Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 02, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Heska Corp | |
Entity Central Index Key | 1,038,133 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
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 | Q3 | |
Document Fiscal Year Focus | 2,017 | |
Entity Common Stock, Shares Outstanding | 7,243,787 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 7,423 | $ 10,794 |
Accounts receivable, net of allowance for doubtful accounts of $196 and $237, respectively | 13,492 | 20,857 |
Due from – related parties | 22 | 100 |
Inventories, net | 30,013 | 20,395 |
Other current assets | 6,022 | 3,127 |
Total current assets | 56,972 | 55,273 |
Property and equipment, net | 16,147 | 16,581 |
Goodwill | 26,688 | 26,647 |
Other intangible assets, net | 2,055 | 2,346 |
Deferred tax asset, net | 20,299 | 21,122 |
Other non-current assets | 13,485 | 8,875 |
Total assets | 135,646 | 130,844 |
Current liabilities: | ||
Accounts payable | 10,374 | 7,154 |
Accrued liabilities | 4,649 | 6,469 |
Current portion of deferred revenue | 3,466 | 3,439 |
Obligation to purchase minority interest | 0 | 14,602 |
Line of credit and other short-term borrowings | 6,313 | 750 |
Total current liabilities | 24,802 | 32,414 |
Deferred revenue, net of current portion, and other | 9,817 | 11,455 |
Total liabilities | 34,619 | 43,869 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value, 2,500,000 shares authorized, none issued or outstanding | 0 | 0 |
Traditional common stock, $.01 par value, 10,000,000 shares authorized, none issued or outstanding | 0 | 0 |
Public common stock, $.01 par value, 10,000,000 shares authorized, 7,243,648 and 7,026,051 shares issued and outstanding, respectively | 72 | 70 |
Additional paid-in capital | 242,998 | 238,635 |
Accumulated other comprehensive income | 222 | 97 |
Accumulated deficit | (142,265) | (151,827) |
Total stockholders' equity | 101,027 | 86,975 |
Total liabilities and stockholders' equity | $ 135,646 | $ 130,844 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Allowance for doubtful accounts | $ 237 | $ 196 |
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 |
Traditional Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
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 | 10,000,000 | 10,000,000 |
Common stock, shares issued | 7,026,051 | 7,243,648 |
Common stock, shares outstanding | 7,026,051 | 7,243,648 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue: | ||||
Core companion animal health | $ 26,670 | $ 26,386 | $ 78,299 | $ 74,284 |
Other vaccines, pharmaceuticals and products | 4,758 | 7,044 | 17,847 | 16,257 |
Total revenue, net | 31,428 | 33,430 | 96,146 | 90,541 |
Cost of revenue | 17,875 | 19,712 | 54,455 | 52,699 |
Gross profit | 13,553 | 13,718 | 41,691 | 37,842 |
Operating expenses: | ||||
Selling and marketing | 5,815 | 5,490 | 17,908 | 16,495 |
Research and development | 601 | 507 | 1,576 | 1,605 |
General and administrative | 3,359 | 3,229 | 11,081 | 9,724 |
Total operating expenses | 9,775 | 9,226 | 30,565 | 27,824 |
Operating income | 3,778 | 4,492 | 11,126 | 10,018 |
Interest and other expense (income), net | (6) | 14 | (186) | (85) |
Income before income taxes | 3,784 | 4,478 | 11,312 | 10,103 |
Income tax expense: | ||||
Current income tax expense | 8 | 123 | 25 | 284 |
Deferred income tax expense | 693 | 1,012 | 762 | 2,287 |
Total income tax expense | 701 | 1,135 | 787 | 2,571 |
Net income | 3,083 | 3,343 | 10,525 | 7,532 |
Net income (loss) attributable to non-controlling interest | 0 | (4) | (498) | 477 |
Net income attributable to Heska Corporation | $ 3,083 | $ 3,347 | $ 11,023 | $ 7,055 |
Earnings Per Share [Abstract] | ||||
Basic earnings per share attributable to Heska Corporation, in dollars per share | $ 0.43 | $ 0.49 | $ 1.58 | $ 1.05 |
Diluted earnings per share attributable to Heska Corporation, in dollars per share | $ 0.40 | $ 0.45 | $ 1.45 | $ 0.97 |
Weighted average outstanding shares used to compute basic earnings per share attributable to Heska Corporation | 7,139 | 6,871 | 6,985 | 6,727 |
Weighted average outstanding shares used to compute diluted earnings per share attributable to Heska Corporation | 7,668 | 7,454 | 7,580 | 7,299 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||||
Net income | $ 3,083 | $ 3,343 | $ 10,525 | $ 7,532 |
Other comprehensive income: | ||||
Sale of equity investment | 0 | 0 | 0 | (90) |
Foreign currency translation | (45) | 28 | 125 | 71 |
Comprehensive income | 3,038 | 3,371 | 10,650 | 7,513 |
Comprehensive income (loss) attributable to non-controlling interest | 0 | (4) | (498) | 477 |
Comprehensive income attributable to Heska Corporation | $ 3,038 | $ 3,375 | $ 11,148 | $ 7,036 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 10,525 | $ 7,532 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 3,586 | 3,418 |
Deferred tax expense | 762 | 2,287 |
Stock based compensation | 2,094 | 1,685 |
Unrealized benefit on foreign currency translation | 0 | (1) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 7,376 | 377 |
Inventories | (10,490) | (5,661) |
Other current assets | (2,748) | 197 |
Accounts payable | 3,218 | (1,817) |
Accrued liabilities and other | (1,824) | 475 |
Other non-current assets | (4,606) | (3,997) |
Deferred revenue and other | (1,615) | (2,614) |
Net cash provided by operating activities | 6,278 | 1,881 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Proceeds from sale of equity investment | 0 | 115 |
Purchase of minority interest | (13,757) | 0 |
Purchases of property and equipment | (1,998) | (2,126) |
Proceeds from disposition of property and equipment | 6 | 716 |
Net cash used in investing activities | (15,749) | (1,295) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 2,287 | 567 |
Repurchase of equity instruments | (860) | 0 |
Distributions to non-controlling interest members | (963) | 0 |
Proceeds from line of credit borrowings | 40,307 | 25,417 |
Repayments of line of credit borrowings | (34,666) | (24,006) |
Repayments of other debt | (78) | (279) |
Net cash provided by financing activities | 6,027 | 1,699 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 73 | 39 |
DECREASE IN CASH AND CASH EQUIVALENTS | (3,371) | 2,324 |
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 10,794 | 6,890 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ 7,423 | $ 9,214 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Heska Corporation and its wholly-owned subsidiaries ("Heska", the "Company", "we" or "our") sell advanced veterinary diagnostic and specialty products. Our offerings include blood testing instruments and supplies, digital imaging products, software and services, vaccines, local and cloud-based data services, allergy testing and immunotherapy, and single-use offerings such as in-clinic diagnostic tests and heartworm preventive products. Our core focus is on supporting veterinarians in the canine and feline healthcare space. 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 September 30, 2017 , and the results of our operations for the three and nine months ended September 30, 2017 and 2016 and cash flows for the nine months ended September 30, 2017 and 2016 . The unaudited 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, 2016 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, 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, 2016, except as noted below. Revenue Recognition We generate our revenue through the sale of products, either by outright purchase by our customers or through a subscription agreement whereby our customers receive specified blood-testing equipment and pay us a monthly fee for the usage of the equipment as well as the consumables needed to conduct testing. Additionally, we may recognize rental revenue for certain of our equipment in our digital imaging product line in which we are paid a monthly rental fee for usage of the equipment. We also may recognize revenue through licensing of technology product rights, royalties and sponsored research and development. Our policy is to recognize revenue when the applicable revenue recognition criteria have been met, which generally include the following: • Persuasive evidence of an arrangement exists; • Delivery has occurred or services have been rendered; • Price is fixed or determinable; and • Collectability is reasonably assured. Revenue from the outright sale of products to customers is recognized after both the goods are shipped to the customer and acceptance has been received, if required, with an appropriate provision for estimated returns and allowances. We do not permit general returns of products sold. Certain of our products have expiration dates. Our policy is to exchange certain outdated, expired product with the same product. We record an accrual for the estimated cost of replacing the expired product expected to be returned in the future, based on our historical experience, adjusted for any known factors that reasonably could be expected to change historical patterns, such as regulatory actions which allow us to extend the shelf lives of our products. Revenue from our subscription agreements is recognized based on the length of the agreements that are signed by our customers. Among other factors, the length of the agreement determines whether a subscription is considered an operating lease or capital lease. For subscription agreements that are considered operating leases, we recognize revenue of our subscriptions ratably over the term of the agreement. The equipment is transferred from inventory to property, plant and equipment and depreciated into cost of goods sold over the term of the agreement, based on the assets’ useful life. Revenue from subscription agreements that are considered