Heska Corp. (HSKA) 23 Feb 212020 Q4 Earnings call transcript

Good day, and welcome to the Heska Corporation Fourth Quarter and Full Year 2020 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jon Aagaard, Director, Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. earnings XXXX. the Corporation's full quarter Heska of year to call fourth for and Welcome Jon Head am I Aagaard, at Heska. of Investor Relations us Catherine have Officer With Officer. we Heska's morning, Executive Chief Kevin and Heska's Grassman, Wilson, and Chief Financial President; this Mr. Ms. Wilson and provide questions. results reported details company's as as open will the then and outlook, we surrounding the will well the Grassman XXXX call to course Kevin, you and or discussing I the turn regarding the to Heska's that over remind to results statements before this company. may I to future we like Prior call would forward-looking of call, make of during the financial certain performance events future need beliefs uncertainties, cause implied actual We statements current and forward-looking expectations be such results and and statements. which may performance and that different or caution and expressed to to from involve that any risks by our are based materially forward-looking on known those you unknown to in quarterly release, are cause could differences detailed such that the with filings Corporation's writing in Heska and SEC or Factors elsewhere. earnings morning's annual contribute this and Any speak only does statements they Heska reflect forward-looking and specifically update occur statements intend that the time to was the after statement made. of events and intention made, any not are disclaims to time any such obligation as or forward-looking [Operator Instructions]. my being over now that Heska's With said, the President. it pleasure call CEO turn to is to and Kevin Wilson, Kevin?

morning, was listening Jon telling I this good thrilled everybody. instead to me are Jon, that of I'm and people Hey, Chairman thanks, morning Powell.

good hopefully, information you we for So have today. some

encourage review in callers written this to morning's Before data I our begin, like release comments. to I'd

quarter, nicely quarter full release. revenue callers North you'll see, the subscriptions' And fourth morning's as an year. helpful. exceptional a for our segment from from Heska Consumables strength in details do guide sales we're exceptional all XX.X% International XX.X%, deliver And and performance the find Australian Full teams at metrics. the retention. executed encourage across this in X% of gains above of is full universal American captured I share grew we year Subscriptions XX% sales as year-to-date to report with captured record XX.X%. Heska throughout you'll grew rose German In look the key In good bad Fourth results continuation XXXX, and rose to at summary, results in teams Spanish, quarter, again Lab -- metric. it think to them XX.X%. XX%. market in in XX.X%, our find bringing performance our to I year delivered the pleased to hard of well and which to which third and year quarter a is POC particular. fourth all we you the solid

a a throughout of our wanted because areas. Heska teams highlight While motivating. posture. well detail, remote difficult good, in year is winning and game worked a way We've from Catherine large quarter part Morale specifics few in greater hybrid raised our all healthy of will I today. the in in have time is with things Starting to in Q&A advance the cover our people. a

for of and see do difficult situation our begin. XXXX, in a the more to that While ramp-up quarter dynamic customers new to of to AIM just normal more it's XXXX, of possible in installs equipment Element person end been do in to we second the visit shifting and customers towards time

resiliency. and customer skills on retain opens to are has to tailwind return to Pet an by industry broadly diagnostics, as trends. we from create forecasts demand normalized our up, utilization demonstrated increasing new decades-long recent move we to pet installations. doing to to year. benefited encouraging, most across perform to that market Heska's pet can Veterinarians industry demand its to great. to strong. forward the doing of increases convinced benefits manner of and in-person we're long-established an are veterinary are posture are and built all well is visits continues more with remain great our visits been intend trends The focus our enduring flexibility on view, trends based health the Regardless, outpace families tests. Specific Even trends, macro reaffirm prior remote leading execute this environments, the continue we which, in and newly the end-user we Similarly, underlying as our of that similarly as care in in point-of-care

