IDEXX Laboratories Announces Fourth Quarter Results
WESTBROOK, Maine, Jan. 25 /PRNewswire-FirstCall/ -- IDEXX Laboratories, Inc. (Nasdaq: IDXX), today reported that revenue for the fourth quarter of 2007 increased 27% to $245.0 million from $192.2 million for the fourth quarter of 2006. Earnings per diluted share ("EPS") for the quarter ended December 31, 2007 were $0.40, compared to $0.38, for the same period in the prior year. Non-GAAP adjusted diluted EPS for the fourth quarter grew 29% to $0.40 from $0.31 for the fourth quarter of 2006.
"We completed another strong quarter for our companion animal business, with overall organic growth at 17% and each individual business growing at a double-digit rate, which I think speaks to the fundamental strength of our market and our business model," said Jonathan W. Ayers, Chairman and CEO. "Of particular note, instruments had another strong placement quarter, continuing the strong trend in placement growth that we saw throughout 2007. We expect the momentum in our IDEXX VetLab instrumentation business to continue in 2008 with the launch of our two new instruments, Catalyst Dx(TM) and SNAPShot Dx(TM), both of which we expect to begin shipping in March."
Companion Animal Group ("CAG") revenue for the fourth quarter of 2007 increased 26% to $197.5 million from $157.0 million for the fourth quarter of 2006. Acquisitions of reference laboratories contributed 5% to growth and changes in foreign currency exchange rates contributed an additional 4%. Growth for the quarter adjusted for acquisitions and foreign currency exchange rates was 17%.
Water segment revenue for the fourth quarter of 2007 increased 17% to $17.3 million from $14.7 million for the fourth quarter of 2006 due primarily to higher sales volume, partly offset by lower average unit sales prices due to both higher relative sales in geographies where products are sold at lower average unit sales prices and greater price competition in certain geographies. Higher sales volumes resulted in part from our commencement in September 2007 of distribution of certain water testing kits manufactured by Invitrogen Corporation, which contributed 6% to revenue growth. Compared to the same period of 2006, changes in foreign currency exchange rates contributed 5% to Water revenue growth.
Production Animal Segment ("PAS") revenue for the fourth quarter of 2007 increased 34% to $22.2 million from $16.6 million for the fourth quarter of 2006 due primarily to higher livestock diagnostics sales volume, including sales attributable to Institut Pourquier, which we acquired in March 2007. Sales of Pourquier products contributed 16% to PAS revenue growth. The favorable impact of higher sales volume was partly offset by lower average unit sales prices for products that test for transmissible spongiform encephalopathies ("TSE") due to greater price competition. Compared to the same period of 2006, changes in foreign currency exchange rates contributed 11% to PAS revenue growth.
The accompanying financial tables provide more information concerning our revenue and other operating results for the three and twelve months ended December 31, 2007, as well as a reconciliation of non-GAAP adjusted diluted EPS to earnings per share.
Full-Year Results
Revenue for the year ended December 31, 2007 increased 25% to $922.6 million from $739.1 million for the year ended December 31, 2006. Revenue for the year ended December 31, 2007, adjusted for the impacts of acquisitions and foreign currency exchange rates, increased 14%.
Earnings per diluted share for the year ended December 31, 2007 increased 3% to $1.46 from $1.42 for the year ended December 31, 2006. Non-GAAP adjusted diluted EPS for the year ended December 31, 2007 grew 19% to $1.58 from $1.33 for the year ended December 31, 2006.
Additional Operating Results for the Fourth Quarter
Gross profit for the fourth quarter of 2007 increased $26.0 million, or 27%, to $122.2 million from $96.3 million for the fourth quarter of 2006. As a percentage of total revenue, gross profit was constant at 50%. Year-over-year, the gross profit percentage was unfavorably impacted by greater relative sales of lower margin products and services including laboratory and consulting services. Decreases in the gross margin percentage were offset by the favorable net impact of foreign currency exchange rates and higher average selling prices, resulting in part from higher relative sales of combination rapid assay products such as the SNAP(R)4Dx(R), which was launched in the U.S. in September 2006.
