Heska Corporation Reports First Quarter 2001 Financial Results; Company Delivers Significant Improvement in Bottom Line Results

Apr 26, 2001, 01:00 ET from Heska Corporation

    FORT COLLINS, Colo., April 26 /PRNewswire/ -- Heska Corporation
 (Nasdaq:   HSKA), a research and development based biotechnology company
 focusing on companion animal health care products, today reported financial
 results for its first quarter ended March 31, 2001.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000622/HESKALOGO )
     For the quarter ended March 31, 2001, the Company's net loss declined to
 $4.6 million from $5.9 million in the first quarter of the prior year.  This
 represents a 23% improvement over the results reported in the prior year.  The
 net loss per common share in the first quarter of 2001 improved by 33% to
 $0.12, compared with a net loss per common share of $0.18 in the first quarter
 of the prior year.
     Revenue from the Company's proprietary pharmaceuticals, vaccines and
 diagnostic products grew by 20% and gross profit margins on products sold
 improved by more than seven full percentage points over the first quarter of
 the prior year.  In addition, total operating expenses declined by more than
 $2.5 million from first quarter 2000 levels.
     "Financial results for the first quarter of 2001 reflect a continuation of
 our solid progress," said Robert Grieve, Heska's Chairman and Chief Executive
 Officer.  "In addition, we made significant progress on a number of strategic
 initiatives during the quarter.  For example, we introduced two new veterinary
 instrumentation products, announced two new distribution agreements with
 Novartis to expand our global presence, in-licensed new technology for
 veterinary application and out-licensed Heska technology for potential human
 application.  We also expanded the number of issued U.S. patents to 112 during
 the quarter.  We remain committed to a strategy of attaining profitability as
 soon as possible, while creating a company with substantial growth
 opportunity."
     During the first quarter of 2001, Heska continued to strengthen its
 financial position to provide the liquidity needed to fund future growth.  In
 February 2001, the Company completed a private placement of common stock,
 raising approximately $5.7 million in gross proceeds.  The Company ended the
 quarter with $4.7 million in cash, cash equivalents and marketable securities.
 In addition, there were no amounts outstanding under the Company's revolving
 credit facility with Wells Fargo and it had an available borrowing capacity of
 approximately $7.1 million at March 31, 2001.
     For the quarter ended March 31, 2001, product revenue from the Company's
 continuing core business decreased by 2.6%.  This decrease was attributable to
 a weak quarter at the Company's Diamond Animal Health subsidiary, which was
 partially offset by strong growth in the Company's proprietary
 pharmaceuticals, vaccines and diagnostic products.
     Total reported revenue for the Company declined from $14.4 million in 2000
 to $10.9 million in 2001.  The total revenue reported in the prior year
 included approximately $1.8 million from businesses sold during 2000 and
 included non-recurring revenue of $1.25 million related to the sale of one of
 the Company's products.
 
     Product Revenue Components
     Heska Corporation's total reported product revenues are derived from the
 three components of its continuing core business, plus revenues from sold
 businesses and discontinued products.  These revenue components are as
 follows:
 
         Pharmaceuticals, Vaccines and Diagnostic Products (PVD).  This group
 of products includes the Company's heartworm diagnostic products, equine
 influenza vaccine, allergy products, feline vaccines and other such products
 for the companion animal health market.  During the first quarter of 2001, PVD
 product revenue grew approximately 20% over the comparable quarter of 2000, to
 $4.0 million.
 
        Veterinary Medical Instrumentation Products.  This group of products
 includes all of the Company's veterinary medical instrumentation, as well as
 the reagents, consumables, parts and accessories for these instruments which
 are for the companion animal health market.  During the first quarter of 2001,
 medical instrumentation product revenue declined by approximately 3% from the
 comparable quarter of 2000, to $3.6 million.
 
         Diamond Animal Health Products.  Revenue reported from this group of
 products is comprised principally of vaccines and other biological products
 for cattle and other non-companion animals.  In addition, Diamond also
 manufactures some of the PVD products marketed by Heska and serves as the
 Company's primary product distribution center.  During the first quarter of
 2001, Diamond's product revenue declined by approximately 23% from the
 comparable quarter of 2000, to $2.8 million.
 
         Sold Businesses and Discontinued Products.  During 2000, the Company
 engaged in a number of activities to restructure its business, including the
 sale of Heska UK, effective January 31, 2000 and the sale of Center
 Laboratories, effective June 23, 2000.  The total product revenue reported by
 the Company in 2000 includes the revenue from these sold businesses prior to
 the dates of sale.  The revenue attributable to these sold businesses in the
 first quarter of 2000 was approximately $1.8 million.
 
