Heska (HSKA) Tops Q1 EPS by 19c, Revenues Beat

Heska (NASDAQ: HSKA) reported Q1 EPS of $0.10, $0.19 better than the analyst estimate of ($0.09). Revenue for the quarter came in at $29.5 million versus the consensus estimate of $28.57 million.

Kevin Wilson, Heska's Chief Executive Officer and President, commented, "The first quarter met or slightly exceeded our estimates in nearly all key areas. Leading the way was solid growth in CCA Lab Diagnostics, where POC Lab Consumables rose 13.8% over the prior year period and we added the highest number of new POC Lab Diagnostics subscriptions in any quarter since the middle of 2016. Active Subscriptions, Months Under Subscription, Minimum Contract Subscription Value ("CSV") and Subscription Retentions all progressed in-line with our full year Outlook. We saw (and continue to see) strong momentum from our new six months "Free Term" campaign for consumables and shipping, and utilization trends under this promotion are tracking higher than traditional minimums, which we anticipate will increase utilization over the life of these agreements above traditional Minimum CSV ranges. Moving to our corporate account installations efforts, while there is still much work to do, we are progressing positively with all of our accounts and are generally in-line with our goals for 2019 and beyond. I am proud of the strong work of our teams and their continuing success in this very competitive market. We continue to work hard to earn customers and we are being rewarded with market share gains from retention of satisfied Heska customers and from long-time competitor customers switching to a better future with Heska."

Mr. Wilson continued, "Heska teams executed well this quarter to expand the utility of our existing family of analyzers by developing and launching new tests. Progesterone testing for the Element i® is launched and the reception has been excellent. For Element DC® and DC5x®, the new Plus Panel eWrap™ is launched and early response is quite positive. For Element POC®, BUN has now been added to the test card to meet a major and longstanding request from clinicians. We believe these new test menu expansions will increase utilization and satisfaction amongst our thousands of current users and will also serve to attract new customers to Heska from the competition."

"On the international front, Heska Australia Pty Ltd is up and running in POC Lab Diagnostics," continued Mr. Wilson. "The team is trained and in place, operational systems are coming on line, and early results are encouraging, with a handful of localized Heska Reset subscriptions now signed up. Moving to Europe, Heska's February acquisition of Optomed in France is closed, the integration is progressing well, and preparations for launching Optomed endoscopy products in North America and Heska POC Lab Diagnostics into France and broader European markets are continuing. Near term contributions from these initiatives are anticipated to be small in 2019 and growing in 2020."

"On the new product front and in regards to our announced new product launches, Element i+™ and Element RC™ continue to be targeted for early limited release in June and full market release late in the third quarter of 2019," added Mr. Wilson. "Element UF™ progress continues positively, with several milestones now met, important data known, and key decisions made. With this progress and updated status, we continue to target early limited release of Element UF in the second quarter of 2020. While risks around precise timing and costs are inherent in major development initiatives such as these, based on the current status and progress of our announced projects, we remain optimistic for meeting our timetables and we continue to strongly believe in the market opportunity and feasibility of these projects."

"2019 continues to be the busiest and most productive period in Heska's history; simultaneously, we are broadening our proprietary solutions, growing our subscriber base, expanding our geographical footprint, and scaling our teams to create a multiplier effect. Underpinning these efforts is a growing pet healthcare market with favorable trends. Into this healthy environment, our challenge remains clear: (1) win with our Heska Reset POC Lab Diagnostics subscriptions; (2) deliver on transformative product and geography expansions; (3) more fully transition to core, proprietary, highly differentiated diagnostics developed, manufactured, and sold directly by Heska; and (4) allocate capital for product development, in-house manufacturing of Heska diagnostics, team expansion, acquisitions, joint ventures, and licensing opportunities," concluded Mr. Wilson.

For earnings history and earnings-related data on Heska (HSKA) click here.

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