IDEXX Laboratories Announces Fourth Quarter Results
WESTBROOK, Maine, Jan. 26 /PRNewswire-FirstCall/ -- IDEXX Laboratories, Inc. (Nasdaq: IDXX), today reported that revenue for the fourth quarter of 2006 increased 15% to $192.2 million from $167.0 million for the fourth quarter of 2005. Adjusted for the impacts of acquisitions and changes in foreign currency exchange rates, revenue for the fourth quarter of 2006 increased 11% over the same period of the prior year. Earnings per diluted share ("EPS") for the quarter ended December 31, 2006 increased 25% to $0.75 from $0.60 for the same period in the prior year.
Non-GAAP adjusted diluted EPS for the fourth quarter were $0.68, an increase of 6% compared to non-GAAP adjusted diluted EPS for the same period of the prior year. Non-GAAP adjusted diluted EPS including share-based compensation expense was $0.62. 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. The accompanying financial table provides additional information and reconciles these non-GAAP measures to earnings per diluted share.
"We have wrapped up a strong year of organic revenue growth, investment in the new product pipeline, and strategic acquisitions across our business portfolio, all of which position us extremely well for continued growth in 2007 and 2008. In particular, I am pleased with the outlook we see for continued success in the companion animal market," said Jonathan Ayers, Chairman and Chief Executive Officer.
"We are making excellent progress on the growth and further development of our bench-top line of instruments and proprietary consumables for the companion animal market. We expect to launch our next generation chemistry analyzer, Catalyst Dx(TM), in January of 2008 along with a second platform, SNAPshot Dx(TM), which will augment the immunodiagnostic capability of the IDEXX VetLab(R) suite of instruments. Through these launches, we expect to take the pet-side diagnostic capability of the IDEXX VetLab suite to a whole new level of performance and value."
Companion Animal Group ("CAG") revenue for the fourth quarter of 2006 increased 15% to $157.0 million from $135.9 million for the fourth quarter of 2005 due to higher sales in all CAG product and service categories, with the largest growth in revenue from laboratory and consulting services. Incremental sales from businesses acquired since January 2005, consisting primarily of veterinary reference laboratories, a digital radiography business, and intellectual property and distribution rights of a veterinary diagnostics business, contributed 2% to CAG revenue growth. The favorable impact of foreign currency exchange rates also contributed 2% to CAG revenue growth.
Water segment revenue for the fourth quarter increased 1% to $14.7 million from $14.6 million for the fourth quarter of 2005 due to the favorable impact of foreign currency exchange rates, which increased Water revenue growth by 3%, and, to a lesser extent, higher average unit sales prices. These favorable impacts were partly offset by lower sales volume.
Food Diagnostics Group ("FDG") revenue for the fourth quarter increased 25% to $20.5 million from $16.4 million for the fourth quarter of 2005 primarily due to higher worldwide livestock diagnostics sales volume, particularly of the IDEXX HerdChek(R) test for transmissible spongiform encephalopathies. The favorable impact of foreign currency exchange rates increased FDG revenue growth by 6%.
Full-year results
Revenue for the year ended December 31, 2006 increased 16% to $739.1 million from $638.1 million for the same period in 2005. Incremental sales from businesses acquired since the beginning of 2005 added 2% to revenue growth. Changes in foreign currency exchange rates did not have a significant impact on the reported revenue growth rate. Revenue for the year ended December 31, 2006, adjusted for the impacts of acquisitions and foreign currency exchange rates, increased 14%.
Earnings per diluted share for 2006 increased 23% to $2.84 from $2.30 for the same period in the prior year. Non-GAAP adjusted diluted EPS for the year ended December 31, 2006 were $2.93, an increase of 23% compared to non-GAAP adjusted diluted EPS for 2005. Non-GAAP adjusted diluted EPS including share- based compensation expense was $2.67. The accompanying financial table provides additional information and reconciles these non-GAAP measures to earnings per diluted share.
