115,000)     (1,040,000)     (1,155,000)

Dividends paid ($.42 per share)           --              --        (1,282,000)     (1,282,000)

Net income for the year .......           --              --         2,312,000       2,312,000
                                  ------------    ------------    ------------    ------------

BALANCE, March 31, 2005 .......      3,038,822    $  1,335,000    $ 14,044,000    $ 15,379,000
                                  ============    ============    ============    ============


                       See notes to financial statements.


                             MESA LABORATORIES, INC.
                            STATEMENTS OF CASH FLOWS


                                                                      Years Ended  March 31,
                                                                    --------------------------
                                                                       2005            2004
                                                                    -----------    -----------
Cash flows from operating activities:
  Net income ....................................................   $ 2,312,000    $ 2,130,000
  Depreciation and amortization .................................        90,000         97,000
  Allowance for bad debt ........................................         5,000        (10,000)
  Provision for inventory reserve ...............................        35,000        (55,000)
  Deferred income taxes .........................................        31,000        109,000
  Tax benefit of nonqualified stock options .....................          --           40,000
Change in assets and liabilities-
     (Increase) decrease in accounts receivable .................      (394,000)       688,000
     (Increase) decrease in inventories .........................       123,000        285,000
     (Increase) decrease in prepaid expenses ....................       (26,000)       (41,000)
     Increase (decrease) in accounts payable, trade .............       152,000         (8,000)
     Increase (decrease) in accrued liabilities and taxes payable       173,000         79,000
                                                                    -----------    -----------
Net cash provided by operating activities .......................     2,501,000      3,314,000
                                                                    -----------    -----------

Cash flows from investing activities:
  Short-term investments purchased ..............................      (996,000)    (2,098,000)
  Short-term investments redeemed ...............................     1,190,000           --
  Capital expenditures ..........................................       (70,000)       (34,000)
                                                                    -----------    -----------
Net cash (used) provided by investing activities ................       124,000     (2,132,000)
                                                                    -----------    -----------

Cash flow from financing activities:
  Dividends paid ................................................    (1,282,000)      (770,000)
  Net proceeds from issuance of stock ...........................       120,000        297,000
  Common stock repurchases ......................................    (1,155,000)      (800,000)
                                                                    -----------    -----------
Net cash used by financing activities ...........................    (2,317,000)    (1,273,000)
                                                                    -----------    -----------

Net increase (decrease) in cash and cash equivalents ............       308,000        (91,000)

Cash and cash equivalents at
  beginning of year .............................................     4,670,000      4,761,000
                                                                    -----------    -----------

Cash and cash equivalents at
  end of year ...................................................   $ 4,978,000    $ 4,670,000
                                                                    ===========    ===========

Supplemental disclosures of cash flow information:
Cash paid during the year for:
  Income taxes ..................................................   $ 1,251,000    $ 1,073,000
                                                                    ===========    ===========

                       See notes to financial statements.


                             MESA LABORATORIES, INC.
                          NOTES TO FINANCIAL STATEMENTS

1.   Summary of Significant Accounting Policies:

General - Mesa  Laboratories,  Inc. was incorporated under the laws of the State
of Colorado on March 26, 1982, for the purpose of designing,  manufacturing  and
marketing electronic instruments and supplies.

Concentration of Credit Risk - Financial  instruments which potentially  subject
the Company to  concentrations  of credit risk  consist of money  market  funds,
short-term  investments and accounts  receivable.  The Company invests primarily
all of its excess cash in money market funds administered by reputable financial
institutions,  debt  instruments  of  the  U.S.  government  and  its  agencies,
adjustable  rate, fixed dollar municipal debt and grants credit to its customers
who are located throughout the United States and several foreign  countries.  To
reduce  credit risk,  the Company  periodically  evaluates the money market fund
administrators  and performs  credit  analysis of customers  and monitors  their
financial condition.  Additionally,  the Company maintains cash balances in bank
deposit  accounts  which, at times,  may exceed  federally  insured limits.  The
Company has not experienced any losses in such accounts.

During  the  fiscal  year  ended  March  31,  2005,  one  customer   represented
approximately  15%  of  the  Company's  revenues  and  approximately  9% of  the
Company's accounts  receivable  balance.  During the fiscal year ended March 31,
2004 one customer  represented  approximately 12% of the Company's  revenues and
approximately 11% of the Company's account receivable balances.

Cash Equivalents - Cash equivalents  include all highly liquid  investments with
an original maturity of three months or less.

Short-term  investments - Short-term  investments  consist of U.S Treasury bills
and  municipal  bonds and are  classified as  "available  for sale."  Short-term
investments are carried in the financial  statements at cost, which approximates
fair value.

Accounts  Receivable  - At the time the  accounts  are  originated,  the Company
considers a reserve for doubtful accounts based on the  creditworthiness  of the
customer.  The provision for uncollectible  amounts is continually  reviewed and
adjusted to  maintain  the  allowance  at a level  considered  adequate to cover
future  losses.  The allowance is  management's  best estimate of  uncollectible
amounts and is determined based on historical performance that is tracked by the
Company on an  ongoing  basis.  The  losses  ultimately  incurred  could  differ
materially  in the near term  from the  amounts  estimated  in  determining  the
allowance.

Inventories - Inventories  are stated at the lower of cost or market,  using the
first-in,  first-out method (FIFO) to determine cost. The Company's policy is to
periodically evaluate the market value of the inventory and the stage of product
life cycle,  and record a reserve for any  inventory  considered  slow moving or
obsolete.  As of March 31, 2005 and 2004 the  Company had  recorded a reserve of
$90,000 and $55,000, respectively, against slow moving inventory.

Property,  Plant and  Equipment -  Property,  plant and  equipment  is stated at
acquisition   cost.   Depreciation   and  amortization  is  provided  using  the
straight-line  method over the  estimated  useful lives of three to  thirty-nine
years.

Goodwill - Goodwill, which resulted from the acquisitions of Nusonics, Datatrace
and Automata,  is no longer subject to amortization,  and is tested annually for
impairment  in  accordance  with  Statement  of Financial  Accounting  Standards
("SFAS") No. 142 "Goodwill and Intangible Assets."

