Published on July 25, 2008
Contact:
Merilee Raines, Chief Financial Officer, 1-207-556-8155
FOR
IMMEDIATE RELEASE
IDEXX
Laboratories Announces Second Quarter Results
WESTBROOK,
Maine, July 25, 2008—
IDEXX
Laboratories, Inc. (NASDAQ: IDXX), today reported that revenue for the second
quarter of 2008 increased 18% to $280.6 million from $237.0 million for the
second quarter of 2007. Diluted earnings per share (“EPS”) for the quarter ended
June 30, 2008 were $0.63, compared to $0.34 for the same period in the prior
year. Second quarter 2007 results included several discrete items detailed
in
the accompanying non-GAAP reconciliation table that reduced reported EPS by
$0.10. There were no adjustments to EPS related to discrete items in the second
quarter of 2008. Diluted EPS grew 43% when compared to second quarter 2007
non-GAAP diluted EPS of $0.44.
“Our
results for both the second quarter and the first half of the year demonstrate
the consistency of our revenue and profit model. The economic environment
contributed to slightly slower organic revenue growth compared to recent
quarters after taking into account exceptional revenues from one of our
pharmaceutical products; however, we had strong earnings growth and above
plan operating margins,” said Jonathan W. Ayers, Chairman and Chief Executive
Officer. “We continue to see solid revenue trends overall, particularly in the
companion animal veterinary market, and we have raised our earnings per share
guidance for the full year of 2008, even as we remain somewhat cautious about
the economic outlook.”
“We
also
continue to achieve milestones in the controlled launch of our next generation
point-of-care instrument systems, Catalyst Dx™
and
SNAPshot Dx™.
We are
gaining customer experience with the early placements and, as part of the
controlled launch process, are incorporating refinements in the instruments’
design and software, all while building a backlog of orders for higher volume
shipments in the second half of the year.”
Revenue
Performance
Companion
Animal Group (“CAG”) revenue for the second quarter of 2008 increased 19% to
$230.8 million from $194.0 million for the second quarter of 2007. Acquisitions
of reference laboratories contributed less than 1% to CAG revenue 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 15%. The increase in CAG revenue was due to increased sales volume across
all lines of business, most notably in our pharmaceuticals business where
incremental sales of PZI VET®,
our
insulin product for the treatment of diabetic cats, contributed an estimated
$10
million, or 5%, to CAG revenue growth. In the second quarter we announced that
we would be discontinuing this product because the raw material is no longer
available, which resulted in the subsequent sale of all of our remaining PZI
VET®
inventory.
IDEXX
Announces Second Quarter Results
July
25,
2008
Page
of
2 of
13
Water
segment revenue for the second quarter of 2008 increased 18% to $20.2 million
from $17.1 million for the second quarter of 2007 as higher sales volume offset
lower average unit sales prices driven by changes in regional sales mix. Higher
sales volumes reflected the distribution of water testing kits manufactured
by
Invitrogen Corporation under an arrangement that commenced in September 2007,
which contributed 8% to Water revenue growth. Changes in foreign currency
exchange rates also added 4% to Water revenue growth.
Production
Animal Segment (“PAS”) revenue for the second quarter of 2008 increased 15% to
$21.5 million from $18.7 million for the second quarter of 2007 as higher
livestock diagnostics sales volume offset lower average unit sales prices
resulting from increased price competition. Changes in foreign currency exchange
rates contributed 11% to PAS revenue growth.
Year-to-Date
Results
Year-to-date
revenue increased 18% to $529.6 million from $448.2 million for the six months
ended June 30, 2007. Revenue for the six months ended June 30, 2008, adjusted
for the impacts of acquisitions and foreign currency exchange rates, increased
12%.
Year-to-date
diluted EPS increased 61% to $1.06 from $0.66 for the six months ended June
30,
2007. Non-GAAP diluted EPS of $1.04 grew 33% when compared to 2007 non-GAAP
diluted EPS of $0.78.
