HSKA - Earnings call transcript Q4 2021 | Heska Corp. (Restricted Voting)

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Operator

Good day, ladies and gentlemen, and welcome to the Heska Corporation Fourth Quarter and Full Year 2021 Earnings Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Jon Aagaard, Head of Investor Relations. Please go ahead.

Jon Aagaard

Thank you, Keith, and good morning, everyone. earnings XXXX. the Corporation’s full quarter Heska of year to call fourth for and Welcome

known and reminder, to conference certain Heska. after Heska results such events or a Heska’s reflect and or or Accepted financial by any measures A also Grassman, which by time Also Head intention of statements. the and such these this As Heska’s forward-looking our provided today’s most we XXXX course Chief and of they provide Jon the to you I morning, the found financial be speak before Accounting Investor Generally our Officer. the President; results, Investor or GAAP reported, Aagaard, uncertainties, beliefs non-GAAP and implied discussing growth in that mention We based unknown finally, Executive events was will SEC those open as of and to please our to of to caution the discussing to Principles expectations call In otherwise not we call, detailed call period the growth that website. am Wilson are over Chief housekeeping. writing differences questions. to I results from which Officer made. unless Corporation’s made, Relations Heska’s and update will XXXX, future and in Kevin Financial before turn prepared at to Relations compared have need and with then And would or call, quarter remind company. to and expressed I different current cause of forward-looking the the results be note, our references statements us accordance time Ms. the occur during the this Kevin, could GAAP. are And performance any and and and make earnings materially and Factors fourth statement and call involve equivalent I noted. like is that any I details risks measures with refer Wilson, surrounding directly opinions this financial being statements of Catherine and actual in contribute reconciliation comparable visiting the Grassman annual future such you the to measures certain recorded. filings to Mr. to forward-looking two elsewhere. on forward-looking quarterly morning’s cause Any that will to year does to turn performance will Prior obligation only in may Kevin, we specifically that this all over with be statements during Heska full is intend regarding we forward-looking items earnings to may reviewing in release, want of section disclaim not are release, statements

my that strategy; the on Wilson, Heska consolidated on call today’s Kevin to May reported find the is host performance, event the including its Details Wednesday, be now launches, XX multi-year will And recent it to pipeline CEO the pleasure Analyst and surrounding please First, company’s being acquisitions outlook. Heska’s President. presentation Resources Annual turn said, to earnings and new Investor Investor Day XXXX second, Investor With product website. product Relations the to an supplement and results, to discuss page, Kevin? and new Heska’s company’s forthcoming. growth plans over

Kevin Wilson

Hey, thanks, Jon, and good morning, everyone.

and is year. company this far it I better next time keep ago. to helpful. you’ll try our than you this than our year a we any thing things at this for is The review this time find to far, history, to the initiative participants and think, is expect release, encourage other were to morning. in to substantially concise Heska simple. every release, summary key metric like I’d stronger we begin, Nearly to strategic I Similar say Before a morning’s same I’ll morning

market Our International up outlook strong POC North months XX.X% subscriptions strong fall solid Consumables the for were outlook sales global International North over as was sales contract third sales Active performance. of quarter CSV a for rock XXXX expected grew subscription year, Catherine XX.X%. value Consumables was for XX%, is up we cover subscription strong POC subscriptions XX% year, captured XXXX share. XX.X% was which our retention minimum growth. or and Lab grew up growth specifics XX% very for rose year greater sales XX.X%. record grew sales were XX.X%, the the the and the in under will subscriptions of quarter. Heska double grew great America and America XX%, had Lab a and detail.

to is remaining have a own good shape. take our thoughts I advance in observations the About broadly highlight my Pet the I’ll market. of that healthcare So today. and time of in few Q&A