Valuation of Long-Lived  Assets - The Company  assesses the realizable  value of
long-lived  assets and goodwill for potential  impairment  at least  annually or
when events and  circumstances  warrant such a review.  The carrying  value of a
long-lived asset is considered  impaired when the anticipated fair value is less
than its carrying  value.  In assessing  the  recoverability  of our  long-lived
assets and goodwill,  we must make assumptions  regarding  estimated future cash
flows and other factors to determine the fair value of the respective assets. In
addition,  we must make assumptions  regarding the useful lives of these assets.
As of  March  31,  2005,  we  evaluated  our  long-lived  assets  for  potential
impairment. Based on our evaluation, no impairment charge was recognized.

Revenue  Recognition  - Revenue is  recognized  when  persuasive  evidence of an
arrangement  exists, when title and risk of ownership passes, the sales price is
fixed or determinable,  and  collectibility is probable.  The Company recognizes
revenues at the time products are shipped.  Revenue from ongoing product service
and repair is fully recognized upon completion and shipment of serviced product.

Sales  to  distributors  are  made at  their  net  discounted  price.  This  net
discounted  price is net of any volume pricing that may be available.  Customers
who may be unsure of the  appropriateness  of our products for their application
are offered demonstration equipment prior to purchase, thus no return rights are
extended.  Products  are built to customer  order and no price  protections  are
offered.  The Company does not conduct a rebate or other  incentive  programs at
this time.

Other than normal and customary on-going customer service,  the Company does not
have  any  post  shipment  contractual  obligations  to its  customers,  such as
installation, training, etc.

Research & Development Costs - Costs related to research and development efforts
on  existing or  potential  products  are  expensed as  incurred.  Research  and
development  costs for the  fiscal  years  ended  March  31,  2005 and 2004 were
$358,000 and $332,000, respectively.

Accrued  Warranty Expense - The Company provides limited product warranty on its
products and,  accordingly,  accrues an estimate of the related warranty expense
at the time of sale.

Advertising  Costs -  Advertising  costs are expensed as  incurred.  Advertising
costs for the years ended March 31, 2005 and 2004 were  $138,000  and  $138,000,
respectively.

Income Taxes - The Company accounts for income taxes under the liability method,
which  requires  an entity to  recognize  deferred  tax assets and  liabilities.
Temporary  differences  are  differences  between  the tax basis of  assets  and
liabilities  and their reported  amounts in the financial  statements  that will
result in taxable or deductible amounts in future years.

Earnings Per Share - Basic  earnings per share is  calculated  using the average
number of common shares  outstanding.  Diluted earnings per share is computed on
the basis of the average number of common shares  outstanding plus the effect of
outstanding stock options using the treasury stock method,  which totaled 76,000
and 83,000 additional shares in 2005 and 2004, respectively.

Stock  based  compensation  - At March 31,  2005,  the  Company  has stock based
compensation  plans,  which are described  more fully in Note 7. The Company has
adopted the  disclosure-only  provisions  of Statement  of Financial  Accounting
Standards No. 123, "Accounting for Stock-Based  Compensation."  Accordingly,  no
compensation   cost  has  been  recognized  for  the  stock  option  plans.  Had
compensation  cost for the Company's stock option plans been determined based on
the fair value at the grant date for awards in 2005 and 2004 consistent with the
provisions  of SFAS No. 123, the  Company's  net earnings and earnings per share
would have been reduced to the pro forma amount indicated below:

                                                                   March 31,
                                                        -------------------------------
                                                             2005              2004
                                                        --------------    -------------
Net income - as reported ............................   $   2,312,000     $   2,130,000
Add:  Stock based employee compensation expense
   included in net income, net of related tax effects            --               --
Less: Total stock based compensation expense
    determined under fair value based method for
     all awards net of related tax effects ..........        (109,000)          (90,000)
                                                        --------------    -------------
Net income - pro forma ..............................   $    2,203,000    $   2,040,000

Income per diluted share - as reported ..............   $          .76    $         .70
Income per diluted share - pro forma ................   $          .72    $         .67
Income per diluted share - as reported ..............   $          .74    $         .68
Income per diluted share - pro forma ................   $          .70    $         .65
 
The fair value of each option  grant is estimated on the date of grant using the
Black-Scholes   option-pricing   model  with  the   following   weighted-average
assumptions  used for grants:  dividend yield of  approximately  3.6% (2005) and
2.1% (2004); expected volatility of approximately 19%-29% (2005) and 29% (2004);
discount rate of 3.35%-4.62%  (2005) and 3.0% (2004); and expected lives of 5 to
10 years.

Basic net income per common  share is  computed  by  dividing  net income by the
weighted average number of shares of common stock outstanding during the period.
Diluted net income per common share is computed  using the treasury stock method
to compute the weighted average common stock outstanding assuming the conversion
of  potential   dilutive   common  shares.   The  following   table  presents  a
reconciliation  of the  denominators  used in the  computation of net income per
common  share-- basic and net income per common  share--  diluted for the twelve
month periods ended March 31, 2005 and 2004:

                                           Twelve Months Ended
                                               March 31,
                                        -----------------------
                                           2005         2004
                                        ----------   ----------

Net income available for shareholders   $2,312,000   $2,130,000
Weighted avg. outstanding shares
 of common stock ....................    3,060,000    3,055,000
Dilutive effect of stock options ....       76,000       83,000
                                        ----------   ----------

Common stock and equivalents ........    3,136,000    3,138,000

Earnings per share:
Basic ...............................   $      .76   $      .70
Diluted .............................   $      .74   $      .68

For the twelve months ended March 31, 2005 and 2004, no shares  attributable  to
outstanding stock options were excluded from the calculation of diluted earnings
per share because the exercise  prices of the stock options were greater than or
equal to the average price of the common shares,  and therefore  their inclusion
would have been anti-dilutive.

Use of Estimates - The  preparation of financial  statements in conformity  with
accounting  principles  generally  accepted  in the  United  States  of  America
requires  management to make estimates and assumptions  that affect the reported
amounts  of assets and  liabilities  and  disclosure  of  contingent  assets and
liabilities at the date of the financial  statements and the reported amounts of
revenues and expenses during the reporting  period.  Actual results could differ
from those estimates.

Fair  Value  of  Financial  Instruments  -  The  carrying  amount  of  financial
instruments including cash and cash equivalents, accounts receivable, short-term
investments, accounts payable and accrued expenses approximated fair value as of
March 31, 2005 because of the relatively short maturity of these instruments.

