Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 27, 2020 | Jun. 28, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | Heska Corp | ||
Entity Central Index Key | 0001038133 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 591,307,230 | ||
Entity Common Stock, Shares Outstanding | 7,838,402 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 89,030 | $ 13,389 |
Accounts receivable, net of allowance for doubtful accounts of $186 and $245, respectively | 15,161 | 16,454 |
Inventories, net | 26,601 | 25,104 |
Net investment in leases, current, net of allowance for doubtful accounts of $105 and $40, respectively | 3,856 | 2,989 |
Prepaid expenses | 2,219 | 1,533 |
Other current assets | 3,000 | 2,938 |
Total current assets | 139,867 | 62,407 |
Property and equipment, net | 15,469 | 15,981 |
Operating lease right-of-use assets | 5,726 | |
Goodwill | 36,204 | 26,679 |
Other intangible assets, net | 11,472 | 9,764 |
Deferred tax asset, net | 6,429 | 14,121 |
Net investment in leases, non-current | 14,307 | 11,908 |
Investments in unconsolidated affiliates | 7,424 | 8,018 |
Other non-current assets | 7,526 | 7,574 |
Total assets | 244,424 | 156,452 |
Current liabilities: | ||
Accounts payable | 6,600 | 7,469 |
Due to related parties | 0 | 226 |
Accrued liabilities | 6,345 | 10,142 |
Accrued purchase consideration payable | 14,579 | 0 |
Current operating lease liabilities | 1,745 | |
Current portion of deferred revenue, and other | 2,930 | 2,526 |
Total current liabilities | 32,199 | 20,363 |
Convertible note, long-term, net | 45,348 | 0 |
Deferred revenue, net of current portion | 5,966 | 7,082 |
Line of credit and other long-term borrowings | 1,121 | 6,000 |
Non-current operating lease liabilities | 4,413 | |
Deferred tax liability | 691 | 0 |
Other liabilities | 152 | 598 |
Total liabilities | 89,890 | 34,043 |
Redeemable non-controlling interest and mezzanine equity | 170 | 0 |
Stockholders' equity: | ||
Preferred stock, $.01 par value, 2,500,000 and 2,500,000 shares authorized, respectively, none issued or outstanding | 0 | 0 |
Original common stock, $.01 par value, 10,250,000 and 10,250,000 shares authorized, respectively, none issued or outstanding | 0 | 0 |
Public common stock, $.01 par value, 10,250,000 and 10,250,000 shares authorized, 7,881,928 and 7,675,692 shares issued and outstanding, respectively | 79 | 77 |
Additional paid-in capital | 290,216 | 257,034 |
Accumulated other comprehensive income | 513 | 277 |
Accumulated deficit | (136,444) | (134,979) |
Total stockholders' equity | 154,364 | 122,409 |
Total liabilities and stockholders' equity | $ 244,424 | $ 156,452 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for doubtful accounts | $ 186 | $ 245 |
Net investment in leases, current | $ 105 | $ 40 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 10,250,000 | 10,250,000 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Public Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 10,250,000 | 10,250,000 |
Common stock, shares issued | 7,881,928 | 7,675,692 |
Common stock, shares outstanding | 7,881,928 | 7,675,692 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue: | |||
Total revenue, net | $ 122,661 | $ 127,446 | $ 129,341 |
Cost of revenue | 68,212 | 70,808 | 71,080 |
Gross profit | 54,449 | 56,638 | 58,261 |
Operating expenses: | |||
Selling and marketing | 27,678 | 24,663 | 23,225 |
Research and development | 8,240 | 3,334 | 2,004 |
General and administrative | 18,204 | 24,847 | 14,813 |
Total operating expenses | 54,122 | 52,844 | 40,042 |
Operating income | 327 | 3,794 | 18,219 |
Interest and other expense (income), net | 2,910 | (13) | (150) |
(Loss) income before income taxes and equity in losses of unconsolidated affiliates | (2,583) | 3,807 | 18,369 |
Income tax (benefit) expense: | |||
Current income tax expense | 359 | 140 | 49 |
Deferred income tax (benefit) expense | (1,805) | (2,255) | 8,864 |
Total income tax (benefit) expense | (1,446) | (2,115) | 8,913 |
Net (loss) income before equity in losses of unconsolidated affiliates | (1,137) | 5,922 | 9,456 |
Equity in losses of unconsolidated affiliates | (594) | (72) | 0 |
Net (loss) income, after equity in losses of unconsolidated affiliates | (1,731) | 5,850 | 9,456 |
Net loss attributable to non-controlling interest | (266) | 0 | (497) |
Net (loss) income attributable to Heska Corporation | $ (1,465) | $ 5,850 | $ 9,953 |
Earnings Per Share [Abstract] | |||
Basic earnings per share attributable to Heska Corporation (in dollars per share) | $ (0.20) | $ 0.81 | $ 1.42 |
Diluted earnings per share attributable to Heska Corporation (in dollars per share) | $ (0.20) | $ 0.74 | $ 1.30 |
Weighted average outstanding shares used to compute basic (loss) earnings per share attributable to Heska Corporation | 7,446 | 7,220 | 7,026 |
Weighted average outstanding shares used to compute diluted (loss) earnings per share attributable to Heska Corporation | 7,446 | 7,856 | 7,642 |
Core companion animal | |||
Revenue: | |||
Total revenue, net | $ 106,570 | $ 108,924 | $ 105,191 |
Other vaccines and pharmaceuticals | |||
Revenue: | |||
Total revenue, net | $ 16,091 | $ 18,522 | $ 24,150 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract] | |||
Net (loss) income, after equity in losses of unconsolidated affiliates | $ (1,731) | $ 5,850 | $ 9,456 |
Other comprehensive income (loss): | |||
Minimum pension liability | 73 | 70 | 12 |
Foreign currency translation | 163 | (25) | 123 |
Comprehensive (loss) income | (1,495) | 5,895 | 9,591 |
Comprehensive loss attributable to non-controlling interest | (266) | 0 | (497) |
Comprehensive (loss) income attributable to Heska Corporation | $ (1,229) | $ 5,895 | $ 10,088 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2016 | 7,026 | ||||
Beginning balance at Dec. 31, 2016 | $ 86,975 | $ 70 | $ 238,635 | $ 97 | $ (151,827) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income attributable to Heska Corporation | 9,456 | 9,456 | |||
Net (loss) income attributable to Heska Corporation | 9,953 | ||||
Issuance of common stock, net of shares withheld for employee taxes (in shares) | 277 | ||||
Issuance of common stock, net of shares withheld for employee taxes | 1,376 | $ 3 | 1,373 | ||
Stock-based compensation | 2,745 | 2,745 | |||
Accretion of non-controlling interest | 845 | 845 | |||
Distribution for Heska Imaging minority | (1,092) | (1,092) | |||
Other comprehensive income | 135 | 135 | |||
Ending balance at Dec. 31, 2017 | 100,440 | $ 73 | 243,598 | 232 | (143,463) |
Ending balance (in shares) at Dec. 31, 2017 | 7,303 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income attributable to Heska Corporation | 5,850 | ||||
Net (loss) income attributable to Heska Corporation | 5,850 | 5,850 | |||
Issuance of common stock, net of shares withheld for employee taxes (in shares) | 318 | ||||
Issuance of common stock, net of shares withheld for employee taxes | 2,762 | $ 3 | 2,759 | ||
Issuance of common stock related to acquisition of assets from Cuattro, LLC (in shares) | 55 | ||||
Issuance of common stock related to acquisition of assets from Cuattro, LLC | 5,451 | $ 1 | 5,450 | ||
Stock-based compensation | 5,227 | 5,227 | |||
Other comprehensive income | 45 | 45 | |||
Ending balance at Dec. 31, 2018 | 122,409 | $ 77 | 257,034 | 277 | (134,979) |
Ending balance (in shares) at Dec. 31, 2018 | 7,676 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income attributable to Heska Corporation | (1,731) | ||||
Net (loss) income attributable to Heska Corporation | (1,465) | (1,465) | |||
Issuance of common stock, net of shares withheld for employee taxes (in shares) | 206 | ||||
Issuance of common stock, net of shares withheld for employee taxes | (1,618) | $ 2 | (1,620) | ||
Stock-based compensation | 4,968 | 4,968 | |||
Convertible notes, equity | 29,834 | 29,834 | |||
Other comprehensive income | 236 | 236 | |||
Ending balance at Dec. 31, 2019 | $ 154,364 | $ 79 | $ 290,216 | $ 513 | $ (136,444) |
Ending balance (in shares) at Dec. 31, 2019 | 7,882 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS € in Thousands, SFr in Thousands, $ in Thousands, $ in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net (loss) income, after equity in losses from unconsolidated affiliates | $ (1,731) | $ 5,850 | $ 9,456 |
Adjustments to reconcile net income to cash provided by operating activities: | |||
Depreciation and amortization | 4,916 | 4,595 | 4,754 |
Non-cash impact of operating leases | 1,565 | ||
Deferred income tax (benefit) expense | (1,805) | (2,255) | 8,864 |
Stock-based compensation | 4,968 | 5,227 | 2,745 |
Equity in losses of unconsolidated affiliates | 594 | 72 | 0 |
Amortization of debt discount and issuance costs | 1,842 | 0 | 0 |
Accretion of non-controlling interest | 14 | 0 | 0 |
Unrealized foreign currency transaction loss on purchase consideration payable | 159 | 0 | 0 |
Other losses (gains) | 387 | 8 | (46) |
Changes in operating assets and liabilities (net of effect of acquisitions): | |||
Accounts receivable | 3,796 | (1,076) | 5,243 |
Inventories | 918 | 6,046 | (13,834) |
Due from related parties | 0 | 1 | 99 |
Lease receivable, current | (846) | (920) | (1,244) |
Other current assets | (394) | (505) | (474) |
Accounts payable | (1,686) | (2,020) | 3,143 |
Due to related parties | (226) | (1,477) | 250 |
Accrued liabilities and other | (5,883) | 6,146 | (1,380) |
Lease receivable, non-current | (2,283) | (2,294) | (4,782) |
Other non-current assets | (57) | (871) | (984) |
Deferred revenue and other | (952) | (3,240) | (1,401) |
Net cash provided by operating activities | 3,296 | 13,287 | 10,409 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Investment in subsidiary, net of cash acquired | (622) | 0 | 0 |
Cash acquired from acquisition of CVM | 927 | 0 | 0 |
Acquisition of intangible asset | 0 | (2,750) | 0 |
Investments in unconsolidated affiliates | 0 | (8,091) | 0 |
Purchase of minority interest | 0 | 0 | (13,757) |
Real estate asset acquisition | (1,184) | 0 | 0 |
Purchases of property and equipment | (1,044) | (1,358) | (3,469) |
Proceeds from disposition of property and equipment | 0 | 25 | 57 |
Net cash used in investing activities | (1,923) | (12,174) | (17,169) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from issuance of common stock | 1,829 | 4,034 | 2,452 |
Repurchase of common stock | (3,447) | (1,271) | (1,076) |
Distributions to non-controlling interest members | 0 | (126) | (965) |
Convertible debt proceeds | 86,250 | 0 | 0 |
Proceeds from line of credit borrowings | 6,750 | 3,000 | 40,307 |
Repayments of line of credit borrowings | (12,750) | (3,000) | (34,979) |
Repayments of other debt | (1,191) | (10) | (68) |
Payment of debt issuance costs | (3,177) | 0 | (120) |
Net cash provided by financing activities | 74,264 | 2,627 | 5,551 |
NET EFFECT OF EXCHANGE RATE CHANGES ON CASH | 4 | (10) | 74 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 75,641 | 3,730 | (1,135) |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 13,389 | 9,659 | 10,794 |
CASH AND CASH EQUIVALENTS, END OF YEAR | 89,030 | 13,389 | |
NON-CASH TRANSACTIONS: | |||
Transfers of equipment between inventory and property and equipment, net | 827 | 1,449 | 1,637 |
Consideration payable for CVM Acquisition | 14,420 | 0 | 0 |
Common stock issued as partial consideration of Cuattro acquisition transactions (See Note 3) | $ 0 | $ 5,450 | $ 0 |
OPERATIONS AND SUMMARY OF SIGNI
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Heska Corporation and its wholly-owned subsidiaries ("Heska", the "Company", "we" or "our") sell veterinary and animal health diagnostic and specialty products. Our offerings include Point of Care diagnostic laboratory instruments and supplies; digital imaging diagnostic products, software and services; vaccines; local and cloud-based data services; allergy testing and immunotherapy; and single-use offerings such as in-clinic diagnostic tests and heartworm preventive products. Our core focus is on supporting veterinarians in the canine and feline healthcare space. Basis of Presentation and Consolidation In the opinion of management, the accompanying Consolidated Financial Statements contain all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the financial position of the Company as of December 31, 2019 and 2018 , as well as the results of our operations, statements of stockholders' equity and cash flows for the twelve months ended December 31, 2019 , 2018 and 2017 . The audited Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the SEC. Our audited Consolidated Financial Statements include our accounts and the accounts of our wholly-owned subsidiaries since their respective dates of acquisitions. All intercompany accounts and transactions have been eliminated in consolidation. Where our ownership of a subsidiary was less than 100%, the non-controlling interest is reported on our consolidated balance sheets. The non-controlling interest in our consolidated net income is reported as "Net loss attributable to non-controlling interest" on our Consolidated Statements of Income. Our audited Consolidated Financial Statements are stated in U.S. Dollars and have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"). Reclassification To maintain consistency and comparability, certain amounts in the financial statements have been reclassified to conform to current year presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are required when establishing the allowance for doubtful accounts and the net realizable value of inventory; determining future costs associated with warranties provided; determining the period over which our obligations are fulfilled under agreements to license product rights and/or technology rights; evaluating long-lived and intangible assets and investments for estimated useful lives and impairment; estimating the useful lives of instruments under leasing arrangements; determining the allocation of purchase price under purchase accounting; estimating the expense associated with the granting of stock options; determining the need for, and the amount of a valuation allowance on deferred tax assets; determining the non-controlling interest in a business combination; and determining the fair value of the liability component associated with the issuance of convertible debt. Concentration of Credit Risk Financial instruments that potentially subject us to a concentration of credit risk consist of cash and cash equivalents and accounts receivable. We maintain the majority of our cash and cash equivalents with financial institutions that management believes are creditworthy in the form of demand deposits. We have no off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign currency hedging arrangements. Our accounts receivable balances are due largely from distribution partners, domestic veterinary clinics and individual veterinarians and other animal health companies. Covetrus represented 19% and 12% of our consolidated accounts receivable at December 31, 2019 and 2018 , respectively. Merck entities represented approximately 1% and 10% of our consolidated accounts receivable at December 31, 2019 and 2018 , respectively. Elanco represented approximately 4% and 32% of our consolidated accounts receivable at December 31, 2019 and 2018 , respectively. No other customer accounted for more than 10% of our consolidated accounts receivable at December 31, 2019 or 2018 . We have established an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at net realizable value. From time to time, our customers are unable to meet their payment obligations. We continuously monitor our customers' credit worthiness and use our judgment in establishing a provision for estimated credit losses based upon our historical experience and any specific customer collection issues that we have identified. While such credit losses have historically been within our expectations and the provisions established, there is no assurance that we will continue to experience the same credit loss rates that we have in the past. A significant change in the liquidity or financial position of our customers could have a material adverse impact on the collectability of accounts receivable and our future operating results. Changes in allowance for doubtful accounts are summarized as follows (in thousands): Years Ended December 31, 2019 2018 2017 Balances at beginning of period $ 245 $ 215 $ 237 Additions - charged to expense 113 104 168 Deductions - write offs, net of recoveries (172 ) (74 ) (190 ) Balances at end of period $ 186 $ 245 $ 215 Cash and Cash Equivalents Cash and cash equivalents are stated at cost, which approximates market value, and include short-term, highly liquid investments with original maturities of less than three months. We valued our foreign cash accounts at the spot market foreign exchange rate as of each balance sheet date, with changes due to foreign exchange fluctuations recorded in current earnings. The majority of our cash and cash equivalents are held in accounts not insured by governmental entities. The foreign cash balances are summarized as follows (in thousands): As of December 31, 2019 2018 European Union Euros 1,773 1,615 Swiss Francs 124 156 Canadian Dollars 88 — Australian Dollars 54 — Fair Value of Financial Instruments Our financial instruments consist of cash and cash equivalents, short-term trade receivables and payables, and the Notes. The carrying values of cash and cash equivalents and short-term trade receivables and payables approximate fair value because of the short-term nature of the instruments. The fair value of our line of credit balance was estimated based on current rates available for similar debt with similar maturities and collateral, and at December 31, 2018 , approximated the carrying value due primarily to the floating rate of interest on such debt instruments. The Company repaid all outstanding indebtedness and terminated Revolving Commitments under the Credit Agreement with JPMorgan Chase Bank, N.A., effective as of December 31, 2019. The estimated fair value of the convertible senior notes disclosed at each reporting period is evaluated through consideration of quoted market prices in less active markets. The fair value measurement is classified as Level 2 in the fair value hierarchy, which is defined in ASC 820 as inputs other than quoted prices in active markets that are either directly or indirectly observable. For additional information regarding the Company's accounting treatment for the issuance of the convertible senior notes, including the fair value measurement of the liability component, refer to Note 16. Convertible Notes and Credit Facility. Property and Equipment Property and equipment is stated at cost, net of accumulated depreciation. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. When an item is sold or retired, the cost and related accumulated depreciation is relieved and the resulting gain or loss, if any, is recognized in the Consolidated Statements of Income. We provide for depreciation primarily using the straight-line method by charges to income in amounts that allocate the cost of property and equipment over their estimated useful lives as follows: Asset Classification Estimated Useful Life Building 10 to 20 years Machinery and equipment 2 to 10 years Office furniture and equipment 3 to 7 years Computer hardware and software 3 to 5 years Leasehold and building improvements 5 to 15 years We capitalize certain costs incurred in connection with developing or obtaining software designated for internal use based on three distinct stages of development. Qualifying costs incurred during the application development stage, which consist primarily of internal payroll and direct fringe benefits and external direct project costs, including labor and travel, are capitalized and amortized on a straight-line basis over the estimated useful life of the asset, which range from three to five years. Costs incurred during the preliminary project and post-implementation and operation phases are expensed as incurred. These costs are general and administrative in nature and related primarily to the determination of performance requirements, data conversion and training. Inventories Inventories are stated at the lower of cost or net realizable value using the first-in, first-out method. Inventory we manufacture includes the cost of material, labor and overhead. If the cost of inventories exceeds estimated net realizable value, provisions are made to reduce the carrying value to estimated net realizable value. This estimate is calculated utilizing various information, including assumptions of future market demand, market conditions and remaining shelf life. Investments in Unconsolidated Affiliates Investments in unconsolidated affiliates are measured and recorded as either non-marketable equity securities or equity method investments. Non-marketable equity securities are equity securities without readily determinable fair value that are measured and recorded using a measurement alternative which measures the securities at cost minus impairment, if any, plus or minus changes from qualifying observable price changes. Equity method investments are equity securities in investees we do not control but over which we have the ability to exercise significant influence. When the equity method of accounting is determined to be appropriate, the initial measurement of the investment includes the cost of the investment and all direct transaction costs incurred to acquire the investment. Equity method investments are measured at cost minus impairment, if any, plus or minus our share of equity method investee income or loss, which is recorded as a separate line on the income statement. Both types of investments are evaluated for impairment if a triggering event occurs. Goodwill, Intangible and Other Long-Lived Assets Goodwill is initially valued based on the excess of the purchase price of a business combination over the fair value of acquired net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Intangible assets other than goodwill are initially valued at fair value. If a quoted price in an active market for the identical asset is not readily available at the measurement date, the fair value of the intangible asset is estimated based on discounted cash flows using market participant assumptions, which are assumptions that are not specific to the Company. The selection of appropriate valuation methodologies and the estimation of discounted cash flows require significant assumptions about the timing and amounts of future cash flows, risks, appropriate discount rates, and the useful lives of intangible assets. When material, we utilize independent valuation experts to advise and assist us in determining the fair values of the identified intangible assets acquired in connection with a business acquisition and in determining appropriate amortization methods and periods for those intangible assets. We assess goodwill for impairment annually, at the reporting unit level, in the fourth quarter and whenever events or circumstances indicate impairment may exist. In evaluating goodwill for impairment, we have the option to first assess the qualitative factors to determine whether it is more-likely-than-not that the estimated fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the comparison of the estimated fair value of the reporting unit to the carrying value. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, we determine that it is more-likely-than-not that the estimated fair value of a reporting is less than its carrying amount, we would then estimate the fair value of the reporting unit and compare it to the carrying value. If the carrying value exceeds the estimated fair value we would recognize an impairment for the difference; otherwise, no further impairment test would be required. In contrast, we can opt to bypass the qualitative assessment for any reporting unit in any period and proceed directly to quantitative analysis. Doing so does not preclude us from performing the qualitative assessment in any subsequent period. We performed qualitative assessments in the fourth quarters of 2019 , 2018, and 2017 and determined that no indications of impairment existed. We assess the realizability of intangible assets other than goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If an impairment review is triggered, we evaluate the carrying value of intangible assets based on estimated undiscounted future cash flows over the remaining useful life of the primary asset of the asset group and compare that value to the carrying value of the asset group. The cash flows that are used contain our best estimates, using appropriate and customary assumptions and projections at the time. If the net carrying value of an intangible asset exceeds the related estimated undiscounted future cash flows, an impairment to adjust the intangible asset to its fair value would be reported as a non-cash charge to earnings. If necessary, we would calculate the fair value of an intangible asset using the present value of the estimated future cash flows to be generated by the intangible asset, and applying a risk-adjusted discount rate. We had no impairments of our intangible assets during the years ended December 31, 2019, 2018, and 2017. Revenue Recognition We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which we adopted on January 1, 2018, using the modified retrospective transition approach. See "Adoption of New Accounting Pronouncements" below for impacts of adoption. We generate our CCA segment revenue through the sale of products, either by outright purchase by our customers or through a subscription agreement whereby our customers receive instruments and pay us a monthly fee for the consumables needed to conduct testing. Subscription placement is the majority of our Point of Care laboratory transactions while outright sales to customers are the majority of both Point of Care imaging diagnostic transactions and the sale of pharmaceuticals and vaccines. For outright sales of products, revenue is recognized when control of the promised product or service is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). Taxes assessed by governmental authorities and collected from the customer are excluded from our revenue recognition. