Heska Corp. (HSKA) 8 Nov 202020 Q3 Earnings call transcript

Good day and welcome to the Heska Corporation Third Quarter 2020 Earnings Call. 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. Please go ahead sir.

morning good and you everyone. Thank Corporation's Welcome quarter for third call XXXX. to Heska of the earnings I Head Jon am Aagaard, for Heska. of Investor Relations to future during quarter to Prior certain forward-looking call third I future make of Heska's like events the regarding would or we XXXX may remind performance course the results, that statements of financial this you discussing company. uncertainties beliefs and caution statements results to are those our or and current forward-looking unknown actual that known based implied involve such and may any you and and Need be to from expectations cause materially by which risks that statements. on performance forward-looking different expressed the such this that release and Heska contribute to in with detailed annual morning's and differences SEC Factors elsewhere. earnings in writing Corporation's could filings are quarterly are to speak intention of occur events Heska disclaims forward-looking and time and statements they or after any time not statement obligation Any forward-looking reflect the does any made was intend made. specifically such that the update only to statements

have Mr. open We Catherine Financial then the will morning Chief and Chief to Heska's call Grassman Heska's Grassman, President; Wilson, Officer. Officer results, Kevin and and provide Executive details and Ms. we will surrounding us questions. the Wilson with this

strategy the over this November update, and company's visit targets. turn including growth event Virtual performance the commercial Investor present Kevin, XXth, the will page key and like I special multi-year Relations website. of new integration product register Day XXXX. would at geography remind event I Investor for new To Before call this please demonstrations, company's the on everyone to to of Heska's Heska management

With call President. is my we Kevin Heska's over and pleasure hope to and there. that said, being it the excited now CEO are to Wilson, turn Kevin? to see We you

busy crazy jump in. it's Hey I and cycle, everybody just I'm to morning everybody. new right a going so good is know thanks Jon

report to third pleased quarter an exceeded expectations. we're exceptional today So, with

all at at to which record strength exceptional bringing year-to-date captured key our growth strong a performance the for Spanish, teams that most from teams All North teams strong and and key to full of this performance particular. of metrics. year As ranges German for bad our deliver We targets revenue with a leads executed and publicly. XX.X% Consumables level that our very Heska's across is competition, the saw macro metrics X.X%. outlined morning's Lab high release, performance in of shared end results hard again in near-universal segment In to and delivered Heska all in We POC Australian, international it believe the top solid results will us metric. perform strong we've not find we to uncertainty spite if across American

the benefited a to industry proud cover association continues an do of a trends its will Heska's for Heska. our work underlying greater lives posture things moments flexible veterinary a by effectively honored with their team industry staffed people. reaffirm is specifics a I'm which helpful be performance the detail, attitude, great. at recent people few good is Heska a could team of the to few of will which and increasing Catherine Animal most extremely have I by is all-time quarter been hundreds way which continued regardless employees pet be and and that high should The to quickly to and knowing our any in underpinned established is growing population While take from our productive. living Pet investors positive visits investors. We've want and operate in of to have highlight across well operate. sustainable micro-environmental of in country rates more in tailwind broadly each sleep challenges trends. Heska enduring likely proud forecasts. our to be part resiliency. many that dedicated solve we than an outpaced people, not, challenges. of I'm hard with and healthy and doing, healthcare is Starting trends, with customers long demand long investors decade's generally great wonderful by doing Similarly, that are, Companion good market to this has broadly The worked

very of pet positive similarly Specific an encouraging favorable increased up and pet are point breeders pet acceleration We the trends demand up firmly drop pet in and an discharge housing, human stronger most hospitals. adoptions with at-home are human-pet even now procedures on are ownership focus waiting less, of are bond. households, in seeing first Heska's demographics, ownership, end-user and long-term Pet care same-day strong. time diagnostics, place off curbside veterinarians to to visits are across remains time trends and managing

at has that the the with We of care the point some of smaller laboratories. are new utilization seeing some testing increased is central migrated reference point-of-care increase portion of testing, in from is test, increase from brand

