Form: 8-K

Current report

April 21, 2003

Documents

Exhibit 99.1

[IDEXX LABORATORIES LOGO]

      Contact: Merilee Raines, Vice President, Finance, (207) 856-0446

FOR IMMEDIATE RELEASE

IDEXX Laboratories Announces First Quarter Results

WESTBROOK, Maine, April 21, 2003 — IDEXX Laboratories, Inc. (NASDAQ: IDXX) today reported that net income increased 68% to $12.1 million for the quarter ended March 31, 2003, from $7.2 million for the same period in the prior year. Earnings per diluted share for the quarter were $0.34, a 62% increase over earnings per diluted share of $0.21 for the quarter ended March 31, 2002. During the first quarter of 2002, the Company incurred an after tax charge of $1.9 million, or $0.05 per diluted share, related to the retirement of its former CEO. Excluding the effect of the 2002 charge, net income and earnings per share would have increased 33% and 31%, respectively, in 2003. Revenue for the first quarter of 2003 increased 13% to $109.2 million from $96.6 million for the first quarter of 2002.

        Companion Animal Group (CAG) revenue for the first quarter of 2003 increased 15% to $88.2 million from $76.4 million for the first quarter of 2002. This increase resulted primarily from increased sales of instruments and consumables, including the sale of 183 units of the Company’s LaserCyte hematology system, which was introduced in the fourth quarter of 2002, and increased sales of rapid assays and laboratory services. Approximately 3% of CAG revenue growth was due to the favorable impact of foreign currency exchange.

        Food and Environmental Group revenue for the first quarter of 2003 increased 5% to $21.1 million from $20.1 million for the first quarter of 2002. Increased sales of water testing and production animal diagnostic products were offset partially by a decline in sales of dairy testing products. Excluding the favorable effect of foreign currency exchange, FEG sales would have been approximately flat relative to 2002 sales.

        “We are very pleased with the Company’s strong profit performance this quarter, which resulted from accelerated sales growth and improving margins,” said Jonathan W. Ayers, Chairman and CEO. “We achieved solid progress with the LaserCyte hematology system launch, as we continued a disciplined ramp-up in volumes. Our first quarter results also reflect good performance from our international business, which had strong volume growth that was further enhanced by currency translation.”


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Outlook for 2003

The Company offers the following guidance for the full year of 2003:

• Revenue is expected to be approximately $465 million.
• Operating margin is expected to be approximately 17.5% of revenue.
• Diluted earnings per share are expected to be approximately $1.58.

The Company offers the following guidance for the second quarter of 2003:


• Revenue is expected to be $118 million to $120 million.
• Operating margin is expected to be 18% to 19% of revenue.
• Diluted earnings per share are expected to be $0.42 to $0.43.

        IDEXX Laboratories, Inc. is a worldwide leader in the development and commercialization of innovative, technology-based products and services for animal health. The Company’s largest business is focused on companion animal health, combining biotechnology, medical device technology and information technology to aid veterinarians in providing better medicine while building successful practices. IDEXX Laboratories is also focused on employing innovative technologies to monitor production animal health and the safety and quality of drinking water and milk. Headquartered in Westbrook, Maine, IDEXX Laboratories employs more than 2,200 people and offers products to customers in more than 50 countries.

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations of future events, which are subject to risks and uncertainties. If underlying assumptions prove inaccurate, actual results could vary materially from management’s expectations. Risks and uncertainties include timing and success of new product introductions, competition and technological change, government regulation and obtaining government approvals, product demand and market acceptance, availability of products and raw materials, and litigation. A further description of these risks and uncertainties and other factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002, in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments.

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IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Operations
Amounts in thousands except per share data (Unaudited)


Three Months Ended
March 31,      March 31,     
2002      2003     
Revenue:     Revenue     $ 96,551   $ 109,247  
Expenses and   
Income:    Cost of revenue    53,490    57,785  
   Gross profit    43,061    51,462  
   Sales and marketing    13,698    16,323  
   General and administrative    11,865    10,355  
   Research and development    7,182    7,337  
   Income from operations    10,316    17,447  
   Interest income, net    570    690  
   Income before provision for income taxes    10,886    18,137  
   Provision for income taxes    3,701    6,075  
Net Income:    Net income   $ 7,185   $ 12,062  
   Earnings per share: Basic   $ 0.21   $ 0.36  
   Earnings per share: Diluted   $ 0.21   $ 0.34  
   Shares outstanding: Basic    33,883    33,812  
   Shares outstanding: Diluted    35,017    35,520  
  

IDEXX Laboratories, Inc. and Subsidiaries
Key Operating Ratios (Unaudited)


Three Months Ended
March 31,     March 31,    
2002     2003    
Key                  
Operating                  
Ratios (as a                  
percentage                  
of revenue):    Gross profit    44.6 %  47.1 %
   Sales, marketing, general and administrative expense    26.5 %  24.4 %
   Research and development expense    7.4 %  6.7 %
   Income from operations    10.7 %  16.0 %
International                  
Revenue:    International revenue   $    26,334   $    33,209  


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IDEXX Laboratories, Inc. and Subsidiaries
Segment Information
Amounts in thousands except per share data (Unaudited)


Three Months Ended
March 31,           March 31,    
2002           2003    
Revenue:     Companion Animal Group     $76,430   $ 88,188  
   Food and Environmental Group    20,121    21,059  
   Total   $ 96,551   $ 109,247  
  
Gross Profit:    Companion Animal Group   $ 31,658   $ 39,407  
   Food and Environmental Group    11,403    12,055  
   Total   $ 43,061   $ 51,462  
  
Income from                 
Operations:    Companion Animal Group   $ 7,936   $ 12,687  
   Food and Environmental Group    6,023    5,558  
    Other    (3,643 )  (798 )
   Total   $ 10,316   $ 17,447  
  
Gross Profit                 
(as a percentage                 
of revenue):    Companion Animal Group    41.4 %  44.7 %
   Food and Environmental Group    56.7 %  57.2 %
Operating                 
Profit (as a                 
percentage                 
of revenue):    Companion Animal Group    10.4 %  14.4 %
   Food and Environmental Group    29.9 %  26.4 %


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IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Balance Sheet
Amounts in thousands except per share data (Unaudited)


December 31,         March 31,     
2002         2003     
Assets:     Current Assets:            
   Cash and cash equivalents   $ 113,788   $ 133,451  
   Short-term investments    33,403    41,980  
   Accounts receivable, net    45,689    51,582  
   Inventories    75,086    69,382  
   Other current assets    21,154    21,306  
   Total current assets      289,120     317,701  
   Long-term investments     15,572    8,708  
   Property and equipment - cost    115,309    115,953  
   Less - Accumulated depreciation    65,854    67,190  
   Property and equipment, net     49,455    48,763  
   Goodwill, net     52,321    52,280  
   Other intangible assets, net     3,836    3,818  
   Other non-current assets, net     6,348    5,648  
   Total assets    $ 416,652   $ 436,918  
Liabilities   
and   
Stockholders'   
Equity:    Current Liabilities:   
   Accounts payable   $ 9,427   $ 17,013  
   Accrued expenses    51,710    51,497  
   Notes payable    973    984  
   Deferred revenue    7,662    8,318  
   Total current liabilities      69,772     77,812  
   Long-term Liabilities:   
   Deferred tax liabilities    --    39  
   Deferred revenue    5,907    5,716  
   Total long-term liabilities      5,907     5,755  
   Stockholders' Equity:   
   Common Stock, $0.10 par value: authorized  
       60,000 shares, issued 42,331 shares in 2002  
       and 43,005 in 2003    4,233    4,301  
   Additional paid-in capital    334,348    348,769  
   Retained earnings    183,260    195,322  
   Treasury stock (8,650 shares in 2002 and 9,041  
       shares in 2003), at cost    (178,357 )  (192,512 )
   Accumulated other comprehensive income (loss)    (2,511 )  (2,529 )
   Total stockholders' equity      340,973     353,351  
   Total liabilities and stockholders' equity    $ 416,652   $ 436,918  


IDEXX Laboratories, Inc. and Subsidiaries
Key Balance Sheet Statistics (Unaudited)


December 31,         March 31,  
2002         2003  
Key Balance                  
Sheet   
Statistics:    Days sales outstanding    40    41  
   Inventory turns    1.5  1.7

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IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Cash Flow
Amounts in thousands except per share data (Unaudited)


Three Months Ended
March 31,         March 31,   
2002         2003   
Operating:     Cash Flows from Operating Activities:            
   Net income   $ 7,185   $ 12,062  
   Non-cash charges    6,630    5,567  
   Changes in current assets and liabilities, net  
       of acquisitions and disposals    10,640    11,915  
   Net cash provided by operating activities   $ 24,455   $ 29,544  
Investing:    Cash Flows from Investing Activities:   
   Increase in investments, net    (7,399 )  (1,771 )
   Purchase of property and equipment    (3,793 )  (3,089 )
   Increase in other assets    (668 )  (468 )
   Net cash used by investing activities   $ (11,860 ) $ (5,328 )
Financing:    Cash Flows from Financing Activities:   
   Purchase of treasury stock    --    (9,257 )
   Proceeds from the exercise of stock options    2,268    4,745  
   Net cash provided (used) by financing activities   $ 2,268   $ (4,512 )
   Net effect of exchange rate changes    (51 )  (41 )
   Net increase in cash and cash equivalents    14,812    19,663  
   Cash and cash equivalents, beginning of period    66,666    113,788  
   Cash and cash equivalents, end of period   $ 81,478   $ 133,451  

IDEXX Laboratories, Inc. and Subsidiaries
Free Cash Flow (Unaudited)


Three Months Ended
March 31,      March 31,   
2002      2003   
Free Cash                  
Flow:    Net cash provided by operating activities   $    24,455   $    29,544  
   Purchase of property and equipment    (3,793 )  (3,089 )
   Increase in other assets    (668 )  (468 )
   Free cash flow    $    19,994   $     25,987  


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