Lowering the possibility of patient movement due to electrical stimulation of their muscles. If you don't have that, you can lower anesthesia from general anesthesia to some level of sedation, conscious sedation. That allows the movement of the patient outside of the hospital and more and more toward the ambulatory surgery center. And that, I think, is a real opportunity for a technology like this. Thank you.
All right.
Sorry, that's all the time we have today, but thank you so much, everyone, for joining us.
I think we got a spot pretty soon, but that means we have some better.
Let's get these.
All right.
Thank you. Good afternoon, everyone, and welcome to the 44th Annual J.P. Morgan Healthcare Conference. My name is Teilan Wilson, an associate in the healthcare group based out of New York. Pleased to introduce Gary Owens and John Sakys, CEO and CFO of Mesa Labs. Thank you.
Thank you, Teilan, and thank you, J.P. Morgan, for hosting the conference again this year and having us come. Safe harbor statement. I'm pretty sure everyone has got out their legal prescription glasses to get through this one. Mesa Labs, for those of you who aren't over-familiar with the story, we're a diversified tools who focuses on mission-critical quality controls for regulated markets. What this means is we enter drugs' life cycle in the development phase, typically clinical trial support, and then we help to make sure that those drugs are intact and get to the right people all the way through development, bioproduction, and into the healthcare system. As such, you see our purpose doesn't come up with a big scientific statement, right? Our purpose is very human-centric.
We focus on protecting the vulnerable to make sure that people get the right drugs and that those drugs are manufactured correctly and that they are of highest quality by the time they get to an arm, not just out of a manufacturing plant. So we are diversified. We do focus on biopharmaceutical. These highly regulated end markets have a natural stickiness to them, as we'll talk about when we talk about our consumable and recurring revenue exposure. Because we focus on the development of drugs, right, we have no NIH funding, right? We're not in academia or anywhere else. We are a broad platform. Because of the unique needs of these regulated markets and the stability of underlying core technologies, what we tend to do is we buy core technologies that are proven.
We continue to evolve the applications that they can serve, and we then continue to have a recurring revenue stream. The real focus there is then less on being a technology-pure or technology-leader or dominant player in one mode of technology, but a market leader for a very important set of customers who have very distinct needs. And that's how we compete against those who have maybe a broader footprint, also how we maintain focus for our commercial energy and our commercial efforts. We are a disciplined management team. We come from a long background at places you would know: Danaher, Thermo Fisher, Cytiva, Agilent, right? Deep operating experience. And we do focus on our version of the operating model, which we call the Mesa Way. We operate in four segments today. 40, 20, 20, 20 is kind of how I think about them, the largest being sterility controls.
So we ensure that the biologically-based drugs have no contaminants in them that might actually impact the patient's safety. We operate then in biopharmaceutical development, which is a protein analytical platform, as most drugs are either proteins or their effect on humans are based on proteins, a very critical technique. Behind that sits the genomic platform. Obviously, the proteins are created by genes. And so in as much as you have protein deviations, we help to understand the genetic backdrop to those protein deviations and how those can affect patient safety and health. And our calibration solution business is really about environmental monitoring. So what is the environment that those biologically-based drugs are living in, and is that safe for them and healthy for them? So just to get some of the numbers out of the way, last year we were around $240 million in revenue.
We've been on a five-year CAGR of around 15%. I think actually if you went back around 10 years, you'd see right around the same number. We are, for a small company of that size, highly profitable, so close to 63% gross margin. If you think about that and you take out things like amortization, depreciation on a cash gross margin basis, extremely attractive. So we do focus a lot on our organic growth because the operating leverage profile is there. And for this scale, I think we are the, if not one of the very one or two that are actually meaningfully profitable. And that's AOI excluding unusual items is our version of an adjusted EBITDA number. We have been working on increasing our core organic growth rate.
So we went from a one, which was kind of a very obviously unexciting growth rate before, to around three and a half to four over the last few years, obviously during a lot of ups and downs in the marketplace. We would say that our main leading indicator for the health of our business is clinical trial starts. And so as clinical trial starts really crash during this period, we feel like we are picking up share against those. And obviously, as clinical trial starts gain, we expect to see acceleration of the core business. We've been really conscious about changing the profile of the business. As you see, the difference in organic and the total growth, right, is obviously some inorganic activity that we've done to increase the quality of the portfolio.
