Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 09, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Heska Corp | |
Entity Central Index Key | 1,038,133 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 | |
Entity Common Stock, Shares Outstanding | 6,682,137 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 6,180 | $ 6,890 |
Accounts receivable, net of allowance for doubtful accounts of $189 and $203, respectively | 13,707 | 16,136 |
Due from – related parties | 244 | 308 |
Inventories, net | 18,613 | 16,101 |
Other current assets | 1,440 | 1,827 |
Total current assets | 40,184 | 41,262 |
Property and equipment, net | 17,761 | 17,020 |
Note receivable – related party | 1,528 | 1,516 |
Goodwill and other intangibles | 20,992 | 20,966 |
Deferred tax asset | 25,302 | 25,883 |
Other long-term assets | 4,325 | 3,072 |
Total assets | 110,092 | 109,719 |
Current liabilities: | ||
Accounts payable | 5,941 | 7,624 |
Accrued liabilities | 6,661 | 5,416 |
Current portion of deferred revenue | 3,896 | 5,461 |
Line of credit | 798 | 143 |
Other short-term borrowings, including current portion of long-term note payable | 159 | 159 |
Total current liabilities | 17,455 | 18,803 |
Long-term note payable, net of current portion | 32 | 69 |
Deferred revenue, net of current portion, and other | 11,323 | 11,572 |
Total liabilities | $ 28,810 | $ 30,444 |
Commitments and contingencies | ||
Non-Controlling Interest | $ 15,777 | $ 15,747 |
Stockholders' equity: | ||
Preferred stock, $.01 par value, 2,500,000 shares authorized, none issued or outstanding | 0 | 0 |
Common stock, $.01 par value, 7,500,000 shares authorized, none issued or outstanding | 0 | 0 |
Public common stock, $.01 par value, 7,500,000 shares authorized, 6,625,287 and 6,636,389 shares issued and outstanding, respectively | 66 | 66 |
Additional paid-in capital | 227,798 | 227,267 |
Accumulated other comprehensive income | 186 | 187 |
Accumulated deficit | (162,545) | (163,992) |
Total stockholders' equity | 65,505 | 63,528 |
Total liabilities and stockholders' equity | $ 110,092 | $ 109,719 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Allowance for doubtful accounts | $ 203 | $ 189 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Public Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock, shares issued | 6,636,389 | 6,625,287 |
Common stock, shares outstanding | 6,636,389 | 6,625,287 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenue: | ||
Core companion animal health | $ 23,434 | $ 19,572 |
Other vaccines, pharmaceuticals and products | 3,712 | 3,322 |
Total revenue, net | 27,146 | 22,894 |
Cost of revenue | 15,704 | 12,810 |
Gross profit | 11,442 | 10,084 |
Operating expenses: | ||
Selling and marketing | 5,619 | 5,460 |
Research and development | 575 | 419 |
General and administrative | 3,278 | 3,184 |
Total operating expenses | 9,472 | 9,063 |
Operating income | 1,970 | 1,021 |
Interest and other expense (income), net | (133) | 137 |
Income before income taxes | 2,103 | 884 |
Income tax expense: | ||
Current income tax expense | 74 | 44 |
Deferred income tax expense | 582 | 257 |
Total income tax expense | 656 | 301 |
Net income | 1,447 | 583 |
Net income (loss) attributable to non-controlling interest | 261 | (15) |
Net income attributable to Heska Corporation | $ 1,186 | $ 598 |
Earnings Per Share [Abstract] | ||
Basic earnings per share attributable to Heska Corporation, in dollars per share | $ 0.18 | $ 0.10 |
Diluted earnings per share attributable to Heska Corporation, in dollars per share | $ 0.17 | $ 0.09 |
Weighted average outstanding shares used to compute basic earnings per share attributable to Heska Corporation | 6,496 | 6,181 |
Weighted average outstanding shares used to compute diluted earnings per share attributable to Heska Corporation | 7,164 | 6,869 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||
Net income | $ 1,447 | $ 583 |
Other comprehensive income (expense): | ||
Unrealized gain (loss) on available for sale investments | (90) | 0 |
Foreign currency translation | 89 | 76 |
Comprehensive income | 1,446 | 659 |
Comprehensive income (loss) attributable to non-controlling interest | 261 | (15) |
Comprehensive income attributable to Heska Corporation | $ 1,185 | $ 674 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 1,447 | $ 583 |
Adjustments to reconcile net income to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 1,096 | 1,006 |
Deferred tax expense | 582 | 257 |
Stock based compensation | 527 | 398 |
Unrealized (gain) loss on foreign currency translation | (1) | 16 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,429 | 405 |
Inventories | (3,538) | (4,058) |
Other current assets | 323 | (194) |
Accounts payable | (1,683) | 237 |
Accrued liabilities and other | 1,229 | 785 |
Other non-current assets | (1,250) | (393) |
Deferred revenue and other | (1,798) | (432) |
Net cash used in operating activities | (637) | (1,390) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of equity investment | 115 | 0 |
Purchases of property and equipment | (905) | (605) |
Proceeds from disposition of property and equipment | 95 | 0 |
Net cash used in investing activities | (695) | (605) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock, net of distributions | 33 | 235 |
Proceeds from line of credit borrowings, net | 655 | 1,633 |
Repayments of other debt | (128) | (34) |
Net cash provided by financing activities | 560 | 1,834 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 62 | 34 |
DECREASE IN CASH AND CASH EQUIVALENTS | (710) | (127) |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 6,890 | 5,855 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 6,180 | $ 5,728 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Heska Corporation and its wholly-owned and majority-owned subsidiaries ("Heska", the "Company", "we" or "our") sell advanced veterinary diagnostic and other specialty veterinary products. Our offerings include blood testing instruments and supplies, digital imaging products, software and services, and single use products and services such as in-clinic heartworm diagnostic tests, heartworm preventive products, allergy immunotherapy products and allergy testing. Our core focus is on the canine and feline companion animal health markets. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the financial position of the Company at March 31, 2016, and the results of our operations and cash flows for the three months ended March 31, 2016 and 2015. The Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and other financial information filed with the SEC. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are required when establishing the allowance for doubtful accounts and the provision for excess or obsolete inventory, in determining the period over which our obligations are fulfilled under agreements to license product rights and/or technology rights, evaluating long-lived and intangible assets for impairment, determining the allocation of purchase price under purchase accounting, estimating the expense associated with the granting of stock options, determining the value of our non-controlling interest and in determining the need for, and the amount of, a valuation allowance on deferred tax assets. Critical Accounting Policies Our accounting policies are described in our audited Consolidated Financial Statements and Notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2015. Recent Accounting Pronouncements In March 2016, the FASB issued guidance codified in Accounting Standards Codification (“ASC”) Topic 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The standard simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements and classification on the statement of cash flows. The standard will be effective for the fiscal year beginning January 1, 2017 and subsequent interim periods. We are currently evaluating the impact the provisions of the Topic will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which supersedes ASC 840, Leases, and creates a new topic, ASC 842, Leases. This update requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with earlier application permitted. This update will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We are currently evaluating the effect of this update on our consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update simplify the presentation of deferred income taxes and require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. This update applies to all entities that present a classified statement of financial position. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. If the guidance is applied prospectively, disclosure is made in the first interim and first annual period of change, the nature of and reason for the change in accounting principle and a statement that prior periods were not retrospectively adjusted. If the guidance is applied retrospectively, disclosure is made in the first interim and first annual period of change, the nature of and reason for the change in accounting principle and quantitative information about the effects of the accounting change on prior periods. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. We have decided to early-adopt ASU 2015-17, which resulted in a retrospective adjustment of amounts disclosed in our consolidated balance sheet as of March 31, 2015. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Upon the effective date, the ASU replaces almost all existing revenue recognition guidance, including industry specific guidance, in generally accepted accounting principles. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendments in this update deferred the effective date for implementation of ASU 2014-09 by one year and are now effective for annual reporting periods beginning after December 15, 2017. Early application is permitted only as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that period. We are currently assessing the impact that the adoption of this standard will have on our consolidated financial statements and related disclosures upon implementation. |
