WESTBROOK, Maine, July 30, 2015 /PRNewswire/ -- IDEXX
Laboratories, Inc. (NASDAQ: IDXX) today reported revenues for the
second quarter of 2015 of $413
million, an increase of 6% compared to the prior year
period. Impacts from the strengthening of the US dollar reduced
reported revenue growth by 7%. Normalized organic revenue
growth1,2 for the quarter was 11%, supported by strong
growth in the Companion Animal Group ("CAG") and Water. Earnings
per diluted share ("EPS") was $0.60
for the quarter, an increase of 9% compared to the prior year
period despite a negative $0.05 per
share impact related to net changes in foreign exchange rates.
"We are very pleased with the Company's performance in the
second quarter. Instrument placements were outstanding. Placements
were strong in all geographic regions, benefiting from our robust
worldwide commercial capabilities and best in class products
including Catalyst One®, our next generation chemistry
analyzer. We expect continued momentum with instrument placements
and have updated our outlook to well over 9,000 chemistry and
hematology instrument placements for the full year 2015, which
bodes well for long-term growth in the recurring instrument
consumable revenues," said Jonathan
Ayers, the Company's Chairman and Chief Executive
Officer.
"Growth of CAG Diagnostics recurring revenue was strong,
supported by continued high growth in our reference laboratory
diagnostic and consulting services, particularly in the US, as well
as continued strong growth in instrument consumable revenues. Our
full launch earlier this month of our new kidney function test,
SDMA, has been flawless. In just a few weeks, nearly 9,000 US
veterinary practices have benefitted from SDMA results on over
140,000 patients.
"Revenue for our rapid assay products, which increased 3% in the
quarter, was consistent with our expectations for normalized
organic growth," added Ayers. "Recent head-to-head comparison
studies, including those that have been peer-reviewed, have
demonstrated IDEXX's significant superiority in test sensitivity in
both canine and feline lines over competing tests using the lateral
flow platform. Higher sensitivity in the detection of
infectious diseases is due in part to our SNAP®
platform, which is unique in using reference lab ELISA technology.
We know that test accuracy is the primary factor that customers
value with these in-house kits, given the importance of accurately
detecting the presence of these serious infectious diseases in
practice. We are well equipped to communicate this data to our
customers with our fully direct US sales organization.
"We are on track to accelerate CAG Diagnostics recurring revenue
growth in future quarters as we continue to gain productivity from
our US all-direct sales strategy and our momentum internationally.
We also benefit from an unprecedented wave of innovations we are
bringing to the market, including the recently launched SDMA and
fecal antigen tests in the reference labs, the total T4 slide on
our Catalyst chemistry platform, the new SNAP test for
Leptospirosis, the H3N2 dog flu test, and several advancements in
our VetConnect® PLUS cloud-based and mobile diagnostic
results viewing app."
Second Quarter Financial Performance
Highlights
Second quarter revenue increased 6% to $413 million. Normalized organic revenue growth
was 11% and benefited in part from incremental margin capture
associated with the move to an all-direct sales model for US CAG
Diagnostics.
- Companion Animal Group normalized organic revenue growth was
13% for the second quarter. Gains were driven by 19% normalized
organic revenue growth in IDEXX VetLab® consumables,
primarily due to double digit volume increases and benefits from
margin capture, and 12% organic revenue growth2 in
reference lab and consulting services.
- Catalyst placements increased 44% and premium hematology
instrument placements increased 30% in the second quarter compared
to the prior year period. Instrument revenues increased 38%
organically, including a 16% growth benefit from recognition of
deferred revenue associated with the Catalyst One introductory
offer.
- Livestock, Poultry and Dairy ("LPD") organic revenue declined
1% for the second quarter. Growth in new products worldwide and
strong performance in China was
offset by lower livestock services revenue in Australia.
- Water's organic revenue growth was 8% in the second quarter,
supported by worldwide increases in core coliform and E.coli
products and the launch of our new Quanti-Tray® Sealer
PLUS product.
Operating margins were 21.4% in the second quarter, up slightly
compared to prior year period margins of 21.3%. Gross profits
increased 7%, reflecting a moderate increase in gross margins to
56.3% from 56.0% in the prior year period. Operating expenses
increased 7% primarily due to costs associated with the all-direct
US CAG Diagnostics sales strategy and other increases in global
commercial resources, partly offset by the favorable impact of
foreign exchange.
