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  "documentTitle": "Heska Corporation (HSKA)",
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  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2021-10-25 00:00:00",
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      "kind": "callout",
      "text": "Based on Wilson's comments, Element AIM is expected to contribute $24-$27 million in revenue in 2022. Given the history of delays and obfuscation, we are highly skeptical. We note that such revenue contribution represents 31% of LTM North America POC Instruments and Consumables revenue, which took a decade to achieve.",
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      "text": "Based on Wilson's comments, Element AIM is expected to contribute $24-$27 million in revenue in 2022. Given the history of delays and obfuscation, we are highly skeptical.",
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      "text": "revenue contribution: $24-$27 million",
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      "text": "Wilson said that Element AIM will account for over 10% of revenue in 2022. Depending on whether you reference LTM revenues or Street consensus, that implies Element AIM revenues of at least $24-$27 million. Given that current LTM North American POC Lab Instrument and Consumables account for $83 million, and that took over a decade to achieve, we are highly skeptical of this forecast, especially since it has yet to ship.",
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      "text": "Heska has repeatedly said that there is nothing in the world like the Element AIM and suggests that it is a truly revolutionary machine with customers pre-ordering. If that is true, then why will Element AIM gross margins be lower than the corporate average, which includes a lot of low-margin revenue from older products and contract manufacturing of vaccines and pharmaceuticals? Don't companies with innovative products usually see pricing power? Apparently, this does not exist in Heska's case.",
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      "text": "\"The timing and acceptance of Element AIM is a key assumption in our model...I could tell you that it's about less than 5% of our total revenue projected for 2021. As we move into a global launch in '22 and '23, we're still targeting about a 10% annual installed base, but on our global customer profile, and obviously, with that would come a significant contribution to revenue in those two years, exceeding 10% and exceeding 15% just based on those targeted percentages.\" — Wilson (Investor Day, November 2020)",
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      "kind": "source-note",
      "text": "Source: Bloomberg Transcript",
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      "text": "Investor Day November 2020: The timing and acceptance of Element AIM is a key assumption in our model...I could tell you that it's about less than 5% of our total revenue projected for 2021. As we move into a global launch in '22 and '23, we're still targeting about a 10% annual installed base, but on our global customer profile, and obviously, with that would come a significant contribution to revenue in those two years, exceeding 10% and exceeding 15% just based on those targeted percentages.",
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      "text": "Investor Day November 2020: Increasing consumable sales, which are higher margin, will be offset by international reset subscription program transition and the continuation of product rationalization and higher instrument revenue recognition relating to Element AIM in North America.",
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      "kind": "title",
      "text": "We Believe Wilson's Comments About Element AIM's Future Financial Contribution Are Non-Sensical",
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