Companion Animal Group ("CAG") revenue for the year ended December 31, 2006 increased 16% to $606.3 million from $520.8 million due to higher sales in all CAG product and service categories, with the largest growth in revenue from laboratory and consulting services. Incremental sales from businesses acquired since the beginning of 2005, consisting primarily of veterinary reference laboratories, a digital radiography business, and intellectual property and distribution rights of a veterinary diagnostics business, contributed 2% to CAG revenue growth. Changes in foreign currency exchange rates did not have a significant impact on the CAG revenue growth rate.
Water segment revenue for the year ended December 31, 2006 increased 3% to $58.5 million from $56.8 million primarily due to higher sales volume in the Americas and Europe and, to a lesser extent, to higher average unit sales prices. The favorable impact of foreign currency exchange rates increased the Water revenue growth rate by 1%.
Food Diagnostics Group ("FDG") revenue for the year ended December 31, 2006 increased 23% to $74.3 million from $60.5 million for the same period in 2005. This increase is primarily due to higher worldwide sales volume of livestock diagnostics. The favorable impact of foreign currency exchange rates increased FDG revenue growth by 1%.
Additional operating results for the fourth quarter
Gross profit for the fourth quarter of 2006 increased $11.4 million, or 13%, to $96.3 million from $84.9 million for 2005. As a percentage of revenue, gross profit decreased to 50% from 51% primarily due to proportionately higher sales of laboratory and consulting services and instruments, which are sold at lower gross profit rates than certain other products, and to the combined net unfavorable impact of changes in foreign currency rates on foreign exchange hedge contracts and on sales denominated in those foreign currencies. These unfavorable impacts on the gross profit percentage were partly offset by the lower cost of slides sold for use in IDEXX VetTest(R) chemistry analyzers.
Research and development ("R&D") expense for the quarter was $14.0 million compared to $10.6 million for the fourth quarter of 2005. As a percentage of revenue, R&D expense increased to 7.3% from 6.4% for the same period in 2005.
Selling, general and administrative ("SG&A") expense for the quarter was $52.8 million, or 27% of revenue, compared to $44.1 million, or 26% of revenue, in the fourth quarter of 2005. Increased SG&A expense was due primarily to higher personnel-related costs due, in part, to expanded worldwide sales, customer service and marketing headcount; share-based compensation expense, including the impact of SFAS No. 123(R) which was adopted on January 1, 2006; and higher spending on information technology and other general support functions.
Acquisition of Institut Pourquier
The Company also announced today that it has entered into an agreement to acquire all of the outstanding shares of Institut Pourquier. Based in Montpelier, France, Institut Pourquier is a leading provider of production animal diagnostic products with a strong European market presence and a product portfolio that is complementary to the Company's existing production animal products. In 2006 Institut Pourquier had sales of approximately $7.5 million. The Company expects to complete the acquisition during the first quarter of 2007.
Outlook
The Company offers the following revised guidance for the full year of 2007, which reflects the estimated impacts of the previously announced acquisitions of Central Laboratory for Veterinarians Ltd., which closed in November 2006, and the Critical Care Division of Osmetech plc, which is expected to close on or around January 31, 2007, as well as the anticipated acquisition of Institut Pourquier, which is expected to close during the first quarter of 2007:
- Revenue is expected to be $860 to $870 million, including $28 to $30
million of revenue attributable to these acquisitions.
- Diluted earnings per share are expected to be $2.90 to $2.98, which
reflects a dilutive impact of approximately $0.14 per diluted share
attributable to these acquisitions, of which approximately $0.04 per
diluted share is attributable to the acquisition of Institut Pourquier.
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 800-475-3716 or 719-457-2727 and reference confirmation code 1704816. An audio replay will be available through February 2 by dialing 719-457-0820 and referencing replay code 1704816.
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 Westbrook, Maine, IDEXX Laboratories employs more than 3,500 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 develop, license or obtain rights to new technologies; 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 our 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, 2005, and on the Quarterly Report on Form 10-Q for the quarter ended September 30, 2006, in the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations."