We getting are pet in continue be and that earnings I’ve to super diagnostics. I increase rather will days unsettled in no in middle are space, pandemic. and their before healthcare. there’s cycle can following be middle will great the families be strong, say more the the utilization and position Demand great was great XX in from pet I’d the years to healthcare focus taken pet valuable the Since times place long solid. of after that that early societal a decade’s remain on during COVID-XX of and adjustments, Net

play. stay-at-home a not We’re

work not to return a play. We’re

a not play. reflation We’re

solid down, think probably of necessary that increase in than facts momentum. and XXXX an for That diagnostics to good backdrop XXXX in would encouraging exposure. specifically, is Heska been step-up XX% Up XX% and Heska stocks little of simply before just due more particular for the normalize industry’s seesawed healthcare narratives the pet search of in play. we a held rates, a consistently We’re search have and and in for denominator range. in growth or to which the rates with diagnostics strong the growth mid-cycle already has shareholders that’s We for to

We on with XX% tap growth expect ranges participate within for XXXX. up to to consolidated these revenue

diagnostics, subscriptions. active grow complete and expect optics XX%, of We will realigned. subscriptions to our and progressing major XX%. the minimum a lower accounting is beyond, subscription for base accounting to this pressure show conversion dampen as has in margin see international in XXXX when Heska same to good decades what XX%, entire higher margins The international utilization, consolidated and performance, times we our year-over-year. will costs, This be for and intend get dollars get I expected, began to XXXX products investments, XXXX. better rationalization international trade alongside contracts benefits period in products trim subscribers or a international, and moderated upgrade grow to which we to the value product are sales largely facts what some subscription launches first things and completed XXXX utilization subscriptions in will higher margin. been convert to plan and and higher unified and integrations, Heska’s in stack,. the our exchange of to under grow XXXX XXXX under grow better-performing installed largely gross months for do well. levels our portfolio conversion in products, multi-year Since our at strategy. the Veterinarians will and About international and higher

these of platforms as through long subscriptions, in international things solid long-term the solid and are transition, As got utilization, margins, with reasonable we placements product good we expandable retention get long-term roadmaps XXXX on efforts. we our growing thrilled, highly

we we these As expansion, things ongoing to enter and product standardization. rationalization in continue see success opportunity XXXX, and from

circa see successes customer and subscription to minimum average CSV faster international in We path than also is North similar a North conversion, a goals growth in at XXXX when our continue pursued clear America. in we rate that monthly America, to

meet to grow to the opportunities bundled want. in goals Our quickly partnering, current that they in early our XXXX. our internal pre-revenue collaborative needs strategy. and invested customers’ XXXX this can heavily future in of suite revenue morning’s and and XXXX convert then for services teams in to About innovation, innovation, that financial and We’ve These beginning we licensing are products technologies are and and investment full release. for this detailed investments effort acquiring

created in of rapid as Our come to this become informatics done and of plan. informatics. release in lab telemedicine and X, acquisition our that exclusive now is Initial Element to designed XX-year a in to leadership we management for diagnostics is Heska full software leg and anticipate informatics a testing is accomplished and a markets. has with financial bit ago, wonderful. AIM, or executing has of of quarter at a that strategically intelligence software Heska and This Heska central forward care. I one I can VetZ, enthusiasm team fourth America we’re leap has the in and practice our meaningful Today remarkable a imaging three Heska platform feedback Heska one microscopy in AIM to in in more goal. leadership the veterinarians XXXX. Germany financially by point our of serve key position. VetZ imaging tell devices is most and only commercial began stool to we anyone industry’s care is anyone On diagnostics internal the team bundled been there to of What practice leading our contribution XX XXXX. innovations that advanced and great, XXX needs in What is and for our in And best all accomplished subscription has in We exciting and is for Element offerings urine years and and unified closed is January fecal ahead articulate installed information this diagnostics, from Element has over this plan Heska’s leader AIM of unmatched North point of two lab reference Xx artificial automated industry. our services the wanting continue as

pivoted. haven’t We

scale improve said build win and through in would we We haven’t our coveted through growth. From at this XXXX, revenue wavered. we we XXXX, would it XXXX, we XXXX have. profitably, said win And and build XXXX value XXXX improve have reinvention we will. market From relevance intrinsic through did. health, From and we would our we we said we