     Investor Conference Call
     Management will conduct a conference call on Thursday, April 26, at
 9:00 a.m. MDT (11:00 a.m. EDT) to discuss the first quarter earnings.  To
 participate you may dial in on the telephone at (877) 326-9974 (domestic) or
 (303) 262-2211 (international); the conference call access number is 324892.
 The conference call will also be broadcast live over the Internet at
 http://www.heska.com.  Simply log on to the web at this address at least ten
 minutes prior to the start of the call to register, download and install any
 necessary audio software.  Telephone replays of the conference call will be
 available for playback until May 10, 2001.  The telephone replay may be
 accessed by dialing (800) 405-2236 (domestic) or (303) 590-3000
 (international).  The webcast replay may be accessed from Heska's home page at
 www.heska.com.
 
     About Heska
     Heska (Nasdaq:   HSKA) applies biotechnology to the large and growing
 companion animal health market.  Veterinarians in the United States and Europe
 count on Heska for state-of-the-art pharmaceuticals, vaccines and diagnostic
 products for the testing and treatment of thousands of cats and dogs each
 year, as well as for diagnostic and patient monitoring instrumentation and
 supplies.  Heska also operates a USDA- and FDA-licensed facility, which
 manufactures vaccines and pharmaceutical products.  For additional information
 on Heska and its products, visit the company's web site at www.heska.com.
 
     Forward Looking Statements
     With the exception of historical matters, this press release contains
 express or implied forward-looking information about Heska's products,
 markets, and results of operations, including implied statements concerning
 the market acceptance of the products described above, the anticipated growth
 rate of the business and the ability to reduce operating losses going forward.
 Such forward-looking statements involve known and unknown risks, uncertainties
 and other factors which may cause actual results, performance or achievements
 of Heska to be materially different from any future results, performance or
 achievements expressed or implied by such forward-looking statements.  Heska's
 achievement of these results may be affected by many factors, including among
 others, the following: delays in or failure to achieve market acceptance of
 products; delays in or failure to achieve future product development;
 uncertainties regarding our ability to raise sufficient capital or borrow
 sufficient cash to fund future operations as needed; uncertainties regarding
 the outcome of research and development efforts or the ability to successfully
 develop or commercialize products in research and development, uncertainties
 regarding the ability to receive required regulatory approvals in a timely
 manner, if at all, uncertainties regarding the scope,  enforceability and
 validity of patents and proprietary rights, which are subject to complex legal
 standards that vary from country to country and are subject to interpretation
 by administrative agencies and courts;  quality of management; competition;
 changes in business strategy or development plans; inability to obtain renewal
 or continuation of contracts, or obtain exclusivity, to market, sell or
 distribute products described herein; inability to manufacture, market, sell
 or distribute products at currently projected costs and the risks set forth in
 Heska's filings and future filings with the Securities and Exchange
 Commission, including those set forth in Heska's Annual Report on Form 10-K
 for the year ended December 31, 2000.
 
 
                       Consolidated Statements of Operations
                       In Thousands, Except per Share Amounts
                                    (unaudited)
                                                       Three Months Ended
                                                            March 31,
                                                        2001          2000
 
     Revenues:
       Products, net                                  $10,314       $12,423
       Research, development and other                    613         1,940
         Total revenues                                10,927        14,363
 
     Cost of products sold                              6,214         8,422
                                                        4,713         5,941
 
     Operating expenses:
       Selling and marketing                            3,558         4,288
       Research and development                         3,455         4,003
       General and administrative                       2,096         2,819
       Amortization of intangible assets
        and deferred compensation                          68           194
       Restructuring expense                               --           435
         Total operating expenses                       9,177        11,739
     Loss from operations                              (4,464)       (5,798)
 
 
     Other, net                                          (108)         (131)
     Net loss                                         $(4,572)      $(5,929)
 
     Basic and diluted net loss per share              $(0.12)       $(0.18)
 