Contact: Merilee Raines, Chief Financial Officer, 1-207-556-8155
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,
2006 2005 2006 2005
Revenue:
Revenue $ 192,209 $ 166,970 $ 739,117 $638,095
Expenses and
Income:
Cost of revenue 95,940 82,054 359,588 315,195
Gross profit 96,269 84,916 379,529 322,900
Sales and marketing 31,214 26,769 115,882 101,990
General and
administrative 21,634 17,327 82,097 64,631
Research and
development 13,951 10,636 53,617 40,948
Income from operations 29,470 30,184 127,933 115,331
Interest income, net 845 849 2,817 3,141
Income before provision
for income taxes
and partner's interest 30,315 31,033 130,750 118,472
Provision for income
taxes 5,643 11,137 37,224 40,670
Partner's share of
consolidated loss - (131) (152) (452)
Net Income:
Net income $24,672 $20,027 $93,678 $78,254
Earnings per share:
Basic $0.79 $0.63 $2.98 $ 2.41
Earnings per share:
Diluted $0.75 $0.60 $2.84 $ 2.30
Shares outstanding:
Basic 31,261 32,032 31,433 32,521
Shares outstanding:
Diluted 32,736 33,627 32,954 34,055
IDEXX Laboratories, Inc. and Subsidiaries
Key Operating Information (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
Key Operating Ratios
(as a percentage of
revenue):
Gross profit 50.1% 50.9% 51.3% 50.6%
Sales, marketing, general
and administrative
expense 27.5% 26.4% 26.8% 26.1%
Research and development
expense 7.3% 6.4% 7.2% 6.4%
Income from operations 15.3% 18.1% 17.3% 18.1%
International Revenue:
International revenue
(in thousands) $70,590 $59,153 $260,945 $219,530
International revenue
as percentage of
total revenue 36.7% 35.4% 35.3% 34.4%
IDEXX Laboratories, Inc. and Subsidiaries
Non-GAAP Financial Measures
Amounts in thousands except per share data (Unaudited)
Three Months Ended
Income from
Gross Profit Operations
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
GAAP measurement $96,269 $84,916 $29,470 $30,184
Specified items:
Acquisition-related
integration costs &
investment
impairment(1) 82 57 467 928
Discrete income tax
expense (benefit)(2) - - - -
subtotal(4) 96,351 84,973 29,937 31,112
Share-based compensation
expense(3) 450 - 2,653 -
Non-GAAP comparative
measurements(4) $96,801 $84,973 $32,590 $31,112
Three Months Ended
Earnings per Share
Net Income Diluted
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
GAAP measurement $24,672 $20,027 $0.75 $0.60
Specified items:
Acquisition-related
integration costs &
investment
impairment(1) 311 618 0.01 0.02
Discrete income tax
expense (benefit)(2) (4,830) 992 (0.15) 0.03
subtotal(4) 20,153 21,637 0.62 0.64
Share-based compensation
expense(3) 2,168 - 0.07 -
Non-GAAP comparative
measurements(4) $22,321 $21,637 $0.68 $0.64
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. Discrete items
for 2006 also include a write-down of an equity investment in one of our
technology licensors. We believe that the investment write-down is
infrequent and is not representative of ongoing operations; IDEXX holds 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 statutes of limitations. For
2005, income tax expense on the repatriation of foreign earnings under the
American Jobs Creation Act is separately identified as a discrete expense.
(3) We adjusted 2006 GAAP financial results to exclude the after-tax
impact of share-based compensation expense, except for the impact of
deferred stock units issued under our Director Compensation Plan and our
Executive Deferred Compensation Plan that do not have vesting conditions,
in order to evaluate the Company's performance relative to 2005 financial
results. We do not consider the pro forma 2005 financial results that are
included in our Annual Report on Form 10-K and quarterly reports on Form
10-Q to be reasonably comparable to 2006 financial results with respect to
the impact of share-based compensation expense due to several factors,
including changes in 2006 in the types, terms and total fair value of
share-based compensation awards; changes in the timing of expense
recognition for 2006 awards; and differences between periods in income tax
benefits.
