Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 02, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 000-22427 | |
Entity Registrant Name | HESKA CORPORATION | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 77-0192527 | |
Entity Address, Address Line One | 3760 Rocky Mountain Avenue | |
Entity Address, City or Town | Loveland | |
Entity Address, State or Province | CO | |
Entity Address, Postal Zip Code | 80538 | |
City Area Code | 970 | |
Local Phone Number | 493-7272 | |
Title of 12(b) Security | Common stock, $0.01 par value | |
Trading Symbol | HSKA | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 10,645,363 | |
Entity Central Index Key | 0001038133 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2021 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 245,153 | $ 86,334 |
Accounts receivable, net of allowance for losses of $798 and $769, respectively | 27,887 | 31,080 |
Inventories | 41,204 | 40,037 |
Net investment in leases, current, net of allowance for losses of $136 and $192, respectively | 5,394 | 4,794 |
Prepaid expenses | 5,517 | 3,875 |
Other current assets | 5,688 | 5,155 |
Total current assets | 330,843 | 171,275 |
Property and equipment, net | 34,296 | 35,542 |
Operating lease right-of-use assets | 4,944 | 5,457 |
Goodwill | 90,771 | 88,276 |
Other intangible assets, net | 52,898 | 55,992 |
Deferred tax asset, net | 17,845 | 5,694 |
Net investment in leases, non-current | 17,384 | 15,789 |
Investments in unconsolidated affiliates | 6,175 | 6,704 |
Related party convertible note receivable, net | 6,776 | 6,671 |
Promissory note receivable from investee, net | 8,846 | 0 |
Other non-current assets | 8,588 | 8,439 |
Total assets | 579,366 | 399,839 |
Current liabilities: | ||
Accounts payable | 14,581 | 15,119 |
Accrued liabilities | 17,368 | 18,055 |
Operating lease liabilities, current | 2,035 | 2,087 |
Deferred revenue, current, and other | 7,497 | 6,854 |
Total current liabilities | 41,481 | 42,115 |
Convertible note, non-current, net | 83,824 | 48,459 |
Deferred revenue, non-current | 4,074 | 4,667 |
Other long-term borrowings | 119 | 554 |
Operating lease liabilities, non-current | 3,404 | 3,858 |
Deferred tax liability | 11,583 | 11,856 |
Other liabilities | 1,115 | 1,277 |
Total liabilities | 145,600 | 112,786 |
Stockholders' equity: | ||
Preferred stock, $.01 par value, 2,500,000 shares authorized, none issued or outstanding | 0 | 0 |
Common stock, $.01 par value, 13,250,000 shares authorized, respectively, none issued or outstanding | 0 | 0 |
Public common stock, $.01 par value, 13,250,000 shares authorized, 10,645,730 and 9,475,845 shares issued and outstanding, respectively | 106 | 95 |
Additional paid-in capital | 569,214 | 423,650 |
Accumulated other comprehensive income | 10,638 | 14,169 |
Accumulated deficit | (146,192) | (150,861) |
Total stockholders' equity | 433,766 | 287,053 |
Total liabilities and stockholders' equity | $ 579,366 | $ 399,839 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Allowance for doubtful accounts | $ 798 | $ 769 |
Leases, allowance for doubtful accounts | $ 136 | $ 192 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 2,500,000 | 2,500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Traditional Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 13,250,000 | 13,250,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Public Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 13,250,000 | 13,250,000 |
Common stock, shares issued (in shares) | 10,645,730 | 9,475,845 |
Common stock, shares outstanding (in shares) | 10,645,730 | 9,475,845 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Revenues [Abstract] | ||||
Revenue, net | $ 64,928 | $ 45,712 | $ 125,431 | $ 76,366 |
Cost of revenue | 37,656 | 27,847 | 72,689 | 45,053 |
Gross profit | 27,272 | 17,865 | 52,742 | 31,313 |
Operating expenses: | ||||
Selling and marketing | 12,449 | 9,583 | 23,356 | 16,963 |
Research and development | 1,948 | 1,696 | 3,134 | 3,824 |
General and administrative | 13,569 | 11,040 | 25,930 | 19,599 |
Total operating expenses | 27,966 | 22,319 | 52,420 | 40,386 |
Operating (loss) income | (694) | (4,454) | 322 | (9,073) |
Interest and other expense, net | 581 | 2,145 | 1,106 | 4,343 |
Loss before income taxes and equity in losses of unconsolidated affiliates | (1,275) | (6,599) | (784) | (13,416) |
Income tax expense (benefit): | ||||
Current income tax expense | 36 | 31 | 677 | 56 |
Deferred income tax benefit | (1,087) | (243) | (3,294) | (1,776) |
Total income tax benefit | (1,051) | (212) | (2,617) | (1,720) |
Net (loss) income before equity in losses of unconsolidated affiliates | (224) | (6,387) | 1,833 | (11,696) |
Equity in losses of unconsolidated affiliates | (343) | (87) | (529) | (217) |
Net (loss) income after equity in losses of unconsolidated affiliates | (567) | (6,474) | 1,304 | (11,913) |
Net loss attributable to redeemable non-controlling interest | 0 | (117) | 0 | (268) |
Net (loss) income attributable to Heska Corporation | $ (567) | $ (6,357) | $ 1,304 | $ (11,645) |
Earnings Per Share [Abstract] | ||||
Basic (loss) earnings per share attributable to Heska Corporation (in dollars per share) | $ (0.06) | $ (0.72) | $ 0.13 | $ (1.43) |
Diluted (loss) earnings per share attributable to Heska Corporation (in dollars per share) | $ (0.06) | $ (0.72) | $ 0.13 | $ (1.43) |
Weighted average outstanding shares used to compute basic (loss) earnings per share attributable to Heska Corporation (in shares) | 10,167 | 8,776 | 9,825 | 8,165 |
Weighted average outstanding shares used to compute diluted (loss) earnings per share attributable to Heska Corporation (in shares) | 10,167 | 8,776 | 10,189 | 8,165 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | ||||
Net income (loss) after equity in losses from unconsolidated affiliates | $ (567) | $ (6,474) | $ 1,304 | $ (11,913) |
Other comprehensive income (loss): | ||||
Translation adjustments and gains (losses) from intra-entity transactions | 1,852 | 2,216 | (3,531) | 1,860 |
Comprehensive income (loss) | 1,285 | (4,258) | (2,227) | (10,053) |
Comprehensive loss attributable to redeemable non-controlling interest | 0 | (117) | 0 | (268) |
Comprehensive income (loss) attributable to Heska Corporation | $ 1,285 | $ (4,141) | $ (2,227) | $ (9,785) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Preferred Stock | Preferred StockCumulative Effect, Period of Adoption, Adjusted Balance | Traditional Common Stock | Traditional Common StockCumulative Effect, Period of Adoption, Adjusted Balance | Additional Paid-in Capital | Additional Paid-in CapitalCumulative Effect, Period of Adoption, Adjustment | Additional Paid-in CapitalCumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss)Cumulative Effect, Period of Adoption, Adjusted Balance | Accumulated Deficit | Accumulated DeficitCumulative Effect, Period of Adoption, Adjustment | Accumulated DeficitCumulative Effect, Period of Adoption, Adjusted Balance |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 0 | 7,882 | 7,882 | |||||||||||
Beginning balance at Dec. 31, 2019 | $ 154,364 | $ (18) | $ 154,346 | $ 0 | $ 0 | $ 79 | $ 79 | $ 290,216 | $ 290,216 | $ 513 | $ 513 | $ (136,444) | $ (18) | $ (136,462) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net loss attributable to Heska Corporation | (11,645) | (11,645) | |||||||||||||
Issuance of common stock, net of shares withheld for employee taxes (in shares) | 24 | ||||||||||||||
Issuance of common stock, net of shares withheld for employee taxes | 904 | $ 0 | 904 | ||||||||||||
Issuance of preferred stock, net of issuance costs (in shares) | 122 | ||||||||||||||
Issuance of preferred stock, net of issuance costs | 121,785 | $ 1 | 121,784 | ||||||||||||
Conversion of convertible securities (in shares) | 122 | 1,509 | |||||||||||||
Conversion of preferred stock to common stock | 0 | $ (1) | $ 15 | (14) | |||||||||||
Stock-based compensation | 2,797 | 2,797 | |||||||||||||
Other comprehensive income (loss) | 1,860 | 1,860 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 0 | 9,415 | |||||||||||||
Ending balance at Jun. 30, 2020 | 270,047 | $ 0 | $ 94 | 415,687 | 2,373 | (148,107) | |||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 122 | 7,843 | |||||||||||||
Beginning balance at Mar. 31, 2020 | 270,638 | $ 1 | $ 78 | 412,152 | 157 | (141,750) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net loss attributable to Heska Corporation | (6,357) | (6,357) | |||||||||||||
Issuance of common stock, net of shares withheld for employee taxes (in shares) | 63 | ||||||||||||||
Issuance of common stock, net of shares withheld for employee taxes | 1,106 | $ 1 | 1,105 | ||||||||||||
Conversion of convertible securities (in shares) | 122 | 1,509 | |||||||||||||
Conversion of preferred stock to common stock | 0 | $ (1) | $ 15 | (14) | |||||||||||
Stock-based compensation | 2,444 | 2,444 | |||||||||||||
Other comprehensive income (loss) | 2,216 | 2,216 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 0 | 9,415 | |||||||||||||
Ending balance at Jun. 30, 2020 | 270,047 | $ 0 | $ 94 | 415,687 | 2,373 | (148,107) | |||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 0 | 9,476 | 9,476 | |||||||||||
Beginning balance at Dec. 31, 2020 | 287,053 | $ (26,469) | $ 260,584 | $ 0 | $ 0 | $ 95 | $ 95 | 423,650 | $ (29,834) | $ 393,816 | 14,169 | $ 14,169 | (150,861) | $ 3,365 | $ (147,496) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net loss attributable to Heska Corporation | 1,304 | 1,304 | |||||||||||||
Issuance of common stock, net of shares withheld for employee taxes (in shares) | 229 | ||||||||||||||
Issuance of common stock, net of shares withheld for employee taxes | 1,766 | $ 2 | 1,764 | ||||||||||||
Issuance of preferred stock, net of issuance costs (in shares) | 941 | ||||||||||||||
Issuance of preferred stock, net of issuance costs | 164,186 | $ 9 | 164,177 | ||||||||||||
Stock-based compensation | 9,457 | 9,457 | |||||||||||||
Other comprehensive income (loss) | (3,531) | (3,531) | |||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | 10,646 | |||||||||||||
Ending balance at Jun. 30, 2021 | 433,766 | $ 0 | $ 106 | 569,214 | 10,638 | (146,192) | |||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 0 | 10,418 | |||||||||||||
Beginning balance at Mar. 31, 2021 | 425,273 | $ 0 | $ 104 | 562,008 | 8,786 | (145,625) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||
Net loss attributable to Heska Corporation | (567) | (567) | |||||||||||||
Issuance of common stock, net of shares withheld for employee taxes (in shares) | 228 | ||||||||||||||
Issuance of common stock, net of shares withheld for employee taxes | 1,588 | $ 2 | 1,586 | ||||||||||||
Stock-based compensation | 5,620 | 5,620 | |||||||||||||
Other comprehensive income (loss) | 1,852 | 1,852 | |||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 0 | 10,646 | |||||||||||||
Ending balance at Jun. 30, 2021 | $ 433,766 | $ 0 | $ 106 | $ 569,214 | $ 10,638 | $ (146,192) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows from operating activities: | ||
Net income (loss) after equity in losses from unconsolidated affiliates | $ 1,304 | $ (11,913) |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||
Depreciation and amortization | 6,680 | 4,704 |
Non-cash impact of operating leases | 1,050 | 840 |
Deferred income tax benefit | (3,294) | (1,776) |
Stock-based compensation | 9,457 | 2,797 |
Equity in losses of unconsolidated affiliates | (529) | 217 |
Accretion of discounts and issuance costs | 35 | 3,049 |
Other losses | 768 | 65 |
Changes in operating assets and liabilities (net of the effect of acquisitions): | ||
Accounts receivable | 3,046 | (1,268) |
Inventories | (4,080) | (4,094) |
Other assets | (4,404) | (56) |
Accounts payable | (334) | (2,732) |
Other liabilities | (3,603) | (2,928) |
Net cash provided by (used in) operating activities | 7,154 | (13,095) |
Cash flows from investing activities: | ||
Promissory note receivable issuance | (9,000) | 0 |
Purchases of property and equipment | (546) | (316) |
Proceeds from disposition of property and equipment | 41 | 0 |
Net cash used in investing activities | (13,387) | (119,926) |
Cash flows from financing activities: | ||
Payment of stock issuance costs | (314) | (214) |
Preferred stock proceeds | 0 | 122,000 |
Proceeds from issuance of common stock | 167,198 | 1,514 |
Repurchase of common stock | (932) | (610) |
Repayments of other debt | (653) | (109) |
Borrowings on other debts | 0 | 410 |
Net cash provided by financing activities | 165,299 | 122,991 |
Foreign exchange effect on cash and cash equivalents | (247) | 189 |
Net increase (decrease) in cash and cash equivalents | 158,819 | (9,841) |
Cash and cash equivalents, beginning of period | 86,334 | 89,030 |
Cash and cash equivalents, end of period | 245,153 | 79,189 |
Supplemental disclosure of cash flow information: | ||
Non-cash transfers of equipment between inventory and property and equipment, net | 2,562 | 1,560 |
Non-cash conversion of preferred stock to common stock | 0 | 122,000 |
Consideration payable for scil acquisition | 0 | 537 |
Contingent consideration for acquisition | 1,700 | 0 |
Indemnity holdback for acquisition | 370 | 0 |
CVM | ||
Cash flows from investing activities: | ||
Acquisition of CVM | 0 | (14,420) |
Lacuna Diagnostics, Inc. | ||
Cash flows from investing activities: | ||
Acquisition of CVM | (3,882) | 0 |
Scil Animal Care Company | ||
Cash flows from investing activities: | ||
Acquisition of CVM | $ 0 | $ (105,190) |
OPERATIONS AND SUMMARY OF SIGNI