     Shares used to compute net loss per share         37,029        33,602
 
 
                                 Balance Sheet Data
                                    In Thousands
                                    (unaudited)
                                                     March 31,    December 31,
                                                        2001          2000
     Cash, cash equivalents and
      marketable securities                            $4,709        $5,658
     Working capital                                   14,586        13,308
     Total assets                                      37,901        39,160
     Long-term obligations                              3,683         3,819
     Stockholders' equity                              25,748        25,100
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE Heska Corporation
    FORT COLLINS, Colo., April 26 /PRNewswire/ -- Heska Corporation
 (Nasdaq:   HSKA), a research and development based biotechnology company
 focusing on companion animal health care products, today reported financial
 results for its first quarter ended March 31, 2001.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000622/HESKALOGO )
     For the quarter ended March 31, 2001, the Company's net loss declined to
 $4.6 million from $5.9 million in the first quarter of the prior year.  This
 represents a 23% improvement over the results reported in the prior year.  The
 net loss per common share in the first quarter of 2001 improved by 33% to
 $0.12, compared with a net loss per common share of $0.18 in the first quarter
 of the prior year.
     Revenue from the Company's proprietary pharmaceuticals, vaccines and
 diagnostic products grew by 20% and gross profit margins on products sold
 improved by more than seven full percentage points over the first quarter of
 the prior year.  In addition, total operating expenses declined by more than
 $2.5 million from first quarter 2000 levels.
     "Financial results for the first quarter of 2001 reflect a continuation of
 our solid progress," said Robert Grieve, Heska's Chairman and Chief Executive
 Officer.  "In addition, we made significant progress on a number of strategic
 initiatives during the quarter.  For example, we introduced two new veterinary
 instrumentation products, announced two new distribution agreements with
 Novartis to expand our global presence, in-licensed new technology for
 veterinary application and out-licensed Heska technology for potential human
 application.  We also expanded the number of issued U.S. patents to 112 during
 the quarter.  We remain committed to a strategy of attaining profitability as
 soon as possible, while creating a company with substantial growth
 opportunity."
     During the first quarter of 2001, Heska continued to strengthen its
 financial position to provide the liquidity needed to fund future growth.  In
 February 2001, the Company completed a private placement of common stock,
 raising approximately $5.7 million in gross proceeds.  The Company ended the
 quarter with $4.7 million in cash, cash equivalents and marketable securities.
 In addition, there were no amounts outstanding under the Company's revolving
 credit facility with Wells Fargo and it had an available borrowing capacity of
 approximately $7.1 million at March 31, 2001.
     For the quarter ended March 31, 2001, product revenue from the Company's
 continuing core business decreased by 2.6%.  This decrease was attributable to
 a weak quarter at the Company's Diamond Animal Health subsidiary, which was
 partially offset by strong growth in the Company's proprietary
 pharmaceuticals, vaccines and diagnostic products.
     Total reported revenue for the Company declined from $14.4 million in 2000
 to $10.9 million in 2001.  The total revenue reported in the prior year
 included approximately $1.8 million from businesses sold during 2000 and
 included non-recurring revenue of $1.25 million related to the sale of one of
 the Company's products.
 
     Product Revenue Components
     Heska Corporation's total reported product revenues are derived from the
 three components of its continuing core business, plus revenues from sold
 businesses and discontinued products.  These revenue components are as
 follows:
 
         Pharmaceuticals, Vaccines and Diagnostic Products (PVD).  This group
 of products includes the Company's heartworm diagnostic products, equine
 influenza vaccine, allergy products, feline vaccines and other such products
 for the companion animal health market.  During the first quarter of 2001, PVD
 product revenue grew approximately 20% over the comparable quarter of 2000, to
 $4.0 million.
 
        Veterinary Medical Instrumentation Products.  This group of products
 includes all of the Company's veterinary medical instrumentation, as well as
 the reagents, consumables, parts and accessories for these instruments which
 are for the companion animal health market.  During the first quarter of 2001,
 medical instrumentation product revenue declined by approximately 3% from the
 comparable quarter of 2000, to $3.6 million.
 
         Diamond Animal Health Products.  Revenue reported from this group of
 products is comprised principally of vaccines and other biological products
 for cattle and other non-companion animals.  In addition, Diamond also
 manufactures some of the PVD products marketed by Heska and serves as the
 Company's primary product distribution center.  During the first quarter of
 2001, Diamond's product revenue declined by approximately 23% from the
 comparable quarter of 2000, to $2.8 million.
 
         Sold Businesses and Discontinued Products.  During 2000, the Company
 engaged in a number of activities to restructure its business, including the
 sale of Heska UK, effective January 31, 2000 and the sale of Center
 Laboratories, effective June 23, 2000.  The total product revenue reported by
 the Company in 2000 includes the revenue from these sold businesses prior to
 the dates of sale.  The revenue attributable to these sold businesses in the
 first quarter of 2000 was approximately $1.8 million.
 