(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)
Twelve Months Ended
Income from
Gross Profit Operations
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
GAAP measurement $379,529 $322,900 $ 127,933 $ 115,331
Specified items:
Acquisition-related
integration costs &
investment
impairment(1) 82 981 467 2,830
Discrete income tax
expense (benefit)(2) - - - -
subtotal(4) 379,611 323,881 128,400 118,161
Share-based compensation
expense(3) 1,671 - 10,657 -
Non-GAAP comparative
measurements(4) $381,282 $323,881 $ 139,057 $ 118,161
Twelve Months Ended
Earnings per Share
Net Income Diluted
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
GAAP measurement $93,678 $78,254 $2.84 $2.30
Specified items:
Acquisition-related
integration costs &
investment impairment(1) 311 1,886 0.01 0.05
Discrete income tax
expense (benefit)(2) (6,111) 992 (0.19) 0.03
subtotal(4) 87,878 81,132 2.67 2.38
Share-based compensation
expense(3) 8,812 - 0.27 -
Non-GAAP comparative
measurements(4) $96,690 $81,132 $2.93 $2.38
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. The discrete
integration costs incurred in 2005 included costs associated with the
consolidation of our European production animal diagnostics operations in
Bern, Switzerland. Discrete items for 2006 also include a write-down of an
equity investment in one of our technology licensors. We believe that the
investment write-down is infrequent and is not representative of ongoing
operations; IDEXX holds 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 benefits
were composed of a tax benefit of $0.15 per diluted share 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 statutes of limitations, 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.
For 2005, income tax expense on the repatriation of foreign earnings under
the American Jobs Creation Act is separately identified as a discrete
expense.
(3) We adjusted 2006 GAAP financial results to exclude the after-tax
impact of share-based compensation expense, except for the impact of
deferred stock units issued under our Director Compensation Plan and our
Executive Deferred Compensation Plan that do not have vesting conditions,
in order to evaluate the Company's performance relative to 2005 financial
results. We do not consider the pro forma 2005 financial results that are
included in our Annual Report on Form 10-K and quarterly reports on Form
10-Q to be reasonably comparable to 2006 financial results with respect to
the impact of share-based compensation expense due to several factors,
including changes in 2006 in the types, terms and total fair value of
share-based compensation awards; changes in the timing of expense
recognition for 2006 awards; and differences between periods in income tax
benefits.
(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
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2006 2005 2006 2005
Revenue: Companion
Animal
Group $156,995 $135,942 $606,319 $520,830
Water 14,734 14,606 58,466 56,760
Food
Diagnostics
Group 20,480 16,422 74,332 60,505
Total $192,209 $166,970 $739,117 $638,095
Gross
Profit: Companion
Animal
Group $74,524 $65,396 $297,999 $250,409
Water 9,588 9,951 38,441 38,277
Food
Diagnostics
Group 12,607 9,569 44,760 34,214
Other (450) - (1,671) -
Total $96,269 $84,916 $379,529 $322,900
Income from
Opera-
tions: Companion
Animal
Group $22,219 $21,369 $100,760 $82,970
Water 6,280 6,653 25,762 25,974
Food
Diagnostics
Group 5,459 3,038 18,024 9,894