capital leases is recognized, along with the associated cost of the equipment, at the time of placement in our customer’s location. The amount of revenue recognized at the time of lease inception is based on, along with other factors, observable prior sales prices of similar equipment sold by us over the prior twelve months, which is the amount determined to be the fair value. Revenue from our rentals of digital imaging equipment is recognized ratably over the term of the rental agreement, which is typically over a 26-month period. The equipment is transferred from inventory to property, plant and equipment and depreciated over the assets' useful life. Recording revenue from the sale of products involves the use of estimates and management's judgment. We must make a determination at the time of sale whether the customer has the ability to make payments in accordance with arrangements. While we do utilize past payment history, and, to the extent available for new customers, public credit information in making our assessment, the determination of whether collectability is reasonably assured is ultimately a judgment decision that must be made by management. We must also make estimates regarding our future obligations relating to returns, rebates, allowances and similar other programs. License revenue under arrangements to sell or license product rights or technology rights is recognized as obligations under the agreement are satisfied, which generally occurs over a period of time. Generally, licensing revenue is deferred and recognized over the estimated life of the related agreements, products, patents or technology. Nonrefundable licensing fees, marketing rights and milestone payments received under contractual arrangements are deferred and recognized over the remaining contractual term using the straight-line method. Recording revenue from license arrangements involves the use of estimates. The primary estimate made by management is determining the useful life of the related agreement, product, patent or technology. We evaluate all of our licensing arrangements by estimating the useful life of either the product or the technology, the length of the agreement or the legal patent life and defer the revenue for recognition over the appropriate period. We may enter into arrangements that include multiple elements. In these situations, we must determine whether the various elements meet the criteria to be accounted for as separate elements. If the elements cannot be separated, revenue is recognized once revenue recognition criteria for the entire arrangement have been met or over the period that the Company's obligations to the customer are fulfilled, as appropriate. If the elements are determined to be separable, the revenue is allocated to the separate elements based on relative fair value and recognized separately for each element when the applicable revenue recognition criteria have been met. In accounting for these multiple element arrangements, we must make determinations about whether elements can be accounted for separately and make estimates regarding their relative fair values. Recent Accounting Pronouncements In May 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 was issued to provide clarity and reduce both 1) diversity in practice and 2) cost and complexity when applying the guidance in Topic 718 to a change in the terms or conditions of a share-based payment award. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Topic 718. The amendments in ASU 2017-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. Heska adopted the new guidance in its second quarter of fiscal year 2017 and will apply the guidance to any future changes to the terms or conditions of its share-based payment awards. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment,” to simplify financial reporting by eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, up to the amount of goodwill allocated to that reporting unit. The new guidance effectively eliminates “Step 2” from the previous goodwill impairment test. ASU 2017-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. Heska plans to adopt the new guidance in its fourth quarter of fiscal year 2017 when it performs its annual goodwill impairment test as of December 15, 2017. Heska does not expect the adoption of ASU 2017-04 to have a significant impact on the results of its goodwill impairment testing. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)", 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 early adoption 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 May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” and has subsequently issued several supplemental and/or clarifying ASUs (collectively “ASC 606”). ASC 606 prescribes a single common revenue standard that replaces most existing U.S. GAAP revenue recognition guidance. ASC 606 outlines a five-step model, under which Heska will recognize revenue as performance obligations within a customer contract are satisfied. ASC 606 is intended to provide more consistent interpretation and application of the principles outlined in the standard across filers in multiple industries and within the same industries compared to current practices, which should improve comparability. Adoption of ASC 606 is required for annual reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Upon adoption, Heska must elect to adopt either retrospectively to each prior reporting period presented (full retrospective method) or using the cumulative effect transition method with the cumulative effect of initial adoption recognized at the date of initial application (modified retrospective method). Based on evaluation of the accounting impact of ASC 606 on our revenue streams, Heska has elected to adopt the modified retrospective method. Heska assessed the impact that the future adoption of ASC 606 is expected to have on its Consolidated Financial Statements by analyzing its current portfolio of customer contracts and various revenue streams, including a review of historical accounting policies and practices to identify potential differences in applying the guidance of ASC 606. Heska is also performing a comprehensive review of its current processes and systems to determine and implement changes required to support the adoption of ASC 606 on January 1, 2018. Based on Heska’s review of its customer contracts, Heska has determined that the timing of revenue recognition on the majority of its customer contracts will continue to be recognized as they are currently, generally upon shipment of products, consistent with Heska’s current revenue recognition model. While Heska believes that the timing of revenue recognition is consistent with current practice, we are still evaluating the allocation of the standalone selling price of goods and services and this could have an impact on the amount of revenue recognized at a point in time versus over time. As such, Heska believes the adoption of ASC 606 will have an impact on both the timing of revenue recognition and various line items within the Consolidated Balance Sheet. Heska generally expenses costs to obtain contracts (i.e. sales commissions) as a period expense for all contracts, despite the length of the arrangement. ASC 606, states that "an asset recognized in accordance with the incremental costs of obtaining a contract shall be amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates." Because a significant number of Heska’s customers are under noncancelable contracts for periods extending beyond one year with the delivery of goods and services occurring throughout the duration, Heska anticipates recording an asset related to the prepayment of such contract acquisition costs. In addition, ASC 606 will require more comprehensive disclosures about revenue streams and contracts with customers, including significant judgments required. Heska is currently evaluating potential changes to its processes for preparing required disclosures and to information systems that support the financial reporting process. Heska is also evaluating implications to the Company’s system of internal controls, relative to revenue recognition and the related revenue disclosures. |
ACQUISITION AND RELATED PARTY I
ACQUISITION AND RELATED PARTY ITEMS | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations and Related Party Disclosures [Abstract] | |
