IDEXX Laboratories Announces Second Quarter Results
WESTBROOK, Maine, July 27 /PRNewswire-FirstCall/ -- IDEXX Laboratories, Inc. (Nasdaq: IDXX), today reported that revenue for the second quarter of 2007 increased 24% to $237.0 million from $191.4 million for the second quarter of 2006. Earnings per diluted share ("EPS") for the quarter ended June 30, 2007 were $0.67, compared to $0.78 for the same period in the prior year. EPS reflects a write-down of certain pharmaceutical assets of $10.1 million, or $0.20 per diluted share, as described further below, and $0.02 per share of discrete acquisition-related purchase accounting and integration costs.
Non-GAAP adjusted diluted EPS for the second quarter were $0.89, an increase of 20% compared to non-GAAP adjusted diluted EPS for the same period of the prior year. Non-GAAP adjusted diluted EPS for the second quarter of 2007 excludes the impact of the write-down of certain pharmaceutical assets, described below, and acquisition-related purchase accounting and integration costs. Non-GAAP adjusted diluted EPS for the second quarter of 2006 excludes the income tax benefits from certain discrete tax events. The accompanying financial table provides additional information and reconciles these non-GAAP measures to earnings per diluted share. 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.
During the second quarter, the Company 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. The Company has written down these assets because the third-party contract manufacturer of finished goods recently gave notification that it will discontinue manufacturing the product in 2009. Additionally, product sales have been significantly lower than projected. Due in part to an estimated production volume which is low, the Company believes that it will not be able to enter into a replacement manufacturing arrangement on economically feasible terms and that it will not be able to obtain the product after termination of the existing manufacturing arrangement. Sales of Navigator(R) were $0.2 million for the first six months of 2007.
"I am pleased with our revenue momentum, and particularly with the growth of our three core companion animal diagnostics businesses, which together make up almost 75% of the company revenues and accounted for over 80% of organic growth for the quarter," said Jonathan Ayers, Chairman and CEO. "The positive trends in these three businesses included record in-house instrument placements, a high level of conversions to our SNAP(R)4Dx(R) rapid assay screening product, and strong performance in our global reference laboratory business. Based on our current outlook, we are raising our revenue and adjusted earnings per share guidance for the balance of 2007."
Companion Animal Group ("CAG") revenue for the second quarter of 2007 increased 24% to $194.0 million from $156.9 million for the second quarter of 2006 primarily due to higher sales in all CAG product and service categories, generated in part by acquisitions, with the largest growth in revenue dollars
from laboratory and consulting services and from instruments and consumables products.
Water segment revenue for the second quarter of 2007 increased 13% to $17.1 million from $15.1 million for the second quarter of 2006 primarily due to higher worldwide sales volume.
Production Animal Segment ("PAS") revenue for the second quarter increased 21% to $18.7 million from $15.4 million for the second quarter of 2006 primarily from higher livestock diagnostics sales volume including sales attributable to the Institut Pourquier business, which was 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.
Year-to-date results
Year-to-date revenue increased 25% to $448.2 million from $359.5 million for the same period in 2006. Revenue for the six months ended June 30, 2007, adjusted for the impacts of acquisitions and foreign currency exchange rates, increased 14%.
Year-to-date earnings per diluted share decreased 1% to $1.32 from $1.33 for the same period in the prior year. Non-GAAP adjusted diluted EPS for the six months ended June 30, 2007 grew 20% to $1.55 compared to the same period in the prior year. Non-GAAP adjusted diluted EPS for the six months ended June 30, 2007 excludes the impact of the write-down of certain pharmaceutical assets, described above, and acquisition-related purchase accounting and integration costs. Non-GAAP adjusted diluted EPS for the six months ended June 30, 2006 excludes the income tax benefits from certain discrete tax events. The accompanying financial table provides additional information and reconciles these non-GAAP measures to earnings per diluted share.
Companion Animal Group revenue for the six months ended June 30, 2007 increased 24% to $367.5 million from $296.3 million due 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.
Water segment revenue for the six months ended June 30, 2007 increased 16% to $31.5 million from $27.2 million primarily due to higher worldwide sales volume.
Production Animal Segment revenue for the six months ended June 30, 2007 increased 25% to $35.5 million from $28.4 million for the same period in 2006. The increase resulted primarily from higher livestock diagnostics sales volume including sales attributable to the Institut Pourquier business. The favorable impact of higher sales volume was partly offset by lower average unit sales prices for TSE testing products due to greater price competition.