Additional
Operating Results for the Second Quarter
Gross
profit for the second quarter of 2008 increased $37.0 million, or 32%, to $151.3
million from $114.2 million for the second quarter of 2007. Gross margin
increased to 54% from 48%. Gross margin in the second quarter of 2007 was
depressed by the write-off of inventory and prepaid royalties related to our
Navigator pharmaceutical product.
Research
and development (“R&D”) expense for the second quarter of 2008 was $18.3
million compared to $17.3 million for the second quarter of 2007. As a
percentage of revenue, R&D expense was 7% in both the second quarter of 2007
and 2008. R&D expense growth reflected higher personnel costs due, in part,
to increased headcount and increased corporate research and development
resources dedicated to software for information management. These increases
were
partly offset by a decrease in product development spending related to our
Catalyst Dx™
and
SNAPshot Dx™
analyzers, which were launched in the first quarter.
IDEXX
Announces Second Quarter Results
July
25,
2008
Page
of 3
of 13
Selling,
general and administrative (“SG&A”) expense for the second quarter of 2008
was $74.1 million, or 26% of revenue, compared to $64.4 million, or 27% of
revenue, for the second quarter of 2007. Growth in SG&A expense reflected
increased headcount and worldwide expansion of sales, marketing and customer
support resources as well as the unfavorable impact of exchange rates on foreign
currency denominated expenses.
Supplementary
Analysis of Results
The
accompanying financial tables provide more information concerning our revenue
and other operating results for the three and six months ended June 30, 2008,
as
well as a reconciliation of non-GAAP diluted EPS to earnings per
share.
Outlook
The
Company offers the following revised guidance for the full year of
2008:
|
·
|
Revenue
is expected to be $1.06 billion to $1.07 billion, updated from guidance
of
$1.06 billion to $1.075 billion provided in April of this year, which
represents revenue growth of 15% to 16%.
|
|
·
|
Diluted
EPS are expected to be $1.89 to $1.92, updated from guidance of $1.84
to
$1.87 provided in April of this year, which represents EPS growth
of 29%
to 32%.
|
|
·
|
Non-GAAP
diluted EPS are expected to be $1.87 to $1.90, reflecting growth
of 18% to
20%. Non-GAAP diluted EPS excludes the impact of discrete income
tax
benefits in 2008 and acquisition-related purchase accounting and
acquisition integration costs and the write-down of certain pharmaceutical
assets in 2007.
|
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
612-332-0530 or 800-288-8968 and reference confirmation code 954295. An audio
replay will be available through August 1, 2008 by dialing 320-365-3844 and
referencing replay code 954295.
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 Second Quarter Results
July
25,
2008
Page
of 4
of 13
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;
disruptions, shortages or pricing changes that affect the Company’s purchases of
products and materials from third parties, including from sole source suppliers;
the Company’s ability to identify acquisition opportunities, complete
acquisitions and integrate acquired businesses; the impact of competition,
technological change, and veterinary hospital consolidation on the markets
for
the Company’s products; the Company’s ability to manufacture complex biologic
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 effects of deep or sustained economic weakness on pet owner
decisions regarding pet health care; 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; 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, 2007,
and
quarterly report on Form 10-Q for the quarter ended March 31, 2008, in the
section captioned "Risk Factors.”