ACQUISITION AND RELATED PARTY I
ACQUISITION AND RELATED PARTY ITEMS | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations and Related Party Disclosures [Abstract] | |
ACQUISITION AND RELATED PARTY ITEMS | ACQUISITION AND RELATED PARTY ITEMS On February 24, 2013, the Company acquired a 54.6% interest in Cuattro Veterinary USA, LLC which was subsequently renamed Heska Imaging US, LLC ("Heska Imaging"). The remaining minority position (45.4)% in Heska Imaging is subject to purchase by Heska under performance-based puts and calls following calendar year 2016 and 2017. Should Heska undergo a change in control, as defined, prior to the end of 2017, Heska Imaging minority unit holders will be entitled to sell their Heska Imaging units to Heska. Heska Imaging markets, sells and supports digital radiography and ultrasound products along with embedded software and support, data hosting and other services. Shawna M. Wilson, Clint Roth, DVM, Steven M. Asakowicz, Rodney A. Lippincott, Kevin S. Wilson and Cuattro, LLC own approximately 29.75% , 8.39% , 4.09% , 3.07% , 0.05% and 0.05% of Heska Imaging, respectively. Kevin S. Wilson is the Chief Executive Officer and President of the Company and the spouse of Shawna M. Wilson. Steven M. Asakowicz serves as Executive Vice President, Companion Animal Health Sales for the Company. Rodney A. Lippincott serves as Executive Vice President, Companion Animal Health Sales for the Company. Mr. Wilson, Mrs. Wilson and trusts for their children and family own a 100% interest in Cuattro, LLC. Cuattro, LLC owns a 100% interest in Cuattro Software, LLC. Mr. Wilson, Mrs. Wilson and trusts for their children and family own a majority interest in Cuattro Veterinary, LLC and Cuattro Medical, LLC. Since January 1, 2016, Cuattro, LLC has charged Heska Imaging $3.1 million , primarily related to digital imaging products, for which there is an underlying supply contract with minimum purchase obligations, software and services as well as other operating expenses; Heska Corporation charged Heska Imaging $1.3 million , primarily related to sales expenses; Heska Corporation charged Cuattro, LLC $82 thousand , primarily related to facility usage and other services. At March 31, 2016 , Heska Imaging had a $1.5 million note receivable, including accrued interest, from Cuattro Veterinary, LLC, which is due on June 15, 2016 and listed as "Note receivable - related party" on the Company's consolidated balance sheets. We currently do not anticipate collecting this note in 2016 due to our pending acquisition of Cuattro Veterinary, LLC. Heska Corporation had net accounts receivable from Cuattro, LLC of $32 thousand which is included in "Due from – related parties" on the Company's consolidated balance sheets; Heska Imaging had net prepaid receivables from Cuattro, LLC of $212 thousand which is included in "Due from – related parties" on the Company's consolidated balance sheets; Heska Corporation had accounts receivable from Heska Imaging of $5.4 million , including accrued interest, which eliminated in consolidation of the Company's financial statements; all monies owed accrue interest at the same interest rate Heska Corporation pays under its credit and security agreement with Wells Fargo Bank, National Association ("Wells Fargo") once past due with the exception of the note receivable, which accrues at this rate to its maturity date. The aggregate position in Heska Imaging of the unit holders who hold the 45.4% of Heska Imaging that Heska Corporation does not own (the "Put Value") is being accreted to its estimated redemption value in accordance with Heska Imaging's Operating Agreement (the "Operating Agreement"). Since the Operating Agreement contains certain put rights that are out of the control of the Company, authoritative guidance requires the non-controlling interest, which includes the estimated value of such put rights, to be displayed outside of the equity section of the consolidated balance sheets. The adjustment to increase or decrease the Put Value to its expected redemption value and to estimate any distributions required under the Operating Agreement to the unit holders who hold the 45.4% of Heska Imaging that Heska Corporation does not own (the "Imaging Minority") each reporting period is recorded to stockholders' equity in accordance with U.S. GAAP. The following is a reconciliation of the non-controlling interest balance (in thousands): Beginning December 31, 2015 $ 15,747 Accretion of Put Value 30 Balance March 31, 2016 $ 15,777 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our total income tax expense and the effective tax rate for our income before income taxes are as follows (in thousands): Three months ended March 31, 2015 2016 Income before income taxes $ 884 $ 2,103 Total income tax expense 301 656 Effective tax rate 34.0 % 31.2 % We are subject to income taxes in the U.S. federal jurisdiction, and various foreign, state and local jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. Cash paid for income taxes for each of the three months ended March 31, 2015 and 2016 was $5 thousand . |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share ("EPS") is computed by dividing net income attributable to Heska Corporation by the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the numerator is increased to exclude charges that would not have been incurred, and the denominator is increased to include the number of additional common shares that would have been outstanding (using the if-converted and treasury stock methods), if securities containing potentially dilutive common shares (stock options and restricted stock units but excluding options to purchase fractional shares resulting from the Company's December 2010 1-for-10 reverse stock split) had been converted to common shares, and if such assumed conversion is dilutive. The following is a reconciliation of the weighted-average shares outstanding used in the calculation of basic and diluted earnings per share for the three months ended March 31, 2015 and 2016 (in thousands, except per share data): Three Months Ended March 31, 2015 2016 Net income attributable to Heska Corporation $ 598 $ 1,186 Basic weighted-average common shares outstanding 6,181 6,496 Assumed exercise of dilutive stock options and restricted stock units 688 668 Diluted weighted-average common shares outstanding 6,869 7,164 Basic earnings per share $ 0.10 $ 0.18 Diluted earnings per share $ 0.09 $ 0.17 The following stock options and restricted units were excluded from the computation of diluted earnings per share because they would have been anti-dilutive (in thousands): Three Months Ended March 31, 2015 2016 Stock options 106 120 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOOWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES The following summarizes the changes in goodwill during the three months ended March 31, 2016 (in thousands): March 31, 2016 Carrying amount, beginning of period $ 20,910 Adjustments due to foreign currency fluctuations 29 Carrying amount, end of period $ 20,939 Other intangibles consisted of the following as of December 31, 2015 and March 31, 2016 (in thousands): December 31, March 31, 2015 2016 Gross carrying amount $ 788 $ 788 Accumulated amortization (732 ) (735 ) Net carrying amount $ 56 $ 53 Amortization expense relating to other intangibles is as follows (in thousands): Three Months Ended March 31, 2015 2016 Amortization expense $ 65 $ 3 Estimated amortization expense related to intangibles for each of the five years from 2016 (remaining) through 2020 and thereafter is as follows (in thousands): Year Ending December 31, 2016 (remaining) $ 7 2017 10 2018 10 2019 10 2020 10 Thereafter 6 $ 53 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Detail of property and equipment is as follows (in thousands): December 31, March 31, 2015 2016 Land $ 377 $ 377 Building 2,868 2,868 Machinery and equipment 35,284 36,945 Leasehold and building improvements 6,673 6,720 Construction in progress 1,496 1,531 46,698 48,441 Less accumulated depreciation and amortization (29,678 ) (30,680 ) Total property and equipment, net $ 17,020 $ 17,761 The Company has utilized marketing programs whereby its instruments in inventory may be placed in a customer's location on a rental basis. The cost of these instruments is transferred to machinery and equipment or other long-term assets and depreciated, typically over a five to seven year period depending on the circumstance under which the instrument is placed with the customer. Total costs transferred from inventory were approximately $1.0 million for each of the three month periods ended March 31, 2015 and 