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
	July 27, 2011 Date of Report (Date of earliest event reported)
	HESKA CORPORATION (Exact name of Registrant as specified in its charter)
Delaware		000-22427	77-0192527
(State or other jurisdiction of incorporation)		(Commission File Number)	(I.R.S. Employer Identification No.)
	3760 Rocky Mountain Avenue Loveland, Colorado 80538 (Address of principal executive offices, including zip code)
(970) 493-7272 (Registrant’s telephone number, including area code)
Not Applicable (Former name or former address, if changed since last report)
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 July 27, 2011, Heska Corporation announced its financial results for the quarter ended June 30, 2011 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 July 27, 2011.

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:  July 27, 2011	By: /s/  Jason A. Napolitano                                                                          Jason A. Napolitano Executive Vice President, Chief Financial Officer and Secretary

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release dated July 27, 2011

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 15% Revenue Growth, Fourth Consecutive Profitable Quarter, for the Second Quarter of 2011

$2.4 Million in Operating Income Year-to-Date;

Company Ends Quarter with $0 Debt and $5.7 Million in Cash

LOVELAND, CO, July 27, 2011 -- Heska Corporation (NASDAQ: HSKA; "Heska" or the "Company"), a provider of advanced veterinary diagnostic and other specialty veterinary products, today reported financial results for its second quarter, ended June 30, 2011.

Second Quarter Highlights Include:

•   15.5% revenue growth to $17.4 million vs. $15.1 million in last year's period

•   Revenue growth in both operating segments

•   27.7% increase in year-over-year quarterly gross profit and a 42.8% Gross Margin, a 411-basis point improvement compared to the second quarter last year and a 27-basis point sequential improvement compared to the prior quarter

•   Selling, General and Administrative expenses, or SG&A, increased 3.8% compared to the second quarter last year, but decreased as a percent of revenue to 33.7% from 37.5% in the second quarter last year

•   $887,000 in operating income compared to a ($207,000) operating loss in the second quarter last year

•   Strong cash from operations resulting in $0 debt at the end of the period

•   The addition of Ms. Sharon Riley, a proven hospital administrator and most recently the CEO of UT Southwestern University Hospitals in Dallas, to Heska's Board of Directors

•   Completed the quarter with $5.7 million in cash, no debt and $18.7 million in working capital

"This was another quarter of solid execution, as we laid the groundwork for accelerated growth and increased profitability in future quarters," commented Robert Grieve, Heska's Chairman and CEO. "Joe Aperfine, our new Executive Vice President, Sales and Marketing, has been expanding our technical sales expertise, filling vacant sales territories with exceptionally talented people and creating a more effective commercial organization.  The ramp in new hiring has been steady and we expect to have all vacancies filled by the end of the current third quarter.  I firmly believe the right hiring and Mr. Aperfine's other initiatives will provide us with a more productive sales force to optimize growth in the future, particularly as we continue to innovate and introduce new products."

Financial Results

Second quarter revenue was $17.4 million, an increase of 15.5% compared to $15.1 million in the second quarter last year. Core companion animal health revenue grew 2.1% to $14.0 million from $13.7 million in the year-ago quarter. Other vaccines, pharmaceuticals and products revenue grew 148.8% to $3.4 million from $1.4 million, although the second quarter of 2010 was negatively impacted by a now resolved regulatory issue. Gross profit was $7.5 million, or a 42.8% gross profit margin, compared with gross profit of $5.8 million, or 38.7% gross profit margin, in the second quarter last year. SG&A expense was $5.9 million, or 33.7% of sales, compared to SG&A expense of $5.7 million, or 37.5% of sales in the second quarter last year. Total operating expenses were $6.6 million, or 37.7% of sales, compared with total operating expenses of $6.1 million, or 40.1% of sales, in last year's second quarter. The Company reported operating income of $887,000, compared to a loss from operations of ($207,000) in last year's second quarter. Pre-tax income was $745,000 compared to a pre-tax loss of ($329,000) last year. Net income, inclusive of a $235,000 deferred income tax expense, was $457,000 or $0.09 per basic and diluted share, compared with a net loss of ($165,000) or ($0.03) per basic and diluted share in last year's period. In the second quarter last year, the Company recorded a ($178,000) deferred income tax benefit.

"This was another strong quarter with revenue growth, margin expansion and an improved level of quarterly profitability compared to last year as we grew revenue at nearly twice the rate of expenses, resulting in a significant swing to positive operating income," Dr. Grieve continued. "Looking to the future, we launched our handheld lactate analyzer and are on pace to launch one more unique product by the end of this year. In addition, we expect to introduce up to four new products next year, including at least two new products from our recently announced alliance with Rapid Diagnostek. This commitment to innovation, research and development and the development of proprietary intellectual property is consistent with our focus on accelerated growth and profitability. We are demonstrating the ability to scale our top line faster than our operating expenses, and this is expected to result in increased earnings power as we grow. "