IDEXX
Announces Second Quarter Results
July
25,
2008
Page
of 5
of 13
| 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,
|
|
||||
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|||||
|
Revenue:
|
Revenue
|
$
|
280,570
|
$
|
237,046
|
$
|
529,644
|
$
|
448,201
|
|||||
|
Expenses
and
|
|
|||||||||||||
|
Income:
|
Cost
of revenue
|
129,310
|
122,825
|
248,548
|
225,401
|
|||||||||
|
Gross
profit
|
151,260
|
114,221
|
281,096
|
222,800
|
||||||||||
|
Sales
and marketing
|
44,214
|
36,747
|
88,215
|
72,329
|
||||||||||
|
General
and administrative
|
29,881
|
27,690
|
59,702
|
53,839
|
||||||||||
|
Research
and development
|
18,274
|
17,317
|
35,569
|
33,288
|
||||||||||
|
Income
from operations
|
58,891
|
32,467
|
97,610
|
63,344
|
||||||||||
|
Interest
expense, net
|
643
|
834
|
1,128
|
806
|
||||||||||
|
Income
before provision for income taxes
|
58,248
|
31,633
|
96,482
|
62,538
|
||||||||||
|
Provision
for income taxes
|
18,884
|
9,969
|
29,567
|
19,847
|
||||||||||
|
Net
Income:
|
Net
income
|
$
|
39,364
|
$
|
21,664
|
$
|
66,915
|
$
|
42,691
|
|||||
|
Earnings
per share: Basic
|
$
|
0.66
|
$
|
0.35
|
$
|
1.11
|
$
|
0.69
|
||||||
|
Earnings
per share: Diluted
|
$
|
0.63
|
$
|
0.34
|
$
|
1.06
|
$
|
0.66
|
||||||
|
Shares
outstanding: Basic
|
60,029
|
61,697
|
60,448
|
61,984
|
||||||||||
|
Shares
outstanding: Diluted
|
62,440
|
64,400
|
63,017
|
64,758
|
||||||||||
|
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
|
|
Six
Months Ended
|
|
|||||||||||
|
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
||||
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
||||
|
Key
Operating
|
Gross
profit
|
53.9
|
%
|
48.2
|
%
|
53.1
|
%
|
49.7
|
%
|
|||||
|
Ratios
(as
a
|
Sales,
marketing, general and
|
|||||||||||||
| percentage of |
administrative
expense
|
26.4
|
%
|
27.2
|
%
|
27.9
|
%
|
28.2
|
%
|
|||||
| revenue): |
Research
and development expense
|
6.5
|
%
|
7.3
|
%
|
6.7
|
%
|
7.4
|
%
|
|||||
|
Income
from operations (1)
|
21.0
|
%
|
13.7
|
%
|
18.4
|
%
|
14.1
|
%
|
||||||
| International |
International
revenue (in
thousands)
|
$
|
113,928
|
$
|
94,098
|
$
|
217,256
|
$
|
174,967
|
|||||
| Revenue: |
International
revenue as a percentage of
|
|||||||||||||
|
total
revenue
|
40.6
|
%
|
39.7
|
%
|
41.0
|
%
|
39.0
|
%
|
||||||
(1)
The sum
of individual items may not equal the total due to rounding.
IDEXX
Announces Second Quarter Results
July
25,
2008
Page
of 6
of 13
|
Non-GAAP
Financial Measures
|
|||||||||||||||||||||||||
|
Amounts
in thousands except per share data (Unaudited)
|
|||||||||||||||||||||||||
|
Three
Months Ended
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
Income
from
|
|
|
|
|
|
Earnings
per Share
|
|
||||||||||||
|
|
|
Gross
Profit
|
|
Operations
|
|
Net
Income
|
|
Diluted
|
|
||||||||||||||||
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
||||||||
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|||||||||
|
GAAP
measurement
|
$
|
151,260
|
$
|
114,221
|
$
|
58,891
|
$
|
32,467
|
$
|
39,364
|
$
|
21,664
|
$
|
0.63
|
$
|
0.34
|
|||||||||
|
%
of revenue
|
53.9
|
%
|
48.2
|
%
|
21.0
|
%
|
13.7
|
%
|
14.0
|
%
|
9.1
|
%
|
|||||||||||||
|
Write-downs
of certain pharmaceutical
|
|||||||||||||||||||||||||
|
assets
(1)
|
-
|
10,138
|
-
|
10,138
|
-
|
6,392
|
-
|
0.10
|
|||||||||||||||||
|
Acquisition-related
purchase accounting
|
|||||||||||||||||||||||||
|
and