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Heska Corporation and its wholly-owned subsidiaries ("Heska", the "Company", "we" or "our") sell veterinary and animal health diagnostic and specialty products. Our offerings include Point of Care diagnostic laboratory instruments and supplies; digital imaging diagnostic products, software and services; digital cytology 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. Basis of Presentation and Consolidation The accompanying interim Condensed Consolidated Financial Statements are unaudited. The interim unaudited Condensed Consolidated Financial Statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include normal, recurring adjustments, necessary to present fairly the financial position of the Company as of June 30, 2021, and the results of our operations and statements of stockholders' equity for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020. 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 ("GAAP") have been condensed or omitted pursuant to such rules and regulations. Our unaudited Condensed Consolidated Financial Statements include our accounts and the accounts of our wholly-owned subsidiaries since their respective dates of acquisitions. All intercompany accounts and transactions have been eliminated in consolidation. Where our ownership of a subsidiary is less than 100%, the non-controlling interest is reported on our Condensed Consolidated Balance Sheets. The non-controlling interest in our consolidated net income is reported as "Net loss attributable to redeemable non-controlling interest" on our Condensed Consolidated Statements of (Loss) Income. The results of operations for the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year or any future period, particularly in light of the COVID-19 pandemic and its effects on the domestic and global economies as described below. 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 year ended December 31, 2020 and other financial information filed with the SEC. Beginning in the first quarter of 2020, to limit the spread of COVID-19, governments took various actions including the issuance of stay-at-home policies and social distancing procedures and guidelines, causing some businesses to adjust, reduce or suspend business and operating activities. Veterinary care is widely recognized as an "essential" service for pet owners, and veterinarians continued to deliver essential medical care for sick and injured pets. The stay-at-home policies deployed early in 2020 to combat the spread of COVID-19 resulted in a decrease in companion animal clinical visits, including delay of elective procedures and wellness visits and as a result lowers demand for diagnostic testing services. Beginning in the second quarter of 2020, certain local, state and federal governments began to ease the stay-at-home policies and allowed more businesses and facilities to re-open, leading to a recovery in companion animal clinical visits and associated demand for our diagnostic products. During the fourth quarter of 2020 and into the first quarter of 2021, increased restrictions in countries in which we operate, mainly in the European Union, and certain parts of Canada and Australia, re-emerged. These restrictions lessened during the second quarter of 2021, however, with the rise in variants, the extent to which the continuation, or another wave outbreak of COVID-19, or an outbreak of other health epidemics could impact our business, results of operations and financial condition, including the potential for write-offs or impairments of assets and suspension of capital investments, will depend on future developments. We are unable to predict with certainty the effects of the COVID-19 pandemic on our customers, suppliers and vendors, as well as the actions of governments, and when and to what extent normal economic and operating conditions can resume; these effects may differ from those assumed in our projected estimates. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business, mainly in our ability to place new capital equipment, primarily under long-term contracts, as a result of any economic impact that may occur in the future. Use of Estimates The preparation of financial statements in conformity with 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 credit losses and the net realizable value of inventory; determining future costs associated with warranties provided; 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 and investments for estimated useful lives and impairment; estimating the useful lives and standalone selling prices of instruments under leasing arrangements; determining the allocation of purchase price under purchase accounting; estimating the expense associated with the granting of stock; determining the need for, and the amount of a valuation allowance on deferred tax assets; determining the fair value of our embedded derivatives; and determining the value of the non-controlling interest in a business combination. Our actual results may differ from these estimates and there may be changes to those estimates in future periods. 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, 2020, and other than the recently adopted accounting pronouncements described below have not changed materially since such filing. Adoption of New Accounting Pronouncements Effective January 1, 2021, we adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740, and also clarifies and amends existing guidance to improve consistent application. We evaluated the impact of the standard on our consolidated financial statements and the adoption of this ASU did not have a material impact on our consolidated financial statements and disclosures. Effective January 1, 2021, we adopted ASU 2020-01, Investments-Equity Securities (Topic 321) , Investments-Equity Method and Joint Ventures (Topic 323) , and Derivatives and Hedging (Topic 815) . The amendments in this ASU clarify the interaction between the accounting for investments in equity securities, investments in equity method and certain derivatives instruments. The ASU is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. We evaluated the impact of the standard on our consolidated financial statements and the adoption of this ASU did not have a material impact on our consolidated financial statements and disclosures. Effective January 1, 2021, we early adopted ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40), which simplifies the accounting for certain convertible instruments. The update reduces the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible debt will be accounted for as a single liability measured at its amortized cost and convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. The update also requires the if-converted method to be used for convertible instruments and the effect of potential share settlement be included in the diluted earnings per share calculation when an instrument may be settled in cash or shares. The Company's 3.75% Convertible Senior Notes due 2026 (the "Notes") are a convertible instrument with a cash-conversion feature that is accounted for within the scope of ASC 470-20 and impacted by the adoption of ASU 2020-06. The Company has elected to apply the modified retrospective method wherein the Company recognized a cumulative-effect adjustment to the opening balance of retained earnings (January 1, 2021). Further, the Company will not restate EPS in prior periods. The Company calculated the cumulative-effect adjustment as of January 1, 2021 by comparing (i) the historical amortization schedule for the Notes through December 31, 2020 and (ii) an updated amortization schedule wherein the conversion feature within the Notes would not be separated as an equity component and subsequently recognized as non-cash interest expense under ASC 835-30. As a result of ASU 2020-06, while cash interest expense is not impacted, non-cash interest accretion is limited to the amortization of debt issuance costs under ASC 835-30. Therefore, the Company prepared its transition journal entries by (i) reversing the conversion feature amount recorded in APIC and (ii) reversing the difference in non-cash interest expense via retained earnings. The adoption resulted in a decrease to accumulated deficit of $3.4 million, a decrease to additional paid-in capital of $29.8 million, and an increase to convertible note, non-current, net of $35.2 million. Additionally, due to the adoption, the Company reversed the remaining balance of the net deferred tax liability of $8.8 million, which was initially recorded in connection with the Notes. Effective January 1, 2021, we adopted ASU 2020-10, Codification Improvements |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE We separate our goods and services among two reportable segments, North America and International. The two segments consist of revenue originating from: • North America: including the United States, Canada and Mexico • International: all geographies outside North America, currently consisting primarily of Australia, France, Germany, Italy, Malaysia, Spain and Switzerland Refer to Note 18 for further detail regarding the Company's reportable segments. The following table summarizes our segment revenue (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 North America Revenue: POC Lab Instruments & Other $ 3,482 $ 2,962 $ 6,470 $ 5,578 POC Lab Consumables 19,296 13,537 36,248 27,223 POC Imaging 7,101 4,148 13,789 7,644 PVD 6,210 4,880 13,074 9,384 OVP 4,444 3,455 8,225 6,802 Total North America Revenue $ 40,533 $ 28,982 $ 77,806 $ 56,631 International Revenue: POC Lab Instruments & Other $ 3,987 $ 2,206 $ 7,001 $ 2,440 POC Lab Consumables 11,935 9,470 24,159 10,032 POC Imaging 7,277 4,404 13,935 5,762 PVD 1,196 650 2,530 1,501 OVP — — — — Total International Revenue $ 24,395 $ 16,730 $ 47,625 $ 19,735 Total Revenue $ 64,928 $ 45,712 $ 125,431 $ 76,366 Remaining Performance Obligations Remaining performance obligations represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. Remaining performance obligations include noncancellable purchase orders, the non-lease portion of minimum purchase commitments under long-term supply arrangements, extended warranty, service and other long-term contracts. Remaining performance obligations do not include revenue from contracts with customers with an original term of one year or less, revenue from long-term supply arrangements with no minimum purchase requirements, revenue expected from purchases made in excess of the minimum purchase requirements, or revenue from instruments leased to customers. While the remaining performance obligations disclosure is similar in concept to backlog, the definition of remaining performance obligations excludes leases and contracts that provide the customer with the right to cancel or terminate for convenience with no substantial penalty, even if historical experience indicates the likelihood of cancellation or termination is remote. Additionally, the Company has elected to exclude contracts with customers with an original term of one year or less from remaining performance obligations. As of June 30, 2021, the aggregate amount of the transaction price allocated to remaining minimum performance obligations was approximately $156.5 million. As of June 30, 2021, the Company expects to recognize revenue as follows (in thousands): Year Ending December 31, Revenue 2021 (remaining) $ 18,313 2022 35,463 2023 31,859 2024 27,220 2025 21,672 Thereafter 22,013 $ 156,540 Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled contract assets, deferred revenue, and customer deposits and billings in excess of revenue recognized. In addition, the Company defers certain costs incurred to obtain contracts. Contract Assets Certain unbilled amounts related to long-term contracts for which we provide a free term to the customer are recorded in "Other current assets" and "Other non-current assets" on the accompanying Condensed Consolidated Balance Sheets. The collection of these balances occurs over the term of the underlying contract. The balances as of June 30, 2021 were $1.4 million and $4.3 million for current and non-current assets, respectively, shown net of related unearned interest. The balances as of December 31, 2020 were $1.2 million and $4.1 million for current and non-current assets, respectively, shown net of related unearned interest. Contract Liabilities The Company receives cash payments from customers for licensing fees or other arrangements that extend for a specified term. These contract liabilities are classified as either current or long-term in the Condensed Consolidated Balance Sheets based on the timing of when the Company expects to recognize revenue. As of June 30, 2021 and December 31, 2020, contract liabilities were $8.3 million and $8.9 million, respectively, and are included within "Deferred revenue, current, and other" and "Deferred revenue, non-current" in the accompanying Condensed Consolidated Balance Sheets. The decrease in the contract liability balance during the six-month period ended June 30, 2021 is approximately $3.1 million of revenue recognized during the period, offset by approximately $2.5 million of additional deferred sales in 2021. Contract liabilities are reported on the accompanying Condensed Consolidated Balance Sheets on a contract-by-contract basis. |
ACQUISITION AND RELATED PARTY I
ACQUISITION AND RELATED PARTY ITEMS | 6 Months Ended |
Jun. 30, 2021 | |
Business Combinations and Related Party Disclosure [Abstract] | |
