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VCA Antech Q4 Profit Meets View, Revenues Top; Guides 2013 EPS In Line

Animal healthcare company VCA Antech, Inc. (WOOF) reported Thursday a loss for the fourth quarter compared to a profit last year, hurt by a significant goodwill impairment charge. Stripping down the charge, adjusted earnings per share for the quarter matched analysts' expectations, while quarterly revenues topped their estimates by a whisker. The company also provided earnings and revenue guidance for the full-year 2013.

"We are pleased that we are experiencing improving revenue growth in both our core Animal Hospital and Laboratory segments. We are also encouraged that we were able to increase our same-store gross profit margins in each of those segments," Chairman and CEO Bob Antin said in a statement.

The Los Angeles, California-based company reported a net loss of $58.05 million or $0.66 per share for the fourth quarter, wider than $3.22 million or $0.04 per share in the prior-year quarter.

The results for the latest quarter includes a non-cash goodwill impairment charge of $79.2 million net of tax or $0.90 per share, primarily related to the write-down of goodwill and other long-lived assets in the Vetstreet business.

Excluding items, adjusted net income for the quarter was $21.17 million or $0.24 per share, compared to $18.10 million or $0.21 per share in the year-ago quarter.

On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.24 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter rose 13.3 percent to $418.19 million from $369.0 million in the same quarter last year, and topped nine Wall Street analysts' consensus estimate of $416.78 million by a whisker.

Animal Hospital revenue for the quarter quarter grew 15.6 percent to $330.07 million, driven by acquisitions made by the company in the past twelve months and same-store revenue growth of 1.6 percent. During the quarter, the company acquired 11 independent animal hospitals which had historical combined annual revenue of $26.8 million.

Laboratory revenue rose 3.0 percent to $75.17 million, driven by both an increase in the number of requisitions and the average revenue per requisition.

Gross profit for the quarter increased 14.1 percent to $81.8 million, while gross margin contracted 40 basis points to 12.1 percent, due to lower margins for acquired Animal Hospitals.

For fiscal 2012, the company reported net income of $45.55 million or $0.51 per share, lower than $95.41 million or $1.09 per share in the prior year. Excluding items, adjusted earnings per share was $1.36, compared to last year's $1.35. Revenue increased 14.4 percent to $1.7 billion from last year.

Street was looking for full-year 2012 earnings of $1.36 per share, on annual revenues of $1.70 billion.

Looking ahead to fiscal 2013, VCA Antech currently expects earnings in a range of $1.45 per share to $1.55 per share, on projected revenues between $1.825 billion and $1.855 billion. Analysts expect the company to report full-year 2013 earnings of $1.50 per share on revenues of $1.82 billion.

"We are seeing steady improvement and growth in the veterinary market which bolsters our optimism for our overall growth prospects," Antin added.

WOOF closed Thursday's regular trading session at $21.85, down $0.24 or 1.11% on a volume of 0.94 million shares. However, the stock lost gained $0.50 or 2.29% in after-hours trading.

by RTTNews Staff Writer

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