Heska Corporation Reports 2nd Quarter 2022 Results.

LOVELAND, Colo:Heska Corporation (NASDAQ: HSKA; "Heska" or the "Company"), a leading global provider of advanced veterinary diagnostic and specialty solutions, reported financial results in two segments (North America and International) for its second quarter ended June 30, 2022. In this release, Point of Care is "POC", Pharmaceuticals, Vaccines and Diagnostics is "PVD", Other Vaccines and Pharmaceuticals is "OVP", and basis points is "bps".

Second Quarter 2022 and Year Over Year ("YOY") Metrics

$ in millions except Earnings Per Share ("EPS")

Q2 ($)

Q2 (%) YOY

Consolidated Revenue

$64.7

(0.4) %

North America Revenue

$40.9

0.9 %

International Revenue

$23.8

(2.5) %

Q2 (%)

Q2 YOY bps

Consolidated Gross Margin

42.3 %

30

Net Margin1

(7.6) %

(730)

Adjusted EBITDA Margin1,2

10.8 %

(220)

Q2 ($)

Q2 (%) YOY

Net loss attributable to Heska

$(5.2)

NM3

Net loss

$(4.9)

NM3

Adjusted EBITDA2

$7.0

(17.2) %

EPS, Diluted

$(0.51)

NM3

Non-GAAP EPS, Diluted2

$0.34

(32.0) %

1Net margin and adjusted EBITDA margin represents the ratio of net (loss) income and adjusted EBITDA, respectively, to revenue. 2See "Use of Non-GAAP Financial Measures" and related reconciliations provided below.3"NM" is not meaningful.

Report Highlights

Quarterly revenue increased 4.0% on a constant currency basis to $64.7 million, led by North America Lab Consumables growth of 5.4% and sales in VetZ software solutions.

Year over year gross margin: Consolidated up 30 bps to 42.3%, International up 370 bps to 35.9%, and North America down approximately 200 bps to 46.0%.

Key strategic initiatives advanced, including new product launches toward commercial rollout: Heska Nu.Q(r) Vet Cancer Screen Test and Heska truRapidTM Series single-use tests, and new cloud-based software solutions.

Full Year 2022 Outlook updated.

Kevin Wilson, Heska's Chief Executive Officer and President, commented, "Heska did fantastic work on and in Heska in the first half, while also growing revenue and gross margin on a consolidated basis. In the second quarter, Heska grew key revenue lines, expanded gross margin, improved our strategic position, advanced our secure subscription model across all geographies, and progressed major new product launches, pipeline, and sales funnels. Our sales growth execution this quarter was commendable in the face of a 42% growth comparisons in the prior year. But, as shared on our full year 2021 call, on our Q1 call, and again at our Investor Day mid-May, we expect to do better and are well prepared to do so in the second half. We have seen nice sales and margin mix from our new...