ACQUISITION AND RELATED PARTY ITEMS | ACQUISITIONS AND RELATED PARTY ITEMS Lacuna Acquisition On February 1, 2021, the Company completed the acquisition of Lacuna Diagnostics, Inc. ("Lacuna"), a veterinary digital cytology company, to broaden the Company's point of care diagnostic offerings. The Company acquired 100% of the issued and outstanding shares of Lacuna for a purchase price of $4.3 million. The Company then dissolved Lacuna on February 1, 2021. In accordance with the purchase agreement, the Company is required to hold a $0.4 million general indemnity holdback that is intended to provide a non-exclusive source of funds for the payment of any losses identified and shall be released within 18 months of closing. As of June 30, 2021, $0.4 million of the indemnification holdback remains outstanding. As additional consideration for the shares, the Company agreed to a contingent earn-out of an additional $2.0 million based on the achievement of certain performance metrics within a twelve twelve The total purchase consideration exceeded the fair value of the identifiable net assets acquired, resulting in $3.9 million of goodwill, primarily related to expanded opportunities with our offerings. All of the goodwill is allocated to the North America segment and is not tax deductible for income tax purposes. The acquisition was accounted for as a business combination in accordance with ASC 805. As such, the total purchase consideration was allocated to the assets acquired and liabilities assumed based on their fair values as of February 1, 2021. The information below represents the preliminary purchase price allocation as of the acquisition date (in thousands): February 1, 2021 Purchase price $ 4,255 Fair value of contingent consideration 1,700 Total purchase consideration $ 5,955 Cash and cash equivalents $ 3 Accounts receivable 170 Property and equipment, net 530 Other intangible assets, net 1,185 Deferred tax asset 167 Total assets acquired 2,055 Goodwill 3,900 Total fair value of consideration transferred $ 5,955 The Company's preliminary estimates of fair values of the net assets acquired are based on the information that was available at the date of the acquisition, and the Company is continuing to evaluate the underlying inputs and assumptions used in its valuations. Accordingly, these preliminary estimates are subject to change during the measurement period, which is up to one year from the date of the acquisition. Intangible assets acquired, amortization method and estimated useful life as of February 1, 2021, was as follows (dollars in thousands): Useful Life Amortization Fair Value Developed technology 3 years Straight-line $ 1,000 Customer relationships 6 months Straight-line 150 Trade name 11 months Straight-line 35 Total intangible assets acquired $ 1,185 Pro forma financial information related to the acquisition of Lacuna has not been provided as it is not material to our consolidated results of operations. scil Acquisition On April 1, 2020, the Company completed the acquisition of scil animal care company GmbH (“scil”) from Covetrus, Inc. The Company purchased 100% of the capital stock of scil for an aggregate price of $110.3 million in cash. The acquisition represents a key milestone in the Company's long-term strategic plan, creating a global veterinary diagnostics company with leadership positions in key geographic markets. The purchase price exceeded the identifiable net assets, resulting in goodwill of $46.0 million, primarily attributable to the synergies expected from the expanded market opportunities with our offerings and the experienced workforce acquired. Of the goodwill acquired, $37.3 million is allocated to our International segment and $8.7 million is allocated to our North America segment. All of the goodwill is tax deductible for purposes of calculating Controlled Foreign Corporation tested income, which may result in a decrease to the Company's future U.S. federal tax liability. The acquisition was accounted for using the acquisition method of accounting in accordance with ASC 805, Business Combinations , which requires, among other things, that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. As such, the total purchase consideration was allocated to the assets acquired and liabilities assumed based on their fair values as of April 1, 2020. The Company finalized the accounting for the acquisition as of March 31, 2021. The information below represents the final purchase price allocation of scil (in thousands): April 1, 2020 Total purchase consideration $ 110,290 Cash and cash equivalents $ 5,889 Accounts receivable 10,707 Inventories 11,278 Net investment in lease, current 311 Prepaid expenses 1,692 Other current assets 1,338 Property and equipment, net 19,320 Operating lease right-of-use assets 877 Other intangible assets, net 44,517 Net investment in leases, non-current 1,027 Investments in unconsolidated affiliates 55 Other non-current assets 291 Total assets acquired 97,302 Accounts payable 8,221 Accrued liabilities 7,067 Operating lease liabilities, current 356 Deferred revenue, current, and other 3,220 Deferred revenue, non-current 94 Operating lease liabilities, non-current 529 Deferred tax liability 13,249 Other liabilities 276 Net assets acquired 64,290 Goodwill 46,000 Total fair value of consideration transferred $ 110,290 Per the tax indemnification included in the purchase agreement of scil, the seller has indemnified the Company for $1.1 million related to uncertain tax positions taken in prior years. The outcome of this arrangement will either be settled or expire due to lapse of statute of limitations by 2027. As of June 30, 2021, approximately $0.4 million of the indemnification agreement remains outstanding. Intangible assets acquired, amortization method and estimated useful life as of April 1, 2020, was as follows (dollars in thousands): Useful Life Amortization Fair Value Customer relationships 10 years Straight-line $ 36,272 Internally developed software 7 years Straight-line 353 Backlog 0.2 years Straight-line 210 Non-compete agreements 2 years Straight-line 60 Trade name subject to amortization 0.8 years Straight-line 66 Trademarks and trade names not subject to amortization n/a Indefinite 7,556 Total intangible assets acquired $ 44,517 Unaudited Pro Forma Financial Information The following tables present unaudited supplemental pro forma financial information as if the acquisition had occurred on January 1, 2019 (in thousands): Six Months Ended June 30, 2020 Revenue, net $ 94,917 Net (loss) income before equity in losses of unconsolidated affiliates $ (12,512) Net (loss) income attributable to Heska Corporation $ (12,461) The pro forma financial information presented above has been prepared by combining our historical results and the historical results of scil and further reflects the effect of purchase accounting adjustments, including: (i) amortization of acquired intangible assets, (ii) the impact of certain fair value adjustments such as depreciation on the acquired property, plant and equipment, and (iii) historical intercompany sales between the Company and scil. The unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what actual results of operations would have been if the acquisition had occurred as the beginning of the period presented, nor are they indicative of future results of operations. Other Related Party Activities |
INVESTMENTS IN UNCONSOLIDATED A
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 6 Months Ended |
Jun. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | INVESTMENTS IN UNCONSOLIDATED AFFILIATES The carrying values of investments in unconsolidated affiliates, categorized by type of investment, is as follows (in thousands): June 30, 2021 December 31, 2020 Equity method investment $ 3,157 $ 3,686 Non-marketable equity security investment 3,018 3,018 Investments in unconsolidated affiliates $ 6,175 $ 6,704 Equity Method Investment On September 24, 2018, the Company invested approximately $5.1 million, including costs, to acquire an equity interest in a business as part of its product development strategy. As of June 30, 2021, the Company's ownership interest in the business was 29.1%. In connection with the investment, the Company entered into a Manufacturing Supply Agreement that grants the Company global exclusivity to specified products to be delivered under the agreement for a 15-year period that begins upon the Company's receipt and acceptance of an initial order under the agreement. The Company accounts for this investment using the equity method of accounting. Under the equity method, the carrying value of the investment is adjusted for the Company's proportionate share of the investee's reported earnings or losses with the corresponding share of earnings or losses reported as Equity in losses of unconsolidated affiliates, listed below Net income before equity in losses of unconsolidated affiliates within the Condensed Consolidated Statements of (Loss) Income. Non-Marketable Equity Security Investment On August 8, 2018, the Company invested approximately $3.0 million, including costs, in exchange for preferred stock. The Company’s investment is a non-marketable equity security, recorded using the measurement alternative of cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. As part of the agreement, the Company entered into a Supply and License Agreement, which provides that the investee produce and commercialize products that will enhance the Company's diagnostic portfolio. As part of this agreement, the Company made an upfront payment of $1.0 million related to a worldwide exclusive license agreement over a 20-year period, recorded in both short and long-term other assets. In addition, the agreement provides for an additional contingent payment of $10.0 million, relating to the successful achievement of sales milestones. This potential future milestone payment has not yet been accrued as it is not deemed by the Company to be probable at this time. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's total income tax benefit for our loss before income taxes were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Loss before income taxes and equity in losses of unconsolidated affiliates $ (1,275) $ (6,599) $ (784) $ (13,416) Total income tax benefit $ (1,051) $ (212) $ (2,617) $ (1,720) There were cash payments for income taxes of $0.7 million and $1.2 million for the three and six months ended June 30, 2021, respectively, and there were cash payments of $340 thousand and $347 thousand, respectively, for income taxes for the three and six months ended June 30, 2020. The Company’s tax benefit was $1.1 million and $2.6 million for the three and six months ended June 30, 2021, respectively, compared to the tax benefit of $0.2 million and $1.7 million for the three and six months ended June 30, 2020, respectively. The increase in tax benefit in the six month period is due to excess tax benefits recognized from employee stock compensation and a release in the partial valuation allowance further discussed below. The Company recognized $0.6 million in excess tax benefits related to employee share-based compensation for the three months ended June 30, 2021, compared to $0.2 million recognized for the three months ended June 30, 2020. The Company recognized $1.0 million in excess tax benefits related to employee share-based compensation for the six months ended June 30, 2021, compared to $0.5 million recognized for the six months ended June 30, 2020. As of June 30, 2021, the Company had a deferred tax asset of approximately $9.4 million from net operating losses and tax credits and a net partial valuation allowance recorded against these deferred tax assets. During the current year, the Company forecasts the release of approximately $1.2 million of the partial valuation allowance through the annual effective tax rate used to estimate tax expense. The release is due to an increase in non-deductible executive compensation and capitalization of research and development expenses that results in the projected utilization of net operating losses in the current year. After the release, the net partial valuation allowance is forecasted to be approximately $3.2 million as of December 31, 2021. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
LEASES, LESSEE | LEASES Lessee Accounting The Company leases buildings, office equipment, and vehicle s. The following table summarizes the Company's operating and finance lease balances (in thousands): Leases Balance Sheet Location June 30, 2021 December 31, 2020 Assets Operating Operating lease right-of-use assets $ 4,944 $ 5,457 Finance Property and equipment, net 1,814 1,907 Total Leased Assets $ 6,758 $ 7,364 Liabilities Operating Operating lease liabilities, current $ 2,035 $ 2,087 Operating lease liabilities, non-current 3,404 3,858 Finance Deferred revenue, current, and other 235 295 Other liabilities 278 261 Total Lease Liabilities $ 5,952 $ 6,501 Lessor Accounting The following table summarizes the profit recognized on the commencement date for sales-type leases and lease income for equipment-only operating leases (in thousands): |
LEASES, LESSOR | LEASES Lessee Accounting The Company leases buildings, office equipment, and vehicle s. The following table summarizes the Company's operating and finance lease balances (in thousands): Leases Balance Sheet Location June 30, 2021 December 31, 2020 Assets Operating Operating lease right-of-use assets $ 4,944 $ 5,457 Finance Property and equipment, net 1,814 1,907 Total Leased Assets $ 6,758 $ 7,364 Liabilities Operating Operating lease liabilities, current $ 2,035 $ 2,087 Operating lease liabilities, non-current 3,404 3,858 Finance Deferred revenue, current, and other 235 295 Other liabilities 278 261 Total Lease Liabilities $ 5,952 $ 6,501 Lessor Accounting The following table summarizes the profit recognized on the commencement date for sales-type leases and lease income for equipment-only operating leases (in thousands): |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | 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 ("EPS") for the three and six months ended June 30, 2021 and 2020 (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net (loss) income attributable to Heska Corporation $ (567) $ (6,357) $ 1,304 $ (11,645) Basic weighted-average common shares outstanding 10,167 8,776 9,825 8,165 Dilutive effect of stock options and restricted stock awards — — 364 — Diluted weighted-average common shares outstanding 10,167 8,776 10,189 8,165 Basic (loss) earnings per share attributable to Heska Corporation $ (0.06) $ (0.72) $ 0.13 $ (1.43) Diluted (loss) earnings per share attributable to Heska Corporation $ (0.06) $ (0.72) $ 0.13 $ (1.43) The following potentially outstanding common shares from convertible preferred stock, convertible senior notes, stock options and restricted stock awards were excluded from the computation of diluted EPS because the effect would have been antidilutive (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Convertible preferred stock — 332 — 920 Convertible Senior Notes 996 — 996 21 Stock options and restricted stock 374 355 6 299 1,370 687 1,002 1,240 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES The following summarizes the change in goodwill during the six months ended June 30, 2021 (in thousands): North America International Total Carrying amount, December 31, 2020 $ 35,414 $ 52,862 $ 88,276 Goodwill attributable to acquisitions (subject to change) 3,900 — 3,900 Foreign currency adjustments — (1,405) (1,405) Carrying amount, June 30, 2021 $ 39,314 $ 51,457 $ 90,771 Other intangibles consisted of the following (in thousands): June 30, 2021 December 31, 2020 Gross Carrying Amount Accum. Amortiz. Net Carrying Amount Gross Carrying Amount Accum. Amortiz. Net