Financial Outlook for 2015
The Company is maintaining its previous 2015 financial guidance,
adjusted to account for the June 15,
2015 two-for-one stock split, as summarized below:
Amounts in
millions except per share data and percentages
|
|
Guidance
Range
|
Growth
Definition
|
Year-over-Year
Growth
|
Revenue
|
$1,600 -
$1,620
|
Normalized Organic
Revenue Growth2
|
12% to 13%
|
|
|
Reported
|
8% to 9%
|
EPS
|
$2.07 -
$2.12
|
Adjusted
|
4% to
6%3
|
|
|
Reported
|
16% to 18%
|
Free Cash
Flow4
|
80% - 90%
|
|
|
|
of net
income
|
|
|
Capital
Expenditures
|
~$100
|
|
|
At current foreign exchange rates, we estimate that the
effect of the stronger US dollar will adversely impact 2015
reported revenue and EPS growth by 6% and 9%, respectively.
The guidance above reflects the assumptions that the value of
the US dollar relative to other currencies will remain at our
current assumptions of the euro at $1.08, the British pound at $1.55, the Canadian dollar at $0.77, the Australian dollar at $0.74 and the Japanese yen at ¥124 to the US
dollar for the remainder of 2015. Our full year financial outlook
includes the benefit of hedge contracts which we expect will
favorably impact EPS by approximately $0.16 per share.
The favorable deferred revenue impact of our Catalyst One
introductory offer is expected to increase revenue growth for the
full year 2015 by approximately 0.5%.
We expect an effective tax rate of 30%. This outlook has not
assumed that the federal R&D tax credit, which benefited EPS by
$0.03 per share in 2014, will be
renewed in 2015.
We are projecting a reduction in weighted average shares
outstanding of approximately 7.0% to 7.5%, and interest expense,
net of interest income, of approximately $28
million reflecting current and projected borrowings.
Adjustments to EPS for 2014 used for calculating adjusted EPS
growth are summarized below:
Earnings per
share: Diluted (as Reported - adjusted for two-for-one stock
split)
|
$1.79
|
|
|
Incremental expenses
associated with transition to an all-direct sales
strategy
|
|
- Non-recurring
transition costs
|
0.06
|
- Expense
ramp-up in advance of transition to new sales strategy
|
0.03
|
|
|
Impact of distributor
inventory drawdown
|
0.14
|
Non-recurring income
tax benefit related to the deferral of intercompany
profits
|
(0.02)
|
|
|
Adjusted earnings per
share: Diluted3
|
$2.00
|
Statement Regarding Non-GAAP Financial Measures
The following provides information regarding certain measures
used in this earnings release that are not required by, or
presented in accordance with, generally accepted accounting
principles in the United States of
America ("GAAP"), otherwise referred to herein as non-GAAP
financial measures. To supplement the Company's consolidated
results presented in accordance with GAAP, the Company has
disclosed non-GAAP financial measures that exclude or adjust
certain items. Management believes these non-GAAP financial
measures provide useful supplemental information for its and
investors' evaluation of the Company's business performance and are
useful for period-over-period comparisons of the performance of the
Company's business. While management believes that these non-GAAP
financial measures are useful in evaluating the Company's business,
this information should be considered as supplemental in nature and
should not be considered in isolation or as a substitute for the
related financial information prepared in accordance with GAAP. In
addition, these non-GAAP financial measures may not be the same as
similarly titled measures reported by other companies. See the
notes to this earnings release for information regarding these
non-GAAP financial measures and the reconciliations included in the
notes and elsewhere in this earnings release for a reconciliation
of the non-GAAP financial measures to the most directly comparable
GAAP financial measures.
Conference Call and Webcast Information
IDEXX Laboratories, Inc. will be hosting a conference call today
at 8:30 a.m. (Eastern) to discuss its
second quarter results and management's outlook. To participate in
the conference call, dial 1-800-288-8968 or 1-612-332-0228 and
reference confirmation code 363893. An audio replay will be
available through Thursday, August 6,
2015 by dialing 1-320-365-3844 and referencing replay code
363893.
The call will also be available via live or archived webcast on
the IDEXX Laboratories' website at www.idexx.com and will be
available for one year.
About IDEXX Laboratories, Inc.
IDEXX Laboratories, Inc. is a leader in pet healthcare
innovation, serving practicing veterinarians around the world with
a broad range of diagnostic and information technology-based
products and services. IDEXX products enhance the ability of
veterinarians to provide advanced medical care, improve staff
efficiency and build more economically successful practices. IDEXX
is also a worldwide leader in providing diagnostic tests and
information for livestock and poultry and tests for the quality and
safety of water and milk. Headquartered in Maine, IDEXX Laboratories employs more than
6,000 people and offers products to customers in over 175
countries.
