IDEXX Laboratories Announces Third Quarter Results and Two-for-One Stock Split
WESTBROOK, Maine, Oct. 26 /PRNewswire-FirstCall/ -- IDEXX Laboratories, Inc. (Nasdaq: IDXX), today reported that revenue for the third quarter of 2007 increased 22% to $229.4 million from $187.4 million for the third quarter of 2006. Earnings per diluted share ("EPS") for the quarter ended September 30, 2007 were $0.81, compared to $0.76 for the same period in the prior year.
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"In the third quarter we continued our sales momentum with strong revenue growth in the Companion Animal Group," said Jonathan Ayers, Chairman and CEO. "Instrument sales and total instrument placements achieved record levels, which bodes well for the acceleration of instrument consumables sales in future periods. Our rapid assay and laboratory services lines of business also continued their revenue growth momentum in the third quarter, while digital radiography and computer systems logged double digit revenue growth. In this release we are providing initial revenue and earnings guidance for 2008, a year in which we will benefit from the launch of several new products, including three new instruments that will augment the IDEXX VetLab(R) suite of in-house analyzers."
Companion Animal Group ("CAG") revenue for the third quarter of 2007 increased 22% to $187.5 million from $153.1 million for the third quarter of 2006 due primarily to higher sales in all CAG product and service categories, with the largest growth in revenue dollars from laboratory and consulting services and from instruments and consumables products. Incremental sales from acquired businesses contributed 6% to revenue growth.
Water segment revenue for the third quarter of 2007 increased 5% to $17.4 million from $16.6 million for the third quarter of 2006 due primarily to higher worldwide 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.
Production Animal Segment ("PAS") revenue for the third quarter of 2007 increased 25% to $17.4 million from $13.9 million for the third quarter of 2006 due primarily to higher livestock diagnostics sales volume, including sales attributable to Institut Pourquier, which we acquired in March 2007. 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.
The accompanying financial tables provide more information concerning our revenue and other operating results for the three and nine months ended September 30, 2007.
Year-to-Date Results
Year-to-date revenue increased 24% to $677.6 million from $546.9 million for the same period in 2006. Revenue for the nine months ended September 30, 2007, adjusted for the impacts of acquisitions and foreign currency exchange rates, increased 14%.
Year-to-date earnings per diluted share increased 1% to $2.12 from $2.09 for the same period in 2006. Non-GAAP adjusted diluted EPS for the nine months ended September 30, 2007 grew 16% to $2.37 from $2.05 for the same period in 2006. Non-GAAP adjusted diluted EPS for the nine months ended September 30, 2007 excludes the impact of acquisition-related purchase accounting and integration costs and the write-down of certain pharmaceutical assets in the second quarter. Non-GAAP adjusted diluted EPS for the nine months ended September 30, 2006 excludes the income tax benefits from certain discrete tax events. The accompanying financial table provides additional information and reconciles reported earnings per diluted share to these non-GAAP measures. Management believes adjusted diluted EPS is a useful non-GAAP financial measure to evaluate the results of ongoing operations, excluding significant specified items, period over period, and therefore believes that investors may find this information useful in addition to the GAAP results.
Additional Operating Results for the Third Quarter
Gross profit for the third quarter of 2007 increased $20.3 million, or 21%, to $118.5 million from $98.2 million for the third quarter of 2006. As a percentage of total revenue, gross profit was constant at 52%. The gross profit percentage was unfavorably impacted by greater relative sales of lower margin products and services such as laboratory and consulting services. Decreases in the gross margin percentage were offset by 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 third quarter of 2007 was $17.3 million, or 7.5% of revenue, compared to $13.7 million, or 7.3% of revenue, for the third 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 third quarter of 2007 was $65.1 million, or 28% of revenue, compared to $50.0 million, or 27% of revenue, for the third quarter of 2006. Increased SG&A expense was due primarily to higher personnel-related costs due, in part, to expanded worldwide sales, marketing and customer service headcount; higher spending on information technology, facilities and other general support functions; and incremental activities associated with recently acquired businesses.
