January 25, 2008 - - 8-K: Current report | IDEXX Laboratories, Inc. (IDXX)

Contact: Merilee Raines, Chief Financial Officer, (207) 556-8155

FOR IMMEDIATE RELEASE

IDEXX Laboratories Announces Fourth Quarter Results

WESTBROOK, Maine, January 25, 2008— IDEXX Laboratories, Inc. (NASDAQ: IDXX), today reported that revenue for the fourth quarter of 2007 increased 27% to $245.0 million from $192.2 million for the fourth quarter of 2006. Earnings per diluted share (“EPS”) for the quarter ended December 31, 2007 were $0.40, compared to $0.38, for the same period in the prior year. Non-GAAP adjusted diluted EPS for the fourth quarter grew 29% to $0.40 from $0.31 for the fourth quarter of 2006.

“We completed another strong quarter for our companion animal business, with overall organic growth at 17% and each individual business growing at a double-digit rate, which I think speaks to the fundamental strength of our market and our business model,” said Jonathan W. Ayers, Chairman and CEO. “Of particular note, instruments had another strong placement quarter, continuing the strong trend in placement growth that we saw throughout 2007. We expect the momentum in our IDEXX VetLab instrumentation business to continue in 2008 with the launch of our two new instruments, Catalyst Dx (TM) and SNAPShot Dx (TM), both of which we expect to begin shipping in March.”

Companion Animal Group (“CAG”) revenue for the fourth quarter of 2007 increased 26% to $197.5 million from $157.0 million for the fourth quarter of 2006. Acquisitions of reference laboratories contributed 5% to growth and changes in foreign currency exchange rates contributed an additional 4%. Growth for the quarter adjusted for acquisitions and foreign currency exchange rates was 17%.

Water segment revenue for the fourth quarter of 2007 increased 17% to $17.3 million from $14.7 million for the fourth quarter of 2006 due primarily to higher sales volume, partly offset by lower average unit sales prices due to both higher relative sales in geographies where products are sold at lower average unit sales prices and greater price competition in certain geographies. Higher sales volumes resulted in part from our commencement in September 2007 of distribution of certain water testing kits manufactured by Invitrogen Corporation, which contributed 6% to revenue growth. Compared to the same period of 2006, changes in foreign currency exchange rates contributed 5% to Water revenue growth.

Production Animal Segment (“PAS”) revenue for the fourth quarter of 2007 increased 34% to $22.2 million from $16.6 million for the fourth quarter of 2006 due primarily to higher livestock diagnostics sales volume, including sales attributable to Institut Pourquier, which we acquired in March 2007. Sales of Pourquier products contributed 16% to PAS revenue growth. The favorable impact of higher sales volume was partly offset by lower average unit sales prices for products that test for transmissible spongiform encephalopathies (“TSE”) due to greater price competition. Compared to the same period of 2006, changes in foreign currency exchange rates contributed 11% to PAS revenue growth.

IDEXX Announces Fourth Quarter Results

January 25, 2008

Page 2 of 13

The accompanying financial tables provide more information concerning our revenue and other operating results for the three and twelve months ended December 31, 2007, as well as a reconciliation of non-GAAP adjusted diluted EPS to earnings per share.

Full-Year Results

Revenue for the year ended December 31, 2007 increased 25% to $922.6 million from $739.1 million for the year ended December 31, 2006. Revenue for the year ended December 31, 2007, adjusted for the impacts of acquisitions and foreign currency exchange rates, increased 14%.

Earnings per diluted share for the year ended December 31, 2007 increased 3% to $1.46 from $1.42 for the year ended December 31, 2006. Non-GAAP adjusted diluted EPS for the year ended December 31, 2007 grew 19% to $1.58 from $1.33 for the year ended December 31, 2006.

Additional Operating Results for the Fourth Quarter

Gross profit for the fourth quarter of 2007 increased $26.0 million, or 27%, to $122.2 million from $96.3 million for the fourth quarter of 2006. As a percentage of total revenue, gross profit was constant at 50%. Year-over-year, the gross profit percentage was unfavorably impacted by greater relative sales of lower margin products and services including laboratory and consulting services. Decreases in the gross margin percentage were offset by the favorable net impact of foreign currency exchange rates and higher average selling prices, resulting in part from higher relative sales of combination rapid assay products such as the SNAP^®4Dx^®,which was launched in the U.S. in September 2006.

