8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 12, 2008

HESKA CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	000-22427	77-0192527
(State or other jurisdiction of	(Commission File Number)	(I.R.S. Employer
incorporation)		Identification Number)

3760 Rocky Mountain Avenue
Loveland, Colorado 80538

(Address, including zip code, of principal executive offices)

Registrant’s telephone number, including area code:  (970) 493-7272

Former name or former address, if changed since last report:  Not Applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

[  ]  Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02       Results of Operations and Financial Condition.

         The information in this Current Report is being furnished and shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

         On May 12, 2008, Heska Corporation announced its financial results for the quarter ended March 31, 2008 and certain other information. A copy of the press release announcing these financial results and certain other information is attached hereto as Exhibit 99.1.

Item 9.01       Financial Statements and Exhibits.

         (c)     Exhibits.

                   The following exhibit is furnished with this report on Form 8-K:

                   99.1     Press Release dated May 12, 2008.

         Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

HESKA CORPORATION
a Delaware corporation

Dated:           May 12, 2008
By:  /s/Jason A. Napolitano     
JASON A. NAPOLITANO
Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

      Exhibit Number                                                                     Description                                                                              

              99.1                                            Press Release dated May 12, 2008

EX-99.1

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

At Heska Corporation:

Jason Napolitano, Executive Vice President & CFO

(970) 493-7272, Ext. 4105

Heska Announces Q1 2008 Results

Record Product Revenue from Core Companion Animal Health Segment

LOVELAND, CO, May 12, 2008 -- Heska Corporation (NASDAQ: HSKA) today reported financial results for its first quarter ended March 31, 2008.

Heska Corporation ("Heska" or the "Company") generated its highest first quarter Core Companion Animal Health segment ("CCA") product revenue ever in the three months ended March 31, 2008, with product revenue totaling $17.4 million. The Company also generated approximately $4.3 million in product revenue in its Other Vaccines, Pharmaceuticals and Products segment ("OVP") and $282 thousand in Research, development and other revenue.

"We continue to be pleased with the competitiveness of our product offering. In the first quarter of 2008, we experienced strong chemistry instrument revenue growth due to the launch of an upgraded product – the Heska® Dri-Chem 4000 Veterinary Clinical Chemistry Analyzer by FUJIFILM - last November," said Robert Grieve, Heska's Chairman and CEO. "As we have previously predicted, the first quarter of 2007 presented a difficult comparison for us as we recognized over $2 million in high gross margin revenue we did not expect to repeat in the first quarter of 2008. While we are disappointed to report a net loss of $226 thousand after seven consecutive quarters of profitability, we expect to return to profitability in the second quarter of 2008."

Total Revenue

Total revenue for the first quarter of 2008 was $21.9 million, a decrease of 3.5% compared to the first quarter of 2007. Total revenue consists of product revenue and research, development and other revenue, both of which are discussed below.

Segment Product Revenue

Total product revenue for the first quarter of 2008 was $21.6 million, down 3% from $22.3 million in the first quarter of 2007. Heska Corporation's business is comprised of two reportable segments - Core Companion Animal Health and Other Vaccines, Pharmaceuticals and Products. Product revenue from these segments is as follows:

Core Companion Animal Health This segment includes revenue from the Company's diagnostic instruments and supplies as well as single use, point-of-care tests, vaccines and pharmaceuticals, primarily for canine and feline use. In the first quarter of 2008, this segment generated product revenue of $17.4 million, up 2% as compared to $17.0 million in the first quarter of 2007.

Other Vaccines, Pharmaceuticals and Products This segment includes revenue from private label vaccine and pharmaceutical production, primarily for cattle but also for other animals including small mammals and fish. In the first quarter of 2008, this segment generated product revenue of $4.3 million, down 20% as compared to $5.3 million in the first quarter of 2007. Results for the first quarter ended March 31, 2007 include approximately $1.6 million in revenue recognized in the first quarter upon receipt of a payment for product previously shipped and "take-or-pay" minimums for 2005 and 2006 which previously had not been paid as part of a now settled dispute with United Vaccines, Inc. ("United"), a former customer.

Research, Development and Other Revenue

Research, development and other revenue was $282 thousand in the first quarter of 2008, a decrease of approximately $119 thousand when compared to $401 thousand in the prior year period. In December 2006, the Company completed the sale of a worldwide patent portfolio covering a number of major allergens and the genes that encode them to Allergopharma Joachim Ganzer AG (the "Allergopharma Portfolio"). In the first quarter of 2007, the Company recognized approximately $100 thousand in revenue under a service contract which was completed in 2007 related to the Allergopharma Portfolio.

Investor Conference Call

Management will conduct a conference call on Monday, May 12, 2008 at 9:00 a.m. MDT (11:00 a.m. EDT) to discuss the first quarter 2008 financial results. To participate, dial (800) 240-5318 (domestic) or (303) 262-2142 (international); the conference call access number is 11113418. The conference call will also be broadcast live over the Internet at http://www.heska.com. To listen, simply log on to the web at this address at least ten minutes prior to the start of the call to register, download and install any necessary audio software. Telephone replays of the conference call will be available for playback until May 26, 2008. The telephone replay may be accessed by dialing (800) 405-2236 (domestic) or (303) 590-3000 (international). The webcast replay may be accessed from Heska's home page at www.heska.com until May 26, 2008.

About Heska

Heska Corporation (NASDAQ: HSKA) sells advanced veterinary diagnostic and other specialty veterinary products. Heska's state-of-the-art offerings to its customers include diagnostic instruments and supplies as well as single use, point-of-care tests, pharmaceuticals and vaccines. The company's core focus is on the canine and feline markets where it strives to provide high value products and unparalleled customer support to veterinarians. For further information on Heska and its products, visit the company's website at www.heska.com.