wellness Some QX QX effects of demand procedures, COVID-XX utilization this year. earlier from at chain Heska for the pent-up resulted elective and from up, from visits, deferred testing supply was performance catch dampening that

in the more out veterinary require solutions services good home than sales, people busy strong ever, there decline, Veterinarians in by veterinarian. veterinarians that of for teams busy symptoms, more scheduled instrumentation practices. This some point-of-care is delays blood make increased is they focused way into their offset that and for of major weighting fact particular, the retention continued base. is America, new very are Heska take net access Heska, trends to the supporting being pets while In installed that are Heska. Regardless surgeries, now North sustainable. underlying services. turns and and care and we and to Heska's experience strong utilization have at in of by the another presumably able tests was has increased price, to also health whether and dynamic diagnostics, companies less From licensure. decisions result the in-clinic are company. or others, so pet and increased their critical households by by Veterinarians for strong technology to new in incumbent installation with And driven sales, so you pets our quarter blooming growth increase that is continue to revenues opportunities professional consumer the with families the making being in subscriber It diet and the factor now are and time diagnostics central third perspective, testing point the believe the see by such each reduced of be analyzers their more veterinarians' sales more are regularly other are there Diagnostics growing than demand remains and very as imaging installations. and pets their competitive which the to to takeaways has are pet continue to incumbent their on take flexibility at pets, that

this all at level likely it quarters. see to over is moderating we the time, some continue the While trend several next

with point-of-care veterinarians upgrade point in core to in time first specifically However, we to over exactly their the now quickly first North veterinarians is or diagnostics first years. for of much point-of-care veterinary second markets to International for cycles America the increasing new diagnostics for largely and from the Europe major are outside to enthusiastically anticipate of diagnostics increase adopt more capture to five profitability and percentage first-generation international the adopt Australia. accelerating and likely early same demand are reasons adoption, for more stage adopters, as unfold American North testing. full rates time care is and certainly utilization The XX in are the of swing next likely

we a Heska win. it to finally like in intends three As are in in QX, that and And top line markets research competitor we development future. conclude race of In to a to our remarks, remind are preparing initiatives timelines. with the to the of and most you for progressed my compete I'd targeting, how is

across as we and our recent with Our are grow over can also with the goals. projects and acquisitions time. line we confident several in commercial these solidified further businesses improve of launch meaningfully expected progressed Integration key profitability our international plans

confident of in anticipate tenants geographies and amongst turn For which back these the to the continue to to major half grow By performance. to that accomplishments, three and performance to we a done With three customers plan. very we we 'XX quarter's done; these and very, to we lines detail plan, of the great offer core strategic in and our the accomplishing; which to Catherine? Catherine anticipate our do. the which and to double over multiplying on which five-year I'll we have call and in remain adding and to through business served deliver more and reasons continuing XXXX have core revenue double we are products ability our resolute our the close

morning Kevin and Thanks, everyone. good

performance CVM, America a results growth solid acquisitions Scil in As Kevin quarter to on percent our report a legacy benefited business We mentioned, strong by contributed performance uncertain geographically year-over-year these North and and of XXXX. during also recent segments our for Heska times largely our basis. XX.X% report and two Consolidated revenue we while grew of the are pleased to third International.

growth The was includes as XX.X% high America this return America manufactured strong with XX.X% in Consolidated throughout of all of comparative declined for points revenue to XXXX. of demand growth segment outside the grew experienced to margin consumable placements. International of and U.S., product basis is in equipment Europe Merck, this countries end North International Canada and XX.X%. while America gross contributing comprised today. period -- a North our to North XXX in was the capital which Mexico; contract sales approximately Tri-Heart consists primarily segment performed expectations and Our sales segment at the with expected customer growth of and sales segment our PVD consumable of of contributing and reduced

a consolidated is on Scil impacting As negatively profile gross margin margin business. the a of anticipated consolidation lower basis comparative