acquisition integration costs
(2)
|
-
|
644
|
-
|
808
|
-
|
528
|
-
|
0.01
|
|||||||||||||||||
|
Non-GAAP
comparative measurements(3)
|
$
|
151,260
|
$
|
125,003
|
$
|
58,891
|
$
|
43,413
|
$
|
39,364
|
$
|
28,584
|
$
|
0.63
|
$
|
0.44
|
|||||||||
|
%
of revenue
|
53.9
|
%
|
52.7
|
%
|
21.0
|
%
|
18.3
|
%
|
14.0
|
%
|
12.1
|
%
|
|||||||||||||
|
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 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 of 2007, 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 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)
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 Second Quarter Results
July
25,
2008
Page
of 7
of 13
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|||||||||||||||||||||||||
|
Non-GAAP
Financial Measures
|
|||||||||||||||||||||||||
|
Amounts
in thousands except per share data (Unaudited)
|
|||||||||||||||||||||||||
|
Six
Months Ended
|
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
Income
from
|
|
|
|
|
|
Earnings
per Share
|
|
||||||||||||
|
|
|
Gross
Profit
|
|
Operations
|
|
Net
Income
|
|
Diluted
|
|
||||||||||||||||
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
||||||||
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|||||||||
|
GAAP
measurement
|
$
|
281,096
|
$
|
222,800
|
$
|
97,610
|
$
|
63,344
|
$
|
66,915
|
$
|
42,691
|
$
|
1.06
|
$
|
0.66
|
|||||||||
|
%
of revenue
|
53.1
|
%
|
49.7
|
%
|
18.4
|
%
|
14.1
|
%
|
12.6
|
%
|
9.5
|
%
|
|||||||||||||
|
Write-downs
of certain pharmaceutical
|
|||||||||||||||||||||||||
|
assets
(1)
|
-
|
10,138
|
-
|
10,138
|
-
|
6,392
|
-
|
0.10
|
|||||||||||||||||
|
Acquisition-related
purchase accounting
|
|||||||||||||||||||||||||
|
and
acquisition integration costs
(2)
|
-
|
1,892
|
-
|
2,242
|
-
|
1,432
|
-
|
0.02
|
|||||||||||||||||
|
Discrete
income tax benefits(3)
|
-
|
-
|
-
|
-
|
(1,472
|
)
|
-
|
(0.02
|
)
|
-
|
|||||||||||||||
|
Non-GAAP
comparative measurements(4)
|
$
|
281,096
|
$
|
234,830
|
$
|
97,610
|
$
|
75,724
|
$
|
65,443
|
$
|
50,515
|
$
|
1.04
|
$
|
0.78
|
|||||||||
|
%
of revenue
|
53.1
|
%
|
52.4
|
%
|
18.4
|
%
|
16.9
|
%
|
12.4
|
%
|
11.3
|
%
|
|||||||||||||
|
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 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 of 2007, 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 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
2008, the separately identified discrete income tax benefit was due
to a
reduction in international deferred tax liabilities due to lower
anticipated international tax rates.
|
|||||||||||||||||||||||||
|
(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 Second Quarter Results
July
25,
2008
Page
of 8
of 13
|
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,
|
|
||||
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|||||
|
Revenue:
|
CAG
|
$
|
230,752
|
$
|
194,025
|
$
|
434,361
|
$
|
367,458
|
|||||
|
Water
|
20,150
|
17,105
|
36,966
|
31,510
|
||||||||||
|
PAS
|
21,489
|
18,683
|
42,651
|
35,494
|
||||||||||
|
Other
|
8,179
|
7,233
|
15,666
|
13,739
|
||||||||||
|
Total
|
$
|
280,570
|
$
|
237,046
|
$
|
529,644
|
$
|
448,201
|
||||||
|
Gross
Profit:
|
CAG
|
$
|
120,800
|
$
|
89,049
|
$
|
222,785
|
$
|
175,379
|
|||||
|
Water
|
12,433
|
10,809
|
22,748
|
20,041
|
||||||||||
|
PAS
|
14,430
|
11,302
|
28,663
|
22,265
|
||||||||||
|
Other
|
3,501
|
2,931
|
6,628