from end family user increase pet from testing Some demand. brand-new is

and from is to increase educate new efforts the utilization. of Some promote our

integration Heska that new are is the XXXX. the efforts, we moving Regardless the Products' base. of in veterinarians of see Heska utilization opportunity supporting into is net demand we strong our for expansion full education smaller new subscriber that quarter some analyzers major to each by and sustainable. rationalization perhaps our In and of their from and efforts as now these of recent Some is continue XXXX making And trends and for the encouragingly, launches migrated progressing on is reference is And and factors, portion testing increase in diagnostics tests underlying by point-of-care remain point-of-care driven the installed see and with the very result to and international most fourth being at just the continue central way increase that strong pace my in year. a of well. also laboratories. are was the margin that those weighting goals,

tested infrastructure, margin. effort similar margin market better products and have a market and a installed we international a XXXX. We we in experience began base, and installed also to our XXXX, North America is at share, condition, supported in existing that the roughly circa that position new experience path same by is a superior in to than faster team, today playbook America and XXXX We continue products through and at North in began clear effort the international see rate a conversion subscriptions base our

in prepared future. conclude effort finally, remind Our morning's detailed to to goals this are prepared the And how for my I'd for remarks, release. we like of you this are

our who We're not Investor a Act executing have viewed it November, you entitled plan dynamics. we're last I'd encourage yet broad-based listeners and do from X-year X, presentation articulated and following has those that plan to For Heska while market very of so. positive closely. to support Day receiving

research have as in new including Our continued and progress launches, digital line to even time effort and psychology bonus lines, our professional previously development our added initiatives shared new progressed with we've services. in

sheet in great is balance Our shape.

been Our position in never has serve markets the stronger. we

at our in better than time history. Our teams are any

them place to grow. the diagnostics Our best end are perhaps markets are doing specific within great and our markets

call throughout we we these deliver which ability done; tenets active and confident products which core addressable our our done more, the double provide the outlook. quarter year XXXX I'll our remain and we in For grow pet of with of turn have and and to to our XXXX these additional that, X full in double to anticipate major to and do accomplishments you me XXXX. core to opportunity in have aggressively offer, the to and revenue effect With Catherine? Heska continuing X to in great geographies reasons on lines intends which that substantial on detail and have plan: multiplier leads over performance and opportunity we we beyond. win serve, strategic Catherine the in XXXX is information business, The in to a the care, continue we to we and to There XXXX done; XXXX. combined health anticipate performance

morning, good and Kevin, everyone. Thanks,

exceeded the will performance outlook pleased noted, in the communicated. report we are through for discussion overview XXXX financial our our all As to XXXX. At fourth I met in exceptional our an year you or metrics of XXXX conclusion of we of take performance, outlook our Kevin and full financial for quarter around previously which

performance. care results. Now the delivered by to companion Heska health animal demand global the in market, Underpinned excellent expanding

pandemic, XXXX a and to closed a on in of our acquisition in of the the During which consolidated of XX.X%. care, global animal transformational our revenue contributed transaction net most company's growth midst scil history, single Heska

for for the International. and year. results quarter and X to report Continued We strong legacy also contributed products geographically businesses and performance America North our Heska in the segments: growth in our

revenue to this -- Contributing international Our sales America for is for America XX.X% Europe grew growth segment for all and of was while grew includes North North today. and consists year. XX.X% of America the and Canada XX.X% our of as XX.X% fourth full segment the outside for North the the year. of of Mexico, consumable quarter fourth primarily comprised countries U.S., in and full quarter segment the

experienced growth sales a strong relating XXX includes approximately for to Merck. XX% fourth our also This and in our The exceeded full We sales International product XXXX. contract consumable of to year year. growth. placements with full margin points the point-of-care segment and XXX expectations for segment Tri-Heart, manufactured of Consolidated equipment for inorganic gross PVD, capital declined represents largely approximately basis the quarter imaging and which