2016. The Company has sold certain customer rental contracts and underlying assets to a third party under the agreement that once the customer has met the customer obligations under the contract, ownership of the assets underlying the contract would be returned to the Company. The Company enters a debit to cash and a corresponding credit to deferred revenue at the time of these sales. These sales, all related to the Company's 54.6% -owned subsidiary, Heska Imaging, provided $42 thousand of cash which was reported in the "deferred revenue and other" line item of the Company's consolidated statements of cash flows for the three months ended March 31, 2015 . There were no such sales during the three months ended March 31, 2016 . As the Company anticipates it will regain ownership of the assets underlying these sales, it reports these assets as part of property and equipment and depreciates these assets per its depreciation policies. The Company had $2.2 million and $1.9 million of net property and equipment related to these transactions as of December 31, 2015 and March 31, 2016 , respectively, all related to the Company's 54.6% -owned subsidiary, Heska Imaging. Depreciation and amortization expense for property and equipment was $1.0 million and $1.1 million for the three months ended March 31, 2015 and 2016 , respectively. The Company capitalizes third-party software costs, where appropriate, and reports such costs, net of accumulated amortization, on the "property and equipment, net" line of its consolidated balance sheets. We had $0.4 million of such capitalized costs, net of accumulated amortization, on the "property and equipment, net" line on each of our consolidated balance sheets as of December 31, 2015 and March 31, 2016 , respectively. Capitalized software costs in a given year are reported on the "purchases of property and equipment" line item of the Company's consolidated statements of cash flows. We had $35 thousand of capitalized software costs reported on the "purchases of property and equipment" line item of our consolidated statements of cash flows for the quarter ended March 31, 2015 . There were no capitalized software costs incurred in the three months ended March 31, 2016 . |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES Inventories are stated at the lower of cost or net realizable value using the first-in, first-out method. Inventory we manufacture includes the cost of material, labor and overhead. If the cost of inventories exceeds estimated net realizable value, provisions are made to reduce the carrying value to estimated net realizable value. Inventories, net consist of the following (in thousands): December 31, March 31, 2015 2016 Raw materials $ 8,531 $ 10,475 Work in process 2,839 3,472 Finished goods 6,122 6,092 Allowance for excess or obsolete inventory (1,391 ) (1,426 ) $ 16,101 $ 18,613 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consisted of the following as of December 31, 2015 and March 31, 2016 (in thousands): December 31, March 31, Accrued payroll and employee benefits $ 860 $ 1,013 Accrued property taxes 721 357 Accrued purchases 300 1,274 Other 3,535 4,017 Total accrued liabilities $ 5,416 $ 6,661 Other accrued liabilities consists of items that are individually less than 5% of total current liabilities. |
CAPITAL STOCK
CAPITAL STOCK | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
CAPITAL STOCK | CAPITAL STOCK Stock Option Plans The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-model with the following weighted average assumptions for options granted in the three months ended March 31, 2015 and 2016 . 2015 2016 Risk-free interest rate 1.10% 1.45% Expected lives 3.4 years 4.5 years Expected volatility 42% 41% Expected dividend yield 0% 0% A summary of our stock option plans, excluding options to purchase fractional shares resulting from our December 2010 1-for- 10 reverse stock split, is as follows: Year Ended December 31, Three Months Ended March 31, 2015 2016 Weighted Average Exercise Price Weighted Average Exercise Price Outstanding at beginning of period 1,074,251 $ 10.110 940,610 $ 14.163 Granted at Market 146,446 $ 36.904 1,000 $ 30.520 Canceled (28,440 ) $ 10.080 (347 ) $ 14.711 Exercised (251,647 ) $ 10.559 (5,290 ) $ 11.675 Outstanding at end of period 940,610 $ 14.163 935,973 $ 14.195 Exercisable at end of period 621,559 $ 10.269 642,909 $ 10.272 The total estimated fair value of stock options granted during the three months ended March 31, 2015 and 2016 were computed to be approximately $15 thousand and $11 thousand , respectively. The amounts are amortized ratably over the vesting periods of the options. The weighted average estimated fair value of options granted during the three months ended March 31, 2015 and 2016 was computed to be approximately $6.17 and $10.93 , respectively. The total intrinsic value of options exercised during the three months ended March 31, 2015 and 2016 was $1.3 million and $107 thousand , respectively. The cash proceeds from options exercised during the three months ended March 31, 2015 and 2016 was $407 thousand and $62 thousand , respectively. The following table summarizes information about stock options outstanding and exercisable at March 31, 2016, excluding outstanding options to purchase an aggregate of 6.0 fractional shares resulting from our December 2010 1-for- 10 reverse stock split with a weighted average remaining contractual life of 0.60 years, a weighted average exercise price of $16.77 and exercise prices ranging from $11.00 - $22.50 . We intend to issue whole shares only from option exercises. The following table includes 109,500 shares underlying options issued in December 2015 with a strike price of $39.76 and expiration date of December 28, 2025 which will only vest and become exercisable if our stockholders approve an increase in the total number of authorized shares of our Public Common Stock to at least 8.5 million shares on or before December 31, 2022. Options Outstanding Options Exercisable Exercise Prices Number of Weighted Weighted Number of Weighted $ 4.40 - $ 6.90 225,302 4.52 $ 5.600 223,052 $ 5.594 $ 6.91 - $ 8.26 188,524 7.62 $ 7.384 108,788 $ 7.384 $ 8.27 - $15.80 189,795 6.02 $ 9.688 162,762 $ 9.748 $15.81 - $18.30 178,965 5.19 $ 18.016 114,674 $ 17.952 $18.31 - $39.76 153,387 9.26 $ 36.306 33,633 $ 26.980 $ 4.40 - $39.76 935,973 6.35 $ 14.195 642,909 $ 10.272 As of March 31, 2016, there was approximately $2.0 million in total unrecognized compensation cost related to outstanding stock options. That cost is expected to be recognized over a weighted average period of 1.70 years, with approximately $560 thousand to be recognized in the nine months ending December 31, 2016 and all cost to be recognized as of March 2020, assuming all options vest according to the vesting schedules in place at March 31, 2016. As of March 31, 2016, the aggregate intrinsic value of outstanding options was approximately $14.6 million and the aggregate intrinsic value of exercisable options was approximately $11.7 million . Employee Stock Purchase Plan (the "ESPP") For the three months ended March 31, 2015 and 2016 , we issued 827 and 5,885 shares under the ESPP, respectively. In all periods presented, we estimated the fair values of stock purchase rights granted under the ESPP using the Black-Scholes pricing model. The weighted average assumptions used for the periods presented were as follows: Three Months Ended March 31, 2015 2016 Risk-free interest rate 0.23% 0.51% Expected lives 1.3 years 1.2 years Expected volatility 35% 41% Expected dividend yield 0% 0% For the three months ended March 31, 2015 and 2016 , the weighted-average fair value of the purchase rights granted was $5.21 and $6.29 per share, respectively. Restricted Stock Issuance On March 17, 2015, the Company issued unvested shares to certain Executive Officers related to performance-based restricted stock grants (the "Performance Grants") and performance-based restricted stock grants related to the Company's 2015 Management Incentive Plan (the "2015 MIP Grants"). The Company issued 52,956 shares under the Performance Grants and 24,649 shares under 2015 MIP Grants. The Performance Grants have met the underlying performance condition based on the Company's 2015 financial performance and are to cliff vest on March 17, 2018, subject to other vesting provisions in the underlying restricted stock grant agreement. The 2015 MIP Grants were subject to the Company’s achievement of certain financial goals and other vesting provisions in the underlying restricted stock grant agreement. On March 2, 2016, the Company vested 14,364 shares related to the 2015 MIP Grant based on the respective performance criteria, including 4,788 shares withheld for tax, and canceled the remaining 10,285 shares. On March 2, 2016, the Company issued 15,000 unvested shares to certain Executive Officers related to performance-based restricted stock grants as part of the Company’s 2016 Management Incentive Plan (the "2016 MIP Grants"). The 2016 MIP Grants are to vest on the date MIP Payouts are to be made under the 2016 Management Incentive Plan and are subject to the Company’s achievement of certain financial goals and other vesting provisions in the underlying restricted stock grant agreement. On March 26, 2016, 27,500 shares originally issued to Mr. Wilson on March 26, 2014 pursuant to an employment