Year-to-date, revenues were $37.0 million, an increase of 12.7% compared to revenue of $32.8 million last year. Core companion animal health revenue grew 3.2% to $30.5 million from $29.5 million last year and other vaccines, pharmaceuticals and products revenue grew 97.9% to $6.5 million from $3.3 million last year. Gross profit was $15.8 million, or 42.7% gross profit margin, compared with gross profit of $12.1 million, or 36.7% gross profit margin last year. SG&A expense was $12.3 million, or 33.3% of sales, compared to SG&A expense of $11.9 million, or 36.3% of sales in the first six months last year. Total operating expenses were $13.3 million, or 36.1% of sales, compared with total operating expenses of $12.7 million, or 38.9% of sales last year. The Company reported operating income of $2.4 million compared to a loss from operations of ($695,000) last year. Pre-tax income was $2.3 million compared to a pre-tax loss of ($990,000) last year. Net income, inclusive of a $730,000 deferred income tax expense, was $1.4 million or $0.26 per basic and diluted share, compared with a net loss of ($495,000) or ($0.09) per basic and diluted share last year. The first six months of last year's results included a ($495,000) deferred income tax benefit.

Balance Sheet and Liquidity

As of June 30, 2011, Heska had $5.7 million in cash and working capital of $18.7 million. During the quarter, the Company generated strong cash from operations to eliminate all borrowings under its line of credit, ending the quarter with no debt. Stockholders' equity increased 4.2% to $47.7 million compared to $45.8 million as of December 31, 2010.

Investor Conference Call

Management will conduct a conference call on Wednesday, July 27, 2011 at 9 a.m. MDT (11 a.m. EDT) to discuss the second quarter 2011 financial results.  To participate, dial (877) 941-1465 (domestic) or (480) 629-9866 (international); the conference call access number is 4458377.  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 and webcast replays of the conference call will be available for playback until August 10, 2011.  The telephone replay may be accessed by dialing (800) 406-7325 (domestic) or (303) 590-3030 (international).  The webcast replay may be accessed from Heska's home page at www.heska.com until August 10, 2011.

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. For example, Dr. Grieve's stated expectations for new product launches and increased earnings power are forward-looking.  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, including trends, to predict future outcomes.  In addition, factors that could affect the business and financial results of Heska generally include the following: risks related to Heska's reliance on third parties to develop certain of Heska's future products; risks related to Heska's ability to increase the productivity of its sales force; risks related to the implementation of current product development plans, including anticipated launch dates; risks regarding Heska's reliance on third-party suppliers such as minimum purchase requirements, which could have a significant adverse impact on Heska's financial position; uncertainties related to Heska's ability to hire and retain effective individuals to fill currently vacant positions; uncertainties related to Heska's ability to successfully commercialize new products; uncertainties regarding Heska's reliance on third parties to whom Heska has granted substantial marketing rights to certain of Heska's existing products and whom may be large Heska customers, including Schering-Plough Animal Health Corporation which has exclusive rights to Heska's heartworm preventive in the United States; uncertainties regarding Heska's ability to successfully market and sell its products in an economically sustainable manner; competition; risks related to Heska's ability to generate levels of profitability to utilize significantly its deferred tax assets; 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 Quarterly Report on Form 10-Q for the quarter ended March 31, 2011.

Financial Table Follows:

Consolidated Statements of Operations

In Thousands, Except per Share Amounts

(unaudited)

	Three Months Ended  June 30,						SixMonths Ended June 30,
	2010			2011			2010			2011
Revenue, net:
Core companion animal health	$	13,731			$	14,023	$	29,523			$	30,464
Other vaccines, pharmaceuticals and products		1,376				3,424		3,278				6,488
Total revenue, net		15,107				17,447		32,801				36,952
Cost of revenue		9,260				9,978		20,749				21,185
Gross profit		5,847				7,469		12,052				15,767
Operating expenses:
Selling and marketing		3,656				3,570		7,692				7,530
Research and development		388				703		845				1,034
General and administrative		2,010				2,309		4,210				4,776
Total operating expenses		6,054				6,582		12,747				13,340
Operating income (loss)		(207	)			887		(695	)			2,427
Interest and other expense, net		122				142		295				165
Income (loss) before income taxes		(329	)			745		(990	)			2,262
Income tax expense (benefit):
Current tax expense		14				53		64				159
Deferred tax expense (benefit)		(178	)			235		(559	)			730
Total income tax expense (benefit)		(164	)			288		(495	)			889
Net income (loss)	$	(165	)		$	457	$	(495	)		$	1,373
Basic net income (loss) per share	$	(0.03	)		$	0.09	$	(0.09	)		$	0.26
Diluted net income (loss) per share	$	(0.03	)		$	0.09	$	(0.09	)		$	0.26
Shares used for basic net income (loss) per share		5,217				5,234		5,216				5,233
Shares used for diluted net income (loss) per share		5,217				5,353		5,216				5,298

Balance Sheet Data

In Thousands (unaudited)

	December 31, 2010		June 30, 2011
Cash and cash equivalents	$	5,492	$	5,707
Total current assets		27,279		28,418
Property and equipment, net		5,486		4,998
Total assets		63,048		61,823
Line of credit		3,079		--
Total current liabilities		12,660		9,708
Stockholders' equity		45,798		47,736

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