Additional operating results for the second quarter
Gross profit for the second quarter of 2007 increased $15.2 million, or 15%, to $114.2 million from $99.0 million for the second quarter of 2006. As a percentage of revenue, gross profit decreased to 48% from 52%. Excluding the write-down of certain pharmaceutical assets of $10.1 million, described above, and acquisition-related purchase accounting and integration costs, the adjusted gross profit percentage increased to 53%. The accompanying financial table provides additional information and reconciles these non-GAAP measures. The gross profit percentage was favorably impacted 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, and a lower cost of slides that are sold for use in VetTest(R) chemistry analyzers. Increases in the gross profit percentage were partly offset by greater relative sales of lower margin products and services such as laboratory and consulting services.
Research and development ("R&D") expense for the quarter was $17.3 million compared to $13.3 million for the second quarter of 2006. As a percentage of revenue, R&D expense increased to 7.3% from 7.0%. R&D expense grew primarily as a result of personnel additions in 2006 and 2007 to support increased long- term product development activities.
Selling, general and administrative ("SG&A") expense for the quarter was $64.4 million, or 27% of revenue, compared to $48.7 million, or 25% of revenue, in the second 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 and higher sales commissions as a result of revenue performance; higher spending on facilities, information technology 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 2007:
-- Revenue is expected to be $900 to $905 million, updated from guidance
of $890 to $897 million provided in April of this year.
-- Diluted earnings per share are expected to be $2.86 to $2.91 (or $3.06
to $3.11 excluding the impact of the write-down of certain
pharmaceutical assets, described above), updated from guidance of $3.00
to $3.07 provided in April.
Conference Call and Webcast Information
IDEXX Laboratories will be hosting a conference call today at 9:00 a.m. (eastern) to discuss its second quarter results. To participate in the conference call, dial 719-457-2621 or 800-238-9007 and reference confirmation code 5945803. An audio replay will be available through August 3, 2007 by dialing 719-457-0820 and referencing replay code 5945803.
The call will also be available via live or archived Webcast on the IDEXX Laboratories' web site at http://www.idexx.com.
IDEXX Laboratories Names Bill Goodspeed Corporate Vice President and General Manager, Production Animal Segment
IDEXX Laboratories, Inc. today announced the appointment of Bill Goodspeed as Corporate Vice President and General Manager, Production Animal Segment.
Mr. Goodspeed joins IDEXX from the J.M. Huber Corporation, a privately-held company in chemicals, food ingredients, building products, energy and timber industries, where he served most recently as Sector CEO for Natural Resources and Technology-based Services, located in Houston. In that role, he held responsibility for operations in energy exploration and development, timber, energy trading, and receivables securitization. Prior to that role, Mr. Goodspeed served as the President of Huber Engineered Woods, where he led development of a new specialty strategy that transformed Huber from a traditional commodity wood products business to an industry-leading branded products company. Prior to joining Huber in 1994, Mr. Goodspeed served as Executive Vice President of Japan-based Pasona International, managing the non-Japanese businesses of the Pasona Group. He also spent three years as a consultant at McKinsey & Company and three years as an attorney. Mr. Goodspeed graduated from Dartmouth College and received his JD from the University of Michigan.