1All references to growth and organic growth refer to
growth compared to the equivalent period in 2014.
2Normalized organic revenue growth and organic
revenue growth are non-GAAP financial measures. Management believes
that reporting organic revenue growth provides useful information
to investors by facilitating easier comparisons of our revenue
performance with prior and future periods and to the performance of
our peers. Organic revenue growth for the second quarter of 2015
excludes the impact of changes in foreign currency exchange rates,
which had a 7% unfavorable impact on revenue growth, and revenue
from business acquisitions, which contributed 0.5% to revenue
growth. See the supplementary analysis of results below for a
reconciliation of reported revenue growth to organic revenue growth
for the three months ended June 30,
2015. Management also believes that reporting normalized
organic revenue growth provides useful information to investors by
facilitating easier comparisons of our revenue growth performance
with prior and future periods. Normalized organic revenue
growth excludes the impact of changes in our significant
distributors' inventory levels on organic revenue
growth. When selling our products through
distributors, changes in distributors' inventory levels can impact
our reported sales, and these changes may be affected by many
factors, which may not be directly related to underlying end-user
demand for our products. Effective January 1, 2015, we fully transitioned to an
all-direct sales strategy in the US, however changes in prior year
US distributors' inventory levels can still impact current year
reported growth results. In certain countries
internationally, we continue to sell our products through third
party distributors. Although we are unable to obtain data for
sales to end users from certain less significant non-US third party
distributors, we do not believe the impact of changes in these
distributors' inventories had or would have a material impact on
our growth rates in the relevant periods. Reconciliation of
organic revenue growth to normalized organic revenue growth for the
second quarter of 2015 includes the following positive/(negative)
impacts to organic revenue growth from changes in our significant
distributors' inventory levels; Total Company 1.1%, US 2.1%,
International (0.3%), CAG 1.4%, CAG Diagnostics Recurring 1.6%,
VetLab consumables 1.5%, VetLab service and accessories 0.4%, and
Rapid Assay 5.9%.
3Adjusted EPS and Adjusted EPS growth are non-GAAP
financial measures. Management believes that reporting
Adjusted EPS provides useful information to investors by
facilitating easier comparisons of our EPS performance with prior
and future periods. For the total year projected 2015
comparison to 2014, 2014 excludes impacts in the second half of
2014 related to the all-direct transition and a non-recurring
income tax benefit related to the deferral of intercompany profits
recorded in the third quarter of 2014. See table above for a
reconciliation of 2014 EPS adjustments.
4Free cash flow is a non-GAAP financial measure and
means, with respect to a measurement period, the cash generated
from operations during that period, excluding tax benefits
attributable to share-based compensation arrangements, reduced by
the Company's investments in fixed assets. Management
believes 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. See the supplementary
analysis of results below for our calculation of free cash flow for
the three months ended June 30, 2015
and 2014. With respect to this particular forward-looking
projected non-GAAP financial measure, the Company is unable to
provide a quantitative reconciliation as the inputs to the
measurement are difficult to predict and estimate and are primarily
dependent on future events.
Note Regarding Forward-Looking
Statements
This earnings 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.