That we really focused on our vertical market exposure or the end applications that we serve to try to drive that opportunity growth rate higher. Lean is not just words, and it's not shallow. Danaher used to call it fake DBS, right? That's not for us. We do 24, I'm sorry, 42 different lean events last year. You'll see a regular cadence of how we think about improving using experimentation, the quality of our business processes, and our ability to serve customers better. This is kind of back to a chart, right? It shows that that compounding has occurred, and this is what the last 10 years or so. You'll see like a pretty steady underlying growth rate despite a lot of this market turmoil.
Additionally, what you'll see is that our AOI has increased in action or in line with that, meaning we focus on acquisitions and/or leveraging of highly profitable companies, not companies that are built off of revenue multiples or something like that. Okay, so a little bit deeper dive into where we focus. And I'll actually start in the upper right-hand corner. We focus on protein analytics, a highly automated single-plex ELISA platform. Turns out that this is exactly perfect for supporting clinical trials and in engineering a bioprocess. So if you think about what the first things you do in clinical trial support, it's called PKPD assays. You inject a drug into somebody for the first time, and you see where it goes and what it does. You haven't been able to do that so far, and obviously you're impacting patient safety.
A whole rigor around exact quantification of what that is. You're looking at things like dosing and everything else. Great trends here. Obviously, we've been able to, now that we've gotten a certain amount of scale, expand our penetration globally. And so we have a number, we have 30 to 40 people on the ground in China who are helping us to penetrate that market, novel applications for the kinds of tools that we serve. We have a razor-blade model, and we expect to see both consumables and services associated with this dedicated analytical device continue to grow. And we do actually also play in the GLP-1s where we have peptide synthesizers that are capable of helping with the screening and the efficacy and development of new peptide-based modalities, regardless of whether they're GLP-1s or other adjacents.
If you think about what underlies some of those protein analytical differences, so in clinical trials one, you might find that you have highly differentiated results for people based off of dosing and mechanisms. Well, there's often an underlying genetic background to that that deals with how you metabolize those drugs. So in our genomics division, what we do is we analyze the background of somebody's individual genes looking for markers that belong on a drug label, an FDA-related drug label, to make sure they get matched with the right therapy and/or that they get the right dosing associated with how quickly or how slowly they might metabolize those drugs. There we're growing double digits outside of China. China has obviously been a bit of a challenge during the period where there's been a concerted effort to not have an American presence in the diagnostic supply chain.
And so those things are offsetting. Obviously, from a sequential standpoint, we don't see any additional headwinds coming out of China related to this business, but that will take through Liberation Day impact of our coming fiscal year to see that show up in the year-over-year numbers. Likewise, we use that same protein analyzer to characterize each step in a biomanufacturing process. So if you have a tangential viral filtration filter, the kinds of questions that you're asking is, good product in one side, good product out the other side. Did I happen to filter out tighter along with those viral particles? Did I get the viral particles out? Did I accidentally damage the protein going through this process? Did I accidentally introduce any new leachables into that? Those are all the kinds of questions we would answer with our protein analytics as well on the bioprocessing side.
Then we ensure that because that is an organic process, lots of things like to grow in an organic process and spin off. And we ensure that those things are indeed sterile as part of the manufacturing process itself. And then we ensure that the environment that those drugs are living in have the right chemical and physical parameters to ensure the integrity of those drugs in the long term and the integrity of the process itself. And often we'll follow that into the healthcare system to ensure that they're not denaturing or whatever it might be all the way to a customer's arms. So that kind of is maybe a little bit more detail, right, that some people might get into. Really think about it as we don't start in discovery. We start in drug development, clinical trials one.
We have a series of tools in these highly regulated markets that kind of complement each other, and that enables us both to have a differentiated set of technologies and regulatory barriers that keep larger players out of our market and the focus of our commercial efforts so that we get commercial efficiency, and this happens both on the patient and the clinical trial support side, as well as a parallel process that happens in designing and engineering your process and then using that in pharmaceutical QC in real time. This is just simply an example of the kind of solutions that we have. We call it pharmacokinetics. What does the body do to the drug, right? How does the drug persist in your body over time? How does it get metabolized and flushed out? Obviously, that kind of curve profile is not what you're looking for in a drug.
