North America Point of Care
Lab Consumables up 11.4%, Consolidated Gross Margin up 180
bps
LOVELAND, Colo., Nov. 8, 2022
/PRNewswire/ -- 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 %
|
|
|
1 Net 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.
- Year over year consolidated gross margin: up 180 bps to 43.7%,
driven by the International segment expanding approximately 510 bps
to 38.4%.
- Strategic initiatives advanced, including new product launches
toward commercial rollout and the execution of a definitive
agreement to acquire LightDeck Diagnostics ("LightDeck") to
strengthen manufacturing at scale capabilities, to accelerate menu
development, and to acquire valuable intellectual property and
rights to globally scale the Company's key Element i+®
growth platform.
- Received long-awaited USDA authorization October 20th for truRapid™ canine
heartworm tests.
Kevin Wilson, Heska's Chief
Executive Officer and President, commented, "In the third quarter,
Heska exceeded nearly all profitability targets despite some
softness in reported revenue. The profitability performance is
clear throughout the release, as we execute on our European
products and subscriptions conversion strategy and North America continues to do well. Turning to
sales, underlying patient visits trends in North America are showing an upswing, while
International reported top-line remains challenged by seasonal,
energy inflation, and economy related lower patient visits and
budgets, and significant foreign exchange currency impacts that,
when combined with our ongoing, purposeful conversion of legacy
customers into higher margin, lower unit price subscriptions, drove
a 2.7% reduction in constant currency International POC Lab
Consumables. Meanwhile, North America POC Lab Consumables sales
grew 11.4%, driven by growing Element AIM®, Element
POC®, and Heskaview® Telecytology
utilization, and price, highlighting the ongoing contributions from
our recent innovations and the resiliency of Heska's expanding
customer base.
"As we work to close this year and begin next, our solutions,
selling prices and costs, supply chain, innovations pipeline, and
team are broadly stronger and much further along in our strategic
plan than last year. Heska remains focused on entering 2023
prepared to Win at Scale and Win at Innovation," continued Mr.
Wilson, "Advancing both goals this quarter, Heska is securing major
manufacturing-at-scale and R&D capabilities by acquiring
LightDeck, the inventor and producer of Heska's very important
Element i+® platform. In addition to a broad menu of
already released and popular immunoassay tests, Element
i+® is targeted to launch transformative menu in 2023,
including our exclusive point of care Nu.Q® Vet Cancer
Screening Test recently announced. Further supporting our 2023
consumables growth, in addition to continued success in Element
AIM®, is receipt of our long-awaited USDA clearance on
October 20th for our
truRapid™ canine heartworm product, in advance of
the main 2023 selling season and upcoming new, cloud-based
AI-powered Practice Information Management Software ("PIMS") in the
first half of 2023. These and several other exciting product and
commercial wins on tap for early 2023, combined with a strong
subscriptions base, a solid cash position, a great team, several of
the industry's newest and most advanced halo products within our
broad technology stack, and a wonderful pet healthcare space with
ever-increasing focus on diagnostics and data have Heska ready to
Win at Scale and Win at Innovation."
Third Quarter
Financial Results
Revenue North America Segment
Revenue
|
|
|
Q3 2022
($)
|
Q3 (%)
YOY
|
North America
Revenue
|
$40.3
|
6.7 %
|
POC Lab Instruments
& Other
|
$3.6
|
2.3 %
|
POC Lab
Consumables
|
$19.7
|
11.4 %
|
POC Imaging &
Informatics
|
$7.7
|
3.4 %
|
PVD1
|
$5.3
|
24.3 %
|
OVP2
|
$4.0
|
(18.2) %
|
|
|
1
|
"PVD" is
Pharmaceuticals, Vaccines and Diagnostic, and includes Tri-Heart®
heartworm and Allercept® allergy testing and
therapeutics.
|
2
|
"OVP" is Other
Vaccines and Pharmaceuticals, which includes contract manufactured
products, mainly production animal.
|
Note:
|
Numbers may not foot
due to rounding. North American segment is not materially impacted
by fluctuations in foreign exchange rates.
