Q1 2021 Heska Corp Earnings Call
[music].
And please standby were about to begin.
Good day and welcome to the Heska Corporation first quarter 2021 earnings call.
Today's conference is being recorded at this time I'd like to turn the call over to Mr. John Agar Director of Investor Relations. Please go ahead Sir.
Thank you and good morning, everyone welcome to Heska Corporation's earnings call for the first quarter of 2021, I'm, Johnny Guard head of Investor Relations at Heska.
This morning, we have Kevin Wilson, and Heska, as Chief Executive Officer, and President and Catherine Grassman, Heska as Chief Financial Officer, Mr. Wilson and MS. Grassman will provide details surrounding the results reported and then we will open the call to questions.
Prior to discussing Heska as results and before I turn the call over to Kevin I would like to remind you that during the course of this call. We may make certain forward looking statements regarding future events or future financial performance of the company, we need to caution you that any such forward looking statements are based on our current beliefs and expectations and involve known and unknown risks.
Based on our current beliefs and X.
And on risk based on our current beliefs and expectations and involved.
Uncertainties, which may cause actual results and performance to be materially different from that expressed or implied by those forward looking statements factors that could cause or contribute to such differences are detailed in writing and this morning's release Heska corporate Heska Corporation's annual and quarterly filings with the SEC and elsewhere any forward looking statements speak only as of the time there.
And made and Heska does not intend and specifically disclaims any obligation or intention to update any forward looking statements to reflect events that occur. After the time such statement was made.
And finally to facilitate broad participation and the question and answer session. This morning, we ask that each participant exercise discretion and limit their questions with follow up as necessary and as time permits with all that being said it is now my pleasure to turn the call over to Kevin Wilson, <unk>, CEO and President Kevin.
Hey, John Thanks, and good morning, everybody.
And I know, it's a crowded animal health release calendar today, and I really do appreciate that you're taking the time with with Heska. This morning.
For those of you who have to leave early.
Summary is simple heska had a great first quarter and a great start to the year.
Our underlying markets are doing wonderfully well and we believe it is sustainable.
Our product launches are on schedule and we are convinced that heska is a great place to be in 2020, one and beyond.
Encourage listeners to fully review the results and the data published in this morning's release.
You will find them helpful and filling and the gaps with the remainder of our time. This morning, Catherine Jon and I will try to provide you.
And with some additional color and helpful answers during our prepared remarks, and Q&A, where we can go a little bit deeper in the areas that interest you and the most.
But before we get there I would like to share a few observations with you.
On the overall market situation and it's great on top of decades long positive underlying trends and veterinary health care.
There's been a step up function of millions of additional pet families globally over the past year.
Veterinarians are reporting double digit growth in pet and visits overall and even faster acceleration and the long term trend of increasing diagnostics during those visits.
We at Heska, and most and our industry believes that these gains are sustainable and other long term.
Specific to Heska and the first quarter on North American lab consumable sales grew 23, 9% from.
From an expanding utilization and price, which is further supported by our improving share position. These past few years and strong end user demand.
North America imaging and grow very impressive 91, 3%.
Benefiting from the work that we did last year and reorganize and expand our sales force into a unified address focused structure.
We believe this location based focus rather than our prior modality based division and prepares us well.
For our in process major new product launches.
And our international segment skilled C. B M and Heska teams delivered a really solid quarter and start to the year and nearly all geographies.
That's a great momentum and lab consumables and.
And great adoption of our subscriptions model and select European markets are.
Our combined organizations products rationalization into and international best of breed products stack is well underway to delivering better customer experience sales attractiveness customer price company margin and competitive differentiation.
We intend to press on even faster with these initiatives throughout the remainder of the year.
Operationally, our strong margin generated from selling more of the most important products and consumable lines was sufficiently captured by strong companywide operational discipline and efficiency.
I was again pleased to see that when Heska sales more of the right mix, we do see operating leverage.
And our R&D and commercial launch efforts are many announced projects continue to progress with and targets that have been previously announced.
For element name that means our highly anticipated urine and fecal point of care platform.
We will be installing and the second quarter on schedule and.
And that we continue to see solid demand and pre subscriptions for that product.