ACQUISITION AND RELATED PARTY ITEMS | ACQUISITIONS AND RELATED PARTY ITEMS Cuattro Veterinary, LLC On May 31, 2016, the Company closed a transaction (the "Merger") to acquire Cuattro Veterinary, LLC ("Cuattro International") from Kevin S. Wilson, and all of the members of Cuattro International (the "Members"). Pursuant to the Merger, the Company issued 175,000 shares of the Company’s common stock, $.01 par value per share (the "Common Stock"), to the Members on the Closing Date, at an aggregate value equal to approximately $6.3 million based on the adjusted closing price per share of the Common Stock as reported on the Nasdaq Stock Market on the Merger closing date. These shares were issued to the Members in a private placement in reliance upon an exemption from the registration requirements of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and the safe harbor provided by Rule 506 of Regulation D promulgated thereunder. In addition, the Company assumed approximately $1.5 million in debt as part of the transaction. Mr. Wilson is a founder of Cuattro International, Cuattro, LLC, Cuattro Software, LLC and Cuattro Medical, LLC. Mr. Wilson, Mrs. Wilson and trusts for the benefit of Mr. and Mrs. Wilson’s children and family own a 100% interest in Cuattro, LLC and a majority interest in Cuattro Medical, LLC. Cuattro, LLC owns a 100% interest in Cuattro Software, LLC and, prior to the Merger, owned a majority interest in Cuattro International. The Company recorded assets acquired and liabilities assumed at their estimated fair values. Intangible assets were valued based on a report from an independent third party. The following summarizes the aggregate consideration paid by the Company and the allocation of the purchase price (in thousands): Common stock issued - 175,000 shares $ 6,347 Debt assumed 1,535 Total fair value of consideration transferred $ 7,882 Accounts receivable $ 222 Inventories 39 Due from Cuattro, LLC 963 Property and equipment 80 Other tangible assets 164 Deferred tax asset 56 Intangible assets 2,521 Goodwill 5,783 Accounts payable (112 ) Deferred tax liability (905 ) Other assumed liabilities (929 ) Total fair value of consideration transferred $ 7,882 Intangible assets acquired, amortization method and estimated useful lives as of May 31, 2016 was as follows (dollars in thousands): Useful Life Amortization Method Fair Value Customer relationships 6.67 Straight-line $2,521 Cuattro International is a provider to international markets of digital radiography technologies for veterinarians. As a leading provider of advanced veterinary diagnostic and specialty products, we made the acquisition in an effort to combine Cuattro International's international reach with our domestic success in the imaging and blood testing markets in the United States. International markets represent a significant portion of worldwide veterinary revenues for which we intend to compete. As of the closing date of the Merger, Cuattro International was renamed Heska Imaging International, LLC, and the Company's interest in both Heska Imaging International, LLC ("International Imaging") and Heska Imaging US, LLC ("US Imaging") was transferred to the Company's wholly-owned subsidiary, Heska Imaging Global, LLC ("Global Imaging"). Cuattro Veterinary USA, LLC On February 24, 2013, the Company acquired a 54.6% interest in Cuattro Veterinary USA, LLC, which was subsequently renamed Heska Imaging US, LLC. The remaining minority position (45.4%) in US Imaging was subject to purchase by Heska under performance-based puts and calls following the audit of our financial statements for 2016 and 2017. The required performance criteria were met in 2016, we considered notice given on March 3, 2017 that the put option was being exercised and on May 31, 2017, we delivered $13.8 million in cash to obtain the remaining minority position in US Imaging. Prior to the purchase of the minority position (the "Imaging Minority"), Shawna M. Wilson, Clint Roth, DVM, Steven M. Asakowicz, Rodney A. Lippincott, Kevin S. Wilson and Cuattro, LLC owned approximately 29.75% , 8.39% , 4.09% , 3.07% , 0.05% and 0.05% of US 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. On April 3, 2017, and in accordance with the terms of its Operating Agreement, US Imaging distributed $2.1 million based on past operating performance, including $1.0 million to its minority interest members. On June 1, 2017, the Company consolidated its assets and liabilities in the US Imaging and International Imaging companies into Global Imaging, which was re-named Heska Imaging, LLC ("Heska Imaging"). Related Party Activities Cuattro, LLC charged Heska Imaging $13.9 million during the nine months ended September 30, 2017 , 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 $2.9 million during the five months ended May 31, 2017, prior to the purchase of the Imaging Minority on June 1, 2017, primarily related to sales expenses; and Heska Corporation charged Cuattro, LLC $0.1 million during the nine months ended September 30, 2017 , primarily related to facility usage and other services. As of September 30, 2017 , Heska Corporation had receivables from Cuattro, LLC of $22 thousand , which is included in "Due from – related parties" on the Company's consolidated balance sheet. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Our total income tax expense and the effective tax rate for our income before income taxes were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Income before income taxes $ 3,784 $ 4,478 $ 11,312 $ 10,103 Total income tax expense 701 1,135 787 2,571 Effective tax rate 18.5 % 25.3 % 7.0 % 25.4 % 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. During interim periods, the Company generally utilizes the estimated annual effective tax rate method which involves the use of forecasted information. Under this method, the provision is calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. The Company’s effective tax rate decreased to 18.5% for the three months ended September 30, 2017 , compared to 25.3% for the three months ended September 30, 2016 . The Company's effective tax rate decreased to 7% for the nine months ended September 30, 2017, compared to 25.4% for the nine months ended September 30, 2016. The decreases in rates for both periods was primarily attributable to an increase in stock-based compensation excess tax benefits, which are now recorded as income tax expense or benefit in accordance with our policy. As of September 30, 2017 , the Company assessed whether the reduction of taxable income due to large benefits created by stock option exercises and vesting of restricted stock and the excess tax benefits would cause a larger portion of our DTAs to likely expire unrealized. The Company assessed its ability to realize the DTAs by evaluating all available positive and negative evidence, including (1) cumulative results of operations in recent years, (2) sources of recent pre-tax losses, (3) estimates of future taxable income, and (4) the length of Net Operating Loss ("NOL") carryforward periods. Additionally, the Company considered the length of NOL carryforward periods and an objectively verifiable estimate of future income based on operating results from the Company’s recent history, as well as an estimate of future income that incorporates the Company's forecasted operating results for fiscal 2017. Due to the significant amount of additional stock based compensation excess tax deduction generated, the Company determined that the negative evidence outweighed the positive evidence and that the threshold of more-likely-than-not was not met and that sufficient taxable income may not be generated to realize all of the DTAs as of September 30, 2017 . As such, an additional $1.3 million and $3.1 million was recorded to the current partial valuation allowance against the Company’s DTAs during the three and nine months ended September 30, 2017 , respectively, which was partially offset by other adjustments to the valuation allowance. The Company will continue to closely monitor the need for an additional valuation allowance against its DTAs in each subsequent reporting period which can be impacted by actual operating results compared to the Company's forecast. There were $2 thousand cash payments for income taxes for the three months ended September 30, 2017 and there were $225 thousand cash payments for income taxes for the three month period ended September 30, 2016 . There were $146 thousand cash payments for income taxes for the nine months ended September 30, 2017 and there were $288 thousand cash paid for income taxes for the nine month period ended September 30, 2016 . |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share ("EPS") is computed by dividing net income attributable to Heska 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 and nine months ended September 30, 2017 and 2016 (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net income attributable to Heska $ 3,083 $ 3,347 $ 11,023 $ 7,055 Basic weighted-average common shares outstanding 7,139 6,871 6,985 6,727 Assumed exercise of dilutive stock options and restricted shares 529 583 595 572 Diluted weighted-average common shares outstanding 7,668 7,454 7,580 7,299 Basic earnings per share attributable to Heska $ 0.43 $ 0.49 $ 1.58 $ 1.05 Diluted earnings per share attributable to Heska $ 0.40 $ 0.45 $ 1.45 $ 0.97 The following stock options and restricted shares were excluded from the computation of diluted earnings per share because they would have been anti-dilutive (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Stock options 27 100 132 135 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOOWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES The following summarizes the change in goodwill during the nine months ended September 30, 2017 (in thousands): Carrying amount, December 31, 2016 $ 26,647 Foreign currency adjustments 41 Carrying amount, September 30, 2017 $ 26,688 Other intangibles consists of the following as of September 30, 2017 and December 31, 2016 (in thousands): September 30, December 31, 2017 2016 Gross carrying amount $ 3,309 $ 3,309 Accumulated amortization (1,254 ) (963 ) Net carrying amount $ 2,055 $ 2,346 Amortization expense relating to other intangibles was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Amortization expense $ 97 $ 97 $ 291 $ 134 Estimated amortization expense related to intangibles for each of the five years from 2017 (remaining) through 2021 and thereafter is as follows (in thousands): Year Ending December 31, 2017 (remaining) $ 97 2018 388 2019 388 2020 388 2021 384 Thereafter 410 $ 2,055 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment, net consists of the following (in thousands): September 30, December 31, 2017 2016 Land $ 377 $ 377 Building 2,868 2,868 Machinery and equipment 38,124 36,588 Leasehold and building improvements 8,129 7,662 Construction in progress 2,169 1,655 51,667 49,150 Less accumulated depreciation (35,520 ) (32,569 ) Total property and equipment, net $ 16,147 $ 16,581 The Company has subscription agreements 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 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 $0.7 million and $1.8 million for the nine months ended September 30, 2017 and the annual period ended December 31, 2016 , respectively. The Company has sold certain customer rental contracts and underlying assets to third parties under agreements that once the customer has met its 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. Since 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 in accordance with its depreciation policies. The Company had $0.2 million and $ 0.3 million of net property and equipment related to these transactions as of September 30, 2017 and December 31, 2016 , respectively, all related to Heska Imaging. Depreciation expense for property and equipment was $1.1 million and $1.2 million for the three months ended September 30, 2017 and 2016, respectively. Depreciation expense was $3.3 million and $3.4 million for the nine months ended September 30, 2017 and 2016, respectively. |