Recently Issued  Accounting  Pronouncements  - In December 2004, the FASB issued
Statement 123 (revised  2004),  Share-Based  Payment  (Statement  123(R)).  This
Statement requires that the costs of employee  share-based  payments be measured
at fair  value on the  awards'  grant  date  using an  option-pricing  model and
recognized in the financial  statements over the requisite service period.  This
Statement does not change the accounting for stock  ownership  plans,  which are
subject  to  American  Institute  of  Certified  Public  Accountants  SOP  93-6,
"Employer's  Accounting for Employee Stock Ownership  Plans."  Statement  123(R)
supersedes  Opinion 25, Accounting for Stock Issued to Employees and its related
interpretations,  and eliminates  the  alternative to use Opinion 25's intrinsic
value method of accounting, which the Company is currently using.

Statement 123(R) allows for two alternative transition methods. The first method
is the  modified  prospective  application  whereby  compensation  cost  for the
portion of awards for which the requisite service has not yet been rendered that
are  outstanding  as of the adoption date will be recognized  over the remaining
service period.  The compensation  cost for that portion of awards will be based
on the  grant-date  fair  value of those  awards  as  calculated  for pro  forma
disclosures under Statement 123, as originally issued. All new awards and awards
that are  modified,  repurchased,  or cancelled  after the adoption date will be
accounted for under the provisions of Statement 123(R). The second method is the
modified  retrospective  application,  which requires that the Company  restates
prior period financial statements. The modified retrospective application may be
applied either to all prior periods or only to prior interim periods in the year
of  adoption  of this  statement.  The Company is  currently  determining  which
transition  method it will adopt and is evaluating the impact  Statement  123(R)
will have on its financial position,  results of operations,  EPS and cash flows
when the Statement is adopted.

In November 2004, the FASB issued SFAS No. 151,  "Inventory Costs - an amendment
of ARB No. 43" ("FAS 151"),  which is the result of its efforts to converge U.S.
accounting  standards for inventories with International  Accounting  Standards.
FAS No. 151 requires idle facility expenses, freight, handling costs, and wasted
material  (spoilage) costs to be recognized as current-period  charges.  It also
requires  that  allocation  of  fixed  production  overheads  to  the  costs  of
conversion be based on the normal capacity of the production facilities. FAS No.
151 will be effective for inventory costs incurred during fiscal years beginning
after June 15, 2005.  The Company has  evaluated  the impact of this standard on
the consolidated financial statements,  and has determined that the current idle
plant  capacity has been  accounted for  properly.  In December  2004,  the FASB
issued SFAS No. 153 "Exchanges of Nonmonetary  Assets-- amendment of APB Opinion
No. 29".  Statement 153  eliminates the exception to fair value for exchanges of
similar  productive assets and replaces it with a general exception for exchange
transactions that do not have commercial substance, defined as transactions that
are not  expected  to result in  significant  changes  in the cash  flows of the
reporting  entity.  This  statement is effective  for  exchanges of  nonmonetary
assets  occurring  after June 15, 2005.  The  adoption of this  statement is not
expected to have a material impact on the Company's financial position,  results
of operations, or cash flows.

2. Inventories:

         Inventories consist of the following:


                            March 31,
                  --------------------------
                      2005           2004
                  -----------    -----------

Raw materials .   $ 1,690,000    $ 1,648,000
Work-in-process       174,000        335,000
Finished goods        167,000        171,000
Less reserve ..       (90,000)       (55,000)
                  -----------    -----------
                  $ 1,941,000    $ 2,099,000
                  ===========    ===========

Work-in-process  and  finished  goods  include raw  materials,  direct labor and
manufacturing overhead at March 31, 2005 and 2004.

3.   Property, Plant and Equipment:

Property, plant and equipment consist of the following:

                                        March 31,
                                --------------------------
                                    2005           2004
                                -----------    -----------

Land ........................   $   148,000    $   148,000
Building ....................     1,260,000      1,260,000
Manufacturing equipment .....     1,268,000      1,228,000
Computer equipment ..........       329,000        301,000
Furniture and fixtures ......        75,000         74,000
                                -----------    -----------
                                  3,080,000      3,011,000
Less accumulated depreciation    (1,815,000)    (1,726,000)
                                -----------    -----------
                                $ 1,265,000    $ 1,285,000
                                ===========    ===========


4. Income Taxes:

The  components  of the provision for income taxes for the years ended March 31,
2005 and 2004 are as follows:

                                      March 31,
                              -----------------------
                                  2005         2004
                              ----------   ----------
  Current tax provision:
     Federal ...              $1,076,000   $  930,000
     State .....                 149,000      131,000
                              ----------   ----------
                               1,225,000    1,061,000
                              ----------   ----------
  Deferred tax provision:
     Federal ...                  32,000       95,000
     State .....                   4,000       13,000
                              ----------   ----------
                                  36,000      108,000
                              ----------   ----------

                              $1,261,000   $1,169,000
                              ==========   ==========

Deferred  taxes result from temporary  differences in the  recognition of income
and expenses for  financial and income tax  reporting  purposes and  differences
between the fair value of assets acquired in business combinations accounted for
as a purchase and their tax bases. The components of net deferred tax assets and
liabilities as of March 31, 2005 and 2004 are as follows:

                                        March 31,
                                 ----------------------
                                    2005         2004
                                 ---------    ---------

Depreciation and amortization    $(245,000)   $(189,000)
Accrued vacation .............      64,000       56,000
Bad debt expense .............      15,000       14,000
Inventory reserve ............      31,000       19,000
Warranty reserve .............       5,000        5,000
Other ........................      19,000       15,000
                                 ---------    ---------
Net deferred (liability)/asset   $(111,000)   $ (80,000)
                                 =========    =========

A reconciliation of the Company's income tax provision for the years ended March
31, 2005 and 2004,  and the amounts  computed  by  applying  statutory  rates to
income before income taxes is as follows:

                                               March 31,
                                      --------------------------
                                          2005            2004
                                      -----------    -----------

Income taxes at statutory rates ...   $ 1,257,000    $ 1,220,000
State income taxes,
   net of federal benefit .........       114,000         99,000
Foreign sales corporation exemption       (47,000)       (49,000)
Other .............................       (63,000)      (101,000)
                                      -----------    -----------
                                      $ 1,261,000    $ 1,169,000
                                      ===========    ===========

5.   Stock Repurchase:

In June, 2003, the Company's Board of Directors approved a program to repurchase
up to 300,000 shares of its outstanding common stock. Under the program,  shares
may be purchased from time to time in the open market at prevailing prices or in
negotiated  transactions off the market.  Shares purchased will be cancelled and
repurchase of shares will be funded through existing cash reserves.