You want persistent levels of that drug, active drug in your body. Likewise, pharmacodynamics. We understand how much dosing needs to happen to affect that drug. Before then, you're playing around with cells on plates and squirting things on it, and there is no system in place, the human body, that affects that. These are the only times you start to begin and understand the complicated things of how the drug is reacting in the body, not only for the target of interest called lung cancer, but how much of it ends up on the back of your retina and what does that do? How much of it ends up going to your liver and causing toxicology? How do the metabolites, as your body naturally attacks these organic molecules and metabolizes them, what happens to those and where are those? How does your immune system respond?
Behind a lot of these things, when you look at outliers or you look at lots of different drugs going after the same kind of disease state, really end up affecting how does that person going to respond? And that has a genetic underlying tone to it, which is called pharmacogenomics, pharmacogenetics. And those are the things that we measure with our other platform in genomics segment. So this is just an example of how we think about how we built this business before. We kind of rank these in terms of regulatory intensity. And obviously, for a company that focuses on regulated tools, regulatory intensity is actually a good thing. So we like pharmaceutical drugs, medical devices, and the manufacturing of those is what we would say here.
Not the discovery of those, but the development, manufacturing. Clinical genomics is the application of all that information that comes out of those clinical trials into the clinical setting to help match a patient to the right therapy, and then obviously, from a regulatory standpoint, a lot of the same regulations fall into healthcare services. And FDA has food at the very beginning of it, and so you find a lot of the regulations also cover food, and we take a more opportunistic approach for how those would affect our business. You take that same view on the left and you match it with the view on the right, so we would say we are 75% plus recurring revenue.
That is consumables that are specced into a drug manufacturing process, consumables that are dedicated to our platforms that are unique and required to run our platforms, the service associated with those, which in a regulated environment is not going out to the lowest bidder or Joe's Body Shop to come service. That's really a core of our business. Really what we're doing is placing the CapEx hardware at the top, the big ticket stuff, right, to get that ongoing consumable revenue stream. How this all comes together and how you operate a business with a diverse set of technologies but going to a common endpoint is really our application of that lean-based operating model, right? We start with the heart of protecting the vulnerable.
We follow that through with the Mesa Way, a very experimental, if you're a scientist, right, everything you would expect when you're writing a scientific paper. What's your hypothesis? What variables are you changing the equation? What outcome do you expect? How am I isolating that variable and understanding how it impacts it? It's no different in the business world. You're doing the same exact things over and over again that you would do in science instead of doing it on a bench lab. We do it in the real world with people and businesses. So we measure what matters, and we run experiments to try to do that. That enables us to empower teams by having a common language for how we evaluate and improve our businesses and enables them to manage this diversity of technologies and portfolios. We focus on always improving.
That's our goal, not to be perfect. Naturally, what we do in quality control, we demand perfection for our customers. We're never going to be perfect ourselves. We're all humans, but we can always get better as well. And so we're always going to be improving and then constantly creating this learning loop and this learning cycle. It really makes it a fun and exciting place to be. And you'll find that we attract a certain number of people who've been in the space, right, and are really looking for that entrepreneurialism, but also looking for that customer intensity that maybe you don't get from a larger organization. We talked about our inorganic strategy. This is an example of the last one that we did, GKE. We had a relationship with this company for about nine years. What they do is they make an alternative kind of sterility indicator.
It's called the chemical indicator. It's more of a process monitoring so they can ensure that your sterility process is working correctly. It has lots of utility and use. This complements our biological indicators, which will tell you everything is indeed dead. So not the process worked correctly, but actually the results of the process worked correctly. These are highly complementary to what we do. These are the kind of companies that we would bring unique access to for some of you guys, right? These smaller entrepreneurial companies, right, that aren't in the public markets today, they become part of Mesa, and we help them to grow, and indirectly, you get exposure to that. There's a series of steps around sterility, and we work to integrate workflows and how we can have a complementary set of products around a workflow that are unique to these highly regulated environments.