Our balance sheet shape. great in is

the in never been we position markets has stronger. serve Our

time than Our in teams our are history. better at any

are end Our markets the great doing diagnostics are them and better. even doing within markets

margins Our are sales left an our growing, sales are multi-year our entire goal. over year of we’ve growing,

a of we’ve And serve. lines for doubled have the center doubled at subscriptions revenue puts business the We’ve products customers We the that very trusted decades. veterinarians addressable we and business the we offer. model us that geographies and

And our sometimes our we stack a now bumpy, new of invested assembled win. creation, a many multiple value We cash. Work. We’ve while always to business overall XXXX and full and grow leading subscriptions have busy on It’s a of bigger full are geographies with it. to slice our entered in dollars innovation millions generating products simple, And and capabilities focus geographic pie full of expanding markets in scaling while getting and directly we hard. also the little super operational across

we’re We’re to and it investors we do customers XXXX honored and and glad since us thankful our have that work. as supported do

before call and to to the over quarter move going I’m Now into go time, our Q&A to Catherine? detail the turn ahead Catherine we

Catherine Grassman

everyone. and Thanks, morning, good Kevin,

XXXX. quarter outlook pleased and report performance As the fourth for will the we take XXXX. along I noted, you with results are Kevin of our strong to full through year financial reported for

to revenue our year of guidance, XXXX, in scil acquisition growth million in entire now the major for product our with double-digit XX.X% in $XXX.X full the groups, Our and representing addition in to year. grew included line

million, we lease as quarter both of Instruments program fourth launch Our in commercial in began over our $XX to in revenue POC as with and the a launch just our continued placements of Europe. of Element key AIM grew driver Lab successful capital America North Reset segments our

as grew contributed and our grew of the resulting price segment favorability XX.X% Increased year Imaging growth continued and fourth and full America for the diagnostics, significant for X.X% the as the and demand XX.X% in fourth menu quarter. XX.X% year well to Consumables, all expanded strong POC in offerings, revenue quarter, XX.X% the year. North subscriptions for health full animal for POC Our respectively.

the saw allergy drove increased with year. within for our growth PVD for and of Tri-Heart both manufacturer, PVD also contract We products, XX.X% – which demand

Our we International basis results as the XXXX. scil. outlook if driver of quarter the subscription XX%, international for by a year segment key a revenue impact of core to of execute of compared grew Exceeding full in strategic exclude Reset XX%, you growth reported acquisition XX.X% in and tenet XXXX continue an the of to our our transition on our program additional scil we’re on Europe,

margin gross the gross of in XX.X%, imaging International North international. XX%. Mix XX.X% America and both to margin in America XX with margin XXX key America basis quarter margin to began XX.X%. to year to North quarter in the year XX consumable AIM drivers introduce Element the fourth approximately growth. basis experienced higher approximately consolidated in XX North quarter lower Our points were basis and the increased as consolidated sales points full seen expanded of increased placements. the approximately compressed for points we gross year to Fourth gross with gross margin of XX.X%. expansion both approximately

Adjusted key year $XX.X our to year. cents. by offsetting was improvement for opportunity EPS this gross revenue margin full full compensation POC improvement million the while EBITDA which margin of $X.XX in points, an by margin. operating our of sales than short sales, greater contributed was imaging prior long-term was full expense. Total full the year of for the and gains positive impact XX.X%, margin of adjusted and the also of the has Non-GAAP year expenses quarter mentioned, favorably XX%. with as better the improvement previously the loss a synergy operating $X.XX, exceeding EBITDA for leverage for and a Fourth mix – and leveraged was performance. negative EPS Product been first see costs. quarter scil year outlook the operating over was gross X.X%, to impacted year loss XXXX driven Higher an a and and continue ownership year the increased Partially our and margin of the We expanded full basis XXX $X.XX was acquisition. the the well scil as one-time lower for as Consumables, $X.XX was for higher

end Our of to the year. is cash with balance strong sheet million $XXX approximately

