Heska Corporation (NASDAQ:HSKA) Q1 2018 Earnings Conference Call - Preliminary Transcript
May 04, 2018 • 11:00 am ET
Good day, ladies and gentlemen, and welcome to the Heska Corporation First Quarter 2018 Earnings Call. Please note, today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Jon Aagaard, Director of Investor Relations with Heska. Please go ahead, Jon.Good morning, everyone, and welcome to Heska Corporation's earnings call for the first quarter of 2018. I'm Jon Aagaard, Director of Investor Relations.
Prior to discussing the company's first quarter results, Heska would first like to remind listeners that during the course of this call, certain forward-looking statements may be made with regards to future events or future financial performance of the company. Any such forward-looking statements are based on our current beliefs and expectations and involve known and unknown risks and uncertainties, which may cause actual results and performance to be materially different from that expressed or implied by those forward-looking statements. Factors that could cause or contribute to such differences are detailed in writing in places, including Heska Corporation's annual and quarterly filings with the SEC. Any forward-looking statements speak only as of the time they are made, and Heska does not intend and specifically disclaims any obligation or intention to update any forward-looking statements to reflect events that occur after the time such a statement was made.
We have with us this morning, Kevin Wilson, Heska's Chief Executive Officer and President; Jason Napolitano, Heska's Chief Operating Officer and Chief Strategist; and Catherine Grassman, Heska's Vice President, Chief Accounting Officer and Controller. Mr. Wilson will begin with commentary surrounding the results reported today, followed by additional comments from Ms. Grassman. And after Ms. Grassman, we'll open the call up for questions before closing with final remarks from Mr. Wilson.
At this time, then I will turn the call over to Kevin Wilson, Heska's Chief Executive Officer and President. Kevin?
Thanks, Jon. Good morning, everybody. Today, we're pleased to discuss the first quarter 2018 results that are detailed in our release this morning. I'm very pleased with these results, and they slightly exceeded my expectations.
Net revenue increased 10.8% to $32.8 million, led by our Core Companion Animal segment, which rose a healthy 12.8% in sales led by a 17% increase in point-of-care consumables and a 33% increase in imaging. On our last call for 2018, I called out three clear jobs at Heska for the year. First, we are to continue to win in our baseline domestic plan that emphasizes Heska Reset diagnostic subscriptions. We are doing well in this area. As we entered the year, our outlook for point-of-care laboratory consumables was for 15% to 20% growth. We continue to see this outlook as reasonable. In the first quarter, point-of-care laboratory consumables rose 17%, while quantities utilized by our customers rose above this level.
In addition to solid sales growth, laboratory consumables and instruments gross margins improved 1.4 percentage points to 52%, demonstrating the benefits and reliability of our Heska Reset subscriptions model to deliver growth, profitability and cash flows.