Forward-looking statements are included above under "Financial
Outlook for 2015" and elsewhere and can be identified by the use of
words such as "expects," "may," "anticipates," "intends," "would,"
"will," "plans," "believes," "estimates," "should," and similar
words and expressions. Our forward-looking statements include
statements relating to our revenue growth and EPS outlooks; free
cash flow forecast; projected impact of currency exchange rates;
projected capital expenditures, weighted average shares outstanding
and interest expense; projected instrument placements; and product
launches. These statements are based on management's expectation of
future events as of the date of this earnings 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
successfully execute its strategy, including supporting its
all-direct sales strategy in the US; the Company's ability to
develop, manufacture, introduce and market new products and
enhancements to existing products; the Company's ability to
achieve cost improvements in its worldwide network of laboratories
and in the manufacture and service of in-clinic
instruments;the Company's ability to identify acquisition
opportunities, complete acquisitions and integrate acquired
businesses; disruptions, shortages or pricing changes that affect
the Company's purchases of products and materials from third
parties, including from sole source suppliers; the effectiveness of
the Company's sales and marketing activities; the Company's ability
to manufacture complex biologic products; the impact of a
change to our relationship with the Company's
distributors;the impact of distributor purchasing decisions
on sales of the Company's products that are sold through
distribution; the Company's ability to manage the risks
associated with the use of distributors to sell the Company's
products; the impact of increased competition from existing and new
technologies and technological advances by our competitors;
the promotion and sale of our competitors' products by our
former US distribution partners; 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 veterinary hospital consolidation, and the
prevalence of buying consortiums on the markets for the Company's
products; 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; changes in testing patterns
or practices in veterinary medicine that affect the rate of use of
the Company's products and services by veterinarians; a failure or
perceived failure to comply with regulations and our policies
regarding the privacy and protection of user data; the effect of
any strengthening of the rate of exchange for the US dollar; the
effect of any adverse changes in the financial markets on the value
of the Company's investment portfolio; the impact of a weak economy
on demand for the Company's products and services or increased
customer credit risk; the effects of operations outside the US,
including from currency fluctuations, different regulatory,
political and economic conditions, and different market conditions
and local business and cultural factors; the impact of the
Company's limited experience and small scale in the human
point-of-care market; the effects of interruptions to the Company's
operations due to natural or man-made disasters, system failures or
disruptions or security breaches; the effect on the Company's stock
price if quarterly or annual operating results do not meet
expectations of market analysts or investors in future periods;
potential exposures related to our worldwide provision for income
taxes and the potential loss of tax incentives; and the Company's
ability to obtain financing on favorable terms. 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, 2014 and the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, in the sections
captioned "Risk Factors," as well as the Company's other periodic
reports filed or to be filed with the Securities and Exchange
Commission.
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,
