HESKA CORP

CIK:0001038133|SEC Filings

CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues [Abstract]
Revenue, net	$ 62,381	$ 64,800
Cost of revenue	34,982	35,655
Gross profit	27,399	29,145
Operating expenses:
Selling and marketing	12,449	11,997
Research and development	3,088	12,456
General and administrative	22,285	16,146
Total operating expenses	37,822	40,599
Operating loss	(10,423)	(11,454)
Interest and other (income) expense, net	(272)	359
Net loss before taxes and equity in losses of unconsolidated affiliates	(10,151)	(11,813)
Income tax (benefit) expense:
Current income tax expense	690	158
Deferred income tax benefit	(1,065)	(2,366)
Total income tax benefit	(375)	(2,208)
Net loss before equity in losses of unconsolidated affiliates	(9,776)	(9,605)
Equity in losses of unconsolidated affiliates	(349)	(381)
Net loss attributable to Heska Corporation	$ (10,125)	$ (9,986)
Earnings Per Share [Abstract]
Basic (loss) earnings per share attributable to Heska Corporation (in dollars per share)	$ (0.97)	$ (0.97)
Diluted (loss) earnings per share attributable to Heska Corporation (in dollars per share)	$ (0.97)	$ (0.97)
Weighted average outstanding shares used to compute basic (loss) earnings per share attributable to Heska Corporation (in shares)	10,390	10,273
Weighted average outstanding shares used to compute diluted (loss) earnings per share attributable to Heska Corporation (in shares)	10,390	10,273

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash flows from operating activities:
Net loss before equity in losses of unconsolidated affiliates	$ (10,125)	$ (9,986)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	3,974	3,300
Non-cash impact of operating leases	871	673
Deferred tax benefit	(1,065)	(2,366)
Stock-based compensation	3,077	5,110
Change in fair value of contingent consideration	8	(236)
Equity in losses of unconsolidated affiliates	349	381
Accretion of discounts and issuance costs	24	11
Other losses (gains), net	703	(473)
Changes in operating assets and liabilities (net of the effect of acquisitions):
Accounts receivable	4,399	2,060
Inventories	(3,112)	(6,528)
Lease receivables	(2,708)	(2,248)
Other assets	(1,908)	(288)
Accounts payable	(7,683)	(3,069)
Other liabilities	4,035	(4,006)
Net cash used in operating activities	(9,161)	(17,665)
Cash flows from investing activities:
Capital expenditures	(1,885)	(334)
Net cash used in investing activities	(22,558)	(29,843)
Cash flows from financing activities:
Proceeds from issuance of common stock	1	1,761
Payments for taxes related to shares withheld for employee taxes	(90)	(4,961)
Repayments of other debt	(39)	(62)
Net cash used in financing activities	(128)	(3,262)
Foreign exchange effect on cash and cash equivalents	438	(60)
Net decrease in cash and cash equivalents	(31,409)	(50,830)
Cash and cash equivalents, beginning of period	156,618	223,574
Cash and cash equivalents, end of period	125,209	172,744
Supplemental disclosure of cash flow information:
Non-cash transfers of equipment between inventory and property and equipment, net	1,297	749
Contingent consideration for acquisitions	0	3,860
Settlement of Promissory Note and other preexisting relationships as part of acquisition	11,800	0
Indemnity holdback and net working capital adjustment for acquisitions	2,550	1,608
LightDeck
Cash flows from investing activities:
Acquisition	(20,673)	0
VetZ GmbH
Cash flows from investing activities:
Acquisition	$ 0	$ (29,509)

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 125,209,000	$ 156,618,000
Accounts receivable, net of allowance for losses of $1,190 and $1,129, respectively	26,054,000	29,493,000
Inventories	64,183,000	60,050,000
Net investment in leases, current, net of allowance for losses of $190 and $182, respectively	8,173,000	7,433,000
Prepaid expenses	6,239,000	5,514,000
Related party convertible note receivable, net	2,312,000	0
Other current assets	6,451,000	5,926,000
Total current assets	238,621,000	265,034,000
Property and equipment, net	55,030,000	32,171,000
Operating lease right-of-use assets	13,101,000	6,897,000
Goodwill	145,403,000	135,918,000
Other intangible assets, net	65,813,000	62,393,000
Deferred tax asset, net	31,483,000	23,684,000
Net investment in leases, non-current	29,605,000	27,499,000
Investments in unconsolidated affiliates	592,000	3,959,000
Related party convertible note receivable, net	0	2,224,000
Promissory note receivable from investee, net	0	13,511,000
Other non-current assets	13,067,000	12,526,000
Total assets	592,715,000	585,816,000
Current liabilities:
Accounts payable	12,246,000	16,403,000
Accrued liabilities	20,866,000	15,149,000
Operating lease liabilities, current	4,049,000	2,944,000
Deferred revenue, current, and other	5,137,000	5,081,000
Total current liabilities	42,298,000	39,577,000
Convertible note, non-current, net	84,579,000	84,467,000
Notes payable	11,130,000	11,130,000
Deferred revenue, non-current	5,422,000	4,096,000
Operating lease liabilities, non-current	9,674,000	4,528,000
Deferred tax liability	16,629,000	16,438,000
Other liabilities	5,312,000	3,372,000
Total liabilities	175,044,000	163,608,000
Stockholders' equity:
Preferred stock, $0.01 par value, 2,500,000 shares authorized, none issued or outstanding	0	0
Common stock, $0.01 par value, 20,000,000 shares authorized, none issued or outstanding	0	0
Public common stock, $0.01 par value, 20,000,000 shares authorized, 10,915,679 and 10,829,518 shares issued and outstanding, respectively	109,000	108,000
Additional paid-in capital	600,126,000	597,139,000
Accumulated other comprehensive loss	(3,906,000)	(6,506,000)
Accumulated deficit	(178,658,000)	(168,533,000)
Total stockholders' equity	417,671,000	422,208,000
Total liabilities and stockholders' equity	$ 592,715,000	$ 585,816,000