million, of of of margin of gross synergy -- the OVP $X continue third within XXX continue operating third We year third is point for an EBITDA quarter or adjusted line an as million The activities our $X.X other EBITDA XXX,XXX. primarily X.X% with as by This as as this margin America margin expenses prior of higher million our of profitability the increase meaningful XXXX. gap the carefully. XXXX from XX.X% compared quarter in Total for expenses or attributable acquisitions and XXXX. increase Heska. second segment and see North cost business. at an increase our related release which in of $X.XX was well and of loss Adjusted EBITDA well containment one-time product operating the for bridging as to $XX.X adjusted XX.X% per acquisitions million quarter $X.X our quarter were of a a legacy our increased per increase stock-based recent consumables. driven was to non-GAAP of had third per million XXXX. mix included the certain a a the manage about from in detailed was approximately operating product third opportunity to product quarter of mainly We with in sales from and increase the managed EPS quarter share increased our decrease from of reconciliation to items of cost share consolidation to GAAP the third for adjusting basis to and $X.XX due EPS $X.XX share are acquisition compensation of margin an $X in The XXXX $X.X of primarily million, mix quarter

non-GAAP quarter decreasing an deferred tax convertible increase positively our more as during the Also a result impacted result in as associated interest expense the carrying -- is offset decrease by of notes assets. than of measure issuance. the debt increased a tax was of value but with negatively expense our Third this our quarter, the cash impacting profitability by EPS

cash position with Our balance us $XX.X to continues which provide million of our our plan. the strong flexibility liquidity strategic is sheet and advance remains to solid

we XXXX provide Turning It to based our quarterly our is guidance and guidance presentation. on provided intention on August on quarterly now not nor guidance. to previously segment recasted update Xth, new the will May Xth,

will update we on performance annual events provide Moving significantly forth. to the understanding gain based we set our forward, relevant expectations to we guidance our of

pandemic, the of business, COVID-XX with However, the is the important to is on investors believe communicate uncertainty factors to analysts which it strong. given of macro-environmental our related health mostly our and we

rate look are this financial Based to our our opportunity financial are our are As we of revenue EBITDA and call, benefit quarter's the for XXXX sharing with In such like in and we Operator? tax indicated, end business reaffirming full-year have We we'd With as I year and pleased our adjusted XX%. performance at disclosed. targets previously we all third on near and to XX% Day. Kevin key to Investor ranges guidance. On at achieve previously provided some, last top communicated tax rescinding quarter strategy, we the changes call other and your full performance our effective of believe a to underlying earnings considerations we multi-year open guidance the time. that questions. our forward in upcoming

question Westenberg Thank Guggenheim you. from first David The comes today Instructions] [Operator Securities. of

for Hi. my on quarter. taking Thanks and a question congrats good

instruments new it's is that So instruments. space got of prepared that at practices something said not actually instruments on sales same and has kind that same not allowing the in probably time these there a been capital you thoughts are and in make Can think just And really token, outperformed renewal a but commentary this remarks not us touches the that lab impacting your is whether clarify your the these fact really force kind a just -- I the subscription of like the you install that little on is in subscription that commitment? all the you to in back people half sales bit isn't lot renewal more there necessarily then purchase can given open, force or of dynamic or other? practices is on

stop. it Well, not is get want we ability we've It approach about a so stopped, to people a customers and to at how I'll ability Catherine have travel talk clinics to the anything so is and full your you not well. stop as also hasn't full into add. qualitatively altered then The

of in more stretch. terms put ways difficult the that's little get but any it's pin-point of and to hasn't many customers installed. really hasn't it I is instruments We remote on specialty It's So of a terms more. special equipment, variability really how by so stopped. to of are line We've think installation a the going have entirely answer in the conversations, leverage it the to hard bit quarter-to-quarter be stopped found

and additional subscription terms the with easily In think been more problem. to a has problem. incumbent. of relationship There they not them Customers extending been positive renewals finding tend a with transact that have for a benefits I that hasn't relationship

I customer, positive top of So or in already offer just have of little you an the gotten put when sometimes dynamic of bump in opportunity terms and bit we've and portion we extend being a the in to analyzer equipment think two a from of also the terms we on that of maybe what's as that's additional instrumentation that contract new renewed.