agreement between Mr. Wilson and the Company effective as of March 26, 2014 (the "Wilson Employment Agreement") vested pursuant to the Wilson Employment Agreement. Restrictions on the transfer of Company stock The Company's Restated Certificate of Incorporation, as amended (the "Certificate of Incorporation"), places restrictions (the "Transfer Restrictions") on the transfer of the Company's stock that could adversely affect the Company's ability to utilize its domestic Federal Net Operating Loss Position. In particular, the Transfer Restrictions prevent the transfer of shares without the approval of the Company's Board of Directors if, as a consequence of such transfer, an individual, entity or groups of individuals or entities would become a 5-percent holder under Section 382 of the Internal Revenue Code of 1986, as amended, and the related Treasury regulations, and also prevents any existing 5 -percent holder from increasing his or her ownership position in the Company without the approval of the Company's Board of Directors. Any transfer of shares in violation of the Transfer Restrictions (a "Transfer Violation") shall be void ab initio under the Certificate of Incorporation, and the Company's Board of Directors has procedures under the Certificate of Incorporation to remedy a Transfer Violation including requiring the shares causing such Transfer Violation to be sold and any profit resulting from such sale to be transferred to a charitable entity chosen by the Company's Board of Directors in specified circumstances. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME Accumulated other comprehensive income consisted of the following (in thousands): Minimum pension liability Foreign currency translation Unrealized gains (losses) on available for sale investments Total accumulated other comprehensive income Balances at December 31, 2015 $ (576 ) $ 673 $ 90 $ 187 Current period other comprehensive income (loss) — 89 (90 ) (1 ) Balances at March 31, 2016 $ (576 ) $ 762 $ — $ 186 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company holds certain rights to market and manufacture all products developed or created under certain research, development and licensing agreements with various entities. In connection with such agreements, the Company has agreed to pay the entities royalties on net product sales. In each of the three months ended March 31, 2015 and 2016 , royalties of $0.1 million became payable under these agreements. The Company has contracts with suppliers for unconditional annual minimum inventory purchases and milestone obligations to third parties the Company believes are likely to be triggered currently totaling approximately $0.2 million for each of the fiscal years 2016 and 2017 . From time to time, the Company may be involved in litigation relating to claims arising out of its operations. On March 12, 2015, a complaint was filed against us by Shaun Fauley in the United States District Court Northern District of Illinois alleging our transmittal of unauthorized faxes in violation of the federal Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005, as a class action seeking stated damages of the greater of actual monetary loss or five hundred dollars per violation. We intend to defend ourselves vigorously in this matter. As of March 31, 2016, the Company was not a party to any other legal proceedings that were expected, individually or in the aggregate, to have a material adverse effect on our business, financial condition or operating results. The Company's current terms and conditions of sale include a limited warranty that its products and services will conform to published specifications at the time of shipment and a more extensive warranty related to certain of its products. The Company also sells a renewal warranty for certain of its products. The typical remedy for breach of warranty is to correct or replace any defective product, and if not possible or practical, the Company will accept the return of the defective product and refund the amount paid. Historically, the Company has incurred minimal warranty costs. The Company's warranty reserve at March 31, 2016 was $0.4 million . |
INTEREST AND OTHER EXPENSE (INC
INTEREST AND OTHER EXPENSE (INCOME) | 3 Months Ended |
Mar. 31, 2016 | |
Other Income and Expenses [Abstract] | |
INTEREST AND OTHER EXPENSE (INCOME) | INTEREST AND OTHER EXPENSE (INCOME) Interest and other expense (income) consisted of the following (in thousands): Three Months Ended March 31, 2015 2016 Interest income $ (58 ) $ (33 ) Interest expense 52 38 Other, net 143 (138 ) $ 137 $ (133 ) Cash paid for interest for each of the three months ended March 31, 2015 and 2016 was $18 thousand . |
CREDIT FACILITY
CREDIT FACILITY | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITY | CREDIT FACILITY At March 31, 2016 , we had a $15.0 million asset-based revolving line of credit with Wells Fargo which has a maturity date of December 31, 2017 as part of our credit and security agreement with Wells Fargo. At March 31, 2016 , we had $0.8 million of borrowings outstanding on this line of credit. Our ability to borrow under this line of credit varies based upon available cash, eligible accounts receivable and eligible inventory. On March 31, 2016 , any interest on borrowings due was to be charged at a stated rate of three month LIBOR plus 2.25% and payable monthly. There is an annual minimum interest charge of $75 thousand under the agreement. We are required to comply with various financial and non-financial covenants, and we have made various representations and warranties under our agreement with Wells Fargo. A key financial covenant is based on a fixed charge coverage ratio, as defined in our agreement with Wells Fargo. We were in compliance with all financial covenants as of March 31, 2016 and our available borrowing capacity based upon eligible accounts receivable and eligible inventory under our revolving line of credit was approximately $10.7 million . |
SEGMENT REPORTING
SEGMENT REPORTING | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company consists of two reportable segments, Core Companion Animal Health ("CCA") and Other Vaccines, Pharmaceuticals and Products ("OVP"). The Core Companion Animal Health segment includes diagnostic instruments and supplies, as well as single use diagnostic and other tests, pharmaceuticals and vaccines, primarily for canine and feline use. The CCA segment also includes digital radiography and ultrasound products along with embedded software and support, data hosting and other services from Heska Imaging. These products are sold directly by the Company as well as through independent third-party distributors and through other distribution relationships. CCA segment products manufactured at the Des Moines, Iowa production facility included in the OVP segment's assets are transferred at cost and are not recorded as revenue for the OVP segment. The Other Vaccines, Pharmaceuticals and Products segment includes private label vaccine and pharmaceutical production, primarily for cattle, but also for other animals including small mammals. All OVP products are sold by third parties under third-party labels. One customer represented approximately 11% of our revenue and another company generated approximately 12% of our revenue for the three months ended March 31, 2015 . One customer represented approximately 20% of our accounts receivable at December 31, 2015 and 13% of our accounts receivable at March 31, 2016 and another customer represented 13% of our accounts receivable at December 31, 2015 and 10% of accounts receivable at March 31, 2016 . No other customers represented 10% or more of revenue for the three months ended March 31, 2015 and 2016 nor 10% or more of accounts receivable at December 31, 2015 or March 31, 2016 . We have established an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends, and other information. Summarized financial information concerning the Company's reportable segments is shown in the following table (in thousands): Three Months Ended March 31, 2015 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 19,572 $ 3,322 $ 22,894 Operating Income 535 486 1,021 Income before income taxes 410 474 884 Capital expenditures 307 298 605 Depreciation and amortization 830 176 1,006 Three Months Ended March 31, 2016 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 23,434 $ 3,712 $ 27,146 Operating Income 1,758 212 1,970 Income before income taxes 1,808 295 2,103 Capital expenditures 397 508 905 Depreciation and amortization 897 199 1,096 Revenue is attributed to individual countries based on customer location. Total revenue by principal geographic area was as follows (in thousands): Three Months Ended March 31, 2015 2016 United States $ 22,279 $ 26,480 Europe 615 666 Total $ 22,894 $ 27,146 Asset information by reportable segment as of December 31, 2015 is as follows (in thousands): Core Companion Animal Health Other Vaccines, Pharmaceuticals and Products Total Total assets $ 92,567 $ 17,152 $ 109,719 Net assets 48,175 15,353 63,528 Asset information by reportable segment as of March 31, 2016 is as follows (in thousands): Core Companion Animal Health Other Vaccines, Pharmaceuticals and Products Total Total assets $ 93,330 $ 16,762 $ 110,092 Net assets 57,152 8,353 65,505 Total assets by principal geographic areas were as follows (in