|
International
Segment Revenue
|
|
|
Q3 2022
($)
|
Q3 (%)
YOY
|
Q3 (%)
YOY
|
|
|
Reported
|
Constant
Currency
|
International
Revenue
|
$21.2
|
(5.7) %
|
7.3 %
|
POC Lab Instruments
& Other
|
$3.7
|
(2.7) %
|
13.1 %
|
POC Lab
Consumables
|
$9.4
|
(16.4) %
|
(2.7) %
|
POC Imaging &
Informatics
|
$7.2
|
23.8 %
|
36.3 %
|
PVD1
|
$0.8
|
(46.1) %
|
(43.2) %
|
|
|
1
|
"PVD" is
Pharmaceuticals, Vaccines and Diagnostic, and includes allergy
testing and therapeutics.
|
Note:
|
Numbers may not foot
due to rounding. International segment is materially impacted by
foreign exchange rates fluctuations; therefore we present the
change in constant currency as well. See "Use of Non-GAAP Financial
Measures" for definition of constant currency.
|
Profitability
Consolidated gross margin expanded approximately 180 bps to
43.7%. International gross margin increased approximately 510 bps
to 38.4%, largely driven by the continued execution of ongoing
product rationalization efforts to replace lower margin legacy
products acquired during the 2020 acquisition of scil Animal Care
Company, particularly within POC Lab. The addition of PIMS and
other software applications to our product portfolio from our
acquisition of VetZ earlier this year favorably impacted gross
margin. North America gross margin
experienced slight compression of approximately 50 bps to 46.5%,
due to product mix and as expected as we continue to install
instrument placements of Element AIM®.
Consolidated operating margin improved approximately 290 bps to
negative 1.1%. Currency favorably impacted gross margin
approximately 50 bps and consolidated operating margin
approximately 30 bps. Adjusted EBITDA margin, which excludes
stock-based compensation and acquisition related costs,
non-recurring items and extraordinary charges not indicative of
ongoing operations, grew approximately 90 bps (50 bps on a constant
currency basis) driven by gross margin gains, partially offset by
increased operating costs from investment in growth and new
technologies like cloud-based PIMS and new
truRapid™ portfolio.
Liquidity
We continue to demonstrate a strong liquidity position with cash
of $161.1 million.
2022 Updated Outlook
This year's challenges in foreign exchange, inflation, interest
rates, labor constraints, supply chain, pandemic-era comparisons,
pet patient visit trends, delayed regulatory approvals, and the
slower-than-expected launch of truRapid™ single use tests and
Element AIM® into Europe and other channels have all combined
into headwinds to reaching our 2022 Outlook. We are updating our
2022 Updated Outlook to reflect the accumulation of these factors
year to date.
- Reported revenue approximately in line with the prior year and
up approximately 5% in constant currency.
- North America POC Lab Consumables revenue growth rate of
approximately 8%-10% vs prior year.
- International POC Lab Consumables revenue decline of 11%-13% vs
prior year on a reported basis, roughly in line with prior year on
a constant currency basis.
- Gross margin of 43%-44% and adjusted EBITDA margin at
approximately 11%.
Earnings Conference Call
Heska management will host a conference call on November 8, 2022 at 9:00
a.m. MT (11:00 a.m. ET) to discuss the Company's third
quarter 2022 financial results. The call may be accessed by dialing
1-800-239-9838 within the United
States and 1-323-794-2551 outside of the United States and referencing conference
identification number 7035658. The call will also be webcast online
at https://ir.heska.com/events/. A telephonic replay of the
conference call will be available through November 22, 2022. The replay may be accessed by
dialing 1-844-512-2921 within the United
States or 1-412-317-6671 outside of the United States and referencing replay
identification number 7035658. The webcast will be archived on the
Company's website for 90 days.
About Heska
Heska Corporation (NASDAQ: HSKA) manufactures, develops and
sells advanced veterinary diagnostic and specialty healthcare
solutions through its two business segments: North America and International. Both segments
include Point of Care Lab testing instruments and consumables,
single-use offerings such as in-clinic diagnostic tests, digital
imaging products, software and services, data services, allergy
testing and immunotherapy, and heartworm preventive products. The
North America segment also
includes private label vaccine and pharmaceutical production under
third-party agreements and channels, primarily for herd animal
health. For more information, please visit www.heska.com.