Research and development ("R&D") expense for the fourth quarter of 2007 was $16.8 million, or 6.8% of revenue, compared to $14.0 million, or 7.3% of revenue, for the fourth quarter of 2006. R&D expense grew primarily as a result of increased product development spending related to IDEXX VetLab(R) instrumentation and to product development activities across all product and service categories.
Selling, general and administrative ("SG&A") expense for the fourth quarter of 2007 was $68.7 million, or 28% of revenue, compared to $52.8 million, or 27% of revenue, for the fourth quarter of 2006. Year- over-year increased SG&A expense was due primarily to expanded worldwide sales, marketing and customer support resources; higher spending on information technology, facilities and other general support functions; and incremental activities associated with recently acquired businesses.
Outlook
The Company offers the following revised guidance for the full year of 2008:
-- Revenue is expected to be $1.05 billion to $1.07 billion, which
represents revenue growth of 14% to 16%.
-- Diluted earnings per share are expected to be $1.83 to $1.87, which
represents EPS growth of 25% to 28%. Excluding the impact in 2007 of
acquisition-related purchase accounting and acquisition integration
costs and the write-down of certain pharmaceutical assets, non-GAAP
adjusted diluted EPS are projected to grow 16% to 18%.
Conference Call and Webcast Information
IDEXX Laboratories will be hosting a conference call today at 9:00 a.m. (eastern) to discuss its fourth quarter results. To participate in the conference call, dial 719-325-4782 or 877-723-9502 and reference confirmation code 3405969. An audio replay will be available through February 1, 2008 by dialing 719-457-0820 and referencing replay code 3405969.
The call will also be available via live or archived Webcast on the IDEXX Laboratories' web site at www.idexx.com.
About IDEXX Laboratories
IDEXX Laboratories, Inc. is a leader in companion animal health, serving practicing veterinarians around the world with innovative, technology-based offerings, including a broad range of diagnostic products and services, practice management systems and pharmaceuticals. IDEXX products enhance the ability of veterinarians to provide advanced medical care and to build more economically successful practices. IDEXX is also a worldwide leader in providing diagnostic tests and information for the production animal industry and tests for the quality and safety of water and milk. Headquartered in Maine, IDEXX Laboratories employs more than 4,500 people and offers products to customers in over 100 countries.
Note Regarding Forward-Looking Statements
This press release contains statements about the Company's business prospects and estimates of the Company's financial results for future periods that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management's expectations of future events as of the date of this press release, and the Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments. Actual results could differ materially from management's expectations. Factors that could cause or contribute to such differences include the following: the Company's ability to develop, manufacture, introduce and market new products and enhancements to existing products; the effectiveness of the Company's sales and marketing activities; the Company's ability to identify acquisition opportunities, complete acquisitions and integrate acquired businesses; the impact of competition and technological change on the markets for the Company's products; the effect of government regulation on the Company's business, including government decisions about whether and when to approve the Company's products and decisions regarding labeling, manufacturing and marketing products; the impact of distributor purchasing decisions on sales of the Company's products that are sold through distribution; changes or trends in veterinary medicine that affect the rate of use of the Company's products and services by veterinarians; the Company's ability to obtain patent and other intellectual property protection for its products, successfully enforce its intellectual property rights and defend itself against third party claims against the Company; disruptions, shortages or pricing changes that affect the Company's purchases of products and materials from third parties, including from sole source suppliers; the effects of government regulatory decisions, customer demand, pricing and other factors on the realizability of the Company's inventories; the Company's ability to manufacture complex biologic products; the effects of operations outside the U.S., including from currency fluctuations, different regulatory, political and economic conditions, and different market conditions; and the loss of key employees. A further description of these and other factors can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2006, and quarterly report on Form 10-Q for the quarter ended September 30, 2007, in the section captioned "Risk Factors."