As anticipated, profile is margin which impacting consolidation lower on gross a comparative margin consolidated of business. the a is skill, basis

are full the expectations. segment meaningful and lower for prior financially the XX.X% consolidation synergy Total acquisitions, North the opportunity increases this related was operating it million increase The a the at in We year expenses experienced share full non-GAAP non-GAAP throughout gross for is hard share impacted over compared in revenue compensation, the the onetime year $XX.X in positively fourth bridging was quarter, increase to per when margin as for quarter experienced the EPS an margin with periods, segment XXXX. by EPS contributing costs certain full to year work fourth our the growth full was stock-based recognize gap EBITDA America Heska. an the our In fourth gross of XX.X% both quarter costs within $X.XX of of XXX higher well reconciliation million, margin but activities and sales per are in operating mix, share GAAP with International finished our The an $X.XX in quarter from EPS which and full a Full Non-GAAP the per other to our of and product per $X.XX the XXXX, XXXX year other increase the and and was basis for and full $X.XX and $XX.X factors. and primarily acquisition items, leveraged a year operating and was of mix EBITDA due products year EPS and higher XXXX OVP. XXXX, expenses per sales, consumables adjusted exceeding the Adjusting of fourth was and share. point sales XXXX amortization fourth and margin XX.X%, manufacturer is of driven gain XX% an our share. the quarter resulting year or line as our at XXXX was for purchase increase XX.X%, year outlook. fourth of leverage year non-GAAP $X.XX to increased increased $X.XX full which were operating XXXX. $XX.X of in EPS Adjusted about of increase XXXX. by were release, due of year, from share included million accounting. respectively. margin of in for loss depreciation as PVD the gross mainly Higher from detailed contract all quarter per

balance sheet million. strong $XX.X of position and as ended remains liquidity Our we our solid cash is with XXXX

$XXX XXXX. well Turning outlined XXXX. newly updating the provided in summarize, for of growth of utilization, this new pricing $XXX we outlook. scil a assumptions Care scil in industry a to our top incorporates of test. in as for positive Investor in On steady million including in million our Care the continued by range financial and Care of of of around financial outlook outlook acquired line transition this million and At the million model. XXXX We trends to a profile the range consolidated growth impact $XXX result our Point Laboratory, Reset now of market is Element consumable key the share is on continued and November, time, acquisition is a expected as our the to increased multiyear estimate imaging, as AIM impact Point Day which continued million We year-over-year. $XX launch driver driven growth. of $XX global To to of gains, Growth revenue Point also are past of million to estimate financial Laboratory business we which $XXX acquisition,

the to are consistent to XX% be full-year XXXX PVD product segment, XXXX. lines from which anticipate outlook Point North rate Care and to estimated of an to our consolidated approximately than OVP of expected remaining We more relatively XX% XX%. America of revenues Lab growth consumable come of Our includes

margin relating international of is will by on rationalization XX% is North basis. includes be expected more margin, the transition, adjusted which XXXX than flat recognition Our instrument be AIM revenue to sales International expected Element X%. higher expected to consumable reset subscription continuation to and internationally growth Increased a be America. an rate program offset EBITDA reported in product approximately

additional increased mobility attributing at compared against XXXX, macro in expense the the in the operating to anticipate to margin among as sales are of of to in increased factors as Finally, force of relating we and COVID-XX light to sales-related travel scil compression quarter addition XXXX. vaccinations expense our

will assist and Lastly, which uncertainty, we $XX and change profile we GAAP no than to that's costs. this compensation for year, depreciation a of to investors we record million. still issuance statement approximately some on $XX Due million to on to applicable relatively noncash point of debt full other approximately notes X, forecast of the expense amortization income small related and analysts $XX to interest difficult a longer expect the January our of amortization due at stock-based our in to XXXX, guidance adopted instrument, accounting million amount convertible to

to Heska, net due we investment expect the $X related benefiting treatment expense approximately decisions interest of million. Additionally, accounting certain and

creating with specifically. pleased performance realizability to smaller initiatives. your is XXXX have With We projection, as open those discrete operations financial in In approximately future the which which believe as cash XXXX. tax the is are to in forward by for CapEx, many cash liquidity us sum, are to be million or $XX items as that, any assets any free we afforded and opportunities tax in strategic of look effective the rate valuation would changes full-year Operator? X% expected flow potential X% ongoing sufficient our for expense, XXXX less we for the compete deferred call to space will million. to we $X we Our questions. our for which and operating like Heska well we to flexibility flow defined excludes between on

Instructions]. [Operator

The first question Guggenheim comes Securities. from David Westenberg of

Congrats on great a year.