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 4,000 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 March 31, 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 Six Months Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
Revenue: Revenue $237,046 $191,364 $448,201 $359,528
Expenses and
Income: Cost of revenue 122,825 92,328 225,401 174,467
Gross profit 114,221 99,036 222,800 185,061
Sales and
marketing 36,747 28,679 72,329 55,617
General and
administrative 27,690 20,039 53,839 39,473
Research and
development 17,317 13,292 33,288 25,970
Income from
operations 32,467 37,026 63,344 64,001
Interest income
(expense), net (834) 594 (806) 1,363
Income before
provision for
income taxes and
partner's
interest 31,633 37,620 62,538 65,364
Provision for
income taxes 9,969 11,879 19,847 21,463
Partner's share
of consolidated
loss - (39) - (152)
Net Income: Net income $21,664 $25,780 $42,691 $44,053
Earnings per
share: Basic $0.70 $0.82 $1.38 $1.39
Earnings per
share: Diluted $0.67 $0.78 $1.32 $1.33
Shares
outstanding:
Basic 30,849 31,467 30,992 31,633
Shares
outstanding:
Diluted 32,201 33,014 32,380 33,216
IDEXX Laboratories, Inc. and Subsidiaries
Key Operating Information (Unaudited)
Three Months Ended Six Months Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
Key Operating Gross profit 48.2% 51.8% 49.7% 51.5%
Ratios (as a Sales, marketing,
percentage of general and
revenue): administrative
expense 27.2% 25.5% 28.2% 26.5%
Research and
development
expense 7.3% 7.0% 7.4% 7.2%
Income from
operations 13.7% 19.3% 14.1% 17.8%
International International
Revenue: revenue (in
thousands) $94,098 $68,000 $174,967 $126,400
International
revenue as
percentage of
revenue 39.7% 35.5% 39.0% 35.2%
IDEXX Laboratories, Inc. and Subsidiaries
Non-GAAP Financial Measures
Amounts in thousands except per share data (Unaudited)
Three Months Ended
Gross Profit
as a % Income from
Gross Profit of Revenue Operations
June 30, June 30, June 30, June 30, June 30, June 30,
2007 2006 2007 2006 2007 2006
GAAP
measurement $114,221 $99,036 48.2% 51.8% $31,633 $37,620
Specified items:
Write-downs of
certain
pharmaceutical
assets(1) 10,138 - 4.3% - 10,138 -
Acquisition-
related
purchase
accounting &
integration
costs(2) 644 - 0.2% - 808 -
Discrete income
tax benefits(3) - - - - - -
Non-GAAP
comparative
measure-
ments(4) $125,003 $99,036 52.7% 51.8% $42,579 $37,620
Earnings per Share
Net Income Diluted
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
GAAP measurement $21,664 $25,780 $0.67 $0.78
Specified items:
Write-downs of certain
pharmaceutical
assets(1) 6,392 - 0.20 -
Acquisition-related
purchase accounting &
integration costs(2) 528 - 0.02 -
Discrete income tax
benefits(3) - (1,281) - (0.04)
Non-GAAP comparative
measurements(4) $28,584 $24,499 $0.89 $0.74
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 volume 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
the third-party contract manufacturer of finished goods recently gave
notification that it will discontinue manufacturing the product in
2009. Additionally, product sales have been significantly lower than
projected. Due in part to an estimated production volume which is low,
we believe that we will not be able to enter into a replacement
manufacturing arrangement on economically feasible terms and that we
will not be able to obtain the product after 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
Non-GAAP Financial Measures
Amounts in thousands except per share data (Unaudited)
Six Months Ended
Gross Profit Income from
Gross Profit as a % of Revenue Operations
June 30, June 30, June 30, June 30, June 30, June 30,
2007 2006 2007 2006 2007 2006
GAAP
measurement $222,800 $185,061 49.7% 51.5% $63,344 $64,001
Specified items:
Write-downs of
certain
pharmaceutical
assets(1) 10,138 - 2.3% - 10,138 -
Acquisition-
related purchase
accounting &
integration
costs(2) 1,892 - 0.4% - 2,242 -
Discrete income
tax benefits(3) - - - - - -
Non-GAAP
comparative
measure-
ments(4) $234,830 $185,061 52.4% 51.5% $75,724 $64,001
Earnings per Share
Net Income Diluted
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
GAAP measurement $42,691 $44,053 $1.32 $1.33
Specified items:
Write-downs of certain
pharmaceutical
assets(1) 6,392 - 0.20 -
Acquisition-related
purchase accounting &
integration costs(2) 1,432 - 0.04 -
Discrete income tax
benefits(3) - (1,281) - (0.04)
Non-GAAP comparative
measurements(4) $50,515 $42,772 $1.55 $1.29
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
the third-party contract manufacturer of finished goods recently gave