INVENTORIES, NET
INVENTORIES, NET | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | INVENTORIES, NET Inventories, net 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): September 30, December 31, 2017 2016 Raw materials $ 12,779 $ 10,807 Work in process 5,553 3,820 Finished goods 13,082 7,087 Allowance for excess or obsolete inventory (1,401 ) (1,319 ) Total inventory, net $ 30,013 $ 20,395 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consists of the following (in thousands): September 30, December 31, Accrued payroll and employee benefits $ 1,591 $ 2,166 Accrued property taxes 606 748 Accrued purchases — 664 Other 2,452 2,891 Total accrued liabilities $ 4,649 $ 6,469 Other accrued liabilities consist of items that are individually less than 5% of total current liabilities. |
CAPITAL STOCK
CAPITAL STOCK | 9 Months Ended |
Sep. 30, 2017 | |
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- pricing model with the following weighted average assumptions for options granted in the nine months ended September 30, 2017 and 2016 . Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Risk-free interest rate 1.83% 1.14% 1.75% 1.19% Expected lives 4.9 years 4.5 years 4.9 years 4.5 years Expected volatility 39% 40% 41% 41% Expected dividend yield 0% 0% 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: Nine Months Ended September 30, Year Ended December 31, 2017 2016 Weighted Average Exercise Price Weighted Average Exercise Price Outstanding at beginning of period 829,617 $ 23.203 940,610 $ 14.163 Granted at Market 26,550 $ 99.127 129,855 $ 67.706 Canceled (3,895 ) $ 45.635 (463 ) $ 14.881 Exercised (189,350 ) $ 10.877 (240,385 ) $ 11.886 Outstanding at end of period 662,922 $ 29.633 829,617 $ 23.203 Exercisable at end of period 445,542 $ 17.075 532,703 $ 12.140 The total estimated fair value of stock options granted during the nine months ended September 30, 2017 and 2016 was computed to be approximately $993 thousand and $277 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 nine months ended September 30, 2017 and 2016 was computed to be approximately $37.41 and $13.96 , respectively. The total intrinsic value of options exercised during the nine months ended September 30, 2017 and 2016 was $16.5 million and $2.8 million , respectively. The cash proceeds from options exercised during the nine months ended September 30, 2017 and 2016 was $1.8 million and $740 thousand , respectively. The following table summarizes information about stock options outstanding and exercisable at September 30, 2017 : Options Outstanding Options Exercisable Exercise Prices Number of Weighted Average Remaining Contractual Life in Years Weighted Average Exercise Price Number of Weighted Average Exercise Price $ 4.40 - $ 6.90 97,835 2.94 $ 5.405 97,835 $ 5.405 $ 6.91 - $ 7.36 106,544 6.14 $ 7.360 98,784 $ 7.360 $ 7.37 - $18.13 158,575 6.33 $ 13.469 128,286 $ 12.417 $18.14 - $39.76 167,893 7.30 $ 35.030 101,104 $ 32.449 $39.77 - $108.25 132,075 9.32 $ 78.093 19,533 $ 75.675 $ 4.40 - $108.25 662,922 6.64 $ 29.633 445,542 $ 17.075 As of September 30, 2017 , there was approximately $4.2 million in total unrecognized compensation cost related to outstanding stock options. That cost is expected to be recognized over a weighted average period of 1.59 years, with all cost to be recognized by the end of July 2021, assuming all options vest according to the vesting schedules in place at September 30, 2017 . As of September 30, 2017 , the aggregate intrinsic value of outstanding options was approximately $39.0 million and the aggregate intrinsic value of exercisable options was approximately $31.7 million . Employee Stock Purchase Plan (the "ESPP") For the three months ended September 30, 2017 and 2016 , we issued 2,515 and 3,583 shares under the ESPP, respectively. For the nine months ended September 30, 2017 and 2016 , we issued 8,058 and 13,965 shares under the ESPP, respectively. For the three and nine months ended September 30, 2017 and 2016 , 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 Nine Months Ended September 30, 2017 2016 2017 2016 Risk-free interest rate 0.76% 0.57% 0.70% 0.54% Expected lives 1.2 years 1.2 years 1.2 years 1.2 years Expected volatility 45% 44% 45% 43% Expected dividend yield 0% 0% 0% 0% For the three months ended September 30, 2017 and 2016, the weighted-average fair value of the purchase rights granted was $16.49 and $9.87 per share, respectively. For the nine months ended September 30, 2017 and 2016 , the weighted-average fair value of the purchase rights granted was $15.90 and $7.64 per share, respectively. Restricted Stock Issuance On March 26, 2014, we issued 110,000 shares to Mr. Wilson pursuant to an employment agreement between Mr. Wilson and the Company effective as of March 26, 2014 (the "Wilson Employment Agreement"). The shares were issued in four equal tranches and subject to time-based vesting and other provisions outlined in the Wilson Employment Agreement. As of March 26, 2017, all tranches have vested. On March 17, 2015, the Company issued unvested shares to certain Executive Officers related to performance-based restricted stock grants (the "Performance Grants"). The Company issued 52,956 shares under the Performance 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. 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"). Of these, 14,629 vested, 371 were forfeited, and 4,133 were withheld for tax. The 2016 MIP Grants vested during the three months ended March 31, 2017. On May 1, 2017, the Company issued 2,720 shares of our Common Stock to the Company's non-employee directors. These grants are to vest (the "Vesting Time") in full on the latter of (i) the one year anniversary of the date of grant and (ii) the Company’s Annual Meeting of Stockholders for the year following the year of grant for the award (the "Vesting Meeting"), subject to (i) the non-employee director's continued service to the Company through the Vesting Time, unless the non-employee director’s current term expires at the Vesting Meeting in which case vesting is subject to the non-employee director’s service to the Vesting Meeting and (ii) the non-employee director not engaging in “competition”, as defined in a restricted stock grant agreement executed by the non-employee director, to the Vesting Time. On May 31, 2017, the Company issued 23,700 unvested performance-based restricted stock shares to certain key employees. The vesting of these shares is subject to the achievement of certain Company performance and market conditions that must be met on or before May 30, 2024 . On June 15, 2017, the Company issued 6,594 unvested restricted shares to certain Executive Officers related to performance-based restricted stock grants as part of the Company’s 2017 Management Incentive Plan (the "2017 MIP Grants"). The 2017 MIP Grants have a one year vesting period from date of grant, subject to the Company’s achievement of certain financial goals and other vesting provisions in the underlying restricted stock grant 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 | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME Accumulated other comprehensive income consists of the following (in thousands): Minimum pension liability Foreign currency translation Total accumulated other comprehensive income Balances at December 31, 2016 $ (501 ) $ 598 $ 97 Current period other comprehensive income — 125 125 Balances at September 30, 2017 $ (501 ) $ 723 $ 222 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
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 the three months ended September 30, 2017 and 2016, royalties of $0.1 million became payable under these agreements. In each of the nine months ended September 30, 2017 and 2016, royalties of $0.3 million became payable under these agreements. The Company has contracts with suppliers for unconditional annual minimum inventory purchases in the amounts of approximately $0.3 million for the remainder of 2017 and $0.6 million in 2018 . 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. The Company intends to defend itself vigorously in this matter and at this time is unable to estimate a possible loss or range of loss. As of September 30, 2017, 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 its 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. The Company's warranty reserve was $0.4 million at both September 30, 2017 and December 31, 2016 . |
INTEREST AND OTHER INCOME, NET
INTEREST AND OTHER INCOME, NET | 9 Months Ended |
Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | |
INTEREST AND OTHER INCOME, NET | INTEREST AND OTHER INCOME, NET Interest and other income, net consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Interest income $ (41 ) $ (30 ) $ (122 ) $ (93 ) Interest expense 81 54 156 130 Other expense (income), net (46 ) (10 ) (220 ) (122 ) Total interest and other expense (income), net $ (6 ) $ 14 $ (186 ) $ (85 ) Cash paid for interest for the three months ended September 30, 2017 and 2016 was $67 thousand and $20 thousand , respectively. Cash paid for interest for the nine months ended September 30, 2017 and 2016 was $125 thousand and $56 thousand , respectively. |
CREDIT FACILITY
CREDIT FACILITY | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITY | CREDIT FACILITY On July 27, 2017, we entered into a Credit Agreement (the "Credit Agreement") with JP Morgan Chase Bank, N.A. ("Chase"), which provides for a new revolving credit facility of up to $30.0 million (the "Credit Facility"). The Credit Facility provides us with the ability to borrow up to $30.0 million , although the amount of the Credit Facility may be increased by an additional $20.0 million up to a total of $50.0 million subject to receipt of additional lender commitments and other conditions. Any interest on borrowings due is to be charged at either the (i) rate of interest per annum publicly announced from time to time by Chase as its prime rate in effect at its principal offices in New York City, subject to a floor, minus 1.65% , or (ii) the interest rate per annum equal to (a) LIBOR for the interest period in effect multiplied by (b) Chase's Statutory Reserve Rate (as defined in the Credit Agreement), plus 1.10% and payable monthly. There is an annual minimum interest charge of $60 thousand under the Credit Agreement. Borrowings under the Credit Facility are subject to certain financial and non-financial covenants and are available for various corporate purposes, including general working capital, capital investments, and certain permitted acquisitions. The Credit Agreement also permits us to issue letters of credit. The maturity date of the Credit Facility is July 27, 2020. The foregoing discussion of the new Credit Facility is a summary only and is qualified in its entirety by reference to the full text of the Credit Agreement, a copy of which has been filed as an exhibit to the Company's Current Report on Form 8-K filed with the SEC on August 2, 2017. At September 30, 2017, we had $6.3 million borrowings outstanding on this line of credit and we were in compliance with all financial covenants. Concurrent with the Credit Agreement, we repaid all outstanding balances and closed our asset-based revolving line of credit with Wells Fargo, which had a maturity date of December 31, 2017 . Our outstanding balance under this arrangement at December 31, 2016 was $0.7 million . |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2017 | |
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 CCA 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. 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 OVP 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. Summarized financial information concerning the Company's reportable segments is shown in the following table (in thousands): Three Months Ended September 30, 2017 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 26,670 $ 4,758 $ 31,428 Operating income 3,068 710 3,778 Income before income taxes 3,074 710 3,784 Capital purchases 34 669 703 Depreciation and amortization 935 259 1,194 Three Months Ended September 30, 2016 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 26,386 $ 7,044 $ 33,430 Operating income 2,995 1,497 4,492 Income before income taxes 2,994 1,484 4,478 Capital purchases 202 556 758 Depreciation and amortization 996 212 1,208 Nine months ended September 30, 2017 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 78,299 $ 17,847 $ 96,146 Operating income 6,763 4,363 11,126 Income before income taxes 6,971 4,341 11,312 Capital purchases 119 1,879 1,998 Depreciation and amortization 2,837 749 3,586 Nine months ended September 30, 2016 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 74,284 $ 16,257 $ 90,541 Operating income 7,499 2,519 10,018 Income before income taxes 7,526 2,577 10,103 Capital purchases 681 1,445 2,126 Depreciation and amortization 2,807 611 3,418 Revenue is attributed to individual countries based on customer location. Total revenue by principal geographic area was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 United States $ 28,795 $ 30,003 $ 87,824 $ 83,958 Europe 736 1,398 1,820 2,830 Canada 974 918 3,255 1,724 Other International 923 1,111 3,247 2,029 Total $ 31,428 $ 33,430 $ 96,146 $ 90,541 Asset information by reportable segment as of September 30, 2017 is as follows (in thousands): Core Companion Animal Health Other Vaccines, Pharmaceuticals and Products Total Total assets $ 112,453 $ 23,193 $ 135,646 Net assets 77,783 23,244 101,027 Asset information by reportable segment as of December 31, 2016 is as follows (in thousands): Core Companion Animal Health Other Vaccines, Pharmaceuticals and Products Total Total assets $ 110,995 $ 19,849 $ 130,844 Net assets 68,072 18,903 86,975 Total assets by principal geographic areas were as follows (in thousands): September 30, December 31, 2017 2016 United States $ 132,734 $ 127,827 Europe 2,912 3,017 Total $ 135,646 $ 130,844 |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Heska Corporation and its wholly-owned subsidiaries ("Heska", the "Company", "we" or "our") sell advanced veterinary diagnostic and specialty products. Our offerings include blood testing instruments and supplies, digital imaging products, software and services, vaccines, local and cloud-based data services, allergy testing and immunotherapy, and single-use offerings such as in-clinic diagnostic tests and heartworm preventive products. Our core focus is on supporting veterinarians in the canine and feline healthcare space. 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 September 30, 2017 , and the results of our operations for the three and nine months ended September 30, 2017 and 2016 and cash flows for the nine months ended September 30, 2017 and 2016 . The unaudited 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, 2016 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, and in determining the need for, and the amount of, a valuation allowance on deferred tax assets. |
Recent Accounting Pronouncements | In May 2017, the Financial Accounting Standards Board ("FASB") issued ASU 2017-09, “Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting.” ASU 2017-09 was issued to provide clarity and reduce both 1) diversity in practice and 2) cost and complexity when applying the guidance in Topic 718 to a change in the terms or conditions of a share-based payment award. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Topic 718. The amendments in ASU 2017-09 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. Heska adopted the new guidance in its second quarter of fiscal year 2017 and will apply the guidance to any future changes to the terms or conditions of its share-based payment awards. In January 2017, the FASB issued ASU 2017-04, “Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment,” to simplify financial reporting by eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. Under ASU 2017-04, an entity should perform its goodwill impairment test by comparing the fair value of the reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, up to the amount of goodwill allocated to that reporting unit. The new guidance effectively eliminates “Step 2” from the previous goodwill impairment test. ASU 2017-04 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. Heska plans to adopt the new guidance in its fourth quarter of fiscal year 2017 when it performs its annual goodwill impairment test as of December 15, 2017. Heska does not expect the adoption of ASU 2017-04 to have a significant impact on the results of its goodwill impairment testing. In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)", 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 early adoption 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 May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” and has subsequently issued several supplemental and/or clarifying ASUs (collectively “ASC 606”). ASC 606 prescribes a single common revenue standard that replaces most existing U.S. GAAP revenue recognition guidance. ASC 606 outlines a five-step model, under which Heska will recognize revenue as performance obligations within a customer contract are satisfied. ASC 606 is intended to provide more consistent interpretation and application of the principles outlined in the standard across filers in multiple industries and within the same industries compared to current practices, which should improve comparability. Adoption of ASC 606 is required for annual reporting periods beginning after December 15, 2017, including interim periods within the reporting period. Upon adoption, Heska must elect to adopt either retrospectively to each prior reporting period presented (full retrospective method) or using the cumulative effect transition method with the cumulative effect of initial adoption recognized at the date of initial application (modified retrospective method). Based on evaluation of the accounting impact of ASC 606 on our revenue streams, Heska has elected to adopt the modified retrospective method. Heska assessed the impact that the future adoption of ASC 606 is expected to have on its Consolidated Financial Statements by analyzing its current portfolio of customer contracts and various revenue streams, including a review of historical accounting policies and practices to identify potential differences in applying the guidance of ASC 606. Heska is also performing a comprehensive review of its current processes and systems to determine and