QX commentary I just to is also start data, new out that looks to there's like when with see definitely And subscription an want you've new the in clinic. terms great. given was but accounts go share in says acceleration tough wins, of in revenue So and you -- gave then you it can't like instrument market

a up, muted is commentary suggesting numbers of So that are can so you little but why reconcile market more going there? help share, those us acceleration your far kind of

Yes.

you as realistic as I can, competitors. crystal you really, think you be really has have you a want And nobody to ball. have to assume strong that

that understands I everybody think space. our about

competition. you think you size by just But the of given and do -- So strong number maybe do better. getting is what that just I more realistic tailwind some process. the bit. think really for the of holds up that We be I that difficult yes, do the a maybe We may opening a imaging, challenges would for have but see see nature installation and future have don't a which it's as little done the know into clinics,

a mean -- great, retrospective mean, it of growth like I again, I also of step But was into great. new it's was a just back. kind even to accounts. growth maybe from maybe account take and a you the view, looks kind Yes, get said hard subscription

I numbers the where terms because maybe the that pandemic installing going So necessarily know that. like conceptualize can signing of were a look subscription again, not but the in great if on. instrument you you there's really But

that trying if I'm makes difference. that So I don't just to know sense? conceptualize

It's continued. No, harder in travel, for have I It's installations, think, to to harder industry. everybody installations just It's continued have no. Yes. the mean, schedule. harder. but I

there the X can be Tuesdays little get in a it's up in to to You trying of just X now. if time But figure more place. Tuesday, has frame from since little or were bit a going or out Tuesdays whether spend on bit you people when time that March-April opened kind frozen

market. just still doing the But better than Restaurants and in are would it's like So what some see general as busy. you aren't open, not others. they're

more progress. it it's than think would we've little -- still been difficult have bit I otherwise able so And a been It's been to just been.

it. Got

had lot is you to fecal willingness term. coming a diagnostic mean, all You pie? of new of but built your you're the subscription of the the a there's out products? know of something winning new fraction entire in these a talk really about concepts, on out be Can products. where kind could pie rather analysis, I diagnostic lot your I equipment analysis, fraction something win near than small maybe the cytology, new just digital as rolling Is business a urine interesting

needs. trying question. reference we to those get diagnostic we serve a if technology the to at And no There's if lab, We're needs still that currently so. customers' want to serve diagnostic have Yes. do they need

where in for defensive business. So might play defensive be a digital the not folks us side for play cytology a is are it who reference

services. it's the customers to us, For our ability offer more

And Progesterone it pet like can from envelope then York the New to so Los drop make and Angeles technology it a that It's fly a things to better is or current the we to is pet, the it's it an care. and bringing not point the airport, owner and up, experience the technology for it airplane, inefficient green. We that's the car We we drop in it have efficient, -- drive that the the a box, at. have a car and veterinarians. and of put to looked not airport central We It's and on lab think think into to to think more think sample, trend. slide, an drive somebody pick example. the drive a take

at small very year a that's be would pie. but thrilled some free I that. large million think in happening we to of there's get If central $XXX reference smaller piece to getting a the a cash of lab, flow So of get the perfect a piece example

what is think been have beginning And menu, And and services, in the the and AIM, is moving business, like you adding if Testing, largely the and blood the for and then in types that now we're or slides you quite and and specialty-type we're with but urine and store, call we've entering which also fecal been side half other would plasma. blood the have that services. so those of blood Heska business of process. definitely laboratory fecal. of I businesses And also you for leg testing into us lab urine just and time, which and last at on the have scenarios the a services. decade you And two. Element plasma then professional that, look now pathology-type you is of the it's third Similarly, for things long