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Operations
Amounts in thousands except per share data (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
Revenue: Revenue $ 244,969 $ 192,209 $ 922,555 $739,117
Expenses and
Income: Cost of revenue 122,725 95,940 459,033 359,588
Gross profit 122,244 96,269 463,522 379,529
Sales and
marketing 41,796 31,214 151,882 115,882
General and
administrative 26,937 21,634 108,119 82,097
Research and
development 16,769 13,951 67,338 53,617
Income from
operations 36,742 29,470 136,183 127,933
Interest income
(expense), net (19) 845 (1,340) 2,817
Income before
provision for
income taxes and
partner's interest 36,723 30,315 134,843 130,750
Provision for
income taxes 11,195 5,643 40,829 37,224
Partner's share of
consolidated loss - - - (152)
Net Income: Net income $25,528 $24,672 $94,014 $93,678
Earnings per share:
Basic $0.42 $0.39 $1.53 $ 1.49
Earnings per share:
Diluted $0.40 $0.38 $1.46 $ 1.42
Shares outstanding:
Basic 61,186 62,523 61,560 62,866
Shares outstanding:
Diluted 64,156 65,472 64,455 65,907
Historical share and per share data has been retroactively restated to
reflect the additional shares of common stock that were distributed on
November 26, 2007 as a result of the two-for-one split of our outstanding
common stock.
IDEXX Laboratories, Inc. and Subsidiaries
Key Operating Information (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
Key Operating
Ratios (as a
percentage of
revenue):
Gross profit 49.9% 50.1% 50.2% 51.4%
Sales, marketing,
general and
administrative expense 28.1% 27.5% 28.1% 26.8%
Research and development
expense 6.8% 7.3% 7.3% 7.3%
Income from operations 15.0% 15.3% 14.8% 17.3%
International Revenue:
International revenue
(in thousands) $106,251 $70,590 $370,422 $260,945
International revenue as
percentage of total
revenue 43.4% 36.7% 40.2% 35.3%
IDEXX Laboratories, Inc. and Subsidiaries
Non-GAAP Financial Measures
Amounts in thousands except per share data (Unaudited)
Three Months Ended
Gross Profit Income from
Gross Profit as a % of Revenue Operations
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec.31,
2007 2006 2007 2006 2007 2006
GAAP measurement $122,244 $ 96,269 49.9% 50.1% $36,742 $29,470
Acquisition-related
purchase accounting,
acquisition
integration costs
& investment
impairment(1) - 82 - - 101 467
Discrete income
tax benefits (2) - - - - - -
Non-GAAP comparative
measurements (3) $122,244 $ 96,351 49.9% 50.1% $36,843 $29,937
Three Months Ended
Net Earnings per Share
Income Diluted
Dec. 31, Dec. 31, Dec. 31, Dec.31,
2007 2006 2007 2006
GAAP measurement $ 25,528 $ 24,672 $ 0.40 $ 0.38
Acquisition-related
purchase accounting,
acquisition
integration costs
& investment
impairment(1) 65 311 - -
Discrete income
tax benefits (2) - (4,830) - (0.07)
Non-GAAP comparative
measurements (3) $ 25,593 $ 20,153 $ 0.40 $ 0.31
Management believes adjusted diluted EPS is a useful non-GAAP financial measure to evaluate the results of ongoing operations, excluding significant specified events, period over period, and therefore believes that investors may find this information useful in addition to the GAAP results.
We use these supplemental non-GAAP financial measures to evaluate the Company's comparative financial performance. The specified items that are excluded in these non-GAAP measures are actual charges that impact net income and cash flows, however, we believe that it is useful to evaluate our core business performance period over period excluding these specified items, in addition to relying upon GAAP financial measures.