Carrying Amount Intangible assets subject to amortization: Customer relationships and other $ 46,196 $ (8,878) $ 37,318 $ 46,989 $ (6,436) $ 40,553 Developed technology 9,654 (2,278) 7,376 8,669 (1,696) 6,973 Trade names 230 (137) 93 197 (105) 92 Intangible assets not subject to amortization: Trade names 8,111 — 8,111 8,374 — 8,374 Total intangible assets $ 64,191 $ (11,293) $ 52,898 $ 64,229 $ (8,237) $ 55,992 Amortization expense relating to other intangibles was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Amortization expense $ 1,652 $ 1,624 $ 3,056 $ 2,053 The remaining weighted-average amortization period for intangible assets is approximately 8.1 years. Estimated amortization expense related to intangibles for each of the five years from 2021 (remaining) through 2025 and thereafter is as follows (in thousands): Year Ending December 31, 2021 (remaining) $ 3,116 2022 6,111 2023 5,749 2024 5,306 2025 5,248 Thereafter 19,257 Total amortization related to finite-lived intangible assets $ 44,787 Indefinite-lived intangible assets 8,111 Net intangible assets $ 52,898 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT, NET Property and equipment, net, consisted of the following (in thousands): June 30, 2021 December 31, 2020 Land $ 2,520 $ 2,590 Building 12,439 12,737 Machinery and equipment 41,407 40,411 Office furniture and equipment 2,120 2,047 Computer hardware and software 5,102 4,773 Leasehold and building improvements 10,729 10,728 Construction in progress 61 4 Property and equipment, gross 74,378 73,290 Less accumulated depreciation (40,082) (37,748) Total property and equipment, net $ 34,296 $ 35,542 The Company has subscription agreements whereby its instruments in inventory may be placed at a customer's location on a rental basis. For instruments classified as operating leases, the cost of these instruments is transferred to machinery and equipment and depreciated, typically over a 5 to 7 year period depending on the circumstance under which the instrument is placed with the customer. Our cost of instruments under operating leases as of June 30, 2021 and December 31, 2020, was $14.9 million and $13.6 million, respectively, before accumulated depreciation of $5.1 million and $4.7 million, respectively. |
INVENTORIES, NET
INVENTORIES, NET | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | INVENTORIES Inventories consisted of the following (in thousands): June 30, 2021 December 31, 2020 Raw materials $ 12,798 $ 14,454 Work in process 4,850 4,262 Finished goods 23,556 21,321 Total inventories $ 41,204 $ 40,037 |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consisted of the following (in thousands): June 30, 2021 December 31, 2020 Accrued payroll and employee benefits $ 6,458 $ 7,949 Accrued property taxes 403 659 Accrued purchase orders 2,298 1,549 Accrued taxes 3,839 3,731 Other 4,370 4,167 Total accrued liabilities $ 17,368 $ 18,055 Other accrued liabilities consist of items that are individually less than 5% of total current liabilities. |
CAPITAL STOCK
CAPITAL STOCK | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
CAPITAL STOCK | CAPITAL STOCK During the six months ended June 30, 2021, the Company granted the following stock options, restricted stock awards, and restricted stock units: Six Months Ended June 30, 2021 Options/Awards/Units Weighted-Average Grant Date Fair Value Stock options 54,300 $ 78.19 Restricted stock awards 203,369 $ 196.48 Restricted stock units 6,000 $ 172.11 The Company used the Black-Scholes option pricing model to determine the grant date fair value of stock options with service and/or company performance conditions. For stock options with market conditions, we utilized a Monte Carlo simulation model to estimate grant date fair value. Compensation cost is recognized ratably over the vesting periods of the options. We valued the restricted stock awards and restricted stock units related to service and/or company performance targets based on grant date fair value and will expense over the requisite service period when achievement of those conditions is deemed probable. For restricted stock awards and restricted stock units related to market conditions, we utilized a Monte Carlo simulation model to estimate grant date fair value and expense over the requisite period. 2021 Equity Offering On March 5, 2021, the Company completed a public offering of 940,860 shares of common stock, $0.01 par value per share, at a public offering price of $186.00 per share. The Company received net proceeds of approximately $164.2 million after deducting underwriting discounts and commissions and issuance costs. The Company granted the underwriters an option to purchase up to an additional 141,129 shares of common stock from the Company at the offering price of $186.00 per share (less the underwriting discounts and commissions), within 30 days of the Prospectus Supplement dated March 2, 2021. The Company evaluated the accounting treatment of the option under ASC 815-40, Derivatives and Hedging - Contracts on an Entity's |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME Accumulated other comprehensive income consisted of the following (in thousands): Pension Adjustments Foreign Currency Translation 1 Foreign Currency Gain (Loss) on Intra-Entity Transactions 2 Total Accumulated Other Comprehensive Income Balances at December 31, 2020 $ (386) $ 5,872 $ 8,683 $ 14,169 Current period other comprehensive loss — (1,206) (2,325) (3,531) Balances at June 30, 2021 $ (386) $ 4,666 $ 6,358 $ 10,638 1 Foreign currency gains and losses related to translation of foreign subsidiary financial statements. 2 The Company has intercompany loans of a long-term investment nature that are denominated in a foreign currency. These transactions are considered to be of a long-term nature if settlement is not planned or anticipated in the foreseeable future. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Warranties 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 products. The Company also sells a renewal warranty for certain of its products. The typical remedy for breach of warranty is to repair or replace any defective product, and if not possible or practical, the Company will accept the return of the defective product and refund the amount paid. Historically, the Company has incurred minimal warranty costs. The Company's warranty re serve was $0.5 million a nd $0.5 million as of June 30, 2021 and December 31, 2020, respectively. Litigation From time to time, the Company may be involved in litigation relating to claims arising out of its operations. The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred, and the amount can be reasonably estimated. On February 18, 2020, a former managing director of scil filed a claim disputing the effective date of the termination of his management service agreement and the validity of the Company´s waiver of his two-year post-contractual non-compete obligation. The Company intends to defend itself against the claim. Whether or not this will be successful depends on complex facts and circumstances. The Company is, based on the advice of its legal counsel, confident that it will be successful in evidencing the effective date of the termination of the management service agreement. Additionally, the Company is indemnified by the scil acquisition agreement for this claim. As of June 30, 2021, 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. Off-Balance Sheet Commitments We have no off-balance sheet arrangements or variable interest entities. Purchase Obligations |
INTEREST AND OTHER EXPENSE, NET
INTEREST AND OTHER EXPENSE, NET | 6 Months Ended |
Jun. 30, 2021 | |
Other Income and Expenses [Abstract] | |
INTEREST AND OTHER EXPENSE, NET | INTEREST AND OTHER EXPENSE, NET Interest and other expense, net, consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Interest income $ (467) $ (120) $ (856) $ (353) Interest expense 922 2,333 1,842 4,679 Other expense (income), net 126 (68) 120 17 Total interest and other expense, net $ 581 $ 2,145 $ 1,106 $ 4,343 |
CONVERTIBLE NOTES AND CREDIT FA
CONVERTIBLE NOTES AND CREDIT FACILITY | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE NOTES AND CREDIT FACILITY | CONVERTIBLE NOTES Convertible Notes On September 17, 2019, the Company issued $86.25 million aggregate principal amount of 3.750% Convertible Senior Notes due 2026 (the "Notes"), which included the exercise in full of an $11.25 million purchase option, to certain financial institutions as the initial purchasers of the Notes (the "Initial Purchasers"). The Company pays interest on the Notes semiannually in arrears at a rate of 3.750% per annum on March 15 and September 15 of each year. The Notes are senior unsecured obligations of the Company. The Notes were issued pursuant to an Indenture, dated September 17, 2019, between the Company and U.S. Bank National Association, as trustee. The net proceeds from the sale of the Notes were approximately $83.7 million after deducting the Initial Purchasers' discounts and the offering expenses payable by the Company. Refer to Note 16, Convertible Notes, in the Notes to Consolidated Financial Statements included in Part II, Item 8 of the Company's 2020 Form 10-K for further information on the Notes. No portion of the Notes was converted during the six months ended June 30, 2021 and the liability component was classified as long-term debt on the Company's Condensed Consolidated Balance Sheet as of June 30, 2021. As discussed in Note 1, the Company early adopted ASU 2020-06, effective January 1, 2021, which simplifies the accounting for certain convertible instruments. Under the new standard, qualifying convertible debt is accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. As a result of ASU 2020-06, the Company's cash interest expense is not impacted, however, the Company's non-cash interest accretion is limited to the amortization of debt issuance costs under ASC 835-30. The new effective interest rate of the Notes post-adoption is 4.35%. The Company also reversed the conversion feature amount recorded in APIC and reversed the difference in non-cash interest expense via retained earnings. The following table summarizes the net carrying amount of the Notes (in thousands): June 30, 2021 December 31, 2020 Principal amount of the Notes $ 86,250 $ 86,250 Unamortized debt discount (2,426) (37,791) Net carrying amount $ 83,824 $ 48,459 Interest expense related to the Notes is comprised of the amortization of debt discount and debt issuance costs and the contractual coupon interest as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Interest expense related to contractual coupon interest $ 809 $ 809 $ 1,617 $ 1,617 Interest expense related to amortization of the debt discount 103 1,524 205 3,049 $ 912 $ 2,333 $ 1,822 $ 4,666 As of June 30, 2021, the remaining period over which the unamortized discount will be amortized is 63.0 months. The estimated fair value of the Notes was $235.4 million and $156.9 million as of June 30, 2021 and December 31, 2020, respectively, determined through consideration of quoted market prices in less active markets. The fair value measurement is classified as Level 2 in the fair value hierarchy, which is defined in ASC 820 as inputs other than quoted prices in active markets that are either directly or indirectly observable. Based on our closing stock price of $229.73 on June 30, 2021, the if-converted value exceeded the aggregate principal amount of the Notes by $142.5 million. |
NOTE RECEIVABLES
NOTE RECEIVABLES | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
NOTE RECEIVABLES | NOTE RECEIVABLES Convertible Promissory Note On December 9, 2020, the Company's equity method investee (the “Equity Method Investee”), issued a Convertible Promissory Note to the Company (the “Convertible Promissory Note”) with a principal amount of $6.65 million and a stated interest rate of 3.0% per annum that is payable monthly. The Convertible Promissory Note has a maturity date of December 9, 2023, or otherwise upon qualified redemption event or in the event of a default. Refer to Note 4 for additional information on our equity method investment. The conversion of the Convertible Promissory Note is contingent upon certain events. Due to the convertible debt features included in the Convertible Promissory Note, it is not an equity security and is therefore not considered an additional investment in our Equity Method Investee. The Company accounted for the transaction as a note receivable, included in Related party convertible note receivable, net on the Consolidated Balance Sheets. The note receivable will be measured at amortized cost and evaluated for credit losses each reporting period. The Company determined that the redemption features described above met the definition of an embedded derivative that requires bifurcation from the note receivable host. The Company measured the redemption features at fair value, with the residual proceeds paid allocated to the note receivable host, creating a discount to the note receivable. The discount will be amortized over the contractual term of the Convertible Promissory Note using the effective interest method. The effective interest rate of the Convertible Promissory Note is 8.69%, and the amortization of the discount will be included as interest income within Interest and other expense, net on the Consolidated Statements of (Loss) Income. The carrying value of the note receivable, included in Related party convertible note receivable, net on the Consolidated Balance Sheets, is as follows (in thousands): June 30, 2021 December 31, 2020 Principal amount $ 6,650 $ 6,650 Unamortized discount (828) (977) Net carrying amount $ 5,822 $ 5,673 The fair value of the embedded derivative wa s $1.0 million as of June 30, 2021 and December 31, 2020, respectively, and is included in Related party convertible note receivable, net on the Consolidated Balance Sheets. The fair value of the derivative will be remeasured each reporting period, with the mark-to-market adjustment to be included in Interest and other expense, net on the Consolidated Statements of (Loss) Income. In addition, the Company recorded an allowance for expected credit losses on the promissory note of $33 thousand as of June 30, 2021. Promissory Note On February 1, 