think XXXX, piece shown with think really we of And of thing same can line I that We can at a space table. bigger gain and better that's a ability in do and getting competitive in we're our the do So point than much been haven't way. small market we we in segments. care think big in a in in the table pie. just a X. We've to at I that And plasma, blood share other also

comes James. Andrew Next Cooper Raymond question from of

sort is lot. of think something we you're utilization, talk which you But starting little not about Maybe with a haven't to bit back, to if heard some longer in term, we higher-level on a regards Kevin, driving metrics said comment going just one. Heska

give And do lot can been -- How that. some sort received? competitors a just what you're of doing? of we've us seen you of context maybe certainly, So that's

sort really Heska make it's Any to So be color would see there that of helpful. shift. interesting

money X,XXX first. base we installed of that's lots utilization think to in even We effort that's Yes. Look, and don't drive or trying or invest XXX game-changing X,XXX. an milestone, a

but over in couple get the driving the You you have America, that move just installed can North now when that get a you well outside number thousand thousand, and utilization in and needle. of base of don't then over leverage, North several we're America,

to until I a just competitor been And I They're or out, by last way week, just a at webinar. we we that. had haven't maxed I the just XXX But and willing example so been we haven't if really a And those seminar, pull I to Heska. web lever it. got X,XXX participants, a we've -- end of who's say that called was example, at a much remember of And extraordinary things I bigger traditionally said it XXXX. but don't say wonderful that's of want done it

base. So The we drive is think can do we utilization itself base our installed in installed growing.

multiplier of kind it's that So effect.

of So yes, it's is something in the half we're pursuing actively well. going and that XXXX, second that

the there's in unpack especially could you maybe International business. good came bit? Okay. growth, but consumables Great. then I when the us The little the Obviously, help And is on a a think, number, deal in. lapping

look underlying growth same-store rationalizations consumables you're to -- what's anything sort through us for So market is help for how looking or the think want your like the of that get for you adjust might whether not? of that gains sort there growing sort some you 'XX? out flavor to of share do and Just what a

prepared don't we're owned on whole a today, XXXX. since think, deeper that. business dive only April of the I We've lot to

data. is if And really be some a line enough X give to really that is more of you level in we we have of which little quarters, in. So X delays quarter bit we'll more it. I share after quarters X factor the able of you to April do just But think COVID the lap X a before confident we're with data time not

consolidated think before good. dive We on try of our I But to it's We need another or transparent. two going we that. So think it's more into It's outlook. to positive. pause be we're we detail. We quarter think part

Sandler. Piper of Mah Steven from comes question Next

quarter. Congrats on the

you. Thank

dig a are that improve? that I or international give on us sense you and is Can International the for model when you've when will completed conversion converted us that give of what And been scil of how subscriptions? you've some and expect color we be been on part want subscriptions. to get XXX the customers expecting. gross margins color number Yes. conversion on and should in going a is to if to the some sense that I've maybe rate subscription trying

Yes.

at subscriptions, And about XXXX's we America efforts. XXX. ended North XXXX So in XXXX ended international the we

you about at North in back to XXXX, at all America, XXXX, ended go XXX. If XXXX the we in And way we ended XXX.

forecast XXX, start take And little this so kind bit XXXX year to America. at together obviously in we'll better our a But that less we XXX the so first of a which in that year, than put than North started is we've we'll internationally in XXX.

So put another way, And we do see the a faster us customer just scil. International isn't adoption for rate base. with International

of part scil. before So been really busy we XXX that got has with work

in CVM Spain. the those So companies put business businesses and CVM scil We've with business. since X together

and been during active half, also. they've And in done So then Australia the done well second subscriptions has they've well.

that be kind think XXX, going I baseline XXXX. XXX. And I very do starting in of But a in That's as America that is to number, number. similar North view it's started So to rate. largely view, faster a I our that XXX that the adoption we

year, XXX in out for faster than North which So is calling we're did this America. we what

maybe sneak last in. one just And one

consumables of more backlog is going element do the durable you up any Point there Care Lab XX.X%, of think that's On of catch or forward? a increase

backlog recall. a was have in don't there. XX.X%, QX And We I

don't any as of a see So we really snapback. that

I a within market. think a -- it's strong And we market. a I well strong just think did that's

it. Got Okay.