(1) We believe that the change from period to period due to specific acquisition-related purchase accounting and integration costs is not representative of ongoing operations and is not indicative of future performance. Specific acquisition-related discrete costs do not include amortization expense related to acquired intangible assets. We applied the statutory income tax rates of the applicable tax jurisdictions to calculate the after-tax impact of these discrete items. Discrete items for 2006 also include a write-down of an equity investment in one of our technology licensors. We believe the investment write-down is infrequent and is not representative of ongoing operations; IDEXX owns no other equity investments.
(2) We believe that certain significant discrete income tax items create impacts on financial measures that are not indicative of future performance because the items are not likely to recur within a reasonable period. For 2006, the separately identified discrete income tax benefit was due to a reduction in previously accrued taxes in connection with the resolution of an Internal Revenue Service income tax audit for 2003 and 2004 in advance of the expiration of the statues of limitations.
(3) The sum of the individual items may not equal the non-GAAP measurement due to rounding of the individual items in this presentation.
IDEXX Laboratories, Inc. and Subsidiaries
Non-GAAP Financial Measures
Amounts in thousands except per share data (Unaudited)
Twelve Months Ended
Gross Profit Income from
Gross Profit as a % of Revenue Operations
Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec.31,
2007 2006 2007 2006 2007 2006
GAAP measurement $463,522 $379,529 50.2% 51.4% $ 136,183 $127,933
Specified items:
Write-downs of
certain
pharmaceutical
assets(1) 10,138 - 1.1% - 10,138 -
Acquisition-related
purchase accounting,
acquisition
integration costs
& investment
impairment(2) 1,979 82 0.3% 0.1% 2,482 467
Discrete income tax
benefits(3) - - - - - -
Non-GAAP comparative
measurements (4) $ 475,639 $ 379,611 51.6% 51.5% $148,803 $128,400
Twelve Months Ended
Net Earnings per Share
Income Diluted
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2007 2006 2007 2006
GAAP measurement $ 94,014 $ 93,678 $ 1.46 $ 1.42
Specified items:
Write-downs of
certain
pharmaceutical
assets(1) 6,392 - 0.10 -
Acquisition-related
purchase accounting,
acquisition
integration costs
& investment
impairment(2) 1,588 311 0.02 -
Discrete income tax
benefits(3) - (6,111) - (0.09)
Non-GAAP comparative
measurements (4) $ 101,994 $ 87,878 $ 1.58 $ 1.33
Management believes adjusted diluted EPS is a useful non-GAAP financial measure to evaluate the results of ongoing operations, excluding significant specified events, period over period, and therefore believes that investors may find this information useful in addition to the GAAP results.
We use these supplemental non-GAAP financial measures to evaluate the Company's comparative financial performance. The specified items that are excluded in these non-GAAP measures are actual charges that impact net income and cash flows, however, we believe that it is useful to evaluate our core business performance period over period excluding these specified items, in addition to relying upon GAAP financial measures.
(1) We believe that the write-down of certain pharmaceutical assets is not indicative of future performance because significant costs of a similar nature are not likely to recur within a reasonable period. We believe that we do not have other large inventory investments where the relationship of inventory to current sales volumes creates significant exposure to valuation risk. During the second quarter, we recognized a $9.1 million write-down of raw materials inventory and a $1.0 million write-off of a prepaid royalty license associated with Navigator(R) paste, a nitazoxanide product for the treatment of equine protozoal myeloencephalitis. We have written down these assets because product sales have been significantly lower than projected and we received notice from our third-party contract manufacturer of finished goods that the manufacturer will discontinue manufacturing the product in 2009. Due in part to an estimated production volume which is low, we believe that we will not be able to find an economically feasible replacement manufacturer and therefore that we will not be able to obtain the product after the termination of the existing manufacturing arrangement. We applied the statutory income tax rate of the applicable tax jurisdiction to calculate the after-tax impact of this discrete item.