During generated capital in approximately $XX million cash we other investing the in acquisitions flow in partnerships. year, we and growth deployed and free about $X million

outlook for financial Now XXXX. our for

revenue million, the to consolidated within constant $XXX expect $XXX of of growth reported to XX%. We reflects range XX% XX% to which and XX% a growth currency million of

exceptional all XXX demand, placement of range to million of successful fundamentals favorable growing relating completed and informatics, a VetZ subscription of to now base Element for menu, $XXX imaging year on of estimating includes January million. inclusive care our we’re range our Coming analyzers resulting XX%, AIM million point guide Our our continuation $XX X. $XX gains, off point imaging, of for underlying in to an price million care of lab a approximately expanding $XXX acquisition placements, of

we a product revenue and see on about groups expect will consistent We of schedule OVP and year. levels. PVD to Based placement our XXXX the second minute, speak the sales AIM in half relatively I in support, current investment remain with Element in our acceleration

to of approximately total revenue, to total of lab XX% estimated care in XX% of lab estimated America includes an our of XX% an point rate which X%. segment approximately North consumable comprise includes International revenue of of point growth The rate XX%. growth expect consumable care We remaining

as for rate in customers of consumable focus a longer-term transition, continuation exchange impacts in will Subscription and which the we growth the near-term XXXX existing Our on Reset International segment be price focus economics.

basis We gross XXX between points our expect to expand to basis margin XXX points.

the in XXXX, execute performance to investment business strategic revenue on plan. to of order is our multi-year shared of in outlook our ahead our November required While is in continue

building and and commercialize support development sales, corporate as key existing products, of support and functions of out ongoing building around centered legal. capabilities promotion to in be research future efforts will investments and such IT further and Our accounting

expense XX%. XXXX million. to million, million, to Further, $X of depreciation interest compensation margin expectation exceed of expect is $XX and $XX EBITDA approximately of Our $XX million about amortization adjusted continue expense we expense stock to approximately

Our and could is additional impacted benefits. XX%, at executive which to excess limitations annual be effective by further X% tax tax rate compensation estimated

be expense to tax in expect position. a We

to flow as questions. XXXX, the Operator? for open we With of in to generation expected be would we your cash in is $XX to in to nearly growth range part the the of million. $X Our have million capital date, that, acquisition. VetZ And deployed $XX million like call free

Operator

[Operator you. Thank Instructions] Please take first from We’ll question with go our Chris ahead. JPMorgan. Schott

Unidentified Analyst

results taking Hi, for update. this much and so is for the Katarina Thank congratulations our you on [ph] actually on from JPMorgan Chris. and questions

And so is growth point the question first XXXX. of care for national the on in

or piece But when volume about And then Of obviously, half you’re headwinds. you’re first you’re going thinking when normalized is underlying growth that part seeing So talk the seeing to probably the maybe growth conversions Consumables see elaborate that Lab the the Point on we’re question as customer the Care the can a trends on conversions about Growth. second you business? that perhaps of half versus appreciate customer of more still America how North these And number? second for

think you’ve color Can growth. some I much AIM Element to so there? XX% So how rough you XX% guided provide Thank contribution you around much. isn’t to

Kevin Wilson

do that, to me Catherine, want do you do you to take or want it?

Catherine Grassman

go to can order. I’m reverse start. I in going

So to the Actually, Europe. the first first relating Catarina, reiterate your question. volume to I question need help maybe in might

We are seeing increased volume.

price some Europe. we in So these base see in volume increases contracts, long-term customer our are do but exchange and trading definitely for across we

for phase which to standpoint. AIM, is As a half points based within about finally, the the the third year of on North in the far range. growth rate our American the was slower question that expectation consumable of from believe percentage yield target half the Element would placement, I transition the contribution and X into rate growth first the a then into comparative have And cadence as second expectation, a right

Unidentified Analyst

so you thank much. Great,

Kevin Wilson

You’re welcome.