notification that it will discontinue manufacturing the product in
2009. Additionally, product sales have been significantly lower than
projected. Due in part to an estimated production volume which is low,
we believe that we will not be able to enter into a replacement
manufacturing arrangement on economically feasible terms and that we
will not be able to obtain the product after 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 Six Months Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
Revenue: Companion
Animal
Group $194,025 $156,903 $ 367,458 $296,266
Water 17,105 15,087 31,510 27,153
Production
Animal
Segment 18,683 15,450 35,494 28,403
Other 7,233 3,924 13,739 7,706
Total $237,046 $191,364 $448,201 $359,528
Gross
Profit: Companion
Animal
Group $89,049 $78,131 $ 175,379 $146,736
Water 10,809 9,866 20,041 17,827
Production
Animal
Segment 11,302 9,831 22,265 18,153
Other 2,931 1,629 4,845 3,144
Unallocated 130 (421) 270 (799)
Total $114,221 $99,036 $222,800 $185,061
Income
from
Operations: Companion
Animal
Group $23,179 $29,501 $46,764 $52,105
Water 7,156 6,817 12,798 11,639
Production
Animal
Segment 3,760 4,134 7,725 7,371
Other (101) 607 (514) 1,041
Unallocated (1,527) (4,033) (3,429) (8,155)
Total $32,467 $37,026 $63,344 $64,001
Gross Profit
(as a
percentage
of revenue): Companion
Animal
Group 45.9% 49.8% 47.7% 49.5%
Water 63.2% 65.4% 63.6% 65.7%
Production
Animal
Segment 60.5% 63.6% 62.7% 63.9%
Other 40.5% 41.5% 35.3% 40.8%
Income from
Operations
(as a percentage
of revenue): Companion
Animal
Group 11.9% 18.8% 12.7% 17.6%
Water 41.8% 45.2% 40.6% 42.9%
Production
Animal
Segment 20.1% 26.8% 21.8% 26.0%
Other -1.4% 15.5% -3.7% 13.5%
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
June 30, June 30, Dollar age Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect
CAG $194,025 $156,903 $37,122 23.7% 1.8% 8.1% 13.8%
Water 17,105 15,087 2,018 13.4% 2.6% - 10.8%
PAS 18,683 15,450 3,233 20.9% 5.4% 13.9% 1.6%
Other 7,233 3,924 3,309 84.3% 2.2% 77.8% 4.3%
Total $237,046 $191,364 $45,682 23.9% 2.2% 9.3% 12.4%
Three Months Ended
Percentage
Change Net
Percent- Percent- of
age age Acquis-
Change Change itions
Percent- from from and
June 30, June 30, Dollar age Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect
Instruments
and
consum-
ables $71,490 $61,211 $10,279 16.8% 2.2% - 14.6%
Rapid
assay
products 36,588 32,627 3,961 12.1% 0.2% 2.4% 9.5%
Laboratory
and
consulting
services 68,548 47,811 20,737 43.4% 2.7% 24.9% 15.8%
Practice
information
management
systems
and digital
radio-
graphy 11,697 10,782 915 8.5% 0.5% - 8.0%
Pharma-
ceutical
products 5,702 4,472 1,230 27.5% - - 27.5%
Net CAG
revenue $194,025 $156,903 $37,122 23.7% 1.8% 8.1% 13.8%
(1) Represents the percentage change in revenue attributed to the effect
of changes in currency rates from the three months ended June 30, 2006
to the three months ended June 30, 2007.
(2) Represents the percentage change in revenue attributed to incremental
revenues during the three months ended June 30, 2007 compared to the
three months ended June 30, 2006 from businesses acquired since
April 1, 2006.
IDEXX Laboratories, Inc. and Subsidiaries
Revenues by Product and Service Categories
Amounts in thousands (Unaudited)
Six Months Ended
Percentage
Change Net
Percent- Percent- of
age age Acquis-
Change Change itions
Percent- from from and
June 30, June 30, Dollar age Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect
CAG $367,458 $296,266 $71,192 24.0% 2.0% 6.5% 15.5%
Water 31,510 27,153 4,357 16.0% 2.9% - 13.1%
PAS 35,494 28,403 7,091 25.0% 6.1% 10.1% 8.8%
Other 13,739 7,706 6,033 78.3% 2.8% 74.3% 1.2%
Total $448,201 $359,528 $88,673 24.7% 2.5% 7.7% 14.5%
Six Months Ended
Percentage
Change Net
Percent- Percent- of
age age Acquis-
Change Change itions
Percent- from from and
June 30, June 30, Dollar age Currency Acquis- Currency
2007 2006 Change Change (1) itions(2) Effect
Instruments
and
consum-
ables $138,446 $117,031 $21,415 18.3% 2.6% - 15.7%
Rapid
assay
products 67,825 58,631 9,194 15.7% 0.5% 2.9% 12.3%
Laboratory
and
consulting
services 126,436 91,394 35,042 38.3% 3.0% 19.1% 16.2%
Practice
information
management
systems
and digital
radio-
graphy 24,222 20,477 3,745 18.3% 0.5% - 17.8%
Pharma-
ceutical
products 10,529 8,733 1,796 20.6% - - 20.6%
Net
CAG
revenue $367,458 $296,266 $71,192 24.0% 2.0% 6.5% 15.5%
(1) Represents the percentage change in revenue attributed to the effect
of changes in currency rates from the six months ended June 30, 2006
to the six months ended June 30, 2007.