Early wins with Heska view of specialty services and top tier hospitals, and North America for digital Cytology have also confirmed our enthusiasm for entry into professional services and the first quarter with the acquisition of Lacuna diagnostics.
The teams are already put together and subscriptions are already being signed now installed and now servicing.
On our other announced analyzers test menu expansion and new services are also now launching and rapid fire succession now and throughout 2021, and we continue to see strong demand for what we're launching.
And there's so many products and projects launching that I encourage investors new to Heska to review, our latest investor presentations and our Investor day presentation from November of last year for more information on several of them.
Moving on to our resources, it's fair to say that our capital structure has never been this well prepared to play offense and our wonderful and now global sandbox.
And the first quarter, we successfully raised substantial growth capital and we are preparing to properly put it to work.
It is also fair to say that our team our human resource and there's also and the best condition of any period and our history. We're excited equipped and well positioned to have a great 2021 and beyond as we continue to win and the second half of our five year strategic plan and.
And you know I can't get through a call without updating you on what that is first we will double the geographies and the customers that we serve which we've done.
Second we will double the products and the addressable revenue lines that we offer which we have also done.
And third we will continue to grow our core business, which we've done throughout 2020.
Now on the first quarter of 2021 and anticipate continuing to do throughout the balance of the year day.
Multiplier effect of these three major accomplishments leads me to anticipate a great performance for the rest of 2020, one and into 2020 two.
And we've begun the first of four laps and 2021 very strongly and investors will remember that we have maintained annual guidance throughout the pandemic and 2020 and 2021 and we have generally met or exceeded most expectations with this strong start to the year, we're well on pace to reach higher levels of our ranges and 2021 and perhaps a bit further.
The first quarter 2021, its been fun April has been fun may.
May is off to a fund start and I think the rest of 2020 will be fun.
With that I'll turn the call over to Catherine to detail the quarter and to provide you with additional information and then we'll take some Q&A Kathryn.
Thanks, Kevin and good morning, everyone coming off a strong finish to 2020, Heska and delivered a great start to try and 21 and companion animal health market continues to experience expanding global demand and Heska is delivering we reported total revenue of $60 5 million double the comparative period strategic acquisitions and continued part.
Is it a trend and the markets. We serve contributed to a very solid start to this year.
Our North America segment revenue grew 34 eight per cent for the first quarter of 2021 contributing to that growth of 23, 9% and consumable sales, which was driven by all key factors, including new customer acquisition utilization and improved pricing. We also experienced growth and point of care imaging. Additionally, we saw increased demand.
And P. B D, which is driven primarily by increased sales and Tri heart of contract manufactured products. Our international segment reported $23 2 million and revenue and the first quarter of 2021. This segment largely represents our strategic acquisition of scale consolidated gross margin declined approximately 180 basis points to $42 one per.
And for the first quarter as anticipated impacting consolidated gross margin on a comparative basis is the consolidation of skills, which has a lower margin margin profile business. It continues to be a financially meaningful synergy opportunity for heska and we are making progress towards bridging this margin gap.
And North America segment delivered gross margin of 47% and the first quarter of 2020, one compared to 45 two per cent for the first quarter of 2020, due mainly to higher sales of consumables as well as increased sales and product mix and our other contract manufactured products and then it will be P. The international segment gross margin was $34 three per cent for.
The first quarter of 2020 one.
Operating expenses and the first quarter of 'twenty, one were $24 5 million and increase of 35% over the first quarter of 2020. The increase was driven primarily by the consolidation of skills operations and higher stock based compensation expense, partially offsetting partially offset by the timing of research and development costs and lower one time acquisition.
<unk> costs incurred last year as part of the skilled transaction.
Adjusted EBITDA for the first quarter of 2021 with $8 4 million on adjusted EBITDA margin of 13, 9% driven mainly by continued revenue growth deleted.
Diluted EPS and the first quarter was <unk> 19 per share adjusting for certain items, which are detailed in our GAAP to non-GAAP reconciliation included with our release non-GAAP EPS from 59 cents per share and increase of 73 cents per share from the first quarter of 2020 diluted EPS and non-GAAP EPS were favorably impacted by.