Other (4,488) (876) (16,613) (3,507)
Total $29,470 $30,184 $127,933 $115,331
Gross
Profit Companion
(as a Animal Group 47.5% 48.1% 49.1% 48.1%
percen- Water 65.1% 68.1% 65.7% 67.4%
tage of Food
revenue): Diagnostics
Group 61.6% 58.3% 60.2% 56.5%
Income from
Opera-
tions Companion
(as a Animal Group 14.2% 15.7% 16.6% 15.9%
percen- Water 42.6% 45.5% 44.1% 45.8%
tage of Food
revenue): Diagnostics
Group 26.7% 18.5% 24.2% 16.4%
IDEXX Laboratories, Inc. and Subsidiaries
Revenues by Product and Service Categories
Amounts in thousands (Unaudited)
Three Months Ended
Percentage
Change
Percen- Net of
Percen- tage Acquisi-
tage Change tions
Percen- Change from and
Dec. 31 Dec. 31 Dollar tage from Acqui- Currency
2006 2005 Change Change Currency sitions Changes
(1) (2)
Net CAG Revenue:
Instruments
and
consumables $64,986 $59,181 $5,805 9.8% 2.7% - 7.1%
Rapid
assay
products 25,724 22,815 2,909 12.8% 0.8% 4.4% 7.6%
Laboratory
and
consulting
services 47,827 39,527 8,300 21.0% 3.0% 5.1% 12.9%
Practice
information
systems
and
digital
radiography 13,663 10,763 2,900 26.9% 1.1% - 25.8%
Pharmaceutical
products 4,795 3,656 1,139 31.2% - - 31.2%
Net
CAG
revenue 156,995 135,942 21,053 15.5% 2.3% 2.2% 11.0%
Net Water
Revenue:
Water 14,734 14,606 128 0.9% 3.0% - -2.1%
Net FDG Revenue:
Production
animal
products 16,630 12,569 4,061 32.3% 7.1% - 25.2%
Dairy
testing
products 3,850 3,853 (3) -0.1% 3.0% - -3.1%
Net
FDG
revenue 20,480 16,422 4,058 24.7% 6.2% - 18.5%
Net Revenue: $192,209 $166,970 $25,239 15.1% 2.7% 1.8% 10.6%
(1) Represents the percentage change in revenue attributed to the effect
of changes in currency rates from the three months ended December 31,
2005 to the three months ended December 31, 2006.
(2) Represents the percentage change in revenue attributed to incremental
revenues from businesses acquired since October 2005 during the three
months ended December 31, 2005 compared to the three months ended
December 31, 2006.
IDEXX Laboratories, Inc. and Subsidiaries
Revenues by Product and Service Categories
Amounts in thousands (Unaudited)
Twelve Months Ended
Percentage
Change
Percen- Net of
Percen- tage Acquisi-
tage Change tions
Percen- Change from and
Dec. 31 Dec. 31 Dollar tage from Acqui- Currency
2006 2005 Change Change Currency sitions Changes
(1) (2)
Net CAG Revenue:
Instruments
and
consumables $242,312 $217,537 $24,775 11.4% 0.5% - 10.9%
Rapid
assay
products 114,536 100,255 14,281 14.2% -0.1% 1.6% 12.7%
Laboratory
and
consulting
services 187,114 156,425 30,689 19.6% 0.2% 4.5% 14.9%
Practice
information
systems
and
digital
radiography 44,427 32,589 11,838 36.3% 0.8% 10.6% 24.9%
Pharmaceutical
products 17,930 14,024 3,906 27.9% - - 27.9%
Net CAG revenue 606,319 520,830 85,489 16.4% 0.3% 2.3% 13.8%
Net Water
Revenue: Water 58,466 56,760 1,706 3.0% 0.8% - 2.2%
Net FDG Revenue:
Production
animal
products 58,940 44,945 13,995 31.1% 0.9% - 30.2%
Dairy
testing
products 15,392 15,560 (168) -1.1% -0.1% - -1.0%
Net
FDG
revenue 74,332 60,505 13,827 22.9% 0.7% - 22.2%
Net Revenue: $739,117 $638,095$ 101,022 15.8% 0.4% 1.8% 13.6%
(1) Represents the percentage change in revenue attributed to the effect
of changes in currency rates from the twelve months ended December 31,
2005 to the twelve months ended December 31, 2006.
(2) Represents the percentage change in revenue attributed to incremental
revenues from businesses acquired since January 2005 during the twelve
months ended December 31, 2005 compared to the twelve months ended
December 31, 2006.