2021, one of the Company's equity investees (the "Investee"), which the Company accounts for as a non-marketable equity security, issued a Promissory Note to the Company (the “Promissory Note”) with a principal amount of $9.0 million and a stated interest rate of 10.0% per annum that is payable monthly. The Promissory Note has a maturity date of December 1, 2024 and provides for interest only payments through December 1, 2023. Beginning on January 1, 2024, the Promissory Note requires repayment of the principal and interest over twelve consecutive monthly payments. As additional consideration, the Company was also issued a warrant to acquire securities of the Investee that expires December 31, 2034. Refer to Note 4 for additional information on our equity investments. The Company evaluated the accounting treatment of the warrant to acquire securities and determined is a freestanding instrument that meets the definition of an embedded derivative under ASC 815 and requires bifurcation from the note receivable host. The Company measured the warrant at fair value, with the residual proceeds paid allocated to the note receivable host, creating a discount to the note receivable. The discount will be amortized over the contractual term of the Promissory Note using the effective interest method. The effective interest rate of the Promissory Note is 10.99%, and the amortization of the discount will be included as interest income within Interest and other expense, net on the Consolidated Statements of (Loss) Income. The carrying value of the note receivable, included in Promissory note receivable from investee, net, on the Consolidated Balance Sheets, is as follows (in thousands): June 30, 2021 December 31, 2020 Principal amount $ 9,000 $ — Unamortized discount (283) — Net carrying amount $ 8,717 $ — The fair value of the embedded derivative was $0.3 million at issuance and $0.4 million as of June 30, 2021, and is included in Other non-current assets on our Consolidated Balance Sheets. The fair value of the derivative will be remeasured each reporting period, with the mark-to-market adjustment to be included in other Interest and other expense, net on the Consolidated Statements of (Loss) Income. In addition, the Company recorded an allowance for expected credit losses on the note receivable of $0.3 million as of June 30, 2021. |
SEGMENT REPORTING
SEGMENT REPORTING | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING On April 1, 2020, Heska completed the acquisition of scil. Following this acquisition, the Company restructured its operating segments based on how the Chief Operating Decision Maker (“CODM”) manages the business, allocates resources, makes operating decisions and evaluates operating performance. The CODM changed how he assesses performance and allocates resources based on geographic regions in order to better align with the global operations of the Company. Based on this change, the Company determined it has two reportable segments and revised prior comparative periods to conform to the current period segment presentation. The Company’s two segments are North America and International. The North America segment is comprised of the Company's operations in the United States, Canada and Mexico and the International segment is comprised of geographies outside of North America, which are the Company's operations primarily in Australia, France, Germany, Italy, Malaysia, Spain and Switzerland. Certain expenses incurred at the Company’s headquarters located in the North America segment are allocated to each segment in a manner consistent with where the benefits from the expenses are derived. However, there are certain corporate expenses included in the North America segment that the Company does not allocate. Such expenses include research and development, certain selling, marketing, general, and administrative costs that support the global organization. Sales and transfers between operating segments are accounted for at market-based transaction prices and are eliminated in consolidation. The Company's sales are determined by the country of origin where the sale occurred. For a description of Heska's previous operating segments, refer to Note 17 to the consolidated financial statements included in Part II. Item 8 of Heska's Annual Report on Form 10-K for the year ended December 31, 2019. Our CODM continues to evaluate segment performance and allocate resources based on Revenue, Cost of Revenue, Gross Profit, Gross Margin and Operating Income. The CODM does not evaluate operating segments using asset information; however, we have included total asset information by segment below as there was a material change in total assets by segment as of June 30, 2021 due to the acquisition of scil. Summarized financial information concerning the Company's reportable segments is shown in the following tables (in thousands): Three Months Ended June 30, 2021 North America International Total Total revenue $ 40,533 $ 24,395 $ 64,928 Cost of revenue 21,111 16,545 37,656 Gross profit $ 19,422 $ 7,850 $ 27,272 Gross margin 48 % 32 % 42 % Operating income (loss) $ 130 $ (824) $ (694) Three Months Ended June 30, 2020 North America International Total Total revenue $ 28,982 $ 16,730 $ 45,712 Cost of revenue 16,222 11,625 27,847 Gross profit $ 12,760 $ 5,105 $ 17,865 Gross margin 44 % 31 % 39 % Operating loss $ (3,067) $ (1,387) $ (4,454) Six Months Ended June 30, 2021 North America International Total Total revenue $ 77,806 $ 47,625 $ 125,431 Cost of revenue 40,875 31,814 72,689 Gross profit $ 36,931 $ 15,811 $ 52,742 Gross margin 47 % 33 % 42 % Operating income (loss) $ 1,160 $ (838) $ 322 Six Months Ended June 30, 2020 North America International Total Total revenue $ 56,631 $ 19,735 $ 76,366 Cost of revenue 31,368 13,685 45,053 Gross profit $ 25,263 $ 6,050 $ 31,313 Gross margin 45 % 31 % 41 % Operating loss $ (7,161) $ (1,912) $ (9,073) Asset information by reportable segment as of June 30, 2021 is as follows (in thousands): As of June 30, 2021 North America International Total Total assets $ 418,842 $ 160,524 $ 579,366 Asset information by reportable segment as of December 31, 2020 is as follows (in thousands): As of December 31, 2020 North America International Total Total assets $ 238,550 $ 161,289 $ 399,839 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSOn July 1, 2021, the Company completed the acquisition of BiEsseA s.r.l., a veterinary reference lab based in Milan, Italy ("BiEsseA"). In exchange for all of the shares of BiEsseA, the Company paid total consideration of $4.7 million upon closing. The Company expects to account for this transaction as a business combination however, the Company does not have the accounting complete as of the date of this filing due to the limited time that has passed since the date of acquisition. As additional consideration for the shares of BiEsseA, the Company agreed to make a contingent earn-out payment of up to an additional $3.0 million based on the achievement of certain performance metrics during the next three years. |
OPERATIONS AND SUMMARY OF SIG_2
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | The accompanying interim Condensed Consolidated Financial Statements are unaudited. The interim unaudited Condensed Consolidated Financial Statements have been prepared on a basis consistent with the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include normal, recurring adjustments, necessary to present fairly the financial position of the Company as of June 30, 2021, and the results of our operations and statements of stockholders' equity for the three and six months ended June 30, 2021 and 2020, and cash flows for the six months ended June 30, 2021 and 2020. 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 ("GAAP") have been condensed or omitted pursuant to such rules and regulations. Our unaudited Condensed Consolidated Financial Statements include our accounts and the accounts of our wholly-owned subsidiaries since their respective dates of acquisitions. All intercompany accounts and transactions have been eliminated in consolidation. Where our ownership of a subsidiary is less than 100%, the non-controlling interest is reported on our Condensed Consolidated Balance Sheets. The non-controlling interest in our consolidated net income is reported as "Net loss attributable to redeemable non-controlling interest" on our Condensed Consolidated Statements of (Loss) Income. The results of operations for the six months ended June 30, 2021 are not necessarily indicative of the results to be expected for the full year or any future period, particularly in light of the COVID-19 pandemic and its effects on the domestic and global economies as described below. 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 year ended December 31, 2020 and other financial information filed with the SEC. Beginning in the first quarter of 2020, to limit the spread of COVID-19, governments took various actions including the issuance of stay-at-home policies and social distancing procedures and guidelines, causing some businesses to adjust, reduce or suspend business and operating activities. Veterinary care is widely recognized as an "essential" service for pet owners, and veterinarians continued to deliver essential medical care for sick and injured pets. The stay-at-home policies deployed early in 2020 to combat the spread of COVID-19 resulted in a decrease in companion animal clinical visits, including delay of elective procedures and wellness visits and as a result lowers demand for diagnostic testing services. Beginning in the second quarter of 2020, certain local, state and federal governments began to ease the stay-at-home policies and allowed more businesses and facilities to re-open, leading to a recovery in companion animal clinical visits and associated demand for our diagnostic products. During the fourth quarter of 2020 and into the first quarter of 2021, increased restrictions in countries in which we operate, mainly in the European Union, and certain parts of Canada and Australia, re-emerged. These restrictions lessened during the second quarter of 2021, however, with the rise in variants, the extent to which the continuation, or another wave outbreak of COVID-19, or an outbreak of other health epidemics could impact our business, results of operations and financial condition, including the potential for write-offs or impairments of assets and suspension of capital investments, will |
Use of Estimates | The preparation of financial statements in conformity with 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 credit losses and the net realizable value of inventory; determining future costs associated with warranties provided; 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 and investments for estimated useful lives and impairment; estimating the useful lives and standalone selling prices of instruments under leasing arrangements; determining the allocation of purchase price under purchase accounting; estimating the expense associated with the granting of stock; determining the need for, and the amount of a valuation allowance on deferred tax assets; determining the fair value of our embedded derivatives; and determining the value of the non-controlling interest in a business combination. Our actual results may differ from these estimates and there may be changes to those estimates in future periods. |
Adoption of New Accounting Pronouncements | Adoption of New Accounting Pronouncements Effective January 1, 2021, we adopted ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740, and also clarifies and amends existing guidance to improve consistent application. We evaluated the impact of the standard on our consolidated financial statements and the adoption of this ASU did not have a material impact on our consolidated financial statements and disclosures. Effective January 1, 2021, we adopted ASU 2020-01, Investments-Equity Securities (Topic 321) , Investments-Equity Method and Joint Ventures (Topic 323) , and Derivatives and Hedging (Topic 815) . The amendments in this ASU clarify the interaction between the accounting for investments in equity securities, investments in equity method and certain derivatives instruments. The ASU is expected to reduce diversity in practice and increase comparability of the accounting for these interactions. We evaluated the impact of the standard on our consolidated financial statements and the adoption of this ASU did not have a material impact on our consolidated financial statements and disclosures. Effective January 1, 2021, we early adopted ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40), which simplifies the accounting for certain convertible instruments. The update reduces the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible debt will be accounted for as a single liability measured at its amortized cost and convertible preferred stock will be accounted for as a single equity instrument measured at its historical cost, as long as no other features require bifurcation and recognition as derivatives. The update also requires the if-converted method to be used for convertible instruments and the effect of potential share settlement be included in the diluted earnings per share calculation when an instrument may be settled in cash or shares. The Company's 3.75% Convertible Senior Notes due 2026 (the "Notes") are a convertible instrument with a cash-conversion feature that is accounted for within the scope of ASC 470-20 and impacted by the adoption of ASU 2020-06. The Company has elected to apply the modified retrospective method wherein the Company recognized a cumulative-effect adjustment to the opening balance of retained earnings (January 1, 2021). Further, the Company will not restate EPS in prior periods. The Company calculated the cumulative-effect adjustment as of January 1, 2021 by comparing (i) the historical amortization schedule for the Notes through December 31, 2020 and (ii) an updated amortization schedule wherein the conversion feature within the Notes would not be separated as an equity component and subsequently recognized as non-cash interest expense under ASC 835-30. As a result of ASU 2020-06, while cash interest expense is not impacted, non-cash interest accretion is limited to the amortization of debt issuance costs under ASC 835-30. Therefore, the Company prepared its transition journal entries by (i) reversing the conversion feature amount recorded in APIC and (ii) reversing the difference in non-cash interest expense via retained earnings. The adoption resulted in a decrease to accumulated deficit of $3.4 million, a decrease to additional paid-in capital of $29.8 million, and an increase to convertible note, non-current, net of $35.2 million. Additionally, due to the adoption, the Company reversed the remaining balance of the net deferred tax liability of $8.8 million, which was initially recorded in connection with the Notes. Effective January 1, 2021, we adopted ASU 2020-10, Codification Improvements |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes our segment revenue (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 North America Revenue: POC Lab Instruments & Other $ 3,482 $ 2,962 $ 6,470 $ 5,578 POC Lab Consumables 19,296 13,537 36,248 27,223 POC Imaging 7,101 4,148 13,789 7,644 PVD 6,210 4,880 13,074 9,384 OVP 4,444 3,455 8,225 6,802 Total North America Revenue $ 40,533 $ 28,982 $ 77,806 $ 56,631 International Revenue: POC Lab Instruments & Other $ 3,987 $ 2,206 $ 7,001 $ 2,440 POC Lab Consumables 11,935 9,470 24,159 10,032 POC Imaging 7,277 4,404 13,935 5,762 PVD 1,196 650 2,530 1,501 OVP — — — — Total International Revenue $ 24,395 $ 16,730 $ 47,625 $ 19,735 Total Revenue $ 64,928 $ 45,712 $ 125,431 $ 76,366 |
