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Heska Earnings Drop On Flat Q1 Revenues

Revenue and income declined at Heska Corp. in the first quarter of its 2012 fiscal year.

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Revenue and income declined at Heska Corp. in the first quarter of its 2012 fiscal year compared to the year-ago period, the Loveland, Colo.-based company reported today.

Revenues from Heska’s “Core Companion Animal Health” category grew 1.2 percent, but total first quarter revenues retreated 1.5 percent to $19.2 million on a 15.3 percent drop in revenues in Heska’s “Other Vaccines, Pharmaceuticals and Products” category.

“This was a strong start for 2012,” said Robert Grieve, CEO and chairman at Heska. “We grew our Core Companion Animal Health revenue despite an anticipated $2.1 million decline in revenue from our heartworm preventive sold to a unit of Merck. We also delivered a notable increase in gross margins.”

An increase in operating expenses coupled with relatively flat revenues led to a 56.8 percent drop in net income in the first quarter compared to the year-ago period.

“We continued to invest in new products, as well as in the expansion and improvement of our sales organization,” said Grieve. “We believe the results of these efforts will support our expected revenue growth during this year.”

Heska shipped its first stocking order of PetTrust Plus heartworm preventive sold exclusively through retail pharmacies. Heska’s subsidiary Diamond Animal Health manufactures the product under an agreement with developer FidoPharmBrands LLC. Heska is also rolling out a new sublingual allergy therapy, which Grieve said will help grow the company’s revenues.

The company will pay out its second-ever dividend payment on July 10, 2012, to stockholders of record as of June 29, 2012.

As a whole, the company reported net earnings of $584,000 on revenues of $19.2 million in the first quarter ended March 31, 2012, compared to earnings of $916,000 on revenues of $19.5 million in the year-ago period.

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