Forward-Looking Statements
This document contains forward-looking information related to
the Company. These forward-looking statements generally include
statements that are predictive in nature and depend upon or refer
to future events or conditions, and include words such as
"believes," "plans," "anticipates," "expects," "intends,"
"strategy," "future," "opportunity," "may," "will," "should,"
"could," "potential," or similar expressions. All of the statements
in this document, other than historical facts, are forward-looking
statements and are based on a number of assumptions that could
ultimately prove inaccurate and cause actual results to materially
deviate from forward-looking statements. Forward-looking statements
in this document include, among other things, statements with
respect to Heska's future financial and operating results, future
sales, sales split percentages, sales geography percentages, market
share, and strategic goals, and the anticipated benefits of the
scil, Lacuna, BiEsseA, Biotech, VetZ, and potential LightDeck
acquisitions. Such statements are based on current expectations and
are subject to a number of risks and uncertainties, including but
not limited to, risks and uncertainties related to the ability to
achieve the anticipated benefits of recent acquisitions; supplier
availability; competing suppliers; any product's ability to
performed and be recognized as anticipated, in particular when such
product is under development; Heska's ability to sell and market
its products in an economically sustainable fashion, including
related to varying customs, cultures, languages and sales cycles
and uncertainties with foreign political and economic climates; the
impact of foreign exchange rates, inflation, interest rates, and
labor constraints; the Company's ability to integrate the acquired
businesses within its existing operations; and new product
development and release schedules.
Other factors that could cause actual results to differ
materially from those matters expressed in or implied by such
forward-looking statements include, among others, risks and
uncertainties related to: the impact of the COVID-19 pandemic on
our business, results of operations and financial condition; the
success of third parties in marketing our products; our reliance on
third party suppliers and collaborative partners; our dependence on
key personnel; our dependence upon a number of significant
customers; competitive conditions in our industry; our dependence
on third parties to successfully develop new products; our ability
to market and sell our products successfully; expansion of our
international operations; the impact of regulation on our business;
the success of our acquisitions and other strategic development
opportunities; our ability to develop, commercialize and gain
market acceptance of our products; cybersecurity incidents and
related disruptions and our ability to protect our stakeholders'
privacy; product returns or liabilities; volatility of our stock
price; and our ability to service our convertible notes and comply
with their terms. Such factors are set forth under "Risk Factors"
in the Company's most recent annual report on Form 10-K.
Use of Non-GAAP Financial Measures
In addition to financial measures presented on the basis of
accounting principles generally accepted in the U.S. ("U.S. GAAP"),
we also present third quarter and year to date 2022 and 2021 EBITDA
(net (loss) income before income taxes, interest, depreciation and
amortization), Adjusted EBITDA, Adjusted EBITDA Margin and Non-GAAP
earnings per share, which are non-GAAP measures. These measures
should be viewed as a supplement to (not substitute for) our
results of operations presented under U.S. GAAP. The non-GAAP
financial measures presented may not be comparable to similarly
titled measures of other companies because they may not calculate
their measures in the same manner. A reconciliation of non-GAAP
financial measures and most directly comparable GAAP financial
measures is included in this release. Our management has included
these measures to assist in comparing performance from period to
period on a consistent basis.
Constant currency is a non-GAAP measure utilized by Heska
management to measure performance, excluding the impact of
translational movements, and is intended to be indicative of
results in local currency. As we operate in various foreign
countries where the local currency may strengthen or weaken
significantly versus the U.S. dollar, we utilize a constant
currency measure as an additional metric to evaluate performance
without consideration of foreign currency movements. This
information is non-GAAP and should be viewed as a supplement to
(not a substitute for) our reported results of operations under
U.S. GAAP. We calculate the impact of foreign exchange by
translating our current period local currency results throughout
the year at the average exchange rates during the respective prior
year period. The result is the current period results in U.S.
dollars, as if foreign exchange rates had not changed from the
prior year period.