Operator

David our Please With take next Sandler. We’ll go question ahead. from Piper Westenberg

David Westenberg

Hi, good thank on Again, taking for you congrats quarter. the the question.

growth. just that in is you to the acceleration go not being there’s looks – overall about it the imaging to from imply the reported it’s indeed If growth to think So fee X% imaging like that XX%, acceleration the does XX% heard Element along confirm, AIM, growth only I an rate. an I of VetZ that other. previous with the still And is question there’s say it in in and and just

it I maybe Because missing there also anything is? number confirm you I’m growth massive that’s confirm really want to just just and – and wasn’t? inorganic can Are there So good it? maybe really, a is seems in pushing like step-up this there not overall,

Kevin Wilson

I’ll Yeah, a certainly Catherine, then XXXX. may start and On had more fantastic have Imaging, detail. imaging

it’s We with are think market consistent how it. sees combining and the I

combining are a one and of huge We such in But that imaging of and won’t bucket. this think software – strong in XXXX. I off won’t number informatics imaging awful into imaging sense. an a And have have of lot informatics a itself, year step-up makes

for from remind inorganic. that’s name just of There I a and contributing terms people, [ph] I revenue, reading I that most lot really driving there’s you’re a awful a LM there, And think right? that points most of an we’ve don’t inorganic company. So done don’t would small consumables I of underlying think it. is strong in couple that the what’s think the aside so things growth are rate

We’re we’re good seeing utilization, we’re menu subscriber seeing good seeing retention. good launches,

number. into number pretty of that a think And just leading lot positive So that is factors it’s good I consistent.

posted consistent on referenced that If our visually, see XXXX pretty I Jon that at the that’s website, XXXX, actuals. deck that the and think with look you’ll you

strong we’re industry Catherine, what XX% back XX% of very get pre-pandemic. in would indicated, we that with XXXX underlying really when XXXX, So seeing rates, to get growth is did kind I right? really to we consistent

Catherine Grassman

Yep.

David Westenberg

Great. right. Yeah. All

Okay.

kind a XX% now or organic right? grower. yes mean, just is confirm see to I XXish-plus it or or no, So of

Kevin Wilson

All right.

I think it. way to right that’s the at look

David Westenberg

but news. is great And the on thing, am COGS. that’s investors thing little one to and there’s from getting a sorry just right, in All then bit on pick the pushback I one

faster they I than think materialize people to little expected the bit COGS are. a

upside that of materialize longer can might headwinds of you’re I the So if contracts, what that? that’s headwind. for drive Catherine, playing there mean, Europe this there couple of I the has next much some mean, is mix to on years in to be other headwinds. that in into guess taking kind maybe in I price about is faster? exchange terms in that were kind of I that But for of up know you any – specific talk of

Catherine Grassman

Yeah, I would headwinds facing… we’re say one the of

Kevin Wilson

margin Catherine, headwinds?

Catherine Grassman

is of for some are the the Yeah, kind of of the contracts in compressing right? a strengthening With our of European USD, one headwinds margin that’s we’re purchased into entity USD, XXXX our the bit. facing

some of some this one will that going the have would year take and out that little I though to throughout Europe the imaging and Europe work well. we board launches Rolling cells mix. yield imaging somewhat as a less bit with good and to gross do a that and largely roll That’s that So be little see out But to ultrasound heavy improvement the them. US. in that’s in should there. quattro of are tends branded the in – margin – to imaging underway time and that’s across within say our take of MRI the time,

me. a is So Kevin, hurdle there. a for for coming rate to nothing mind of it’s else us bit

Kevin Wilson

world margin way we skews. only while has show a I is think up think I we’re doing And job. inversions, the job products, incoming COGS the other done done just managing say think that’s gross thing And shipment subscription team of which would I the has a in more logistics, has certain great freight the we’re certain our kind Yeah, trimming of great while expensive. team our got advancing I have in does

knit, always There’s number. with and good there’s that a yeah, So one. I’m a always

good doing there. I pretty we’re a job think

David Westenberg

Gotcha.