I don't add. if Catherine, you anything know to have So

that covers think it. I No, that

-- and look you to new you conceptualized a probably guess of United what handholding a growth Okay. an a is then strategy. us greenfield just Thank of help for you of kind you of accounts now, us outside has I not Can kind right highlighted kind States, on do different like of that's is accessibility accounts we I And so and terms or old conceptualize lot what the growing to just as faster one, greenfield have that as those a in new, analyzer markets. skill market player, no they those generation help but you. it now, guess, that analyzer penetrating different but on sense a really right a better

good and Spain on that and those have with our as Yeah, are so in and CVM you market relationships actually efforts servicing France has it customers well them. long-term hit we and been entrenched still we in

can divide into buckets. it a you think I of couple

wellness targeted have They testing, it where ingrained point do full more testing, that the less to just do divide to it's like to a can have not they testing. they into approach they do folks just feel less You suite. a

use see they'll those who you use will we portfolio. some local things, types with reference people So nothing, incomplete and a will they a have university then very lab, the of see folks

fair parameters and integrated one really practice. a not more with for so a panels not test will use quickly, them of their running We older is half Europe, but counts might then with be into maybe not two running targeted something, American have the been then approach that blood we it's years. more it's a older And let's think three in machine strip, they or So many who largely it's, see five generation. or part as say, an market full again, amount, to lot a have I North tend more part has and they for

and say, it is might countries in three Germany, divide those variability in Italy. amongst then into buckets even there you let's better would a than I adoption So,

a Europe well. it as difficult So much very cultural say is it's broadly, really just question country-by-country to

Got on margin mean, I expansion. margin, maybe it. one And then just

that you double getting a to might bigger You leverage five-year have strong in and is of lever with with advantage. in be a two, just to the significantly make able of suppliers being more size global but able have not in a P&L terms business use three, revenue being to get pull able also footprint, the to more more to you terms blood, leverage now shift that necessarily your your something

partner, global have business some fewer lose different that rationalizing obviously, rewarded price so margin increased with get picking price wouldn't those they the suppliers for these suppliers and and that products we'll and pick countries and and Absolutely. of we think on others, acquisition thinking and And and that underpinnings able consolidated well if suppliers it as and as they're my was use with more in Europe into one the expanding benefits Scil of Europe our a the America of to up suppliers, North gotten some in the earn about CVM volume means otherwise key the business volume.

exactly So, yeah, I think right. that's

products, more two for weeks. Investor Day, I because off don't I'll just have in want hold about your to I of but get want to really talk Okay. but I questions, front

We'll Perfect. you. you Investor Okay. Day. the see at Thank

Our question Raymond from of comes Andrew next Cooper James.

kind starting Hey at end questions. high we get cold dynamics on there? about the and and there, of try some Europe expectations of for are it can to for what positioning so like parts some point with there know you that of products the of some us at guys. your help and and was to any you said just moving about there kind likely trajectory you're the Thanks the give XQ where subscription, Maybe think I as each in from think scale those to flavor quarter, the look might transition

Yeah.

that expectations, and we and place I'm given The now way those So in will the here and subscription quarter quarter lockdowns climbing the see of in big year so they're I mountain COVID advance look don't they especially process. of for we're happen and I ownership setting things rolling of direction, and kind in but doing baseline field beginning effects fourth all us recognition so those still. be in will in full had certain the first doing margin the that then cliff the doing quarter as we're so largely those so first of because exist third of we're the are we in very second, that won't at big and the largely and or the it basis same situation second we're quarter baseline the into either XXXX we XXXX time, revenue, on Scil the and halfway have that got to terms the that at at through, trying is we're putting or now. areas events exclusive go at have XXXX to things. so and but dampened and just better upfront so profile it

for we Milan those now wonderful we've even are Lombardy, but with rolling in and place, have wonderfully dynamics instance. in a and lockdowns So quarter -- done there

nicely all that we first year dangers so is the include baseline noise, would So things now, of we're there. those of just but in still mind and that in year our I despite guess, for kind Andrew, it's right we're that what -- lurk out coming I keep in will say

look it of at So that's I how kind

Okay. That's on just And helpful. margin. one then maybe

a you hey, of a and the but love that elevated, note nice the like to things insight. to some point in sort in think the but think health other being space, I and gross of I mix way about mix some perspective was would kind was us necessarily think I about it, anything about call-outs and impressive out there our in anything obviously for the number margin so number shipping a in had costs there are shifts component general, there for animal for that's new we've to us else OVP, know is mentioned players margin but heard but North when American the think around not strong quarter, think than, to other from I