(2) We believe that the change from period to period due to specific acquisition-related purchase accounting and integration costs is not representative of ongoing operations and is not indicative of future performance. Specific acquisition-related discrete costs do not include amortization expense related to acquired intangible assets. We applied the statutory income tax rates of the applicable tax jurisdictions to calculate the after-tax impact of these discrete items. Discrete items for 2006 include a write-down of an equity investment in one of our technology licensors. We believe the investment write-down is infrequent and is not representative of ongoing operations; IDEXX owns no other equity investments.
(3) We believe that certain significant discrete income tax items create impacts on financial measures that are not indicative of future performance because the items are not likely to recur within a reasonable period. For 2006, the separately identified discrete income tax benefits were composed of a tax benefit of $0.06 per diluted share due to a reduction of previously accrued taxes in connection with the resolution of an Internal Revenue Service income tax audit for 2003 and 2004 in advance of the expiration of the statutes of limitations and a tax benefit of $0.03 per diluted share due to the release of a valuation allowance on international deferred tax assets as a result of obtaining certain multi-year tax incentives and the release of a valuation allowance on international deferred tax assets as a result of a subsidiary demonstrating consistent sustained profitability.
(4) The sum of the individual items may not equal the non-GAAP measurement due to rounding of the individual items in this presentation.
IDEXX Laboratories, Inc. and Subsidiaries
Segment Information
Amounts in thousands (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
Revenue: Companion
Animal Group $ 197,524 $ 156,995 $ 752,463 $ 606,319
Water 17,294 14,734 66,235 58,466
Production
Animal Segment 22,214 16,630 75,085 58,940
Other 7,937 3,850 28,772 15,392
Total $ 244,969 $ 192,209 $ 922,555 $ 739,117
Gross
Profit: Companion
Animal Group $ 93,912 $ 74,524 $ 363,240 $ 297,999
Water 10,696 9,588 41,656 38,441
Production
Animal Segment 14,051 11,020 46,728 38,654
Other 3,451 1,587 11,377 6,106
Unallocated 134 (450) 521 (1,671)
Total $ 122,244 $ 96,269 $ 463,522 $ 379,529
Income from
Operations: Companion
Animal
Group $ 26,070 $ 22,219 $ 101,363 $ 100,760
Water 6,837 6,280 26,847 25,762
Production
Animal
Segment 5,170 4,893 15,456 16,172
Other 412 566 (75) 1,852
Unallocated (1,747) (4,488) (7,408) (16,613)
Total $ 36,742 $ 29,470 $ 136,183 $ 127,933
Gross Profit
(as a percentage
of revenue): Companion
Animal
Group 47.5% 47.5% 48.3% 49.1%
Water 61.8% 65.1% 62.9% 65.7%
Production
Animal
Segment 63.3% 66.3% 62.2% 65.6%
Other 43.5% 41.2% 39.5% 39.7%
Income from
Operations
(as a percentage
of revenue): Companion
Animal
Group 13.2% 14.2% 13.5% 16.6%
Water 39.5% 42.6% 40.5% 44.1%
Production
Animal
Segment 23.3% 29.4% 20.6% 27.4%
Other 5.2% 14.7% (0.3)% 12.0%
IDEXX Laboratories, Inc. and Subsidiaries
Revenues by Product and Service Categories
Amounts in thousands (Unaudited)
Three Months Ended
Percentage
Change Net
Percen- Percen- of
tage tage Acquis-
Change Change itions
Percen- from from and
Dec. 31, Dec. 31, Dollar tage Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect(3)
CAG $197,524 $156,995 $40,529 25.8% 3.9% 5.1% 16.8%
Water 17,294 14,734 2,560 17.4% 5.3% - 12.1%
PAS 22,214 16,630 5,584 33.6% 10.9% 16.0% 6.7%
Other 7,937 3,850 4,087 106.2% 5.6% 97.7% 2.9%
Total $244,969 $192,209 $52,760 27.4% 4.6% 7.5% 15.3%
Three Months Ended
Percentage
Change Net
Percen- Percen- of
tage tage Acquis-
Change Change itions
Percen- from from and
Dec. 31, Dec. 31, Dollar tage Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect(3)
Instruments
and
consumables $79,382 $64,986 $14,396 22.2% 4.9% - 17.3%
Rapid assay
products 31,036 25,724 5,312 20.6% 1.7% - 18.9%
Laboratory and
consulting
services 63,843 47,827 16,016 33.5% 4.5% 16.6% 12.4%
Practice
information
systems and
digital
radiography 16,966 13,663 3,303 24.2% 3.2% - 21.0%
Pharmaceutical
products 6,297 4,795 1,502 31.3% - - 31.3%
Net CAG
revenue $197,524 $156,995 $40,529 25.8% 3.9% 5.1% 16.8%
(1) Represents the percentage change in revenue attributed to the effect of changes in currency rates from the three months ended December 31, 2006 to the three months ended December 31, 2007.