implement changes required to support the adoption of ASC 606 on January 1, 2018. Based on Heska’s review of its customer contracts, Heska has determined that the timing of revenue recognition on the majority of its customer contracts will continue to be recognized as they are currently, generally upon shipment of products, consistent with Heska’s current revenue recognition model. While Heska believes that the timing of revenue recognition is consistent with current practice, we are still evaluating the allocation of the standalone selling price of goods and services and this could have an impact on the amount of revenue recognized at a point in time versus over time. As such, Heska believes the adoption of ASC 606 will have an impact on both the timing of revenue recognition and various line items within the Consolidated Balance Sheet. Heska generally expenses costs to obtain contracts (i.e. sales commissions) as a period expense for all contracts, despite the length of the arrangement. ASC 606, states that "an asset recognized in accordance with the incremental costs of obtaining a contract shall be amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates." Because a significant number of Heska’s customers are under noncancelable contracts for periods extending beyond one year with the delivery of goods and services occurring throughout the duration, Heska anticipates recording an asset related to the prepayment of such contract acquisition costs. In addition, ASC 606 will require more comprehensive disclosures about revenue streams and contracts with customers, including significant judgments required. Heska is currently evaluating potential changes to its processes for preparing required disclosures and to information systems that support the financial reporting process. Heska is also evaluating implications to the Company’s system of internal controls, relative to revenue recognition and the related revenue disclosures. |
ACQUISITION AND RELATED PARTY22
ACQUISITION AND RELATED PARTY ITEMS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations and Related Party Disclosures [Abstract] | |
Schedule of purchase price allocation | The following summarizes the aggregate consideration paid by the Company and the allocation of the purchase price (in thousands): Common stock issued - 175,000 shares $ 6,347 Debt assumed 1,535 Total fair value of consideration transferred $ 7,882 Accounts receivable $ 222 Inventories 39 Due from Cuattro, LLC 963 Property and equipment 80 Other tangible assets 164 Deferred tax asset 56 Intangible assets 2,521 Goodwill 5,783 Accounts payable (112 ) Deferred tax liability (905 ) Other assumed liabilities (929 ) Total fair value of consideration transferred $ 7,882 |
Schedule of intangible assets acquired | Intangible assets acquired, amortization method and estimated useful lives as of May 31, 2016 was as follows (dollars in thousands): Useful Life Amortization Method Fair Value Customer relationships 6.67 Straight-line $2,521 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Income before income taxes $ 3,784 $ 4,478 $ 11,312 $ 10,103 Total income tax expense 701 1,135 787 2,571 Effective tax rate 18.5 % 25.3 % 7.0 % 25.4 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 and nine months ended September 30, 2017 and 2016 (in thousands, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net income attributable to Heska $ 3,083 $ 3,347 $ 11,023 $ 7,055 Basic weighted-average common shares outstanding 7,139 6,871 6,985 6,727 Assumed exercise of dilutive stock options and restricted shares 529 583 595 572 Diluted weighted-average common shares outstanding 7,668 7,454 7,580 7,299 Basic earnings per share attributable to Heska $ 0.43 $ 0.49 $ 1.58 $ 1.05 Diluted earnings per share attributable to Heska $ 0.40 $ 0.45 $ 1.45 $ 0.97 |
Schedule of antidilutive securities excluded from computation of earnings per share | The following stock options and restricted shares were excluded from the computation of diluted earnings per share because they would have been anti-dilutive (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Stock options 27 100 132 135 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | The following summarizes the change in goodwill during the nine months ended September 30, 2017 (in thousands): Carrying amount, December 31, 2016 $ 26,647 Foreign currency adjustments 41 Carrying amount, September 30, 2017 $ 26,688 |
Schedule of other intangible assets | Other intangibles consists of the following as of September 30, 2017 and December 31, 2016 (in thousands): September 30, December 31, 2017 2016 Gross carrying amount $ 3,309 $ 3,309 Accumulated amortization (1,254 ) (963 ) Net carrying amount $ 2,055 $ 2,346 |
Schedule of amortization expense on intangible assets | Amortization expense relating to other intangibles was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Amortization expense $ 97 $ 97 $ 291 $ 134 |
Schedule of estimated future amortization expense | Estimated amortization expense related to intangibles for each of the five years from 2017 (remaining) through 2021 and thereafter is as follows (in thousands): Year Ending December 31, 2017 (remaining) $ 97 2018 388 2019 388 2020 388 2021 384 Thereafter 410 $ 2,055 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment, net consists of the following (in thousands): September 30, December 31, 2017 2016 Land $ 377 $ 377 Building 2,868 2,868 Machinery and equipment 38,124 36,588 Leasehold and building improvements 8,129 7,662 Construction in progress 2,169 1,655 51,667 49,150 Less accumulated depreciation (35,520 ) (32,569 ) Total property and equipment, net $ 16,147 $ 16,581 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories, net consist of the following (in thousands): September 30, December 31, 2017 2016 Raw materials $ 12,779 $ 10,807 Work in process 5,553 3,820 Finished goods 13,082 7,087 Allowance for excess or obsolete inventory (1,401 ) (1,319 ) Total inventory, net $ 30,013 $ 20,395 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consists of the following (in thousands): September 30, December 31, Accrued payroll and employee benefits $ 1,591 $ 2,166 Accrued property taxes 606 748 Accrued purchases — 664 Other 2,452 2,891 Total accrued liabilities $ 4,649 $ 6,469 |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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- pricing model with the following weighted average assumptions for options granted in the nine months ended September 30, 2017 and 2016 . Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Risk-free interest rate 1.83% 1.14% 1.75% 1.19% Expected lives 4.9 years 4.5 years 4.9 years 4.5 years Expected volatility 39% 40% 41% 41% Expected dividend yield 0% 0% 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: Nine Months Ended September 30, Year Ended December 31, 2017 2016 Weighted Average Exercise Price Weighted Average Exercise Price Outstanding at beginning of period 829,617 $ 23.203 940,610 $ 14.163 Granted at Market 26,550 $ 99.127 129,855 $ 67.706 Canceled (3,895 ) $ 45.635 (463 ) $ 14.881 Exercised (189,350 ) $ 10.877 (240,385 ) $ 11.886 Outstanding at end of period 662,922 $ 29.633 829,617 $ 23.203 Exercisable at end of period 445,542 $ 17.075 532,703 $ 12.140 |
Schedule of shares authorized under stock options plans by exercise price | The following table summarizes information about stock options outstanding and exercisable at September 30, 2017 : Options Outstanding Options Exercisable Exercise Prices Number of Weighted Average Remaining Contractual Life in Years Weighted Average Exercise Price Number of Weighted Average Exercise Price $ 4.40 - $ 6.90 97,835 2.94 $ 5.405 97,835 $ 5.405 $ 6.91 - $ 7.36 106,544 6.14 $ 7.360 98,784 $ 7.360 $ 7.37 - $18.13 158,575 6.33 $ 13.469 128,286 $ 12.417 $18.14 - $39.76 167,893 7.30 $ 35.030 101,104 $ 32.449 $39.77 - $108.25 132,075 9.32 $ 78.093 19,533 $ 75.675 $ 4.40 - $108.25 662,922 6.64 $ 29.633 445,542 $ 17.075 |
Schedule of pricing models | The weighted average assumptions used for the periods presented were as follows: Three Months Ended Nine Months Ended September 30, 2017 2016 2017 2016 Risk-free interest rate 0.76% 0.57% 0.70% 0.54% Expected lives 1.2 years 1.2 years 1.2 years 1.2 years Expected volatility 45% 44% 45% 43% Expected dividend yield 0% 0% 0% 0% |
ACCUMULATED OTHER COMPREHENSI30
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | Accumulated other comprehensive income consists of the following (in thousands): Minimum pension liability Foreign currency translation Total accumulated other comprehensive income Balances at December 31, 2016 $ (501 ) $ 598 $ 97 Current period other comprehensive income — 125 125 Balances at September 30, 2017 $ (501 ) $ 723 $ 222 |
INTEREST AND OTHER INCOME, NET
INTEREST AND OTHER INCOME, NET (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Income and Expenses [Abstract] | |
Schedule of interest expense (income) and other income, net | Interest and other income, net consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Interest income $ (41 ) $ (30 ) $ (122 ) $ (93 ) Interest expense 81 54 156 130 Other expense (income), net (46 ) (10 ) (220 ) (122 ) Total interest and other expense (income), net $ (6 ) $ 14 $ (186 ) $ (85 ) |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