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC 606. For instruments, consumables and most software licenses sold by the Company, control transfers to the customer at a point in time. To indicate the transfer of control, the Company must have a present right to payment, legal title must have passed to the customer, the customer must have the significant risks and rewards of ownership and where acceptance is not a formality, the customer must have accepted the product or service. Heska’s principal terms of sale are FOB Shipping Point, or equivalent, and, as such, we primarily transfer control and record revenue for product sales upon shipment. If a performance obligation to the customer with respect to a sales transaction remains unfulfilled following shipment (typically owed installation or acceptance by the customer), revenue recognition for that performance obligation is deferred until such commitments have been fulfilled. For extended warranty and service plans, control transfers to the customer over the term of the arrangement. Revenue for extended warranties and service is recognized based upon the period of time elapsed under the arrangement. Our revenue under subscription agreements relates to OTL arrangements or STL arrangements. Determination of an OTL or STL is primarily determined as a result of the length of the contract as compared to the estimated useful life of the instrument, among other factors. Leases are outside of the scope of ASC 606 and are therefore accounted for in accordance with ASC 842 , Leases . A STL would result in earlier recognition of instrument revenue as compared to an OTL, which is generally upon installation of the instruments. The cash collected under both arrangements is over the term of the contract. The cost of the customer-leased instruments is removed from inventory and recognized in the Consolidated Statements of Income. Instrument lease revenue for OTL agreements is recognized on a straight-line basis over the life of the lease, and the costs of customer-leased instruments are recorded within property and equipment in the accompanying Consolidated Balance Sheets and depreciated over the instrument’s estimated useful life. The depreciation expense is reflected in cost of revenue in the accompanying Consolidated Statements of Income. The OTLs and STLs are not cancellable until after an initial term. OTLs may include a minimum utilization rather than a minimum supply credit. For contracts with multiple performance obligations, the Company allocates the contracts' transaction price for each performance obligation on a relative standalone selling price basis using our best estimate of the standalone selling price of each distinct product or service in the contract. The primary method used to estimate the standalone selling price is the price observed in standalone sales to customers of a prior period. Changes in these values can impact the amount of consideration allocated to each component of the contract. When prices in standalone sales are not available, we may use a cost-plus margin approach. Allocation of the transaction price is determined at the contracts' inception. The Company does not adjust the transaction price for the effects of a significant financing component when the period between the transfer of the promised good or service to the customer and payment for that good or service by the customer is expected to be one year or less. This allocation approach also applies to contracts for which a portion of the contract relates to a lease component. To the extent the transaction price includes variable consideration, such as future payments based on consumable usage over time, we apply judgment to determine if the variable consideration should be constrained. As the variable consideration is highly susceptible to factors outside of the Company’s influence, and the potential values contain a broad range of possible outcomes given all potential amounts of consumption that could occur, it is likely that a significant revenue reversal would occur should the variable consideration be estimated at an amount greater than the minimum stated amount until such a time as the uncertainty is resolved. We generate revenue within our OVP segment through contract manufacturing agreements with customers. The timing of revenue recognition of our customer contracts are generally recognized upon shipment or acceptance by our customer, under the same guidelines noted above for other outright product sales. Heska assessed the over-time criteria within ASC 606 and concluded that while products within this segment have no alternative use to Heska, as Heska is contractually prohibited to redirect the product to other customers, Heska does not have right to payment for performance to date. Therefore, point in time revenue recognition has been determined to be appropriate. Revenue generated from licensing arrangements is recognized based on the underlying terms of the contract. Recording revenue from the sale of products involves the use of estimates and management's judgment. We must make a determination at the time of sale whether the customer has the ability and intent to make payments in accordance with arrangements. While we do utilize past payment history and, to the extent available for new customers, public credit information in making our assessment, the determination of whether collectability is reasonably assured is ultimately a judgment that must be made by management. For contracts with multiple performance obligations, we exercise judgment in allocating the transaction price for each performance obligation based on an estimated standalone selling price for each distinct product or service. We must also make estimates regarding our future obligations relating to returns, rebates, allowances and similar other programs. We do not generally allow return of products or instruments. Distributor rebates are recorded as a reduction to revenue. Refer to Note 2 for additional disclosures required by ASC 606. Prior to the adoption of ASC 606 on January 1, 2018, the Company recognized revenue in accordance with Topic 605, Revenue Recognition . Our policy was to recognize revenue when the applicable revenue recognition criteria were met, which generally included the following: persuasive evidence of an arrangement exists; delivery has occurred or services rendered; price is fixed or determinable; and collectability is reasonably assured. The adoption of the new revenue standard did not materially change our recognition from ASC 605 (as disclosed under Adoption of New Accounting Pronouncements ). Stock-based Compensation Stock-based compensation expense is measured at the grant date based upon the estimated fair value of the portion of the award that is ultimately expected to vest and is recognized as expense over the applicable vesting period of the award generally using the straight-line method. Advertising Costs Advertising costs are expensed as incurred and are included in sales and marketing expenses. Advertising expenses were $0.3 million for the year ended December 31, 2019 and $0.2 million for each of the years ended December 31, 2018 and 2017 . Income Taxes The Company records a current provision for income taxes based on estimated amounts payable or refundable on tax returns filed or to be filed each year. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates, in each tax jurisdiction, expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense or benefit for the period. Deferred tax assets are reduced by a valuation allowance based on a judgmental assessment of available evidence if the Company is unable to conclude that it is more likely than not that some or all of the deferred tax assets will be realized. Earnings Per Share Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Foreign Currency Translation The functional currency of certain foreign subsidiaries is the local currency. Accordingly, assets and liabilities of these subsidiaries are translated using the exchange rate in effect at the balance sheet date. Revenue and expense accounts and cash flows are translated using an average of exchange rates in effect during the period. Cumulative translation gains and losses are shown in the Consolidated Balance Sheets as a separate component of stockholders' equity. Exchange gains and losses arising from transactions denominated in foreign currencies (i.e., transaction gains and losses) are recognized as a component of other income (expense) in current operations, as are exchange gains and losses on intercompany transactions expected to be settled in the near term. Warranty Costs The Company generally provides for the estimated cost of hardware and software warranties in the period the related revenue is recognized. The Company assesses the adequacy of its accrued warranty liabilities and adjusts the amounts as necessary based on actual experience and changes in future estimates. Should product failure rates differ from our estimates, actual costs could vary significantly from our expectations. Extended warranties are sold to our customers and revenue is recognized over the term of the warranty agreement, as expected costs are incurred. Adoption of New Accounting Pronouncements Effective January 1, 2019, we adopted Accounting Standard Update ("ASU") 2018-07, Compensation – Stock Compensation (Topic 718) , Improvements to Non-employee Share-Based Payment Accounting . This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with accounting for employee share-based compensation. Guidance related to the stock compensation granted to employees is followed for non-employees, including the measurement date, valuation approach and performance conditions. The expense is recognized in the same period as though cash were paid for the good or service, ratably over the service period. The adoption of this ASU did not have an impact on our consolidated financial statements but did have a minimal impact on our related disclosures. Effective January 1, 2019, we adopted ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The ASU permits companies to elect a reclassification of the disproportionate tax effects in accumulated other comprehensive income ("AOCI") caused by the 2017 Tax Act to retained earnings. As of December 31, 2019 , the Company does not have any disproportionate income tax effects in AOCI to reclassify. However, if the Company did have disproportionate income tax effects in AOCI in the future, it would reclassify them to retained earnings. In February 2016, the FASB issued ASU 2016-02, Leases ( Topic 842 ) , which supersedes ASC 840, Leases . This update requires lessees to recognize a right-of-use (“ROU”) asset and a lease liability for all leases, including operating leases, with terms greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from leases. The accounting for lessors does not fundamentally change except for changes to conform and align guidance to the lessee guidance as well as to the new revenue recognition guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . Subsequent to the issuance of Topic 842, the FASB clarified the guidance through several ASUs; hereinafter the collection of lease guidance is referred to as “ASC 842”. The Company adopted ASC 842 on January 1, 2019, using the modified retrospective approach for all lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning January 1, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 840, Leases . For leases that commenced before the effective date of ASC 842, the Company elected the permitted practical expedients to not reassess the following: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. The Company also elected to exclude leases with a term of 12 months or less from the recognized ROU assets and lease liabilities. Adoption of the standard did not have a material net impact in our Consolidated Balance Sheets, Consolidated Statements of Income or Consolidated Statements of Cash Flows. The most significant impact was the recognition of ROU assets and lease liabilities for the operating leases, of which we are the lessee. As a result of the cumulative impact of adopting ASC 842, the Company recorded operating lease ROU assets of $6.5 million and operating lease liabilities of $6.9 million as of January 1, 2019, primarily related to building, vehicle, and office equipment leases, based on the present value of the future lease payments on the date of adoption. As a lessor, accounting for our subscription agreements remains substantially unchanged. Refer to Note 6 for additional disclosures required by ASC 842. The Company determines if an arrangement is a lease at inception based on whether control of an identified asset is transferred. For leases where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as amortization expense and interest expense. The Company has lease agreements which require payments for lease and non-lease components and has elected to account for these as a single lease component for our building and office equipment leases, but as separate components for our vehicle leases. Our revenue under subscription agreements relates to both operating-type lease (“OTL”) arrangements and sales-type lease (“STL”) arrangements. Determination of an OTL or STL is primarily a result of the length of the contract as compared to the estimated useful life of the instrument, among other factors. A STL results in earlier recognition of instrument revenue. The cost of the customer-leased instruments is removed from inventory and recognized in the Consolidated Statements of Income. There is no residual value taken into consideration as it do |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE We separate our goods and services among two reportable segments, Core companion animal ("CCA") and Other vaccines and pharmaceuticals ("OVP"). The CCA segment consists of revenue generated from the following: • Point of Care laboratory products including instruments, consumables and services; • Point of Care imaging products including instruments, software and services; • Single use pharmaceuticals, vaccines and diagnostic tests primarily related to companion animals; and • Other vaccines and pharmaceuticals. The OVP segment consists of revenue generated from the following: • Contract manufacturing agreements; and • Other license, research and development revenue. The following table summarizes our CCA revenue (in thousands): Year Ended December 31, 2019 2018 2017 Point of Care laboratory revenue: $ 67,132 $ 57,375 $ 54,855 Consumables 53,590 44,771 39,161 Sales-type leases 6,890 5,888 7,382 Outright instrument sales 5,247 4,922 6,391 Other 1,405 1,794 1,921 Point of Care imaging revenue: 25,652 22,832 21,907 Outright instrument sales 22,594 19,746 19,187 Other 3,058 3,086 2,720 Other CCA revenue: 13,786 28,717 28,429 Other pharmaceuticals, vaccines and diagnostic tests 13,495 28,265 28,008 Research and development, license and royalty revenue 291 452 421 Total CCA revenue $ 106,570 $ 108,924 $ 105,191 The following table summarizes our OVP revenue (in thousands): Year Ended December 31, 2019 2018 2017 Contract manufacturing $ 15,374 $ 17,508 $ 23,490 License, research and development 717 1,014 660 Total OVP revenue $ 16,091 $ 18,522 $ 24,150 Remaining Performance Obligations Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. Remaining performance obligations include noncancelable purchase orders, the non-lease portion of minimum purchase commitments under long-term supply arrangements, extended warranty, service and other long-term contracts. Remaining performance obligations do not include revenue from contracts with customers with an original term of one year or less, revenue from long-term supply arrangements with no minimum purchase requirements, revenue expected from purchases made in excess of the minimum purchase requirements, or revenue from instruments leased to customers. While the remaining performance obligation disclosure is similar in concept to backlog, the definition of remaining performance obligations excludes leases and contracts that provide the customer with the right to cancel or terminate for convenience with no substantial penalty, even if historical experience indicates the likelihood of cancellation or termination is remote. Additionally, the Company has elected to exclude contracts with customers with an original term of one year or less from remaining performance obligations. As of December 31, 2019 , the aggregate amount of the transaction price allocated to remaining minimum performance obligations was approximately $117.8 million . As of December 31, 2019 , the Company expects to recognize revenue as follows (in thousands): Year Ending December 31, Revenue 2020 $ 26,939 2021 23,808 2022 20,724 2023 17,815 2024 13,626 Thereafter 14,897 $ 117,809 Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets) and deferred revenue, and customer deposits and billings in excess of revenue recognized (contract liabilities) on the Consolidated Balance Sheets. In addition, the Company defers certain costs incurred to obtain contracts (contract costs). Contract Receivables Certain unbilled receivable balances related to long-term contracts for which we provide a free term to the customer are recorded in "Other current assets" and "Other non-current assets" on the accompanying Consolidated Balance Sheets. We have no further performance obligations related to these receivable balances and the collection of these balances occurs over the term of the underlying contract. The balances as of December 31, 2019 were $1.1 million and $3.7 million for current and non-current assets, respectively, shown net of related unearned interest. The balances as of December 31, 2018 were $0.9 million and $3.3 million for current and non-current assets, respectively, shown net of related unearned interest. Contract Liabilities The Company receives cash payments from customers for licensing fees or other arrangements that extend for a specified term. These contract liabilities are classified as either current or long-term in the Consolidated Balance Sheets based on the timing of when the Company expects to recognize revenue. As of December 31, 2019 and 2018 , contract liabilities were $8.7 million and $9.6 million , respectively, and are included within "Current portion of deferred revenue, and other" and "Deferred revenue, net of current portion" in the accompanying Consolidated Balance Sheets. The decrease in the contract liability balance during the year ended December 31, 2019 is $3.1 million of revenue recognized during the period, offset by $2.2 million of additional deferred sales. The decrease in the contract liability balance during the year ended December 31, 2018 is $4.1 million of revenue recognized during the period, offset by $1.4 million of additional deferred sales. Contract Costs The Company capitalizes certain direct incremental costs incurred to obtain customer contracts, typically sales-related commissions, where the recognition period for the related revenue is greater than one year. Contract costs are classified as current or non-current, and are included in "Other current assets" and "Other non-current assets" in the Consolidated Balance Sheets based on the timing of when the Company expects to recognize the expense. Contract costs are generally amortized into selling and marketing expense with a certain percentage recognized immediately based upon placement of the instrument with the remainder recognized on a straight-line basis (which is consistent with the transfer of control for the related goods or services) over the average term of the underlying contracts, approximately 6 years. Management assesses these costs for impairment at least quarterly on a portfolio basis and as “triggering” events occur that indicate it is more-likely-than-not that an impairment exists. The balance of contract costs as of December 31, 2019 and December 31, 2018 was $2.7 million and $2.5 million , respectively. Amortization expense for the year ended December 31, 2019 was approximately $0.9 million , offset by approximately $1.1 million of additional contract costs capitalized. Amortization expense for the year ended December 31, 2018 was approximately $1.0 million , offset by approximately $1.0 million of additional contract costs capitalized. Contract liabilities are reported on the accompanying Consolidated Balance Sheets on a contract-by-contract basis whereas contract costs are calculated and reported on a portfolio basis. |
ACQUISITION AND RELATED PARTY I
ACQUISITION AND RELATED PARTY ITEMS | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations and Related Party Disclosures [Abstract] | |
ACQUISITION AND RELATED PARTY ITEMS | ACQUISITION AND RELATED PARTY ITEMS CVM On December 5, 2019, Heska entered into a definitive agreement to purchase 100% of the outstanding shares of CVM Diagnostico Veternario S.L. and CVM Ecografia S.L. (“CVM”, collectively), primarily to expand international operations in Europe. CVM is headquartered in Tudela, outside of Madrid, Spain. CVM mainly operates in Spain. The terms of the agreement transferred administrative control of CVM upon signing, and the transfer of the purchase price of approximately $14.4 million and shares occurred subsequently in January 2020. The purchase price exceeded the fair value of the identifiable net assets and, accordingly, $8.8 million was allocated to goodwill based on the preliminary purchase price allocation, all of which is tax deductible for U.S. federal income tax purposes. The preliminary fair values allocated to CVM's assets and liabilities as of the acquisition date, as well as the purchase price, are reflected in the table below (in thousands): Purchase Price December 5, 2019 Consideration payable to former owners $ 14,420 Total $ 14,420 Net Assets Acquired Cash and cash equivalents $ 927 Accounts receivable 2,392 Inventories 1,494 Other current assets 10 Property and equipment 382 Other intangible assets 2,551 Other non-current assets 178 Accounts payable (250 ) Current portion of deferred revenue, and other (164 ) Deferred tax liability (683 ) Other long-term borrowings (1,109 ) Other liabilities (157 ) Total fair value of net assets acquired 5,571 Goodwill 8,849 Total fair value of consideration transferred $ 14,420 The Company's preliminary estimates of fair values of the assets acquired and the liabilities assumed are based on the information that was available at the date of the acquisition, and the Company is continuing to evaluate the underlying inputs and assumptions used in its valuations. Accordingly, these preliminary estimates are subject to change during the measurement period, which is up to one year from the date of the acquisition. Intangible assets acquired, amortization method and estimated useful life as of December 5, 2019, was as follows (dollars in thousands): Useful Life Amortization Method Fair Value Customer relationships 6 years Straight-line $2,440 Trade name 4 years Straight-line $111 The Company incurred acquisition related costs of approximately $0.1 million for the year ended December 31, 2019 , which are included within general and administrative expenses on our Consolidated Statements of Income. CVM generated net revenue of $0.8 million and net income of $0.1 million , for the period from December 6, 2019 to December 31, 2019 . Unaudited Pro Forma Financial Information The following table presents unaudited supplemental pro forma financial information as if the CVM acquisition had occurred on January 1, 2018 (in thousands): Year Ended December 31, 2019 2018 Total revenue, net $ 130,434 $ 135,344 Net (loss) income attributable to Heska Corporation (788 ) 5,970 The pro forma financial information presented above has been prepared by combining our historical results and the historical results of CVM and further reflects the effect of purchase accounting adjustments. The unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what actual results of operations would have been if the acquisition had occurred as the beginning of the period presented, nor are they indicative of future results of operations. Optomed On February 22, 2019, Heska acquired 70% of the equity of Optomed, a French-based endoscopy company, in exchange for approximately $0.2 million in cash and the assumption of approximately $0.4 million in debt. As part of the purchase, Heska entered into put and call options on the remaining 30% minority interest. The written put options can be exercised based on the achievement of certain financial conditions over a specified period of time for a fixed amount. The options are not currently exercisable at the acquisition date or the reporting date. The estimated value of the non-controlling interest is inclusive of the probability weighted outcome of the options described herein. As of December 31, 2019 , the purchase price allocation is final. As part of the purchase agreement, Heska also committed to purchase from the minority interest holder real estate in the amount of $1.2 million , which was paid in full as of December 31, 2019 . Cuattro Veterinary Acquisitions In February 2013, the Company acquired a majority interest in Cuattro Veterinary USA, LLC, which was owned by Kevin S. Wilson, the CEO and President of the Company, among other members. The subsidiary was subsequently renamed Heska Imaging US, LLC ("US Imaging"). The remaining minority position in US Imaging was subject to purchase by Heska under a performance-based put option which was exercised in March 2017. In May 2017, we purchased the remaining minority interest position in US Imaging. In May 2016, the Company closed a transaction to acquire Cuattro Veterinary, LLC ("International Imaging"), which was owned by Kevin S. Wilson, among other members. International Imaging is a provider to international markets of digital radiography technologies for veterinarians. As a leading provider of advanced veterinary diagnostic and specialty products, we made the acquisition in an effort to combine International Imaging's global reach with our domestic success in the imaging and laboratory markets in the United States. In June 2017, the Company consolidated its assets and liabilities in the US Imaging and International Imaging companies into Heska Imaging, LLC ("Heska Imaging"). Cuattro, LLC ("Cuattro") is owned by Kevin S. Wilson, in addition to Mrs. Wilson and trusts for the benefit of Mr. and Mrs. Wilson's children and family. Steven M. Asakowicz and Rodney A. Lippincott, members of Cuattro Veterinary USA, LLC and Cuattro International prior to the acquisitions, and as of December 31, 2019, serve as Executive Vice President, Companion Animal Health Sales for the Company. Purchase Agreement for Certain Assets On December 21, 2018, the Company closed a transaction (the "Asset Acquisition") to acquire certain assets from Cuattro, LLC ("Cuattro"), all related to the CCA segment. Cuattro is owned by Kevin S. Wilson, the CEO and President of Heska Corporation. Pursuant to the Asset Acquisition, dated November 26, 2018, the Company issued 54,763 shares of the Company's common stock, $0.01 par value per share (the "Common Stock"), to Cuattro on the Closing Date, at an aggregate value equal to approximately $5.4 million based on the adjusted closing price per share of the Common Stock as reported on the Nasdaq Stock Market on the Asset Acquisition agreement date. These shares were issued to Cuattro in a private placement in reliance upon an exemption from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof and the safe harbor provided by Rule 506 of Regulation D promulgated thereunder. In addition to the Common Stock, the Company paid cash in the amount of $2.8 million to Cuattro as part of the transaction. The total purchase price was determined based on a valuation report from an independent third party. Part of the Asset Acquisition was an agreement to terminate the supply and license agreement that Heska had been operating under since the acquisition of Cuattro Veterinary USA, LLC. The Company evaluated the acquisition of the purchased assets under ASC 805, Business Combinations and ASU 2017-01, Business Combinations (Topic 805) and concluded that as substantially all of the fair value of the gross assets acquired is concentrated in an identifiable group of similar assets, the transaction did not meet the requirements to be accounted for as a business combination and therefore was accounted for as an asset acquisition. Accordingly, the $8.2 million purchase price of the purchased assets was allocated entirely to an identifiable intangible asset amortizing on a straight-line basis over a 10 -year useful life. In addition to the software assets acquired, Cuattro is obligated, without further compensation, to assist the Company with the implementation of third-party image hosting platform and necessary data migration. Related Party Activities Cuattro, LLC charged Heska Imaging $ 6.0 thousand , $ 4.6 million and $ 17.7 million during 2019 , 2018 and 2017 , respectively, primarily related to digital imaging products, pursuant to an underlying supply contract that contains minimum purchase obligations, software and services as well as other operating expenses. The Company charged Cuattro, LLC $0 , $3.0 thousand and $0.1 million in the years ended December 31, 2019 , 2018 and 2017 , respectively, for facility usage and other services. The Company had no receivables from Cuattro, LLC as of December 31, 2019 and 2018 . Heska Imaging owed Cuattro $0 and $0.2 million as of December 31, 2019 and 2018 , respectively, which is included in "Due to - related parties" on the Company's Consolidated Balance Sheets. Heska Corporation charged U.S. Imaging $2.9 million from January 1, 2017 to May 31, 2017, prior to the acquisition of the minority interest. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income Taxes As of December 31, 2019 , the Company had net operating loss carryforwards ("NOL"), of approximately $47.0 million , a foreign tax credit of $64 thousand and a domestic research and development tax credit carryforward of approximately $1.0 million . Our federal NOL is expected to expire as follows if unused: $41.0 million in 2020 through 2022 , $5.5 million in 2024 through 2025 and $0.5 million in 2027 and later. The Company is subject to income taxes in the U.S. federal jurisdiction, and various foreign, state and local jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. Although the U.S. and many states generally have statutes of limitations ranging from 3 to 5 years, those statutes could be extended due to the Company’s net operating loss and tax credit carryforward positions in several of the Company's tax jurisdictions. In the U.S., the tax years 2016 - 2018 remain open to examination by the Internal Revenue Service. Cash paid for income taxes for the years ended December 31, 2019 , 2018 and 2017 was $128 thousand , $36 thousand and $213 thousand , respectively. The components of income before income taxes were as follows (in thousands): Year Ended December 31, 2019 2018 2017 Domestic $ (1,872 ) $ 3,602 $ 18,188 Foreign (711 ) 205 181 $ (2,583 ) $ 3,807 $ 18,369 Temporary differences that give rise to the components of net deferred tax assets are as follows (in thousands): December 31, 2019 2018 Inventory $ 2,005 $ 1,249 Accrued compensation 122 110 Stock options 1,858 1,281 Research and development 990 476 Legal settlement — 1,678 Research and development expense 1,417 — Deferred revenue 2,052 3,305 Property and equipment 3,469 3,065 Net operating loss carryforwards 11,676 17,088 Foreign tax credit carryforward 64 38 Sales-type leases (1,968 ) (3,936 ) Convertible debt equity component (9,421 ) — Foreign intangible (691 ) — Other (179 ) — 11,394 24,354 Valuation allowance (5,656 ) (10,233 ) Total net deferred tax assets $ 5,738 $ 14,121 The components of the income tax (benefit) expense are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Current income tax expense: Federal $ — $ (115 ) $ — State 189 192 6 Foreign 170 63 43 Total current expense $ 359 $ 140 $ 49 Deferred income tax (benefit) expense: Federal $ (1,610 ) $ (1,877 ) $ 9,736 State (307 ) (378 ) (872 ) Foreign 112 — — Total deferred (benefit) expense (1,805 ) (2,255 ) 8,864 Total income tax (benefit) expense $ (1,446 ) $ (2,115 ) $ 8,913 The Company's income tax (benefit) expense relating to income (loss) for the periods presented differs from the amounts that would result from applying the federal statutory rate to that income (loss) as follows: Year Ended December 31, 2019 2018 2017 Statutory federal tax rate 21 % 21 % 34 % State income taxes, net of federal benefit 9 % (8 )% (5 )% Non-controlling interest in Heska Imaging US, LLC — % — % 1 % Non-controlling interest in Optomed (2 )% — % — % Non-temporary stock option benefit 48 % (50 )% (30 )% Meals and entertainment permanent difference (2 )% 1 % — % GILTI permanent difference 2 % 1 % — % Other permanent differences (1 )% 1 % 1 % Foreign tax rate differences 6 % — % — % Change in tax rate (6 )% — % 32 % Change in valuation allowance (17 )% — % 16 % Other deferred differences (9 )% (21 )% — % Transaction costs (6 )% — % — % Executive compensation limit (7 )% — % — % Research & development credit 20 % — % — % Other — % (1 )% — % Effective income tax rate 56 % (56 )% 49 % In 2019 , we had total income tax benefit of $1.4 million , including $1.9 million in domestic deferred income tax benefit and $0.1 million in foreign deferred tax expense, and $0.4 million in current income tax expense. In 2018 , we had total income tax benefit of $2.1 million , including approximately $2.3 million in domestic deferred income tax benefit, a non-cash benefit, and approximately $0.1 million in current income tax expense. In 2017 , we had total income tax expense of $8.9 million , including $8.9 million in domestic deferred income tax expense, a non-cash expense, and $0.05 million in current income tax expense. Income tax benefit decreased in 2019 from 2018 due to executive compensation limitations and lower excess tax benefits related to stock-based compensation deductions. Income tax expense decreased in 2018 from 2017 from the recognition of $1.9 million in tax benefits related to stock-based compensation deductions. ASC 740 provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in the financial statements. Tax positions must meet a "more-likely-than-not" recognition threshold before a benefit is recognized in the financial statements. As of December 31, 2019 , the Company has not recorded a liability for uncertain tax positions. The Company would recognize interest and penalties related to uncertain tax positions in income tax (benefit) expense. No interest and penalties related to uncertain tax positions were accrued at December 31, 2019 . |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
LEASES | LEASES Lessee Accounting The Company leases buildings, office equipment, and vehicles. The Company’s finance leases were not material as of December 31, 2019 and for the twelve -month period then ended. ROU assets arising from finance leases are included in Property and equipment, net in the accompanying Consolidated Balance Sheets. The current portion of the finance lease liabilities are included in Current portion of deferred revenue, and other and the non-current portion of the finance lease liabilities are included in Other liabilities in the accompanying Consolidated Balance Sheets. For the twelve months ended December 31, 2019 , operating lease expense was approximately $2.4 million , including immaterial variable lease costs. The Company had building and other rent expense of $1.9 million and $2.0 million for the years ended December 31, 2018 and 2017 , respectively, under ASC 840, Leases. Supplemental cash flow information related to the Company's operating leases for the twelve months ended December 31, 2019 was as follows (in thousands): Cash paid for amounts included in the measurement of operating lease liabilities $ 1,800 ROU assets obtained in exchange for operating lease obligations 604 The following table presents the weighted average remaining lease term and weighted average discount rate related to the Company's operating leases as of December 31, 2019 : Weighted average remaining lease term 3.8 years Weighted average discount rate 4.44 % The following table presents the maturity of the Company's operating lease liabilities as of December 31, 2019 (in thousands): Year Ending December 31, 2020 $ 1,792 2021 1,639 2022 1,413 2023 1,796 2024 30 Thereafter 57 Total operating lease payments 6,727 Less: imputed interest 569 Total operating lease liabilities $ 6,158 Lessor Accounting In our CCA segment, primarily related to our Point of Care laboratory products, the Company enters into sales-type leases as part of our subscription agreements. The following table presents the maturity of the Company's undiscounted lease receivables as of December 31, 2019 (in thousands): Year Ending December 31, 2020 $ 3,856 2021 4,087 2022 3,758 2023 3,047 2024 2,118 Thereafter 1,297 $ 18,163 |
LEASES | LEASES Lessee Accounting The Company leases buildings, office equipment, and vehicles. The Company’s finance leases were not material as of December 31, 2019 and for the twelve -month period then ended. ROU assets arising from finance leases are included in Property and equipment, net in the accompanying Consolidated Balance Sheets. The current portion of the finance lease liabilities are included in Current portion of deferred revenue, and other and the non-current portion of the finance lease liabilities are included in Other liabilities in the accompanying Consolidated Balance Sheets. For the twelve months ended December 31, 2019 , operating lease expense was approximately $2.4 million , including immaterial variable lease costs. The Company had building and other rent expense of $1.9 million and $2.0 million for the years ended December 31, 2018 and 2017 , respectively, under ASC 840, Leases. Supplemental cash flow information related to the Company's operating leases for the twelve months ended December 31, 2019 was as follows (in thousands): Cash paid for amounts included in the measurement of operating lease liabilities $ 1,800 ROU assets obtained in exchange for operating lease obligations 604 The following table presents the weighted average remaining lease term and weighted average discount rate related to the Company's operating leases as of December 31, 2019 : Weighted average remaining lease term 3.8 years Weighted average discount rate 4.44 % The following table presents the maturity of the Company's operating lease liabilities as of December 31, 2019 (in thousands): Year Ending December 31, 2020 $ 1,792 2021 1,639 2022 1,413 2023 1,796 2024 30 Thereafter 57 Total operating lease payments 6,727 Less: imputed interest 569 Total operating lease liabilities $ 6,158 Lessor Accounting In our CCA segment, primarily related to our Point of Care laboratory products, the Company enters into sales-type leases as part of our subscription agreements. The following table presents the maturity of the Company's undiscounted lease receivables as of December 31, 2019 (in thousands): Year Ending December 31, 2020 $ 3,856 2021 4,087 2022 3,758 2023 3,047 2024 2,118 Thereafter 1,297 $ 18,163 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share ("EPS") is computed by dividing net income attributable to the Company by the weighted-average number of common shares outstanding during the period. The computation of diluted EPS is similar to the computation of basic EPS except that the numerator is increased to exclude charges that would not have been incurred, and the denominator is increased to include the number of additional common shares that would have been outstanding (using the if-converted and treasury stock methods), if securities containing potentially dilutive common shares (stock options and restricted stock awards but excluding options to purchase fractional shares resulting from the Company's December 2010 1-for- 10 reverse stock split) had been converted to common shares, and if such assumed conversion is dilutive. The following is a reconciliation of the weighted-average shares outstanding used in the calculation of basic and diluted earnings per share for the years ended December 31, 2019 , 2018 and 2017 (in thousands, except per share data): Years ended December 31, 2019 2018 2017 Net (loss) income attributable to Heska Corporation $ (1,465 ) $ 5,850 $ 9,953 Basic weighted-average common shares outstanding 7,446 7,220 7,026 Assumed exercise of dilutive stock options and restricted shares — 636 616 Diluted weighted-average common shares outstanding 7,446 7,856 7,642 Basic (loss) earnings per share attributable to Heska Corporation $ (0.20 ) $ 0.81 $ 1.42 Diluted (loss) earnings per share attributable to Heska Corporation $ (0.20 ) $ 0.74 $ 1.30 The following stock options and restricted awards were excluded from the computation of diluted earnings per share because they would have been anti-dilutive (in thousands): Years ended December 31, 2019 2018 2017 Stock options and restricted shares 300 111 123 As more fully described in Note 16, our Notes are convertible under certain circumstances, as defined in the indenture, into a combination of cash and shares of our common stock. The Company intends to settle the principal value of the Notes in cash and issue shares of our common stock to settle the intrinsic value of the conversion feature. The Company will use the treasury stock method when calculating the potential dilutive effect of the conversion feature on earnings per share, if any. Potential dilution upon conversion of the Notes occurs when the market price per share of our common stock is greater than the conversion price of the Notes of $86.63 . The average price of our common stock exceeded the conversion price of the Notes during the fourth quarter of 2019; therefore, under the net share settlement method, less than one thousand potential shares issuable under the Notes would be included in the calculation of diluted EPS for the year ended December 31, 2019. However, these shares were excluded from the computation of diluted EPS because the effect would have been anti-dilutive. |
INVESTMENTS IN UNCONSOLIDATED A
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS IN UNCONSOLIDATED AFFILIATES | INVESTMENTS IN UNCONSOLIDATED AFFILIATES The carrying values of investments in unconsolidated affiliates, categorized by type of investment, is as follows (in thousands): December 31, 2019 December 31, 2018 Equity method investment $ 4,406 $ 5,000 Non-marketable equity security investment 3,018 3,018 $ 7,424 $ 8,018 Equity Method Investment On September 24, 2018, the Company invested $5.1 million , including costs, in exchange for a 28.7% interest of a business as part of our product development strategy. In connection with the investment, the Company entered into a 15 -year Manufacturing Supply Agreement, which grants the Company global exclusivity to specified products to be delivered under the agreement for a 15 -year period that begins upon the Company's receipt and acceptance of an initial order under the agreement. The Company accounts for this investment using the equity method of accounting. Under the equity method, the carrying value of the investment is adjusted for the Company's proportionate share of the investee's reported earnings or losses with the corresponding share of earnings or losses reported as Equity in losses of unconsolidated affiliates, listed below Net income before equity in losses of unconsolidated affiliates within the Consolidated Statements of Income. Non-Marketable Equity Security Investment On August 8, 2018, the Company invested $3.0 million , including costs, in MBio Diagnostics, Inc. ("MBio"), in exchange for 1,714,285 shares of Series B-3 preferred stock, representing a 6.9% interest in MBio. The Company's investment in MBio is a non-marketable equity security, recorded using the measurement alternative of cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes. As part of the agreement, the Company entered into a Supply and License Agreement with MBio, which provides that MBio produce and commercialize products that will enhance the Company's diagnostic portfolio. As part of this agreement, the Company made upfront payment to MBio of $1.0 million related to a worldwide exclusive license agreement over a 20 -year period, recorded in both short and long-term other assets. In addition, the agreement provides for an additional contingent payment from Heska to MBio of $10.0 million , relating to the successful achievement of sales milestones. This potential future milestone payment has not yet been accrued as it is not deemed by the Company to be probable at this time. Both parties in this arrangement are active participants and are exposed to significant risks and rewards dependent on the commercial success of the activities of the collaboration. The parties are actively working on developing and testing the product as well as funding the research and development. Heska classifies the amounts paid for MBio's research and development work within the CCA segment research and development operating segments. Expense is recognized ratably when incurred and in accordance with the development plan. The Company evaluated both its equity method investment and non-marketable equity security investment for impairment as of December 31, 2019 , and determined that no indications of impairment existed. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOOWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES The following summarizes the changes in goodwill during the years ended December 31, 2019 and 2018 (in thousands): Carrying amount, December 31, 2017 $ 26,687 Foreign currency adjustments (8 ) Carrying amount, December 31, 2018 $ 26,679 Goodwill attributable to acquisitions (subject to change) 9,396 Foreign currency adjustments 129 Carrying amount, December 31, 2019 $ 36,204 Other intangibles assets, net consisted of the following as of December 31, 2019 and 2018 (in thousands): 2019 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 8,200 $ (819 ) $ 7,381 $ 8,200 $ — $ 8,200 Customer relationships and other 6,317 (2,226 ) 4,091 3,303 (1,739 ) 1,564 Total intangible assets $ 14,517 $ (3,045 ) $ 11,472 $ 11,503 $ (1,739 ) $ 9,764 Amortization expense relating to other intangibles is as follows (in thousands): Years Ended December 31, 2019 2018 2017 Amortization expense $ 1,278 $ 388 $ 388 Estimated amortization expense related to intangibles for each of the five years from 2020 through 2024 and thereafter is as follows (in thousands): Year Ending December 31, 2020 $ 1,738 2021 1,734 2022 1,716 2023 1,364 2024 1,231 Thereafter 3,689 $ 11,472 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT Property and equipment, net, consisted of the following (in thousands): December 31, 2019 2018 Land $ 694 $ 377 Building 3,845 2,978 Machinery and equipment 28,777 33,087 Office furniture and equipment 1,345 1,687 Computer hardware and software 3,408 4,704 Leasehold and building improvements 10,558 9,953 Construction in progress 671 1,274 Property and equipment, gross 49,298 54,060 Less accumulated depreciation (33,829 ) (38,079 ) Total property and equipment, net $ 15,469 $ 15,981 The Company has subscription agreements whereby its instruments in inventory may be placed in a customer's location on a rental basis. The cost of these instruments is transferred to machinery and equipment and depreciated, typically over a five to seven -year period depending on the circumstance under which the instrument is placed with the customer. Our cost of equipment under operating leases at December 31, 2019 and 2018 , respectively, was $8.1 million and $10.8 million , before accumulated depreciation of $4.6 million and $6.1 million . Depreciation expense for property and equipment was $3.6 million , $4.2 million and $4.3 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. |
ACCRUED LIABILITIES
ACCRUED LIABILITIES | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
ACCRUED LIABILITIES | ACCRUED LIABILITIES Accrued liabilities consisted of the following (in thousands): December 31, 2019 2018 Accrued payroll and employee benefits $ 1,175 $ 759 Accrued property taxes 681 632 Accrued settlement (see Note 14) — 6,750 Accrued purchase orders 739 699 Other 3,750 1,302 Total accrued liabilities $ 6,345 $ 10,142 Other accrued liabilities consist of items that are individually less than 5% of total current liabilities. |
CAPITAL STOCK
CAPITAL STOCK | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
