VCA Antech, Inc. (WOOF) Tops Q2 EPS by 1c; Reaffirms

VCA Antech, Inc. (NASDAQ: WOOF) reported Q2 EPS of $0.55, $0.01 better than the analyst estimate of $0.54. Revenue for the quarter came in at $489.5 million versus the consensus estimate of $491.19 million.

VCA Antech, Inc. reaffirmed FY2014 guidance.

Bob Antin, Chairman and CEO, stated, "We are very pleased with the increase in our organic revenue growth rates and related margin improvement in both our core Animal Hospital and Laboratory business segments. Accordingly, we remain optimistic with respect to our results for the second half of the year.

"Animal Hospital revenue in the current quarter increased 5.9%, to $386.8 million, driven by acquisitions made during the past 12 months and same-store revenue growth of 2.2%. Our same-store gross profit margin increased to 16.8% from 16.6%, while our total gross margin decreased slightly to 16.4%, from 16.5% in the prior-year quarter. The following margins are adjusted excluding amortization: adjusted same-store gross profit margin increased to 17.7%, from 17.4% in the prior-year quarter; adjusted total gross margin increased to 17.4%, from 17.3% in the prior-year quarter; adjusted operating margin decreased to 14.8%, from 14.9% in the prior-year quarter. During the quarter, we acquired six independent animal hospitals which had historical combined annual revenue of $12.1 million.

"Laboratory internal revenue in the second quarter increased 5.0%, to $95.8 million. Our Laboratory gross profit margin increased to 51.2% from 49.6%, and our operating margin increased as well to 42.5%, from 40.8% in the prior-year quarter. Excluding amortization expense, our adjusted Laboratory gross profit margin increased to 51.4%, from 49.8% in the prior-year quarter, and our adjusted operating margin likewise increased to 42.8%, from 41.1% in the prior-year quarter.

"Revenue from our other operations reported in our All Other segment decreased to $23.7 million, from $27.5 million in the prior-year quarter. Sound-Eklin, our medical technology business included in this segment, was negatively impacted by the May 2014 fire, which destroyed their offices and manufacturing facility. We are grateful for the support of our clients, VCA family and friends in the veterinary industry as we work to bring their operations back to normal."

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