LOVELAND, Colo., March 5, 2015 /PRNewswire/ -- Heska Corporation (NASDAQ: HSKA - "Heska" or the "Company"), a provider of advanced veterinary diagnostic and other specialty veterinary products, today reported financial results for its fourth quarter and 12 months ended December 1, 2014.
2014 Highlights:
- Consolidated revenue for 2014 rose to a record of $89.8 million, up 15% from $78.3 million in 2013.
- Gross profit for 2014 was up 17% to $35.7 million from $30.6 million in 2013.
- Net income attributable to Heska Corporation in 2014 was $2.6 million, or 41 cents per diluted share, compared to a net loss of 1.2 million in 2013, or -21 cents per diluted share.
- Heska ended 2014 with $5.9 million in cash, $189 thousand in short-term debt and $19.3 million in working capital.
- On October 28, 2014 Henry Schein Animal Health partnered with Heska to become Heska's new and exclusive distributor of blood analyzers and related consumables.
- Generally available customer release of Heska blood analyzer products through Henry Schein Animal Health began the second week of December.
Fourth Quarter 2014 Highlights:
- Consolidated revenue for the fourth quarter of 2014 rose to a record of $24.3 million, up 3.5% from $23.5 million in the fourth quarter of 2013.
- Gross profit for the fourth quarter of 2014 was down 3.5% to $10.0 million from $10.4 million in the fourth quarter of 2013.
- Gross margin was 41.3% compared to 44.3% in the fourth quarter of 2013.
- The Company reported net income attributable to Heska Corporation of $829 thousand, or 12 cents per diluted share, compared to net income attributable to Heska Corporation of $1.2 million in the fourth quarter of 2013, or 20 cents per diluted share.
"I am extremely proud of Heska and our 2014 annual results. Heska finished 2014 a much more focused and better positioned commercial force than at any time in our history. I expect Heska to compete for and to win market share and increased profits in 2015 and beyond," commented Kevin Wilson, Heska's Chief Executive Officer and President. "2014 was a highly successful transition year in which Heska delivered exceptional financial results and, at the same time, replenished its stores of tactical, strategic, and financial power for the future. Each of our teams delivered. We got products right, with new introductions and substantial refreshes. These products grew Heska in 2014 and will continue to do so in 2015; I expect Heska to announce and to launch several new products in 2015. We got strategy right, by seizing immediate opportunities while nurturing long-term ones. These opportunities benefited Heska in 2014 and will continue to do so in 2015; I expect Heska to seize several meaningful opportunities in 2015. In 2014, Heska increased revenues, improved margins in key areas, implemented disciplined expense control, increased profits, and invested in many key initiatives that will yield fruit in 2015 and beyond."
"In 2014, Heska transitioned away from dependence on the industry's more traditional and front-end loaded capital equipment sales model by fully deploying Heska's new 'Reset' and rental programs. These multiple period programs are investments in our business model that dampen short term results, in exchange for long-term, contracted, protected growth. I am proud to note that Heska delivered our record 2014 financial performance, even as we significantly expanded the use and promotion of these programs. I anticipate ever-wider adoption of this model in 2015."
"The long-awaited leveling of the nationwide distribution playing field occurred in the fourth quarter of 2014. On October 28th, Heska signed a distribution agreement with Henry Schein Animal Health, the largest companion animal health distribution company in the United States. Henry Schein Animal Health will market and promote Heska's full line of blood analyzer instruments and consumables. Commercial general release of these Heska products through Henry Schein Animal Health began broadly in the second week of December. Early results have been impressive, and Heska enters 2015 with its largest pipeline of active, year-end opportunities on record."
Financial Results
Full year 2014 revenue was $89.8 million, an increase of 14.7% compared to revenue of $78.3 million in 2013. In 2014, Core Companion Animal Health revenue grew 9.0% to $72.4 million from $66.4 million in 2013. Other Vaccines, Pharmaceuticals and Products revenue increased 46.5% to $17.5 million from $11.9 million in 2013. 2014 gross profit was $35.7 million, or 39.8% gross margin, compared with gross profit of $30.6 million, or 39.1% gross margin in 2013. Total 2014 operating expenses, including a $1.5 million charge for CEO and Executive Chair non-cash compensation related to 2014 employment agreements, were $32.8 million, or 36.5% of sales, compared with total operating expenses of $32.1 million, or 40.9% of sales in 2013. The Company reported 2014 operating income of $2.9 million, up from an operating loss of $1.4 million in 2013. Income before income taxes was $3.0 million in 2014, compared to a loss before taxes of $1.4 million in the prior year period. 2014 net income attributable to Heska Corporation, inclusive of a $1.3 million deferred tax expense, was $2.6 million, or $0.41 per diluted share, compared with 2013 net loss attributable to Heska Corporation of $1.2 million, inclusive of a $637 thousand deferred tax benefit, or $0.21 per diluted share.
Fourth quarter 2014 revenue was $24.3 million, up 3.5% as compared to $23.5 million in the fourth quarter of 2013. In the fourth quarter of 2014, Core Companion Animal Health revenue increased approximately 3.6% to $21.1 million from $20.4 million in the prior year period. The fourth quarter of 2013 was a particularly strong quarter for the Core Companion Animal Health segment. Other Vaccines, Pharmaceuticals and Products revenue increased approximately 2.5% to $3.2 million from $3.1 million in the fourth quarter last year. Gross profit was $10.0 million, or a 41.3% gross margin, in the fourth quarter of 2014 compared with gross profit of $10.4 million, or 44.3% gross margin, in the fourth quarter of 2013. The imaging-related revenue in the year-ago quarter was accompanied by exceptionally high gross profit margins. Heska Imaging US, LLC ended 2014 with a $1.4 million backorder, which the Company expects to generate approximately $400 thousand in operating income as the underlying products ship in early 2015.
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