IDEXX Laboratories Announces Two-for-One Stock Split
The Company also announced today that its Board of Directors approved a two-for-one split of its outstanding common stock. The stock split will be effected in the form of a 100% common stock dividend. Stockholders of record as of the close of business on November 5, 2007 will be issued one additional share for each share of common stock held on such date. The additional shares of common stock will be distributed on or about November 26, 2007. It is anticipated that the Company's common stock will begin trading on a post-split basis on the business day following the distribution date. The stock split will double the number of outstanding common shares to approximately 61 million based on the number of shares outstanding as of October 22, 2007.
Outlook
The Company offers the following revised guidance for the full year of 2007:
-- Revenue is expected to be $910 to $915 million, updated from guidance
of $900 to $905 million provided in July of this year, which represents
revenue growth of 23% to 24% compared to 2006.
-- Diluted earnings per share are expected to be $2.88 to $2.91 on a pre-
split basis or $1.44 to $1.46 on a post-split basis. Excluding the
impact of acquisition-related purchase accounting and integration costs
and the write-down of certain pharmaceutical assets in the second
quarter, non-GAAP adjusted diluted EPS are expected to be $3.13 to
$3.16 on a pre-split basis or $1.56 to $1.58 on a post-split basis.
Adjusted for discrete items in both 2006 and 2007, non-GAAP adjusted
diluted EPS are projected to grow 17% to 18%.
The Company offers the following guidance for the full year of 2008:
-- Revenue is expected to be $1.03 billion to $1.05 billion, which
represents revenue growth of 13% to 15% compared to projected revenue
for 2007.
-- Diluted earnings per share are expected to be $3.63 to $3.73 on a pre-
split basis or $1.82 to $1.87 on a post-split basis. Excluding the
impact in 2007 of acquisition-related purchase accounting and
integration costs and the write-down of certain pharmaceutical assets,
non-GAAP adjusted diluted EPS are projected to grow 15% to 20%.
Conference Call and Webcast Information
IDEXX Laboratories will be hosting a conference call today at 9:00 a.m. (eastern) to discuss its third quarter results. To participate in the conference call, dial 719-325-4744 or 877-681-3377 and reference confirmation code 2004728. An audio replay will be available through November 2, 2007 by dialing 719-457-0820 and referencing replay code 2004728.
The call will also be available via live or archived Webcast on the IDEXX Laboratories' web site at http://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 June 30, 2007, in the section captioned "Risk Factors."
Contact: Merilee Raines, Chief Financial Officer, (207) 556-8155
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Operations
Amounts in thousands except per share data (Unaudited)
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2007 2006 2007 2006
Revenue: Revenue $229,385 $187,380 $677,586 $546,908
Expenses
and
Income: Cost of revenue 110,907 89,181 336,308 263,648
Gross profit 118,478 98,199 341,278 283,260
Sales and marketing 37,757 29,051 110,086 84,668
General and
administrative 27,343 20,990 81,182 60,463
Research and
development 17,281 13,696 50,569 39,666
Income from
operations 36,097 34,462 99,441 98,463
Interest income
(expense), net (515) 609 (1,321) 1,972
Income before
provision for income
taxes and partner's
interest 35,582 35,071 98,120 100,435
Provision for income
taxes 9,787 10,118 29,634 31,581
Partner's share of
consolidated loss - - - (152)
Net
Income: Net income $25,795 $24,953 $68,486 $69,006
Earnings per share:
Basic $0.84 $0.80 $2.22 $2.19
Earnings per share:
Diluted $0.81 $0.76 $2.12 $2.09
Shares outstanding:
Basic 30,547 31,210 30,843 31,491
Shares outstanding:
Diluted 31,991 32,731 32,262 33,022
IDEXX Laboratories, Inc. and Subsidiaries
Key Operating Information (Unaudited)
Three Months Ended Nine Months Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2007 2006 2007 2006
Key Operating Gross profit 51.7 % 52.4 % 50.4 % 51.8 %
Ratios (as Sales, marketing,
a percentage general and
of revenue): administrative
expense 28.5 % 26.7 % 28.2 % 26.5 %
Research and
development
expense 7.5 % 7.3 % 7.5 % 7.3 %
Income from
operations 15.7 % 18.4 % 14.7 % 18.0 %
International International
Revenue: revenue (in
thousands) $89,547 $63,955 $264,514 $190,355
International
revenue as
percentage of
total revenue 39.0 % 34.1 % 39.0 % 34.8 %
IDEXX Laboratories, Inc. and Subsidiaries
Non-GAAP Financial Measures
Amounts in thousands except per share data (Unaudited)
Three Months Ended
Gross Profit
as a % of Income from
Gross Profit Revenue Operations
Sept.30 Sept.30 Sept.30 Sept.30 Sept.30 Sept.30
2007 2006 2007 2006 2007 2006
GAAP measurement $118,478 $98,199 51.7 % 52.4 % $36,097 $34,462
Acquisition-related
purchase accounting &
integration costs(1) 87 - - - 139 -
Non-GAAP comparative
measurements(2) $118,565 $98,199 51.7 % 52.4 % $36,236 $34,462
Earnings per Share
Net Income Diluted
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2007 2006 2007 2006
GAAP measurement $25,795 $24,953 $0.81 $0.76
Acquisition-related
purchase accounting &
integration costs(1) 90 - - -
Non-GAAP comparative
measurements(2) $25,885 $24,953 $0.81 $0.76
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.