thousands): December 31, March 31, 2015 2016 United States $ 106,780 $ 106,980 Europe 2,939 3,112 Total $ 109,719 $ 110,092 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On November 11, 2015, the Company entered into a Unit Purchase Agreement (the "International Agreement") with Cuattro Veterinary, LLC ("Cuattro International"), Kevin S. Wilson and all of the Cuattro International members (the "Members"). Cuattro International sells the same digital radiography solutions outside the United States that Heska Imaging sells in the United States. Under the terms of the International Agreement, the Company agreed to deliver $6.0 million in stock, subject to a minimum of 175,000 shares and a maximum of 200,000 shares, in exchange for 100% ownership of Cuattro International. In addition, the Company also agreed to issue additional shares of common stock to the Members (the "Contingent Shares") in the event that any of the liabilities or obligations of Cuattro International that have been fully reserved as uncollectible (the "Reserved Assets") from affiliates of Cuattro International, Mr. Wilson and the Members are recovered by the Company or Cuattro International. Additionally, the Company would assume approximately $2.1 million in debt as part of the International Agreement. The acquisition was expected to close on or about January 1, 2016 subject to certain closing conditions, including the affirmative vote of the Company's stockholders to increase by 1,000,000 shares each the authorized shares of both classes of the Company's Common Stock Securities, as defined in the Company's Restated Certificate of Incorporation, as amended (the "Share Increase"). On December 16, 2015, the Company entered into a First Amendment to Unit Purchase Agreement, dated effective as of December 1, 2015 (the "First International Amendment"), with Cuattro International, Kevin S. Wilson and all of the Members. The First International Amendment extended to February 29, 2016 from December 31, 2015 the earliest date upon which the parties may terminate the International Agreement for the failure of a closing condition under the International Agreement to be satisfied. The Amendment also capped Contingent Shares at 100,000 . On March 14, 2016, the Company, Cuattro International, Kevin S. Wilson and the Members terminated the International Agreement and superseded the International Agreement with an agreement and plan of merger by and among the Company, the Company’s wholly-owned subsidiary, Cuattro International Merger Subsidiary Inc., a Delaware corporation ("Merger Sub"), Cuattro International and the Members (the "New Agreement") and Heska Imaging extended the due date on the $ 1.5 million note receivable, including accrued interest, from Cuattro Veterinary, LLC, which is listed as "Note receivable – related party" on the Company's consolidated balance sheets, from March 15, 2016 to June 15, 2016. All parties involved intend that the transactions contemplated by the New Agreement be treated as a transaction that qualifies as a "reorganization" within the meaning of Section 368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code"), and the New Agreement is intended to be, and is adopted as, a plan of reorganization for purposes of Sections 354 and 361 of the Code and within the meaning of Treasury regulation section 1.368-2(g). The New Agreement eliminated the use of Contingent Shares in the event any of the Reserved Assets are recovered by the Company or Cuattro International; in such a circumstance, the Members would be paid in cash under the New Agreement. The earliest date upon which the parties may terminate the New Agreement for failure of a closing condition to be satisfied under the New Agreement is May 31, 2016. On April 14, 2016, the Company filed a definitive proxy statement with the SEC which included a Share Increase proposal for consideration by the Company’s stockholders at the Company’s 2016 Annual Meeting of Stockholders on May 13, 2016. Assuming this Share Increase proposal is approved by the Company’s stockholders, the Company expects to obtain 100% ownership of Cuattro International by the end of May 2016. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Heska Corporation and its wholly-owned and majority-owned subsidiaries ("Heska", the "Company", "we" or "our") sell advanced veterinary diagnostic and other specialty veterinary products. Our offerings include blood testing instruments and supplies, digital imaging products, software and services, and single use products and services such as in-clinic heartworm diagnostic tests, heartworm preventive products, allergy immunotherapy products and allergy testing. Our core focus is on the canine and feline companion animal health markets. In the opinion of management, the accompanying unaudited Condensed Consolidated Financial Statements contain all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the financial position of the Company at March 31, 2016, and the results of our operations and cash flows for the three months ended March 31, 2016 and 2015. The Condensed Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes thereto contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and other financial information filed with the SEC. |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are required when establishing the allowance for doubtful accounts and the provision for excess or obsolete inventory, in determining the period over which our obligations are fulfilled under agreements to license product rights and/or technology rights, evaluating long-lived and intangible assets for impairment, determining the allocation of purchase price under purchase accounting, estimating the expense associated with the granting of stock options, determining the value of our non-controlling interest and in determining the need for, and the amount of, a valuation allowance on deferred tax assets. |
Recent Accounting Pronouncements | In March 2016, the FASB issued guidance codified in Accounting Standards Codification (“ASC”) Topic 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The standard simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements and classification on the statement of cash flows. The standard will be effective for the fiscal year beginning January 1, 2017 and subsequent interim periods. We are currently evaluating the impact the provisions of the Topic will have on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, which supersedes ASC 840, Leases, and creates a new topic, ASC 842, Leases. This update requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. This update is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with earlier application permitted. This update will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. We are currently evaluating the effect of this update on our consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this update simplify the presentation of deferred income taxes and require that deferred tax liabilities and assets be classified as non-current in a classified statement of financial position. This update applies to all entities that present a classified statement of financial position. These amendments may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. If the guidance is applied prospectively, disclosure is made in the first interim and first annual period of change, the nature of and reason for the change in accounting principle and a statement that prior periods were not retrospectively adjusted. If the guidance is applied retrospectively, disclosure is made in the first interim and first annual period of change, the nature of and reason for the change in accounting principle and quantitative information about the effects of the accounting change on prior periods. The amendments are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. We have decided to early-adopt ASU 2015-17, which resulted in a retrospective adjustment of amounts disclosed in our consolidated balance sheet as of March 31, 2015. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Upon the effective date, the ASU replaces almost all existing revenue recognition guidance, including industry specific guidance, in generally accepted accounting principles. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendments in this update deferred the effective date for implementation of ASU 2014-09 by one year and are now effective for annual reporting periods beginning after December 15, 2017. Early application is permitted only as of annual reporting periods beginning after December 15, 2016 including interim reporting periods within that period. We are currently assessing the impact that the adoption of this standard will have on our consolidated financial statements and related disclosures upon implementation. |
ACQUISITION AND RELATED PARTY23
ACQUISITION AND RELATED PARTY ITEMS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations and Related Party Disclosures [Abstract] | |