HESKA CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF LOSS (in thousands, except per share
amounts)
(unaudited)
|
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Revenue, net
|
|
$
61,492
|
|
$
60,240
|
|
$ 190,969
|
|
$ 185,671
|
Cost of
revenue
|
|
34,616
|
|
34,996
|
|
107,621
|
|
107,685
|
Gross profit
|
|
26,876
|
|
25,244
|
|
83,348
|
|
77,986
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling and
marketing
|
|
11,280
|
|
10,785
|
|
35,042
|
|
34,141
|
Research and
development
|
|
2,382
|
|
1,955
|
|
17,164
|
|
5,089
|
General and
administrative
|
|
13,885
|
|
14,937
|
|
48,811
|
|
40,867
|
Total operating
expenses
|
|
27,547
|
|
27,677
|
|
101,017
|
|
80,097
|
Operating
loss
|
|
(671)
|
|
(2,433)
|
|
(17,669)
|
|
(2,111)
|
Interest and other
expense (income), net
|
|
241
|
|
(30)
|
|
1,080
|
|
1,075
|
Net loss before taxes
and equity in losses of unconsolidated affiliates
|
|
(912)
|
|
(2,403)
|
|
(18,749)
|
|
(3,186)
|
Income tax (benefit)
expense:
|
|
|
|
|
|
|
|
|
Current income tax
expense (benefit)
|
|
235
|
|
(63)
|
|
450
|
|
614
|
Deferred income tax
benefit
|
|
(1,069)
|
|
(750)
|
|
(4,625)
|
|
(4,043)
|
Total income tax
benefit
|
|
(834)
|
|
(813)
|
|
(4,175)
|
|
(3,429)
|
|
|
|
|
|
|
|
|
|
Net (loss) income
before equity in losses of unconsolidated affiliates
|
|
(78)
|
|
(1,590)
|
|
(14,574)
|
|
243
|
Equity in losses of
unconsolidated affiliates
|
|
(358)
|
|
(308)
|
|
(1,094)
|
|
(837)
|
Net loss attributable
to Heska Corporation
|
|
$
(436)
|
|
$
(1,898)
|
|
$ (15,668)
|
|
$
(594)
|
|
|
|
|
|
|
|
|
|
Basic loss per share
attributable to Heska Corporation
|
|
$
(0.04)
|
|
$
(0.19)
|
|
$
(1.52)
|
|
$
(0.06)
|
Diluted loss per share
attributable to Heska Corporation
|
|
$
(0.04)
|
|
$
(0.19)
|
|
$
(1.52)
|
|
$
(0.06)
|
|
|
|
|
|
|
|
|
|
Weighted average
outstanding shares used to compute basic (loss) earnings per share
attributable to Heska Corporation
|
|
10,368
|
|
10,195
|
|
10,330
|
|
9,949
|
Weighted average
outstanding shares used to compute diluted (loss) earnings per
share attributable to Heska Corporation
|
|
10,368
|
|
10,195
|
|
10,330
|
|
9,949
|
HESKA CORPORATION
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands)
(unaudited)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2022
|
|
2021
|
|
|
|
|
|
ASSETS
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
161,074
|
|
$
223,574
|
Accounts receivable,
net of allowance for losses of $1,130 and $874,
respectively
|
|
26,415
|
|
27,995
|
Inventories
|
|
57,477
|
|
49,361
|
Net investment in
leases, current, net of allowance for losses of $149 and $137,
respectively
|
|
6,898
|
|
6,175
|
Prepaid
expenses
|
|
5,269
|
|
5,244
|
Other current
assets
|
|
5,681
|
|
7,206
|
Total current
assets
|
|
262,814
|
|
319,555
|
|
|
|
|
|
Property and equipment,
net
|
|
31,059
|
|
33,413
|
Operating lease
right-of-use assets
|
|
6,810
|
|
5,198
|
Goodwill
|
|
129,960
|
|
118,826
|
Other intangible
assets, net
|
|
60,435
|
|
56,705
|
Deferred tax asset,
net
|
|
23,763
|
|
19,429
|
Net investment in
leases, non-current
|
|
23,782
|
|