maybe think just the when to X% do need X% promise this that stipulation of you CPI contracts, might in I but pull last that know in you excess one. have you for there Do of of And I contracts? you that? squeeze supply is is then increases maybe I there in the any a of if Okay. issues? your more, of that. think I can in is one happening? be Or Thank that that And the to in do you. to of kind levers about mitigate price way stop anticipate pricing in is Or supply And is is face I’ll some there think there. future just excess or if

Kevin Wilson

think, Our had foresight. contracts, pretty good I

So since XXXX, in have CPI we had a well. adjustment there as

so of the price. raise try veterinarians. prices ability as in keep getting possible end happening one we part price we’re push the as lot our missions. what’s And And think I have We of of that’s to terms to to world, in And not well. always for our low fine back. a But relative I are just price whole doing veterinarians user as of still think

nobody to as do X.X% in. inflation X%, chews take celebrate those of the we So price kind have But to ability increases. likes

try So but will appropriate. use not use we to ability. have it We that we it, is as

David Westenberg

you. quarter. Thank Congrats on the

Kevin Wilson

Thank you.

Operator

our go ahead. from Please Morgan Wright question take with We’ll Stanley. Erin next

Erin Wright

we product opportunity which standalone embedded the expect, assay in to to rapid as relates should what’s products, speak you it Can the I in and thanks. Great, guidance guess, rapids? heartworm XXXX

Kevin Wilson

year. know ramp, single I don’t us I but XXXX, reasonably we’ve broken markets slow, don’t I know we’re it in we market think and think But still I a for say, we’ve pretty millions say that to $XXX Catherine, that this clearly out, I million that a I in know breaking in. I’ll that small. $XXX a we’re don’t that it’s going out. compete million, that got it’s will the

David Westenberg

correct. that’s Yep,

and single it’s within our accurate, PVD So millions year, is category, this for Erin.

Erin Wright

international there? on Thanks. thinking about of pace international, Okay, how with approach lab we it. are lab? got versus Is should the inorganic internationally? thinking then And how organic be about there ref you the a reference with the initiative And deal pipeline the

Kevin Wilson

Yeah, I that’s a great think question.

So just one many there reference scale. mind labs in is keep I thing at will aren’t very

relationships if reputation, of would local small an services. it’s the organic expertise, on local language, terms in base small But in organic, very, providing local very So, to do base. in reason that the revenue community even be you revenue going gain local is, the very specialty there’s you

business So our be of think local ideally, with software our We partners be which expand small but business. point it to grow. expect we’d to that really rapids them to business find could able informatics we bundling our by from and strong, and care, very substantially

lab tuck-ins we grow a businesses at very the think if we’re needle a but of in lot. So assets lot can very move reference aren’t just scale inorganic of small, that that whole to we regard, doing from small would not whole small there

So I I think answered the question.

Erin Wright

that’s Thank Okay. Yep. No, helpful. you.

Kevin Wilson

Yeah.

Operator

take [Operator question go with next Elliot ahead. Please Instructions] Wilbur from We’ll our Raymond James.

Unidentified Analyst

is This for of you morning. questions. Elliot. our [ph] on Smith] behalf good Hi, taking Thank [Hannah

to America the visits clinic vet progression recovering. overall, year-to-date, of start, growth has slow have the First, year? sales this off the course this been North impact a does though been How of in over

Kevin Wilson

things on to filter so that struggle Yeah, some Individual, those is driver macro surveys, sometimes. any at the hospital struggle see it of or dampener one a visits diagnostics and I This me. just of quarter. as in in Kevin one-to-one Wilson. I kind sometimes to use look

for I and more a happens. don’t which And sure visit, trend as really a other probably is by online per whether of things. profits. more diagnostics it’s professional being focus concerned think behavior I’m us. saying disintermediated their and think Diagnostics I disintermediated how up. more and probably they’re that’s by there’s revenue think being causation I of So more they’re visit, and probably think, If pharmacy, way per I’m focused utilization direct that. controversial. a their they’re not a rambling I correlation about service, that’s doing is fast and utilization I veterinarians levels And that on streams

