VCA Inc. (NASDAQ:WOOF) Q1 2015 Earnings Conference Call - Final Transcript

Apr 29, 2015 • 09:00 am ET

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VCA Inc. (NASDAQ:WOOF) Q1 2015 Earnings Conference Call - Final Transcript

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Operator
operator

Good day, ladies and gentlemen and welcome to VCA Inc., First Quarter 2015 Conference Call and Webcast. At this time, all participants are in listen-only mode. Later we will conduct a question-and-answer session and instruction will follow at that time. [Operator Instructions]Before we commence our discussion, I would like to preference the comments made today with a statement regarding forward-looking information.(Forward-looking Statements)

I would now like turn this conference call Mr. Tom Fuller, CFO. You may begin.

Executive
Tomas Fuller

Thank you, Kevin. That's probably the hardest part of the call. Thank you for joining us for the early edition, the 6.00 AM West Pacific Time, WOOF earnings call. Today we reported $0.46 per share on a GAAP basis after adding back $0.04 for acquisition related amortization expense adjusted diluted earnings per share of $0.50 per share, which is a $19 increase over the prior year's 42. Since there are no other adjustments, which is the amortization expense of $0.04 in both the 2014 and 2015 periods.

Operating results for the quarter as I said EPS up 19%, which is the third consecutive quarter that are above 19% so getting the nice trend. They are coming on strong fundamentals our hospital and lab business continue - internal growth rate continue to accelerate and very we're seeing accelerating growth in volumes and of course good margin expansion in both businesses.

In the lab antic diagnosis internal growth was 6.1% coming on positive volumes and nice acceleration to preceding three quarters around 5%, 5.1% in the fourth quarter, 5.5% and 5.0% in the third and fourth quarter 2014. Excellent margin performance 190 basis point margin improvement on that 6.1% internal growth. VCA Animal Hospitals' same-store growth was 5.3% again on positive volumes and a nice acceleration after the preceding three quarters 4.4% in the fourth quarter of 2014 and same-store growth profit margins up 40 basis points on that 5.3%.

So, on a consolidated basis with 11.1% increase in consolidated revenues due to internal growth and hospital acquisitions. And on that growth, adjusted operating income excluding amortization increased 12.5% adjusted operating margin up 10 basis points to 14.9% and adjusted net income of 12.1%.And with the accretion in our buyback program, adjusted diluted EPS of 19% to that $0.56 per share. Antech Diagnostics had a great quarter, revenue increased 6.1% all from internal growth which is a post recession high for them. As I said on positive volumes of 1% which is a nice improvement off of the negative 0.1% in the preceding quarter, fourth quarter 2014.

On that 6.1% adjusted operating income increased 11.4% and adjusted operating margins up 190 basis points to 14.8%. So I think [indiscernible] stands out for the lab is after negative volume or flat volume roughly negative 0.1% in Q4 seen positive 1% growth in volume in the first quarter 2015 and 6.1% growth.In terms of composition of the growth, number of requisitions up 1% to 3.140 million, and average requisition - average revenue per requisition up 5.1% to $29.92.