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VCA Antech's CEO Discusses Q1 2012 Results - Earnings Call Transcript

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So in addition to improvement in growth rates, we also saw -- our margins were up. Laboratory profit margins were up 110 basis points, and the Hospital same-store gross profit margins were up 10 basis points. Canada, which we acquired on February 1, is doing great for the first 2 months of the quarter. They're performing -- for the 2 months in the quarter, they're performing ahead of our expectation. We're very, very excited to be up in Canada, and have our entire team as part of our management team.

Our core business, as I said, Laboratory and Hospital businesses are doing quite well, but Vetstreet losses had a slightly negative impact on our results for the quarter. The increase in operating income in the Lab and Hospital segments of $7.5 million was offset by losses at Vetstreet and about a $5.2 million increase in our corporate SG&A costs due primarily to a $2.7 million increase in share-based comp, and about $880,000 of transaction costs related to AVC and ThinkPets acquisitions in the first quarter.

Antech Diagnostics' total net revenue increased 6.5% to $84.7 million due to internal growth and that 1 extra business day. Operating income increased 110 basis points at 38.9%, which I think is the first quarter we've seen positive margin in many quarters. It was nice to see that we are -- the operating leverage is kicking in. The components of the growth, number of requisitions at 4.9% to $3,202,000, and average requisition at 1.5% to $26.46 since for that 6.5% growth. Total requisitions for the quarter, $3,000,202. No change in lab account. We ended the quarter with 53 laboratories. So I think we'll have a trip to quarter. We continue to see improving internal growth rates on a 6.5% internal growth, operating margin, up 110 basis points. So we are seeing the operating leverage that we believe inherent of what is a very high-fixed cost business. A great quarter for the Lab.

Read the rest of this transcript for free on seekingalpha.com

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