Revenue higher gross profit and better leveraged operating cost.
Further improving diluted EPS was lower interest expense related to noncash interest as a result on the change in accounting treatment related to the company's convertible notes. This change was effective on January 1st of this year.
Our liquidity position is solid with cash of approximately $239 million, we are well positioned to continue to execute on our strategic plan.
Our strong start to the year clearly it gives us confidence and reaching a high end of our guidance range. As previously provided during our fourth quarter earnings call. All factors point to a positive year for the industry and Heska and while we could be a bit higher than the range. As we have provided we are not officially updating our guidance until our second quarter call with that and we would like to open the call for your <unk>.
Operator.
Thank you if you'd like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again, that's star one.
I'll ask a question.
We'll pause for just a moment to allow everyone a chance to queue and.
And we'll take our first question from Chris Schott from J P. Morgan.
Oh, great. Thanks, so much and congrats on the results I'm. Just first question for me was can you just give us an update on on the skill business and its transitioned over to a subscription model I guess, how is that process proceeding and just as youre going through this and you're seeing any major differences as you look at the different countries you're in in terms of how quickly customers are willing to adopt or any kind of.
Earnings from one market you can apply to the other reason and I just had one follow up from there.
Yes, Chris it's Kevin Thanks.
Thanks for the question.
On Spain, whereas our first major initiatives and it's going great.
And we haven't had any pushback at all.
We do have a very large competitor that also goes to market under subscriptions and I think they are succeeding.
And in those markets as well.
We're just now starting to push that out throughout the rest of the skilled business.
So I think Germany, France, Italy.
And again getting really good positive early results. So we don't really see and issue that there aren't massive differences are there are some contractual differences.
Country by country that arent and a substantial there are just paper and the contracts that they're selling but we're.
And we're sticking to the same model so they they tend to be over five years.
And duration and and they may have minimums and they have you know.
This protection and all the same aspects that we have and North America.
Alright, Great and then just on the on just the very obviously very healthy industry dynamics, we're seeing I guess from your perspective, how much of this is and it's more of a one time step up and growth is when you think about kind of higher pet adoptions and everything that happened through COVID-19 and then we start to see and.
History, why growth kind of slow down to more historic levels as we get through this later this year versus how much of this is like on some more six sustainable acceleration and growth for the industry as we think about increased diagnosis.
And I was just usage people close to their pets et cetera, I'm, just getting a sense of you know as we think about the longer term trends are.
Mike you kind of a onetime step up and normalizing or or and and.
Inflection point in terms of the slope of the growth curve going forward. Thanks.
Yeah. So I think it's kind of a numerator and denominator thing right and so when you get a step up and.
And the denominator changes and then continue to grow.
So simple math and let's say the step up as a 10% step up and then continue on and 10% growth on top of sometimes 10 per cent now better you'll pick up and extra point and now your 11% better I think that's basically how it is going to work for the entire industry and other.
That is there are just millions more pets I think that's.
And that's consistent and every industry released that I've seen and and all of our peers.
And.
And and we had good growth rates prior to that step up with them and so I don't think there's really a normalize and where we're going to get back that extra.
That extra 1.2 points, you know whatever Matthew and decided to industries, a numerator and denominator.
I do think it's sticky and I will caution people and the one thing I haven't heard a lot on causes.
And I've been doing this a long time the barriers the barrier to veterinary medicine, and this is not always need and it's not always.
It's not always is it appropriate medicine, the barrier or a lot of times is compliance and getting the pet to the veterinarian.
And so and so the one thing on a macro basis and I'm interested to see it.
And is when there is less flexibility.
Childcare returns to normal people go to the office more often and schedules become a little bit more rigid.
Or will you see fewer.
Veterinary hospital visits because of that barrier not because of need not because of finance not because of taxes.
It's just harder to get your cat to the veterinarian when you drop on the kids off on school, and then Youre going to work as opposed to a more flexible schedule.
I still think that's an unknown.
I don't think it will return to pre pandemic, so and put another way I think it's actually a tailwind and the long term.