(2) Represents the percentage change in revenue attributed to incremental revenues during the three months ended December 31, 2007 compared to the three months ended December 31, 2006 from businesses acquired since October 1, 2006.
(3) Organic growth
IDEXX Laboratories, Inc. and Subsidiaries
Revenues by Product and Service Categories
Amounts in thousands (Unaudited)
Twelve Months Ended
Percentage
Change Net
Percen- Percen- of
tage tage Acquis-
Change Change itions
Percen- from from and
Dec. 31, Dec. 31, Dollar tage Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect(3)
CAG $752,463 $606,319 $146,144 24.1% 2.7% 6.0% 15.4%
Water 66,235 58,466 7,769 13.3% 3.5% - 9.8%
PAS 75,085 58,940 16,145 27.4% 7.4% 12.4% 7.6%
Other 28,772 15,392 13,380 86.9% 3.4% 82.7% 0.8%
Total $922,555 $739,117 $183,438 24.8% 3.2% 7.6% 14.0%
Twelve Months Ended
Percentage
Change Net
Percent- Percent- of
age age Acquis-
Change Change itions
Percent- from from and
Dec. 31, Dec. 31, Dollar age Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect(3)
Instruments
and
consum-
ables $289,271 $242,312 $46,959 19.4% 3.5% - 15.9%
Rapid
assay
prod-
ucts 132,500 114,536 17,964 15.7% 0.8% 1.5% 13.4%
Labor-
atory
and con-
sulting
ser-
vices 255,193 187,114 68,079 36.4% 3.4% 18.4% 14.6%
Practice
inform-
ation
systems
and
digital
radio-
graphy 53,385 44,427 8,958 20.2% 1.5% - 18.7%
Pharma-
ceutical
products 22,114 17,930 4,184 23.3% - - 23.3%
Net CAG
revenue $752,463 $606,319 $146,144 24.1% 2.7% 6.0% 15.4%
(1) Represents the percentage change in revenue attributed to the effect of changes in currency rates from the twelve months ended December 31, 2006 to the twelve months ended December 31, 2007.
(2) Represents the percentage change in revenue attributed to incremental revenues during the twelve months ended December 31, 2007 compared to the twelve months ended December 31, 2006 from businesses acquired subsequent to January 1, 2006.
