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FOR IMMEDIATE RELEASE
At Heska Corporation:
Ron Hendrick, Executive Vice President & CFO
(970) 493-7272, Ext. 4105
Robert
Grieve, Chairman & CEO
(970) 493-7272, Ext. 4155
At Noonan/Russo
Communications, Inc.
Matthew Orsagh (Investor Relations):
(212) 696-4455, Ext. 357
Brian Ritchie (Media Relations)
(212) 696-4455, Ext. 335
HESKA CORPORATION REPORTS FIRST
QUARTER 2001
FINANCIAL RESULTS
COMPANY DELIVERS SIGNIFICANT IMPROVEMENT
IN
BOTTOM LINE RESULTS
FORT COLLINS, CO, April 26, 2001 --
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.
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.
Financial
Table Follows:
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