|
4,845
|
||||||||||
|
Unallocated
|
96
|
130
|
272
|
270
|
||||||||||
|
Total
|
$
|
151,260
|
$
|
114,221
|
$
|
281,096
|
$
|
222,800
|
||||||
| Income from |
|
|||||||||||||
|
Operations:
|
CAG
|
$
|
47,807
|
$
|
23,179
|
$
|
77,362
|
$
|
46,764
|
|||||
|
Water
|
8,302
|
7,156
|
14,572
|
12,798
|
||||||||||
|
PAS
|
5,514
|
3,760
|
11,342
|
7,725
|
||||||||||
|
Other
|
(54
|
)
|
(101
|
)
|
(243
|
)
|
(514
|
)
|
||||||
|
Unallocated
|
(2,678
|
)
|
(1,527
|
)
|
(5,423
|
)
|
(3,429
|
)
|
||||||
|
Total
|
$
|
58,891
|
$
|
32,467
|
$
|
97,610
|
$
|
63,344
|
||||||
|
Gross
Profit
|
|
|||||||||||||
| (as a percentage |
|
|||||||||||||
|
of
revenue):
|
CAG
|
52.4
|
%
|
45.9
|
%
|
51.3
|
%
|
47.7
|
%
|
|||||
|
Water
|
61.7
|
%
|
63.2
|
%
|
61.5
|
%
|
63.6
|
%
|
||||||
|
PAS
|
67.2
|
%
|
60.5
|
%
|
67.2
|
%
|
62.7
|
%
|
||||||
|
Other
|
42.8
|
%
|
40.5
|
%
|
42.3
|
%
|
35.3
|
%
|
||||||
|
Income
from
|
|
|||||||||||||
|
Operations
|
|
|||||||||||||
| (as a percentage |
|
|||||||||||||
|
of
revenue):
|
CAG
|
20.7
|
%
|
11.9
|
%
|
17.8
|
%
|
12.7
|
%
|
|||||
|
Water
|
41.2
|
%
|
41.8
|
%
|
39.4
|
%
|
40.6
|
%
|
||||||
|
PAS
|
25.7
|
%
|
20.1
|
%
|
26.6
|
%
|
21.8
|
%
|
||||||
|
Other
|
(0.7
|
%)
|
(1.4
|
%)
|
(1.6
|
%)
|
(3.7
|
%)
|
||||||
IDEXX
Announces Second Quarter Results
July
25,
2008
Page
of 9
of 13
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
||||||||||||||||||||||
|
Revenues
by Product and Service Categories
|
||||||||||||||||||||||
|
Amounts
in thousands (Unaudited)
|
||||||||||||||||||||||
|
Three
Months Ended
|
||||||||||||||||||||||
|
Net
Revenue
|
June
30,
2008
|
|
June
30,
2007
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency
(1)
|
|
Percentage
Change
from
Acquisitions
(2)
|
|
Percentage
Change
Net of
Acquisitions
and
Currency
Effect(3)
|
|||||||||
|
CAG
|
$
|
230,752
|
$
|
194,025
|
$
|
36,727
|
18.9
|
%
|
4.0
|
%
|
0.4
|
%
|
14.5
|
%
|
||||||||
|
Water
|
20,150
|
17,105
|
3,045
|
17.8
|
%
|
4.2
|
%
|
-
|
13.6
|
%
|
||||||||||||
|
PAS
|
21,489
|
18,683
|
2,806
|
15.0
|
%
|
11.4
|
%
|
-
|
3.6
|
%
|
||||||||||||
|
Other
|
8,179
|
7,233
|
946
|
13.1
|
%
|
5.1
|
%
|
-
|
8.0
|
%
|
||||||||||||
|
Total
|
$
|
280,570
|
$
|
237,046
|
$
|
43,524
|
18.4
|
%
|
4.7
|
%
|
0.3
|
%
|
13.4
|
%
|
||||||||
|
Three
Months Ended
|
||||||||||||||||||||||
|
Net
CAG Revenue
|
|
June
30,
2008
|
|
June
30,
2007
|
|
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
|
$
|
80,777
|
$
|
71,490
|
$
|
9,287
|
13.0
|
%
|
4.7
|
%
|
-
|
8.3
|
%
|
|||||||||
|
Rapid
assay products
|
41,265
|
36,588
|
4,677
|
12.8
|
%
|
1.9
|
%
|
-
|
10.9
|
%
|
||||||||||||
|
Laboratory
and consulting services
|
79,341
|
68,548
|
10,793
|
15.7
|
%
|
5.2
|
%
|
1.2
|
%
|
9.3
|
%
|
|||||||||||
|
Practice
information
management
systems
and
digital radiography
|
14,015
|
11,697
|
2,318
|
19.8
|
%
|
1.7
|
%
|
-
|
18.1
|
%
|
||||||||||||
|
Pharmaceutical
products
|
15,354
|
5,702
|
9,652
|
169.3
|
%
|
-
|
-
|
169.3
|
%
|
|||||||||||||
|
Net
CAG revenue
|
$
|
230,752
|
$
|
194,025
|
$
|
36,727
|
18.9
|
%
|
4.0
|
%
|
0.4
|
%
|
14.5
|
%
|
||||||||
(1)
Represents the percentage change in revenue attributed to the effect of changes
in currency rates from the three months ended June 30, 2008 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, 2008 compared to the three months ended
June 30, 2007 from businesses acquired since April 1, 2007.