Schedule of Timing of Revenue Expected to be Recognized | As of June 30, 2021, the Company expects to recognize revenue as follows (in thousands): Year Ending December 31, Revenue 2021 (remaining) $ 18,313 2022 35,463 2023 31,859 2024 27,220 2025 21,672 Thereafter 22,013 $ 156,540 |
ACQUISITION AND RELATED PARTY_2
ACQUISITION AND RELATED PARTY ITEMS ACQUISITION AND RELATED PARTY ITEMS (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Business Combinations and Related Party Disclosure [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The information below represents the preliminary purchase price allocation as of the acquisition date (in thousands): February 1, 2021 Purchase price $ 4,255 Fair value of contingent consideration 1,700 Total purchase consideration $ 5,955 Cash and cash equivalents $ 3 Accounts receivable 170 Property and equipment, net 530 Other intangible assets, net 1,185 Deferred tax asset 167 Total assets acquired 2,055 Goodwill 3,900 Total fair value of consideration transferred $ 5,955 The information below represents the final purchase price allocation of scil (in thousands): April 1, 2020 Total purchase consideration $ 110,290 Cash and cash equivalents $ 5,889 Accounts receivable 10,707 Inventories 11,278 Net investment in lease, current 311 Prepaid expenses 1,692 Other current assets 1,338 Property and equipment, net 19,320 Operating lease right-of-use assets 877 Other intangible assets, net 44,517 Net investment in leases, non-current 1,027 Investments in unconsolidated affiliates 55 Other non-current assets 291 Total assets acquired 97,302 Accounts payable 8,221 Accrued liabilities 7,067 Operating lease liabilities, current 356 Deferred revenue, current, and other 3,220 Deferred revenue, non-current 94 Operating lease liabilities, non-current 529 Deferred tax liability 13,249 Other liabilities 276 Net assets acquired 64,290 Goodwill 46,000 Total fair value of consideration transferred $ 110,290 |
Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination | Intangible assets acquired, amortization method and estimated useful life as of February 1, 2021, was as follows (dollars in thousands): Useful Life Amortization Fair Value Developed technology 3 years Straight-line $ 1,000 Customer relationships 6 months Straight-line 150 Trade name 11 months Straight-line 35 Total intangible assets acquired $ 1,185 Intangible assets acquired, amortization method and estimated useful life as of April 1, 2020, was as follows (dollars in thousands): Useful Life Amortization Fair Value Customer relationships 10 years Straight-line $ 36,272 Internally developed software 7 years Straight-line 353 Backlog 0.2 years Straight-line 210 Non-compete agreements 2 years Straight-line 60 Trade name subject to amortization 0.8 years Straight-line 66 Trademarks and trade names not subject to amortization n/a Indefinite 7,556 Total intangible assets acquired $ 44,517 |
Business Acquisition, Pro Forma Information | The following tables present unaudited supplemental pro forma financial information as if the acquisition had occurred on January 1, 2019 (in thousands): Six Months Ended June 30, 2020 Revenue, net $ 94,917 Net (loss) income before equity in losses of unconsolidated affiliates $ (12,512) Net (loss) income attributable to Heska Corporation $ (12,461) |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Carrying values of investments in unconsolidated entities | The carrying values of investments in unconsolidated affiliates, categorized by type of investment, is as follows (in thousands): June 30, 2021 December 31, 2020 Equity method investment $ 3,157 $ 3,686 Non-marketable equity security investment 3,018 3,018 Investments in unconsolidated affiliates $ 6,175 $ 6,704 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense | The Company's total income tax benefit for our loss before income taxes were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Loss before income taxes and equity in losses of unconsolidated affiliates $ (1,275) $ (6,599) $ (784) $ (13,416) Total income tax benefit $ (1,051) $ (212) $ (2,617) $ (1,720) |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leases [Abstract] | |
Assets and Liabilities, Lessee | The following table summarizes the Company's operating and finance lease balances (in thousands): Leases Balance Sheet Location June 30, 2021 December 31, 2020 Assets Operating Operating lease right-of-use assets $ 4,944 $ 5,457 Finance Property and equipment, net 1,814 1,907 Total Leased Assets $ 6,758 $ 7,364 Liabilities Operating Operating lease liabilities, current $ 2,035 $ 2,087 Operating lease liabilities, non-current 3,404 3,858 Finance Deferred revenue, current, and other 235 295 Other liabilities 278 261 Total Lease Liabilities $ 5,952 $ 6,501 |
Sales-type Lease, Lease Income | The following table summarizes the profit recognized on the commencement date for sales-type leases and lease income for equipment-only operating leases (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Sales-type lease revenue $ 3,414 $ 1,298 $ 5,157 $ 2,587 Sales-type lease cost of revenue 2,717 908 3,977 1,776 Profit recognized at commencement for sales-type leases $ 697 $ 390 $ 1,180 $ 811 Operating lease income $ 543 $ 430 $ 1,150 $ 430 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
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 ("EPS") for the three and six months ended June 30, 2021 and 2020 (in thousands, except per share data): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Net (loss) income attributable to Heska Corporation $ (567) $ (6,357) $ 1,304 $ (11,645) Basic weighted-average common shares outstanding 10,167 8,776 9,825 8,165 Dilutive effect of stock options and restricted stock awards — — 364 — Diluted weighted-average common shares outstanding 10,167 8,776 10,189 8,165 Basic (loss) earnings per share attributable to Heska Corporation $ (0.06) $ (0.72) $ 0.13 $ (1.43) Diluted (loss) earnings per share attributable to Heska Corporation $ (0.06) $ (0.72) $ 0.13 $ (1.43) |
Schedule of antidilutive securities excluded from computation of earnings per share | otentially outstanding common shares from convertible preferred stock, convertible senior notes, stock options and restricted stock awards were excluded from the computation of diluted EPS because the effect would have been antidilutive (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Convertible preferred stock — 332 — 920 Convertible Senior Notes 996 — 996 21 Stock options and restricted stock 374 355 6 299 1,370 687 1,002 1,240 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | The following summarizes the change in goodwill during the six months ended June 30, 2021 (in thousands): North America International Total Carrying amount, December 31, 2020 $ 35,414 $ 52,862 $ 88,276 Goodwill attributable to acquisitions (subject to change) 3,900 — 3,900 Foreign currency adjustments — (1,405) (1,405) Carrying amount, June 30, 2021 $ 39,314 $ 51,457 $ 90,771 |
Schedule of other intangible assets | Other intangibles consisted of the following (in thousands): June 30, 2021 December 31, 2020 Gross Carrying Amount Accum. Amortiz. Net Carrying Amount Gross Carrying Amount Accum. Amortiz. Net Carrying Amount Intangible assets subject to amortization: Customer relationships and other $ 46,196 $ (8,878) $ 37,318 $ 46,989 $ (6,436) $ 40,553 Developed technology 9,654 (2,278) 7,376 8,669 (1,696) 6,973 Trade names 230 (137) 93 197 (105) 92 Intangible assets not subject to amortization: Trade names 8,111 — 8,111 8,374 — 8,374 Total intangible assets $ 64,191 $ (11,293) $ 52,898 $ 64,229 $ (8,237) $ 55,992 |
Schedule of amortization expense on intangible assets | Amortization expense relating to other intangibles was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Amortization expense $ 1,652 $ 1,624 $ 3,056 $ 2,053 |
Schedule of estimated future amortization expense | Estimated amortization expense related to intangibles for each of the five years from 2021 (remaining) through 2025 and thereafter is as follows (in thousands): Year Ending December 31, 2021 (remaining) $ 3,116 2022 6,111 2023 5,749 2024 5,306 2025 5,248 Thereafter 19,257 Total amortization related to finite-lived intangible assets $ 44,787 Indefinite-lived intangible assets 8,111 Net intangible assets $ 52,898 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment, net, consisted of the following (in thousands): June 30, 2021 December 31, 2020 Land $ 2,520 $ 2,590 Building 12,439 12,737 Machinery and equipment 41,407 40,411 Office furniture and equipment 2,120 2,047 Computer hardware and software 5,102 4,773 Leasehold and building improvements 10,729 10,728 Construction in progress 61 4 Property and equipment, gross 74,378 73,290 Less accumulated depreciation (40,082) (37,748) Total property and equipment, net $ 34,296 $ 35,542 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consisted of the following (in thousands): June 30, 2021 December 31, 2020 Raw materials $ 12,798 $ 14,454 Work in process 4,850 4,262 Finished goods 23,556 21,321 Total inventories $ 41,204 $ 40,037 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following (in thousands): June 30, 2021 December 31, 2020 Accrued payroll and employee benefits $ 6,458 $ 7,949 Accrued property taxes 403 659 Accrued purchase orders 2,298 1,549 Accrued taxes 3,839 3,731 Other 4,370 4,167 Total accrued liabilities $ 17,368 $ 18,055 |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock options plans | During the six months ended June 30, 2021, the Company granted the following stock options, restricted stock awards, and restricted stock units: Six Months Ended June 30, 2021 Options/Awards/Units Weighted-Average Grant Date Fair Value Stock options 54,300 $ 78.19 Restricted stock awards 203,369 $ 196.48 Restricted stock units 6,000 $ 172.11 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | Accumulated other comprehensive income consisted of the following (in thousands): Pension Adjustments Foreign Currency Translation 1 Foreign Currency Gain (Loss) on Intra-Entity Transactions 2 Total Accumulated Other Comprehensive Income Balances at December 31, 2020 $ (386) $ 5,872 $ 8,683 $ 14,169 Current period other comprehensive loss — (1,206) (2,325) (3,531) Balances at June 30, 2021 $ (386) $ 4,666 $ 6,358 $ 10,638 1 Foreign currency gains and losses related to translation of foreign subsidiary financial statements. 2 The Company has intercompany loans of a long-term investment nature that are denominated in a foreign currency. These transactions are considered to be of a long-term nature if settlement is not planned or anticipated in the foreseeable future. |
INTEREST AND OTHER EXPENSE, N_2
INTEREST AND OTHER EXPENSE, NET (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Other Income and Expenses [Abstract] | |
Schedule of interest expense (income) and other income, net | Interest and other expense, net, consisted of the following (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Interest income $ (467) $ (120) $ (856) $ (353) Interest expense 922 2,333 1,842 4,679 Other expense (income), net 126 (68) 120 17 Total interest and other expense, net $ 581 $ 2,145 $ 1,106 $ 4,343 |
CONVERTIBLE NOTES AND CREDIT _2
CONVERTIBLE NOTES AND CREDIT FACILITY (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Debt | June 30, 2021 December 31, 2020 Principal amount of the Notes $ 86,250 $ 86,250 Unamortized debt discount (2,426) (37,791) Net carrying amount $ 83,824 $ 48,459 |
Interest Income and Interest Expense Disclosure | Interest expense related to the Notes is comprised of the amortization of debt discount and debt issuance costs and the contractual coupon interest as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 Interest expense related to contractual coupon interest $ 809 $ 809 $ 1,617 $ 1,617 Interest expense related to amortization of the debt discount 103 1,524 205 3,049 $ 912 $ 2,333 $ 1,822 $ 4,666 |
NOTE RECEIVABLES (Tables)
