Heska Corp (HSKA) 10-Q Quarterly Report November 2022

LOVELAND, CO, November 8, 2022 -- Heska Corporation (NASDAQ: HSKA; “Heska” or the “Company”), a leading global provider of advanced veterinary diagnostic and specialty solutions, reported financial results in two segments (North America and International) for its third quarter ended September 30, 2022. In this release, Point of Care is “POC”, Pharmaceuticals, Vaccines and Diagnostics is “PVD”, Other Vaccines and Pharmaceuticals is “OVP”, and basis points is “bps”.

Third Quarter 2022 and Year Over Year ("YOY") Metrics

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


	Q3 2022 ($)	Q3 2021 ($)	Q3 (%) YOY
Consolidated Revenue	$61.5	$60.2	2.1%
North America Revenue	$40.3	$37.8	6.7%
International Revenue	$21.2	$22.4	(5.7)%

	Q3 2022 (%)	Q3 2021 (%)	Q3 YOY bps
Consolidated Gross Margin	43.7%	41.9%	180
Net Loss Margin1	(0.1)%	(2.6)%	250
Adjusted EBITDA Margin1,2	10.3%	9.4%	90

	Q3 2022 ($)	Q3 2021 ($)	Q3 (%) YOY
Net loss attributable to Heska	$(0.4)	$(1.9)	77.0%
Net loss3	$(0.1)	$(1.6)	95.1%
Adjusted EBITDA2	$6.3	$5.6	12.3%
EPS, Diluted	$(0.04)	$(0.19)	78.9%
Non-GAAP EPS, Diluted2	$0.41	$0.20	105.0%

1Net loss margin and adjusted EBITDA margin represents the ratio of net loss before equity in losses of unconsolidated affiliates and adjusted EBITDA, respectively, to revenue. 2See “Use of Non-GAAP Financial Measures” and related reconciliations provided below. 3Net loss represents the "Net loss before equity in losses of unconsolidated affiliates".

Report Highlights

•Consolidated revenue increased 7.1% on a constant currency basis (see “Use of Non-GAAP Financial Measures”) to $61.5 million, led by North America POC Lab Consumables growth of 11.4% and sales in POC Imaging and Informatics.

The following information was filed by Heska Corp (HSKA) on Tuesday, November 8, 2022 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
The increase in gross profit and gross margin for both periods is driven by increased revenue, excluding foreign exchange impacts, as well as favorable product mix, particularly within POC laboratory consumables.

Financial - Earnings Highlight
Management uses EBITDA, adjusted EBITDA, adjusted EBITDA margin and non-GAAP net income per diluted share as key profitability measures, which are included in monthly or quarterly analyses of our operating results to our -38- senior management team, our annual budget and related goal setting and other performance measurements.
Financial - Earnings Highlight
The increases in both gross profit and gross margin percentage were due to higher sales of consumables relative to total sales, which are our highest margin products, further strengthened by product rationalization and transition effort within our international segment and overall annual price increases.
Revenue - Product Highlight
Such statements, which include statements concerning future revenue sources and concentration, international market expansion, gross profit margins, selling and marketing expenses, remaining minimum performance obligations, research and development expenses, general and administrative expenses, capital resources, financings or borrowings and additional losses, are subject to risks and uncertainties, including, but not limited to, those discussed under the caption "Risk Factors" contained in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021 that could cause actual results to differ materially from those projected.
Financial - Expense Highlight
The change for the nine months ended September 30, 2022 is due to the $10 million licensing payment, the $3.5 million provision for credit losses on the convertible note receivable, increased cash compensation costs as well as non-recurring and recurring costs associated with recent acquisitions, partially offset by increases in revenue and gross profit.
Other - Other
Liquidity, Capital Resources and Financial...Read more
Revenue - Geography
-46- Effect of currency translation...Read more
Financial - Income
(4) Represents income tax expense...Read more
Revenue - Product
The increase in the three...Read more
Financial - Expense
The increase for the nine...Read more
Financial - Earnings
Gross margin increased to 43.7%...Read more
Financial - Earnings
Gross margin increased to 43.6%...Read more
Other - Other
Our financial position remains strong...Read more
Other - Other
The non-GAAP financial measures presented...Read more
M & A - Other
The acquisition of VetZ also...Read more
Revenue - Geography
The decrease is driven by...Read more
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For the three months ended...Read more
Revenue - Product
The change for the three...Read more
Other - Other
Net Loss Attributable to Heska...Read more
Other - Other
The $3.0 million increase was...Read more
Revenue - Product
The increase for the nine...Read more
M & A - Other
The acquisition of VetZ also...Read more
Financial - Expense
The Company recognized $0.2 million...Read more
Financial - Expense
General and administrative expenses decreased...Read more
Other - Other
Our belief may prove to...Read more
Financial - Income
Net (loss) income margin and...Read more
Revenue - Product
Since items in this area...Read more
Revenue - Product
Revenue Total revenue increased 2.1%...Read more
Revenue - Geography
North America Segment -41- North...Read more
Revenue - Geography
North America segment revenue increased...Read more
Revenue - Product
Total revenue increased 2.9% to...Read more
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This incorporates the discrete tax...Read more
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Income Tax Benefit For the...Read more
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With respect to foreign currency...Read more
Revenue - Product
Our experience has been that...Read more
Financial - Earnings
Gross Profit Gross profit increased...Read more
Financial - Earnings
Gross profit increased 6.9% to...Read more
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In the three months ended...Read more
Financial - Income
For the nine months ended...Read more
Financial - Income
In the nine months ended...Read more
Financial - Expense
General and administrative expenses increased...Read more
Revenue - Product
The increase in the three...Read more
Financial - Income
See "Non-GAAP Financial Measures" for...Read more
Other - Other
We believe these non-GAAP measures...Read more
Financial - Expense
-36- Research and development expenses...Read more
Financial - Expense
Research and development expenses increased...Read more
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The decrease for the three...Read more
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The tax benefit for the...Read more
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We view this facility as...Read more
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For example, we actively seek...Read more
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We will continue to actively...Read more

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 2.4: Plan Of Acquisition, Reorganization, Arrangement, Liquidation Or Succession

Exhibit 2.5: Plan Of Acquisition, Reorganization, Arrangement, Liquidation Or Succession

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: 0001038133-22-000043
Submitted to the SEC: Tue Nov 08 2022 1:22:03 PM EST
Accepted by the SEC: Tue Nov 08 2022
Period: Friday, September 30, 2022
Industry: Biological Products No Disgnostic Substances