(3) Organic growth
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Balance Sheet
Amounts in thousands (Unaudited)
December 31, December 31,
2007 2006
Assets: Current Assets:
Cash and cash
equivalents $60,360 $61,666
Short-term investments - 35,000
Accounts receivable, net 108,384 81,389
Inventories 98,804 95,996
Other current assets 38,115 28,212
Total current assets 305,663 302,263
Property and equipment, at cost 255,176 191,538
Less: accumulated depreciation 113,324 91,910
Property and equipment, net 141,852 99,628
Other long-term assets, net 254,664 157,669
Total assets $702,179 $559,560
Liabilities
and
Stock-
holders'
Equity: Current Liabilities:
Accounts payable $32,510 $24,374
Accrued expenses 107,248 90,715
Debt 72,956 678
Deferred revenue 10,678 8,976
Total current liabilities 223,392 124,743
Long-term debt, net of current portion 5,727 6,447
Other long-term liabilities 34,737 18,509
Total long-term liabilities 40,464 24,956
Stockholders' Equity:
Common stock 9,450 9,324
Additional paid-in capital 514,773 475,331
Deferred stock units 2,201 1,852
Retained earnings 585,862 490,614
Treasury stock, at cost (696,668)(577,826)
Accumulated other comprehensive income 22,705 10,566
Total stockholders' equity 438,323 409,861
Total liabilities and stockholders' equity $702,179 $559,560
IDEXX Laboratories, Inc. and Subsidiaries
Key Balance Sheet Information
(Unaudited)
December 31, December 31,
2007 2006
Key
Balance Total cash, cash equivalents and
Sheet investments (in thousands) $60,360 $96,666
Inform- Days sales outstanding 39 38
ation: Inventory turns 2.3 1.9
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Amounts in thousands (Unaudited)
Twelve Months
Ended
December 31, December 31,
2007 2006
Operating: Cash Flows from Operating Activities:
Net income $94,014 $93,678
Non-cash charges 42,121 26,384
Changes in current assets and
liabilities, net of acquisitions
and disposals (555) (10,236)
Net cash provided by operating
activities $135,580 $109,826
Investing: Cash Flows from Investing Activities:
Decrease in investments, net 35,000 30,655
Purchase of property and equipment (65,138) (32,331)
Purchase of land and buildings - (12,084)
Acquisition of businesses and
intangible assets (89,884) (25,220)
Acquisition of equipment leased
to customers (1,106) (1,720)
Net cash used by investing activities $(121,128) $(40,700)
Financing: Cash Flows from Financing Activities:
Borrowings (payments) of notes payable,
net 69,992 (877)
Purchase of treasury stock (118,843) (105,711)
Proceeds from the exercise of stock
options 20,941 20,922
Tax benefit from exercise of stock
options 9,267 9,407
Net cash used by financing activities $(18,643) $(76,259)
Net effect of exchange rate changes 2,885 1,648
Net decrease in cash and cash
equivalents (1,306) (5,485)
Cash and cash equivalents, beginning
of period 61,666 67,151
Cash and cash equivalents, end of
period $60,360 $61,666
IDEXX Laboratories, Inc. and Subsidiaries
Free Cash Flow
Amounts in thousands (Unaudited)
Twelve Months
Ended
December 31, December 31,
2007 2006
Free Cash
Flow: Net cash provided by operating
activities $135,580 $109,826
Financing cash flows attributable to tax
benefits from exercise of stock options 9,267 9,407
Purchase of fixed assets (65,138) (44,415)
Acquisition of equipment leased
to customers (1,106) (1,720)
Free cash flow $78,603 $73,098
Free cash flow indicates the cash generated from operations and
tax benefits attributable to stock option exercises, reduced by
investments in fixed assets. We feel free cash flow is a useful
measure because it indicates the cash the operations of the
business are generating after appropriate reinvestment for
recurring investments in fixed assets that are required to operate
the business. We believe this is a common financial measure useful
to further evaluate the results of operations.
IDEXX Laboratories, Inc. and Subsidiaries
Common Stock Repurchases (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
Share repurchases
during the period 318,046 285,600 2,577,006 2,675,400
Average price paid
per share $60.20 $41.59 $45.94 $39.51
Shares remaining
under repurchase
authorization as of
December 31, 2007 2,852,254
IDEXX Laboratories, Inc. and Subsidiaries
Earnings per Share Adjusted for Stock Split (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2007 2006 2007 2006
Basic
As reported $0.42 $0.79 $1.53 $2.98
Adjusted for stock split $0.42 $0.39 $1.53 $1.49
Diluted
As reported $0.40 $0.75 $1.46 $2.84
Adjusted for stock split $0.40 $0.38 $1.46 $1.42
Contact: Merilee Raines, Chief Financial Officer, (207) 556-8155
SOURCE IDEXX Laboratories, Inc.
Released January 25, 2008