Heska Corporation (NASDAQ:HSKA) Q3 2017 Earnings Conference Call Transcript
Nov 02, 2017 • 11:00 am ET
Good day everyone and welcome to the Heska Corporation Third Quarter 2017 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Brett Maas. Please go ahead, sir.
Hello and welcome to Heska Corporation's earnings call for the third quarter of 2017. I am Brett Maas of Hayden IR, Heska's IR firm.
(Forward-Looking Cautionary Statements)
We have with us this morning Kevin Wilson, Heska's CEO and President; and John McMahon, Heska's CFO; and Jason Napolitano, Heska's COO and Strategist. Following management's comments, we'll open the call for your questions followed by Mr. Wilson's closing comments.
Now I will turn the call over to Kevin Wilson, Heska's CEO and President. Kevin, floor is yours.
Thanks Brett, and good morning, everyone.
Today, we report our third quarter that shows continued strong execution in the core of our playbook, including 16% growth in our largest and key business of blood diagnostic subscriptions. Consolidated gross margin expansion of 210 basis points to 43.1%, strong market share gains and nice growth in our cash provided from operations, which has outstripped all of 2016 in just the first three quarters of the year. This strong core execution was offset by delayed and otherwise missed shots on goal in our smaller imaging and heartworm business lines, both of which I see becoming positives in 2018.
I have to go back to May of 2015 for a period report to investors that was below my personal goal. After that call, Heska then delivered on eight above-expectation quarters that were powered by then unseen benefits from early-stage initiatives. The third quarter of 2017 feels much the same to me. Like in early 2015, I'm highly confident in the growth prospects of Heska and I hope thoughtful and long-term investors see what I see and may seize upon attractive entry points into Heska as they present themselves. For our part, Heska teams continue our good work on our clear path in our growing space, with the focus and the competitive intensity required to win.
Now I'll turn the call over to John McMahon to go through the details of the quarter and update you on the outlook for the balance of the year. Following John's comments, I'll provide additional insight into our plans and operations and this week's major new Element COAG analyzer launch and Heska's big win in the corporate accounts area with PetVetCare Centers. Then we'll open the call to answer your questions. John?
Thanks Kevin and good morning everyone. For the third quarter of 2017, we recorded revenue of $31.4 million, a 6% decline over $33.4 million in the third quarter of 2016. On a year-to-date basis, revenue was up 6% to $96.1 million as compared to $90.5 million after three quarters a year ago. Revenue for the core companion animal health segment or CCA was up slightly at $26.7 million as compared to $26.4 million in the third quarter last year. CCA revenue was comprised of blood diagnostic