6.   Employee Benefit Plan:

The Company adopted a 401(k) plan effective  January 1, 2000.  Participation  is
voluntary  and  employees  are eligible to  participate  at age 21 and after six
months of employment with the Company. The Company matches 50% of the employee's
contribution  up to 6% of the  employees  salary.  A  participant  vests  in the
Company's  contributions  at a rate of 25% per year, fully vesting at the end of
the participant's fourth year of service. The Company contributed $58,000 to the
plan for fiscal 2005 and $51,000 for fiscal 2004.

7.   Stockholders' Equity:

The State of Colorado has  eliminated  the ability of Colorado  corporations  to
retain  treasury  stock.  As a result,  the Company  reduced common stock to its
average share value and further reduced  retained  earnings for the remainder of
the cost of treasury  stock  acquired in each  fiscal  year.  In the most recent
fiscal year,  management  estimated that approximately 10% of the price paid for
repurchased  shares was  attributable to the original  purchase of common stock,
while the remainder was charged to retained earnings.

The Company  has adopted  incentive  stock  option  plans for the benefit of the
Company's key  employees,  excluding its outside  directors.  Under terms of the
plans,  options  are granted at an amount not less than 100% of the bid price of
the underlying  shares at the date of grant.  Options are exercisable for a term
of five years and, during such term, may be exercised as follows: 25% after each
year, and 100% anytime after the fourth year until the end of the fifth year.

On October 3, 1996, the Company adopted a nonqualified  performance stock option
plan for the benefit of the Company's outside Directors.  The plan provides that
the outside  Directors  will receive grants to be determined and approved by the
Company's  inside  Directors  and not to  exceed  20,000  options  per  year per
director. Under the terms of the plan, the options are exercisable for a term of
ten years and, during such term are exercisable as follows: 25% after each year,
and 100%  anytime  after the fourth  year until the end of the tenth  year.  The
purchase price of the common stock will be equal to 100% of the closing price of
the common stock on the over-the-counter market on the date of grant.

On October 21, 1999,  the Company  adopted a new stock  compensation  plan.  The
purpose of the plan is to encourage ownership of the Common Stock of the Company
by certain officers, directors, employees and certain advisors of the Company in
order to provide incentive to promote the success and business of the Company. A
total of 300,000  shares of Common Stock were  reserved  for issuance  under the
plan and are subject to terms as set by the Compensation  Committee of the Board
of  Directors  at the time of grant.  On  October  18,  2004,  the  shareholders
approved an amendment  to the plan to reserve an  additional  200,000  shares of
Common Stock for issuance under the plan.

All option plans have been approved by the stockholders of the Company.

The following is a summary of options granted under the plans:

                                                      FY 2005                               FY 2004
                                        ----------------------------------    ------------------------------------
                                                            WEIGHTED -                               WEIGHTED -
                                                          AVG EXERCISE                            AVG EXERCISE
                                            SHARES            PRICE                SHARES             PRICE
         Options outstanding at
           beginning of year                265,070            $5.77               323,295            $4.98
         Options granted                     93,600           $10.64                77,600            $7.28
         Options cancelled                  (20,200)           $7.08                (2,122)           $5.33
         Options exercised                  (96,703)           $5.07              (133,703)           $4.74
                                        -----------                               --------
         Options outstanding at
           end of year                      241,767            $7.82               265,070            $5.77
                                        ===========                               ========

         Options exercisable at
           end of year                       54,459            $5.80                77,595            $4.93

         Shares available for
          future option grant               263,700                                139,100


The following is a summary of information about stock options  outstanding as of
March 31, 2005:

                                               Options Outstanding                          Options Exercisable
                               -----------------------------------------------       -----------------------------
                                             Weighted - Average                     Weighted -
            Range of             Number           Remaining       Weighted -          Number           Average
            Exercise         Outstanding as      Contractual       Average       Exercisable as of      Exercise
             Prices             of 03/31/05      Life in Years  Exercise Price        03/31/05           Price
             ------             -----------      -------------  --------------   -----------------     -----------

         $3.75 - $ 5.91          86,067              4.1              $5.31            39,334           $5.21
         $6.26 - $ 7.00          58,500              4.6              $6.99            12,625           $6.99
         $9.20 - $13.03          97,200              5.8             $10.55             2,500           $9.20
         --------------         -------              ----            ------          --------          -------
         $3.75 - $13.03         241,767              4.9             $ 7.82            54,459           $5.80
         ==============         =======              ====            ======          ========          ======


8.   Segment Data:

The Company  adopted SFAS No. 131,  Disclosures  about Segments of an Enterprise
and Related Information.  FAS 131 designates the internal reporting that is used
by management for making  operating  decisions and assessing  performance as the
source of the Company's  reportable  segments.  FAS 131 also requires disclosure
about products and sources,  geographic areas and major  customers.  The Company
aggregates  its  segments  as  one  reportable  segment  based  on  the  similar
characteristics of their operations.

Revenues  related to operations in the U.S. and foreign  countries for the years
ended March 31, 2005 and 2004,  are  presented  below.  Revenues  from  external
customers are attributed to individual  countries  based upon locations to which
the product is shipped or  exported.  Long-lived  assets  related to  continuing
operations  in the U.S.  and foreign  countries  as of the years ended March 31,
2005 and 2004, are as follows:

                                                       Years Ended March 31,
                                                     -----------------------
                                                        2005         2004
                                                     ----------   ----------
Net revenues from unaffiliated customers:
         United States ...........................   $7,113,000   $6,598,000
         Foreign (no country exceeds 10% of total)   $2,928,000   $2,528,000

  Long-lived assets at end of year:
         United States ...........................   $5,473,000   $5,493,000

During  the  fiscal  year  ended  March  31,  2005,  one  customer   represented
approximately  15%  of  the  Company's  revenues  and  approximately  9% of  the
Company's accounts  receivable  balance.  During the fiscal year ended March 31,
2004 one customer  represented  approximately 12% of the Company's  revenues and
approximately 11% of the Company's account receivable balances.