|
|
|
|
2015
|
2014
|
|
2015
|
2014
|
Revenue:
|
Revenue
|
|
$ 413,343
|
$ 390,122
|
|
$ 795,820
|
$ 750,325
|
Expenses
and
|
|
|
|
|
|
|
|
Income:
|
Cost of
revenue
|
|
180,586
|
171,604
|
|
347,519
|
329,710
|
|
Gross
profit
|
|
232,757
|
218,518
|
|
448,301
|
420,615
|
|
Sales and
marketing
|
|
75,217
|
68,020
|
|
150,353
|
135,868
|
|
General and
administrative
|
|
44,920
|
41,846
|
|
87,519
|
82,935
|
|
Research and
development
|
|
24,317
|
25,433
|
|
49,323
|
48,547
|
|
Income from
operations
|
|
88,303
|
83,219
|
|
161,106
|
153,265
|
|
Interest expense,
net
|
|
(6,700)
|
(2,477)
|
|
(12,579)
|
(4,780)
|
|
Income before
provision for income taxes
|
|
81,603
|
80,742
|
|
148,527
|
148,485
|
|
Provision for income
taxes
|
|
24,665
|
23,498
|
|
45,011
|
44,648
|
Net
Income:
|
Net income
|
|
56,938
|
57,244
|
|
103,516
|
103,837
|
|
Less: Noncontrolling
interest in subsidiary's
|
|
|
|
|
|
|
earnings
|
|
26
|
26
|
|
10
|
34
|
|
Net income
attributable to stockholders
|
$ 56,912
|
$ 57,218
|
|
$ 103,506
|
$ 103,803
|
|
Earnings per share:
Basic
|
|
$
0.61
|
$
0.56
|
|
$
1.10
|
$
1.01
|
|
Earnings per share:
Diluted
|
|
$
0.60
|
$
0.55
|
|
$
1.09
|
$
1.00
|
|
Shares outstanding:
Basic
|
|
93,384
|
102,250
|
|
93,829
|
102,739
|
|
Shares outstanding:
Diluted
|
|
94,306
|
103,590
|
|
94,934
|
104,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Selected Operating
Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
June
30,
|
June
30,
|
|
June
30,
|
June
30,
|
|
|
|
2015
|
2014
|
|
2015
|
2014
|
Operating
|
Gross
profit
|
|
56.3%
|
56.0%
|
|
56.3%
|
56.1%
|
Ratios (as
a
|
Sales, marketing,
general and
|
|
|
|
|
|
|
percentage
of
|
administrative
expense
|
|
29.1%
|
28.2%
|
|
29.9%
|
29.2%
|
revenue):
|
Research and
development expense
|
5.9%
|
6.5%
|
|
6.2%
|
6.5%
|
|
Income from
operations1
|
|
21.4%
|
21.3%
|
|
20.2%
|
20.4%
|
|
1Amounts presented may not
recalculate due to rounding.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Segment
Information
|
|
|
|
|
|
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
|
June
30,
|
Percent
of
|
|
June
30,
|
Percent
of
|
|
|
|
2015
|
Revenue
|
|
2014
|
Revenue
|
Revenue:
|
CAG
|
|
$ 351,620
|
|
|
$ 322,129
|
|
|
Water
|
|
25,051
|
|
|
24,487
|
|
|
LPD
|
|
32,059
|
|
|
37,307
|
|
|
Other
|
|
4,613
|
|
|
6,199
|
|
|
Total
|
|
$ 413,343
|
|
|
$ 390,122
|
|
|
|
|
|
|
|
|
|
Gross
Profit:
|
CAG
|
|
$ 192,546
|
54.8%
|
|
$ 177,754
|
55.2%
|
|
Water
|
|
18,016
|
71.9%
|
|
16,107
|
65.8%
|
|
LPD
|
|
19,486
|
60.8%
|
|
24,390
|
65.4%
|
|
Other
|
|
2,361
|
51.2%
|
|
2,743
|
44.2%
|
|
Unallocated
Amounts
|
|
348
|
N/A
|
|
(2,476)
|
N/A
|
|
Total
|
|
$ 232,757
|
56.3%
|
|
$ 218,518
|
56.0%
|
|
|
|
|
|
|
|
|
Income
from
|
|
|
|
|
|
|
|
Operations:
|
CAG
|
|
$ 67,875
|
19.3%
|
|
$
66,924
|
20.8%
|
|
Water
|
|
11,954
|
47.7%
|
|
10,064
|
41.1%
|
|
LPD
|
|
5,895
|
18.4%
|
|
10,747
|
28.8%
|
|
Other
|
|
(237)
|
(5.1%)
|
|
(249)
|
(4.0%)
|
|
Unallocated
Amounts
|
|
2,816
|
N/A
|
|
(4,267)
|
N/A
|
|
Total
|
|
$ 88,303
|
21.4%
|
|
$
83,219
|
21.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
|
June
30,
|
Percent
of
|
|
June
30,
|
Percent
of
|
|
|
|
2015
|
Revenue
|
|
2014
|
Revenue
|
Revenue:
|
CAG
|
|
$ 676,151
|
|
|
$ 620,857
|
|
|
Water
|
|
46,749
|
|
|
45,908
|
|
|
LPD
|
|
63,329
|
|
|
71,518
|
|
|
Other
|
|
9,591
|
|
|
12,042
|
|
|
Total
|
|
$ 795,820
|
|
|
$ 750,325
|
|
|
|
|
|
|
|
|
|
Gross
Profit:
|
CAG
|
|
$ 368,391
|
54.5%
|
|
$ 341,270
|
55.0%
|
|
Water
|
|
33,262
|
71.2%
|
|
30,038
|
65.4%
|
|
LPD
|
|
38,489
|
60.8%
|
|
46,244
|
64.7%
|
|
Other
|
|
4,962
|
51.7%
|
|
6,144
|
51.0%
|
|
Unallocated
Amounts
|
|
3,197
|
N/A
|
|
(3,081)
|
N/A
|
|
Total
|
|
$ 448,301
|
56.3%
|
|
$ 420,615
|
56.1%
|
|
|
|
|
|
|
|
|
Income
from
|
|
|
|
|
|
|
|
Operations:
|
CAG
|
|
$ 120,304
|
17.8%
|
|
$ 120,928
|
19.5%
|
|
Water
|
|
21,413
|
45.8%
|
|
18,180
|
39.6%
|
|
LPD
|
|
11,846
|
18.7%
|
|
19,067
|
26.7%
|
|
Other
|
|
(431)
|
(4.5%)
|
|
340
|
2.8%
|
|
Unallocated