That's how we kind of build out our portfolio of businesses over time. The last acquisition, because this was controversial isn't the right word, but to get there, we needed to increase our debt levels to approximately 3.8-3.9 times. This was when interest rates were really high. So there was a little bit of trepidation, right, in terms of certain Bloomberg metrics or other things. So we had a committed target there. We over-delivered that by about 15%-20%. We hit our core revenue growth above mid-single digits. So it's accretive to our core revenue profile and accretive to our financial metrics. And this was acquired about nine times for a 100% consumable business. So these are the kind of things that we can do with access to capital that perhaps are more meaningful.
You saw that was around an 8-9% grower for us at the time. That if you're looking at other large diversified tool companies, right, their acquisition programs have a hard time actually being meaningful to the total profile of the company. But when we do this right, we can make a real impact for the company and our long-term growth rate. So where do we go from here? Like we said, clinical trials, I think for the last year and a half or so, have kind of flatlined and started to tick up.
As we see that market return to health, whether it's from biotech funding and other activities or contributions from outside of America, things going on in China right now that have growth, or things kind of people having the funding to accelerate more things in the clinical trials, we expect to grow with that and see that three, four, five kind of % growth rate accelerate. We continue to evolve core platforms. You notice that in, say, something about protein analytics. That's a pretty broad statement, right, when you talk about how the body works, which is 100% on proteins. So we have generic platforms that have big domain space, and then what people buy, those lots of small applications within that.
So we get a proven platform, and then we continue to do application development work that both builds our credibility as a resource to come to and the person you come to when you have a protein analytical question, which are hundreds of different questions and supported clinical trials, and move from one application to the other over time to accelerate our organic growth rate. Now that we're getting large enough, we can continue to expand geographically and bring some of those products that might have gone through distribution in other markets to where we can enhance that with direct sales and higher customer intimacy to continue to increase our growth rate. We experiment in our commercial ways and use the Mesa Way, which is a highly commercially focused implementation of the lean-based operating model, continue to try to grow from there.
Naturally, like we talked about before, our operating metrics are really good, so organic growth really has a great financial profile. Our balance sheet is now, we said we were about 3.8, 3.9 times. Today, we would say I think we're below 3. Obviously, we ended the last quarter, which was in September 30th, right at 3, and we expect that to continue to go, and when the markets open up again, we think we can find another series of different acquisitions, which will continue to enhance the story and give us scale and leverage in some of those other areas and enhance our financial profile long term, so away we go. Thank you very much. Appreciate your time.
Thank you, Gary, and appreciate your time and your remarks. We'll take some questions from the audience, but I have a few prepared here as well.
And I think a good format for this. We'll start broad and talk about Mesa just sort of generally and even just like market generally, and then we'll kind of start to zoom in, so maybe going into the mid-range, and then we'll get maybe targeted to some discrete items, but I guess to start, I heard you say that you said Mesa is very human-centric from like a vision and strategy perspective. Could you double-click a little bit on that, and how does it make you different from your peers in the LST market?
Yeah, I think this is just from a business model perspective, a matter of being in the regulated markets, right? Every answer we have is not about seeing something cool that hasn't been seen before. It's about patient safety and efficacy of a drug being manufactured.
That means that when we do our job poorly, people are at risk of dying. That then leads to this regulatory cycle where you're under the watch of the FDA. That means that to do your job well, right, for us, quality is job one. You don't ship a product if it's questionable about whether it's going to work. You don't ship. You focus on quality and the improvement of the quality of the products and maintain that integrity. That gives you integrity with your customers, which develops long-term reputation and where you go from there.
The way that you get people motivated to do that, right? You remind them that when they're sitting around their holiday table, they can look out at their family and know that each one of those families probably has somebody with a disease state where it's taking a drug or is using a medical device that we touch and feel. That gives people a pretty good motivation for doing their job well, gives us heart for what we do, right, and why I think a lot of us are in this sector to be able to do that. But for us, it's super tangible. It's not cool science for cool science's sake. It is protecting, right, those people that you know, protecting those people that you care about. That enables you to have a greater focus.
That enables our team to give that 110% and be super happy about doing so.