(2) 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)
Nine Months Ended
Gross Profit Income from
Gross Profit as a % of Revenue Operations
Sept. 30 Sept. 30 Sept. 30 Sept. 30 Sept. 30 Sept. 30
2007 2006 2007 2006 2007 2006
GAAP measurement $341,278 $283,260 50.4% 51.8% $99,441 $98,463
Specified items:
Write-downs of
certain
pharmaceutical
assets(1) 10,138 - 1.5% - 10,138 -
Acquisition
-related
purchase
accounting
& integration
costs(2) 1,979 - 0.3% - 2,381 -
Discrete income
tax benefits(3) - - - - - -
Non-GAAP
comparative
measurements(4) $353,395 $283,260 52.2% 51.8% $111,960 $98,463
Earning Per Share
Net Income Diluted
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2007 2006 2007 2006
GAAP measurement $68,486 $69,006 $ 2.12 $ 2.09
Specified items:
Write-downs of
certain
pharmaceutical
assets(1) 6,392 - 0.20 -
Acquisition-related
purchase accounting
& integration
costs(2) 1,522 - 0.05 -
Discrete income tax
benefits(3) - (1,281) - (0.04)
Non-GAAP
comparative
measurements(4) $76,400 $67,725 $ 2.37 $ 2.05
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 recently 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.
(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 $0.03 per diluted share due to a
reduction of previously recorded international deferred tax liabilities as
a result of obtaining certain multi-year tax incentives and a tax benefit
of $0.01 per diluted share due to 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 Nine Months Ended
Sept. 30 Sept. 30 Sept. 30 Sept. 30
2007 2006 2007 2006
Revenue: Companion Animal
Group $187,481 $153,058 $554,939 $449,324
Water 17,431 16,579 48,941 43,732
Production Animal
Segment 17,377 13,907 52,871 42,310
Other 7,096 3,836 20,835 11,542
Total $229,385 $187,380 $677,586 $546,908
Gross
Profit: Companion Animal
Group $93,949 $76,739 $269,328 $223,475
Water 10,919 11,026 30,960 28,853
Production Animal
Segment 10,412 9,481 32,677 27,634
Other 3,081 1,375 7,926 4,519
Unallocated 117 (422) 387 (1,221)
Total $118,478 $98,199 $341,278 $283,260
Income from
Operations: Companion Animal
Group $28,529 $26,436 $75,293 $78,541
Water 7,212 7,843 20,010 19,482
Production Animal
Segment 2,561 3,908 10,286 11,279
Other 27 245 (487) 1,286
Unallocated (2,232) (3,970) (5,661) (12,125)
Total $36,097 $34,462 $99,441 $98,463
Gross Profit
(as a
percentage
of revenue):Companion Animal
Group 50.1% 50.1% 48.5% 49.7%
Water 62.6% 66.5% 63.3% 66.0%
Production Animal
Segment 59.9% 68.2% 61.8% 65.3%
Other 43.4% 35.9% 38.0% 39.2%
Income from
Operations
(as a
percentage
of revenue):Companion Animal
Group 15.2% 17.3% 13.6% 17.5%
Water 41.4% 47.3% 40.9% 44.5%
Production Animal
Segment 14.7% 28.1% 19.5% 26.7%
Other 0.4% 6.4% (2.3%) 11.1%
IDEXX Laboratories, Inc. and Subsidiaries
Revenues by Product and Service Categories
Amounts in thousands (Unaudited)
Three Months Ended
Percentage
Change Net
Percent- Percent- of
age age Acquis-
Change Change itions
Percent- from from and
Sept. 30, Sept. 30, Dollar age Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect
CAG $187,481 $153,058 $34,423 22.5% 2.5% 5.9% 14.1%
Water 17,431 16,579 852 5.1% 3.0% - 2.1%
PAS 17,377 13,907 3,470 25.0% 6.1% 12.8% 6.1%
Other 7,096 3,836 3,260 85.0% 2.8% 84.4% (2.2%)
Total 229,385 $187,380 $42,005 22.4% 2.8% 7.5% 12.1%
Three Months Ended
Percentage
Change Net
Percent- Percent- of
age age Acquis-
Change Change itions
Percent- from from and
Sept. 30, Sept. 30, Dollar age Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect
Instruments
and
consum-
ables $71,443 $60,295 $11,148 18.5% 3.3% - 15.2%
Rapid
assay
prod-
ucts 33,639 30,181 3,458 11.5% 0.7% - 10.8%
Laboratory
and
consulting
services 64,914 47,893 17,021 35.5% 2.9% 18.9% 13.7%
Practice
information
management
systems
and
digital
radio-
graphy 12,197 10,287 1,910 18.6% 1.4% - 17.2%
Pharma-
ceutical
products 5,288 4,402 886 20.1% - - 20.1%
Net CAG
revenue $187,481 $153,058 $34,423 22.5% 2.5% 5.9% 14.1%
(1) Represents the percentage change in revenue attributed to the effect
of changes in currency rates from the three months ended September 30,
2006 to the three months ended September 30, 2007.
(2) Represents the percentage change in revenue attributed to incremental
revenues during the three months ended September 30, 2007 compared to
the three months ended September 30, 2006 from businesses acquired
since July 1, 2006.
IDEXX Laboratories, Inc. and Subsidiaries
Revenues by Product and Service Categories
Amounts in thousands (Unaudited)
Nine Months Ended
Percentage
Change Net
Percen- Percen- of
tage tage Acquis-
Change Change itions
Percen- from from and
Sept. 30, Sept. 30, Dollar tage Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect
CAG $554,939 $449,324 105,615 23.5% 2.2% 6.3% 15.0%
Water 48,941 43,732 5,209 11.9% 3.0% - 8.9%
PAS 52,871 42,310 10,561 25.0% 6.4% 10.4% 8.2%
Other 20,835 11,542 9,293 80.5% 2.7% 77.7% 0.1%
Total $677,586 $546,908 $130,678 23.9% 2.6% 7.6% 13.7%
Nine Months Ended
Percentage
Change Net
Percent- Percent- of
age age Acquis-
Change Change itions
Percent- from from and
Sept. 30, Sept. 30, Dollar age Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect
Instruments
and
consum-
ables $209,889 $177,326 $32,563 18.4% 2.8% - 15.6%
Rapid
assay
products 101,464 88,812 12,652 14.2% 0.5% 1.9% 11.8%
Laboratory
and
consulting
services 191,350 139,287 52,063 37.4% 3.1% 19.1% 15.2%
Practice
information
management
systems
and
digital
radio-
graphy 36,419 30,764 5,655 18.4% 0.8% - 17.6%
Pharma-
ceutical
products 15,817 13,135 2,682 20.4% - - 20.4%
Net CAG
revenue $554,939 $449,324 $105,615 23.5% 2.2% 6.3% 15.0%
(1) Represents the percentage change in revenue attributed to the effect
of changes in currency rates from the nine months ended September 30,
2006 to the nine months ended September 30, 2007.
(2) Represents the percentage change in revenue attributed to incremental
revenues during the nine months ended September 30, 2007 compared to
the nine months ended September 30, 2006 from businesses acquired
since January 1, 2006.