CAPITAL STOCK | CAPITAL STOCK Stock Plans We have two stock option plans which authorize granting of stock options, restricted and stock purchase rights to our employees, officers, directors and consultants. In 1997, the board of directors adopted the 1997 Stock Incentive Plan (the "1997 Plan") and terminated two prior stock plans. All shares that remained available for grant under the terminated plans were incorporated into the 1997 Plan, including shares subsequently canceled under prior plans. In May 2012 , the stockholders approved an amendment to the 1997 Plan allowing for an increase of 250,000 shares and an annual increase through 2016 based on the number of non-employee directors serving as of our Annual Meeting of Stockholders, subject to a maximum of 45,000 shares per year. In May 2016, the stockholders approved a further amendment to the 1997 Plan to authorize an additional 500,000 shares to be available for issuance thereunder. In May 2018, the stockholders approved a further amendment to the 1997 Plan to authorize an additional 250,000 shares to be available for issuance thereunder. In December 2018, the Company's Board of Directors amended the 1997 Plan and renamed it the "Stock Incentive Plan". In May 2003 , the stockholders approved a new plan, the 2003 Equity Incentive Plan (the "2003 Plan"), which allows for the granting of stock options/restricted stock for up to 239,050 shares of the Company's common stock. The number of shares reserved for issuance under both plans as of December 31, 2019 was 85,850 . Stock Options The stock options granted by the Board of Directors may be either incentive stock options ("ISOs") or non-qualified stock options ("NQs"). The exercise price for options under all of the plans may be no less than 100% of the fair value of the underlying common stock. Options granted will expire no later than the tenth anniversary subsequent to the date of grant or three months following termination of employment, except in cases of death or disability, in which case the options will remain exercisable for up to twelve months. Under the terms of the Stock Incentive Plan, in the event we are sold or merged, outstanding options will either be assumed by the surviving corporation or vest immediately. There are four key inputs to the Black-Scholes model which we use to estimate the fair value for options which we issue: expected term, expected volatility, risk-free interest rate and expected dividends, all of which require us to make estimates. Our estimates for these inputs may not be indicative of actual future performance and changes to any of these inputs can have a material impact on the resulting estimated fair value calculated for the option. Our expected term input was estimated based on our historical experience for time from option grant to option exercise for all employees in 2019, 2018 and 2017. We treated all employees in one grouping in all three years. Our expected volatility input was estimated based on our historical stock price volatility in 2019, 2018 and 2017. Our risk-free interest rate input was determined based on the U.S. Treasury yield curve at the time of option issuance in 2019, 2018 and 2017. Our expected dividends inputs were zero in all periods as we did not anticipate paying dividends in the foreseeable future. We recognize forfeitures as they occur. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions for options granted in 2019 , 2018 and 2017 for the year ended December 31, 2019 . 2019 2018 2017 Risk-free interest rate 1.62% 2.66% 1.76% Expected lives 4.7 years 4.9 years 4.8 years Expected volatility 40% 40% 41% Expected dividend yield 0% 0% 0% A summary of our stock option plans is as follows: Year Ended December 31, 2019 Options Weighted Average Exercise Price Outstanding at beginning of period 620,553 $ 40.741 Granted at market 88,200 $ 84.234 Forfeited (1,353 ) $ 98.660 Expired (716 ) $ 98.660 Exercised (170,369 ) $ 18.125 Outstanding at end of period 536,315 $ 54.855 Exercisable at end of period 315,964 $ 37.644 The total estimated fair value of stock options granted was computed to be approximately $2.6 million , $4.4 million and $1.0 million during the years ended December 31, 2019 , 2018 and 2017 , respectively. The amounts are amortized ratably over the vesting periods of the options. The weighted average estimated fair value of options granted was computed to be approximately $29.89 , $28.81 and $37.35 during the years ended December 31, 2019 , 2018 and 2017 , respectively. The total intrinsic value of options exercised was $12.8 million , $10.5 million and $17.7 million during the years ended December 31, 2019 , 2018 and 2017 , respectively. The cash proceeds from options exercised were $1.0 million , $3.2 million and $1.8 million during the years ended December 31, 2019 , 2018 and 2017 , respectively. The following table summarizes information about stock options outstanding and exercisable at December 31, 2019 . Options Outstanding Options Exercisable Exercise Prices Number of Weighted Weighted Number of Weighted Weighted $4.96 - $7.36 85,552 3.18 $ 7.043 85,552 3.18 $ 7.043 $7.37 - $32.21 74,668 4.25 $ 15.697 74,668 4.25 $ 15.697 $32.22 - $62.50 52,939 6.07 $ 39.800 52,771 6.07 $ 39.752 $62.51 - $69.77 128,333 8.18 $ 69.770 41,670 8.18 $ 69.770 $69.78 - $108.25 194,823 8.46 $ 85.125 61,303 7.18 $ 83.428 $4.96 - $108.25 536,315 6.73 $ 54.855 315,964 5.35 $ 37.644 As of December 31, 2019 , there was approximately $5.1 million of total unrecognized compensation cost related to outstanding stock options. That cost is expected to be recognized over a weighted-average period of 1.54 years with all cost to be recognized by the end of November 2022, assuming all options vest according to the vesting schedules in place at December 31, 2019 . As of December 31, 2019 , the aggregate intrinsic value of outstanding options was approximately $22.3 million and the aggregate intrinsic value of exercisable options was approximately $18.5 million . Employee Stock Purchase Plan Under the 1997 Employee Stock Purchase Plan (the "ESPP"), we are authorized to issue up to 450,000 shares of common stock to our employees, of which 440,427 had been issued as of December 31, 2019 . On May 5, 2015, our shareholders approved the amendment and restatement of the ESPP, including a 75,000 share increase to 450,000 total shares authorized under the ESPP as well as changes discussed below as compared to the ESPP prior to the amendment and restatement. Employees who are expected to work at least 20 hours per week and 5 months per year are eligible to participate and can choose to have up to 10% of their compensation withheld to purchase our stock under the ESPP when they choose to withhold a whole percentage of their compensation. Beginning on July 1, 2013, our ESPP had a 27 -month offering period and three -month accumulation periods ending on each March 31, June 30, September 30 and December 31. The purchase price of stock on March 31, June 30, September 30 and December 31 was the lesser of (1) 85% of the fair market value at the time of purchase and (2) the greater of (i) 95% of the fair market value at the beginning of the applicable offering period or (ii) 65% of the fair market value at the time of purchase. In addition, participating employees may purchase shares under the ESPP at the beginning of an applicable offering period for a purchase price of stock equal to 95% of the fair market value at such time or at 5 pm on a day other than March 31, June 30, September 30 and December 31 during the applicable offering period for a purchase price of stock equal to 95% of the fair market value at purchase. Beginning April 1, 2015, employees may elect to withhold a positive fixed amount from each compensation payment in addition to the previous approach of withholding a whole percentage of such compensation payment, with all withholding for a given employee subject to a maximum monthly amount of $2,500 following the amendment and restatement as opposed to a $25,000 maximum annual amount prior to the amendment and restatement. For offering periods beginning on or after April 1, 2015, the purchase price of stock on March 31, June 30, September 30 and December 31 is to be the lesser of (1) 85% of the fair market value at the time of purchase and (2) the greater of (i) 85% of the fair market value at the beginning of the applicable offering period, (ii) the fair market value at the beginning of the applicable offering period less 1 cent and (iii) 65% of the fair market value at the time of purchase. In addition, participating employees may elect to purchase shares under the ESPP at the beginning of an applicable offering period for a purchase price of stock equal to the greater of (1) 85% of the fair market value at the beginning of the applicable offering period and (2) the fair market value at the beginning of the applicable offering period less 1 cent or at 5 pm on a day other than March 31, June 30, September 30 and December 31 during the applicable offering period for a purchase price of stock equal to the greater of (1) 85% of the fair market value at the time of purchase and (2) the fair market value at the time of purchase less 1 cent. We issued 10,698 , 10,078 and 10,983 shares under the ESPP for the years ended December 31, 2019 , 2018 and 2017 , respectively. For the years ended December 31, 2019 , 2018 and 2017 , we estimated the fair values of stock purchase rights granted under the ESPP using the Black-Scholes pricing model and the following weighted average assumptions: 2019 2018 2017 Risk-free interest rate 2.09% 1.67% 0.74% Expected lives 1.1 years 1.2 years 1.2 years Expected volatility 40% 42% 45% Expected dividend yield 0% 0% 0% The weighted-average fair value of the purchase rights granted was $18.10 , $18.14 and $15.72 per share for the years ended December 31, 2019 , 2018 and 2017 , respectively. Restricted Stock We have granted non-vested restricted stock awards (“restricted stock”) to management and directors pursuant to the 1997 Plan. The restricted stock awards have varying vesting periods, but generally become fully vested between one and four years after the grant date, depending on the specific award, performance targets met for performance based awards granted to management, and vesting period for time based awards. Management performance based awards are granted at the target amount of shares that may be earned. We valued the restricted stock awards related to service and/or company performance targets based on grant date fair value and expense over the period when achievement of those conditions is deemed probable. For restricted stock awards related to market conditions, we utilize a Monte Carlo simulation model to estimate grant date fair value and expense over the requisite period. We recognize forfeitures as they occur. The following table summarizes restricted stock transactions for the year ended December 31, 2019 : Restricted Stock Weighted-Average Grant Date Fair Value Per Award Non-vested as of December 31, 2018 259,430 $ 74.26 Granted 83,567 $ 74.93 Vested (4,230 ) $ 85.09 Forfeited (3,100 ) $ 80.90 Non-vested as of December 31, 2019 335,667 $ 74.29 The weighted average grant date fair value of awards granted during the year was $74.93 , $71.77 and $82.36 for the years ended December 31, 2019, 2018 and 2017, respectively. Fair value of restricted stock vested was $0.3 million , $4.4 million and $3.9 million for the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019 , there was approximately $2.7 million of total unrecognized compensation cost related to restricted stock with market and time vesting conditions. The Company expects to recognize this expense over a weighted average period of 1.1 years. As of December 31, 2019, we reviewed each of the underlying corporate performance targets and determined that approximately 219,000 shares of common stock were related to corporate performance targets in which we did not deem achievement probable. No compensation expense had been recorded at any period prior to December 31, 2019. The unrecognized compensation cost associated with the restricted stock awards not deemed probable, based on grant date fair value, is approximately $17.8 million . Any change in the probability determination could accelerate the recognition of this expense. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
ACCUMULATED OTHER COMPREHENSIVE INCOME | ACCUMULATED OTHER COMPREHENSIVE INCOME Accumulated other comprehensive income consisted of the following (in thousands): Minimum pension liability Foreign currency translation Total accumulated other comprehensive income Balances at December 31, 2017 $ (489 ) $ 721 $ 232 Other comprehensive income 70 (25 ) 45 Balances at December 31, 2018 (419 ) 696 277 Other comprehensive income 73 163 236 Balances at December 31, 2019 $ (346 ) $ 859 $ 513 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Royalty Agreements The Company holds certain rights to market and manufacture all products developed or created under certain research, development and licensing agreements with various entities. In connection with such agreements, the Company has agreed to pay the entities royalties on net product sales. Royalties of $0.3 million became payable under these agreements for each of the years ended December 31, 2019 , 2018 and 2017 , respectively. Warranties The Company's current terms and conditions of sale include a limited warranty that its products and services will conform to published specifications at the time of shipment and a more extensive warranty related to certain of its products. The Company also sells a renewal warranty for certain of its products. The typical remedy for breach of warranty is to correct or replace any defective product, and if not possible or practical, the Company will accept the return of the defective product and refund the amount paid. Historically, the Company has incurred minimal warranty costs. The Company's warranty reserve was $0.3 million and $0.2 million as of December 31, 2019 and 2018 . Litigation From time to time, the Company may be involved in litigation relating to claims arising out of its operations. The Company records accruals for outstanding legal matters when it believes it is probable that a loss will be incurred, and the amount can be reasonably estimated. On October 10, 2018, we reached an agreement in principle to settle the complaint that was filed against the Company by Shaun Fauley on March 12, 2015 in the U.S. District Court Northern District of Illinois (the "Court") alleging our transmittal of unauthorized faxes in violation of the federal Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005, as a class action (the "Fauley Complaint"). The settlement, which received the Court's approval on February 28, 2019 and was not subsequently appealed by a class member, required us to make available a total of $6.8 million to pay class members, as well as to pay attorneys' fees and expenses to legal counsel to the class. The Company recorded the loss provision in the third quarter of 2018 in connection with the settlement agreement and does not have insurance coverage for the Fauley Complaint. The payment in respect of the settlement was made in full on April 3, 2019, and all activity related to the Fauley Complaint has ceased. At December 31, 2019 , the Company was not a party to any other legal proceedings that were expected, individually or in the aggregate, to have a material adverse effect on our business, financial condition or operating results. |
INTEREST AND OTHER (INCOME) EXP
INTEREST AND OTHER (INCOME) EXPENSE | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
INTEREST AND OTHER (INCOME) EXPENSE | INTEREST AND OTHER EXPENSE (INCOME) Interest and other expense (income), net, consisted of the following (in thousands): Year Ended December 31, 2019 2018 2017 Interest income $ (661 ) $ (261 ) $ (167 ) Interest expense 3,089 310 245 Other expense (income), net 482 (62 ) (228 ) Interest and other expense (income), net $ 2,910 $ (13 ) $ (150 ) Cash paid for interest was $351 thousand , $224 thousand and $206 thousand for the years ended December 31, 2019 , 2018 and 2017 , respectively. |
CREDIT FACILITY AND LONG-TERM D
CREDIT FACILITY AND LONG-TERM DEBT | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
CREDIT FACILITY AND LONG-TERM DEBT | Convertible Notes On September 17, 2019 , the Company issued $86.25 million aggregate principal amount of 3.750% Convertible Senior Notes due 2026 , which included the exercise in full of an $11.25 million purchase option, to certain financial institutions as the initial purchasers of the Notes (the "Initial Purchasers"). The Notes are senior unsecured obligations of the Company. The Notes were issued pursuant to an Indenture, dated September 17, 2019 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee. The net proceeds from the sale of the Notes were approximately $83.7 million after deducting the initial purchasers’ discounts and the offering expenses payable by the Company. The Company used approximately $12.8 million of the net proceeds from the Notes to repay all outstanding indebtedness on its existing Credit Facility (defined below), and an additional $2.0 million to fully fund a cash collateralized, letter of credit facility under the new Credit Facility as amended by the Amendment (as defined below). The Company expects to use the remainder of the net proceeds from the sale of the Notes to fund our intended expansion efforts, including through acquisitions of complementary businesses or technologies or other strategic transactions, and for working capital and other general corporate purposes. The Notes are senior unsecured obligations of the Company and will rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of our unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness (including any letters of credit issued under our Credit Facility) to the extent of the value of assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. The Company pays interest on the Notes semiannually in arrears at a rate of 3.750% per annum on March 15 and September 15 of each year. The Notes are convertible based upon an initial conversion rate of 11.5434 shares of the Company’s common stock per $1,000 principal amount of Notes (equivalent to a conversion price of approximately $86.63 per share of common stock). The Notes would convert in full into 995,618 shares of common stock based on the initial conversion rate. The conversion rate will be subject to standard anti-dilution adjustments upon the occurrence of certain events but will not be adjusted for accrued and unpaid interest. The interest rate on the Notes may be increased by up to 0.50% upon the occurrence of certain events of default or non-timely filings until such matter has been cured. The Indenture includes customary covenants, but no financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities, and sets forth certain events of default and certain types of bankruptcy or insolvency events of default involving the Company after which the Notes become automatically due and payable. The Company can settle any conversions of the Notes in cash, shares of the Company’s common stock or a combination thereof, with the form of consideration determined at the Company’s election. The Company intends to settle the principal value of the Notes in cash and issue shares of the Company’s common stock to settle the intrinsic value of the conversion feature. There can be no guarantee, however, that any settlement will be affected by the Company as currently intended, and the timing and other factors of any settlement, many of which may be outside the Company's control, could impact the actual amounts to be settled in either cash or common stock. The Notes will mature on September 15, 2026 , unless earlier repurchased, redeemed or converted. Prior to March 15, 2026 , holders may convert all or a portion of their Notes only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2019 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the 5 business day period after any 5 consecutive trading day period (the "Notes measurement period") in which the trading price per $1,000 principal amount of Notes for each trading day of the Notes measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (3) with respect to any Notes called for redemption by the Company, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events. On and after March 15, 2026 until the close of business on the scheduled trading day immediately preceding the maturity date, holders may convert their Notes at any time, regardless of the foregoing circumstances. Holders of Notes who convert their Notes in connection with a notice of a redemption or a make-whole fundamental change (each as defined in the Indenture) may be entitled to a premium in the form of an increase in the conversion rate of the Notes. The Company may not redeem the Notes prior to September 20, 2023 . On or after September 20, 2023 , the Company may redeem for cash all or part of the Notes if the last reported sale price of the Company’s common stock equals or exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any. No sinking fund is provided for the Notes. Upon the occurrence of a fundamental change (as defined in the Indenture), holders may require the Company to repurchase all or a portion of their Notes for cash at a price equal to 100% of the principal amount of the Notes to be repurchased plus any accrued but unpaid interest to, but excluding, the fundamental change repurchase date. In accounting for the issuance of the Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component, representing the conversion option, which does not meet the criteria for separate accounting as a derivative as it is indexed to the Company's own stock, was determined by deducting the fair value of the liability component from the par value of the Notes. The difference between the principal amount of the Notes and the liability component represents the debt discount, which is recorded as a direct deduction from the related debt liability in the Consolidated Balance Sheet and amortized to interest expense using the effective interest method over the term of the Notes. The effective interest rate of the Notes is 10.8% per annum. The equity component of the Notes of approximately $39.5 million , net of allocated issuance costs and deferred tax impacts, is included in additional paid-in capital in the Consolidated Balance Sheet and is not remeasured as long as it continues to meet the conditions for equity classification. The Company allocated transaction costs related to the Notes using the same proportions as the proceeds from the Notes. Transaction costs attributable to the liability component were recorded as a direct deduction from the related debt liability in the Consolidated Balance Sheet and amortized to interest expense over the term of the Notes, and transaction costs attributable to the equity component were netted with the equity component in shareholders’ equity. In addition, the Company determined that the additional interest that could be due to the holders of the Notes upon an event of default or non-timely filing represented an embedded derivative feature that should be bifurcated from the Notes. The Company concluded that the fair value of this embedded derivative feature was de minimis upon the issuance of the Notes and at December 31, 2019 . The following table summarizes the net carrying amount of the Notes as of December 31, 2019 (in thousands): December 31, 2019 Carrying amount of equity component $ 39,508 Principal amount of the Notes 86,250 Unamortized debt discount (40,902 ) Net carrying amount $ 45,348 Interest expense related to the Notes for the year ended December 31, 2019 was $2.7 million , which is comprised of the amortization of debt discount and debt issuance costs and the contractual coupon interest as follows (in thousands): Twelve Months Ended December 31, 2019 Interest expense related to contractual coupon interest $ 925 Interest expense related to amortization of the debt discount 1,744 $ 2,669 As of December 31, 2019 , the remaining period over which the unamortized discount will be amortized is 80.5 months. The estimated fair value of the Notes was $116.0 million as of December 31, 2019 , determined through consideration of quoted market prices in less active markets. The fair value measurement is classified as Level 2 in the fair value hierarchy, which is defined in ASC 820 as inputs other than quoted prices in active markets that are either directly or indirectly observable. Based on our closing stock price of $95.94 on December 31, 2019, the if-converted value exceeded the aggregate principal amount of the Notes by $9.3 million . Credit Facility We entered into a Credit Agreement, dated July 27, 2017, as amended in May 2018, December 2018, and July 2019 (the "Credit Agreement") with JPMorgan Chase Bank, N.A. ("Chase") which provided for a revolving credit facility up to $30.0 million (the "Credit Facility"). The Credit Facility provided us with the ability to borrow up to $30.0 million , although the amount of the Credit Facility may have been increased by an additional $20.0 million up to a total of $50.0 million subject to receipt of additional lender commitments and other conditions. Any interest on borrowings due was to be charged at either the (i) rate of interest per annum publicly announced from time to time by Chase at its prime rate in effect at its principal offices in New York City, subject to a floor, minus 1.65% , or (ii) the interest rate per annum equal to (a) LIBOR for the interest period in effect multiplied by (b) Chase's Statutory Reserve Rate (as defined in the Credit Agreement), plus 1.10% and payable monthly. There was an annual minimum interest charge of $60 thousand under the Credit Agreement. Chase held first right of priority over all other liens, if any were to exist. In September 2019, we entered into an amendment to the Credit Agreement (the “Amendment”), which among other things, reduced and limited the Credit Facility to a $2.0 million , cash collateralized, letter of credit facility and eliminated a majority of the negative covenants previously contained in the Credit Facility, including any covenants that could have prohibited the issuance of any Notes and the Company's ability to pay cash upon conversion, repurchase or redemption of any Notes issued. The Company was required to repay in full the approximately $12.8 million of indebtedness outstanding under the Credit Facility and fully fund the $2.0 million collateral account to be held by Chase to secure the Company's obligations under the Amendment to the Credit Facility in connection with the issuance of the Notes. The maturity date of the Credit Facility, as amended by the Amendment, was September 9, 2021 . This Amendment became effective on September 17, 2019 , the first date any Notes were issued. The Company accounted for the modification of the Credit Facility by writing off approximately $33 thousand of remaining unamortized debt issuance costs related to the Credit Agreement. On December 31, 2019, we terminated our $2.0 million letter of credit facility with Chase and expensed the remaining debt issuance costs. As of December 31, 2018 , we had $6.0 million of borrowings outstanding under the Credit Agreement. In connection with the Credit Agreement, the Company incurred debt issuance costs of $120 thousand . These costs are included in other non-current assets on the Company's Consolidated Balance Sheet as of December 31, 2018. |
SEGMENT REPORTING
SEGMENT REPORTING | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | SEGMENT REPORTING The Company's two reportable segments are CCA and OVP. The CCA segment includes Point of Care diagnostic laboratory instruments and consumables, and Point of Care digital imaging diagnostic instruments and software services as well as single use diagnostic and other tests, pharmaceuticals and vaccines, primarily for canine and feline use. These products are sold directly by the Company as well as through independent third party distributors and through other distribution relationships. CCA segment products manufactured at the Des Moines, Iowa production facility included in the OVP segment's assets are transferred at cost and are not recorded as revenue for the OVP segment. The OVP segment includes private label vaccine and pharmaceutical production, primarily for cattle, in addition to other small mammals. All OVP products are sold by third parties under third party labels. Summarized financial information concerning the Company's reportable segments is shown in the following tables (in thousands): Year Ended December 31, 2019 Core Other Vaccines and Total Total revenue $ 106,570 $ 16,091 $ 122,661 Operating income (loss) 1,358 (1,031 ) 327 (Loss) income before income taxes (1,552 ) (1,031 ) (2,583 ) Investments in unconsolidated affiliates 7,424 — 7,424 Total assets 223,980 20,444 244,424 Net assets 137,072 17,292 154,364 Capital expenditures 259 785 1,044 Depreciation and amortization 3,611 1,305 4,916 Year Ended December 31, 2018 Core Other Vaccines and Total revenue $ 108,924 $ 18,522 $ 127,446 Operating income 2,040 1,754 3,794 Income before income taxes 2,053 1,754 3,807 Investments in unconsolidated affiliates 8,018 — 8,018 Total assets 133,586 22,866 156,452 Net assets 96,129 26,280 122,409 Capital expenditures 180 1,178 1,358 Depreciation and amortization 3,369 1,226 4,595 Year Ended December 31, 2017 Core Other Vaccines and Total revenue $ 105,191 $ 24,150 $ 129,341 Operating income 12,656 5,563 18,219 Income before income taxes 12,828 5,541 18,369 Investments in unconsolidated affiliates — — — Total assets 111,625 23,819 135,444 Net assets 75,984 24,456 100,440 Capital expenditures 209 3,260 3,469 Depreciation and amortization 3,736 1,018 4,754 Revenue is attributed to individual countries based on customer location. Total revenue by principal geographic area was as follows (in thousands): For the Years Ended December 31, 2019 2018 2017 U.S. $ 108,469 $ 115,543 $ 116,823 Canada 3,042 2,992 2,924 Europe 8,289 5,995 4,780 Other International 2,861 2,916 4,814 Total $ 122,661 $ 127,446 $ 129,341 Total long-lived assets by principal geographic areas were as follows (in thousands): As of December 31, 2019 2018 2017 U.S. $ 14,712 $ 15,933 $ 17,288 Europe 576 37 18 Other International 181 11 25 Total $ 15,469 $ 15,981 $ 17,331 In our CCA segment, revenue from Covetrus represented approximately 14% , 15% and 13% of our consolidated revenue for the years ended December 31, 2019 , 2018 and 2017 , respectively. Revenue from Merck entities, including Merck Animal Health, represented approximately 1% , 12% and 12% for the years ended December 31, 2019 , 2018 and 2017 , respectively. In our OVP segment, revenue from Elanco represented approximately 8% , 9% and 11% for the years ended December 31, 2019 , 2018 and 2017 , respectively. No other customer accounted for more than 10% of our consolidated revenue for the years ended December 31, 2019 , 2018 or 2017 . |