Thank you. One thing that I, when I was researching your company, let's get back to this thing called the Mesa Way, and you mentioned it briefly up here, and I just wanted you to kind of maybe double-click in your own words. I kind of think of it as lean, right? But what is that for you, and how do you think that's really impacted, especially in the market dynamics we've been in in the last few years?
Yeah, in our language, right, a lot of lean-based operating models are a collection of tools. They're basically like little recipes for how to solve a specific problem.
For our perspective, when you change that from solving like a problem for a turnover time for a lathe to how do I improve a customer perspective, you click up a level. So we look at value streams or how things are created interrelated across a business from the customer's perspective and pull a line all the way through that. That gives you a very different vantage point for how to satisfy customers. That comes from this perspective that we don't solve incremental problems. We solve customer problems to solve customer views. So we pull that all the way through. And instead of focusing on a tool, we focus on what I would say is the craftsmanship with the tools, right? Because a lot of times that process might exist in a customer's mind or their decision-making process, or it might exist in their flow.
And so it takes a little bit more creativity, and you can't be super dogmatic about the tool. You have to be very good with the craftsmanship of it. And that actually makes it a lot more fun because you're not just like cranking out a recipe, right? It's like being a star chef versus being in one of these ordered online chefs where you might as well be a machine squirting fake mashed potatoes into a bucket. It's very different when you start to think about your world that way and you operate that way.
Yeah. No, thank you for that. Maybe looking at Mesa just holistically and its portfolio, where do you see synergies across your business lines?
Yeah. I mean, I think if you look at the thematic things for how we really drive the business, it's really about application development, application marketing, and customer intimacy.
Those things are really consistent. How you then take and compress your time for application development to come up with the next application, how you prove it out, how you market it to customers, how you support people through that. There's a lot of commonality across our different techniques that we're able to learn from each other and apply, and whether that's in how our website operates, how our CRM system operates, how we train people, how we teach them how to approach customer service. All those things are similar, much less the fact that we focus on entering Phase One clinical trials, and our real goal is to get spec'd into a drug during that development process means that knowing where those drugs are, knowing where they are on their life cycle, and having credibility with those customers actually does expand beyond our different portfolios.
You're not going to find that with somebody who's calling on an academic researcher one day and then send them in to somebody who's doing clinical trial support and think that they're going to be effective. They're simply not, and it's just a different context, so we scale this from that, and then, of course, you see some of the knowledge things that follow through in terms of what that drug is and what they affect each other, where our tools start to complement each other. And obviously, we'll benefit the more scale we get, the more we'll see benefits from that process.
Great. I want to turn to the market now, but are there any other questions longer term, big picture on Mesa? Okay, so market, and I'd say the adage is this market headwinds, right?
And you can pick your poison as to what do you want to say that is. I guess in your own words, just how has Mesa been infected by headwinds, and then where do you think we are broad scale in that sort of story in this moment?
Yeah. I get the, what I call it, headline fatigue, right, from the investor side of the table for what's going on in this industry lately, right? Bioprocess destocking, academic funding, pharmaceutical CapEx cycles, LDT regulations, things that are going on in China, right? There's been a lot of changes to what was a pretty benign status quo for about a decade.
I would say, other than China, which will lap at the end of this coming quarter, so we'll lap that essentially, or the impact of that in either April, depending on how you think about it, but it's already lapped sequentially. Those things, to a large extent, are over, right? So I don't know. I don't want to be sometimes the removal of pain is pleasure, right? And so just not kind of facing these headwinds, we expect to see a natural lift. But I think as you look at our business in particular, right, we expect that lift to see in clinical trial starts that we hope to see, right? That'll be a great longer-term leading indicator from us. But just the enthusiasm and positivity of the market means the investment cycle will hopefully naturally continue to grow, and that's our hope.
I think if you look at what's happened, though, to the stock and how the investor community has responded, right? And I think this is across the board, not unique to life science tools, is that smaller companies have been savaged, right? Larger companies where maybe you guys want to be able to move in and out of a stock relatively quickly because the news can change any one day and you want to be hyperliquid, right? That's great. And that's, I think, driven money towards larger caps and a way out of smaller caps because we don't have that necessarily flexibility. As hopefully as the market backdrop starts to clear and get more stable, that will become less of a headwind. And I think you'll see that hopefully the multiple compression for what even during this most tumultuous time, I think we performed, outperformed our diversified tool brethren.