(3)
Organic
growth
IDEXX
Announces Second Quarter Results
July
25,
2008
Page
of 10
of 13
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|||||||||||||||||||||
|
Revenues
by Product and Service Categories
|
|||||||||||||||||||||
|
Amounts
in thousands (Unaudited)
|
|||||||||||||||||||||
|
Six
Months Ended
|
|||||||||||||||||||||
|
Net
Revenue
|
June
30,
2008
|
|
June
30,
2007
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency
(1)
|
|
Percentage
Change
from
Acquisitions
(2)
|
|
Percentage
Change
Net of
Acquisitions
and
Currency
Effect(3)
|
||||||||
|
CAG
|
$
|
434,361
|
$
|
367,458
|
$
|
66,903
|
18.2
|
%
|
4.1
|
%
|
1.5
|
%
|
12.6
|
%
|
|||||||
|
Water
|
36,966
|
31,510
|
5,456
|
17.3
|
%
|
4.4
|
%
|
-
|
12.9
|
%
|
|||||||||||
|
PAS
|
42,651
|
35,494
|
7,157
|
20.2
|
%
|
11.7
|
%
|
5.8
|
%
|
2.7
|
%
|
||||||||||
|
Other
|
15,666
|
13,739
|
1,927
|
14.0
|
%
|
4.9
|
%
|
6.5
|
%
|
2.6
|
%
|
||||||||||
|
Total
|
$
|
529,644
|
$
|
448,201
|
$
|
81,443
|
18.2
|
%
|
4.8
|
%
|
1.9
|
%
|
11.5
|
%
|
|||||||
|
Six
Months Ended
|
|||||||||||||||||||||
|
Net
CAG Revenue
|
June
30,
2008
|
|
June
30,
2007
|
|
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
|
$
|
156,387
|
$
|
138,446
|
$
|
17,941
|
13.0
|
%
|
4.8
|
%
|
-
|
8.2
|
%
|
||||||||
|
Rapid
assay products
|
79,487
|
67,825
|
11,662
|
17.2
|
%
|
2.1
|
%
|
-
|
15.1
|
%
|
|||||||||||
|
Laboratory
and consulting services
|
149,448
|
126,436
|
23,012
|
18.2
|
%
|
5.2
|
%
|
4.3
|
%
|
8.7
|
%
|
||||||||||
|
Practice
information
management
systems
and
digital radiography
|
29,040
|
24,222
|
4,818
|
19.9
|
%
|
1.9
|
%
|
-
|
18.0
|
%
|
|||||||||||
|
Pharmaceutical
products
|
19,999
|
10,529
|
9,470
|
89.9
|
%
|
-
|
-
|
89.9
|
%
|
||||||||||||
|
Net
CAG revenue
|
$
|
434,361
|
$
|
367,458
|
$
|
66,903
|
18.2
|
%
|
4.1
|
%
|
1.5
|
%
|
12.6
|
%
|
|||||||
(1)
Represents the percentage change in revenue attributed to the effect of changes
in currency rates from the six months ended June 30, 2008 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, 2008 compared to the six months ended
June
30, 2007 from businesses acquired since January 1, 2007.