Research and development (“R&D”) expense for the fourth quarter of 2007 was $16.8 million, or 6.8% of revenue, compared to $14.0 million, or 7.3% of revenue, for the fourth quarter of 2006. R&D expense grew primarily as a result of increased product development spending related to IDEXX VetLab^® instrumentation and to product development activities across all product and service categories.

Selling, general and administrative (“SG&A”) expense for the fourth quarter of 2007 was $68.7 million, or 28% of revenue, compared to $52.8 million, or 27% of revenue, for the fourth quarter of 2006. Year- over-year increased SG&A expense was due primarily to expanded worldwide sales, marketing and customer support resources; higher spending on information technology, facilities and other general support functions; and incremental activities associated with recently acquired businesses.

IDEXX Announces Fourth Quarter Results

January 25, 2008

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Outlook

The Company offers the following revised guidance for the full year of 2008:

Revenue is expected to be $1.05 billion to $1.07 billion, which represents revenue growth of 14% to 16%.

Diluted earnings per share are expected to be $1.83 to $1.87, which represents EPS growth of 25% to 28%. Excluding the impact in 2007 of acquisition-related purchase accounting and acquisition integration costs and the write-down of certain pharmaceutical assets, non-GAAP adjusted diluted EPS are projected to grow 16% to 18%.

Conference Call and Webcast Information

IDEXX Laboratories will be hosting a conference call today at 9:00 a.m. (eastern) to discuss its fourth quarter results. To participate in the conference call, dial 719-325-4782 or 877-723-9502 and reference confirmation code 3405969. An audio replay will be available through February 1, 2008 by dialing 719-457-0820 and referencing replay code 3405969.

The call will also be available via live or archived Webcast on the IDEXX Laboratories' web site at www.idexx.com.

About IDEXX Laboratories

IDEXX Laboratories, Inc. is a leader in companion animal health, serving practicing veterinarians around the world with innovative, technology-based offerings, including a broad range of diagnostic products and services, practice management systems and pharmaceuticals. IDEXX products enhance the ability of veterinarians to provide advanced medical care and to build more economically successful practices. IDEXX is also a worldwide leader in providing diagnostic tests and information for the production animal industry and tests for the quality and safety of water and milk. Headquartered in Maine, IDEXX Laboratories employs more than 4,500 people and offers products to customers in over 100 countries.

IDEXX Announces Fourth Quarter Results

January 25, 2008

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Note Regarding Forward-Looking Statements

This press release contains statements about the Company’s business prospects and estimates of the Company’s financial results for future periods that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management's expectations of future events as of the date of this press release, and the Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments. Actual results could differ materially from management’s expectations. Factors that could cause or contribute to such differences include the following: the Company’s ability to develop, manufacture, introduce and market new products and enhancements to existing products; the effectiveness of the Company’s sales and marketing activities; the Company’s ability to identify acquisition opportunities, complete acquisitions and integrate acquired businesses; the impact of competition and technological change on the markets for the Company’s products; the effect of government regulation on the Company’s business, including government decisions about whether and when to approve the Company’s products and decisions regarding labeling, manufacturing and marketing products; the impact of distributor purchasing decisions on sales of the Company’s products that are sold through distribution; changes or trends in veterinary medicine that affect the rate of use of the Company’s products and services by veterinarians; the Company’s ability to obtain patent and other intellectual property protection for its products, successfully enforce its intellectual property rights and defend itself against third party claims against the Company; disruptions, shortages or pricing changes that affect the Company’s purchases of products and materials from third parties, including from sole source suppliers; the effects of government regulatory decisions, customer demand, pricing and other factors on the realizability of the Company’s inventories; the Company’s ability to manufacture complex biologic products; the effects of operations outside the U.S., including from currency fluctuations, different regulatory, political and economic conditions, and different market conditions; and the loss of key employees. A further description of these and other factors can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2006, and quarterly report on Form 10-Q for the quarter ended September 30, 2007, in the section captioned "Risk Factors.”

IDEXX Announces Fourth Quarter Results

January 25, 2008

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IDEXX Laboratories, Inc. and Subsidiaries

Consolidated Statement of Operations

Amounts in thousands except per share data (Unaudited)

		Three Months Ended					Twelve Months Ended
		December 31,			December 31,		December 31,			December 31,
		2007			2006		2007			2006
Revenue:	Revenue	$	244,969		$	192,209	$	922,555		$	739,117
Expenses and
Income:	Cost of revenue		122,725			95,940		459,033			359,588
	Gross profit		122,244			96,269		463,522			379,529
	Sales and marketing		41,796			31,214		151,882			115,882
	General and administrative		26,937			21,634		108,119			82,097
	Research and development		16,769			13,951		67,338			53,617
	Income from operations		36,742			29,470		136,183			127,933
	Interest income (expense), net		(19	)		845		(1,340	)		2,817
	Income before provision for income taxes
	and partner's interest		36,723			30,315		134,843			130,750
	Provision for income taxes		11,195			5,643		40,829			37,224
	Partner's share of consolidated loss		-			-		-			(152	)
Net Income:	Net income	$	25,528		$	24,672	$	94,014		$	93,678
	Earnings per share: Basic	$	0.42		$	0.39	$	1.53		$	1.49
	Earnings per share: Diluted	$	0.40		$	0.38	$	1.46		$	1.42
	Shares outstanding: Basic		61,186			62,523		61,560			62,866
	Shares outstanding: Diluted		64,156			65,472		64,455			65,907

	Historical share and per share data has been retroactively restated to reflect the additional shares of common stock that were distributed on November 26, 2007 as a result of the two-for-one split of our outstanding common stock.

IDEXX Laboratories, Inc. and Subsidiaries

Key Operating Information (Unaudited)

		Three Months Ended						Twelve Months Ended
		December 31,			December 31,			December 31,			December 31,
		2007			2006			2007			2006
Key Operating	Gross profit		49.9	%		50.1	%		50.2	%		51.4	%
Ratios (as a	Sales, marketing, general and
percentage of	administrative expense		28.1	%		27.5	%		28.1	%		26.8	%
revenue):	Research and development expense		6.8	%		7.3	%		7.3	%		7.3	%
	Income from operations		15.0	%		15.3	%		14.8	%		17.3	%


International	International revenue (in thousands)	$	106,251		$	70,590		$	370,422		$	260,945
Revenue:	International revenue as percentage of
	total revenue		43.4	%		36.7	%		40.2	%		35.3	%

IDEXX Announces Fourth Quarter Results

January 25, 2008

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IDEXX Laboratories, Inc. and Subsidiaries

Non-GAAP Financial Measures

Amounts in thousands except per share data (Unaudited)

	Three Months Ended
					Gross Profit						Income from									Earnings per Share
	Gross Profit				as a % of Revenue						Operations				Net Income					Diluted
	Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,			Dec. 31,		Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,		Dec. 31,
	2007		2006		2007			2006			2007		2006		2007		2006			2007		2006

GAAP measurement	$	122,244	$	96,269		49.9	%		50.1	%	$	36,742	$	29,470	$	25,528	$	24,672		$	0.40	$	0.38
Acquisition-related purchase accounting,
acquisition integration costs& investment impairment⁽¹⁾		-		82		-			-			101		467		65		311			-		-
Discrete income tax benefits⁽²⁾		-		-		-			-			-		-		-		(4,830	)		-		(0.07	)
Non-GAAP comparative measurements⁽³⁾	$	122,244	$	96,351		49.9	%		50.1	%	$	36,843	$	29,937	$	25,593	$	20,153		$	0.40	$	0.31

Management believes adjusted diluted EPS is a useful non-GAAP financial measure to evaluate the results of ongoing operations, excluding significant specified events, period over period, and therefore believes that investors may find this information useful in addition to the GAAP results.

We use these supplemental non-GAAP financial measures to evaluate the Company's comparative financial performance. The specified items that are

excluded in these non-GAAP measures are actual charges that impact net income and cash flows, however, we believe that it is useful to evaluate our core business performance period over period excluding these specified items, in addition to relying upon GAAP financial measures.

⁽¹⁾ We believe that the change from period to period due to specific acquisition-related purchase accounting and integration costs is not representative of ongoing operations and is not indicative of future performance. Specific acquisition-related discrete costs do not include amortization expense related to acquired intangible assets. We applied the statutory income tax rates of the applicable tax jurisdictions to calculate the after-tax impact of these discrete items. Discrete items for 2006 also include a write-down of an equity investment in one of our technology licensors. We believe the investment write-down is infrequent and is not representative of ongoing operations; IDEXX owns no other equity investments.

⁽²⁾We believe that certain significant discrete income tax items create impacts on financial measures that are not indicative of future performance because the items are not likely to recur within a reasonable period. For 2006, the separately identified discrete income tax benefit was due to a reduction in previously accrued taxes in connection with the resolution of an Internal Revenue Service income tax audit for 2003 and 2004 in advance of the expiration of the statues of limitations.

⁽³⁾ The sum of the individual items may not equal the non-GAAP measurement due to rounding of the individual items in this presentation.

IDEXX Announces Fourth Quarter Results

January 25, 2008

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IDEXX Laboratories, Inc. and Subsidiaries

Non-GAAP Financial Measures

Amounts in thousands except per share data (Unaudited)

	Twelve Months Ended
					Gross Profit						Income from									Earnings per Share
	Gross Profit				as a % of Revenue						Operations				Net Income					Diluted
	Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,			Dec. 31,		Dec. 31,		Dec. 31,		Dec. 31,			Dec. 31,		Dec. 31,
	2007		2006		2007			2006			2007		2006		2007		2006			2007		2006

GAAP measurement	$	463,522	$	379,529		50.2	%		51.4	%	$	136,183	$	127,933	$	94,014	$	93,678		$	1.46	$	1.42
Specified items:
Write-downs of certain pharmaceutical assets⁽¹⁾		10,138		-		1.1	%		-			10,138		-		6,392		-			0.10		-
Acquisition-related purchase accounting,
acquisition integration costs& investment impairment⁽²⁾		1,979		82		0.3	%		0.1	%		2,482		467		1,588		311			0.02		-
Discrete income tax benefits⁽³⁾		-		-		-			-			-		-		-		(6,111	)		-		(0.09	)
Non-GAAP comparative measurements⁽⁴⁾	$	475,639	$	379,611		51.6	%		51.5	%	$	148,803	$	128,400	$	101,994	$	87,878		$	1.58	$	1.33

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® paste, a nitazoxanide product for the treatment of equine protozoal myeloencephalitis. We have written down these assets because product sales have been significantly lower than projected and we received notice from our third-party contract manufacturer of finished goods that the manufacturer will discontinue manufacturing the product in 2009. Due in part to an estimated production volume which is low, we believe that we will not be able to find an economically feasible replacement manufacturer and therefore that we will not be able to obtain the product after the termination of the existing manufacturing arrangement. We applied the statutory income tax rate of the applicable tax jurisdiction to calculate the after-tax impact of this discrete item.

⁽²⁾ We believe that the change from period to period due to specific acquisition-related purchase accounting and integration costs is not representative of ongoing operations and is not indicative of future performance. Specific acquisition-related discrete costs do not include amortization expense related to acquired intangible assets. We applied the statutory income tax rates of the applicable tax jurisdictions to calculate the after-tax impact of these discrete items. Discrete items for 2006 include a write-down of an equity investment in one of our technology licensors. We believe the investment write-down is infrequent and is not representative of ongoing operations; IDEXX owns no other equity investments.

⁽³⁾ We believe that certain significant discrete income tax items create impacts on financial measures that are not indicative of future performance because the items are not likely to recur within a reasonable period. For 2006, the separately identified discrete income tax benefits were composed of a tax benefit of $0.06 per diluted share due to a reduction of previously accrued taxes in connection with the resolution of an Internal Revenue Service income tax audit for 2003 and 2004 in advance of the expiration of the statutes of limitations and a tax benefit of $0.03 per diluted share due to the release of a valuation allowance on international deferred tax assets as a result of obtaining certain multi-year tax incentives and the release of a valuation allowance on international deferred tax assets as a result of a subsidiary demonstrating consistent sustained profitability.

⁽⁴⁾ The sum of the individual items may not equal the non-GAAP measurement due to rounding of the individual items in this presentation.

IDEXX Announces Fourth Quarter Results

January 25, 2008

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IDEXX Laboratories, Inc. and Subsidiaries

Segment Information

Amounts in thousands (Unaudited)

		Three Months Ended						Twelve Months Ended
		December 31,			December 31,			December 31,			December 31,
		2007			2006			2007			2006
Revenue:	Companion Animal Group	$	197,524		$	156,995		$	752,463		$	606,319
	Water		17,294			14,734			66,235			58,466
	Production Animal Segment		22,214			16,630			75,085			58,940
	Other		7,937			3,850			28,772			15,392
	Total	$	244,969		$	192,209		$	922,555		$	739,117

Gross Profit:	Companion Animal Group	$	93,912		$	74,524		$	363,240		$	297,999
	Water		10,696			9,588			41,656			38,441
	Production Animal Segment		14,051			11,020			46,728			38,654
	Other		3,451			1,587			11,377			6,106
	Unallocated		134			(450	)		521			(1,671	)
	Total	$	122,244		$	96,269		$	463,522		$	379,529

Income from
Operations:	Companion Animal Group	$	26,070		$	22,219		$	101,363		$	100,760
	Water		6,837			6,280			26,847			25,762
	Production Animal Segment		5,170			4,893			15,456			16,172
	Other		412			566			(75	)		1,852
	Unallocated		(1,747	)		(4,488	)		(7,408	)		(16,613	)
	Total	$	36,742		$	29,470		$	136,183		$	127,933

Gross Profit
(as a percentage
of revenue):	Companion Animal Group		47.5	%		47.5	%		48.3	%		49.1	%
	Water		61.8	%		65.1	%		62.9	%		65.7	%
	Production Animal Segment		63.3	%		66.3	%		62.2	%		65.6	%
	Other		43.5	%		41.2	%		39.5	%		39.7	%

Income from
Operations
(as a percentage
of revenue):	Companion Animal Group		13.2	%		14.2	%		13.5	%		16.6	%
	Water		39.5	%		42.6	%		40.5	%		44.1	%
	Production Animal Segment		23.3	%		29.4	%		20.6	%		27.4	%
	Other		5.2	%		14.7	%		(0.3	)%		12.0	%

IDEXX Announces Fourth Quarter Results

January 25, 2008

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IDEXX Laboratories, Inc. and Subsidiaries

Revenues by Product and Service Categories

Amounts in thousands (Unaudited)

Three Months Ended
	Dec. 31, 2007		Dec. 31, 2006		Dollar Change		Percentage Change			Percentage Change from Currency⁽¹⁾			Percentage Change from Acquisitions ⁽²⁾			Percentage Change Net of Acquisitions and Currency Effect ⁽³⁾

CAG	$	197,524	$	156,995	$	40,529		25.8	%		3.9	%		5.1	%		16.8	%
Water		17,294		14,734		2,560		17.4	%		5.3	%		-			12.1	%
PAS		22,214		16,630		5,584		33.6	%		10.9	%		16.0	%		6.7	%
Other		7,937		3,850		4,087		106.2	%		5.6	%		97.7	%		2.9	%
Total	$	244,969	$	192,209	$	52,760		27.4	%		4.6	%		7.5	%		15.3	%

Three Months Ended
	Dec. 31, 2007		Dec. 31, 2006		Dollar Change		Percentage Change			Percentage Change from Currency⁽¹⁾			Percentage Change from Acquisitions ⁽²⁾			Percentage Change Net of Acquisitions and Currency Effect⁽³⁾

Instruments and consumables	$	79,382	$	64,986	$	14,396		22.2	%		4.9	%		-			17.3	%
Rapid assay products		31,036		25,724		5,312		20.6	%		1.7	%		-			18.9	%
Laboratory and consulting services		63,843		47,827		16,016		33.5	%		4.5	%		16.6	%		12.4	%
Practice information systems and digital radiography		16,966		13,663		3,303		24.2	%		3.2	%		-			21.0	%
Pharmaceutical products		6,297		4,795		1,502		31.3	%		-			-			31.3	%
Net CAG revenue	$	197,524	$	156,995	$	40,529		25.8	%		3.9	%		5.1	%		16.8	%

⁽¹⁾ Represents the percentage change in revenue attributed to the effect of changes in currency rates from the three months ended December 31, 2006 to the three months ended December 31, 2007.