NOTE RECEIVABLES (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Related Party Transactions | The carrying value of the note receivable, included in Related party convertible note receivable, net on the Consolidated Balance Sheets, is as follows (in thousands): June 30, 2021 December 31, 2020 Principal amount $ 6,650 $ 6,650 Unamortized discount (828) (977) Net carrying amount $ 5,822 $ 5,673 The carrying value of the note receivable, included in Promissory note receivable from investee, net, on the Consolidated Balance Sheets, is as follows (in thousands): June 30, 2021 December 31, 2020 Principal amount $ 9,000 $ — Unamortized discount (283) — Net carrying amount $ 8,717 $ — |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenue from Segments to Consolidated | Three Months Ended June 30, 2021 North America International Total Total revenue $ 40,533 $ 24,395 $ 64,928 Cost of revenue 21,111 16,545 37,656 Gross profit $ 19,422 $ 7,850 $ 27,272 Gross margin 48 % 32 % 42 % Operating income (loss) $ 130 $ (824) $ (694) Three Months Ended June 30, 2020 North America International Total Total revenue $ 28,982 $ 16,730 $ 45,712 Cost of revenue 16,222 11,625 27,847 Gross profit $ 12,760 $ 5,105 $ 17,865 Gross margin 44 % 31 % 39 % Operating loss $ (3,067) $ (1,387) $ (4,454) Six Months Ended June 30, 2021 North America International Total Total revenue $ 77,806 $ 47,625 $ 125,431 Cost of revenue 40,875 31,814 72,689 Gross profit $ 36,931 $ 15,811 $ 52,742 Gross margin 47 % 33 % 42 % Operating income (loss) $ 1,160 $ (838) $ 322 Six Months Ended June 30, 2020 North America International Total Total revenue $ 56,631 $ 19,735 $ 76,366 Cost of revenue 31,368 13,685 45,053 Gross profit $ 25,263 $ 6,050 $ 31,313 Gross margin 45 % 31 % 41 % Operating loss $ (7,161) $ (1,912) $ (9,073) |
Schedule of revenue from external customers and long-lived assets, by geographical areas | Asset information by reportable segment as of June 30, 2021 is as follows (in thousands): As of June 30, 2021 North America International Total Total assets $ 418,842 $ 160,524 $ 579,366 Asset information by reportable segment as of December 31, 2020 is as follows (in thousands): As of December 31, 2020 North America International Total Total assets $ 238,550 $ 161,289 $ 399,839 |
REVENUE (Details)
REVENUE (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)segment | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Revenue, net | $ 64,928 | $ 45,712 | $ 125,431 | $ 76,366 | |
Contract receivables, current | 1,400 | 1,400 | $ 1,200 | ||
Contract receivables, noncurrent | 4,300 | 4,300 | 4,100 | ||
Current portion of deferred revenue, and other | 8,300 | 8,300 | $ 8,900 | ||
Contract liabilities, revenue recognized | 3,100 | ||||
Contract liabilities, increase due to additional deferred sales | 2,500 | ||||
North America | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | 40,533 | 28,982 | 77,806 | 56,631 | |
International | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | 24,395 | 16,730 | 47,625 | 19,735 | |
POC Lab Instruments & Other | North America | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | 3,482 | 2,962 | 6,470 | 5,578 | |
POC Lab Instruments & Other | International | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | 3,987 | 2,206 | 7,001 | 2,440 | |
POC Lab Consumables | North America | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | 19,296 | 13,537 | 36,248 | 27,223 | |
POC Lab Consumables | International | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | 11,935 | 9,470 | 24,159 | 10,032 | |
POC Imaging | North America | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | 7,101 | 4,148 | 13,789 | 7,644 | |
POC Imaging | International | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | 7,277 | 4,404 | 13,935 | 5,762 | |
PVD | North America | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | 6,210 | 4,880 | 13,074 | 9,384 | |
PVD | International | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | 1,196 | 650 | 2,530 | 1,501 | |
OVP | North America | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | 4,444 | 3,455 | 8,225 | 6,802 | |
OVP | International | Operating Segments | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenue, net | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUE - Performance Obligatio
REVENUE - Performance Obligations (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 156,540 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 18,313 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 35,463 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 31,859 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 27,220 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 21,672 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 22,013 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction |
ACQUISITION AND RELATED PARTY_3
ACQUISITION AND RELATED PARTY ITEMS - Additional Information (Details) $ in Thousands | Feb. 01, 2021USD ($) | Apr. 01, 2020USD ($) | Jun. 30, 2021USD ($)segment | Jun. 30, 2020USD ($) | Feb. 21, 2021 | Dec. 31, 2020USD ($) |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 90,771 | $ 88,276 | ||||
Operating lease right-of-use assets | $ 4,944 | 5,457 | ||||
Affiliated Entity | CVM Practice | ||||||
Business Acquisition [Line Items] | ||||||
Number of warehouses | segment | 2 | |||||
Operating Lease, Payments | $ 16 | $ 15 | ||||
Operating lease right-of-use assets | 200 | 200 | ||||
Operating Lease, Liability | 200 | $ 200 | ||||
Lacuna Diagnostics, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting interest acquired | 100.00% | |||||
Cash consideration transferred | $ 4,255 | |||||
Business combination, indemnification liabilities, holdback | $ 400 | |||||
Business combination, indemnification liabilities, holdback release period | 18 months | |||||
Business combination, contingent consideration, liability | $ 2,000 | |||||
Business acquisition, initial earn out period | 12 months | |||||
Business combination, contingent consideration arrangements, liability performance reduction | $ 1,000 | |||||
Fair value of contingent consideration | 1,700 | |||||
Goodwill | 3,900 | |||||
Purchase price | 5,955 | |||||
Lacuna Diagnostics, Inc. | North America | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 3,900 | |||||
Scil Animal Care Company | ||||||
Business Acquisition [Line Items] | ||||||
Percentage of voting interest acquired | 100.00% | |||||
Goodwill | $ 46,000 | |||||
Purchase price | 110,290 | |||||
Unrecognized tax benefits, decrease resulting from acquisition | $ 1,100 | |||||
Scil Animal Care Company | North America | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 8,700 | |||||
Scil Animal Care Company | International | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 37,300 |
ACQUISITION AND RELATED PARTY_4
ACQUISITION AND RELATED PARTY ITEMS - Fair Value of Assets and Liabilities at Lacuna Acquisition Date (Details) - USD ($) $ in Thousands | Feb. 01, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | |||
Goodwill | $ 90,771 | $ 88,276 | |
Lacuna Diagnostics, Inc. | |||
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination [Abstract] | |||
Cash consideration transferred | $ 4,255 | ||
Fair value of contingent consideration | 1,700 | ||
Total purchase consideration | 5,955 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | |||
Cash and cash equivalents | 3 | ||
Accounts receivable | 170 | ||
Property and equipment, net | 530 | ||
Other intangible assets, net | 1,185 | ||
Deferred tax asset | 167 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets, Total | 2,055 | ||
Goodwill | 3,900 | ||
Total fair value of consideration transferred | $ 5,955 |
ACQUISITION AND RELATED PARTY_5
ACQUISITION AND RELATED PARTY ITEMS - Intangible Assets Acquired, Amortization Method (Details) - USD ($) $ in Thousands | Feb. 01, 2021 | Apr. 01, 2020 | Jun. 30, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Gross Carrying Amount | $ 64,191 | $ 64,229 | ||
Lacuna Diagnostics, Inc. | ||||
Business Acquisition [Line Items] | ||||
Gross Carrying Amount | $ 1,185 | |||
Scil Animal Care Company | ||||
Business Acquisition [Line Items] | ||||
Gross Carrying Amount | $ 44,517 | |||
Scil Animal Care Company | Trade name | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | $ 7,556 | |||
Developed technology | Lacuna Diagnostics, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 3 years | |||
Finite-lived intangible assets acquired | $ 1,000 | |||
Customer relationships | Lacuna Diagnostics, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 6 months | |||
Finite-lived intangible assets acquired | $ 150 | |||
Customer relationships | Scil Animal Care Company | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 10 years | |||
Finite-lived intangible assets acquired | $ 36,272 | |||
Trade name | Lacuna Diagnostics, Inc. | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 11 months | |||
Finite-lived intangible assets acquired | $ 35 | |||
Trade name | Scil Animal Care Company | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 9 months 18 days | |||
Finite-lived intangible assets acquired | $ 66 | |||
Internally developed software | Scil Animal Care Company | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 7 years | |||
Finite-lived intangible assets acquired | $ 353 | |||
Backlog | Scil Animal Care Company | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 months 12 days | |||
Finite-lived intangible assets acquired | $ 210 | |||
Non-compete agreements | Scil Animal Care Company | ||||
Business Acquisition [Line Items] | ||||
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life | 2 years | |||
Finite-lived intangible assets acquired | $ 60 |
ACQUISITION AND RELATED PARTY_6
ACQUISITION AND RELATED PARTY ITEMS - Fair Values of Assets and Liabilties at Scil Acquisition Date (Details) - USD ($) $ in Thousands | Apr. 01, 2020 | Jun. 30, 2021 | Dec. 31, 2020 |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | |||
Goodwill | $ 90,771 | $ 88,276 | |
Scil Animal Care Company | |||
Business Combination, Consideration Transferred, Including Equity Interest in Acquiree Held Prior to Combination [Abstract] | |||
Business combination, consideration transferred | $ 110,290 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | |||
Cash and cash equivalents | 5,889 | ||
Accounts receivable | 10,707 | ||
Inventories | 11,278 | ||
Net investment in lease, current | 311 | ||
Prepaid expenses | 1,692 | ||
Other current assets | 1,338 | ||
Property and equipment, net | 19,320 | ||
Operating lease right-of-use assets | 877 | ||
Other intangible assets, net | 44,517 | ||
Net investment in leases, non-current | 1,027 | ||
Investments in unconsolidated affiliates | 55 | ||
Other non-current assets | 291 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets, Total | 97,302 | ||
Accounts payable | 8,221 | ||
Accrued liabilities | 7,067 | ||
Operating lease liabilities, current | 356 | ||
Deferred revenue, current, and other | 3,220 | ||
Deferred revenue, non-current | 94 | ||
Operating lease liabilities, non-current | 529 | ||
Deferred revenue, non-current | 13,249 | ||
Other liabilities | 276 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net, Total | 64,290 | ||
Goodwill | 46,000 | ||
Total fair value of consideration transferred | $ 110,290 |
ACQUISITION AND RELATED PARTY_7
ACQUISITION AND RELATED PARTY ITEMS - Unaudited Pro Forma Financial Information (Details) - Scil Animal Care Company $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Business Acquisition [Line Items] | |
Revenue, net | $ 94,917 |
Net (loss) income before equity in losses of unconsolidated affiliates | (12,512) |
Net (loss) income attributable to Heska Corporation | $ (12,461) |
INVESTMENTS IN UNCONSOLIDATED_3
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Details) - USD ($) $ in Thousands | Sep. 24, 2018 | Aug. 08, 2018 | Jun. 30, 2021 | Dec. 31, 2020 |
Schedule of Equity Method Investments [Line Items] | ||||
Equity method investment | $ 3,157 | $ 3,686 | ||
Non-marketable equity security investment | 3,018 | 3,018 | ||
Investments | $ 6,175 | $ 6,704 | ||
General Fluidics Corporation | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Supply commitment term | 15 years | |||
General Fluidics Corporation | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Payments to acquire equity method investments | $ 5,100 | |||
Ownership percentage | 29.10% | |||
MBio Diagnostics, Inc. | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Payments to acquire non-marketable securities | $ 3,000 | |||
Intangible asset acquired | $ 1,000 | |||
Intangible assets acquired, useful life | 20 years | |||
Contingent consideration on milestones | $ 10,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2021 | |
Income Tax Contingency [Line Items] | |||||
Income before income taxes | $ (1,275) | $ (6,599) | $ (784) | $ (13,416) | |
Total income tax benefit | (1,051) | (212) | (2,617) | (1,720) | |
Cash paid for income taxes | 700 | 340 | 1,200 | 347 | |
Excess tax benefits related to employee share-based compensation | 600 | $ 200 | 1,000 | $ 500 | |
Deferred tax assets, gross | 9,400 | 9,400 | |||
Deferred tax assets, valuation allowance | $ 1,200 | $ 1,200 | |||
Forecast | |||||
Income Tax Contingency [Line Items] | |||||
Deferred tax assets, valuation allowance | $ 3,200 |
LEASES - Operating and Financin
LEASES - Operating and Financing Lease Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Operating lease right-of-use assets | $ 4,944 | $ 5,457 |
Property and equipment, net | 1,814 | 1,907 |
Total Leased Assets | 6,758 | 7,364 |
Operating lease liabilities, current | 2,035 | 2,087 |
Operating lease liabilities, non-current | 3,404 | 3,858 |
Deferred revenue, current, and other | 235 | 295 |
Other liabilities | 278 | 261 |
Total Lease Liabilities | $ 5,952 | $ 6,501 |
LEASES - Sales-type Leases and
LEASES - Sales-type Leases and Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Leases [Abstract] | ||||
Sales-type lease revenue | $ 3,414 | $ 1,298 | $ 5,157 | $ 2,587 |
Sales-type lease cost of revenue | 2,717 | 908 | 3,977 | 1,776 |
Profit recognized at commencement for sales-type leases | 697 | 390 | 1,180 | 811 |
Operating lease income | $ 543 | $ 430 | $ 1,150 | $ 430 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Earnings Per Share [Abstract] | ||||
Net (loss) income attributable to Heska Corporation | $ (567) | $ (6,357) | $ 1,304 | $ (11,645) |
Basic weighted-average common shares outstanding (in shares) | 10,167 | 8,776 | 9,825 | 8,165 |
Dilutive effect of stock options and restricted stock awards | 0 | 0 | 364 | 0 |
Diluted weighted-average common shares outstanding | 10,167 | 8,776 | 10,189 | 8,165 |
Basic (loss) earnings per share attributable to Heska Corporation (in dollars per share) | $ (0.06) | $ (0.72) | $ 0.13 | $ (1.43) |
Diluted (loss) earnings per share attributable to Heska Corporation (in dollars per share) | $ (0.06) | $ (0.72) | $ 0.13 | $ (1.43) |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options and restricted units excluded from computation of earnings per share | 1,370 | 687 | 1,002 | 1,240 |