Trends, but I don't I do think some moderating tailwind I don't think it will be a strong of a tailwind. This time next year as it is today I hope that makes sense I don't know if that makes sense and I. Appreciate the comments. Thank you.
Thank you and next we'll go to David Whiston.
Securities.
Hey, Thank you for taking the question and I appreciate that last.
Very honest taken the AR and the industry.
So firstly I just wanted to maybe and talk about our corporate accounts and your progress with corporate accounts you had.
Few big wins and in years past on so you can you talk about how those are progressing and particularly because we've seen you know record numbers of new hospital on beef.
And acquired by the largest.
Corporate accounts, so just any thoughts in terms of increased utilization and if that's gonna be a continued area of of growth for you and just dynamics. There also and just to make this question and longer and more complicated you also global now and there's a lot of other consolidators that are also trying to go global.
Does that put you in a better position.
Yes, I'll book.
The North America question first and then we'll go to the global I think we're well positioned corporately and in North America.
We believe we have a slightly higher percentage of the top corporate accounts than we do of the general market and so put another way if they continue to acquire.
Think we acquire and slightly higher rates and what are what are market rate is generally so I think that's good I do expect several of them to go public.
This year, which I think will be good for the industry by the way I think it'll be really good data.
Well that will help everybody.
So we really like our core her position, there's not a lot of trading.
And frankly at this point with the corporates I think they've been well served by their current and incumbent and.
And that's included but also our competitors, where we do see some opportunity and corporates is new products.
So were making inroads with products and other folks don't have and.
And so I think that's a very positive and and maybe a trojan horse and to some of those accounts longer term and then.
The last comment I would say on corporates is and this is a very general statement. There are some wonderful independent hospitals, it's not a commentary on on those but the corporates and the best corporates tend to grow a little bit faster and tend to grow a little bit faster and diagnostics and and and top equipment digital X Ray and mris and things like that.
And because they are funding, but also because of the corporates targeted.
And the larger specialty hospitals, multi doctor hospitals per acquisitions, so as a percentage of their portfolio they tend to be even more premium hospitals.
So we're seeing really good management and in our corporate and our corporate customers internationally, it's less consolidated it's less organised the sock drawer. So there's.
And there's orphan socs and the corner and different powered Socs and all those kinds of things. So it's a little bit more of a wild west and we do we do think we're in a better position, especially with a multi decade reputations.
<unk> still has and places like Germany with income on a pretty good position.
Reputation on way to get some of those bigger accounts.
I think I got them, all David but if not.
Well you're exactly right.
So and so let's see let's talk about element aim and you talked about Q2 Q2 is that whereas when it might hit.
I think and the press release, it obviously seems like you're pretty comfortable with those timelines could you maybe break it down to a month and then I realize a V M axis scale down but is that maybe on something where you could have on kind of a launch date.
Or around that and just any commentary on aim it'll be great.
Yeah, So I think for for launch day.
And so we don't know what the marketing.
Our plan is for B M X. So on that one and then to claim ignorance.
And it's just been a moving target for the last for the last couple of quarters and in terms of the day, Yeah, I don't want to put a month and a week on it but we're not going to squeak and just under the wire.
It is my strong opinion I think we're solidly in the second quarter and and we also have really good free subscription demand for that product. So in terms of marketing and we're not showing on our fingernails, hoping that people will show up on the Big day, I think we've got pretty good demand already signed up and so it's really more about.
And installing on and then making I'm thrilled with what it is that they just they just got installed.
Yeah that was that was actually very helpful. Thank you. So much and then maybe I'll just and on cytology.
And so you you you made an acquisition there can you compare and contrast, the in clinic cytology, where with the reference lab support a D D.
Do you think you can compete with something with a big reference lab on kind of infrastructure, there and I mean, obviously I know the answer is yes, and in your view and and but I want you to and if you can articulate a you know and how you compete with the Big Boy there.
Yeah. So it's the same trend we have.
Wonderful Board certified pathologists and at the same level and it's.
Some cases the same people.
I read your slides are physically when you when you put them in on a courier car and you drive them out of the airport and the flying.
And to some central reference lab somewhere we just think they are getting the answer and and minutes wire and surgery matters and enough cases to make it a very good business.