(2) Represents the percentage change in revenue attributed to incremental
revenues during the six months ended June 30, 2007 compared to the six
months ended June 30, 2006 from businesses acquired since January 1,
2006.
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Balance Sheet
Amounts in thousands (Unaudited)
June 30, December 31,
2007 2006
Assets: Current Assets:
Cash and cash equivalents $49,588 $61,666
Short-term investments - 35,000
Accounts receivable, net 106,684 81,389
Inventories 91,551 95,996
Other current assets 34,645 28,212
Total current assets 282,468 302,263
Property and equipment, at cost 218,532 191,538
Less: accumulated depreciation 100,726 91,910
Property and equipment, net 117,806 99,628
Other long-term assets, net 245,895 157,669
Total assets $646,169 $559,560
Liabilities and
Stockholders'
Equity: Current Liabilities:
Accounts payable $28,366 $24,374
Accrued expenses 92,265 90,715
Debt 84,447 678
Deferred revenue 8,491 8,976
Total current liabilities 213,569 124,743
Long-term debt, net of current portion 6,092 6,447
Other long-term liabilities 41,956 18,509
Total long-term liabilities 48,048 24,956
Stockholders' Equity:
Common stock 4,699 4,662
Additional paid-in capital 500,448 479,993
Deferred stock units 2,094 1,852
Retained earnings 534,539 490,614
Treasury stock, at cost (670,359) (577,826)
Accumulated other comprehensive income 13,131 10,566
Total stockholders' equity 384,552 409,861
Total liabilities and stockholders'
equity $646,169 $559,560
IDEXX Laboratories, Inc. and Subsidiaries
Key Balance Sheet Information (Unaudited)
June 30, December 31,
2007 2006
Key
Balance Sheet Total cash, cash
Information: equivalents and investments
(in thousands) $49,588 $96,666
Days sales outstanding 41 38
Inventory turns 2.1 1.9
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Amounts in thousands (Unaudited)
Six Months Ended
June 30, June 30,
2007 2006
Operating: Cash Flows from Operating Activities:
Net income $42,691 $44,053
Non-cash charges 25,401 10,882
Changes in current assets and
liabilities, net of acquisitions
and disposals (4,956) (10,147)
Net cash provided by operating
activities $63,136 $44,788
Investing: Cash Flows from Investing Activities:
Decrease in investments, net 35,000 38,609
Purchase of property and equipment (26,235) (13,810)
Purchase of land and buildings - (11,521)
Acquisition of businesses and
intangible assets (85,507) (8,245)
Acquisition of equipment leased
to customers (525) (918)
Net cash provided (used) by
investing activities $(77,267) $4,115
Financing: Cash Flows from Financing
Activities:
Borrowings (payments) of notes
payable, net 77,785 (647)
Purchase of treasury stock (92,533) (85,228)
Proceeds from the exercise of
stock options 11,986 13,245
Tax benefit from exercise of
stock options 4,070 5,935
Net cash provided (used) by
financing activities $1,308 $(66,695)
Net effect of exchange rate changes 745 664
Net decrease in cash and cash
equivalents (12,078) (17,128)
Cash and cash equivalents, beginning
of period 61,666 67,151
Cash and cash equivalents, end of
period $49,588 $50,023
IDEXX Laboratories, Inc. and Subsidiaries
Free Cash Flow
Amounts in thousands (Unaudited)
Six Months Ended
June 30, June 30,
2007 2006
Free Cash
Flow: Net cash provided by operating
activities $63,136 $44,788
Financing cash flows attributable to
tax benefits from exercise of
stock options 4,070 5,935
Purchase of fixed assets (26,235) (25,331)
Acquisition of equipment leased to
customers (525) (918)
Free cash flow $40,446 $24,474
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 Six Months Ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
Shares repurchased
during the period 655 538 1,059 1,079
Average price paid
per share $88.14 $79.06 $86.94 $78.96
Shares remaining under
repurchase authorization
as of June 30, 2007 1,655
SOURCE IDEXX Laboratories, Inc.
Released July 27, 2007