Heska Corp (HSKA) 10-Q Quarterly Report November 2020

LOVELAND, CO, November 5, 2020 -- Heska Corporation (NASDAQ: HSKA; “Heska” or “Company”), a leading provider of advanced veterinary diagnostic and specialty products, reported financial results in two segments (North America and International) for its third quarter ended September 30, 2020. Point of Care is "POC" and scil animal care company GmbH is "scil" in this release.

Third Quarter 2020 and Year Over Year ("YOY") Metrics

$ in millions except Earnings Per Share ("EPS")


	Q3 ($)	Q3 (%) YOY
Consolidated Revenue	$56.6	81.3%
North America Revenue	$34.4	16.4%
International Revenue	$22.2	1

	Q3 (%)	Q3 YOY bps2
Consolidated Gross Margin	41.3%	-240

	Q3	Q3 (%) YOY
Net loss attributable to Heska	$(5.2)	1
Net loss margin3	(9.2)%	(8.6)%
Adjusted EBITDA Margin3	15.3%	8.9%
EPS, Diluted	$(0.57)	1
Non-GAAP EPS, Diluted3	$0.08	(42.9)%

1 Comparable percentage variances are not meaningful. 2 "bps" is basis points. 3 See “Use of Non-GAAP Financial Measures” and related reconciliations provided below.

Third Quarter 2020 Highlights

•Record quarterly revenue growth led by strong POC Lab Consumables and recent scil acquisition. North America POC Lab Consumables sales up 15.2% in period and up 9.7% year to date.

•As anticipated, consolidated gross margin was impacted by acquired lower scil margin. Year-over-year, North America quarterly sales rose 16.4% at 48.3% gross margin (+430 bps compared to prior year) and International sales and gross margin met the Company's targets.

•Net loss and diluted EPS impacted by income tax, stock-based compensation, one-time transaction costs, interest associated with convertible debt, and other expenses relating primarily to the

The following information was filed by Heska Corp (HSKA) on Thursday, November 5, 2020 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-Q Quarterly 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-Q Quarterly Report:

Financial - Earnings Highlight
Management uses EBITDA, adjusted EBITDA, adjusted EBITDA margin and non-GAAP net income (loss) per diluted share as key profitability measures, which are included in monthly or quarterly analyses of our operating results to our senior management team, our annual budget and related goal setting and other performance measurements.

Financial - Income Highlight
Net (Loss) Income Attributable to Heska Corporation Net loss attributable to Heska was $5.2 million in the three months ended September 30, 2020, compared to net loss attributable to Heska of $0.3 million in the three months ended September 30, 2019.
Financial - Debt Highlight
This decrease is partially offset by non-cash transactions impacting cash used by operating activities, including a $4.3 million increase related to amortization of the debt discount, a $4.3 million increase in depreciation and amortization driven by the acquisition of scil, and a $3.3 million increase in stock-based compensation expense.
Financial - Earnings Highlight
Despite these headwinds, we believe we are well positioned because: (1) our customers and products are essential, (2) our main Point of Care laboratory business continues to show healthy consumables use and margin, (3) our subscriptions model metrics continue to show solid performance, (4) our vaccines and pharmaceuticals business continues to perform with minimal disruption, (5) our balance sheet is strong, and (6) our employees, logistics, supply chain, and operations continue to operate well in the current environment and they are fully prepared for both a phased return and an instant return to full capacity.
Financial - Expense Highlight
The increase in tax expense is due to an increased valuation allowance based on a realizability assessment of deferred tax assets relating to expiring net operating loss carry-forwards.
Revenue - Product
Such statements, which include statements...Read more
Revenue - Product
The increase is due to...Read more
Financial - Expense
In addition, increased stock-based compensation...Read more
Other - Other
Liquidity, Capital Resources and Financial...Read more
Financial - Earnings
The increase in gross profit...Read more
M & A - Other
The increase in cash used...Read more
Revenue - Product
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Financial - Earnings
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Financial - Earnings
The increase in gross profit...Read more
Financial - Income
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Financial - Cash Flow
We believe that our cash,...Read more
Other - Other
Net cash used in investing...Read more
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Financial - Income
-33- Income Tax (Benefit) Expense...Read more
Financial - Expense
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Other - Other
The non-GAAP financial measures presented...Read more
Financial - Earnings
See "Non-GAAP Financial Measures" for...Read more
Other - Other
The $4.8 million increase was...Read more
Revenue - Product
The $6.6 million increase was...Read more
Financial - Income
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Research and development expenses decreased...Read more
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M & A - Other
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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Heska Corp provided additional information to their SEC Filing as exhibits

Exhibit 10.1: Material Contract

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-Q Quarterly Report
Accession Number: 0001038133-20-000081
Submitted to the SEC: Thu Nov 05 2020 4:50:46 PM EST
Accepted by the SEC: Thu Nov 05 2020
Period: Wednesday, September 30, 2020
Industry: Biological Products No Disgnostic Substances