So when you stick a needle on something and you're in surgery and they need to know immediately as a cancer isn't it do I take it out doughnuts and.
And that's something and central reference lab cant do.
And we also think that getting those answers and two hours instead of maybe several days is good for pet care. So it's the same argument that you have for all of point of care.
And and let's just say half of Av.
Lamps or from blood and plasma gets done at the point of care and half that's done at the reference lab if today.
99% of a pathology range get done on the reference lab do you think look the same per.
<unk> of other point of care services will migrate to point of care and to.
To what extent do you think that that's going to happen.
It's more than 1% I don't know if the city.
But customers who are signing up for the service are thrilled with it.
And we think that the scanner and it's much more efficient and it also resonates and candidly like like all the point of care.
With with this generation of folks who actually care about the environment.
So that's the thing.
And they understand the driving cars all over the place and picking up.
Slides out and boxes and driving them to airports and put them on planes is Missouri inefficient. When you can literally put it on the scanner and five minutes later be getting an answer so we really like it and it's another service our entry into professional services and we think that's on a very good large business that we can compete in and so yeah I I like it.
We will we obsolete pathologists as a central reference lab now that's not even on our goal, but will we get more than 1% Yeah, we will.
Thank you so much and and congrats again on on a fine job and square.
Thanks Amy.
Thank you and once again Thats star one for questions well go next to Elliot Wilbur with Raymond James.
Yeah.
Thanks, Good morning, good to speak with you on.
First question for Kevin and I guess, given sort of the strong relative growth dynamics and the consumables business.
And any one of the factors that you cited price visits utilization.
Stand out in terms of.
Its performance relative to the other.
Drivers yeah yeah.
Yeah.
Definitely baseline utilization.
Just more pets go on to veterinarians.
Would be the first the.
Second as utilization, we're seeing those veterinarians do more diagnostics per per visit.
So utilization is definitely the stand out we call out price mostly to indicate that.
And we didn't run a special and we didn't do a blue light special on the IL six and discount things price I think across the industry is holding up quite.
Quite well and actually at the provider level, I think is probably improving faster than than maybe other suppliers.
Our competitors included.
On raising prices, maybe as fastest veterinarians are able to so I would say utilization is really driving it.
For me is thrilling it's the most long lasting of the levers that you can pull.
Okay. Thanks, and then just a follow.
Follow up question on the International segment.
And if you've provided the organic growth numbers.
Missed this in your commentary so curious what currency impact was and then just thinking about the sequential gross margin and impression obviously this quarter you know quite impressive.
Relative to the last several where we've seen this improving trend, but how should we think that revenue level. Aside I guess, how should we think about gross margin progression and international segment over the balance of the year.
Yeah. So so Catherine wants you to Forex and and then I'll take on.
I'll take what part of gross margin you don't want to take a hit.
Yeah sounds good yeah. So our international segment is largely consist of net.
Scale acquisition to the to the prior year comparative and any FX impact as it relates to its pretty minimal on.
On a comparative basis, so not not much uplift there and.
On to speak of from a gross margin standpoint, as we move throughout the year and we continue to transition.
On the subscription.
And placements in Europe, and I would expect you know and this quarter had a little less and that impact on the margin I'd expect it to have more of that impact.
But not to any level below what we had last year. So we're we're still kind of looking at that lower 30 per.
Per cent range and as our multi year outlook would indicate that we will transition through that over the next two years on bridging like GAAP Q I saw higher rates so that consolidated.
Okay. There was from I'd, just add one thing on that for context.
Because you have to go way back to February of a couple of years ago.
There is a 10 to 12 percentage point GAAP, starting point, primarily with the skill business and our North America business and we have made progress on bridging that gap.
And we do think it's a multiyear progress, but that's a big number.
So moving it a couple of hundred basis points.
And it continues to matter and and we think Theres a lot of meat on that bone and unfortunately is positive.
So we have made progress and I think as Catherine Zeta and kill switch because we have more success and placing more subscriptions with our products stack.
And then I think we'll continue to make that progress over a couple year period, but there's a there's a bit GAAP. There. So I think it's a tailwind.
Alright, thank you.
Youre welcome.