into pushed not QX. durable Okay, then? think more get that a Do so didn't QX like tripled from into backlog but it's it's hangover you good QX maybe

Yes. do. We

big second nice period. X I half whole was the think

question from comes Schott Next Chris JPMorgan. of

was, it's me product trying to America there I expectation? there. first subscriptions looking we're for maybe -- seem The vein, and that guidance the a bit, little the over does have at growth -- in subscription bit a contract you're contract versus X% you're growth slowdown new on dynamics expecting follow-up the of after it 'XX X% XXXX. about the talk And kind new like just 'XX. the about X% a a versus forecasting I'm just you one I of that. a cycle given And guidance contract a bridge growth. North little subscription seeing, in in for of X% just value I was similar in value Can think for subscription growth seeing bit color or some And it's just

great Yes. No, a question. it's

don't is will quite So that cause contract these friction keep dollar people the anyway. commitments. longer-term by value believe ask the subscription point value any utilization, customer are up monthly they'll signs selling value, of we're but in with. for we utilization. asking what if exceed -- get confident that we adoption higher I we low to products that out comfortable want rather contracts And really angst that contract in of that would that their for We'd possible, as some that the as and we the obtain And utility in because of products confident term, a new subscription for. that utilization, the we're trade would a make is lower minimum we And especially we're longer

line growth value in not some also well. nice as thinking big minimum you'll subscription But really subscriptions. So contract months with of maybe that's in growing our gap under piece of see in a between subscription that number the exactly

works So it we all anyway, out. think

Great.

sense. in makes in remarks, no think you this value there, So trend question, And the size. my contract then little just I That addressed though. bit the second a of

EBITDA the margins to low had quarters. past the You've few mid-teens in over

from bit those for this little trends that a year. versus bridge us the you're recent help expecting target Just X%

grow, many so I'll then So add. she have doing to that will to many other than rollouts. I'll in we're maybe product we it take if investment that let things at so color we stab Catherine, things in probably those And better if accelerate invest a that any that, first there's of to wants some

business I legacy experienced point have to addition built among in that we just which in enhance No, good 'XX. our the some costs year, of immobility think into reduced a inhibit in Yes. we've this is that result especially, we and group, a -- it's have sales encourage back to

obviously expand Europe well as bit a pull in So that it down a as to bit as going that's well.

in going costs margin basis. down there are are some that there a on additional comparative bringing that So

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

following just Lab So questions of Point up earlier for of me, first Care on XX%-plus. the International growth of of consumable one kind on

COVID this having thinking not that in helpful. mean QX bit thinking to the you want full plus I said more just any plus about from impact know get read fair? into that be way on QX. too me much, like year having I is a you Just qX, the is to with but to that, full versus little it seems the year just plus it the anything snapback would that to the emphasize don't last COVID that like

nicely... Super

Super broadly.

it, ahead. Go got You Catherine?

think obviously a the the transitioning typically, customer Yes. you're I evaluation I spot 'XX, I onto protecting acquisition keeping still to we're QX but Reset utilization new base. right, existing very I we're being on in growth, aggressive on. priority mean, you're strategies, in that That focused on be point. mean fact that base getting there and really right is key In customer working looking in on on program. internationally, for is going that of potential transition mind QX, see one and is of for But that just our upside in percentage. us. certainly base throughout customer that and Ben, our plus our new and process space

to that makes main because subscriptions is if And out ESG. reasons, months -- one. up the time mean, thing the that and for efficacy I be give should of guys us at equipment equation Great. the your to of understanding friction best the I of get it's side under that's you move my in try Or on the which accounts get evidence over plan, And that understand be as give kind it new figure going should that you installed always at? X following earlier executing always But maximize impacting add, total? to I trade-offs case, as re-up $X to existing to the go what's hard some remove and you to an for guess away are kind on revenue, sense? we you for accounts. the then subscription, makes looking up existing emphasize removal can at it minimum at or metrics the recollection of desire just there's I looking is and But friction kind sense also, when up look to there. $X.XX, various