Yeah.

and people hey, of we've margins, think if right, our key the think, OVP our have part mix, I get you we'd you to right. to mix getting it's product plan, right way got then recall, to to get all back go got I model is get to is product XXXX-XX said, got and you right, it's right, margin which the will and consumables and you which then get gross then to

and SaaS the So type scale of then it. you subscription model

in profitable. So aren't been huge a that things I've scale never and believer

business of and results businesses our future, positive we I that gross percentage the we from So that. what put think adjusted we our have peek to the that margin a that and our higher operating margin eventually margin. and shoulder we be margin And I that's we the positive a will really higher growth emphasize just down at where behind, hope represent think had flows

don't good than like mix I what line top have looks of things that had growth So anything more a we think good and it margin. good it's

ahead. And Great. sorry, one maybe one – last – Okay. then go

I think to that, about the full-year though that on of, margin. on at add, we're coming what on just consolidated of year talked kind basis, all gross quarter clarify don't second off the just full we would I Yeah. a

it's the let's traction you've at say, that And of we quarter Great. if least and think looked the Okay. of what and whether maybe the quarter and that just the the kind market trajectory any instruments DCXX then to one saw differ, or just be already the as RC to you you about about would great. some how but there any like think and last appreciate, traction in brought adoption one, it

good, pipeline. always been would they've the Investor to I that's new customers in both say, that's game. more to But I the would and name the like just terms n Day, adopt in products defer of of

now both of are So and those force being well the sales as also products a really they're enthusiasm received important for arm new well. force is sales shipping and is and shot in the

of So get as of but downer clinics like in terms as sometimes, analyzers launching very little can't it's they been adoption the good. has be a to bit a when into to the quite aggressively they'd

for your Great. I Thanks it. appreciate time.

Andrew. Thanks,

question next Mah from Sandler. Piper Our of Steven comes

guys. great a for the and on quarter. Thanks taking questions congrats Hi,

you. Thank

and may us maybe to you or digging of but of model understand travel you and synergy be Scil a Yeah. of on over we covered setting subscription the I – margins? a in integration Scil and should into more the of sort question. ground for early more but a little baseline give moving your a the an Andrew's A bit maybe mentioned, expect restrictions, lot some could lot bit see gross already, color when I effect know little traction you're

next three I sort years days, take I I those it I future in defer. one we steps we of think can out only in of then You much days. XX looks the context of at what it'll I of be know and over a It's XX the it's think – will and in next like the will think it's how number terms Investor better, if do kind context, present of just cover question, we Day, move gross multi-year stair more margins so

And fair Okay. enough. I appreciate that. No, that's

year? my you know our next about there is some still QX rebound through the the So backlog can business thoroughly residual nice in reshaping in in flush of backlog QX. think that I or if to is, question but end through be of effects the really going you talked

Well, it's a great question.

ways. two it at look I So

maybe it maybe little called we is supply I we think being QX benefit low, out the chain it low and think some of so a bit because transitions we a true. were out, it and little was I called making, that had

we've without backlog, a And of of into percentage a QX performance created. so resolved a own of I just point backlog, was drag or have think it points I so so supply largely two the two our And through. issues those in put suspect just context, a our it's then XX.X we full and suspect, chain points. there was the flushed I to around And think help couple it I of – own

returning we don't X really in it a we of up probably I but continue, as of not quarter. second not is like saw the that of to expect really I catch path think the – So put couple it's fourth size kind it's or tailwind, XX, in context into quarter points to drag see it a and don't supply chain

pretty that not maybe back, didn't QX a snap it's in feel a couple real of came good QX. it's with about the come we So of demand and points really underlying in that exception

in major now And the can of European in America on regions trends Europe, in light America to been translate that very of sense recent North and Obviously, the Thanks North going Companion and for contrast the a Care global a seeing could Great. for macro. you're forward? give maybe Okay. then of maybe more talk where us resilient, compare just question you're and has of you Health how last demand you might especially my Animal very sort color. seeing on lockdowns? the sort And but right

these just musings Yeah. at think I And are more this point.