20,128
|
Investments in
unconsolidated affiliates
|
|
4,330
|
|
5,424
|
Related party
convertible note receivable, net
|
|
3,015
|
|
6,800
|
Promissory note
receivable from investee, net
|
|
13,196
|
|
8,448
|
Other non-current
assets
|
|
10,903
|
|
10,146
|
Total assets
|
|
$
570,067
|
|
$
604,072
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
14,749
|
|
$
15,374
|
Accrued
liabilities
|
|
14,292
|
|
19,424
|
Operating lease
liabilities, current
|
|
2,681
|
|
2,227
|
Deferred revenue,
current, and other
|
|
4,869
|
|
6,901
|
Total current
liabilities
|
|
36,591
|
|
43,926
|
|
|
|
|
|
Convertible note,
non-current, net
|
|
84,357
|
|
84,034
|
Notes
payable
|
|
13,515
|
|
15,900
|
Deferred revenue,
non-current
|
|
3,603
|
|
3,854
|
Operating lease
liabilities, non-current
|
|
4,713
|
|
3,509
|
Deferred tax
liability
|
|
15,436
|
|
12,667
|
Other
liabilities
|
|
3,953
|
|
4,328
|
Total
liabilities
|
|
162,168
|
|
168,218
|
|
|
|
|
|
Total stockholders'
equity
|
|
407,899
|
|
435,854
|
Total liabilities and
stockholders' equity
|
|
$
570,067
|
|
$
604,072
|
HESKA CORPORATION
AND SUBSIDIARIES RECONCILIATION OF GAAP NET (LOSS)
INCOME TO NON-GAAP ADJUSTED EBITDA ($ in thousands)
(unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net (loss)
income(1)
|
$
(78)
|
|
$
(1,590)
|
|
$ (14,574)
|
|
$
243
|
Income tax
benefit
|
(834)
|
|
(813)
|
|
(4,175)
|
|
(3,429)
|
Interest expense,
net
|
315
|
|
439
|
|
1,111
|
|
1,425
|
Depreciation and
amortization
|
3,501
|
|
3,404
|
|
10,327
|
|
10,084
|
EBITDA
|
$ 2,904
|
|
$ 1,440
|
|
$
(7,311)
|
|
$ 8,323
|
Acquisition related
and other non-recurring/extraordinary
costs(2)
|
1,464
|
|
(896)
|
|
17,092
|
|
121
|
Stock-based
compensation
|
2,321
|
|
5,404
|
|
12,311
|
|
14,861
|
Equity in losses of
unconsolidated affiliates
|
(358)
|
|
(308)
|
|
(1,094)
|
|
(837)
|
Adjusted
EBITDA
|
$ 6,331
|
|
$ 5,640
|
|
$
20,998
|
|
$
22,468
|
Net (loss) income
margin(3)
|
(0.1) %
|
|
(2.6) %
|
|
(7.6) %
|
|
0.1 %
|
Adjusted EBITDA
margin(3)
|
10.3 %
|
|
9.4 %
|
|
11.0 %
|
|
12.1 %
|
|
|
(1)
|
Net (loss) income used
for reconciliation represents the "Net (loss) income before equity
in losses of unconsolidated affiliates."
|
(2)
|
To exclude the effect
of acquisition related costs, non-recurring items and extraordinary
charges not indicative of ongoing operations of $1.5 million charge
and $17.1 million charge for the three and nine months ending
September 30, 2022, and $0.9 million benefit and $0.1 million
charge for the three and nine months ending September 30, 2021. The
costs for the three months ended September 30, 2022 are primarily
due to acquisition related charges. The costs for the nine months
ended September 30, 2022 were incurred primarily as a result of the
$3.5 million provision for credit losses for a convertible note
receivable, the $0.5 million mark-to-market adjustment of the fair
value of the embedded derivative on the convertible note
receivable, and a $10.0 million licensing payment. The remainder of
the costs in both periods were incurred as a result of acquisition
related charges.