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 September 30, 2017 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 26,670 $ 4,758 $ 31,428 Operating income 3,068 710 3,778 Income before income taxes 3,074 710 3,784 Capital purchases 34 669 703 Depreciation and amortization 935 259 1,194 Three Months Ended September 30, 2016 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 26,386 $ 7,044 $ 33,430 Operating income 2,995 1,497 4,492 Income before income taxes 2,994 1,484 4,478 Capital purchases 202 556 758 Depreciation and amortization 996 212 1,208 Nine months ended September 30, 2017 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 78,299 $ 17,847 $ 96,146 Operating income 6,763 4,363 11,126 Income before income taxes 6,971 4,341 11,312 Capital purchases 119 1,879 1,998 Depreciation and amortization 2,837 749 3,586 Nine months ended September 30, 2016 Core Other Vaccines, Pharmaceuticals and Products Total revenue $ 74,284 $ 16,257 $ 90,541 Operating income 7,499 2,519 10,018 Income before income taxes 7,526 2,577 10,103 Capital purchases 681 1,445 2,126 Depreciation and amortization 2,807 611 3,418 |
Schedule of revenue from external customers and long-lived assets, by geographical areas | Revenue is attributed to individual countries based on customer location. Total revenue by principal geographic area was as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 United States $ 28,795 $ 30,003 $ 87,824 $ 83,958 Europe 736 1,398 1,820 2,830 Canada 974 918 3,255 1,724 Other International 923 1,111 3,247 2,029 Total $ 31,428 $ 33,430 $ 96,146 $ 90,541 Asset information by reportable segment as of September 30, 2017 is as follows (in thousands): Core Companion Animal Health Other Vaccines, Pharmaceuticals and Products Total Total assets $ 112,453 $ 23,193 $ 135,646 Net assets 77,783 23,244 101,027 Asset information by reportable segment as of December 31, 2016 is as follows (in thousands): Core Companion Animal Health Other Vaccines, Pharmaceuticals and Products Total Total assets $ 110,995 $ 19,849 $ 130,844 Net assets 68,072 18,903 86,975 Total assets by principal geographic areas were as follows (in thousands): September 30, December 31, 2017 2016 United States $ 132,734 $ 127,827 Europe 2,912 3,017 Total $ 135,646 $ 130,844 |
ACQUISITION AND RELATED PARTY33
ACQUISITION AND RELATED PARTY ITEMS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | May 31, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | Feb. 24, 2013 |
Business Acquisition [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | |||
Goodwill | $ 26,688 | $ 26,647 | ||
Cuattro, LLC | Kevin S. Willson, Shawna M. Wilson And Trusts For Their Children And Family | Chief Executive Officer | ||||
Business Acquisition [Line Items] | ||||
General Partner Interest (as a percent) | 100.00% | |||
Cuattro Software, LLC | Kevin S. Willson, Shawna M. Wilson And Trusts For Their Children And Family | Chief Executive Officer | ||||
Business Acquisition [Line Items] | ||||
General Partner Interest (as a percent) | 100.00% | |||
Cuattro Veterinary USA, LLC | ||||
Business Acquisition [Line Items] | ||||
Shares issued as consideration | 175 | |||
Liabilities assumed in debt as part of the transaction | $ 1,535 | |||
Common stock issued - 175,000 shares | 6,347 | |||
Total fair value of consideration transferred | 7,882 | |||
Accounts receivable | 222 | |||
Inventories | 39 | |||
Due from Cuattro, LLC | 963 | |||
Property and equipment | 80 | |||
Other tangible assets | 164 | |||
Deferred tax asset | 56 | |||
Intangible assets | 2,521 | |||
Goodwill | 5,783 | |||
Accounts payable | (112) | |||
Deferred tax liability | (905) | |||
Other assumed liabilities | (929) | |||
Total fair value of consideration transferred | $ 7,882 | |||
Percentage of voting interest acquired | 54.60% | |||
Minority interest subject to purchase (as a percent) | 45.40% | |||
Cuattro Veterinary USA, LLC | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Acquired intangible assets, useful life | 6 years 7 months 31 days | |||
Acquired intangible assets, fair value | $ 2,521 | |||
Heska Imaging | ||||
Business Acquisition [Line Items] | ||||
Shares issued as consideration, value | $ 6,300 | |||
Put option, maximum valuation | $ 13,800 |
ACQUISITION AND RELATED PARTY34
ACQUISITION AND RELATED PARTY ITEMS - RELATED PARTY ITEMS (Details) - USD ($) $ in Thousands | 5 Months Ended | 9 Months Ended |
May 31, 2017 | Sep. 30, 2017 | |
Related Party Transaction [Line Items] | ||
Distributions to non-controlling interest members | $ 1,000 | |
Affiliated Entity | Cuattro, LLC | ||
Related Party Transaction [Line Items] | ||
Related party - amount of transaction | $ 2,900 | |
Heska Imaging | ||
Related Party Transaction [Line Items] | ||
Distributions to non-controlling interest members | $ 2,100 | |
Heska Imaging | Clint Roth | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 8.39% | |
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% | |
Related party - amount of transaction | $ 13,900 | |
Cuattro, LLC | Affiliated Entity | ||
Related Party Transaction [Line Items] | ||
Related party - amount of transaction | 100 | |
Heska Corporation | Cuattro, LLC | ||
Related Party Transaction [Line Items] | ||
Due to – related party | $ 22 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income before income taxes | $ 3,784 | $ 4,478 | $ 11,312 | $ 10,103 |
Total income tax expense | $ 701 | $ 1,135 | $ 787 | $ 2,571 |
Effective tax rate | 18.50% | 25.30% | 7.00% | 25.40% |
Valuation allowance recorded during period | $ 1,300 | $ 3,100 | ||
Cash paid for income taxes | $ 2 | $ 225 | $ 146 | $ 288 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2010 | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | |
Earnings Per Share [Abstract] | |||||
Reverse stock split conversion ratio | 0.10 | ||||
Net income attributable to Heska | $ | $ 3,083 | $ 3,347 | $ 11,023 | $ 7,055 | |
Weighted average outstanding shares used to compute basic earnings per share attributable to Heska Corporation | 7,139 | 6,871 | 6,985 | 6,727 | |
Assumed exercise of dilutive stock options and restricted shares | 529 | 583 | 595 | 572 | |
Diluted weighted-average common shares outstanding | 7,668 | 7,454 | 7,580 | 7,299 | |
Basic earnings per share attributable to Heska Corporation, in dollars per share | $ / shares | $ 0.43 | $ 0.49 | $ 1.58 | $ 1.05 | |
Diluted earnings per share attributable to Heska Corporation, in dollars per share | $ / shares | $ 0.40 | $ 0.45 | $ 1.45 | $ 0.97 | |
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 | 27 | 100 | 132 | 135 |
GOODWILL AND OTHER INTANGIBLE37
GOODWILL AND OTHER INTANGIBLES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | |||||
Carrying amount, December 31, 2016 | $ 26,647 | ||||
Foreign currency adjustments | 41 | ||||
Carrying amount, September 30, 2017 | $ 26,688 | 26,688 | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross carrying amount | 3,309 | 3,309 | $ 3,309 | ||
Accumulated amortization | (1,254) | (1,254) | (963) | ||
Net carrying amount | 2,055 | 2,055 | 2,346 | ||
Amortization expense | 97 | $ 97 | 291 | $ 134 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
2017 (remaining) | 97 | 97 | |||
2,018 | 388 | 388 | |||
2,019 | 388 | 388 | |||
2,020 | 388 | 388 | |||
2,021 | 384 | 384 | |||
Thereafter | 410 | 410 | |||
Net carrying amount | $ 2,055 | $ 2,055 | $ 2,346 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 51,667 | $ 51,667 | $ 49,150 | ||
Less accumulated depreciation | (35,520) | (35,520) | (32,569) | ||
Total property and equipment, net | 16,147 | 16,147 | 16,581 | ||
Total costs transferred from inventory | 700 | 1,800 | |||
Depreciation and amortization | 1,100 | $ 1,200 | 3,300 | $ 3,400 | |
Heska Imaging | |||||
Property, Plant and Equipment [Line Items] | |||||
Total property and equipment, net | 200 | 200 | 300 | ||
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 377 | 377 | 377 | ||
Building | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 2,868 | 2,868 | 2,868 | ||
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 38,124 | 38,124 | 36,588 | ||
Leasehold and building improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 8,129 | 8,129 | 7,662 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 2,169 | $ 2,169 | $ 1,655 | ||
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 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 12,779 | $ 10,807 |
Work in process | 5,553 | 3,820 |
Finished goods | 13,082 | 7,087 |
Allowance for excess or obsolete inventory | (1,401) | (1,319) |
Total inventory, net | $ 30,013 | $ 20,395 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued payroll and employee benefits | $ 1,591 | $ 2,166 |
Accrued property taxes | 606 | 748 |
Accrued purchases | 0 | 664 |
Other | 2,452 | 2,891 |
Total accrued liabilities | $ 4,649 | $ 6,469 |
CAPITAL STOCK - NARRATIVE (Deta
CAPITAL STOCK - NARRATIVE (Details) $ / shares in Units, $ in Thousands | Jun. 15, 2017shares | May 01, 2017shares | May 31, 2016shares | Mar. 02, 2016shares | Mar. 17, 2015shares | Mar. 26, 2014trancheshares | Dec. 31, 2010 | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares |
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 | $ | $ 993 | $ 277 | |||||||||
Weighted average grant date fair value | $ / shares | $ 37.41 | $ 13.96 | |||||||||
Intrinsic value of options exercised | $ | $ 16,500 | $ 2,800 | |||||||||
Proceeds from stock options exercised | $ | $ 1,800 | $ 740 | |||||||||
Weighted average purchase price of shares purchased | $ / shares | $ 16.49 | $ 9.87 | $ 15.90 | $ 7.64 | |||||||
Stockholder ownership percentage, threshold for restrictions | 5.00% | ||||||||||
Employee Stock Option | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Intrinsic value of options exercised | $ | $ 31,700 | ||||||||||
Total unrecognized compensation expense related to outstanding stock options | $ | $ 4,200 | $ 4,200 | |||||||||
Period for recognition of unrecognized compensation expense | 1 year 7 months 2 days | ||||||||||
Intrinsic value of options outstanding | $ | $ 39,000 | $ 39,000 | |||||||||
Employee Stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares issued during period | 2,515 | 3,583 | 8,058 | 13,965 | |||||||