even worldwide veterinary lockdowns, that have to a anticipate what Lombardy we can Milan and their that, your if lockdowns year. other lockdown we veterinarians. but equivalent had they So and North people ability to needs medicine do the it America, having they are it And to time also to don't of for would in But is considered straightforward if that said have go house, in excuses operate I we animal out is wellness, product, they while necessary earlier the markets now, now find so the rather take even in areas sometimes veterinarian to it's animal the in think have do get don't fairly right we pretty the to not the and much that looking you for things.

kind we've during the is, before do the Veterinary it do rolling well. I diagnostics and But will and another That extra partial curb. test, the that the those pretty to kids they veterinarians think holds kids to they well think need they I I'm be recommend fact you the to an or to doing of healthcare point-of-care to baseline set happen periodically issues in from I in working pets a to people otherwise. because that well of service not all wait everything, pet then pretty that the the to spot full to don't check-in, that and flexibility do at call see lead what's commentary day their testing of in watch pubs, is we're curbside everything, the the whatever once model, generally and time, don't but have COVID, of things home get picked it things. flares Madrid as to to sending they're all And sports, I they -- flexibility that, that to of running check-out. also two. some get towards same these they're on out up day a do anticipate really home, the the not on And a going their not the time, to have really movie but extra then lockdowns So up they're are seen woods is epidemiologist, out point-of-care is back are schedule, leads out they're they all my the curbside there they house that having they who and challenges, we've they people out the to And get work-up, or of opposed back get pretty tends necessary they think these going you hot I seen Care teams, Health not with that rolling those

fairly markets point-of-care optimistic that underlying in. well that we're demand up I'm all is diagnostics So in fairly the operating for holding

it. That's yeah. you much. color. so I right. Thank Great, great Okay. appreciate additional All

Thank you.

comes Alliance Global of Haynor question next The Partners. from Ben

guys. Can me hear alright? day Good you

morning, Good can. We Ben.

morning. Good

So we it's of bit that for is any quarter a European so might we for of anticipated, the business there go last typical the bigger then Scil we what me, seasonality in had on international imaging, just as than firms is be ones cognizant QX into the the in and couple should quick fairly a of see European just year? from the

Yeah, Ben.

a little probably better thought I than I little it we're flying I better than So all bit it fog, bit in little some with think a and a was we in was now don't going regard, just probably And think FXXX know are but think the a with big bit my as well. the and QX think a I spike you're positive dynamics we to I get thought That's in clinics. trucks nice again. opinion had

expectations. quarters crazy, to quarters after ownership demand firm there investing of pent-up business. on but couple yeah, it's would of business number, ownership some your baseline. is step are a and it for people to in terms But say incentives it whether was was but think too number it really European say was personal compared terms in okay, in that rather positive early are definitely that our that's certain the We in a it maybe to under above that now we're of have a of maybe capital I that only countries historicals, four a equipment, helpful yeah, back and my nice certain So just wasn't

families guess And flexibility from -- the the home That now. you kind F-XXX model work from mentioned figures then makes I of I sales the the the sense. logistics that and to driver is home. to add got Okay. pet ultimately increased owners from -- it's in have now that your with to flexibility obviously work increased diagnostic sense, increased the usage? -- a of how big guess I

I it's huge. the think again, So been just it's early have XXXXs in commentary. the business personal I since

they always business high they the greatest veterinary compliance, pet the your have said your should. hospital, to space to and the that deal cat to in and then is trust could they We is the challenge their have -- everybody's the veterinarian a car the driving people getting and and very tend getting veterinarian great single into limiter

it's them think getting and is lasting. I there So and I the barrier it's real think

North in work type schedules bigger, are they are probably change I mid-day cultural home where flexible America frankly, and than say think in of the is at arrangements less Spain.