9.   Quarterly Results (unaudited):

Quarterly  financial  information  for  fiscal  2005 and 2004 is  summarized  as
follows:

($ in thousands, except per share amounts)   First    Second   Third    Fourth
               2005                           Qtr.      Qtr.     Qtr.     Qtr.
----------------------------------           ------   ------   ------   ------

Net revenue ................                 $2,539   $2,337   $2,530   $2,634
Gross profit ...............                 $1,603   $1,451   $1,565   $1,700
Net income .................                 $  625   $  548   $  563   $  575
Earnings per share - basic .                 $  .20   $  .18   $  .18   $  .19
Earnings per share - diluted                 $  .20   $  .17   $  .18   $  .18



($ in thousands, except per share amounts)   First    Second   Third    Fourth
               2004                           Qtr.      Qtr.     Qtr.     Qtr.
----------------------------------           ------   ------   ------   ------

Net revenue ................                 $2,253   $2,276   $2,200   $2,397
Gross profit ...............                 $1,447   $1,374   $1,362   $1,514
Net income .................                 $  523   $  528   $  500   $  578
Earnings per share - basic .                 $  .17   $  .17   $  .16   $  .19
Earnings per share - diluted                 $  .17   $  .17   $  .16   $  .18


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

         None.



ITEM 8A.  CONTROLS AND PROCEDURES.

     We maintain  disclosure controls and procedures (as defined in Exchange Act
Rules  13a-15(e)  and  15d-15(e))  that are designed to ensure that  information
required  to be  disclosed  by us in the  reports  we file or  submit  under the
Securities Exchange Act of 1934, as amended, is recorded, processed, summarized,
and reported,  within the time periods  specified in the Securities and Exchange
Commission's  rules  and  forms and that such  information  is  accumulated  and
communicated to our management,  including our principal executive and principal
financial officers,  or persons performing similar functions,  as appropriate to
allow  timely  decisions  regarding  required  disclosure.  Our Chief  Executive
Officer and Chief Financial  Officer  evaluated the  effectiveness of the design
and  operation of our  disclosure  controls and  procedures as of the end of the
period covered in this Annual Report of Form 10-KSB.  Based on that  evaluation,
our Chief  Executive  Officer and Chief  Financial  Officer  concluded  that our
disclosure controls and procedures were effective as of the end of such period.

     There  have  been  no  changes  in the  Company's  internal  controls  over
financial  reporting  during the  quarter  ended March 31,  2005  identified  in
connection  with the Company's  evaluation that has materially  affected,  or is
reasonably  likely to materially  affect,  the Company's  internal controls over
financial reporting.

     Management  currently  believes  that once it has  completed  its review of
internal controls, as mandated by Section 404 of the Sarbanes-Oxley Act of 2002,
that certain control  weaknesses will be identified,  including the inability of
management to properly segment  accounting duties due to the limited size of its
accounting  staff. Due to the constraints of the Company's size,  management may
discover other similar areas of potential  control  weaknesses as its review and
documentation of internal controls proceeds.


                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

The names,  addresses,  ages and terms of office of the  executive  officers and
directors of the Company are:

Name and Address           Age              Office                          Term Expires(1)
----------------           ---              ------                           ------------

Luke R. Schmieder           62              President, Chief Executive          2005
12100 West Sixth Avenue                     Officer, Treasurer and
Lakewood, Colorado                          Director

Steven W. Peterson          48              Vice President-Finance,             2005
12100 West Sixth Avenue                     Chief Financial and Chief
Lakewood, Colorado                          Accounting Officer and
                                            Secretary

John J. Sullivan, Ph.D.     52              Vice President - Sales and          2005
12100 West Sixth Avenue                     Marketing
Lakewood, Colorado

Paul D. Duke                63              Director                            2005
12100 West Sixth Avenue
Lakewood, Colorado

H. Stuart Campbell          75              Director (2)(3)                     2005
12100 West Sixth Avenue
Lakewood, Colorado

Michael T. Brooks           56              Director (2)(3)                     2005
12100 West Sixth Avenue
Lakewood, Colorado

(1)  The term of office of each officer of the Company is at the  discretion  of
     the Board of Directors.
(2)  Audit Committee member.
(3)  Compensation Committee member.


Luke R. Schmieder, President, Chief Executive Officer, Treasurer and Director

     Mr.  Schmieder  attended Ohio State  University and Ohio University  taking
courses in mechanical  engineering and business  management.  Mr.  Schmieder was
employed from 1970 to 1977 by Cobe Laboratories,  Inc. (manufacturer of dialysis
and cardiovascular  equipment and supplies) as a designer and process controller
on various  projects.  From 1977 to 1982, Mr.  Schmieder served as president and
principal of a consulting company for product and process development  primarily
in the medical  field.  Mr.  Schmieder has served as president and a director of
the  Company  since  its  inception  in March  1982.  

Steven W. Peterson, Vice President-Finance, Chief Financial and Chief Accounting
Officer and Secretary

     Mr. Peterson  received his Bachelor of Arts degree in accounting from Lewis
University in 1979. He was employed as an  accountant  and senior  accountant by
Valleylab,  Inc. (a manufacturer of electrosurgical  and IV infusion  equipment)
from 1980 to 1983. From 1983 to 1985, he was employed as assistant controller by
Marquest Medical Products, Inc. (a manufacturer of disposable medical products).
Mr. Peterson joined the Company in February 1985 as Controller and has served as
an executive officer of the Company since June 1990.

John J. Sullivan, Ph.D., Vice President-Sales and Marketing

     Dr.  Sullivan  received  his  Bachelor  of Science  degree in Biology  from
Western  Washington  University in 1976 and a Ph.D.  degree in Food Science from
the  University of Washington in 1982.  From 1976 until 1980,  Dr.  Sullivan was
employed as an  Analytical  Chemist at BioMed  Research  Labs,  (an  independent
research and testing laboratory). In 1982, Dr. Sullivan joined the U.S. Food and
Drug Administration's Seattle District Laboratory as a Senior Research Scientist
and worked there until 1988. In 1988 Dr. Sullivan joined Varian,  Inc., (a major
analytical instrument manufacturer) and served in various capacities in Research
and  Development,  Sales and Marketing  Management  and in Business  Development
until 2004. Dr. Sullivan joined the company in October, 2004 in the role of Vice
President of Sales and Marketing.