I’ve again, maybe more focus macro and it quarter-by-quarter of variation, based necessarily based more than visits really the a on they on me and way. friends little that I three they personally, competitors, long told a surveys. of awful that’s of you want the probably on So maybe bit they’re who have for sounds I’m just really a data. we kind dubious But on this, days. now, doing customers have little been say they’re decades veterinarian My lot have and kind when bigger tired, just But that busy of that me,

anecdotally. of So hear what that’s kind I

Unidentified Analyst

Okay, you’re What XXX in driver margin points basis that the for expecting? thank XXX to primary you that. gross basis is points of improvements the

Kevin Wilson

to? want you Catherine,

Catherine Grassman

Yes.

So that’s…

Kevin Wilson

take … that?

Catherine Grassman

continue Yeah. Yeah, the it’s pretty in us, margins. imaging we our high profile, throughout We that as for across improvement of total saw higher are category by revenue within the our all mix slightly of board branded margin that well as be product expect placement. with in this to consumables to part extremely those our as year then mix instrument as compressed subsidiaries, our equipment through we PVD will Europe occur scil well. launch and see Those

Kevin Wilson

a would thing, I strategically, we clinics, mind where theme because product us. you of this about thousands more globalized various is it’s that really one in standardization, But with to in analyzers product, when keep specific a important have investors should we getting invest because notice broad and global rationalization generally when of highest good. layer R&D, just standard And your platform, R&D converts standardized high the very we when is to a margin, you’ll can to thing test, are that very consumables be continue in margin which you’re the R&D, uptake on tests because and do, the that talk

they’re aren’t international future, our future, of there great. products interesting aren’t especially so the products we’ll the where times, not the in that platforms trim And less margins business, are of

hope do platform. out margin in trade and what long-term over be a and to hematology XXs-plus platform replace the something might then legacy might XX% we XX% XXs we might the we So subscription. chemistry, to we under a is that it platform trim, And with gross whichever immunoassay,

like just for I that’s does years. the to a So better focus look three more over building five business, what general just generally which next a is on what is trend it

while something that and a done margin of job years. is to sales, doing that gross continue grow last really hope couple to while was doing we’re that, that so the think I over has our we’re good grow I helpful. And

Unidentified Analyst

chain to delays. same any the supply issues $X.X Yes, throughout is out that effect much question for there that fourth that may. is these anticipated And the that Was in was and XXXX? if that indicated recaptured business carry Thank you lingering due by fully issues Last quarter? revenue from color. great. other impacted million you negatively quarter, was to I One last so

Kevin Wilson

indicate not that that the and think on business was we recaptured to tried I call.

pretty out ran I largely detail shape. on. supply think probably just more calendar. Catherine we think in has I chain of was good And

through difficulties well managed have I just we’ve like We But think pretty everybody it. else.

reported think fourth but the So characterization, felt in the pretty about Is that discrete number they two go-forward and to chain, the a good fair were that Catherine? it we were. in by quarter quarter third the and we be supply going I time call, on were the those things

Catherine Grassman

Yes, it is.

Unidentified Analyst

congrats you, Well, for both, quarter. answers thank the your and on

Kevin Wilson

you. Thank

Operator

next Haynor Alliance Ben our go ahead. take from Please [Operator Instructions] Partners. with We’ll Global question

Benjamin Haynor

morning, Can hear you Good okay? guys. me,

Kevin Wilson

Ben. morning, Good bet. You

Benjamin Haynor

morning. Great. Good

the all at sitting monthly time expectation got half international gap will that I that more of average of So But One, a quick of couple you’ve another ones just targeted. of North bit is. little about a for guess, at CSV and picture, big then kind broad I that’s close. where American me. the one know more – is the looking over figure kind that,

just that be? queue Just kind installed goes might and on, with larger and quickly occur? clinic? maybe of as about comfort installed how What that? a per seasoning Kevin the wondering Wilson’s occur all what more think you does on into Why that existing does that base it account as do How individual lab