Reconciliation of non-controlling interest balance | The following is a reconciliation of the non-controlling interest balance (in thousands): Beginning December 31, 2015 $ 15,747 Accretion of Put Value 30 Balance March 31, 2016 $ 15,777 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense | Our total income tax expense and the effective tax rate for our income before income taxes are as follows (in thousands): Three months ended March 31, 2015 2016 Income before income taxes $ 884 $ 2,103 Total income tax expense 301 656 Effective tax rate 34.0 % 31.2 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted earnings per share | The following is a reconciliation of the weighted-average shares outstanding used in the calculation of basic and diluted earnings per share for the three months ended March 31, 2015 and 2016 (in thousands, except per share data): Three Months Ended March 31, 2015 2016 Net income attributable to Heska Corporation $ 598 $ 1,186 Basic weighted-average common shares outstanding 6,181 6,496 Assumed exercise of dilutive stock options and restricted stock units 688 668 Diluted weighted-average common shares outstanding 6,869 7,164 Basic earnings per share $ 0.10 $ 0.18 Diluted earnings per share $ 0.09 $ 0.17 |
Schedule of antidilutive securities excluded from computation of earnings per share | The following stock options and restricted units were excluded from the computation of diluted earnings per share because they would have been anti-dilutive (in thousands): Three Months Ended March 31, 2015 2016 Stock options 106 120 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | The following summarizes the changes in goodwill during the three months ended March 31, 2016 (in thousands): March 31, 2016 Carrying amount, beginning of period $ 20,910 Adjustments due to foreign currency fluctuations 29 Carrying amount, end of period $ 20,939 |
Schedule of other intangible assets | Other intangibles consisted of the following as of December 31, 2015 and March 31, 2016 (in thousands): December 31, March 31, 2015 2016 Gross carrying amount $ 788 $ 788 Accumulated amortization (732 ) (735 ) Net carrying amount $ 56 $ 53 |
Schedule of amortization expense on intangible assets | Amortization expense relating to other intangibles is as follows (in thousands): Three Months Ended March 31, 2015 2016 Amortization expense $ 65 $ 3 |
Schedule of estimated future amortization expense | Estimated amortization expense related to intangibles for each of the five years from 2016 (remaining) through 2020 and thereafter is as follows (in thousands): Year Ending December 31, 2016 (remaining) $ 7 2017 10 2018 10 2019 10 2020 10 Thereafter 6 $ 53 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Detail of property and equipment is as follows (in thousands): December 31, March 31, 2015 2016 Land $ 377 $ 377 Building 2,868 2,868 Machinery and equipment 35,284 36,945 Leasehold and building improvements 6,673 6,720 Construction in progress 1,496 1,531 46,698 48,441 Less accumulated depreciation and amortization (29,678 ) (30,680 ) Total property and equipment, net $ 17,020 $ 17,761 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories, net consist of the following (in thousands): December 31, March 31, 2015 2016 Raw materials $ 8,531 $ 10,475 Work in process 2,839 3,472 Finished goods 6,122 6,092 Allowance for excess or obsolete inventory (1,391 ) (1,426 ) $ 16,101 $ 18,613 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following as of December 31, 2015 and March 31, 2016 (in thousands): December 31, March 31, Accrued payroll and employee benefits $ 860 $ 1,013 Accrued property taxes 721 357 Accrued purchases 300 1,274 Other 3,535 4,017 Total accrued liabilities $ 5,416 $ 6,661 |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of weighted average valuation assumptions | The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-model with the following weighted average assumptions for options granted in the three months ended March 31, 2015 and 2016 . 2015 2016 Risk-free interest rate 1.10% 1.45% Expected lives 3.4 years 4.5 years Expected volatility 42% 41% Expected dividend yield 0% 0% |
Schedule of stock options plans | A summary of our stock option plans, excluding options to purchase fractional shares resulting from our December 2010 1-for- 10 reverse stock split, is as follows: Year Ended December 31, Three Months Ended March 31, 2015 2016 Weighted Average Exercise Price Weighted Average Exercise Price Outstanding at beginning of period 1,074,251 $ 10.110 940,610 $ 14.163 Granted at Market 146,446 $ 36.904 1,000 $ 30.520 Canceled (28,440 ) $ 10.080 (347 ) $ 14.711 Exercised (251,647 ) $ 10.559 (5,290 ) $ 11.675 Outstanding at end of period 940,610 $ 14.163 935,973 $ 14.195 Exercisable at end of period 621,559 $ 10.269 642,909 $ 10.272 |
Schedule of shares authorized under stock options plans by exercise price | The following table summarizes information about stock options outstanding and exercisable at March 31, 2016, excluding outstanding options to purchase an aggregate of 6.0 fractional shares resulting from our December 2010 1-for- 10 reverse stock split with a weighted average remaining contractual life of 0.60 years, a weighted average exercise price of $16.77 and exercise prices ranging from $11.00 - $22.50 . We intend to issue whole shares only from option exercises. The following table includes 109,500 shares underlying options issued in December 2015 with a strike price of $39.76 and expiration date of December 28, 2025 which will only vest and become exercisable if our stockholders approve an increase in the total number of authorized shares of our Public Common Stock to at least 8.5 million shares on or before December 31, 2022. Options Outstanding Options Exercisable Exercise Prices Number of Weighted Weighted Number of Weighted $ 4.40 - $ 6.90 225,302 4.52 $ 5.600 223,052 $ 5.594 $ 6.91 - $ 8.26 188,524 7.62 $ 7.384 108,788 $ 7.384 $ 8.27 - $15.80 189,795 6.02 $ 9.688 162,762 $ 9.748 $15.81 - $18.30 178,965 5.19 $ 18.016 114,674 $ 17.952 $18.31 - $39.76 153,387 9.26 $ 36.306 33,633 $ 26.980 $ 4.40 - $39.76 935,973 6.35 $ 14.195 642,909 $ 10.272 |
Schedule of pricing models | The weighted average assumptions used for the periods presented were as follows: Three Months Ended March 31, 2015 2016 Risk-free interest rate 0.23% 0.51% Expected lives 1.3 years 1.2 years Expected volatility 35% 41% Expected dividend yield 0% 0% |
ACCUMULATED OTHER COMPREHENSI31
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | Accumulated other comprehensive income consisted of the following (in thousands): Minimum pension liability Foreign currency translation Unrealized gains (losses) on available for sale investments Total accumulated other comprehensive income Balances at December 31, 2015 $ (576 ) $ 673 $ 90 $ 187 Current period other comprehensive income (loss) — 89 (90 ) (1 ) Balances at March 31, 2016 $ (576 ) $ 762 $ — $ 186 |
INTEREST AND OTHER EXPENSE (I32
INTEREST AND OTHER EXPENSE (INCOME) (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Income and Expenses [Abstract] | |
Schedule of interest expense (income) and other income, net | Interest and other expense (income) consisted of the following (in thousands): Three Months Ended March 31, 2015 2016 Interest income $ (58 ) $ (33 ) Interest expense 52 38 Other, net 143 (138 ) $ 137 $ (133 ) |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Reconciliation of other significant reconciling items from segments to consolidated | Summarized financial information concerning the Company's reportable segments is shown in the following table (in thousands): Three Months Ended March 31, 2015 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 19,572 $ 3,322 $ 22,894 Operating Income 535 486 1,021 Income before income taxes 410 474 884 Capital expenditures 307 298 605 Depreciation and amortization 830 176 1,006 Three Months Ended March 31, 2016 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 23,434 $ 3,712 $ 27,146 Operating Income 1,758 212 1,970 Income before income taxes 1,808 295 2,103 Capital expenditures 397 508 905 Depreciation and amortization 897 199 1,096 |
Schedule of revenue from external customers and long-lived assets, by geographical areas | Total revenue by principal geographic area was as follows (in thousands): Three Months Ended March 31, 2015 2016 United States $ 22,279 $ 26,480 Europe 615 666 Total $ 22,894 $ 27,146 Asset information by reportable segment as of December 31, 2015 is as follows (in thousands): Core Companion Animal Health Other Vaccines, Pharmaceuticals and Products Total Total assets $ 92,567 $ 17,152 $ 109,719 Net assets 48,175 15,353 63,528 Asset information by reportable segment as of March 31, 2016 is as follows (in thousands): Core Companion Animal Health Other Vaccines, Pharmaceuticals and Products Total Total assets $ 93,330 $ 16,762 $ 110,092 Net assets 57,152 8,353 65,505 Total assets by principal geographic areas were as follows (in thousands): December 31, March 31, 2015 2016 United States $ 106,780 $ 106,980 Europe 2,939 3,112 Total $ 109,719 $ 110,092 |
ACQUISITION AND RELATED PARTY34
ACQUISITION AND RELATED PARTY ITEMS (Details) - Cuattro Veterinary USA, LLC | Feb. 24, 2013 |
Business Acquisition [Line Items] | |
Percentage of voting interest acquired | 54.60% |
Interest subject to purchase as a percent | 45.40% |
ACQUISITION AND RELATED PARTY35
ACQUISITION AND RELATED PARTY ITEMS - RELATED PARTY ITEMS (Details) - USD ($) $ in Thousands | 3 Months Ended | 4 Months Ended | |
Mar. 31, 2016 | Apr. 28, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Note receivable – related party | $ 1,528 | $ 1,516 | |
Due from – related parties | 244 | $ 308 | |
Cuattro, LLC | |||
Related Party Transaction [Line Items] | |||