⁽²⁾ Represents the percentage change in revenue attributed to incremental revenues during the three months ended December 31, 2007 compared to the three months ended December 31, 2006 from businesses acquired since October 1, 2006.

⁽³⁾Organic growth

IDEXX Announces Fourth Quarter Results

January 25, 2008

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IDEXX Laboratories, Inc. and Subsidiaries

Revenues by Product and Service Categories

Amounts in thousands (Unaudited)

Twelve Months Ended
	Dec. 31, 2007		Dec. 31, 2006		Dollar Change		Percentage Change			Percentage Change from Currency⁽¹⁾			Percentage Change from Acquisitions ⁽²⁾			Percentage Change Net of Acquisitions and Currency Effect⁽³⁾

CAG	$	752,463	$	606,319	$	146,144		24.1	%		2.7	%		6.0	%		15.4	%
Water		66,235		58,466		7,769		13.3	%		3.5	%		-			9.8	%
PAS		75,085		58,940		16,145		27.4	%		7.4	%		12.4	%		7.6	%
Other		28,772		15,392		13,380		86.9	%		3.4	%		82.7	%		0.8	%
Total	$	922,555	$	739,117	$	183,438		24.8	%		3.2	%		7.6	%		14.0	%

Twelve Months Ended
	Dec. 31, 2007		Dec. 31, 2006		Dollar Change		Percentage Change			Percentage Change from Currency⁽¹⁾			Percentage Change from Acquisitions ⁽²⁾			Percentage Change Net of Acquisitions and Currency Effect⁽³⁾

Instruments and consumables	$	289,271	$	242,312	$	46,959		19.4	%		3.5	%		-			15.9	%
Rapid assay products		132,500		114,536		17,964		15.7	%		0.8	%		1.5	%		13.4	%
Laboratory and consulting services		255,193		187,114		68,079		36.4	%		3.4	%		18.4	%		14.6	%
Practice information systems and digital radiography		53,385		44,427		8,958		20.2	%		1.5	%		-			18.7	%
Pharmaceutical products		22,114		17,930		4,184		23.3	%		-			-			23.3	%
Net CAG revenue	$	752,463	$	606,319	$	146,144		24.1	%		2.7	%		6.0	%		15.4	%

(1) Represents the percentage change in revenue attributed to the effect of changes in currency rates from the twelve months ended December 31, 2006 to the twelve months ended December 31, 2007.

(2) Represents the percentage change in revenue attributed to incremental revenues during the twelve months ended December 31, 2007 compared to the twelve months ended December 31, 2006 from businesses acquired subsequent to January 1, 2006.

(3) Organic growth

IDEXX Announces Fourth Quarter Results

January 25, 2008

Page 11 of 13

IDEXX Laboratories, Inc. and Subsidiaries

Consolidated Balance Sheet

Amounts in thousands (Unaudited)

		December 31,			December 31,
		2007			2006
Assets:	Current Assets:
	Cash and cash equivalents	$	60,360		$	61,666
	Short-term investments		-			35,000
	Accounts receivable, net		108,384			81,389
	Inventories		98,804			95,996
	Other current assets		38,115			28,212
	Total current assets		305,663			302,263
	Property and equipment, at cost		255,176			191,538
	Less: accumulated depreciation		113,324			91,910
	Property and equipment, net		141,852			99,628
	Other long-term assets, net		254,664			157,669
	Total assets	$	702,179		$	559,560
Liabilities and
Stockholders’
Equity:	Current Liabilities:
	Accounts payable	$	32,510		$	24,374
	Accrued expenses		107,248			90,715
	Debt		72,956			678
	Deferred revenue		10,678			8,976
	Total current liabilities		223,392			124,743
	Long-term debt, net of current portion		5,727			6,447
	Other long-term liabilities		34,737			18,509
	Total long-term liabilities		40,464			24,956