Paul D. Duke, Director

     Mr. Duke received his initial  medical  training  while on active duty with
the United States Navy and while  attending the University of Alabama.  Mr. Duke
was employed from 1965 to 1969 by the  University of Alabama  Medical  Center as
chief hemodialysis  technician and was employed by Cobe Laboratories,  Inc. from
1969 to 1973 as field  service and training  technician.  From 1973 to 1979,  he
served in  various  capacities  for  Cordis  Dow  Corporation  (manufacturer  of
pacemakers and hemodialysis  equipment and supplies),  including sales,  product
management, European training manager and national service manager. From 1980 to
1982,  Mr. Duke served as  proprietor  and  president  of a  consulting  company
specializing in medical  marketing,  sales,  service and training.  Mr. Duke has
served as vice  president  and a director of the Company  since its inception in
1982.  At March 31, 2002,  Mr. Duke retired from his position as vice  president
and now devotes such time as is necessary to the affairs of the Company.

H. Stuart Campbell, Director

     Mr.  Campbell   received  his  Bachelor  of  Science  degree  from  Cornell
University in 1951.  From 1960 through  September  1982, Mr.  Campbell served in
various  capacities  for  Johnson  &  Johnson  and  Ethicon,  Inc.,  a  domestic
subsidiary  of Johnson & Johnson.  From 1977 through  September  1982,  he was a
Company  Group  Chairman  with  Johnson & Johnson and served as Chief  Executive
Officer  and  Chairman  of the  Board  of  Directors  of eight  major  corporate
subsidiaries.  Mr. Campbell owned and served as an officer of Highland Packaging
Labs, Inc., Somerville,  New Jersey (contract packaging business) until its sale
in  2002.   He  also   served  as  a  director  of  Atrix   Laboratories,   Inc.
(pharmaceutical and contract research and development company) until its sale in
2004.  Mr.  Campbell has served as a director of the Company  since May 1983 and
devotes such time as is necessary to the affairs of the Company.


Michael T. Brooks, Director

     Mr.  Brooks  received his  Bachelor of Arts in History  from Ohio  Wesleyan
University  in 1971.  While  pursuing  a career in fluid  power,  he  received a
Masters in Business  from the  University  of Denver in 1983.  Mr. Brooks was an
independent  manufacturer's  representative  from  1982 - 1985 at which  time he
purchased an interest in Fiero Fluid Power which he presently owns and operates.
Fiero Fluid Power is a  Rep/Distributor  selling  pneumatic and  instrumentation
equipment.  He has been a director since October,  1998 and devotes such time as
is necessary to the affairs of the Company.

     The small  business  issuer has adopted a code of ethics,  which applies to
all employees and directors of the Company including its Chief Executive Officer
and its Chief Financial Officer.  The Board of Directors has determined that Mr.
H.  Stuart  Campbell,  who is Chairman  of the Audit  Committee,  is a financial
expert.  Over his career,  Mr.  Campbell  has served in  positions  of top level
corporate  leadership for both large public  companies and private  companies of
similar size and structure to our own company.  Mr.  Campbell has also served as
Audit Committee Chairman of at least one other publicly held company.

     Based  solely  upon  a  review  of  Forms  3 and 4 and  amendments  thereto
furnished  to the  Company  pursuant  toss.240.16a-3(e)  during its most  recent
fiscal year and Forms 5 and  amendments  thereto  furnished  to the Company with
respect to its most recent fiscal year, and any written  representation from the
reporting  person  (as  hereinafter  defined)  that no Form 5 is  required,  the
Company is not aware of any person who, at any time during the fiscal year,  was
a director,  officer,  beneficial owner of more than ten percent of any class of
equity  securities  of the  Company  registered  pursuant  to  Section 12 of the
Exchange Act  ("reporting  person"),  that failed to file on a timely basis,  as
disclosed in the above Forms,  reports required by Section 16(a) of the Exchange
Act during the most recent fiscal year or prior fiscal years.

ITEM 10.  EXECUTIVE COMPENSATION.

     The following table, and its accompanying  explanatory footnotes,  includes
annual and long-term  compensation  information on the Company's Chief Executive
Officer and Chief  Financial  Officer for  services  rendered in all  capacities
during the fiscal years ended March 31, 2005, March 31, 2004 and March 31, 2003.
No other executive officer received total annual salary and bonus for the fiscal
year ended March 31, 2005 in excess of $100,000.

                           SUMMARY COMPENSATION TABLE

 Name and Principal Position      Fiscal Year       Salary           Bonus(1)      Options Granted            Other Comp
----------------------------      -----------      --------          ---------    ----------------          --------------

 L. Schmieder, CEO                  2005           $122,287           $56,177           4,000                    $4,381
                                    2004           $118,514           $23,744           4,000                    $3,540
                                    2003           $113,885           $19,066           4,000                    $3,742


 S. Peterson, CFO                   2005           $ 91,030           $42,942           4,000                    $2,535
                                    2004           $ 87,928           $19,021           4,000                    $3,125
                                    2003           $ 84,528           $16,228           4,000                    $2,824

------

(1)  Reflects  bonus earned in fiscal  year,  but paid in the  following  fiscal
     year.

     The following  summary table sets forth  information  concerning  grants of
stock  options made during the fiscal year ended March 31, 2005 to the Company's
Chief Executive Officer,  Chief Financial Officer and Vice President - Sales and
Marketing.

                        Option Grants in Last Fiscal Year
                        ---------------------------------

                           Percent of Total
                  Options  Options Granted          Exercise         Expiration
Name              Granted  in Fiscal Year            Price               Date
----              -------  --------------           -------          -------------

L. Schmieder      4,000               4%            $  9.89          July 26, 2014
S. Peterson       4,000               4%            $  9.89          July 26, 2009
J. Sullivan      20,000              21%            $ 12.56          Oct. 10, 2009 -
                                                                     Oct. 10, 2014

Compensation of Directors

     On October 3, 1996,  the  Company  adopted a new  nonqualified  performance
stock option plan for the benefit of the Company's outside  Directors.  The plan
provides that the outside  Directors  will receive  grants to be determined  and
approved by the Company's  inside directors and not to exceed 20,000 options per
year per director.  Under the terms of the plan, the options are exercisable for
a term of ten years, and during such term are exercisable as follows:  25% after
each year,  and 100%  anytime  after the fourth  year until the end of the tenth
year.  The  purchase  price  of the  common  stock  will be equal to 100% of the
closing bid price of the common stock on the over-the-counter market on the date
of grant.