Due from – related parties | 32 | ||
Heska Imaging | |||
Related Party Transaction [Line Items] | |||
Due from – related parties | $ 5,400 | ||
Affiliated Entity | Cuattro, LLC | Subsequent Event | |||
Related Party Transaction [Line Items] | |||
Related party - amount of transaction | $ 1,300 | ||
Heska Imaging | |||
Related Party Transaction [Line Items] | |||
Following acquisition, former unit holders, ownership percentage | 45.40% | ||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |||
December 31, 2015 | $ 15,747 | 15,747 | |
Accretion of Put Value | 30 | ||
March 31, 2016 | $ 15,777 | ||
Heska Imaging | Clint Roth | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 8.39% | ||
Heska Imaging | Cuattro, LLC | |||
Related Party Transaction [Line Items] | |||
Due to – related party | $ 212 | ||
Heska Imaging | Cuattro Veterinary, LLC | |||
Related Party Transaction [Line Items] | |||
Note receivable – related party | $ 1,500 | ||
Heska Imaging | Immediate Family Member of Management or Principal Owner | Shawna M. Wilson | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 29.75% | ||
Heska Imaging | Executive Officer | Steven M. Asakowicz | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 4.09% | ||
Heska Imaging | Executive Officer | Rodney A. Lippincott | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 3.07% | ||
Heska Imaging | Chief Executive Officer | Kevin S. Wilson | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 0.05% | ||
Heska Imaging | Affiliated Entity | Cuattro, LLC | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 0.05% | ||
Heska Imaging | Affiliated Entity | Cuattro, LLC | Subsequent Event | |||
Related Party Transaction [Line Items] | |||
Related party - amount of transaction | 3,100 | ||
Cuattro, LLC | Chief Executive Officer | Kevin S. Willson, Shawna M. Wilson And Trusts For Their Children And Family | |||
Related Party Transaction [Line Items] | |||
Ownership percentage by trusts | 100.00% | ||
Cuattro, LLC | Affiliated Entity | Subsequent Event | |||
Related Party Transaction [Line Items] | |||
Related party - amount of transaction | $ 82 | ||
Cuattro Software, LLC | Chief Executive Officer | Kevin S. Willson, Shawna M. Wilson And Trusts For Their Children And Family | |||
Related Party Transaction [Line Items] | |||
Ownership percentage by trusts | 100.00% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Income before income taxes | $ 2,103 | $ 884 |
Total income tax expense (benefit) | $ 656 | $ 301 |
Effective income tax rate | 31.20% | 34.00% |
Cash paid for income taxes | $ 5 | $ 5 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2010 | Mar. 31, 2016USD ($)$ / sharesshares | Mar. 31, 2015USD ($)$ / sharesshares | |
Earnings Per Share [Abstract] | |||
Reverse stock split conversion ratio | 0.10 | ||
Net income attributable to Heska Corporation | $ | $ 1,186 | $ 598 | |
Weighted average outstanding shares used to compute basic earnings per share attributable to Heska Corporation | 6,496 | 6,181 | |
Assumed exercise of dilutive stock options and restricted stock units | 668 | 688 | |
Diluted weighted-average common shares outstanding | 7,164 | 6,869 | |
Basic earnings per share attributable to Heska Corporation, in dollars per share | $ / shares | $ 0.18 | $ 0.10 | |
Diluted earnings per share attributable to Heska Corporation, in dollars per share | $ / shares | $ 0.17 | $ 0.09 | |
Stock Options And Restricted Units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Stock options and restricted units excluded from computation of earnings per share | 120 | 106 |
GOODWILL AND OTHER INTANGIBLE38
GOODWILL AND OTHER INTANGIBLES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | |||
Carrying amount, beginning of period | $ 20,910 | ||
Adjustments due to foreign currency fluctuations | 29 | ||
Carrying amount, end of period | 20,939 | ||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross carrying amount | 788 | $ 788 | |
Accumulated amortization | (735) | (732) | |
Net carrying amount | 53 | 56 | |
Amortization expense | 3 | $ 65 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2016 (remaining) | 7 | ||
2,017 | 10 | ||
2,018 | 10 | ||
2,019 | 10 | ||
2,020 | 10 | ||
Thereafter | 6 | ||
Net carrying amount | $ 53 | $ 56 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Feb. 24, 2013 | |
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 48,441,000 | $ 46,698,000 | ||
Less accumulated depreciation and amortization | (30,680,000) | (29,678,000) | ||
Total property and equipment, net | 17,761,000 | 17,020,000 | ||
Total costs transferred from inventory | 1,000,000 | $ 1,000,000 | ||
Deferred revenue and other | (1,798,000) | (432,000) | ||
Depreciation and amortization | 1,100,000 | 1,000,000 | ||
Capital expenditures | 905,000 | 605,000 | ||
Cuattro Veterinary USA, LLC | ||||
Property, Plant and Equipment [Line Items] | ||||
Percentage of voting interest acquired | 54.60% | |||
Heska Imaging | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, net | 1,900,000 | 2,200,000 | ||
Deferred revenue and other | 42,000 | |||
Land | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 377,000 | 377,000 | ||
Building | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 2,868,000 | 2,868,000 | ||
Machinery and equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 36,945,000 | 35,284,000 | ||
Machinery and equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property plant and equipment, useful life | 5 years | |||
Machinery and equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Property plant and equipment, useful life | 7 years | |||
Leasehold and building improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | $ 6,720,000 | 6,673,000 | ||
Construction in progress | ||||
Property, Plant and Equipment [Line Items] | ||||
Property and equipment, gross | 1,531,000 | 1,496,000 | ||
Software and Software Development Costs | ||||
Property, Plant and Equipment [Line Items] | ||||
Total property and equipment, net | 400,000 | $ 400,000 | ||
Capital expenditures | $ 0 | $ 35,000 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 10,475 | $ 8,531 |
Work in process | 3,472 | 2,839 |
Finished goods | 6,092 | 6,122 |
Allowance for excess or obsolete inventory | (1,426) | (1,391) |
Inventory, net | $ 18,613 | $ 16,101 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued payroll and employee benefits | $ 1,013 | $ 860 |
Accrued property taxes | 357 | 721 |
Accrued purchases | 1,274 | 300 |
Other | 4,017 | 3,535 |
Total accrued liabilities | $ 6,661 | $ 5,416 |
CAPITAL STOCK - NARRATIVE (Deta
CAPITAL STOCK - NARRATIVE (Details) $ / shares in Units, $ in Thousands | Mar. 02, 2016shares | Mar. 17, 2015shares | Dec. 31, 2010 | Mar. 31, 2016USD ($)$ / sharesshares | Mar. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Reverse stock split conversion ratio | 0.10 | ||||||
Fair value of stock options granted during period | $ | $ 11 | $ 15 | |||||
Weighted average grant date fair value | $ / shares | $ 10.93 | $ 6.17 | |||||
Intrinsic value of options exercised | $ | $ 107 | $ 1,300 | |||||
Proceeds from stock options exercised | $ | $ 62 | $ 407 | |||||
Options contingently vesting | 109,500 | ||||||
Options contingently vesting, exercise price | $ / shares | $ 39.76 | ||||||
Increase in common stock authorized necessary for vesting of options granted during December 2015 | 8,500,000 | ||||||
Unrecognized compensation expense to be recognized during the remainder of fiscal year | $ | $ 560 | ||||||
Weighted average purchase price of shares purchased | $ / shares | $ 6.29 | $ 5.21 | |||||
Stockholder ownership percentage, threshold for restrictions | 5.00% | ||||||
Excluded Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options outstanding | 6 | ||||||
Options outstanding, weighted average remaining contractual term | 7 months 6 days | ||||||
Options outstanding, weighted average exercise price | $ / shares | $ 16.77 | ||||||
Exercise price, lower range limit | $ / shares | 11 | ||||||
Exercise price, upper range limit | $ / shares | $ 22.50 | ||||||
Employee Stock | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares issued during period | 5,885 | 827 | |||||
Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Intrinsic value of options exercised | $ | $ 11,700 | ||||||
Options outstanding | 935,973 | 940,610 | 1,074,251 | ||||
Total unrecognized compensation expense related to outstanding stock options | $ | $ 2,000 | ||||||
Period for recognition of unrecognized compensation expense | 1 year 7 months 41 days | ||||||
Intrinsic value of options outstanding | $ | $ 14,600 | ||||||
Performance Shares | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares issued during period | 52,956 | ||||||
Performance Shares | Management Incentive Plan (MIP) Grants 2015 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares issued during period | 24,649 | ||||||
Performance shares canceled | 10,285 | ||||||
Shares vested during period | 14,364 | ||||||
Performance Shares | Management Incentive Plan (MIP) Grants 2016 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Shares issued during period | 15,000 |
CAPITAL STOCK - OPTION ACTIVITY
CAPITAL STOCK - OPTION ACTIVITY (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate (as a percent) | 1.45% | 1.10% | |
Expected lives (in years) | 4 years 5 months 21 days | 3 years 4 months 24 days | |