     Investor Conference Call
     Management will conduct a conference call on Thursday, April 26, at
 9:00 a.m. MDT (11:00 a.m. EDT) to discuss the first quarter earnings.  To
 participate you may dial in on the telephone at (877) 326-9974 (domestic) or
 (303) 262-2211 (international); the conference call access number is 324892.
 The conference call will also be broadcast live over the Internet at
 http://www.heska.com.  Simply log on to the web at this address at least ten
 minutes prior to the start of the call to register, download and install any
 necessary audio software.  Telephone replays of the conference call will be
 available for playback until May 10, 2001.  The telephone replay may be
 accessed by dialing (800) 405-2236 (domestic) or (303) 590-3000
 (international).  The webcast replay may be accessed from Heska's home page at
 www.heska.com.
 
     About Heska
     Heska (Nasdaq:   HSKA) applies biotechnology to the large and growing
 companion animal health market.  Veterinarians in the United States and Europe
 count on Heska for state-of-the-art pharmaceuticals, vaccines and diagnostic
 products for the testing and treatment of thousands of cats and dogs each
 year, as well as for diagnostic and patient monitoring instrumentation and
 supplies.  Heska also operates a USDA- and FDA-licensed facility, which
 manufactures vaccines and pharmaceutical products.  For additional information
 on Heska and its products, visit the company's web site at www.heska.com.
 
     Forward Looking Statements
     With the exception of historical matters, this press release contains
 express or implied forward-looking information about Heska's products,
 markets, and results of operations, including implied statements concerning
 the market acceptance of the products described above, the anticipated growth
 rate of the business and the ability to reduce operating losses going forward.
 Such forward-looking statements involve known and unknown risks, uncertainties
 and other factors which may cause actual results, performance or achievements
 of Heska to be materially different from any future results, performance or
 achievements expressed or implied by such forward-looking statements.  Heska's
 achievement of these results may be affected by many factors, including among
 others, the following: delays in or failure to achieve market acceptance of
 products; delays in or failure to achieve future product development;
 uncertainties regarding our ability to raise sufficient capital or borrow
 sufficient cash to fund future operations as needed; uncertainties regarding
 the outcome of research and development efforts or the ability to successfully
 develop or commercialize products in research and development, uncertainties
 regarding the ability to receive required regulatory approvals in a timely
 manner, if at all, uncertainties regarding the scope,  enforceability and
 validity of patents and proprietary rights, which are subject to complex legal
 standards that vary from country to country and are subject to interpretation
 by administrative agencies and courts;  quality of management; competition;
 changes in business strategy or development plans; inability to obtain renewal
 or continuation of contracts, or obtain exclusivity, to market, sell or
 distribute products described herein; inability to manufacture, market, sell
 or distribute products at currently projected costs and the risks set forth in
 Heska's filings and future filings with the Securities and Exchange
 Commission, including those set forth in Heska's Annual Report on Form 10-K
 for the year ended December 31, 2000.
 
 
                       Consolidated Statements of Operations
                       In Thousands, Except per Share Amounts
                                    (unaudited)
                                                       Three Months Ended
                                                            March 31,
                                                        2001          2000
 
     Revenues:
       Products, net                                  $10,314       $12,423
       Research, development and other                    613         1,940
         Total revenues                                10,927        14,363
 
     Cost of products sold                              6,214         8,422
                                                        4,713         5,941
 
     Operating expenses:
       Selling and marketing                            3,558         4,288
       Research and development                         3,455         4,003
       General and administrative                       2,096         2,819
       Amortization of intangible assets
        and deferred compensation                          68           194
       Restructuring expense                               --           435
         Total operating expenses                       9,177        11,739
     Loss from operations                              (4,464)       (5,798)
 
 
     Other, net                                          (108)         (131)
     Net loss                                         $(4,572)      $(5,929)
 
     Basic and diluted net loss per share              $(0.12)       $(0.18)
 
     Shares used to compute net loss per share         37,029        33,602
 
 
                                 Balance Sheet Data
                                    In Thousands
                                    (unaudited)
                                                     March 31,    December 31,
                                                        2001          2000
     Cash, cash equivalents and
      marketable securities                            $4,709        $5,658
     Working capital                                   14,586        13,308
     Total assets                                      37,901        39,160
     Long-term obligations                              3,683         3,819
     Stockholders' equity                              25,748        25,100
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X17288206
 
 SOURCE  Heska Corporation