In the meantime, our multiple gap has expanded dramatically, and hopefully, as these things kind of settle down, you'll see that close back again to what it was, which was a small discount to a small premium, actually, to some of the larger players in the diversified tool space.
Thank you. Moving on, I guess I'd say let's maybe look into the midterm outlook, so maybe three-ish, maybe five-ish years into the future. How does this all add up? What are you kind of envisioning for the future of Mesa in that timeframe?
Yeah. I think for the last several years, right, as the clinical trial starts, it's probably been on a minus 10%. We've been able to grow 3%-4% range. You see that indicator start to go again. Again, a great long-term leading indicator for our business. I think you'll see us accelerate, hopefully, higher than that.
Maybe that's possible. I think one of the things that's nice about the quality control markets, right, are these things tend to move a little bit more steadily than some of the underlying volatility, just given the vital nature of the products that we serve. So I think that's where we'd like to see ourselves end up, right? That mid-single-digit plus range that would require the kind of market returning. I'm done guessing when the market's going to kind of behave more normally, but I'll just say we're ready for it. And when we're ready for it, and that organic growth rate continues to accelerate, you'll start to see, obviously, a lot of really good financial ratcheting. I hope it's this year. But I think everybody else kind of says this is maybe a half step towards that.
Maybe the next fiscal year will be the right one where we kind of get back to that 6% tools growth rate and healthy clinical trial starts. And I think, obviously, we'd be excited for that, but we're prepared for whatever comes.
Thank you. I appreciate the realism there that I think you hear some folks who pontificate as to what is happening in the future, but you can only control what you can control, right? And so.
Yeah. I think that lean-based operating model for us has kind of proven out, right? So maybe a good example of that, right, in the first quarter of this fiscal year as the tariffs were hitting and as China was shutting things off and you were working around tariffs by shipping products, right? We had a bit of a profitability crunch in addition to FX changing dramatically during that period.
I see you saw that we were able to respond, right, acknowledge where the market was moving and our relationship with different countries, adjust our cost structure. So we added about, what, 300 basis points between the first and second quarter. So now we're operating about 150 basis points higher than we were last year, despite all these headwinds. We think we have more room to do that while continuing to ensure that we're investing for that long-term organic growth.
Thank you. Now, maybe getting more into the discrete present-day sort of thing. GK, you mentioned this earlier, and I appreciate you noting it that you took on some leverage, right? It was upper 3.5 almost.
John's the CFO. He took on the leverage. Oh, I took on all the good things.
So but we know that's what happened. So just kind of where are we at today from a debt paydown story? And kind of is that kind of number one in the priority mix? Where do you see yourself there?
Yeah. So in line with the GK acquisition, we did lever up to about 3.8 times. In a two-year period, we're now down to slightly under 3 as we sit here today. We'll continue to aim to drive that down below 2.5 times over the next 12 months, give or so. And we think at that point in time, we'll be positioned hopefully as the market rebounds and acquisition opportunities start to come out there, that we'll be well positioned.
That's great. Great. I guess the question is, do you feel like that laser focus, I guess even maybe rephrasing it, do you feel like it's a laser focus on the deleveraging, or is it, hey, not only are you able to utilize the free cash flow to delever, but we're also able to focus on R&D, things in the pipeline, having something from an M&A perspective as well?
Yeah. The right way to think about this is we buy proven core technologies in these highly regulated markets. We don't need to invest a whole lot in platform redevelopment and advanced high-level R&D. A lot of our R&D resources are focused on either sustaining engineering, keeping those platforms alive and evolving, but they don't want necessarily huge breakthrough innovation. Where they want to see is how does it apply to my specific test area?
Having a relatively broad generic platform for protein analytics and knocking down, improving our application by application how we can use that. That means our R&D profile tends to be much lower risk, quicker return. Because we buy them early enough in their cycle, we have a really long runway of how to apply these tools to solve different questions that enable us to accelerate our organic growth and keep up with it without huge R&D investments.
Thank you. Thank you.
That said, another way to say that, we're fully funded from an R&D standpoint, right? We don't see the need to accelerate funding. We just need the market to grow, and continued commercial execution will help us improve our organic growth rate.