Next we'll go to Steven Mah with Piper Sandler.
Oh, great. Thanks for taking the questions and congrats on the quarter.
Thank you couldn't see good to hear from you and not too [laughter], yeah and.
So a quick question just digging a little bit more on on your comments, Kevin on where you're saying that one of the barriers to getting your pet to the vet on.
On the strength in North America was there any issues with the sort of the surge and surge and COVID-19 cases and in January of this year and I guess to put it on and it too.
But the question and rephrase it could you have done better and Q1 without the COVID-19 headwinds.
And you'll see a I don't think so.
And I keep trying to normalize it like what was going on last March.
So that so there was.
It's more difficult to install things like digital X Ray and like there's so many puts and takes.
It's really hard to get precise on that and and and then even when you are talking about and in January.
It's an odd country right and we think it's a monolithic thing, but apparently there is no COVID-19 and certain parts of the country and there's there's total shutdowns and other parts of the country. So it's just so hard.
To tease out the effects of those things, but I don't think even anecdotally, we got reports that things slowed down.
Pet health care seems to be a necessary thing and people seem to do it regardless of whether or not theres, a masked mandate and you're not allowed to congregate indoors.
Okay, No that makes sense alright, and then a follow up question on on gross margin I know element aim is launching this quarter.
Can you give us a sense for how the the aim launch could pressure gross margin given it's going to be mostly instrument revenues early on.
Oh and Kathryn.
Paul I think probably will swamp that but go ahead Catherine.
Well you know.
And that will have.
Hey.
Pressing impact, but at the level of consumable sales force will still has.
Pretty positive, especially in the U S from demonstrate.
Good margin expansion, but it does have a bit hasn't and earn.
And on impact on the margin when replacing it.
Okay. Great. That's helpful. And then my last question is more of a big picture. So you Kevin you talked about your five year plan. It seems like you're way ahead of schedule on that and also on the profitability goals and you talk about switching to all subs.
Could you talk about areas of the plan that you may want to have a stronger focus on or going forward or reallocate more more resources towards.
Yeah I think the first thing is just go faster and that team is probably heard me say that 100 times last six months like we're not going fast enough.
So some of the things that we have already targeted I think are the correct thing. So go faster and menu launch if you want to drive utilization.
On offer more tests on analyzers and argue sitting on counters and it's really simple.
And so that means you got to watch more menu, whether its a regulated menu, which takes a little bit of time or or its just assay development. So I think going faster and building out our menu.
Is definitely an area going faster on things like professional services. So we have cytology now with lacuna expanding that hiring more international.
Resources to serve multiple time zones.
And so we're going faster and professional services and I think we can expand professional services as well.
So so just and it's just going faster and then obviously our international.
And initiatives.
Well.
I think it's the things that we've already targeted and already highlighted its just making those things go go faster.
How I would look at it.
Okay, great. Thank you so much.
Youre welcome.
And next we'll go to Ben Hayner with a line.
Arthur.
Okay.
Hello can you hear me guys.
Hi, Ben.
Right.
And congrats on the like Q1, and thanks for taking the question and obviously a lot other ground's already been covered but just sit with in place and being a little bit more of a topic. These days and you guys have and the 4% price. That's the way it is built into your contracts.
And.
You know is the place and kind of gets head at those levels you have the ability to increase up 4% and then and you know how locked in and are you on.
And of the Cogs side or the <unk>.
And your Cogs are free.
Providing the.
The products and services.
Boy, that's a great question and <unk>.
Just had some really good advisers at some point many many many years ago, but our price protection for the customer.
But what is very good and it tends to result on a 4% annual price increase that's visible and wait and see.
But we also have the book.
On the clause in there that it's the greater and so if CPI actually wear to wake up and worry about the Jimmy Carter to land it.
At 12%, we would have the contractual ability to go and and match. The CPI. So I think we've got pretty good insurance protection there.
And regards to most of our supply contracts the vast majority of those are fixed and.
And they are not subject to those types of price increases where you can get a little bit of difficulty is transportation.
And and also obviously important export and that tax those kinds of things and more will bleed through your entire supply chain.
And that arent just fixed on on negotiated price. So it's a cost twice as much to move something on.