SUPPLEMENTAL QUARTERLY FINANCIA
SUPPLEMENTAL QUARTERLY FINANCIAL INFORMATION (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
SUPPLEMENTAL QUARTERLY FINANCIAL INFORMATION (Unaudited) | SUPPLEMENTAL QUARTERLY FINANCIAL DATA (Unaudited) The following tables present quarterly unaudited results for the two years ended December 31, 2019 and 2018 (amounts in thousands, except per share data). Q1 Q2 Q3 Q4 Total 2019 Total revenue $ 29,511 $ 28,146 $ 31,237 $ 33,767 $ 122,661 Gross profit 12,543 12,412 13,664 15,830 54,449 Operating income (loss) (75 ) (566 ) 193 775 327 Net income (loss) before equity in losses of unconsolidated affiliates 951 (161 ) (204 ) (1,723 ) (1,137 ) Net income (loss), after equity in losses of unconsolidated affiliates 770 (288 ) (351 ) (1,862 ) (1,731 ) Net income (loss) attributable to Heska Corporation 814 (241 ) (310 ) (1,728 ) (1,465 ) Basic earnings (loss) per share attributable to Heska Corporation 0.11 (0.03 ) (0.04 ) (0.23 ) (0.20 ) Diluted earnings (loss) per share attributable to Heska Corporation 0.10 (0.03 ) (0.04 ) (0.23 ) (0.20 ) 2018 Total revenue $ 32,765 $ 29,662 $ 30,955 $ 34,064 $ 127,446 Gross profit 13,307 13,065 14,794 15,472 56,638 Operating income (loss) 1,871 2,204 (3,595 ) 3,314 3,794 Net income (loss) before equity in losses of unconsolidated affiliates 2,155 1,897 (1,670 ) 3,540 5,922 Net income (loss), after equity in losses of unconsolidated affiliates 2,155 1,897 (1,670 ) 3,468 5,850 Net income (loss) attributable to Heska Corporation 2,155 1,897 (1,670 ) 3,468 5,850 Basic earnings (loss) per share attributable to Heska Corporation 0.30 0.26 (0.23 ) 0.47 0.81 Diluted earnings (loss) per share attributable to Heska Corporation 0.28 0.24 (0.23 ) 0.44 0.74 Note that the sum of each value line for the four quarters does not necessarily equal the amount reported for the full year due to rounding. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS On January 14, 2020, the Company entered into an agreement (the “Agreement”) among the Company, Heska GmbH, Covetrus Animal Health Holdings Limited and Covetrus, Inc. regarding the sale and purchase of the sole share in scil animal care company GmbH (“scil”) whereby Heska is acquiring 100% of the capital stock of scil from Covetrus Animal Health Holdings Limited, a subsidiary of Covetrus, Inc. (“Covetrus”). Heska will purchase scil (the “Acquisition”) for $125 million in cash, subject to working capital and other adjustments. The Acquisition is expected to close no later than by the end of the second quarter of 2020. The obligation of Heska and Covetrus to consummate the Acquisition is subject to the satisfaction or waiver of closing conditions set forth in the Agreement, including, among others (i) the receipt by Heska of audited financial statements of scil for the years ended December 31, 2018 and 2019 and (ii) the absence of a "Material Adverse Change" (as defined in the Agreement) with respect to scil and its subsidiaries or the ability of Covetrus to consummate the Acquisition. The Acquisition is not subject to any financing condition. Under the terms of the Agreement, each of Heska and Covetrus has agreed to certain indemnification obligations with respect to the guarantees made by each party and/or each party’s respective subsidiaries under the Agreement. If the Acquisition has not been consummated by May 31, 2020, each of Heska and Covetrus may terminate the Agreement. Heska expects to finance the Acquisition through a private offering of $125 million of Series X Convertible Preferred Stock, par value $0.01 per share (the “Preferred”) pursuant to a Securities Purchase Agreement, dated as of January 12, 2020, among the Company and certain investors. The Preferred offering is being undertaken in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D as promulgated by the SEC under the Securities Act, as a transaction not involving a public offering. 125,000 shares of Preferred will be issued at the Closing of the Preferred offering, and the Preferred is convertible into shares of the Company’s Public Common Stock at an initial ratio of approximately 12 shares of Public Common Stock for each Preferred share at the option of the Preferred holders or the Company. The Preferred offering is expected to close at the time the Company closes the Acquisition, subject to customary closing conditions. The Company expects to exercise its right to convert the Preferred shares into 1,508,751 shares of Public Common Stock after the Company’s annual shareholder meeting, subject to the receipt of an affirmative shareholder vote to amend the Company’s Restated Certificate of Incorporation, as amended (the “Certificate”), to increase the number of authorized shares of Public Common Stock. The conversion of the Preferred shares will result in dilution of less than 20% of total shares of the Company’s Public Common Stock currently issued and outstanding. If such shareholder vote is not obtained and the conversion of the Preferred shares does not occur, the Company will be required to pay a cash dividend to the Investors at a per annum rate of 5.75% ; provided, that such amount shall increase in subsequent periods up to a maximum per annum rate of 7.25% . In connection with the Preferred offering, the Company has agreed to enter into a Registration Rights Agreement with the Investors pursuant to which the Company is obligated to file a registration statement with the Commission relating to the shares of Public Common Stock issuable to the Investors upon conversion of the Preferred shares. |
OPERATIONS AND SUMMARY OF SIG_2
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | In the opinion of management, the accompanying Consolidated Financial Statements contain all adjustments, consisting of normal, recurring adjustments, necessary to present fairly the financial position of the Company as of December 31, 2019 and 2018 , as well as the results of our operations, statements of stockholders' equity and cash flows for the twelve months ended December 31, 2019 , 2018 and 2017 . The audited Consolidated Financial Statements included herein have been prepared pursuant to the rules and regulations of the SEC. Our audited Consolidated Financial Statements include our accounts and the accounts of our wholly-owned subsidiaries since their respective dates of acquisitions. All intercompany accounts and transactions have been eliminated in consolidation. Where our ownership of a subsidiary was less than 100%, the non-controlling interest is reported on our consolidated balance sheets. The non-controlling interest in our consolidated net income is reported as "Net loss attributable to non-controlling interest" on our Consolidated Statements of Income. Our audited Consolidated Financial Statements are stated in U.S. Dollars and have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP"). |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates are required when establishing the allowance for doubtful accounts and the net realizable value of inventory; determining future costs associated with warranties provided; determining the period over which our obligations are fulfilled under agreements to license product rights and/or technology rights; evaluating long-lived and intangible assets and investments for estimated useful lives and impairment; estimating the useful lives of instruments under leasing arrangements; determining the allocation of purchase price under purchase accounting; estimating the expense associated with the granting of stock options; determining the need for, and the amount of a valuation allowance on deferred tax assets |
Concentration of Credit Risk | Financial instruments that potentially subject us to a concentration of credit risk consist of cash and cash equivalents and accounts receivable. We maintain the majority of our cash and cash equivalents with financial institutions that management believes are creditworthy in the form of demand deposits. We have no off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign currency hedging arrangements. Our accounts receivable balances are due largely from distribution partners, domestic veterinary clinics and individual veterinarians and other animal health companies. Covetrus represented 19% and 12% of our consolidated accounts receivable at December 31, 2019 and 2018 , respectively. Merck entities represented approximately 1% and 10% of our consolidated accounts receivable at December 31, 2019 and 2018 , respectively. Elanco represented approximately 4% and 32% of our consolidated accounts receivable at December 31, 2019 and 2018 , respectively. No other customer accounted for more than 10% of our consolidated accounts receivable at December 31, 2019 or 2018 . We have established an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts receivable are recorded at net realizable value. From time to time, our customers are unable to meet their payment obligations. We continuously monitor our customers' credit worthiness and use our judgment in establishing a provision for estimated credit losses based upon our historical experience and any specific customer collection issues that we have identified. While such credit losses have historically been within our expectations and the provisions established, there is no assurance that we will continue to experience the same credit loss rates that we have in the past. A significant change in the liquidity or financial position of our customers could have a material adverse impact on the collectability of accounts receivable and our future operating results. |
Cash and Cash Equivalents | Cash and cash equivalents are stated at cost, which approximates market value, and include short-term, highly liquid investments with original maturities of less than three months. |
Fair Value of Financial Instruments | Our financial instruments consist of cash and cash equivalents, short-term trade receivables and payables, and the Notes. The carrying values of cash and cash equivalents and short-term trade receivables and payables approximate fair value because of the short-term nature of the instruments. The fair value of our line of credit balance was estimated based on current rates available for similar debt with similar maturities and collateral, and at December 31, 2018 , approximated the carrying value due primarily to the floating rate of interest on such debt instruments. |
Property and Equipment | Property and equipment is stated at cost, net of accumulated depreciation. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. When an item is sold or retired, the cost and related accumulated depreciation is relieved and the resulting gain or loss, if any, is recognized in the Consolidated Statements of Income. We provide for depreciation primarily using the straight-line method by charges to income in amounts that allocate the cost of property and equipment over their estimated useful lives as follows: Asset Classification Estimated Useful Life Building 10 to 20 years Machinery and equipment 2 to 10 years Office furniture and equipment 3 to 7 years Computer hardware and software 3 to 5 years Leasehold and building improvements 5 to 15 years We capitalize certain costs incurred in connection with developing or obtaining software designated for internal use based on three distinct stages of development. Qualifying costs incurred during the application development stage, which consist primarily of internal payroll and direct fringe benefits and external direct project costs, including labor and travel, are capitalized and amortized on a straight-line basis over the estimated useful life of the asset, which range from three to five years. Costs incurred during the preliminary project and post-implementation and operation phases are expensed as incurred. These costs are general and administrative in nature and related primarily to the determination of performance requirements, data conversion and training. |
Investments in Unconsolidated Affiliates | Investments in unconsolidated affiliates are measured and recorded as either non-marketable equity securities or equity method investments. Non-marketable equity securities are equity securities without readily determinable fair value that are measured and recorded using a measurement alternative which measures the securities at cost minus impairment, if any, plus or minus changes from qualifying observable price changes. Equity method investments are equity securities in investees we do not control but over which we have the ability to exercise significant influence. When the equity method of accounting is determined to be appropriate, the initial measurement of the investment includes the cost of the investment and all direct transaction costs incurred to acquire the investment. Equity method investments are measured at cost minus impairment, if any, plus or minus our share of equity method investee income or loss, which is recorded as a separate line on the income statement. Both types of investments are evaluated for impairment if a triggering event occurs. |
Goodwill, Intangible and Other Long-Lived Assets | Goodwill is initially valued based on the excess of the purchase price of a business combination over the fair value of acquired net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Intangible assets other than goodwill are initially valued at fair value. If a quoted price in an active market for the identical asset is not readily available at the measurement date, the fair value of the intangible asset is estimated based on discounted cash flows using market participant assumptions, which are assumptions that are not specific to the Company. The selection of appropriate valuation methodologies and the estimation of discounted cash flows require significant assumptions about the timing and amounts of future cash flows, risks, appropriate discount rates, and the useful lives of intangible assets. When material, we utilize independent valuation experts to advise and assist us in determining the fair values of the identified intangible assets acquired in connection with a business acquisition and in determining appropriate amortization methods and periods for those intangible assets. We assess goodwill for impairment annually, at the reporting unit level, in the fourth quarter and whenever events or circumstances indicate impairment may exist. In evaluating goodwill for impairment, we have the option to first assess the qualitative factors to determine whether it is more-likely-than-not that the estimated fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the comparison of the estimated fair value of the reporting unit to the carrying value. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, we determine that it is more-likely-than-not that the estimated fair value of a reporting is less than its carrying amount, we would then estimate the fair value of the reporting unit and compare it to the carrying value. If the carrying value exceeds the estimated fair value we would recognize an impairment for the difference; otherwise, no further impairment test would be required. In contrast, we can opt to bypass the qualitative assessment for any reporting unit in any period and proceed directly to quantitative analysis. Doing so does not preclude us from performing the qualitative assessment in any subsequent period. We performed qualitative assessments in the fourth quarters of 2019 , 2018, and 2017 and determined that no indications of impairment existed. We assess the realizability of intangible assets other than goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If an impairment review is triggered, we evaluate the carrying value of intangible assets based on estimated undiscounted future cash flows over the remaining useful life of the primary asset of the asset group and compare that value to the carrying value of the asset group. The cash flows that are used contain our best estimates, using appropriate and customary assumptions and projections at the time. If the net carrying value of an intangible asset exceeds the related estimated undiscounted future cash flows, an impairment to adjust the intangible asset to its fair value would be reported as a non-cash charge to earnings. If necessary, we would calculate the fair value of an intangible asset using the present value of the estimated future cash flows to be generated by the intangible asset, and applying a risk-adjusted discount rate. |
Revenue Recognition | We account for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which we adopted on January 1, 2018, using the modified retrospective transition approach. See "Adoption of New Accounting Pronouncements" below for impacts of adoption. We generate our CCA segment revenue through the sale of products, either by outright purchase by our customers or through a subscription agreement whereby our customers receive instruments and pay us a monthly fee for the consumables needed to conduct testing. Subscription placement is the majority of our Point of Care laboratory transactions while outright sales to customers are the majority of both Point of Care imaging diagnostic transactions and the sale of pharmaceuticals and vaccines. For outright sales of products, revenue is recognized when control of the promised product or service is transferred to our customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products or services (the transaction price). Taxes assessed by governmental authorities and collected from the customer are excluded from our revenue recognition. A performance obligation is a promise in a contract to transfer a distinct product or service to a customer and is the unit of account under ASC 606. For instruments, consumables and most software licenses sold by the Company, control transfers to the customer at a point in time. To indicate the transfer of control, the Company must have a present right to payment, legal title must have passed to the customer, the customer must have the significant risks and rewards of ownership and where acceptance is not a formality, the customer must have accepted the product or service. Heska’s principal terms of sale are FOB Shipping Point, or equivalent, and, as such, we primarily transfer control and record revenue for product sales upon shipment. If a performance obligation to the customer with respect to a sales transaction remains unfulfilled following shipment (typically owed installation or acceptance by the customer), revenue recognition for that performance obligation is deferred until such commitments have been fulfilled. For extended warranty and service plans, control transfers to the customer over the term of the arrangement. Revenue for extended warranties and service is recognized based upon the period of time elapsed under the arrangement. Our revenue under subscription agreements relates to OTL arrangements or STL arrangements. Determination of an OTL or STL is primarily determined as a result of the length of the contract as compared to the estimated useful life of the instrument, among other factors. Leases are outside of the scope of ASC 606 and are therefore accounted for in accordance with ASC 842 , Leases . A STL would result in earlier recognition of instrument revenue as compared to an OTL, which is generally upon installation of the instruments. The cash collected under both arrangements is over the term of the contract. The cost of the customer-leased instruments is removed from inventory and recognized in the Consolidated Statements of Income. Instrument lease revenue for OTL agreements is recognized on a straight-line basis over the life of the lease, and the costs of customer-leased instruments are recorded within property and equipment in the accompanying Consolidated Balance Sheets and depreciated over the instrument’s estimated useful life. The depreciation expense is reflected in cost of revenue in the accompanying Consolidated Statements of Income. The OTLs and STLs are not cancellable until after an initial term. OTLs may include a minimum utilization rather than a minimum supply credit. For contracts with multiple performance obligations, the Company allocates the contracts' transaction price for each performance obligation on a relative standalone selling price basis using our best estimate of the standalone selling price of each distinct product or service in the contract. The primary method used to estimate the standalone selling price is the price observed in standalone sales to customers of a prior period. Changes in these values can impact the amount of consideration allocated to each component of the contract. When prices in standalone sales are not available, we may use a cost-plus margin approach. Allocation of the transaction price is determined at the contracts' inception. The Company does not adjust the transaction price for the effects of a significant financing component when the period between the transfer of the promised good or service to the customer and payment for that good or service by the customer is expected to be one year or less. This allocation approach also applies to contracts for which a portion of the contract relates to a lease component. To the extent the transaction price includes variable consideration, such as future payments based on consumable usage over time, we apply judgment to determine if the variable consideration should be constrained. As the variable consideration is highly susceptible to factors outside of the Company’s influence, and the potential values contain a broad range of possible outcomes given all potential amounts of consumption that could occur, it is likely that a significant revenue reversal would occur should the variable consideration be estimated at an amount greater than the minimum stated amount until such a time as the uncertainty is resolved. We generate revenue within our OVP segment through contract manufacturing agreements with customers. The timing of revenue recognition of our customer contracts are generally recognized upon shipment or acceptance by our customer, under the same guidelines noted above for other outright product sales. Heska assessed the over-time criteria within ASC 606 and concluded that while products within this segment have no alternative use to Heska, as Heska is contractually prohibited to redirect the product to other customers, Heska does not have right to payment for performance to date. Therefore, point in time revenue recognition has been determined to be appropriate. Revenue generated from licensing arrangements is recognized based on the underlying terms of the contract. Recording revenue from the sale of products involves the use of estimates and management's judgment. We must make a determination at the time of sale whether the customer has the ability and intent to make payments in accordance with arrangements. While we do utilize past payment history and, to the extent available for new customers, public credit information in making our assessment, the determination of whether collectability is reasonably assured is ultimately a judgment that must be made by management. For contracts with multiple performance obligations, we exercise judgment in allocating the transaction price for each performance obligation based on an estimated standalone selling price for each distinct product or service. We must also make estimates regarding our future obligations relating to returns, rebates, allowances and similar other programs. We do not generally allow return of products or instruments. Distributor rebates are recorded as a reduction to revenue. Refer to Note 2 for additional disclosures required by ASC 606. Prior to the adoption of ASC 606 on January 1, 2018, the Company recognized revenue in accordance with Topic 605, Revenue Recognition . Our policy was to recognize revenue when the applicable revenue recognition criteria were met, which generally included the following: persuasive evidence of an arrangement exists; delivery has occurred or services rendered; price is fixed or determinable; and collectability is reasonably assured. The adoption of the new revenue standard did not materially change our recognition from ASC 605 (as disclosed under Adoption of New Accounting Pronouncements ). |
Stock-Based Compensation | Stock-based compensation expense is measured at the grant date based upon the estimated fair value of the portion of the award that is ultimately expected to vest and is recognized as expense over the applicable vesting period of the award generally using the straight-line method. |
Advertising Costs | Advertising costs are expensed as incurred and are included in sales and marketing expenses. |
Income Taxes | The Company records a current provision for income taxes based on estimated amounts payable or refundable on tax returns filed or to be filed each year. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates, in each tax jurisdiction, expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. The overall change in deferred tax assets and liabilities for the period measures the deferred tax expense or benefit for the period. Deferred tax assets are reduced by a valuation allowance based on a judgmental assessment of available evidence if the Company is unable to conclude that it is more likely than not that some or all of the deferred tax assets will be realized. |
Earnings Per Share | Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. |
Foreign Currency Translation | ssets and liabilities of these subsidiaries are translated using the exchange rate in effect at the balance sheet date. Revenue and expense accounts and cash flows are translated using an average of exchange rates in effect during the period. Cumulative translation gains and losses are shown in the Consolidated Balance Sheets as a separate component of stockholders' equity. Exchange gains and losses arising from transactions denominated in foreign currencies (i.e., transaction gains and losses) are recognized as a component of other income (expense) in current operations, as are exchange gains and losses on intercompany transactions expected to be settled in the near term. |
Warranty Costs | The Company generally provides for the estimated cost of hardware and software warranties in the period the related revenue is recognized. The Company assesses the adequacy of its accrued warranty liabilities and adjusts the amounts as necessary based on actual experience and changes in future estimates. Should product failure rates differ from our estimates, actual costs could vary significantly from our expectations. Extended warranties are sold to our customers and revenue is recognized over the term of the warranty agreement, as expected costs are incurred. |
Recent Accounting Pronouncements | Adoption of New Accounting Pronouncements Effective January 1, 2019, we adopted Accounting Standard Update ("ASU") 2018-07, Compensation – Stock Compensation (Topic 718) , Improvements to Non-employee Share-Based Payment Accounting . This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with accounting for employee share-based compensation. Guidance related to the stock compensation granted to employees is followed for non-employees, including the measurement date, valuation approach and performance conditions. The expense is recognized in the same period as though cash were paid for the good or service, ratably over the service period. The adoption of this ASU did not have an impact on our consolidated financial statements but did have a minimal impact on our related disclosures. Effective January 1, 2019, we adopted ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . The ASU permits companies to elect a reclassification of the disproportionate tax effects in accumulated other comprehensive income ("AOCI") caused by the 2017 Tax Act to retained earnings. As of December 31, 2019 , the Company does not have any disproportionate income tax effects in AOCI to reclassify. However, if the Company did have disproportionate income tax effects in AOCI in the future, it would reclassify them to retained earnings. In February 2016, the FASB issued ASU 2016-02, Leases ( Topic 842 ) , which supersedes ASC 840, Leases . This update requires lessees to recognize a right-of-use (“ROU”) asset and a lease liability for all leases, including operating leases, with terms greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures by lessees and lessors about the amount, timing and uncertainty of cash flows arising from leases. The accounting for lessors does not fundamentally change except for changes to conform and align guidance to the lessee guidance as well as to the new revenue recognition guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . Subsequent to the issuance of Topic 842, the FASB clarified the guidance through several ASUs; hereinafter the collection of lease guidance is referred to as “ASC 842”. The Company adopted ASC 842 on January 1, 2019, using the modified retrospective approach for all lease arrangements at the beginning of the period of adoption. Results for reporting periods beginning January 1, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with the Company’s historic accounting under ASC 840, Leases . For leases that commenced before the effective date of ASC 842, the Company elected the permitted practical expedients to not reassess the following: (i) whether any expired or existing contracts contain leases; (ii) the lease classification for any expired or existing leases; and (iii) initial direct costs for any existing leases. The Company also elected to exclude leases with a term of 12 months or less from the recognized ROU assets and lease liabilities. Adoption of the standard did not have a material net impact in our Consolidated Balance Sheets, Consolidated Statements of Income or Consolidated Statements of Cash Flows. The most significant impact was the recognition of ROU assets and lease liabilities for the operating leases, of which we are the lessee. As a result of the cumulative impact of adopting ASC 842, the Company recorded operating lease ROU assets of $6.5 million and operating lease liabilities of $6.9 million as of January 1, 2019, primarily related to building, vehicle, and office equipment leases, based on the present value of the future lease payments on the date of adoption. As a lessor, accounting for our subscription agreements remains substantially unchanged. Refer to Note 6 for additional disclosures required by ASC 842. The Company determines if an arrangement is a lease at inception based on whether control of an identified asset is transferred. For leases where the Company is the lessee, ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent an obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The lease terms used to calculate the ROU asset and related lease liability include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense while the expense for finance leases is recognized as amortization expense and interest expense. The Company has lease agreements which require payments for lease and non-lease components and has elected to account for these as a single lease component for our building and office equipment leases, but as separate components for our vehicle leases. Our revenue under subscription agreements relates to both operating-type lease (“OTL”) arrangements and sales-type lease (“STL”) arrangements. Determination of an OTL or STL is primarily a result of the length of the contract as compared to the estimated useful life of the instrument, among other factors. A STL results in earlier recognition of instrument revenue. The cost of the customer-leased instruments is removed from inventory and recognized in the Consolidated Statements of Income. There is no residual value taken into consideration as it does not meet our capitalization requirements. Instrument lease revenue for OTL agreements is recognized on a straight-line basis over the life of the lease and included with the predominant non-lease components in consumable revenue. The costs of customer-leased instruments are recorded within property and equipment in the accompanying Consolidated Balance Sheets and depreciated over the instrument’s estimated useful life. The depreciation expense is reflected in cost of revenue in the accompanying Consolidated Statements of Income. The OTLs and STLs are not cancellable until after an initial term and include an option to renew. For lease arrangements with lease and non-lease components where the Company is the lessor, the Company allocates the total contract consideration to the lease and non-lease components on a relative standalone selling price basis using the Company’s best estimate of the standalone selling price of each distinct product or service in the contract. The primary method used to estimate standalone selling price is the price observed in standalone sales to customers of a prior period. Changes in these values can impact the amount of consideration allocated to each component of the contract. When prices in standalone sales are not available, we may use a cost-plus margin approach. Allocation of the transaction price is determined at the inception of the lease arrangement. The Company’s leases consist of leases with fixed and variable lease payments. For those leases with variable lease payments, the variable lease payment is typically based upon purchase of consumables used with the leased instruments and included in consumable revenue. Effective January 1, 2018, we adopted FASB ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting , which provides clarification on accounting for modifications in share-based payment awards. The adoption of this guidance did not have an impact on our consolidated financial statements or related disclosures as there were no modifications to our share-based payment awards during 2018. In March 2018, we adopted FASB ASU 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 , which updates the income tax accounting to reflect the SEC's interpretive guidance released on December 22, 2017, when the 2017 Tax Act was signed into law. See Item 8, Note 5. Income Taxes, for the impact of adoption to our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers and has subsequently issued several supplemental and/or clarifying ASUs (collectively "ASC 606"). ASC 606 prescribes a single common revenue standard that replaces most existing GAAP revenue recognition guidance. ASC 606 outlines a five-step model, under which Heska recognized revenue as performance obligations within customer contracts are satisfied. ASC 606 is intended to provide more consistent interpretation and application of the principles outlined in the standard across filers in multiple industries and within the same industries compared to current practices, which should improve comparability. Along with the issuance of ASC 606, additional cost guidance was issued and codified under ASC 340-40 that outlines the requirements for capitalizing incremental costs of obtaining a contract and costs to fulfill a contract that meet certain capitalization criteria. On January 1, 2018, we adopted ASC 606 using the modified retrospective method for all customer contracts not yet completed as of the adoption date. Results for reporting periods beginning January 1, 2018 are presented under ASC 606, while prior period amounts were not adjusted and continue to be reported in accordance with the Company's historic accounting under Topic 605, Revenue Recognition. We recorded an increase to beginning retained earnings of $2.6 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. The impact to beginning retained earnings was primarily driven by the capitalization of certain costs to obtain our customer contracts, which were primarily sales-related commissions. The adoption of ASC 606 did not have a significant impact on our Consolidated Financial Statements as of and for the twelve months ended December 31, 2019 and 2018. As a result, comparisons of revenues and operating profit performance between periods are not affected by the adoption of this ASU. Accounting Pronouncements Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) , which requires that financial assets measured at amortized cost be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected. The income statement reflects the measurement of credit losses for newly recognized financial assets, as well as the increases or decreases of expected credit losses that have taken place during the period. The measurement of expected credit losses is based upon historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. Subsequent to the issuance of ASU 2016-13, the FASB issued ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses , in November 2018 . This ASU clarifies that receivables from operating leases are accounted for using the lease guidance and not as financial instruments. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments , which further clarifies and improves guidance related to accounting for credit losses. In May 2019, the FASB issued ASU 2019-05, Financial Instruments - Credit Losses (Topic 326) . This ASU provides relief to certain entities adopting ASU 2016-13. The amendment provides entities with an option to irrevocably elect the fair value option for certain financial assets. These amendments are effective for fiscal years beginning after December 15, 2019 and interim periods within those annual periods. We evaluated the impact of the standard on our consolidated financial statements and do not expect the standard to have a material impact on our consolidated financial statements and disclosures, accounting processes, and internal controls. We expect to implement the standard with a cumulative-effect adjustment in retained earnings effective as of the beginning of the period of adoption. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which is intended to simplify various aspects related to the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740, and also clarifies and amends existing guidance to improve consistent application. This guidance will be effective for interim and annual periods beginning after December 15, 2020, and early adoption is permitted. We are currently evaluating the impact of this update on our consolidated financial statements. |
OPERATIONS AND SUMMARY OF SIG_3
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Changes in allowance for doubtful accounts | Changes in allowance for doubtful accounts are summarized as follows (in thousands): Years Ended December 31, 2019 2018 2017 Balances at beginning of period $ 245 $ 215 $ 237 Additions - charged to expense 113 104 168 Deductions - write offs, net of recoveries (172 ) (74 ) (190 ) Balances at end of period $ 186 $ 245 $ 215 |
Schedule of cash and cash equivalents | The foreign cash balances are summarized as follows (in thousands): As of December 31, 2019 2018 European Union Euros 1,773 1,615 Swiss Francs 124 156 Canadian Dollars 88 — Australian Dollars 54 — |
Schedule of property and equipment | We provide for depreciation primarily using the straight-line method by charges to income in amounts that allocate the cost of property and equipment over their estimated useful lives as follows: Asset Classification Estimated Useful Life Building 10 to 20 years Machinery and equipment 2 to 10 years Office furniture and equipment 3 to 7 years Computer hardware and software 3 to 5 years Leasehold and building improvements 5 to 15 years Property and equipment, net, consisted of the following (in thousands): December 31, 2019 2018 Land $ 694 $ 377 Building 3,845 2,978 Machinery and equipment 28,777 33,087 Office furniture and equipment 1,345 1,687 Computer hardware and software 3,408 4,704 Leasehold and building improvements 10,558 9,953 Construction in progress 671 1,274 Property and equipment, gross 49,298 54,060 Less accumulated depreciation (33,829 ) (38,079 ) Total property and equipment, net $ 15,469 $ 15,981 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes our CCA revenue (in thousands): Year Ended December 31, 2019 2018 2017 Point of Care laboratory revenue: $ 67,132 $ 57,375 $ 54,855 Consumables 53,590 44,771 39,161 Sales-type leases 6,890 5,888 7,382 Outright instrument sales 5,247 4,922 6,391 Other 1,405 1,794 1,921 Point of Care imaging revenue: 25,652 22,832 21,907 Outright instrument sales 22,594 19,746 19,187 Other 3,058 3,086 2,720 Other CCA revenue: 13,786 28,717 28,429 Other pharmaceuticals, vaccines and diagnostic tests 13,495 28,265 28,008 Research and development, license and royalty revenue 291 452 421 Total CCA revenue $ 106,570 $ 108,924 $ 105,191 The following table summarizes our OVP revenue (in thousands): Year Ended December 31, 2019 2018 2017 Contract manufacturing $ 15,374 $ 17,508 $ 23,490 License, research and development 717 1,014 660 Total OVP revenue $ 16,091 $ 18,522 $ 24,150 |
Schedule of Timing of Revenue Expected to be Recognized | As of December 31, 2019 , the Company expects to recognize revenue as follows (in thousands): Year Ending December 31, Revenue 2020 $ 26,939 2021 23,808 2022 20,724 2023 17,815 2024 13,626 Thereafter 14,897 $ 117,809 |
ACQUISITION AND RELATED PARTY_2
ACQUISITION AND RELATED PARTY ITEMS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations and Related Party Disclosures [Abstract] | |
Schedule of aggregate consideration and allocation of purchase price | The preliminary fair values allocated to CVM's assets and liabilities as of the acquisition date, as well as the purchase price, are reflected in the table below (in thousands): Purchase Price December 5, 2019 Consideration payable to former owners $ 14,420 Total $ 14,420 Net Assets Acquired Cash and cash equivalents $ 927 Accounts receivable 2,392 Inventories 1,494 Other current assets 10 Property and equipment 382 Other intangible assets 2,551 Other non-current assets 178 Accounts payable (250 ) Current portion of deferred revenue, and other (164 ) Deferred tax liability (683 ) Other long-term borrowings (1,109 ) Other liabilities (157 ) Total fair value of net assets acquired 5,571 Goodwill 8,849 Total fair value of consideration transferred $ 14,420 |
Schedule of intangible assets acquired | Intangible assets acquired, amortization method and estimated useful life as of December 5, 2019, was as follows (dollars in thousands): Useful Life Amortization Method Fair Value Customer relationships 6 years Straight-line $2,440 Trade name 4 years Straight-line $111 |
Business acquisition, pro forma information | The following table presents unaudited supplemental pro forma financial information as if the CVM acquisition had occurred on January 1, 2018 (in thousands): Year Ended December 31, 2019 2018 Total revenue, net $ 130,434 $ 135,344 Net (loss) income attributable to Heska Corporation (788 ) 5,970 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense | The components of income before income taxes were as follows (in thousands): Year Ended December 31, 2019 2018 2017 Domestic $ (1,872 ) $ 3,602 $ 18,188 Foreign (711 ) 205 181 $ (2,583 ) $ 3,807 $ 18,369 The components of the income tax (benefit) expense are as follows (in thousands): Year Ended December 31, 2019 2018 2017 Current income tax expense: Federal $ — $ (115 ) $ — State 189 192 6 Foreign 170 63 43 Total current expense $ 359 $ 140 $ 49 Deferred income tax (benefit) expense: Federal $ (1,610 ) $ (1,877 ) $ 9,736 State (307 ) (378 ) (872 ) Foreign 112 — — Total deferred (benefit) expense (1,805 ) (2,255 ) 8,864 Total income tax (benefit) expense $ (1,446 ) $ (2,115 ) $ 8,913 |
Temporary differences to the components of deferred tax assets | Temporary differences that give rise to the components of net deferred tax assets are as follows (in thousands): December 31, 2019 2018 Inventory $ 2,005 $ 1,249 Accrued compensation 122 110 Stock options 1,858 1,281 Research and development 990 476 Legal settlement — 1,678 Research and development expense 1,417 — Deferred revenue 2,052 3,305 Property and equipment 3,469 3,065 Net operating loss carryforwards 11,676 17,088 Foreign tax credit carryforward 64 38 Sales-type leases (1,968 ) (3,936 ) Convertible debt equity component (9,421 ) — Foreign intangible (691 ) — Other (179 ) — 11,394 24,354 Valuation allowance (5,656 ) (10,233 ) Total net deferred tax assets $ 5,738 $ 14,121 |
Effective income tax rate | The Company's income tax (benefit) expense relating to income (loss) for the periods presented differs from the amounts that would result from applying the federal statutory rate to that income (loss) as follows: Year Ended December 31, 2019 2018 2017 Statutory federal tax rate 21 % 21 % 34 % State income taxes, net of federal benefit 9 % (8 )% (5 )% Non-controlling interest in Heska Imaging US, LLC — % — % 1 % Non-controlling interest in Optomed (2 )% — % — % Non-temporary stock option benefit 48 % (50 )% (30 )% Meals and entertainment permanent difference (2 )% 1 % — % GILTI permanent difference 2 % 1 % — % Other permanent differences (1 )% 1 % 1 % Foreign tax rate differences 6 % — % — % Change in tax rate (6 )% — % 32 % Change in valuation allowance (17 )% — % 16 % Other deferred differences (9 )% (21 )% — % Transaction costs (6 )% — % — % Executive compensation limit (7 )% — % — % Research & development credit 20 % — % — % Other — % (1 )% — % Effective income tax rate 56 % (56 )% 49 % |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease, Cost | Supplemental cash flow information related to the Company's operating leases for the twelve months ended December 31, 2019 was as follows (in thousands): Cash paid for amounts included in the measurement of operating lease liabilities $ 1,800 ROU assets obtained in exchange for operating lease obligations 604 The following table presents the weighted average remaining lease term and weighted average discount rate related to the Company's operating leases as of December 31, 2019 : Weighted average remaining lease term 3.8 years Weighted average discount rate 4.44 % |
Lessee, Operating Lease, Liability, Maturity | The following table presents the maturity of the Company's operating lease liabilities as of December 31, 2019 (in thousands): Year Ending December 31, 2020 $ 1,792 2021 1,639 2022 1,413 2023 1,796 2024 30 Thereafter 57 Total operating lease payments 6,727 Less: imputed interest 569 Total operating lease liabilities $ 6,158 |
Lessor, Operating Lease, Payments to be Received, Maturity | The following table presents the maturity of the Company's undiscounted lease receivables as of December 31, 2019 (in thousands): Year Ending December 31, 2020 $ 3,856 2021 4,087 2022 3,758 2023 3,047 2024 2,118 Thereafter 1,297 $ 18,163 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted earnings per share | The following is a reconciliation of the weighted-average shares outstanding used in the calculation of basic and diluted earnings per share for the years ended December 31, 2019 , 2018 and 2017 (in thousands, except per share data): Years ended December 31, 2019 2018 2017 Net (loss) income attributable to Heska Corporation $ (1,465 ) $ 5,850 $ 9,953 Basic weighted-average common shares outstanding 7,446 7,220 7,026 Assumed exercise of dilutive stock options and restricted shares — 636 616 Diluted weighted-average common shares outstanding 7,446 7,856 7,642 Basic (loss) earnings per share attributable to Heska Corporation $ (0.20 ) $ 0.81 $ 1.42 Diluted (loss) earnings per share attributable to Heska Corporation $ (0.20 ) $ 0.74 $ 1.30 |
Schedule of antidilutive securities excluded from computation of earnings per share | The following stock options and restricted awards were excluded from the computation of diluted earnings per share because they would have been anti-dilutive (in thousands): Years ended December 31, 2019 2018 2017 Stock options and restricted shares 300 111 123 |
INVESTMENTS IN UNCONSOLIDATED_2
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Carrying values of investments in unconsolidated entities | The carrying values of investments in unconsolidated affiliates, categorized by type of investment, is as follows (in thousands): December 31, 2019 December 31, 2018 Equity method investment $ 4,406 $ 5,000 Non-marketable equity security investment 3,018 3,018 $ 7,424 $ 8,018 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in goodwill | The following summarizes the changes in goodwill during the years ended December 31, 2019 and 2018 (in thousands): Carrying amount, December 31, 2017 $ 26,687 Foreign currency adjustments (8 ) Carrying amount, December 31, 2018 $ 26,679 Goodwill attributable to acquisitions (subject to change) 9,396 Foreign currency adjustments 129 Carrying amount, December 31, 2019 $ 36,204 |
Schedule of other intangible assets | Other intangibles assets, net consisted of the following as of December 31, 2019 and 2018 (in thousands): 2019 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Developed technology $ 8,200 $ (819 ) $ 7,381 $ 8,200 $ — $ 8,200 Customer relationships and other 6,317 (2,226 ) 4,091 3,303 (1,739 ) 1,564 Total intangible assets $ 14,517 $ (3,045 ) $ 11,472 $ 11,503 $ (1,739 ) $ 9,764 |
Schedule of amortization expense on intangible assets | Amortization expense relating to other intangibles is as follows (in thousands): Years Ended December 31, 2019 2018 2017 Amortization expense $ 1,278 $ 388 $ 388 |
Schedule of estimated future amortization expense | Estimated amortization expense related to intangibles for each of the five years from 2020 through 2024 and thereafter is as follows (in thousands): Year Ending December 31, 2020 $ 1,738 2021 1,734 2022 1,716 2023 1,364 2024 1,231 Thereafter 3,689 $ 11,472 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | We provide for depreciation primarily using the straight-line method by charges to income in amounts that allocate the cost of property and equipment over their estimated useful lives as follows: Asset Classification Estimated Useful Life Building 10 to 20 years Machinery and equipment 2 to 10 years Office furniture and equipment 3 to 7 years Computer hardware and software 3 to 5 years Leasehold and building improvements 5 to 15 years Property and equipment, net, consisted of the following (in thousands): December 31, 2019 2018 Land $ 694 $ 377 Building 3,845 2,978 Machinery and equipment 28,777 33,087 Office furniture and equipment 1,345 1,687 Computer hardware and software 3,408 4,704 Leasehold and building improvements 10,558 9,953 Construction in progress 671 1,274 Property and equipment, gross 49,298 54,060 Less accumulated depreciation (33,829 ) (38,079 ) Total property and equipment, net $ 15,469 $ 15,981 |
ACCRUED LIABILITIES (Tables)
ACCRUED LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following (in thousands): December 31, 2019 2018 Accrued payroll and employee benefits $ 1,175 $ 759 Accrued property taxes 681 632 Accrued settlement (see Note 14) — 6,750 Accrued purchase orders 739 699 Other 3,750 1,302 Total accrued liabilities $ 6,345 $ 10,142 |
CAPITAL STOCK (Tables)
CAPITAL STOCK (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of weighted average valuation assumptions | in 2019 , 2018 and 2017 for the year ended December 31, 2019 . 2019 2018 2017 Risk-free interest rate 1.62% 2.66% 1.76% Expected lives 4.7 years 4.9 years 4.8 years Expected volatility 40% 40% 41% Expected dividend yield 0% 0% 0% |
Schedule of stock options plans | A summary of our stock option plans is as follows: Year Ended December 31, 2019 Options Weighted Average Exercise Price Outstanding at beginning of period 620,553 $ 40.741 Granted at market 88,200 $ 84.234 Forfeited (1,353 ) $ 98.660 Expired (716 ) $ 98.660 Exercised (170,369 ) $ 18.125 Outstanding at end of period 536,315 $ 54.855 Exercisable at end of period 315,964 $ 37.644 |
Schedule of shares authorized under stock options plans by exercise price range | The following table summarizes information about stock options outstanding and exercisable at December 31, 2019 . Options Outstanding Options Exercisable Exercise Prices Number of Weighted Weighted Number of Weighted Weighted $4.96 - $7.36 85,552 3.18 $ 7.043 85,552 3.18 $ 7.043 $7.37 - $32.21 74,668 4.25 $ 15.697 74,668 4.25 $ 15.697 $32.22 - $62.50 52,939 6.07 $ 39.800 52,771 6.07 $ 39.752 $62.51 - $69.77 128,333 8.18 $ 69.770 41,670 8.18 $ 69.770 $69.78 - $108.25 194,823 8.46 $ 85.125 61,303 7.18 $ 83.428 $4.96 - $108.25 536,315 6.73 $ 54.855 315,964 5.35 $ 37.644 |
Schedule of pricing models | For the years ended December 31, 2019 , 2018 and 2017 , we estimated the fair values of stock purchase rights granted under the ESPP using the Black-Scholes pricing model and the following weighted average assumptions: 2019 2018 2017 Risk-free interest rate 2.09% 1.67% 0.74% Expected lives 1.1 years 1.2 years 1.2 years Expected volatility 40% 42% 45% Expected dividend yield 0% 0% 0% |
Schedule of restricted stock transactions | The following table summarizes restricted stock transactions for the year ended December 31, 2019 : Restricted Stock Weighted-Average Grant Date Fair Value Per Award Non-vested as of December 31, 2018 259,430 $ 74.26 Granted 83,567 $ 74.93 Vested (4,230 ) $ 85.09 Forfeited (3,100 ) $ 80.90 Non-vested as of December 31, 2019 335,667 $ 74.29 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive income (loss) | Accumulated other comprehensive income consisted of the following (in thousands): Minimum pension liability Foreign currency translation Total accumulated other comprehensive income Balances at December 31, 2017 $ (489 ) $ 721 $ 232 Other comprehensive income 70 (25 ) 45 Balances at December 31, 2018 (419 ) 696 277 Other comprehensive income 73 163 236 Balances at December 31, 2019 $ (346 ) $ 859 $ 513 |
INTEREST AND OTHER (INCOME) E_2
INTEREST AND OTHER (INCOME) EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |
Schedule of interest expense (income) and other income, net | Interest and other expense (income), net, consisted of the following (in thousands): Year Ended December 31, 2019 2018 2017 Interest income $ (661 ) $ (261 ) $ (167 ) Interest expense 3,089 310 245 Other expense (income), net 482 (62 ) (228 ) Interest and other expense (income), net $ 2,910 $ (13 ) $ (150 ) |
CREDIT FACILITY AND LONG-TERM_2
CREDIT FACILITY AND LONG-TERM DEBT CREDIT FACILITY AND LONG-TERM DEBT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Debt | The following table summarizes the net carrying amount of the Notes as of December 31, 2019 (in thousands): December 31, 2019 Carrying amount of equity component $ 39,508 Principal amount of the Notes 86,250 Unamortized debt discount (40,902 ) Net carrying amount $ 45,348 |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Reconciliation of other significant reconciling items from segments to consolidated | Summarized financial information concerning the Company's reportable segments is shown in the following tables (in thousands): Year Ended December 31, 2019 Core Other Vaccines and Total Total revenue $ 106,570 $ 16,091 $ 122,661 Operating income (loss) 1,358 (1,031 ) 327 (Loss) income before income taxes (1,552 ) (1,031 ) (2,583 ) Investments in unconsolidated affiliates 7,424 — 7,424 Total assets 223,980 20,444 244,424 Net assets 137,072 17,292 154,364 Capital expenditures 259 785 1,044 Depreciation and amortization 3,611 1,305 4,916 Year Ended December 31, 2018 Core Other Vaccines and Total revenue $ 108,924 $ 18,522 $ 127,446 Operating income 2,040 1,754 3,794 Income before income taxes 2,053 1,754 3,807 Investments in unconsolidated affiliates 8,018 — 8,018 Total assets 133,586 22,866 156,452 Net assets 96,129 26,280 122,409 Capital expenditures 180 1,178 1,358 Depreciation and amortization 3,369 1,226 4,595 Year Ended December 31, 2017 Core Other Vaccines and Total revenue $ 105,191 $ 24,150 $ 129,341 Operating income 12,656 5,563 18,219 Income before income taxes 12,828 5,541 18,369 Investments in unconsolidated affiliates — — — Total assets 111,625 23,819 135,444 Net assets 75,984 24,456 100,440 Capital expenditures 209 3,260 3,469 Depreciation and amortization 3,736 1,018 4,754 |
Schedule of revenue from external customers and long-lived assets, by geographical areas | Total revenue by principal geographic area was as follows (in thousands): For the Years Ended December 31, 2019 2018 2017 U.S. $ 108,469 $ 115,543 $ 116,823 Canada 3,042 2,992 2,924 Europe 8,289 5,995 4,780 Other International 2,861 2,916 4,814 Total $ 122,661 $ 127,446 $ 129,341 Total long-lived assets by principal geographic areas were as follows (in thousands): As of December 31, 2019 2018 2017 U.S. $ 14,712 $ 15,933 $ 17,288 Europe 576 37 18 Other International 181 11 25 Total $ 15,469 $ 15,981 $ 17,331 |
SUPPLEMENTAL QUARTERLY FINANC_2
SUPPLEMENTAL QUARTERLY FINANCIAL INFORMATION (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial information | The following tables present quarterly unaudited results for the two years ended December 31, 2019 and 2018 (amounts in thousands, except per share data). Q1 Q2 Q3 Q4 Total 2019 Total revenue $ 29,511 $ 28,146 $ 31,237 $ 33,767 $ 122,661 Gross profit 12,543 12,412 13,664 15,830 54,449 Operating income (loss) (75 ) (566 ) 193 775 327 Net income (loss) before equity in losses of unconsolidated affiliates 951 (161 ) (204 ) (1,723 ) (1,137 ) Net income (loss), after equity in losses of unconsolidated affiliates 770 (288 ) (351 ) (1,862 ) (1,731 ) Net income (loss) attributable to Heska Corporation 814 (241 ) (310 ) (1,728 ) (1,465 ) Basic earnings (loss) per share attributable to Heska Corporation 0.11 (0.03 ) (0.04 ) (0.23 ) (0.20 ) Diluted earnings (loss) per share attributable to Heska Corporation 0.10 (0.03 ) (0.04 ) (0.23 ) (0.20 ) 2018 Total revenue $ 32,765 $ 29,662 $ 30,955 $ 34,064 $ 127,446 Gross profit 13,307 13,065 14,794 15,472 56,638 Operating income (loss) 1,871 2,204 (3,595 ) 3,314 3,794 Net income (loss) before equity in losses of unconsolidated affiliates 2,155 1,897 (1,670 ) 3,540 5,922 Net income (loss), after equity in losses of unconsolidated affiliates 2,155 1,897 (1,670 ) 3,468 5,850 Net income (loss) attributable to Heska Corporation 2,155 1,897 (1,670 ) 3,468 5,850 Basic earnings (loss) per share attributable to Heska Corporation 0.30 0.26 (0.23 ) 0.47 0.81 Diluted earnings (loss) per share attributable to Heska Corporation 0.28 0.24 (0.23 ) 0.44 0.74 |
OPERATIONS AND SUMMARY OF SIG_4
OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) € in Thousands, SFr in Thousands, $ in Thousands, $ in Thousands, $ in Thousands | 12 Months Ended | |||||||||||||||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2019CAD ($) | Dec. 31, 2019AUD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019EUR (€) | Dec. 31, 2019CHF (SFr) | Jan. 01, 2019USD ($) | Dec. 31, 2018CAD ($) | Dec. 31, 2018AUD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018CHF (SFr) | Jan. 01, 2018USD ($) | Dec. 31, 2016USD ($) | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Balances at beginning of period | $ 245 | $ 215 | $ 237 | |||||||||||||
Additions - charged to expense | 113 | 104 | 168 | |||||||||||||
Deductions - write offs, net of recoveries | (172) | (74) | (190) | |||||||||||||
Balances at end of period | 186 | 245 | 215 | |||||||||||||
Cash and cash equivalents | 9,659 | $ 88 | $ 54 | $ 89,030 | € 1,773 | SFr 124 | $ 0 | $ 0 | $ 13,389 | € 1,615 | SFr 156 | $ 10,794 | ||||
Advertising expense | $ 300 | $ 200 | 200 | |||||||||||||
Operating lease right-of-use assets | 5,726 | |||||||||||||||
Operating lease liability | 6,158 | |||||||||||||||
Stockholders' equity | 100,440 | 154,364 | 122,409 | 86,975 | ||||||||||||
ASU 2016-02 | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Operating lease right-of-use assets | $ 6,500 | |||||||||||||||
Operating lease liability | $ 6,900 | |||||||||||||||
Accumulated Deficit | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Stockholders' equity | $ (143,463) | $ (136,444) | $ (134,979) | $ (151,827) | ||||||||||||
Accumulated Deficit | ASU 2014-09 | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Stockholders' equity | $ 2,600 | |||||||||||||||
Building | Minimum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 10 years | |||||||||||||||
Building | Maximum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 20 years | |||||||||||||||
Machinery and equipment | Minimum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 2 years | |||||||||||||||
Machinery and equipment | Maximum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 10 years | |||||||||||||||
Office furniture & equipment | Minimum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 3 years | |||||||||||||||
Office furniture & equipment | Maximum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 7 years | |||||||||||||||
Computer hardware & software | Minimum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 3 years | |||||||||||||||
Computer hardware & software | Maximum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 5 years | |||||||||||||||
Leasehold and building improvements | Minimum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 5 years | |||||||||||||||
Leasehold and building improvements | Maximum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 15 years | |||||||||||||||
Software Development | Minimum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 3 years | |||||||||||||||
Software Development | Maximum | ||||||||||||||||
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||||||||||||||||
Property plant and equipment, useful life | 5 years | |||||||||||||||
Customer Concentration Risk | Accounts Receivable | Henry Schein | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Concentration risk, percentage | 19.00% | 12.00% | ||||||||||||||
Customer Concentration Risk | Accounts Receivable | Merck | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Concentration risk, percentage | 1.00% | 10.00% | ||||||||||||||
Customer Concentration Risk | Accounts Receivable | Eli Lilly | ||||||||||||||||
Property, Plant and Equipment [Line Items] | ||||||||||||||||
Concentration risk, percentage | 4.00% | 32.00% |
REVENUE (Details)
REVENUE (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Total revenue, net | $ 33,767 | $ 31,237 | $ 28,146 | $ 29,511 | $ 34,064 | $ 30,955 | $ 29,662 | $ 32,765 | $ 122,661 | $ 127,446 | $ 129,341 |
Contract receivables, current | 1,100 | 900 | 1,100 | 900 | |||||||
Contract receivables, noncurrent | 3,700 | 3,300 | 3,700 | 3,300 | |||||||
Current portion of deferred revenue, and other | 8,700 | 9,600 | 8,700 | 9,600 | |||||||
Contract liabilities, revenue recognized | 3,100 | 4,100 | |||||||||
Contract liabilities, increase due to additional deferred sales | $ 2,200 | 1,400 | |||||||||
Contract cost average term | 6 years | ||||||||||
Capitalized contract costs | $ 2,700 | $ 2,500 | $ 2,700 | 2,500 | |||||||
Capitalized contract costs, amortization | 900 | 1,000 | |||||||||
Capitalized contract costs during the period | 1,100 | 1,000 | |||||||||
Core companion animal | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 106,570 | 108,924 | 105,191 | ||||||||
Point of Care laboratory revenue: | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 67,132 | 57,375 | 54,855 | ||||||||
Consumables | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 53,590 | 44,771 | 39,161 | ||||||||
Sales-type leases | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 6,890 | 5,888 | 7,382 | ||||||||
Outright instrument sales | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 5,247 | 4,922 | 6,391 | ||||||||
Other | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 1,405 | 1,794 | 1,921 | ||||||||
Point of Care imaging revenue: | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 25,652 | 22,832 | 21,907 | ||||||||
Outright instrument sales | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 22,594 | 19,746 | 19,187 | ||||||||
Other | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 3,058 | 3,086 | 2,720 | ||||||||
Other CCA revenue: | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 13,786 | 28,717 | 28,429 | ||||||||
Other pharmaceuticals, vaccines and diagnostic tests | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 13,495 | 28,265 | 28,008 | ||||||||
Research and development, license and royalty revenue | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 291 | 452 | 421 | ||||||||
Other vaccines and pharmaceuticals | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 16,091 | 18,522 | 24,150 | ||||||||
Contract manufacturing | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | 15,374 | 17,508 | 23,490 | ||||||||
License, research and development | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Total revenue, net | $ 717 | $ 1,014 | $ 660 |
REVENUE - Performance Obligatio
REVENUE - Performance Obligations (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 117,809 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 26,939 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 23,808 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 20,724 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 17,815 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 13,626 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligation | $ 14,897 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction |
ACQUISITION AND RELATED PARTY_3
ACQUISITION AND RELATED PARTY ITEMS - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 05, 2019 | Feb. 22, 2019 | Dec. 21, 2018 | Dec. 31, 2019 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
Acquisition related costs | $ 100 | ||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||
CVM | |||||
Business Acquisition [Line Items] | |||||
Percentage of voting interest acquired | 100.00% | ||||
Total fair value of consideration transferred | $ 14,420 | ||||
Equity interests issued and issuable | $ 8,800 | ||||
Revenue of acquiree since acquisition date | $ 800 | ||||
Earnings or loss of acquiree since acquisition date | $ 100 | ||||
Optomed | |||||
Business Acquisition [Line Items] | |||||
Percentage of voting interest acquired | 70.00% | ||||
Payments to acquire business | $ 200 | ||||
Debt assumed in acquisition | $ 400 | ||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 30.00% | ||||
Business combination, separately recognized transactions, purchase agreement | $ 1,200 | ||||
Cuattro, LLC | |||||
Business Acquisition [Line Items] | |||||
Consideration transferred shares issued | 54,763 | ||||
Shares issued as consideration, value | $ 5,400 | ||||
Payments for asset acquisition | 2,800 | ||||
Asset acquisition, consideration transferred | $ 8,200 | ||||
Acquired finite-lived intangible assets, weighted average useful life | 10 years |
ACQUISITION AND RELATED PARTY_4
ACQUISITION AND RELATED PARTY ITEMS - Fair Values of Assets and Liabilities at Acquisition Date (Details) - USD ($) $ in Thousands | Dec. 05, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Purchase Price | ||||
Consideration payable to former owners | $ 14,420 | $ 0 | $ 0 | |
Net Assets Acquired | ||||
Goodwill | $ 36,204 | $ 26,679 | $ 26,687 | |
CVM | ||||
Purchase Price | ||||
Consideration payable to former owners | $ 14,420 | |||
Total fair value of consideration transferred | 14,420 | |||
Net Assets Acquired | ||||
Cash and cash equivalents | 927 | |||
Accounts receivable | 2,392 | |||
Inventories | 1,494 | |||
Other current assets | 10 | |||
Property and equipment | 382 | |||
Other intangible assets | 2,551 | |||
Other non-current assets | 178 | |||
Accounts payable | (250) | |||
Current portion of deferred revenue, and other | (164) | |||
Deferred tax liability | (683) | |||
Other long-term borrowings | (1,109) | |||
Other liabilities | (157) | |||
Total fair value of net assets acquired | 5,571 | |||
Goodwill | 8,849 | |||
Total fair value of consideration transferred | $ 14,420 |
ACQUISITION AND RELATED PARTY_5
ACQUISITION AND RELATED PARTY ITEMS - Intangible Assets Acquired, Amortization Method (Details) - CVM $ in Thousands | Dec. 05, 2019USD ($) |
Customer Relationships | |
Business Acquisition [Line Items] | |
Useful Life | 6 years |
Fair Value | $ 2,440 |
Trade Name | |
Business Acquisition [Line Items] | |
Useful Life | 4 years |
Fair Value | $ 111 |
ACQUISITION AND RELATED PARTY_6
ACQUISITION AND RELATED PARTY ITEMS - Unaudited Pro Forma Financial Information (Details) - CVM - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||
Total revenue, net | $ 130,434 | $ 135,344 |
Net (loss) income attributable to Heska Corporation | $ (788) | $ 5,970 |
ACQUISITION AND RELATED PARTY_7
ACQUISITION AND RELATED PARTY ITEMS - Related Party Items (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Affiliated Entity | Cuattro, LLC | |||
Related Party Transaction [Line Items] | |||
Related party - amount of transaction | $ 0 | $ 3,000 | $ 100,000 |
Cuattro, LLC | Heska Imaging | |||
Related Party Transaction [Line Items] | |||
Related party - amount of transaction | 6,000 | 4,600,000 | 17,700,000 |
Heska Corporation | U.S. Imaging | |||
Related Party Transaction [Line Items] | |||
Related party - amount of transaction | $ 2,900,000 | ||
Heska Imaging | Affiliated Entity | Cuattro, LLC | |||
Related Party Transaction [Line Items] | |||
Due to Related Parties | $ 0 | $ 200,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | |||
Income tax expense (benefit) | $ (1,446) | $ (2,115) | $ 8,913 |
Deferred income tax (benefit) expense | (1,805) | (2,255) | 8,864 |
Current income tax expense (benefit) | 359 | 140 | 49 |
Cash paid for income taxes | 128 | 36 | $ 213 |
Income tax expense decrease resulting from the recognition of tax benefits related to stock-based compensation deductions | 1,900 | ||
Tax Years 2018 Through 2022 | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 41,000 | ||
Tax Years 2024 Through 2025 | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 5,500 | ||
Tax Year 2027 and later | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 500 | ||
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred income tax (benefit) expense | 1,900 | ||
Operating loss carryforwards | 47,000 | ||
Domestic Tax Authority | Research Tax Credit Carryforward | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 1,000 | ||
Foreign Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Deferred income tax (benefit) expense | $ 100 | ||
Operating loss carryforwards | $ 64 |
INCOME TAXES - COMPONENTS OF IN
INCOME TAXES - COMPONENTS OF INCOME (LOSS) BEFORE TAXES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (1,872) | $ 3,602 | $ 18,188 |
Foreign | (711) | 205 | 181 |
Income (loss) before income taxes | $ (2,583) | $ 3,807 | $ 18,369 |
INCOME TAXES - TEMPORARY DIFFER
INCOME TAXES - TEMPORARY DIFFERENCES TO THE COMPONENTS OF DEFERRED TAX ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Inventory | $ 2,005 | $ 1,249 |
Accrued compensation | 122 | 110 |
Stock and Stock Options | 1,858 | 1,281 |
Research and development tax credit | 990 | 476 |
Alternative minimum tax credit | 0 | 1,678 |
Research and development expense | 1,417 | 0 |
Deferred revenue | 2,052 | 3,305 |
Property and equipment | 3,469 | 3,065 |
Net operating loss carryforwards – domestic | 11,676 | 17,088 |
Foreign tax credit carryforward | 64 | 38 |
Sales-type leases | (1,968) | (3,936) |
Convertible debt equity component | (9,421) | 0 |
Foreign intangible | (691) | 0 |
Other | (179) | 0 |
Deferred tax assets, gross | 11,394 | 24,354 |
Valuation allowance | (5,656) | (10,233) |
Total net deferred tax assets | $ 5,738 | $ 14,121 |
INCOME TAXES - COMPONENTS OF _2
INCOME TAXES - COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current income tax expense: | |||
Federal | $ 0 | $ (115) | $ 0 |
State | 189 | 192 | 6 |
Foreign | 170 | 63 | 43 |
Total current expense | 359 | 140 | 49 |
Deferred income tax (benefit) expense: | |||
Federal | (1,610) | (1,877) | 9,736 |
State | (307) | (378) | (872) |
Foreign | 112 | 0 | 0 |
Total deferred (benefit) expense | 1,805 | 2,255 | (8,864) |
Total income tax (benefit) expense | $ (1,446) | $ (2,115) | $ 8,913 |
INCOME TAXES - EFFECTIVE INCOME
INCOME TAXES - EFFECTIVE INCOME TAX RECONCILIATION (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | |||
Statutory federal tax rate | 21.00% | 21.00% | 34.00% |
State income taxes, net of federal benefit | 9.00% | (8.00%) | (5.00%) |
Non-temporary stock option benefit | 48.00% | (50.00%) | (30.00%) |
Meals and entertainment permanent difference | (2.00%) | 1.00% | 0.00% |
GILTI permanent difference | 2.00% | 1.00% | 0.00% |
Other permanent differences | (1.00%) | 1.00% | 1.00% |
Foreign tax rate differences | 6.00% | 0.00% | 0.00% |
Change in tax rate | (6.00%) | 0.00% | 32.00% |
Change in valuation allowance | (17.00%) | 0.00% | 16.00% |
Other deferred differences | (9.00%) | (21.00%) | (0.00%) |
Transaction costs | (6.00%) | (0.00%) | (0.00%) |
Executive compensation limit | (7.00%) | (0.00%) | (0.00%) |
Research & development credit | 20.00% | (0.00%) | (0.00%) |
Other | 0.00% | (1.00%) | 0.00% |
Effective income tax rate | 56.00% | (56.00%) | 49.00% |
Heska Imaging | |||
Income Tax Contingency [Line Items] | |||
Non-controlling interest in Heska Imaging US, LLC | (0.00%) | (0.00%) | 1.00% |
Optomed | |||
Income Tax Contingency [Line Items] | |||
Non-controlling interest in Heska Imaging US, LLC | (2.00%) | (0.00%) | (0.00%) |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Leases [Abstract] | |||
Operating lease, expense | $ 2.4 | ||
Building and other rent expense | $ 1.9 | $ 2 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow and Weighted Average Remaining Lease Term (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 1,800 |
ROU assets obtained in exchange for operating lease obligations | $ 604 |
Weighted average remaining lease term | 3 years 9 months 18 days |
Weighted average discount rate | 4.44% |
LEASES - Maturity of Operating
LEASES - Maturity of Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 1,792 |
2021 | 1,639 |
2022 | 1,413 |
2023 | 1,796 |
2024 | 30 |
Thereafter | 57 |
Total operating lease payments | 6,727 |
Less: imputed interest | 569 |
Total operating lease liabilities | $ 6,158 |
LEASES - Maturity of Undiscount
LEASES - Maturity of Undiscounted Lease Receivables (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 3,856 |
2021 | 4,087 |
2022 | 3,758 |
2023 | 3,047 |
2024 | 2,118 |
Thereafter | 1,297 |
Total | $ 18,163 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2019USD ($)$ / shares | Sep. 30, 2019USD ($)$ / shares | Jun. 30, 2019USD ($)$ / shares | Mar. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares | Sep. 30, 2018USD ($)$ / shares | Jun. 30, 2018USD ($)$ / shares | Mar. 31, 2018USD ($)$ / shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Sep. 17, 2019$ / shares | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||
Reverse stock split conversion ratio | 10 | |||||||||||
Net (loss) income attributable to Heska Corporation | $ | $ (1,728) | $ (310) | $ (241) | $ 814 | $ 3,468 | $ (1,670) | $ 1,897 | $ 2,155 | $ (1,465) | $ 5,850 | $ 9,953 | |
Basic weighted-average common shares outstanding (In shares) | 7,446 | 7,220 | 7,026 | |||||||||
Assumed exercise of dilutive stock options and restricted stock awards (in shares) | 0 | 636 | 616 | |||||||||
Diluted weighted-average common shares outstanding (in shares) | 7,446 | 7,856 | 7,642 | |||||||||
Basic earnings per share (in dollars per share) | $ / shares | $ (0.23) | $ (0.04) | $ (0.03) | $ 0.11 | $ 0.47 | $ (0.23) | $ 0.26 | $ 0.30 | $ (0.20) | $ 0.81 | $ 1.42 | |
Diluted earnings per share (in dollars per share) | $ / shares | $ (0.23) | $ (0.04) | $ (0.03) | $ 0.10 | $ 0.44 | $ (0.23) | $ 0.24 | $ 0.28 | $ (0.20) | $ 0.74 | $ 1.30 | |
Stock options and restricted shares | ||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||
Stock options and restricted units excluded from computation of earnings per share | 300 | 111 | 123 | |||||||||
Convertible Debt | Senior Convertible Note | ||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||
Debt instrument, convertible, conversion price (in dollars per share) | $ / shares | $ 86.63 |
INVESTMENTS IN UNCONSOLIDATED_3
INVESTMENTS IN UNCONSOLIDATED AFFILIATES (Details) - USD ($) $ in Thousands | Sep. 24, 2018 | Aug. 08, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Schedule of Equity Method Investments [Line Items] | |||||
Investments in unconsolidated affiliates | $ 4,406 | $ 5,000 | |||
Non-marketable equity security investment | 3,018 | 3,018 | |||
Investments | 7,424 | 8,018 | $ 0 | ||
Payments to acquire equity method investments | $ 0 | $ 8,091 | $ 0 | ||
General Fluidics Corporation | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Supply commitment term | 15 years | ||||
General Fluidics Corporation | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Payments to acquire equity method investments | $ 5,100 | ||||
Ownership percentage | 28.70% | ||||
MBio Diagnostics, Inc. | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Payments to acquire non-marketable securities | $ 3,000 | ||||
Shares purchased during period | 1,714,285 | ||||
Non-Marketable equity security investment, ownership percentage | 6.90% | ||||
Intangible asset acquired | $ 1,000 | ||||
Intangible assets acquired, useful life | 20 years | ||||
Contingent consideration on milestones | $ 10,000 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Roll Forward] | |||
Carrying amount | $ 26,679 | $ 26,687 | |
Foreign currency adjustments | 129 | (8) | |
Goodwill attributable to acquisitions (subject to change) | 9,396 | ||
Carrying amount | 36,204 | 26,679 | $ 26,687 |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 14,517 | 11,503 | |
Accumulated Amortization | (3,045) | (1,739) | |
Net Carrying Amount | 11,472 | 9,764 | |