a No, great question. it's

how So subscriptions at gains. I look me roughly here's look and to to Active leads it. retention of kind market share

do those our under health wonderfully subscription when veterinarians, Months leads are our veterinarians, to So of the premise and do If more over go the main that's at. going up, the say, bucket going me we diagnostics next I they're care, more achieving that are market of in to look decades, care couple to in particular, goal? is testing. roughly testing, point

continue that's of customer, sure achieving about for that $X.XX. make maintaining me relationship in and spend way long-term CSV that veterinarian the certain just more mission to a commit look with more metrics. $X mission, discipline little giving that our the at a amount snapshot that's to as you're not then me a there you're is mission so confident spending being their then to XX% subscription to to proximity revenues away to we're having minimum our That's some customers, long-term first And the X that decades. meeting getting XX%, the grow, of as doing there, right? they Heska. you're And is for And I you're a that the check for is a of their That closest under with it So metric. say, And gives how to close metric, success be a the that are to veterinarian? key so we months customer

dashboard. kind So that at X helps. know of don't how in look I of the I terms if those just that's

I very and looking that what exactly was was for. helpful No,

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

hear you me? Can

we Jim, can.

Two to fecal? questions I from you are me. about put you that assume should lines Are okay? urine and the time the rollout that update out going still for previously So anything

They are.

we're and inflationary And Okay. you facing is rising the do how in interest an you top the And environment and career if in that the second factored the your into all it the first then know line one, at top margins? guidance? so, would I that rates. think Have this my impact time

We in subscriptions. our So feel well that protected guidance. like reasonably factored we our haven't we're into

have a get-out-of-jail-free subscriptions Our card. CPI,

Carter, know Jimmy interest our XX% So if would up for and by woke contract. reason, pricing we some rates, adjust

don't by like our corner inflationary that but our and see happening, and be as the way, that their And there. look contracts, have we're We into protected reasonable. pricing. the then so we around we to that with feel view bake customers too They would

thing don't that driven that think debt have rates by So capital and sprinkled types driven. to it's sits probably but macro care think of good inflation right are We're those I on consumers, subject for like protected huge of health being health a a don't interest is consumer variable event. And we're gigantic kind requirement. I between largely care because balloons in large pet payments things. it We pricing see not also We consumer, there. cyclical, things cash of largely

for So I positioned we're well that probably think environment. fairly

to expense Is I Okay. say that for she heard around think And Catherine be that expects million. I XXXX correct? interest net $X

correct. That's

didn't I Sorry, you. hear

was was Jim I correct. sorry, just confirming. Yes, I'm

from of last Our James. question comes Andrew Cooper Raymond

you're how about out customers. backlog just there? nobody for jump the November to of installed goals sort from But updates AIM, terms talked follow-up Any of But rollout is of could you the a give And existing in the hearing I the in figured build, any some can rolling you're asked on excitement the base. track. this. on you level continuing the to about of just since know I on just else feeling I color in

go can't enough. fast just we Yes,

continue We're to to to more be. is get So to demand confident we goes we where there -- build than want quarter by, backlog. we're every that

as question. working execution an just customers a out it's really, possible. many It's to wonderfully as product fast getting as So

team I at So so don't our is but needless lot update public our to in a bit I of say, customers. good. to because sales backlog get it's our the and want don't specifics into chomping to want

call I'd any questions Kevin at or additional closing Wilson It are for this remarks. further to turn time. back appears there the like to no

thanks thanks and Heska, of we execute half operator, we momentum thanks, great think Well, our to in in everybody to last continue we'll year, we'll who joined expect the second to blessings Until interest Obviously, look accelerate And plan. And and then, you work. and take strategic safe, for your your X-year of our your pet updating your support quarter. vet. I next well guys count call. XXXX. the that through care and in the We did forward be

a appreciate there. you, good day have we out and So

Okay. Thanks. Bye.

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

disconnect. may now You