Convertible Preferred Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options and restricted units excluded from computation of earnings per share | 0 | 332 | 0 | 920 |
Senior Convertible Note | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock options and restricted units excluded from computation of earnings per share | 996 | 0 | 996 | 21 |
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 | 374 | 355 | 6 | 299 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | |||||
Carrying amount, December 31, 2020 | $ 88,276 | ||||
Goodwill attributable to acquisitions (subject to change) | 3,900 | ||||
Foreign currency adjustments | (1,405) | ||||
Carrying amount, June 30, 2021 | $ 90,771 | 90,771 | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Accumulated amortization | (11,293) | (11,293) | $ (8,237) | ||
Net carrying amount | 44,787 | 44,787 | |||
Indefinite-lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | 8,111 | 8,111 | |||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Gross Carrying Amount | 64,191 | 64,191 | 64,229 | ||
Accumulated amortization | (11,293) | (11,293) | (8,237) | ||
Net intangible assets | 52,898 | 52,898 | 55,992 | ||
Amortization expense | 1,652 | $ 1,624 | $ 3,056 | $ 2,053 | |
Remaining weighted average amortization period for intangible assets | 8 years 1 month 6 days | ||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
2021 (remaining) | 3,116 | $ 3,116 | |||
2022 | 6,111 | 6,111 | |||
2023 | 5,749 | 5,749 | |||
2024 | 5,306 | 5,306 | |||
2025 | 5,248 | 5,248 | |||
Thereafter | 19,257 | 19,257 | |||
Net carrying amount | 44,787 | 44,787 | |||
Indefinite-lived intangible assets | 8,111 | 8,111 | |||
Net intangible assets | 52,898 | 52,898 | 55,992 | ||
Trade name | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | 8,111 | 8,111 | 8,374 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Indefinite-lived intangible assets | 8,111 | 8,111 | 8,374 | ||
Customer relationships and other | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross carrying amount | 46,196 | 46,196 | 46,989 | ||
Accumulated amortization | (8,878) | (8,878) | (6,436) | ||
Net carrying amount | 37,318 | 37,318 | 40,553 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Accumulated amortization | (8,878) | (8,878) | (6,436) | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Net carrying amount | 37,318 | 37,318 | 40,553 | ||
Developed technology | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross carrying amount | 9,654 | 9,654 | 8,669 | ||
Accumulated amortization | (2,278) | (2,278) | (1,696) | ||
Net carrying amount | 7,376 | 7,376 | 6,973 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Accumulated amortization | (2,278) | (2,278) | (1,696) | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Net carrying amount | 7,376 | 7,376 | 6,973 | ||
Trade name | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Gross carrying amount | 230 | 230 | 197 | ||
Accumulated amortization | (137) | (137) | (105) | ||
Net carrying amount | 93 | 93 | 92 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |||||
Accumulated amortization | (137) | (137) | (105) | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||
Net carrying amount | 93 | 93 | $ 92 | ||
Operating Segments | North America | |||||
Goodwill [Roll Forward] | |||||
Carrying amount, December 31, 2020 | 35,414 | ||||
Goodwill attributable to acquisitions (subject to change) | 3,900 | ||||
Foreign currency adjustments | 0 | ||||
Carrying amount, June 30, 2021 | 39,314 | 39,314 | |||
Operating Segments | International | |||||
Goodwill [Roll Forward] | |||||
Carrying amount, December 31, 2020 | 52,862 | ||||
Goodwill attributable to acquisitions (subject to change) | 0 | ||||
Foreign currency adjustments | (1,405) | ||||
Carrying amount, June 30, 2021 | $ 51,457 | $ 51,457 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | $ 74,378 | $ 74,378 | $ 73,290 | ||
Less accumulated depreciation | (40,082) | (40,082) | (37,748) | ||
Total property and equipment, net | 34,296 | 34,296 | 35,542 | ||
Depreciation and amortization | 1,600 | $ 1,700 | 3,500 | $ 2,700 | |
Land | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 2,520 | 2,520 | 2,590 | ||
Building | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 12,439 | 12,439 | 12,737 | ||
Machinery and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 41,407 | 41,407 | 40,411 | ||
Office furniture and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 2,120 | 2,120 | 2,047 | ||
Computer hardware and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 5,102 | 5,102 | 4,773 | ||
Leasehold and building improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 10,729 | 10,729 | 10,728 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 61 | $ 61 | 4 | ||
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 | ||||
Leased equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, gross | 14,900 | $ 14,900 | 13,600 | ||
Less accumulated depreciation | $ (5,100) | $ (5,100) | $ (4,700) |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 12,798 | $ 14,454 |
Work in process | 4,850 | 4,262 |
Finished goods | 23,556 | 21,321 |
Total inventory, net | $ 41,204 | $ 40,037 |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued payroll and employee benefits | $ 6,458 | $ 7,949 |
Accrued property taxes | 403 | 659 |
Accrued purchase orders | 2,298 | 1,549 |
Accrued taxes | 3,839 | 3,731 |
Other | 4,370 | 4,167 |
Total accrued liabilities | $ 17,368 | $ 18,055 |
Percentage of total current liabilities | 5.00% |
CAPITAL STOCK - STOCK OPTIONS A
CAPITAL STOCK - STOCK OPTIONS AND RESTRICTED STOCK (Details) | 6 Months Ended |
Jun. 30, 2021$ / sharesshares | |
Options/Awards/Units Granted | |
Stock options (in shares) | shares | 54,300 |
Weighted-Average Grant Date Fair Value (per option/award) | |
Stock options (in dollars per share) | $ / shares | $ 78.19 |
Restricted Stock | |
Options/Awards/Units Granted | |
Restricted stock awards (in shares) | shares | 203,369 |
Weighted-Average Grant Date Fair Value (per option/award) | |
Restricted stock awards (in dollars per share) | $ / shares | $ 196.48 |
Restricted Stock Units (RSUs) | |
Options/Awards/Units Granted | |
Restricted stock awards (in shares) | shares | 6,000 |
Weighted-Average Grant Date Fair Value (per option/award) | |
Restricted stock awards (in dollars per share) | $ / shares | $ 172.11 |
CAPITAL STOCK - ADDITIONAL INFO
CAPITAL STOCK - ADDITIONAL INFORMATION (Details) $ / shares in Units, $ in Millions | Mar. 05, 2021USD ($)$ / sharesshares |
Equity Offering, 2021 | |
Subsidiary, Sale of Stock [Line Items] | |
Sale of stock, number of shares issued in transaction (in shares) | shares | 940,860 |
Common stock, par value (in dollars per share) | $ 0.01 |
Sale of stock, price per share (in dollars per share) | $ 186 |
Sale of stock, consideration received on transaction | $ | $ 164.2 |
Over-Allotment Option | |
Subsidiary, Sale of Stock [Line Items] | |
Sale of stock, price per share (in dollars per share) | $ 186 |
Sale of stock, number of shares authorized (in shares) | shares | 141,129 |
Sale of stock, over-allotment option period | 30 days |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | $ 287,053 |
Ending balance | 433,766 |
Total Accumulated Other Comprehensive Income | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | 14,169 |
Current period other comprehensive loss | (3,531) |
Ending balance | 10,638 |
Pension Adjustments | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | (386) |
Current period other comprehensive loss | 0 |
Ending balance | (386) |
Foreign Currency Translation1 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | 5,872 |
Current period other comprehensive loss | (1,206) |
Ending balance | 4,666 |
Foreign Currency Gain (Loss) on Intra-Entity Transactions2 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Beginning balance | 8,683 |
Current period other comprehensive loss | (2,325) |
Ending balance | $ 6,358 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Millions | Jun. 30, 2021 | Dec. 31, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Warranty reserve | $ 0.5 | $ 0.5 |
Unconditional annual minimum inventory purchases | $ 48.1 |
INTEREST AND OTHER EXPENSE, N_3
INTEREST AND OTHER EXPENSE, NET (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Other Income and Expenses [Abstract] | ||||
Interest income | $ (467) | $ (120) | $ (856) | $ (353) |
Interest expense | 922 | 2,333 | 1,842 | 4,679 |
Other, net | 126 | (68) | 120 | 17 |
Total interest and other expense, net | 581 | 2,145 | 1,106 | 4,343 |
Cash paid for interest | $ 5 | $ 4 | $ 1,600 | $ 1,600 |
CONVERTIBLE NOTES AND CREDIT _3
CONVERTIBLE NOTES AND CREDIT FACILITY - Convertible Notes Narrative (Details) | Sep. 17, 2019USD ($) | Jun. 30, 2021USD ($)$ / shares | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($)$ / shares | Jun. 30, 2020USD ($) | Jan. 01, 2021 | Dec. 31, 2020USD ($) |
Debt Instrument [Line Items] | |||||||
Debt instrument, convertible, remaining discount amortization period | 63 months | ||||||
Share price | $ / shares | $ 229.73 | $ 229.73 | |||||
Senior Convertible Note | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from convertible debt | $ 83,700,000 | ||||||
Debt instrument, convertible, conversion ratio | 0.0115434 | ||||||
Debt instrument, convertible, if-converted value in excess of principal | $ 142,500,000 | ||||||
Convertible Debt | Senior Convertible Note | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 86,250,000 | $ 86,250,000 | 86,250,000 | $ 86,250,000 | |||
Debt instrument, interest rate, stated percentage | 3.75% | ||||||
Interest expense, debt | 912,000 | $ 2,333,000 | 1,822,000 | $ 4,666,000 | |||
Convertible Debt | Senior Convertible Note | Accounting Standards Update 2020-06 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate, effective percentage | 4.35% | ||||||
Fair Value, Inputs, Level 2 | Senior Convertible Note | |||||||
Debt Instrument [Line Items] | |||||||
Convertible debt, fair value | $ 235,400,000 | $ 235,400,000 | $ 156,900,000 | ||||
Initial Purchasers | Convertible Debt | Senior Convertible Note | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 11,250,000 |
CONVERTIBLE NOTES AND CREDIT _4
CONVERTIBLE NOTES AND CREDIT FACILITY - Carrying Amount of Debt (Details) - Convertible Debt - Senior Convertible Note - USD ($) | Jun. 30, 2021 | Dec. 31, 2020 | Sep. 17, 2019 |
Debt Instrument [Line Items] | |||
Aggregate principal amount | $ 86,250,000 | $ 86,250,000 | $ 86,250,000 |
Unamortized debt discount | (2,426,000) | (37,791,000) | |
Net carrying amount | $ 83,824,000 | $ 48,459,000 |
CONVERTIBLE NOTES AND CREDIT _5
CONVERTIBLE NOTES AND CREDIT FACILITY - Interest Expense (Details) - Convertible Debt - Senior Convertible Note - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Debt Instrument [Line Items] | ||||
Interest expense related to contractual coupon interest | $ 809 | $ 809 | $ 1,617 | $ 1,617 |
Interest expense related to amortization of the debt discount | 103 | 1,524 | 205 | 3,049 |
Interest expense, debt | $ 912 | $ 2,333 | $ 1,822 | $ 4,666 |
NOTE RECEIVABLES - Additional I
NOTE RECEIVABLES - Additional Information (Details) - USD ($) | Feb. 01, 2021 | Dec. 09, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||||
Principal amount | $ 9,000,000 | $ 0 | |||
Equity Method Investee | Convertible Note Receivable | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 6,650,000 | ||||
Related party transaction, rate | 3.00% | ||||
Related party transaction, effective interest rate | 8.69% | ||||
Embedded derivative, fair value of embedded derivative asset | 1,000,000 | $ 1,000,000 | |||
Accounts and financing receivable, allowance for credit loss | 33,000 | ||||
Equity Method Investee | Notes Receivable | |||||
Debt Instrument [Line Items] | |||||
Principal amount | $ 9,000,000 | ||||
Related party transaction, rate | 10.00% | ||||
Related party transaction, effective interest rate | 10.99% | ||||
Embedded derivative, fair value of embedded derivative asset | $ 300,000 | 400,000 | |||
Accounts and financing receivable, allowance for credit loss | $ 300,000 |
NOTE RECEIVABLES (Details)
NOTE RECEIVABLES (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Net carrying amount | $ 6,776 | $ 6,671 |
Equity Method Investee | Convertible Note Receivable | ||
Debt Instrument [Line Items] | ||
Principal amount | 6,650 | 6,650 |
Unamortized discount | (828) | (977) |
Net carrying amount | 5,822 | 5,673 |
Equity Method Investee | Notes Receivable | ||
Debt Instrument [Line Items] | ||
Principal amount | 9,000 | 0 |
Unamortized discount | (283) | 0 |
Net carrying amount | $ 8,717 | $ 0 |
SEGMENT REPORTING - NARRATIVE (
SEGMENT REPORTING - NARRATIVE (Details) | 6 Months Ended |
Jun. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total revenue | $ 64,928 | $ 45,712 | $ 125,431 | $ 76,366 | |
Cost of revenue | 37,656 | 27,847 | 72,689 | 45,053 | |
Gross profit | $ 27,272 | $ 17,865 | $ 52,742 | $ 31,313 | |
Gross margin | 42.00% | 39.00% | 42.00% | 41.00% | |
Operating income (loss) | $ (694) | $ (4,454) | $ 322 | $ (9,073) | |
Total assets | 579,366 | 579,366 | $ 399,839 | ||
North America | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total revenue | 40,533 | 28,982 | 77,806 | 56,631 | |
Cost of revenue | 21,111 | 16,222 | 40,875 | 31,368 | |
Gross profit | $ 19,422 | $ 12,760 | $ 36,931 | $ 25,263 | |
Gross margin | 48.00% | 44.00% | 47.00% | 45.00% | |
Operating income (loss) | $ 130 | $ (3,067) | $ 1,160 | $ (7,161) | |
Total assets | 418,842 | 418,842 | 238,550 | ||
International | |||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||
Total revenue | 24,395 | 16,730 | 47,625 | 19,735 | |
Cost of revenue | 16,545 | 11,625 | 31,814 | 13,685 | |
Gross profit | $ 7,850 | $ 5,105 | $ 15,811 | $ 6,050 | |
Gross margin | 32.00% | 31.00% | 33.00% | 31.00% | |
Operating income (loss) | $ (824) | $ (1,387) | $ (838) | $ (1,912) | |
Total assets | $ 160,524 | $ 160,524 | $ 161,289 |
Subsequent Events (Details)
Subsequent Events (Details) - BiEsseA s.r.1. - Subsequent Event $ in Millions | Jul. 01, 2021USD ($) |
Subsequent Event [Line Items] | |
Business combination, consideration transferred | $ 4.7 |
Fair value of contingent consideration | $ 3 |
Business acquisition, initial earn out period | 3 years |