Forward-Looking Statements

This announcement contains forward-looking statements regarding Heska's future financial and operating results. These statements are based on current expectations and are subject to a number of risks and uncertainties. Investors should note that there is an inherent risk in using past results to predict future outcomes. Revenue generated in the past related to customers, technology or products may not recur in future periods. For example, in the quarter ended March 31, 2007, Heska recognized approximately $1.6 million in revenue upon receipt of a payment from United for product previously shipped and "take or pay" minimums for 2005 and 2006. As United has ceased operations, Heska does not expect to generate any future revenue from United. In addition, factors that could affect the business and financial results of Heska generally include the following: risks related to the market acceptance of recently launched diagnostic instrumentation products, including a new chemistry instrument launched in November 2007; uncertainties related to Heska's ability to project future financial results, including its expectation of profitability in the second quarter of 2008; risks regarding Heska's reliance on third-party suppliers, which is substantial and could have significant negative consequences if Heska were to lose exclusive rights or access to a product due to a failure to meet minimum sales requirements or for other reasons; risks regarding Heska's ability to successfully market, sell and distribute its products; competition, including uncertainties regarding the impact of new products competitors have recently launched or may launch in the future; uncertainties regarding Heska's reliance on third parties to whom Heska has granted substantial marketing rights to certain of Heska's existing products; risks regarding Heska's fixed expense base and the potential negative impact of unexpected events, such as significant shortfalls in anticipated revenue, or Heska's ability to meet its financial and other obligations, especially in the short term; uncertainties regarding Heska's ability to raise additional capital on reasonable terms, if at all, if required; and the risks set forth in Heska's filings and future filings with the Securities and Exchange Commission, including those set forth in Heska's Annual Report on Form 10-K for the year ended December 31, 2007.

Financial Table Follows:

Consolidated Statements of Operations

In Thousands, Except per Share Amounts

(unaudited)

			Three Months Ended March 31,
		2007				2008
Revenue, net:
Product revenue, net:
Core companion animal health	$		16,991		$		17,355
Other vaccines, pharmaceuticals and products			5,323				4,281
Total product revenue, net			22,314				21,636
Research, development and other			401				282
Total revenue			22,715				21,918
Cost of revenue:
Cost of products sold			12,252				14,133
Cost of research, development and other			103				49
Total cost of revenue			12,355				14,182
Gross profit			10,360				7,736
Operating expenses:
Selling and marketing			4,418				4,922
Research and development			704				539
General and administrative			2,635				2,498
(Gain) on sale of assets			(47	)			—
Total operating expenses			7,710				7,959
Income (loss) from operations			2,650				(223		)
Interest and other expense, net			180				166
Income (loss) before income taxes			2,470				(389	)
Income tax expense (benefit):			76				(163	)
Net income (loss)	$		2,394		$		(226	)
Basic net income (loss) per share	$		0.05		$		(0.00		)
Diluted net income (loss) per share	$		0.04		$		(0.00		)
Shares used for basic net income (loss) per share			50,803				51,481
Shares used for diluted net income (loss) per share			54,206				51,481

Balance Sheet Data

In Thousands (unaudited)

	December 31, 2007		March 31, 2008
Cash and cash equivalents	$	5,524	$	5,703
Total current assets		35,127		34,127
Total assets		75,591		75,283
Line of credit		12,614		13,903
Current portion of long-term debt and capital leases		776		775
Total current liabilities		25,195		24,769
Long-term debt and capital leases		1,151		958
Stockholders' equity		42,883		43,198

Pro Forma Financial Information Statement of Utility

The following estimated pro forma financial information is presented assuming Heska had reduced its valuation allowance related to its domestic net operating loss on December 31, 2006 rather than December 31, 2007. In this circumstance, the Company would have recognized Net Operating Loss Usage as Income Tax Expense, as outlined below. The Company believes the pro forma information may be valuable to investors as an additional tool to benchmark future periods versus historical results on a consistently reported basis. The Company does not suggest that investors should consider such pro forma financial information in isolation from, or as a substitute for, financial information prepared in accordance with GAAP.

Pro Forma Reconciliation to GAAP

Consolidated Statements of Operations

In Thousands, Except per Share Amounts

(unaudited)

	Three Months Ended March 31, 2007
		As Reported (GAAP)				Adjustments				Pro Forma
Revenue, net:
Product revenue, net:
Core companion animal health			$	16,991		$	—		$		16,991
Other vaccines, pharmaceuticals and products				5,323			—				5,323
Total product revenue, net				22,314			—				22,314
Research, development and other				401			—				401
Total revenue				22,715			—				22,715
Cost of revenue:
Cost of products sold				12,252			—				12,252
Cost of research, development and other				103			—				103
Total cost of revenue				12,355			—				12,355
Gross profit				10,360			—				10,360
Operating expenses:
Selling and marketing				4,418			—				4,418
Research and development				704			—				704
General and administrative				2,635			—				2,635
(Gain) on sale of assets				(47	)		—				(47	)
Total operating expenses				7,710			—				7,710
Income from operations				2,650			—				2,650
Interest and other expense, net				180			—				180
Income before income taxes				2,470			—				2,470
Income tax expense (benefit):
Current				74			—				74
Net operating loss usage, net of AMT benefit				2			896				898
Total income tax expense (benefit)				76			896				972
Net income			$	2,394		$	(896	)	$		1,498
Basic net income per share			$	0.05		$	(0.02	)	$		0.03
Diluted net income per share			$	0.04		$	(0.01	)	$		0.03
Shares used for basic net income per share				50,803			50,803				50,803
Shares used for diluted net income per share				54,206			54,206				54,206

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