Restricted Stock | Non-employee director | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares issued during period | 2,720,000 | ||||||||||
Restricted Stock | Kevin S. Wilson | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares issued during period | 110,000 | ||||||||||
Number of tranches in share-based payment award | tranche | 4 | ||||||||||
Performance Shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares issued during period | 23,700,000 | 52,956 | |||||||||
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 | ||||||||||
Shares vested during period | 14,629 | ||||||||||
Performance shares canceled | 371 | ||||||||||
Shares withheld for income tax expense | 4,133 | ||||||||||
Performance Shares | Management Incentive Plan (MIP) Grants 2017 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares issued during period | 6,594,000 | ||||||||||
Vesting period | 1 year |
CAPITAL STOCK - OPTION ACTIVITY
CAPITAL STOCK - OPTION ACTIVITY (Details) - $ / shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Risk-free interest rate (as a percent) | 1.83% | 1.14% | 1.75% | 1.19% | |
Expected lives (in years) | 4 years 10 months 18 days | 4 years 5 months 18 days | 4 years 10 months 18 days | 4 years 5 months 18 days | |
Expected volatility (as a percent) | 39.00% | 40.00% | 41.00% | 41.00% | |
Expected dividend rate (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||||
Outstanding at beginning of period | 829,617 | 940,610 | 940,610 | ||
Granted at Market | 26,550 | 129,855 | |||
Canceled | (3,895) | (463) | |||
Exercised | (189,350) | (240,385) | |||
Outstanding at end of period | 662,922 | 662,922 | 829,617 | ||
Exercisable at end of period | 445,542 | 445,542 | 532,703 | ||
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) | $ 23.203 | $ 14.163 | $ 14.163 | ||
Granted at Market (in dollars per share) | 99.127 | 67.706 | |||
Cancelled (in dollars per share) | 45.635 | 14.881 | |||
Exercised (in dollars per share) | 10.877 | 11.886 | |||
Outstanding at ending of period (in dollars per share) | $ 29.633 | 29.633 | 23.203 | ||
Exercisable at end of period (in dollars per share) | $ 17.075 | $ 17.075 | $ 12.140 | ||
Employee Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Risk-free interest rate (as a percent) | 0.76% | 0.57% | 0.70% | 0.54% | |
Expected lives (in years) | 1 year 2 months 18 days | 1 year 2 months 18 days | 1 year 2 months 18 days | 1 year 2 months 18 days | |
Expected volatility (as a percent) | 45.00% | 44.00% | 45.00% | 43.00% | |
Expected dividend rate (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
CAPITAL STOCK - EXERCISE PRICE
CAPITAL STOCK - EXERCISE PRICE (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
$ 4.40 - $ 6.90 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at September 30, 2017 | shares | 97,835 |
Weighted Average Remaining Contractual Life in Years | 2 years 11 months 9 days |
Weighted Average Exercise Price | $ 5.405 |
Number of Options Exercisable at September 30, 2017 | shares | 97,835 |
Weighted Average Exercise Price | $ 5.405 |
Exercise price range, lower (in dollars per share) | 4.40 |
Exercise price range, upper (in dollars per share) | $ 6.90 |
$ 6.91 - $ 7.36 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at September 30, 2017 | shares | 106,544 |
Weighted Average Remaining Contractual Life in Years | 6 years 1 month 21 days |
Weighted Average Exercise Price | $ 7.360 |
Number of Options Exercisable at September 30, 2017 | shares | 98,784 |
Weighted Average Exercise Price | $ 7.360 |
Exercise price range, lower (in dollars per share) | 6.91 |
Exercise price range, upper (in dollars per share) | $ 7.36 |
$ 7.37 - $18.13 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at September 30, 2017 | shares | 158,575 |
Weighted Average Remaining Contractual Life in Years | 6 years 3 months 29 days |
Weighted Average Exercise Price | $ 13.469 |
Number of Options Exercisable at September 30, 2017 | shares | 128,286 |
Weighted Average Exercise Price | $ 12.417 |
Exercise price range, lower (in dollars per share) | 7.37 |
Exercise price range, upper (in dollars per share) | $ 18.13 |
$18.14 - $39.76 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at September 30, 2017 | shares | 167,893 |
Weighted Average Remaining Contractual Life in Years | 7 years 3 months 18 days |
Weighted Average Exercise Price | $ 35.030 |
Number of Options Exercisable at September 30, 2017 | shares | 101,104 |
Weighted Average Exercise Price | $ 32.449 |
Exercise price range, lower (in dollars per share) | 18.14 |
Exercise price range, upper (in dollars per share) | $ 39.76 |
$39.77 - $108.25 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at September 30, 2017 | shares | 132,075 |
Weighted Average Remaining Contractual Life in Years | 9 years 3 months 26 days |
Weighted Average Exercise Price | $ 78.093 |
Number of Options Exercisable at September 30, 2017 | shares | 19,533 |
Weighted Average Exercise Price | $ 75.675 |
Exercise price range, lower (in dollars per share) | 39.77 |
Exercise price range, upper (in dollars per share) | $ 108.25 |
$ 4.40 - $108.25 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at September 30, 2017 | shares | 662,922 |
Weighted Average Remaining Contractual Life in Years | 6 years 7 months 21 days |
Weighted Average Exercise Price | $ 29.633 |
Number of Options Exercisable at September 30, 2017 | shares | 445,542 |
Weighted Average Exercise Price | $ 17.075 |
Exercise price range, lower (in dollars per share) | 4.40 |
Exercise price range, upper (in dollars per share) | $ 108.25 |
ACCUMULATED OTHER COMPREHENSI44
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Total accumulated other comprehensive income | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | $ 97 |
Current period other comprehensive income | 125 |
Ending balance | 222 |
Minimum pension liability | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (501) |
Current period other comprehensive income | 0 |
Ending balance | (501) |
Foreign currency translation | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | 598 |
Current period other comprehensive income | 125 |
Ending balance | $ 723 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)$ / violation | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Increase in royalties payable | $ 0.1 | $ 0.1 | $ 0.3 | $ 0.3 | |
Recorded Unconditional Purchase Obligation [Line Items] | |||||
Damages sought per violation | $ / violation | 500 | ||||
Warranty reserve | 0.4 | $ 0.4 | $ 0.4 | ||
Inventories | |||||
Recorded Unconditional Purchase Obligation [Line Items] | |||||
Minimum inventory purchases in fiscal 2016 | 0.3 | 0.3 | |||
Minimum inventory purchases in fiscal 2017 | $ 0.6 | $ 0.6 |
INTEREST AND OTHER INCOME, NE46
INTEREST AND OTHER INCOME, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Other Income and Expenses [Abstract] | ||||
Interest income | $ (41) | $ (30) | $ (122) | $ (93) |
Interest expense | 81 | 54 | 156 | 130 |
Other, net | (46) | (10) | (220) | (122) |
Interest and other expense (income), net | (6) | 14 | (186) | (85) |
Interest Paid | $ 67 | $ 20 | $ 125 | $ 56 |
CREDIT FACILITY (Details)
CREDIT FACILITY (Details) - Line of Credit - Revolving Credit Facility - USD ($) | Jul. 27, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 30,000,000 | ||
Additional maximum borrowing capacity increase | 20,000,000 | ||
Contingent maximum borrowing capacity | $ 50,000,000 | ||
Basis spread on variable rate | 1.10% | ||
Minimum annual interest charge | $ 60,000 | ||
Long-term line of credit | $ 6,300,000 | $ 700,000 | |
London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.65% |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total revenue | $ 31,428 | $ 33,430 | $ 96,146 | $ 90,541 | |
Operating income | 3,778 | 4,492 | 11,126 | 10,018 | |
Income before income taxes | 3,784 | 4,478 | 11,312 | 10,103 | |
Capital expenditures | 703 | 758 | 1,998 | 2,126 | |
Depreciation and amortization | 1,194 | 1,208 | 3,586 | 3,418 | |
Assets | 135,646 | 135,646 | $ 130,844 | ||
Net Assets | 101,027 | 101,027 | 86,975 | ||
United States | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total revenue | 28,795 | 30,003 | 87,824 | 83,958 | |
Assets | 132,734 | 132,734 | 127,827 | ||
Europe | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total revenue | 736 | 1,398 | 1,820 | 2,830 | |
Assets | 2,912 | 2,912 | 3,017 | ||
Canada | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total revenue | 974 | 918 | 3,255 | 1,724 | |
Other International | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total revenue | 923 | 1,111 | 3,247 | 2,029 | |
Operating Segments | Core Companion Animal Health | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total revenue | 26,670 | 26,386 | 78,299 | 74,284 | |
Operating income | 3,068 | 2,995 | 6,763 | 7,499 | |
Income before income taxes | 3,074 | 2,994 | 6,971 | 7,526 | |
Capital expenditures | 34 | 202 | 119 | 681 | |
Depreciation and amortization | 935 | 996 | 2,837 | 2,807 | |
Assets | 112,453 | 112,453 | 110,995 | ||
Net Assets | 77,783 | 77,783 | 68,072 | ||
Operating Segments | Other Vaccines, Pharmaceuticals and Products | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total revenue | 4,758 | 7,044 | 17,847 | 16,257 | |
Operating income | 710 | 1,497 | 4,363 | 2,519 | |
Income before income taxes | 710 | 1,484 | 4,341 | 2,577 | |
Capital expenditures | 669 | 556 | 1,879 | 1,445 | |
Depreciation and amortization | 259 | $ 212 | 749 | $ 611 | |
Assets | 23,193 | 23,193 | 19,849 | ||
Net Assets | $ 23,244 | $ 23,244 | $ 18,903 |
SEGMENT REPORTING - NARRATIVE (
SEGMENT REPORTING - NARRATIVE (Details) | 9 Months Ended |
Sep. 30, 2017segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |