Heska Corp (HSKA) 10-K Annual Report March 2019

LOVELAND, CO, February 26, 2019 -- Heska Corporation (NASDAQ: HSKA - News; “Heska” or the “Company”), a provider of advanced veterinary diagnostic and specialty products, today reported financial results for its fourth quarter and full year ended December 31, 2018. The Company reports results in two segments: Core Companion Animal (“CCA”) and Other Vaccines & Pharmaceuticals (“OVP”). The Company forecast provided during the May 15, 2018 Analyst Day in New York and updated during the Company's second quarter earnings call on August 7, 2018 is referred to in this release as "Outlook".

2018 Fourth Quarter, Full Year ("FY"), Year Over Year ("YOY"), and Outlook Comparison

Revenue (Millions)



	Q4 ($)	Q4 (%) YOY	FY ($)	FY (%) YOY	2018 Outlook
Consolidated Revenue	$34.1	(5.5)%	$127.4	(1.5)%	$135.0
CCA Revenue	$28.3	(4.9)%	$108.9	3.6%	$116.0
Lab Consumables	$10.8	5.8%	$44.8	14.3%	$45.8
Instruments: Lab & Other	$2.3	(15.5)%	$9.9	(15.4)%	$11.3
Instruments: Infusion Pumps	$0.98	(16.8)%	$2.7	(32.2)%	$3.8
Imaging	$7.1	(14.4)%	$22.8	4.2%	$25.3
PVD	$7.1	(3.4)%	$28.7	1%	$29.4
OVP Revenue	$5.8	(8.1)%	$18.5	(23.3)%	$19.0

Margin

2018 fourth quarter (“Q4”) consolidated gross margin down 56 basis point (“bps”) to 45.4%;

2018 FY gross margin down 60 bps to 44.4% (Outlook 45%)

Includes Q4 $415 thousand (120 bps) Imaging inventory reserve impact (Consolidated)

Includes FY $545 thousand (43 bps) Imaging inventory reserve impact (Consolidated)

Q4 CCA gross margin down 338 bps to 46.8%; FY up 11 bps to 48.3%

Includes Q4 $415 thousand (147 bps) Imaging inventory reserve impact

Includes FY $545 thousand (50 bps) Imaging inventory reserve impact

Q4 OVP gross margin up 1,252 bps to 38.5%; FY down 957 bps to 21.8% (Outlook 21.5%)

The following information was filed by Heska Corp (HSKA) on Tuesday, February 26, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Heska Corp's 10-K Annual Report:

Financial - Earnings Highlight
The increase in gross profit was driven primarily by favorable pricing, while the increase in gross margin percentage was driven in part by favorable margins on consumables in our CCA segment and product mix in our OVP segment.

Revenue - Geography Highlight
Net cash provided by operating activities increased due to significant working capital fluctuations such as a $19.9 million increase in cash provided by inventories, due to the timing of inventory purchases in 2017; a $7.5 million increase in cash provided by accrued liabilities, largely due to a preliminary settlement agreement relating to outstanding litigation in the amount of $6.75 million which we expect to pay in the first half of 2019 (See Note 13 -Commitments and Contingencies in our Consolidated Financial Statements included in Item 8 of this Form 10-K); and a $2.8 million increase in cash provided by current and non-current lease receivables due to a lower level of capital lease placements and timing of collections on existing leases.
Financial - Income Highlight
The following table sets forth, for the periods indicated, certain data derived from our Consolidated Statements of Income (in thousands): The following tables set forth, for the periods indicated, segment data derived from our Consolidated Statements of Income (in thousands): Total revenue decreased 1% to $127.4 million in 2018 compared to $129.3 million in 2017.
Revenue - Product Highlight
CCA segment sales are expected to be negatively impacted by a reduction in sales of TRI-HEART heartworm preventative as previously disclosed on our fourth quarter earnings release.
Revenue - Product Highlight
Such statements, which include statements concerning future revenue sources and concentration, gross profit margins, selling and marketing expenses, research and development expenses, general and administrative expenses, capital resources, additional financings or borrowings and additional losses, are subject to risks and uncertainties, including, but not limited to, those discussed below and elsewhere in this Form 10-K, particularly in Item 1A "Risk Factors," that could cause actual results to differ materially from those projected.
Other - Other
The following tables reconcile our...Read more
Other - Other
We believe that adequate liquidity...Read more
Other - Other
A summary of our cash...Read more
Other - Other
Net cash provided by operating...Read more
Other - Other
Net cash used in investing...Read more
Other - Other
Net cash provided by financing...Read more
Financial - Expense
Any change in the probability...Read more
Financial - Earnings
Gross margin percent increased to...Read more
Financial - Shares
We recognize any related share-based...Read more
Financial - Shares
We recognize any related share-based...Read more
Financial - Earnings
The decrease in both gross...Read more
Revenue - Product
Under the New Revenue Standard,...Read more
Legal - Other
The increase was driven by...Read more
Revenue - Product
These types of agreements include...Read more
Financial - Earnings
These factors were partially offset...Read more
Revenue - Product
Approximately $10.8 million, $13.8 million...Read more
Revenue - Product
The increase was driven primarily...Read more
Financial - Income
During the year ended December...Read more
Financial - Cash Flow
If the net carrying value...Read more
Financial - Earnings
The difference between this line...Read more
Other - Other
If actual market conditions or...Read more
Revenue - Product
Since items in this area...Read more
Revenue - Product
CCA segment revenue increased 4%...Read more
Revenue - Product
OVP segment revenue increased 6%...Read more
Other - Other
Specific allowances are maintained for...Read more
Other - Other
Our actual results may differ...Read more
Revenue - Product
This was partially offset by...Read more
Revenue - Product
We view OVP reported revenue...Read more
Revenue - Product
Our experience has been that...Read more
Financial - Earnings
Gross profit increased 8% to...Read more
Other - Other
Our financial plan for 2019...Read more
Financial - Income
In 2018, we had total...Read more
Financial - Expense
General and administrative expenses increased...Read more
Financial - Expense
General and administrative expenses increased...Read more
Financial - Earnings
Gross margin decreased to 44.4%...Read more
M & A - Other
Additionally, we are actively seeking...Read more
Financial - Earnings
Net income attributable to Heska...Read more
Other - Other
Our management believes that the...Read more
Financial - Cash Flow
If necessary, we would calculate...Read more
Revenue - Product
Revenue from Point of Care...Read more
Financial - Cash Flow
If an impairment review is...Read more
Financial - Expense
Research and development expenses increased...Read more
Other - Other
At December 31, 2018, we...Read more
Other - Other
At December 31, 2018, we...Read more
Other - Other
The Company has not entered...Read more
Other - Other
We had no impairments of...Read more
Other - Other
Additionally, we had a $2.1...Read more
Financial - Shares
As of December 31, 2018,...Read more
Financial - Expense
We view this facility as...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

Heska Corp provided additional information to their SEC Filing as exhibits

Exhibit 10.1: Material Contract

Exhibit 10.2: Material Contract

Exhibit 10.3: Material Contract

Exhibit 10.4: Material Contract

Exhibit 10.5: Material Contract

Exhibit 10.6: Material Contract

Exhibit 10.7: Material Contract

Exhibit 10.66: Material Contract

Exhibit 10.72: Material Contract

Exhibit 21.1: Subsidaries Of The Registrant

Exhibit 23.1: Consents Of Experts And Counsel

Exhibit 23.2: Consents Of Experts And Counsel

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Ticker: HSKA
CIK: 1038133
Form Type: 10-K Annual Report
Accession Number: 0001038133-19-000015
Submitted to the SEC: Thu Mar 07 2019 6:31:42 AM EST
Accepted by the SEC: Thu Mar 07 2019
Period: Monday, December 31, 2018
Industry: Biological Products No Disgnostic Substances