Thank you. No, that's a good clarification because I think when I kind of read that, I was like, "Okay, we're really focused on deleveraging," but I appreciate your comments here because you're also not sacrificing anything else for that, and that's a great part of the business model. I guess maybe moving on towards valuation. So right now, we know that your valuations are 50%-60%-ish of other profitable diversified LST companies. If you had to kind of speak to Wall Street with a megaphone in a way, what do you think the market's missing there?
Yeah. I think, obviously, the tools market has been trading off of new cycles, right, and fear of how those new cycles will impact things. Naturally, if you're a lot larger, you have the ability to mitigate some of those things maybe a little bit more easily.
You have more flexibility, and you have a natural diversity to it. As a small company, I think typically small companies are very narrowly focused, right? And so you don't understand the magnitude of impact of one trend and how that could maybe really hurt a particular company or not. And so I think to a certain extent, right, we've all been operating a little bit on fear for a while, right? I think that was the tone for the last couple of years at this particular conference was a little bit more one of fear and what's the downside and how do I mitigate the downside. I hope as this market starts to clear, right, and that's led to a compression for small-cap companies and for us along with it.
I hope in general, right, as we kind of go out of the fear cycle and we get back to an optimism cycle and we start to see some of these things flow through biotech funding, clinical trial starts, right, we start to see the offensive potential again and see that our offensive potential, we feel like, is not only as good as large diversified tools from an organic perspective, our ability to move the needle inorganically is superior and that we have a chance then to kind of recoup that ground and see those multiples compress. I think if you look back and say, have the last four years been tumultuous for tools more so than the last 40? I don't know, before it was called life science tools, right?
Add it up and then look at the reality of how what we've done been able to do from an organic growth perspective and from a margin perspective, compare that to anybody else. I would say that's the reality. Get out of tarring everyone with the same brush just because you're small and look at the reality of what's happened. I think we'll continue to work hard to outperform, right? We'll do our best to make you happy to be investors in the space. We're investors in the space. We're happy to get. I'm personally really happy to get equity compensation. So I'm a believer.
There it is. I guess as I think about it, as I know we've got a couple of minutes left, looking at calendar year 2026, right? We're in January now and kind of starting here. Just what excites you the most about the business? Just I know we talked about deleveraging, but even just overall.
Yeah. I think we've got we're on the back of a lot of things. Whether it was two years ago, Calibration Solutions went through a supply chain crisis. Now it's moving to offense. And you see that growth rate kind of picking up to 5-6%. Lapping the headwinds going on in China and seeing the new product development portfolio that we have in clinical genomics, that's how we got to that low double digits in North America and Europe. Maybe that's a little bit hot for what we can do long-term, but that's a really nice growth rate that has yet to kind of shine through the year-over-year comps and the P&L.
Our Sterlization disinfection control has gone from a 1-2% grower through some really concerted commercial efforts to being a 6-8% for the last several years. We'd love to see that continue. And then finally, what am I missing? Oh, protein analytics. That's been a double-digit grower for us. Really, that's the one most anchored to clinical trial starts. Clinical trial starts go negative. We still grow double digits. I'm really going to be happy when clinical trial starts really renew again to see what that business can do. And I think that gets us back to a, I don't know, mid-single-digit with potential upside and a good year of high single digits. And you look at the ability to do acquisitions, even out of our own cash flow, you get out a few points of growth to that.
We can be back to being a steady double-digit grower, right, without requiring any more of your money to do so. But I think that then becomes probably, hopefully, an exciting story for investors in the long run and those long-term investors who obviously we'd love to have in the stock.
Thank you. And final question. Anything we didn't discuss today that you wanted to bring up in kind of the last few minutes here? Any final takeaways? John?
I don't think so. Thank you. No. I think you guys did a really nice job of covering it. Of course, we're happy to take any questions you guys have afterwards. We're a small company. We're not super foot forward from an IR perspective. So we also take calls, anybody, anytime, anywhere. Feel free to call us. And it's not real hard. Gary.Owens@mesalabs.com. We're easy to find.
So you have no excuse.
Thank you. Thank you both for joining. Thank you, audience, for joining us.