Kevin Wilson

a great asked question. You

after kind we around We’re year. in at to point about of sitting you is first America, the when starting back if XXXX, started XXX. XXX internationally right And North subscriptions our go

good double there’s there. strong And So that. today, really, a really we’re comparison

in from to were double And so able America. between XXXX and XXXX, North we XXX

think the probably And that international, to the that we is faster. really same. grow possibility starting encouraged I have I’m point the

is way part, to growing really which growing a that of We wonderfully, alongside sort do themselves two veterinarians, are to is you’re you for is said long And decades time one a customer. to key and like job well. partner gain – going their the grow be for

getting And partnering period onto of time for subscription key. with you long so, simply is then them the them menu. and a just And grow

analyzers, testing. increases You add which new their

is that pet they see currently their well. have, America just bit behind Europe the narrowing we that You And utilization increases general, my of then in a add agree, terms little which visit, the just in and as testing. think, think I anyway, new to diagnostics per competitors, I analyzers North market tests

whole industry, our narrow including I for think that’ll including competitors and the Heska.

a much that our veterinarians Europe, and the grow to utilization, but in. more we’re possibility monthly good in per it’s to than combination not to XXXX a we there’s faster, utilization CSV in more think in have utilization then North I’m and think provide each And analyzers prepared increasing markets those the diagnostics we menu XXXX of So there. international I ability visit, do analog increased and faster address say did from their in pet America, how that through I

Benjamin Haynor

We get bigger.

three years like say You now?

Kevin Wilson

now ask much to me faster. how to See, going you’re say

Benjamin Haynor

kind there, a more it’s color little provide got than existing kind and Element in just from than no, been any only a AIMs up got or attendees what’s been of I you’ve that my on coming of customers, the out for And and reaction No, more can you’ve tradeshow smarter you not bit one second recent one gotten week then well? as XXX reception but so, know, here, customers trade from you’ve show, at potential the that.

Kevin Wilson

Yeah, CEO I’ll our customers. XXX a so new product great, really standard product. base, mean, And new our excited. But give the of enthusiasm, percentage. it’s answer. a it’s people, – it’s but And launch, is to to percentage been as a It’s our It’s tiny I good customer a right?

product about priced testing which – it’s current you think easier their get that results And for and very your whole you approach And we a us. so the we in the the our innovation have well it expand what possibility is test. the thousands, step And Are own testing can and positive and for first with what’s diagnostics response can they we do very improve of are. to new say we subscribers make when per life pets the customers interested? category and have and

really it’s getting door our good team. and for a we’re good So opener response

that’s called out for So XXXX. like we XXX, about ambitious don’t says overly it I think be continue to

Benjamin Haynor

color, and congrats you guys, Well, good the on the for thank Sure. quarter.

Kevin Wilson

Thanks, Ben.

Operator

At this would to time, like closing we turn have no remarks. further Wilson the Kevin additional conference questions in for I or the any back queue. to

Kevin Wilson

Well, do thanks, so the words. who joined to a call. been Thanks operator. call, everybody trying many to long It’s

with at you say key expect and than metric the I which to simply. we substantially what a year is every I started time than strategic is time land is other far this morning, Heska any I’ll plane Nearly say to year. to this were reiterate company ago. And same to So we stronger next that the want a far, initiative better in do our history. thing

outlook is our for XXXX So strong.

and come working performance, And I the updating to Catherine that. always our to and we’re hard global growth sales progress which on For quickly. on subscriptions achieve they look forward Jon and you call, next

you to So a we’ll day. Have soon. everybody. great talk Thanks,

Operator

Ladies and appreciate your conference. this We concludes gentlemen, today’s participation.

You may disconnect. now

Heska Corp. (HSKA) 28 Feb 222021 Q4 Earnings call transcript