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Balance Sheet
Amounts in thousands (Unaudited)
December 31, December 31,
2006 2005
Assets: Current Assets:
Cash and cash equivalents $61,666 $67,151
Short-term investments 35,000 65,580
Accounts receivable, net 81,389 71,688
Inventories 95,996 69,369
Other current assets 28,212 25,457
Total current assets 302,263 299,245
Property and equipment, at cost 191,538 142,777
Less: accumulated depreciation 91,910 77,080
Property and equipment, net 99,628 65,697
Other long-term assets, net 157,669 125,734
Total assets $ 559,560 $490,676
Liabilities
and
Stockholders'
Equity: Current Liabilities:
Accounts payable $24,374 $19,842
Accrued expenses 90,315 78,208
Current portion of long-term debt 678 551
Deferred revenue 8,976 7,965
Total current liabilities 124,343 106,566
Long-term debt, net of current portion 6,447 -
Other long-term liabilities 18,909 14,800
Total long-term liabilities 25,356 14,800
Partner's interest in subsidiary - 300
Stockholders' Equity:
Common stock 4,662 4,594
Additional paid-in capital 479,993 437,394
Deferred stock units 1,852 1,316
Retained earnings 490,614 396,936
Treasury stock, at cost (577,826) (472,096)
Accumulated other comprehensive income 10,566 866
Total stockholders' equity 409,861 369,010
Total liabilities and stockholders'
equity $ 559,560 $490,676
IDEXX Laboratories, Inc. and Subsidiaries
Key Balance Sheet Information (Unaudited)
December 31, December 31,
2006 2005
Key
Balance Sheet Total cash, cash equivalents
Information: and investments (in thousands) $96,666 $132,731
Days sales outstanding 38 38
Inventory turns 1.9 2.4
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Amounts in thousands (Unaudited)
Twelve Months Ended
December 31, December 31,
2006 2005
Operating: Cash Flows from Operating Activities:
Net income $93,678 $78,254
Non-cash charges 25,551 27,553
Changes in current assets and
liabilities, net of acquisitions
and disposals (9,403) 10,745
Net cash provided by
operating activities $ 109,826 $116,552
Investing: Cash Flows from Investing Activities:
Decrease in investments, net 30,655 44,261
Purchase of property and equipment (32,331) (24,199)
Purchase of land and buildings (12,084) -
Net proceeds from sale of land
and buildings - 2,751
Acquisition of businesses and
intangible assets (25,220) (7,604)
Acquisition of equipment leased
to customers (1,720) (2,615)
Net cash provided (used) by
investing activities $(40,700) $12,594
Financing: Cash Flows from Financing Activities:
Repayment of notes payable (877) (2,057)
Purchase of treasury stock (105,711) (123,769)
Proceeds from the exercise of
stock options 20,922 18,841
Tax benefit from exercise of
stock options 9,407 -
Net cash used by financing
activities $(76,259) $(106,985)
Net effect of exchange rate changes 1,648 (2,166)
Net increase (decrease) in cash
and cash equivalents (5,485) 19,995
Cash and cash equivalents,
beginning of period 67,151 47,156
Cash and cash equivalents,
end of period $61,666 $67,151
IDEXX Laboratories, Inc. and Subsidiaries
Free Cash Flow (Unaudited)
Twelve Months Ended
December 31, December 31,
2006 2005
Free Cash
Flow: Net cash provided by
operating activities $ 109,826 $116,552
Financing cash flows attributable
to tax benefits from exercise of
stock options 9,407 -
Purchase of fixed assets (44,415) (24,199)
Acquisition of equipment leased
to customers (1,720) (2,615)
Free cash flow $73,098 $89,738
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
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2006 2005 2006 2005
Share repurchases
during the period 142,800 499,700 1,337,700 1,992,900
Average price paid
per share $83.18 $69.98 $79.02 $62.11
Shares remaining under
repurchase authorization
as of December 31, 2006 714,630
SOURCE IDEXX Laboratories, Inc.
Released January 26, 2007