     On July 14, 2004,  Mr. Brooks and Mr.  Campbell,  outside  directors,  were
granted  options to purchase  4,000  shares of common stock at $10.00 per share.
Mr. Duke,  a director  who retired from his position as an executive  officer in
March 2002,  was granted  4,000 shares of common stock at $10.00 per share.  Mr.
Schmieder,  the Company's  inside director was granted options to purchase 4,000
shares of common stock at a price of $9.89 per share on July 27, 2005.

     Currently,  all outside  directors  receive cash compensation of $1,000 for
each Board of Directors or committee  meeting  attended in person,  and $300 for
each Board of Directors or committee meeting attended by teleconference.

Incentive Stock Option Plans

     The Company has adopted three incentive stock option plans, approved by the
shareholders of the Company in September  1984,  October 1989 and November 1993,
respectively,  for  the  benefit  of the  Company's  employees.  The  plans  are
administered  by the  non-participating  members of the Board of Directors,  who
select the optionees and determine the terms and  conditions of the stock option
grant.  The exercise  price for options  granted  under the plans cannot be less
than the  fair  market  value of the  stock at the date of grant or 110% of such
fair market value with respect to options granted to any optionee who holds more
than 10% of the Company's  common stock.  Options are not exercisable  until one
year after the date of grant and expire five years after the date of grant.  All
outstanding  options  are  subject to vesting  provisions  whereby  they  become
exercisable over a four-year period.  The plans authorize options to purchase up
to 200,000, 300,000 and 300,000 shares of common stock, respectively.


     On October 21, 1999, the Company adopted a new stock compensation plan. The
purpose of the plan is to encourage ownership of the Common Stock of the Company
by certain officers, directors, employees and certain advisors of the Company in
order to provide incentive to promote the success and business of the Company. A
total of 300,000  shares of Common Stock have been  reserved for issuance  under
the plan and are subject to terms as set by the  Compensation  Committee  of the
Board of Directors at the time of grant.  On October 18, 2004, the  shareholders
approved an amendment  to the plan to reserve an  additional  200,000  shares of
Common Stock for issuance under the plan.

     As of March 31,  2005,  options to purchase a total of 241,767  shares were
outstanding, at exercise prices ranging from $3.75 to $13.03 per share. Further,
as of March 31,  2005,  options to  purchase  an  aggregate  of  263,700  shares
remained  available for grant under the Company's  stock option plans.  The plan
adopted in September  1984 was terminated  effective June 1, 1993.  Options were
granted  during the fiscal year ended March 31, 2005,  pursuant to the Company's
incentive  stock option  plans,  to each of the  Company's  executive  officers.
Options to purchase  4,000 shares at $9.89 per share were granted to Mr.  Steven
W. Peterson,  Vice  President-Finance.  Mr. Luke R.  Schmieder,  President,  was
granted  options  to  purchase  4,000  shares at $9.89 per  share.  Mr.  John J.
Sullivan,  Ph.D.,  Vice  President-Sales  and Marketing,  was granted options to
purchase 20,000 shares at $12.56 per share.

Retirement Plan

     The Company has adopted a 401(k) plan for the benefit of its  officers  and
employees. Subject to certain restrictions, a participant may defer up to 15% of
their gross  compensation  into the plan. The Company currently matches up to 6%
of the participant's contribution at a rate of 50% of the contribution. The plan
also allows for additional contributions by the Company at its discretion.


ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     The following table sets forth the number of shares of the Company's common
stock owned  beneficially as of March 31, 2005 (unless otherwise noted), by each
person known by the Company to have owned beneficially more than five percent of
such shares then outstanding, by each officer and director of the Company and by
all of the Company's  officers and directors as a group.  This information gives
effect to securities deemed  outstanding  pursuant to Rule 13d-3(d)(1) under the
Securities Exchange Act of 1934, as amended. As far as is known to management of
the  Company,  no  person  owns  beneficially  more  than  five  percent  of the
outstanding  shares of common  stock as of March  31,  2005  except as set forth
below.

                                                        Amount and                  Percentage of
Name of Beneficial                                        Nature of                 Class Benefi-
          Owner                                       Beneficial Owner              cially Owned
----------------------                                ----------------              --------------
Luke R. Schmieder (1)                                   340,267  (2)                     11.2
Steven W. Peterson (1)                                   64,174  (3)                      2.1
Paul D. Duke (1)                                        111,466  (4)                      3.7
H. Stuart Campbell (1)                                   86,000  (5)                      2.8
Michael T. Brooks (1)                                    29,200  (6)                      1.0
FMR Corp. (10)                                          231,500  (8)                      7.6
Farnum Street Partners, L.P. (11)                       174,234  (9)                      5.7

All officers and                                        631,107  (7)                     20.5
directors as a group (5 in number)

(1)  The business address is 12100 West Sixth Avenue, Lakewood, Colorado 80228.
(2)  Includes  4,000 shares which Mr.  Schmieder has the right to acquire within
     60 days by exercise of stock options.
(3)  Includes 1,000 shares which Mr. Peterson has the right to acquire within 60
     days by exercise of stock options.
(4)  Includes  15,000  shares which Mr. Duke has the right to acquire  within 60
     days by exercise of stock options.
(5)  Includes 4,000 shares which Mr. Campbell has the right to acquire within 60
     days by exercise of stock options.
(6)  Includes  10,000 shares which Mr. Brooks has the right to acquire within 60
     days by exercise of stock options.
(7)  Includes 34,000 shares which the officers and directors of the Company as a
     group  have the  right  to  acquire  within  60 days by  exercise  of stock
     options.
(8)  Based upon  information  set forth in schedule 13G filed by FMR Corp.  with
     the Securities and Exchange  Commission  dated February 14, 2005.  Fidelity
     Management & Research Company  ("Fidelity"),  a wholly-owned  subsidiary of
     FMR Corp., is the beneficial  owner of 231,500 shares as a result of acting
     as investment advisor to several investment companies. The ownership by one
     investment  company,  Fidelity  Low-Priced Stock Fund,  amounted to 231,500
     shares.  Mr.  Edward C.  Johnson  3d, FMR  Corp.,  through  its  control of
     Fidelity, and the aforementioned investment companies each has the power to
     dispose of the 231,500 shares.
(9)  Based upon  information  set forth in schedule  13D filed by Farnum  Street
     Partners,  L.P. with the Securities and Exchange  Commission dated February
     24, 2005,  Farnum Street Partners,  L.P., a Minnesota  Limited  Partnership
     ("the  Fund"),  has sole  dispositive  and voting  power as to all  174,234
     shares. The Fund, whose principal business  activities involve investing in
     equity securities of publicly traded  companies,  as well as other types of
     securities,  is the beneficial owner of such shares, pursuant to Rule 13d-3
     under the Securities Exchange Act of 1934.
(10) The business address is 82 Devonshire Street, Boston, MA 02109.
(11) The business address is 3033 Excelsior Boulevard,  Suite 300,  Minneapolis,
     MN 55416.