So I one. think North it's but lasting probably shift for America, a a bigger I think personally it's

play will while. quite a it think I in for be

has guess the I F-XXXs. makes that new that Okay. everyone now sense,

thanks with lot So -- a guys. and that,

Ben. Thank you,

comes Company. Sidoti question next The & of Sidoti Jim Instructions] from [Operator

Good morning, you hear Can Kevin. me?

How We you? are Jim. can,

an well. questions. I'm quick than Two drive I'm but other well. well, I'm I old that still Subaru,

the If done is third the quarter quarter for quarter so far year. downturn quarter, strongest you've in year. guidance the the year, historically, you fourth of to revenue from look indicate sequentially the It usually which, fourth a what at this

you think conservative QX into at will something and you in think update QX? there guidance your was can not be So point, rather or that don't this pulled

-- as don't a I it's it's much think Yes. out pull question there. a as place forward scary

really look we and thoughtful the a so, is the probably to think we guide given of full-year that and to job with of done very the be, correct full-year place And and upper a what the when range we have at uncertainty. guide do numbers it, challenging

expected third in really this with a there we going we're hey, of to but it can think give there's showed I million that's is fourth. in up no you to nothing mover So stick large -- quarter and say, I the the that, $XX

probably a the just up especially, we're the I can. is to we're refusing this stage, at full-year really with want to don't move trending -- as upper fact the but most really started think end -- we and trying we of that guide to best of so anything, given that space to I the we communicate it's say think that, the year

So I think we'll leave it where it’s at.

Okay.

the I mean, in with Catherine, think. we conservative thing, a the aggressive, big rate? forward? about So, a is the little don't what's reason to this there's should tax thing, charge Why that the going not And in on other going no being terrible then think I environment, get how quarter? And

Yes.

we just loss. net our effectively the to So, related value of carrying which is deferreds, Jim, the reduced operating primarily

business coming tax have it's Now very been to that strategic fruition. and strategies, by driven some

So we're that's it. carrying really to forward, -- we're I'm really a going assigned not valuation -- if going have growth not only you think only to use million the about it about does allowance word, $X

So the forward going is volatility pretty minimized regard. in that

-- So

I could say way… another it

report… going Are Yes. to you

Yes.

So --

-- going pay going forward. forward what right? going Is are going but you to report -- taxed you're fully pay it a not report smaller that you to number, or

Right.

to we'll so mean, XXXX well. as rate we'll I the going full-year what do -- going we're multi-year of So as yes, forward. expected tax provide certainly part

XXXX at Okay. down year. what in But this I'm of thought XXXX the guessing to from that tax it was to be rate going come and going is beginning you

Yes.

Thank you. Okay. All right.

You're welcome.

As the Mr. additional there like would to at Wilson for or remarks. closing questions back are any further point, I this no turn to call

joining Hey, thank the everybody Thanks you. call. for

I I work think the pretty and of a accomplished the the half plan. good clear year for results pleased it's more and I I'm that our wonderful. we our five-year has even inside great or the second think in place as pretty business enter this think, maybe deal about Heska a quarter, of as excited we're are

hard. super I'm excited, working We're tuned. stay So

half XX. you, XX update to Investor expect is the which now execute with continue I at days again for and Catherine plan from the further Day, We will our strategic of team, to our second and November

be fun it see to yes, see we there. a day great big is a there. We So everybody I virtually to day, you Heska. hope think to for day, hope a And, going

have So good right. a so blessings don't veterinarian, Have day. time, everybody. be your pet forget your as we've your safe take work-at-home you know to discussed, to vet. the pet count take and to then, until the we Thanks All Bye-bye.

for call. concludes today's Thank that Ladies you and participation. your conference gentlemen,

disconnect. now may You