	Stockholders’ Equity:
	Common stock		9,450			9,324
	Additional paid-in capital		514,773			475,331
	Deferred stock units		2,201			1,852
	Retained earnings		585,862			490,614
	Treasury stock, at cost		(696,668	)		(577,826	)
	Accumulated other comprehensive income		22,705			10,566
	Total stockholders’ equity		438,323			409,861
	Total liabilities and stockholders’ equity	$	702,179		$	559,560

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

		December 31,		December 31,
		2007		2006
Key
Balance Sheet	Total cash, cash equivalents and investments (in thousands)	$	60,360	$	96,666
Information:	Days sales outstanding		39		38
	Inventory turns		2.3		1.9

IDEXX Announces Fourth Quarter Results

January 25, 2008

Page 12 of 13

IDEXX Laboratories, Inc. and Subsidiaries

Consolidated Statement of Cash Flows

Amounts in thousands (Unaudited)

		Twelve Months Ended
		December 31,			December 31,
		2007			2006
Operating:	Cash Flows from Operating Activities:
	Net income	$	94,014		$	93,678
	Non-cash charges		42,121			26,384
	Changes in current assets and liabilities, net of
	acquisitions and disposals		(555	)		(10,236	)
	Net cash provided by operating activities	$	135,580		$	109,826
Investing:	Cash Flows from Investing Activities:
	Decrease in investments, net		35,000			30,655
	Purchase of property and equipment		(65,138	)		(32,331	)
	Purchase of land and buildings		-			(12,084	)
	Acquisition of businesses and intangible assets		(89,884	)		(25,220	)
	Acquisition of equipment leased to customers		(1,106	)		(1,720	)
	Net cash used by investing activities	$	(121,128	)	$	(40,700	)
Financing:	Cash Flows from Financing Activities:
	Borrowings (payments) of notes payable, net		69,992			(877	)
	Purchase of treasury stock		(118,843	)		(105,711	)
	Proceeds from the exercise of stock options		20,941			20,922
	Tax benefit from exercise of stock options		9,267			9,407
	Net cash used by financing activities	$	(18,643	)	$	(76,259	)
	Net effect of exchange rate changes		2,885			1,648
	Net decrease in cash and cash equivalents		(1,306	)		(5,485	)
	Cash and cash equivalents, beginning of period		61,666			67,151
	Cash and cash equivalents, end of period	$	60,360		$	61,666

IDEXX Laboratories, Inc. and Subsidiaries

Free Cash Flow

Amounts in thousands (Unaudited)

		Twelve Months Ended
		December 31,			December 31,
		2007			2006
Free Cash
Flow:	Net cash provided by operating activities	$	135,580		$	109,826
	Financing cash flows attributable to tax benefits from exercise of stock options		9,267			9,407
	Purchase of fixed assets		(65,138	)		(44,415	)
	Acquisition of equipment leased to customers		(1,106	)		(1,720	)
	Free cash flow	$	78,603		$	73,098

	Free cash flow indicates the cash generated from operations and tax benefits attributable to stock option exercises, reduced by investments in fixed assets. We feel free cash flow is a useful measure because it indicates the cash the operations of the business are generating after appropriate reinvestment for recurring investments in fixed assets that are required to operate the business. We believe this is a common financial measure useful to further evaluate the results of operations.

IDEXX Announces Fourth Quarter Results

January 25, 2008

Page 13 of 13

IDEXX Laboratories, Inc. and Subsidiaries
Common Stock Repurchases (Unaudited)

	Three Months Ended				Twelve Months Ended
	December 31,		December 31,		December 31,		December 31,
	2007		2006		2007		2006
Share repurchases during the period		318,046		285,600		2,577,006		2,675,400
Average price paid per share	$	60.20	$	41.59	$	45.94	$	39.51

Shares remaining under repurchase authorization as of December 31, 2007						2,852,254

IDEXX Laboratories, Inc. and Subsidiaries

Earnings per Share Adjusted for Stock Split (Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

2007

2006

2007

2006

Basic
As reported	$	0.42	$	0.79	$	1.53	$	2.98
Adjusted for stock split	$	0.42	$	0.39	$	1.53	$	1.49
Diluted
As reported	$	0.40	$	0.75	$	1.46	$	2.84
Adjusted for stock split	$	0.40	$	0.38	$	1.46	$	1.42

Form: 8-K

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