On a on a broker and airplanes and cold storage that will hit you and your cost of goods, but we think that's pretty manageable.
Uh huh.
Helpful and then.
And I really don't have a lot more I was just.
You know how much fun to have April and early may actually bad and I mean, it's just been like you know winning on scratch off what the ticket or it's just been like went into powerball, what's how would you characterize how much numbers and stuff.
And on how you're trying to look under the under the under the wrapping on the President and other Christmas tree, but.
I mean April feels like a light on that.
And its continuation.
And I think we've had a really good string of quarters last five or six I think the fourth quarter was quite good first quarter was quite good and I'm just signaling that we havent seen like big step ups and spikes and and huge advantages on year over year comps and things like that and you've seen those things yet. So April was good and may feels like it.
It's coming and on track so.
And as Kathryn said, we'll probably update you and maybe a little more precisely.
At the half year.
But in terms of the guide and things like that when when and $5 million means to per song.
We don't want quibbling over five and in terms of guidance so about precision matters.
And you are size and so we'll just update folks when we get to the half year is on our attention.
Okay, great well, thanks for taking my questions guys.
Yeah, Youre welcome who can talk on to you.
And as a final reminder, that star one for questions.
Hear from Jim Sidoti with Sidoti and company.
Yeah.
Glad to hear you're doing well Kevin.
And I totally on the.
Totally understand how you would want to update guidance, just with one quarter and.
But can.
Can you just give us he says and Q1.
Was there anything that was unusually strong.
With that.
Maybe distorted things a little bit or do you think it was a pretty normal quarter of Q1.
Kevin I would characterize it as real like that and there weren't big pull forwards and everything.
Grab something from Q2 or Q4 and had some bluebird come in we would have called it out so I really is.
Just health across all those metrics and then when you combine those things and then some operating leverage to capture it so a really good quarter and the fourth quarter was good too so it's not like that.
It's not like and out of the bluestone.
Right and.
And historically Q2 is always a little bit of and stepped up from Q1 and so there's really nothing in Q1 that would make you think that that's not going to happen again.
Yeah, and I don't I don't see any big variability on the calendar this year compared to what it's been the last several years, but again I just I.
On the cautious garage, that's like the crews and that member and it never not be afraid, it's a dangerous world out there so.
Things look pretty good.
Yeah, no I understand and I'm, not really trying to get you to.
Forecast the future I'm, just trying to make sure that there's nothing and the first quarter that was.
Would distort this year relative to other years.
And it doesn't sound like it was.
Yeah.
Okay and then the final thing from me you know now that you've completed the offer and what's a good number for share count and and.
And in Q2 and and for the rest of the year.
[noise], Catherine and you're on yeah that would mean.
[laughter], Yes, our army and our outstanding shares I think around pinpoint 4 million.
And from diluted or on the CR and I think we're pretty 98 for the quarter.
Okay.
So deluded should be higher.
Yeah sure.
Yeah and should be higher.
So it was a $10 8 billion.
Oh, no and yes.
Our outstanding pinpoint for for the year and for now is what I'm, saying, Oh, well not weighted right. So yeah.
Figure out sitting right now with pinpoint for got it.
Yep. Thank you.
Youre welcome.
And now I'd like to turn the call back over to Mr. Kevin Wilson for closing remarks, Sir.
Hey, Thank you and thanks to everybody who joined the call.
And we really really do appreciate it's nice to talk to a nice to talk to you. So just to recap we had a great a great first quarter, great start to the year.
We do think we'll continue to execute throughout 2021.
And we'll work really hard to finish the first.
First that strongly and update you further and.
And then finish out the second half of 2021 with some of these new products and the market. So it really should be as I said at the very beginning of the year.
I'm anticipating on pretty fun year, So I look forward to updating you next quarter and.
Until then.
Hmm.
And you're saying.
And be cautious and count your blessings. So on the last part yet and you got to you got to take your pet from the veterinarian. So we appreciate it when you do that too.
And everybody have a good day and.
And we'll talk to you soon.
Bye bye.
And that concludes today's conference call and thank you for joining you may now disconnect.
[music].
Okay.