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Balance Sheet
Amounts in thousands (Unaudited)
Sept. 30 Dec. 31
2007 2006
Assets: Current Assets:
Cash and cash equivalents $ 58,507 $ 61,666
Short-term investments - 35,000
Accounts receivable, net 103,407 81,389
Inventories 96,273 95,996
Other current assets 35,562 28,212
Total current assets 293,749 302,263
Property and equipment, at cost 233,219 191,538
Less: accumulated
depreciation 106,354 91,910
Property and
equipment, net 126,865 99,628
Other long-term
assets, net 253,619 157,669
Total assets $ 674,233 $ 559,560
Liabilities and
Stockholders'
Equity: Current Liabilities:
Accounts payable $ 21,786 $ 24,374
Accrued expenses 99,350 90,715
Debt 77,990 678
Deferred revenue 10,044 8,976
Total current liabilities 209,170 124,743
Long-term debt, net of current portion 5,911 6,447
Other long-term liabilities 39,012 18,509
Total long-term liabilities 44,923 24,956
Stockholders' Equity:
Common stock 4,716 4,662
Additional paid-in capital 512,266 479,993
Deferred stock units 2,147 1,852
Retained earnings 560,334 490,614
Treasury stock, at cost (677,509) (577,826)
Accumulated other comprehensive
income 18,186 10,566
Total stockholders' equity 420,140 409,861
Total liabilities and
stockholders' equity $ 674,233 $559,560
IDEXX Laboratories, Inc. and Subsidiaries
Key Balance Sheet Information (Unaudited)
Sept. 30 Dec. 31
2007 2006
Key
Balance Sheet Total cash, cash equivalents
Information: and investments (in thousands) $ 58,507 $ 96,666
Days sales outstanding 42 38
Inventory turns 2.1 1.9
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Amounts in thousands (Unaudited)
Nine Months Ended
Sept. 30 Sept. 30
2007 2006
Operating: Cash Flows from Operating Activities:
Net income $ 68,486 $ 69,006
Non-cash charges 30,907 17,484
Changes in current assets and
liabilities, net of acquisitions
and disposals (4,200) (15,078)
Net cash provided by operating
activities $ 95,193 $ 71,412
Investing: Cash Flows from Investing Activities:
Decrease in investments, net 35,000 22,014
Purchase of property and equipment (41,723) (21,476)
Purchase of land and buildings - (11,521)
Acquisition of businesses and intangible
assets (87,738) (9,367)
Acquisition of equipment leased to
customers (740) (1,370)
Net cash provided (used) by investing
activities (95,201) (21,720)
Financing: Cash Flows from Financing Activities:
Borrowings (payments) of notes payable,
net 68,819 (712)
Purchase of treasury stock (99,684) (93,832)
Proceeds from the exercise of stock
options 17,655 18,843
Tax benefit from exercise of stock
options 7,544 8,747
Net cash provided(used)
by financing activities $ (5,666) $(66,954)
Net effect of exchange rate changes 2,515 1,061
Net decrease in cash and cash equivalents (3,159) (16,201)
Cash and cash equivalents, beginning of
period 61,666 67,151
Cash and cash equivalents, end of
period 58,507 50,950
IDEXX Laboratories, Inc. and Subsidiaries
Free Cash Flow
Amounts in thousands (Unaudited)
Nine Months Ended
Sept. 30 Sept. 30
2007 2006
Free Cash
Flow: Net cash provided by operating activities 95,193 71,412
Financing cash flows attributable to
tax benefits from exercise of stock
options 7,544 8,747
Purchase of fixed assets (41,723) (32,997)
Acquisition of equipment leased to
customers (740) (1,370)
Free cash flow $ 60,274 $ 45,792
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
Amounts in thousands except per share data (Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2007 2006 2007 2006
Share repurchases during
the period 70 116 1,129 1,195
Average price paid per share $ 101.83 $ 74.50 $ 87.86 $ 78.53
Shares remaining under repurchase authorization as
of September 30, 2007 1,585
IDEXX Laboratories, Inc. and Subsidiaries
Pro Forma Earnings per Share Adjusted for Stock Split (Unaudited)
Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2007 2006 2007 2006
Basic
As reported $0.84 $0.80 $2.22 $2.19
Pro forma $0.42 $0.40 $1.11 $1.10
Diluted
As reported $0.81 $0.76 $ 2.12 $2.09
Pro forma $0.40 $0.38 $ 1.06 $1.04
SOURCE IDEXX Laboratories, Inc.
Released October 26, 2007