Expected volatility (as a percent) | 41.00% | 42.00% | |
Expected dividend rate (as a percent) | 0.00% | 0.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at beginning of period | 940,610 | 1,074,251 | 1,074,251 |
Granted at Market | 1,000 | 146,446 | |
Canceled | (347) | (28,440) | |
Exercised | (5,290) | (251,647) | |
Outstanding at end of period | 935,973 | 940,610 | |
Exercisable at end of period | 642,909 | 621,559 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Outstanding at beginning of period (in dollars per share) | $ 14.163 | $ 10.110 | $ 10.110 |
Granted at Market (in dollars per share) | 30.520 | 36.904 | |
Cancelled (in dollars per share) | 14.711 | 10.080 | |
Exercised (in dollars per share) | 11.675 | 10.559 | |
Outstanding at ending of period (in dollars per share) | 14.195 | 14.163 | |
Exercisable at end of period (in dollars per share) | $ 10.272 | $ 10.269 | |
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate (as a percent) | 0.51% | 0.23% | |
Expected lives (in years) | 1 year 2 months 18 days | 1 year 3 months 18 days | |
Expected volatility (as a percent) | 41.00% | 35.00% | |
Expected dividend rate (as a percent) | 0.00% | 0.00% |
CAPITAL STOCK - SUMMARY OF INFO
CAPITAL STOCK - SUMMARY OF INFORMATION BY EXERCISE PRICE RANGE (Details) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
$ 4.40 - $ 6.90 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at March 31, 2016 | shares | 225,302 |
Weighted Average Remaining Contractual Life in Years | 4 years 6 months 7 days |
Weighted Average Exercise Price | $ 5.600 |
Number of Options Exercisable at March 31, 2016 | shares | 223,052 |
Weighted Average Exercise Price | $ 5.594 |
Exercise price, lower range limit | 4.40 |
Exercise price, upper range limit | $ 6.90 |
$ 6.91 - $ 8.26 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at March 31, 2016 | shares | 188,524 |
Weighted Average Remaining Contractual Life in Years | 7 years 7 months 15 days |
Weighted Average Exercise Price | $ 7.384 |
Number of Options Exercisable at March 31, 2016 | shares | 108,788 |
Weighted Average Exercise Price | $ 7.384 |
Exercise price, lower range limit | 6.91 |
Exercise price, upper range limit | $ 8.26 |
$ 8.27 - $ 11.65 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at March 31, 2016 | shares | 189,795 |
Weighted Average Remaining Contractual Life in Years | 5 years 11 months 36 days |
Weighted Average Exercise Price | $ 9.688 |
Number of Options Exercisable at March 31, 2016 | shares | 162,762 |
Weighted Average Exercise Price | $ 9.748 |
Exercise price, lower range limit | 8.27 |
Exercise price, upper range limit | $ 15.80 |
$ 11.66 - $ 18.30 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at March 31, 2016 | shares | 178,965 |
Weighted Average Remaining Contractual Life in Years | 5 years 2 months 9 days |
Weighted Average Exercise Price | $ 18.016 |
Number of Options Exercisable at March 31, 2016 | shares | 114,674 |
Weighted Average Exercise Price | $ 17.952 |
Exercise price, lower range limit | 15.81 |
Exercise price, upper range limit | $ 18.30 |
$ 18.31 - $ 39.76 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at March 31, 2016 | shares | 153,387 |
Weighted Average Remaining Contractual Life in Years | 9 years 3 months 3 days |
Weighted Average Exercise Price | $ 36.306 |
Number of Options Exercisable at March 31, 2016 | shares | 33,633 |
Weighted Average Exercise Price | $ 26.980 |
Exercise price, lower range limit | 18.31 |
Exercise price, upper range limit | $ 39.76 |
$ 4.40 - $ 39.76 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at March 31, 2016 | shares | 935,973 |
Weighted Average Remaining Contractual Life in Years | 6 years 4 months 5 days |
Weighted Average Exercise Price | $ 14.195 |
Number of Options Exercisable at March 31, 2016 | shares | 642,909 |
Weighted Average Exercise Price | $ 10.272 |
Exercise price, lower range limit | 4.40 |
Exercise price, upper range limit | $ 39.76 |
ACCUMULATED OTHER COMPREHENSI45
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Total accumulated other comprehensive income | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | $ 187 |
Current period other comprehensive income (loss) | (1) |
Ending balance | 186 |
Minimum pension liability | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (576) |
Current period other comprehensive income (loss) | 0 |
Ending balance | (576) |
Foreign currency translation | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | 673 |
Current period other comprehensive income (loss) | 89 |
Ending balance | 762 |
Unrealized gains (losses) on available for sale investments | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | 90 |
Current period other comprehensive income (loss) | (90) |
Ending balance | $ 0 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | Mar. 12, 2015$ / violation | Mar. 31, 2016USD ($) | Mar. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |||
Increase in royalties payable | $ 0.1 | $ 0.1 | |
Loss Contingencies [Line Items] | |||
Warranty reserve | 0.4 | ||
Inventories | |||
Recorded Unconditional Purchase Obligation [Line Items] | |||
Minimum inventory purchases in fiscal 2016 | 0.2 | ||
Minimum inventory purchases in fiscal 2017 | $ 0.2 | ||
Minimum | Illinois Junk Fax Litigation | |||
Loss Contingencies [Line Items] | |||
Estimate of possible loss, charge per violation | $ / violation | 500 |
INTEREST AND OTHER EXPENSE (I47
INTEREST AND OTHER EXPENSE (INCOME) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Other Income and Expenses [Abstract] | ||
Interest income | $ (33) | $ (58) |
Interest expense | 38 | 52 |
Other, net | (138) | 143 |
Interest and other expense (income), net | 133 | (137) |
Interest Paid | $ 18 | $ 18 |
CREDIT FACILITY (Details)
CREDIT FACILITY (Details) - Line of Credit - Revolving Credit Facility | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Debt Instrument [Line Items] | |
Maximum borrowing capacity | $ 15,000,000 |
Long-term line of credit | 800,000 |
Minimum annual interest charge | 75,000 |
Remaining borrowing capacity | $ 10,700,000 |
London Interbank Offered Rate (LIBOR) | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 2.25% |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total revenue | $ 27,146 | $ 22,894 | |
Operating income (loss) | 1,970 | 1,021 | |
Income before income taxes | 2,103 | 884 | |
Capital expenditures | 905 | 605 | |
Depreciation and amortization | 1,096 | 1,006 | |
Assets | 110,092 | $ 109,719 | |
Net Assets | 65,505 | 63,528 | |
United States | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total revenue | 26,480 | 22,279 | |
Assets | 106,980 | 106,780 | |
Europe | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total revenue | 666 | 615 | |
Assets | 3,112 | 2,939 | |
Operating Segments | Core Companion Animal Health | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total revenue | 23,434 | 19,572 | |
Operating income (loss) | 1,758 | 535 | |
Income before income taxes | 1,808 | 410 | |
Capital expenditures | 397 | 307 | |
Depreciation and amortization | 897 | 830 | |
Assets | 93,330 | 92,567 | |
Net Assets | 57,152 | 48,175 | |
Operating Segments | Other Vaccines, Pharmaceuticals and Products | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Total revenue | 3,712 | 3,322 | |
Operating income (loss) | 212 | 486 | |
Income before income taxes | 295 | 474 | |
Capital expenditures | 508 | 298 | |
Depreciation and amortization | 199 | $ 176 | |
Assets | 16,762 | 17,152 | |
Net Assets | $ 8,353 | $ 15,353 |
SEGMENT REPORTING - NARRATIVE (
SEGMENT REPORTING - NARRATIVE (Details) - segment | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Segment Reporting [Abstract] | |||
Number of reportable segments | 2 | ||
Sales Revenue, Net | Customer Concentration Risk | Customer A | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 11.00% | ||
Sales Revenue, Net | Customer Concentration Risk | Customer B | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 12.00% | ||
Accounts Receivable | Customer Concentration Risk | Customer A | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 13.00% | 20.00% | |
Accounts Receivable | Customer Concentration Risk | Customer B | |||
Concentration Risk [Line Items] | |||
Concentration Risk, Percentage | 10.00% | 13.00% |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands | Feb. 29, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | |||
Note receivable – related party | $ 1,528 | $ 1,516 | |
Heska Imaging | Cuattro Veterinary, LLC | |||
Subsequent Event [Line Items] | |||
Note receivable – related party | $ 1,500 | ||
Cuattro International | |||
Subsequent Event [Line Items] | |||
Equity interest transferred for business combination consideration | $ 6,000 | ||
Percentage of voting interest acquired | 100.00% | ||
Consideration transferred, liabilities incurred | $ 2,100 | ||
Cuattro International | Common Stock | |||
Subsequent Event [Line Items] | |||
Contingent consideration, increase in shares authorized | 1,000,000 | ||
Cuattro International | Minimum | |||
Subsequent Event [Line Items] | |||
Equity interest transferred for business combination consideration, shares | 175,000 | ||
Cuattro International | Maximum | |||
Subsequent Event [Line Items] | |||
Equity interest transferred for business combination consideration, shares | 200,000 | ||
Contingent consideration, shares issued | 100,000 |