Amortization expense | 1,278 | 388 | $ 388 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2019 | 1,738 | ||
2020 | 1,734 | ||
2021 | 1,716 | ||
2022 | 1,364 | ||
2023 | 1,231 | ||
Thereafter | 3,689 | ||
Net Carrying Amount | 11,472 | 9,764 | |
Acquired Technology | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 8,200 | 8,200 | |
Accumulated Amortization | (819) | 0 | |
Net Carrying Amount | 7,381 | 8,200 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Net Carrying Amount | 7,381 | 8,200 | |
Customer relationships and other | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 6,317 | 3,303 | |
Accumulated Amortization | (2,226) | (1,739) | |
Net Carrying Amount | 4,091 | 1,564 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Net Carrying Amount | $ 4,091 | $ 1,564 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 49,298 | $ 54,060 | |
Less accumulated depreciation | (33,829) | (38,079) | |
Total property and equipment, net | 15,469 | 15,981 | |
Transfers of equipment between inventory and property and equipment, net | 827 | 1,449 | $ 1,637 |
Depreciation and amortization | 3,600 | 4,200 | $ 4,300 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 694 | 377 | |
Building | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3,845 | 2,978 | |
Building | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 10 years | ||
Building | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 20 years | ||
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 28,777 | 33,087 | |
Machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 2 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 10 years | ||
Office furniture & equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 1,345 | 1,687 | |
Office furniture & equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 3 years | ||
Office furniture & equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 7 years | ||
Computer hardware & software | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 3,408 | 4,704 | |
Computer hardware & software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 3 years | ||
Computer hardware & software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 5 years | ||
Leasehold and building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 10,558 | 9,953 | |
Leasehold and building improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 5 years | ||
Leasehold and building improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 15 years | ||
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 671 | 1,274 | |
Machinery and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 5 years | ||
Machinery and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property plant and equipment, useful life | 7 years | ||
Leased Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 8,100 | 10,800 | |
Less accumulated depreciation | $ (4,600) | $ (6,100) |
ACCRUED LIABILITIES (Details)
ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued payroll and employee benefits | $ 1,175 | $ 759 |
Accrued property taxes | 681 | 632 |
Accrued settlement | 0 | 6,750 |
Accrued purchase orders | 739 | 699 |
Other | 3,750 | 1,302 |
Accrued liabilities | $ 6,345 | $ 10,142 |
Current percentage of total liabilities | 5.00% |
CAPITAL STOCK - NARRATIVE (Deta
CAPITAL STOCK - NARRATIVE (Details) | May 05, 2015hourshares | Apr. 01, 2015USD ($) | Jul. 01, 2013 | May 31, 2018shares | May 31, 2016shares | May 31, 2012shares | Dec. 31, 2019USD ($)plans$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)$ / sharesshares | Mar. 31, 2015USD ($) | May 31, 2003shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Expected dividend rate (as a percent) | 0.00% | 0.00% | 0.00% | ||||||||
Reverse stock split conversion ratio | 10 | ||||||||||
Fair value of stock options granted during period | $ 2,600,000 | $ 4,400,000 | $ 1,000,000 | ||||||||
Weighted average grant date fair value | $ / shares | $ 29.89 | $ 28.81 | $ 37.35 | ||||||||
Intrinsic value of options exercised | $ 12,800,000 | $ 10,500,000 | $ 17,700,000 | ||||||||
Proceeds from stock options exercised | 1,000,000 | $ 3,200,000 | $ 1,800,000 | ||||||||
Unrecognized compensation costs, not probable | $ 17,800,000 | ||||||||||
Weighted average purchase price of shares purchased | $ / shares | $ 18.10 | $ 18.14 | $ 15.72 | ||||||||
Restricted Stock | Minimum | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period (in years) | 1 year | ||||||||||
Restricted Stock | Maximum | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Award vesting period (in years) | 4 years | ||||||||||
Stock options and restricted shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of stock option plans | plans | 2 | ||||||||||
Intrinsic value of options exercised | $ 18,500,000 | ||||||||||
Total unrecognized compensation expense related to outstanding stock options | $ 5,100,000 | ||||||||||
Period for recognition of unrecognized compensation expense | 1 year 6 months 15 days | ||||||||||
Intrinsic value of options outstanding | $ 22,300,000 | ||||||||||
Incentive Stock Options | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Percent of fair value for options granted | 100.00% | ||||||||||
Employee Stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Expected dividend rate (as a percent) | 0.00% | 0.00% | 0.00% | ||||||||
Shares issued during period | shares | 10,698 | 10,078 | 10,983 | ||||||||
Share Purchase Plan 1997 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Increase in number of share to be repurchased | shares | 250,000 | 500,000 | 250,000 | ||||||||
Number of shares authorized to be repurchased annually | shares | 45,000 | ||||||||||
Number of shares authorized | shares | 450,000 | 450,000,000 | |||||||||
Remaining number of shares authorized to be repurchased | shares | 85,850 | ||||||||||
Common stock, shares issued | shares | 440,427 | ||||||||||
Increase in authorized repurchase amount | shares | 75,000 | ||||||||||
Weekly hours requirement for plan eligibility | hour | 20 | ||||||||||
Annual month requirement for plan eligibility | 5 months | ||||||||||
Maximum percent of annual base earnings withholding for purchases of stock | 10.00% | ||||||||||
Offering period | 27 months | ||||||||||
Accumulation period | 3 months | ||||||||||
Discount from market price, purchase date | 85.00% | 95.00% | |||||||||
Share Purchase Plan 1997 | Maximum | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Discount from market price, purchase date | 85.00% | 85.00% | |||||||||
Monthly withholding for compensation payment | $ 2,500 | $ 25,000 | |||||||||
Share Purchase Plan 1997 | Maximum | Employee Stock Purchase Plan, Purchase Price, Greater Of | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Discount from market price, purchase date | 65.00% | 65.00% | |||||||||
Discount from market price, offering date | 85.00% | 95.00% | |||||||||
Share Purchase Plan 2003 | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares authorized | shares | 239,050 | ||||||||||
Restricted Stock | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Total unrecognized compensation expense related to outstanding stock options | $ 2,700,000 | ||||||||||
Period for recognition of unrecognized compensation expense | 1 year 1 month 6 days | ||||||||||
Shares not meeting performance targets | shares | 219,000 | ||||||||||
Weighted average purchase price of shares purchased | $ / shares | $ 74.93 | $ 71.77 | $ 82.36 | ||||||||
Restricted stock vested, fair value | $ 300,000 | $ 4,400,000 | $ 3,900,000 |
CAPITAL STOCK - OPTION ACTIVITY
CAPITAL STOCK - OPTION ACTIVITY (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate (as a percent) | 1.62% | 2.66% | 1.76% |
Expected lives (in years) | 4 years 8 months 12 days | 4 years 10 months 15 days | 4 years 10 months 6 days |
Expected volatility (as a percent) | 40.00% | 40.00% | 41.00% |
Expected dividend rate (as a percent) | 0.00% | 0.00% | 0.00% |
Stock options and restricted shares | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at beginning of period | 620,553 | ||
Granted at Market | 88,200 | ||
Forfeited | (1,353) | ||
Expired | (716) | ||
Exercised | (170,369) | ||
Outstanding at end of period | 536,315 | 620,553 | |
Exercisable at end of period | 315,964 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Outstanding at beginning of period (in dollars per share) | $ 40.741 | ||
Granted at Market (in dollars per share) | 84.234 | ||
Forfeited (in dollars per share) | 98.660 | ||
Expired (in dollars per share) | 98.660 | ||
Exercised (in dollars per share) | 18.125 | ||
Outstanding at ending of period (in dollars per share) | 54.855 | $ 40.741 | |
Exercisable at end of period (in dollars per share) | $ 37.644 | ||
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate (as a percent) | 2.09% | 1.67% | 0.74% |
Expected lives (in years) | 1 year 1 month 6 days | 1 year 2 months 18 days | 1 year 2 months 18 days |
Expected volatility (as a percent) | 40.00% | 42.00% | 45.00% |
Expected dividend rate (as a percent) | 0.00% | 0.00% | 0.00% |
CAPITAL STOCK- SUMMARY OF INFOR
CAPITAL STOCK- SUMMARY OF INFORMATION BY EXERCISE PRICE RANGE (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
$4.96 - $7.36 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at December 31, 2019 | shares | 85,552 |
Weighted Average Remaining Contractual Life in Years | 3 years 2 months 5 days |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 7.043 |
Number of Options Exercisable at December 31, 2019 | shares | 85,552 |
Weighted Average Remaining Contractual Life in Years | 3 years 2 months 4 days |
Options Exercisable - Weighted Average Exercise Price (in dollars per share) | $ 7.043 |
Exercise price, lower range limit | 4.50 |
Exercise price, upper range limit | $ 7.36 |
$7.37 - $32.21 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at December 31, 2019 | shares | 74,668 |
Weighted Average Remaining Contractual Life in Years | 4 years 3 months |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 15.697 |
Number of Options Exercisable at December 31, 2019 | shares | 74,668 |
Weighted Average Remaining Contractual Life in Years | 4 years 3 months |
Options Exercisable - Weighted Average Exercise Price (in dollars per share) | $ 15.697 |
Exercise price, lower range limit | 7.37 |
Exercise price, upper range limit | $ 32.21 |
$32.22 - $62.50 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at December 31, 2019 | shares | 52,939 |
Weighted Average Remaining Contractual Life in Years | 6 years 26 days |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 39.800 |
Number of Options Exercisable at December 31, 2019 | shares | 52,771 |
Weighted Average Remaining Contractual Life in Years | 6 years 26 days |
Options Exercisable - Weighted Average Exercise Price (in dollars per share) | $ 39.752 |
Exercise price, lower range limit | 32.22 |
Exercise price, upper range limit | $ 62.50 |
$62.51 - $69.77 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at December 31, 2019 | shares | 128,333 |
Weighted Average Remaining Contractual Life in Years | 8 years 2 months 5 days |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 69.770 |
Number of Options Exercisable at December 31, 2019 | shares | 41,670 |
Weighted Average Remaining Contractual Life in Years | 8 years 2 months 5 days |
Options Exercisable - Weighted Average Exercise Price (in dollars per share) | $ 69.770 |
Exercise price, lower range limit | 62.51 |
Exercise price, upper range limit | $ 69.77 |
$69.78 - $108.25 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at December 31, 2019 | shares | 194,823 |
Weighted Average Remaining Contractual Life in Years | 8 years 5 months 16 days |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 85.125 |
Number of Options Exercisable at December 31, 2019 | shares | 61,303 |
Weighted Average Remaining Contractual Life in Years | 7 years 2 months 5 days |
Options Exercisable - Weighted Average Exercise Price (in dollars per share) | $ 83.428 |
Exercise price, lower range limit | 69.78 |
Exercise price, upper range limit | $ 108.25 |
$4.96 - $108.25 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Number of Options Outstanding at December 31, 2019 | shares | 536,315 |
Weighted Average Remaining Contractual Life in Years | 6 years 8 months 23 days |
Options Outstanding - Weighted Average Exercise Price (in dollars per share) | $ 54.855 |
Number of Options Exercisable at December 31, 2019 | shares | 315,964 |
Weighted Average Remaining Contractual Life in Years | 5 years 4 months 6 days |
Options Exercisable - Weighted Average Exercise Price (in dollars per share) | $ 37.644 |
Exercise price, lower range limit | 4.50 |
Exercise price, upper range limit | $ 108.25 |
CAPITAL STOCK CAPITAL STOCK - R
CAPITAL STOCK CAPITAL STOCK - RESTRICTED STOCK (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Granted (in dollars per share) | $ 18.10 | $ 18.14 | $ 15.72 |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Non-vested, period start (in shares) | 259,430 | ||
Granted (in shares) | 83,567 | ||
Vested (in shares) | (4,230) | ||
Forfeited (in shares) | (3,100) | ||
Non-vested, period end (in shares) | 335,667 | 259,430 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Nonvested, at period start (in dollars per share) | $ 74.26 | ||
Granted (in dollars per share) | 74.93 | $ 71.77 | $ 82.36 |
Vested (in dollars per share) | 85.09 | ||
Forfeited (in dollars per share) | 80.90 | ||
Nonvested, at period end (in dollars per share) | $ 74.29 | $ 74.26 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 122,409 | $ 100,440 |
Ending balance | 154,364 | 122,409 |
Total accumulated other comprehensive income | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 277 | 232 |
Other comprehensive income | 236 | 45 |
Ending balance | 513 | 277 |
Minimum pension liability | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | (419) | (489) |
Other comprehensive income | 73 | 70 |
Ending balance | (346) | (419) |
Foreign currency translation | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 696 | 721 |
Other comprehensive income | 163 | (25) |
Ending balance | $ 859 | $ 696 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | Feb. 28, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||||
Increase in royalties payable | $ 300 | $ 300 | $ 300 | |
Rent expense | 1,900 | $ 2,000 | ||
Accrued settlement | 0 | 6,750 | ||
Warranty reserve | $ 300 | $ 200 | ||
Litigation settlement, amount awarded to other party | $ 6,800 |
INTEREST AND OTHER (INCOME) E_3
INTEREST AND OTHER (INCOME) EXPENSE (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other Income and Expenses [Abstract] | |||
Interest income | $ (661) | $ (261) | $ (167) |
Interest expense | 3,089 | 310 | 245 |
Other expense (income), net | 482 | (62) | (228) |
Interest and other expense (income) | 2,910 | (13) | (150) |
Cash paid for interest | $ 351 | $ 224 | $ 206 |
CREDIT FACILITY AND LONG-TERM_3
CREDIT FACILITY AND LONG-TERM DEBT CREDIT FACILITY AND LONG-TERM DEBT - Narrative (Details) | Dec. 31, 2019USD ($)$ / shares | Sep. 17, 2019USD ($)day$ / sharesshares | Jul. 27, 2017USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | |||||||
Proceeds from convertible debt | $ 86,250,000 | $ 0 | $ 0 | ||||
Debt instrument, convertible, conversion ratio | 0.0115434 | ||||||
Debt instrument, convertible, remaining discount amortization period | 80 months 15 days | ||||||
Share price (in dollars per share) | $ / shares | $ 95.94 | $ 95.94 | |||||
Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit and other short-term borrowings | 6,000,000 | ||||||
Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Repayments of debt | $ 12,800,000 | ||||||
Maximum borrowing capacity | $ 30,000,000 | ||||||
Contingent increase in maximum borrowing capacity | 20,000,000 | ||||||
Contingent maximum borrowing capacity | $ 50,000,000 | ||||||
Basis spread on variable rate | 1.10% | ||||||
Minimum annual interest charge | $ 60,000 | ||||||
Write off of deferred debt issuance cost | $ 33,000 | ||||||
Unamortized debt issuance expense | $ 120,000 | ||||||
Line of Credit | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.65% | ||||||
Line of Credit | Letter of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, collateral amount | $ 2,000,000 | 2,000,000 | |||||
Maximum borrowing capacity | 2,000,000 | 2,000,000 | |||||
Extinguishment of debt, amount | 2,000,000 | ||||||
Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, interest rate, effective percentage | 10.80% | ||||||
Senior Convertible Note | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from convertible debt | $ 83,700,000 | ||||||
Debt instrument, convertible, if-converted value in excess of principal | 9,300,000 | ||||||
Senior Convertible Note | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | 86,250,000 | $ 86,250,000 | 86,250,000 | ||||
Debt instrument, interest rate, stated percentage | 3.75% | ||||||
Debt instrument, convertible, conversion price (in dollars per share) | $ / shares | $ 86.63 | ||||||
Debt instrument, shares issuable upon conversion (in shares) | shares | 995,618.25 | ||||||
Debt instrument, debt default, maximum rate increase | 0.50% | ||||||
Carrying amount of equity component | 39,508,000 | 39,508,000 | |||||
Interest expense, debt | 2,669,000 | ||||||
Fair Value, Inputs, Level 2 | Senior Convertible Note | |||||||
Debt Instrument [Line Items] | |||||||
Convertible debt, fair value disclosures | $ 116,000,000 | $ 116,000,000 | |||||
Initial Purchasers | Senior Convertible Note | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Face amount | $ 11,250,000 | ||||||
Debt Instrument, Redemption, Period One | Senior Convertible Note | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, convertible, threshold trading days | day | 20 | ||||||
Debt instrument, convertible, threshold consecutive trading days | day | 30 | ||||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||||||
Debt Instrument, Redemption, Period Two | Senior Convertible Note | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, convertible, threshold consecutive trading days | day | 5 | ||||||
Debt instrument, convertible, threshold percentage of stock price trigger | 98.00% | ||||||
Debt instrument, convertible, threshold business trading days | day | 5 | ||||||
Debt Instrument, Redemption, Period Three | Senior Convertible Note | Convertible Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, convertible, threshold trading days | day | 20 | ||||||
Debt instrument, convertible, threshold consecutive trading days | day | 30 | ||||||
Debt instrument, convertible, threshold percentage of stock price trigger | 130.00% | ||||||
Debt instrument, redemption price, percentage | 100.00% |
CREDIT FACILITY AND LONG-TERM_4
CREDIT FACILITY AND LONG-TERM DEBT CREDIT FACILITY AND LONG-TERM DEBT - Carrying Amount of Debt (Details) - Convertible Debt - Senior Convertible Note - USD ($) | Dec. 31, 2019 | Sep. 17, 2019 |
Debt Instrument [Line Items] | ||
Carrying amount of equity component | $ 39,508,000 | |
Principal amount of the Notes | 86,250,000 | $ 86,250,000 |
Unamortized debt discount | (40,902,000) | |
Net carrying amount | $ 45,348,000 |
CREDIT FACILITY AND LONG-TERM_5
CREDIT FACILITY AND LONG-TERM DEBT CREDIT FACILITY AND LONG-TERM DEBT - Interest Expense Related to the Notes (Details) - Senior Convertible Note - Convertible Debt $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |
Interest expense related to contractual coupon interest | $ 925 |
Interest expense related to amortization of the debt discount | 1,744 |
Total interest expense related to debt | $ 2,669 |
SEGMENT REPORTING (Details)
SEGMENT REPORTING (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of reportable segments | segment | 2 | ||||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||||
Total revenue, net | $ 33,767 | $ 31,237 | $ 28,146 | $ 29,511 | $ 34,064 | $ 30,955 | $ 29,662 | $ 32,765 | $ 122,661 | $ 127,446 | $ 129,341 |
Operating income (loss) | 775 | $ 193 | $ (566) | $ (75) | 3,314 | $ (3,595) | $ 2,204 | $ 1,871 | 327 | 3,794 | 18,219 |
Income before income taxes | (2,583) | 3,807 | 18,369 | ||||||||
Investments in unconsolidated affiliates | 7,424 | 8,018 | 7,424 | 8,018 | 0 | ||||||
Total assets | 244,424 | 156,452 | 244,424 | 156,452 | 135,444 | ||||||
Net assets | 154,364 | 122,409 | 154,364 | 122,409 | 100,440 | ||||||
Capital expenditures | 1,044 | 1,358 | 3,469 | ||||||||
Depreciation and amortization | 4,916 | 4,595 | 4,754 | ||||||||
Total long-lived assets | 15,469 | 15,981 | $ 15,469 | $ 15,981 | $ 17,331 | ||||||
Customer Concentration Risk | Sales Revenue, Net | Butler Animal Health Supply, LLC | |||||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||||
Concentration risk, percentage | 14.00% | 15.00% | 13.00% | ||||||||
Customer Concentration Risk | Sales Revenue, Net | Merck | |||||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||||
Concentration risk, percentage | 1.00% | 12.00% | 12.00% | ||||||||
Customer Concentration Risk | Sales Revenue, Net | Eli Lilly | |||||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||||
Concentration risk, percentage | 8.00% | 9.00% | 11.00% | ||||||||
U.S. | |||||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||||
Total revenue, net | $ 108,469 | $ 115,543 | $ 116,823 | ||||||||
Total long-lived assets | 14,712 | 15,933 | 14,712 | 15,933 | 17,288 | ||||||
Canada | |||||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||||
Total revenue, net | 3,042 | 2,992 | 2,924 | ||||||||
Europe | |||||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||||
Total revenue, net | 8,289 | 5,995 | 4,780 | ||||||||
Total long-lived assets | 576 | 37 | 576 | 37 | 18 | ||||||
Other International | |||||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||||
Total revenue, net | 2,861 | 2,916 | 4,814 | ||||||||
Total long-lived assets | 181 | 11 | 181 | 11 | 25 | ||||||
Core Companion Animal Health | |||||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||||
Total revenue, net | 106,570 | 108,924 | 105,191 | ||||||||
Operating income (loss) | 1,358 | 2,040 | 12,656 | ||||||||
Income before income taxes | (1,552) | 2,053 | 12,828 | ||||||||
Investments in unconsolidated affiliates | 7,424 | 8,018 | 7,424 | 8,018 | 0 | ||||||
Total assets | 223,980 | 133,586 | 223,980 | 133,586 | 111,625 | ||||||
Net assets | 137,072 | 96,129 | 137,072 | 96,129 | 75,984 | ||||||
Capital expenditures | 259 | 180 | 209 | ||||||||
Depreciation and amortization | 3,611 | 3,369 | 3,736 | ||||||||
Other Vaccines, Pharmaceuticals and Products | |||||||||||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||||||||||
Total revenue, net | 16,091 | 18,522 | 24,150 | ||||||||
Operating income (loss) | (1,031) | 1,754 | 5,563 | ||||||||
Income before income taxes | (1,031) | 1,754 | 5,541 | ||||||||
Investments in unconsolidated affiliates | 0 | 0 | 0 | 0 | 0 | ||||||
Total assets | 20,444 | 22,866 | 20,444 | 22,866 | 23,819 | ||||||
Net assets | $ 17,292 | $ 26,280 | 17,292 | 26,280 | 24,456 | ||||||
Capital expenditures | 785 | 1,178 | 3,260 | ||||||||
Depreciation and amortization | $ 1,305 | $ 1,226 | $ 1,018 |
SUPPLEMENTAL QUARTERLY FINANC_3
SUPPLEMENTAL QUARTERLY FINANCIAL INFORMATION (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 33,767 | $ 31,237 | $ 28,146 | $ 29,511 | $ 34,064 | $ 30,955 | $ 29,662 | $ 32,765 | $ 122,661 | $ 127,446 | $ 129,341 |
Gross profit | 15,830 | 13,664 | 12,412 | 12,543 | 15,472 | 14,794 | 13,065 | 13,307 | 54,449 | 56,638 | 58,261 |
Operating income (loss) | 775 | 193 | (566) | (75) | 3,314 | (3,595) | 2,204 | 1,871 | 327 | 3,794 | 18,219 |
Net income (loss) before equity in losses of unconsolidated affiliates | (1,723) | (204) | (161) | 951 | 3,540 | (1,670) | 1,897 | 2,155 | (1,137) | 5,922 | |
Net (loss) income, after equity in losses from unconsolidated affiliates | (1,862) | (351) | (288) | 770 | 3,468 | (1,670) | 1,897 | 2,155 | (1,731) | 5,850 | 9,456 |
Net (loss) income attributable to Heska Corporation | $ (1,728) | $ (310) | $ (241) | $ 814 | $ 3,468 | $ (1,670) | $ 1,897 | $ 2,155 | $ (1,465) | $ 5,850 | $ 9,953 |
Basic earnings (loss) per share attributable to Heska Corporation (in dollars per share) | $ (0.23) | $ (0.04) | $ (0.03) | $ 0.11 | $ 0.47 | $ (0.23) | $ 0.26 | $ 0.30 | $ (0.20) | $ 0.81 | $ 1.42 |
Diluted earnings (loss) per share attributable to Heska Corporation (in dollars per share) | $ (0.23) | $ (0.04) | $ (0.03) | $ 0.10 | $ 0.44 | $ (0.23) | $ 0.24 | $ 0.28 | $ (0.20) | $ 0.74 | $ 1.30 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 14, 2020 | May 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | |||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||
Seil | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Percentage of voting interest acquired | 100.00% | ||||
Payments to acquire business | $ 125 | ||||
Scenario, Forecast | Private Placement | Preferred Stock | |||||
Subsequent Event [Line Items] | |||||
Conversion of stock, dilution of total shares converted, percent | 20.00% | ||||
Scenario, Forecast | Private Placement | Preferred Stock | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Sale of stock, conversion received on transaction | $ 125 | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Sale of stock, number of shares issued in transaction (in shares) | 125,000 | ||||
Conversion of stock, conversion ratio (in shares) | 12 | ||||
Conversion of stock, shares converted (in shares) | 1,508,751 | ||||
Preferred stock, dividend rate, percentage | 5.75% | ||||
Scenario, Forecast | Private Placement | Preferred Stock | Maximum | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Preferred stock, dividend rate, percentage | 7.25% |
Uncategorized Items - hska-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 2,634,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 103,074,000 |
Comprehensive Income [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 232,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 2,634,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (140,829,000) |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 243,598,000 |
Public And Common Stock [Member] | ||
Shares, Outstanding | us-gaap_SharesOutstanding | 7,303,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 73,000 |