(3)
Organic
growth
IDEXX
Announces Second Quarter Results
July
25,
2008
Page
of 11
of 13
| IDEXX Laboratories, Inc. and Subsidiaries | ||||||||
| Consolidated Balance Sheet | ||||||||
| Amounts in thousands (Unaudited) | ||||||||
|
June
30,
|
|
December
31,
|
|
|||||
|
|
|
|
2008
|
|
2007
|
|||
|
Assets:
|
Current
Assets:
|
|||||||
|
Cash
and cash equivalents
|
$
|
75,265
|
$
|
60,360
|
||||
|
Accounts
receivable, net
|
120,565
|
108,384
|
||||||
|
Inventories
|
106,182
|
98,804
|
||||||
|
Other
current assets
|
37,052
|
38,115
|
||||||
|
Total
current assets
|
339,064
|
305,663
|
||||||
|
Property
and equipment, at cost
|
292,515
|
255,176
|
||||||
|
Less:
accumulated depreciation
|
125,911
|
113,324
|
||||||
|
Property
and equipment, net
|
166,604
|
141,852
|
||||||
|
Other
long-term assets, net
|
259,221
|
254,664
|
||||||
|
Total
assets
|
$
|
764,889
|
$
|
702,179
|
||||
|
Liabilities
and
|
|
|||||||
| Stockholders’ |
|
|||||||
|
Equity:
|
Current
Liabilities:
|
|||||||
|
Accounts
payable
|
$
|
25,357
|
$
|
32,510
|
||||
|
Accrued
expenses
|
103,966
|
107,248
|
||||||
|
Debt
|
158,715
|
72,956
|
||||||
|
Deferred
revenue
|
11,014
|
10,678
|
||||||
|
Total
current liabilities
|
299,052
|
223,392
|
||||||
|
Long-term
debt, net of current portion
|
5,350
|
5,727
|
||||||
|
Other
long-term liabilities
|
32,026
|
34,737
|
||||||
|
Total
long-term liabilities
|
37,376
|
40,464
|
||||||
|
Stockholders’
Equity:
|
||||||||
|
Common
stock
|
9,502
|
9,450
|
||||||
|
Additional
paid-in capital
|
532,950
|
514,773
|
||||||
|
Deferred
stock units
|
2,546
|
2,201
|
||||||
|
Retained
earnings
|
652,777
|
585,862
|
||||||
|
Treasury
stock, at cost
|
(800,325
|
)
|
(696,668
|
)
|
||||
|
Accumulated
other comprehensive income
|
31,011
|
22,705
|
||||||
|
Total
stockholders’ equity
|
428,461
|
438,323
|
||||||
|
Total
liabilities and stockholders’ equity
|
$
|
764,889
|
$
|
702,179
|
||||
| IDEXX Laboratories, Inc. and Subsidiaries | ||||||||
| Key Balance Sheet Information (Unaudited) | ||||||||
|
June
30,
|
|
December
31,
|
|
|||||
|
|
|
|
2008
|
|
2007
|
|||
| Key |
|
|||||||
| Balance Sheet |
Days
sales outstanding
|
39.9
|
39.4
|
|||||
|
Information:
|
Inventory
turns
|
2.1
|
2.3
|
|||||
IDEXX
Announces Second Quarter Results
July
25,
2008
Page
of
12 of
13
| IDEXX Laboratories, Inc. and Subsidiaries | ||||||||
| Consolidated Statement of Cash Flows | ||||||||
| Amounts in thousands (Unaudited) |
|
Six
Months Ended
|
||||||||
|
June
30,
|
|
June
30,
|
|
|||||
|
|
|
|
2008
|
|
2007
|
|||
| Operating: |
Cash
Flows from Operating Activities:
|
|||||||
|
Net
income
|
$
|
66,915
|
$
|
42,691
|
||||
|
Non-cash
charges
|
27,354
|
25,401
|
||||||
|
Changes
in current assets and liabilities, net of
|
||||||||
|
acquisitions
and disposals
|
(26,129
|
)
|
(5,375
|
)
|
||||
|
Net
cash provided by operating activities
|
$
|
68,140
|
$
|
62,717
|
||||
| Investing: |
Cash
Flows from Investing Activities:
|
|||||||
|
Decrease
in investments, net
|
-
|
35,000
|
||||||
|
Purchase
of property and equipment
|
(42,564
|
)
|
(26,235
|
)
|
||||
|
Acquisition
of businesses and intangible assets
|
(8,514
|
)
|
(85,507
|
)
|
||||
|
Acquisition
of equipment leased to customers
|
(429
|
)
|
(525
|
)
|
||||
|
Net
cash used by investing activities
|
$
|
(51,507
|
)
|
$
|
(77,267
|
)
|
||
| Financing: |
Cash
Flows from Financing Activities:
|
|||||||
|
Borrowings
on revolving credit facilities, net
|
85,591
|
77,785
|
||||||
|
Purchase
of treasury stock
|
(102,331
|
)
|
(92,114
|
)
|
||||
|
Proceeds
from exercise of stock options
|
9,174
|
11,986
|
||||||
|
Tax
benefit from exercise of stock options
|
3,198
|
4,070
|
||||||
|
Net
cash provided (used) by financing activities
|
$
|
(4,368
|
)
|
$
|
1,727
|
|||
|
Net
effect of exchange rate changes
|
2,640
|
745
|
||||||
|
Net
increase (decrease) in cash and cash equivalents
|
14,905
|
(12,078
|
)
|
|||||
|
Cash
and cash equivalents, beginning of period
|
60,360
|
61,666
|
||||||
|
Cash
and cash equivalents, end of period
|
$
|
75,265
|
$
|
49,588
|
||||
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
||||||||
|
Free
Cash Flow
|
||||||||
|
Amounts
in thousands (Unaudited)
|
||||||||
|
Six
Months Ended
|
||||||||
|
June
30,
|
|
June
30,
|
|
|||||
|
|
|
|
2008
|
|
2007
|
|
||
|
Free
Cash
|
|
|||||||
|
Flow:
|
Net
cash provided by operating activities
|
$
|
68,140
|
$
|
62,717
|
|||
|
Financing
cash flows attributable to tax benefits from exercise of stock
options
|
3,198
|
4,070
|
||||||
|
Purchase
of fixed assets
|
(42,564
|
)
|
(26,235
|
)
|
||||
|
Acquisition
of equipment leased to customers
|
(429
|
)
|
(525
|
)
|
||||
|
Free
cash flow
|
$
|
28,345
|
$
|
40,027
|
||||
|
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 Second Quarter Results
July
25,
2008
Page
of
13 of
13
|
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,
|
|
||||||
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
||||
|
Share
repurchases during the period
|
1,002
|
1,309
|
1,952
|
2,119
|
|||||||||
|
Average
price paid per share
|
$
|
50.89
|
$
|
44.07
|
$
|
52.42
|
$
|
43.47
|
|||||
|
Shares
remaining under repurchase authorization as of June 30,
2008
|
4,900
|
||||||||||||
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
||||||||||||
|
Earnings
per Share Adjusted for Stock Split (Unaudited)
|
|
Three
Months Ended
September
30,
|
Six
Months Ended
September
30,
|
|||||||||||||||
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|||||||||
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
||||||||
|
Basic
|
||||||||||||||||
|
As
reported
|
$
|
0.66
|
$
|
0.70
|
$
|
1.11
|
$
|
1.38
|
||||||||
|
Adjusted
for stock split
|
$
|
0.66
|
$
|
0.35
|
$
|
1.11
|
$
|
0.69
|
||||||||
|
Diluted
|
||||||||||||||||
|
As
reported
|
$
|
0.63
|
$
|
0.67
|
$
|
1.06
|
$
|
1.32
|
||||||||
|
Adjusted
for stock split
|
$
|
0.63
|
$
|
0.34
|
$
|
1.06
|
$
|
0.66
|
||||||||