     For  information  regarding  securities  authorized  for issuance under our
equity compensation plans, please see Footnote 7 to the Financial Statements.


ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         None.


ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K.

         (a)      Exhibits.
                  ---------

         (3)(i)   Articles of Incorporation and Articles of Amendment and Bylaws of Registrant -incorporated by reference to the
                  Exhibits to the Registration Statement on Form S-18, file number 2-88647-D, filed December 21, 1983.

         (3)(ii)  Articles of Amendment of Registrant - incorporated by reference to the Exhibit to the Report on Form 10-K for the
                  fiscal year ended March 31, 1988.

         (3)(iii) Articles of Amendment of Registrant dated October 4, 1990 - incorporated by reference to the Exhibit to the Report
                  on Form 10-K for the fiscal year ended March 31, 1991.

         (3)(iv)  Articles of Amendment of Registrant dated October 20, 1992 - incorporated by reference to the Exhibit to the Report
                  on Form 10-KSB for the fiscal year ended March 31, 1993.

         (23)(i)  Consent of Ehrhardt Keefe Steiner & Hottman PC, independent registered public accounting firm, to the incorporation
                  by reference in the Registration Statements on Form S-8 (file numbers 33-89808, 333-02074, 333-18161, 333-48556 and
                  333-122911) of their report dated April 29, 2005, included in the Registrant's Report on Form 10-KSB for the fiscal
                  year ended March 31, 2005.

         (31.1)   Certification of Chief Executive Officer Pursuant to Rule 13a-14(a).

         (31.2)   Certification of Chief Financial Officer Pursuant to Rule 13a-14(a).

         (32.1)   Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350.

         (32.2)   Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350.

(b)      Reports on Form 8-K.  On February 2, 2005, the Registrant filed a Report on Form 8-K, under Item 2.02, reporting the
         issuance of a press release reporting revenues and earnings for the quarter and nine months ended December 31, 2004.


ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

1.   AUDIT FEES

Ehrhardt  Keefe  Steiner & Hottman  PC's  fees for the  Company's  2004 and 2005
annual audits and reviews of the  Company's  quarterly  financial  statements or
services  that are  normally  provided  by the  accountant  in  connection  with
statutory or regulatory  filings or engagements were  approximately  $57,750 and
$56,725, respectively.

2.   AUDIT RELATED FEES

Ehrhardt Keefe Steiner & Hottman PC did not render any audit related services to
the Company in 2004 and 2005.

3.   TAX FEES

Ehrhardt Keefe Steiner & Hottman PC's fees for tax  preparation  services to the
Company for 2004 and 2005 were approximately $7,500 and $7,900, respectively.

4.   ALL OTHER FEES

Ehrhardt Keefe Steiner & Hottman PC's fees for all other services to the Company
for 2004 and 2005 were approximately $14,000 and $2,910, respectively.  The 2004
fees were paid for a review of prior year tax  preparation  work.  The 2005 fees
were paid for review of S-8 filing documents.

5.   The Audit  Committee  approved all services  performed by Ehrhardt,  Keefe,
     Steiner & Hottman PC.



SIGNATURES


In  accordance  with  Section 13 or 15(d) of the Exchange  Act,  the  registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                                  MESA LABORATORIES, INC.
                                               -----------------------------
                                                  Registrant


Date: June 21, 2005                            By:  /s/Luke R. Schmieder
      -------------                               ------------------------------------
                                                      Luke R. Schmieder, President


In  accordance  with the Exchange  Act, this report has been signed below by the
following  persons on behalf of the  registrant and in the capacities and on the
dates indicated.



          Name                                       Title                                  Date
          ----                                       -----                                  ----


/s/Luke R. Schmieder                President, Chief Executive Officer,                 June 21, 2005
----------------------------                                                            --------------
Luke R. Schmieder                   Treasurer and Director


/s/Steven W. Peterson               Vice President, Finance, Chief Financial            June 21, 2005
-----------------------------                                                           -------------
Steven W. Peterson                     and Chief Accounting Officer and Secretary


/s/John J. Sullivan, Ph.D.          Vice President, Sales and Marketing                 June 21, 2005
-----------------------------                                                           -------------
John J. Sullivan, Ph.D.


/s/Paul D. Duke                     Director                                            June 21, 2005
-------------------------------                                                         -------------
Paul D. Duke


/s/H. Stuart Campbell               Director                                            June 21, 2005
-----------------------------                                                           --------------
H. Stuart Campbell


/s/Michael T. Brooks                Director                                            June 21, 2005
-----------------------------                                                           -------------
Michael T. Brooks


EXHIBITS INDEX
--------------


(23)(i) Consent of Ehrhardt Keefe Steiner & Hottman PC,  independent  registered
        public   accounting  firm,  to  the   incorporation  by  reference  in  the
        Registration  Statements  on Form S-8 (file  numbers  33-89808,  333-02074,
        333-18161,  333-48556 and 333-122911) of their report dated April 29, 2005,
        included  in the  Registrant's  Report on Form  10-KSB for the fiscal  year
        ended March 31, 2005.

(31.1)   Certification of Chief Executive Officer Pursuant to Rule 13a-14(a).

(31.2)   Certification of Chief Financial Officer Pursuant to Rule 13a-14(a).

(32.1)   Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350.

(32.2)   Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and 18 U.S.C. Section 1350.