|
(3)
|
Net (loss) income
margin and adjusted EBITDA margin are calculated as the ratio of
net (loss) income and adjusted EBITDA, respectively, to
revenue.
|
HESKA CORPORATION
AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP
NET (LOSS) INCOME PER DILUTED SHARE ($ in thousands)
(unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
GAAP net (loss) income
attributable to Heska per diluted share
|
$ (0.04)
|
|
$ (0.19)
|
|
$ (1.52)
|
|
$ (0.06)
|
Acquisition related
and other non-recurring/extraordinary
costs(1)
|
0.14
|
|
(0.08)
|
|
1.62
|
|
0.01
|
Amortization of
acquired intangibles(2)
|
0.14
|
|
0.15
|
|
0.51
|
|
0.45
|
Purchase accounting
adjustments related to inventory and fixed asset
step-up(3)
|
0.05
|
|
0.01
|
|
0.16
|
|
0.03
|
Stock-based
compensation
|
0.22
|
|
0.51
|
|
1.17
|
|
1.44
|
Loss on equity
investee transactions
|
0.03
|
|
0.03
|
|
0.10
|
|
0.08
|
Estimated income tax
effect of above non-GAAP adjustments(4)
|
(0.13)
|
|
(0.23)
|
|
(1.02)
|
|
(0.68)
|
Non-GAAP net income per
diluted share
|
$
0.41
|
|
$
0.20
|
|
$ 1.02
|
|
$ 1.27
|
|
|
|
|
|
|
|
|
Shares used in non-GAAP
diluted per share calculations
|
10,508
|
|
10,580
|
|
10,549
|
|
10,321
|
|
|
(1)
|
To exclude the effect
of acquisition related costs, non-recurring items and extraordinary
charges not indicative of ongoing operations of $1.5 million charge
and $17.1 million charge for the three and nine months ending
September 30, 2022, and $0.9 million benefit and $0.1 million
charge for the three and nine months ending September 30, 2021. The
costs for the three months ended September 30, 2022 are primarily
due to acquisition related charges. The costs for the nine months
ended September 30, 2022 were incurred primarily as a result of the
$3.5 million provision for credit losses for a convertible note
receivable, the $0.5 million mark-to-market adjustment of the fair
value of the embedded derivative on the convertible note
receivable, and a $10.0 million licensing payment. The remainder of
the costs in both periods were incurred as a result of acquisition
related charges.
|
(2)
|
To exclude the effect
of amortization of acquired intangibles of $1.4 million and
$5.4 million in the three and nine months ending September 30,
2022, compared to $1.6 million and $4.6 million in the three and
nine months ending September 30, 2021. These costs were incurred as
part of the purchase accounting adjustments for recent
acquisitions.
|
(3)
|
To exclude the effect
of purchase accounting adjustments for inventory step up
amortization of $0.6 million and $1.7 million for the three
and nine months ending September 30, 2022, compared to $0.1 million
and $0.3 million in the three and nine months ending September 30,
2021.
|
(4)
|
Represents income tax
expense utilizing an estimated effective tax rate that adjusts for
non-GAAP measures including: acquisition related, non-recurring and
extraordinary costs (excluding items which are not deductible for
tax of $0 and $0.1 million expense for the three and nine months
ending September 30, 2022, respectively, compared to $0.7 million
benefit and $0.6 million benefit for the three and nine months
ending September 30, 2021, respectively), amortization of acquired
intangibles, purchase accounting adjustments, amortization of debt
discount and issuance costs, and stock-based compensation. This
incorporates the discrete tax expense related to stock-based
compensation of $0.2 million and benefit of $0.3 million for the
three and nine months ending September 30, 2022, respectively,
compared to benefits of $0.7 million and $1.7 million for the three
and nine months ending September 30, 2021, respectively. This also
includes the tax benefits related to R&D tax credit of $0.1
million and $1.1 million for the three and nine months ending
September 30, 2022, respectively, compared to $0 for each of the
three and nine months ending September 30, 2021 respectively.
Adjusted effective tax rates are approximately 25% for both periods
presented.
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/heska-corporation-reports-third-quarter-2022-results-301671191.html
SOURCE Heska Corporation