Amounts
|
|
7,974
|
N/A
|
|
(5,250)
|
N/A
|
|
Total
|
|
$ 161,106
|
20.2%
|
|
$ 153,265
|
20.4%
|
|
|
|
|
|
|
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Revenues and
Revenue Growth Analysis by Product and Service Categories and by
Domestic and International Markets
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue
|
|
June
30,
2015
|
|
June
30,
2014
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic
Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG
|
|
$
|
351,620
|
|
$
|
322,129
|
|
$
|
29,491
|
|
9.2%
|
|
(5.9%)
|
|
0.7%
|
|
14.4%
|
Water
|
|
|
25,051
|
|
|
24,487
|
|
|
564
|
|
2.3%
|
|
(6.1%)
|
|
-
|
|
8.4%
|
LPD
|
|
|
32,059
|
|
|
37,307
|
|
|
(5,248)
|
|
(14.1%)
|
|
(12.6%)
|
|
-
|
|
(1.5%)
|
Other
|
|
|
4,613
|
|
|
6,199
|
|
|
(1,586)
|
|
(25.6%)
|
|
(1.0%)
|
|
-
|
|
(24.6%)
|
Total
|
|
$
|
413,343
|
|
$
|
390,122
|
|
$
|
23,221
|
|
6.0%
|
|
(6.5%)
|
|
0.5%
|
|
12.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue
|
|
June
30,
2015
|
|
June
30,
2014
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
$
|
254,242
|
|
$
|
225,336
|
|
$
|
28,906
|
|
12.8%
|
|
-
|
|
0.2%
|
|
12.6%
|
International
|
|
|
159,101
|
|
|
164,786
|
|
|
(5,685)
|
|
(3.4%)
|
|
(15.4%)
|
|
0.9%
|
|
11.1%
|
Total
|
|
$
|
413,343
|
|
$
|
390,122
|
|
$
|
23,221
|
|
6.0%
|
|
(6.5%)
|
|
0.5%
|
|
12.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
Net CAG
Revenue
|
|
June
30,
2015
|
|
June
30,
2014
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG Diagnostics
recurring revenue:
|
|
$
|
300,146
|
|
$
|
276,949
|
|
$
|
23,197
|
|
8.4%
|
|
(6.1%)
|
|
0.4%
|
|
14.1%
|
VetLab
consumables
|
|
|
100,743
|
|
|
89,113
|
|
|
11,630
|
|
13.1%
|
|
(7.4%)
|
|
-
|
|
20.5%
|
VetLab service and
accessories
|
|
|
14,018
|
|
|
13,433
|
|
|
585
|
|
4.4%
|
|
(6.9%)
|
|
-
|
|
11.3%
|
Rapid assay
products
|
|
|
52,182
|
|
|
49,493
|
|
|
2,689
|
|
5.4%
|
|
(3.1%)
|
|
-
|
|
8.5%
|
Reference
laboratory diagnostic and
consulting services
|
|
|
133,203
|
|
|
124,910
|
|
|
8,293
|
|
6.6%
|
|
(6.5%)
|
|
1.0%
|
|
12.1%
|
CAG Diagnostics
capital - instruments
|
|
|
24,064
|
|
|
18,993
|
|
|
5,071
|
|
26.7%
|
|
(11.1%)
|
|
-
|
|
37.8%
|
Customer information
management and digital imaging systems
|
|
|
27,410
|
|
|
26,187
|
|
|
1,223
|
|
4.7%
|
|
(0.6%)
|
|
3.2%
|
|
2.1%
|
Net CAG
revenue
|
|
$
|
351,620
|
|
$
|
322,129
|
|
$
|
29,491
|
|
9.2%
|
|
(5.9%)
|
|
0.7%
|
|
14.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 The
percentage change from currency is a non-GAAP financial measure.
This measure represents the percentage change in revenue resulting
from the difference between the average exchange rates during the
three months ended June 30, 2015 and the same period of the prior
year applied to foreign currency-denominated revenues for the three
months ended June 30, 2014.
|
|
2 The
percentage change from acquisitions is a non-GAAP financial
measure. This measure represents the percentage change in revenue
during the three months ended June 30, 2015 compared to the three
months ended June 30, 2014 attributed to acquisitions subsequent to
March 31, 2014.
|
|
3
Organic revenue growth is a non-GAAP financial measure and
represents the percentage change in revenue during the three months
ended June 30, 2015 compared to the three months ended June 30,
2014 net of acquisitions and the effect of changes in foreign
currency exchange rates.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Revenues and
Revenue Growth Analysis by Product and Service Categories and by
Domestic and International Markets
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue
|
|
June
30,
2015
|
|
June
30,
2014
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic
Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG
|
|
$
|
676,151
|
|
$
|
620,857
|
|
$
|
55,294
|
|
8.9%
|
|
(5.7%)
|
|
0.6%
|
|
14.0%
|
Water
|
|
|
46,749
|
|
|
45,908
|
|
|
841
|
|
1.8%
|
|
(5.6%)
|
|
-
|
|
7.4%
|
LPD
|
|
|
63,329
|
|
|
71,518
|
|
|
(8,189)
|
|
(11.5%)
|
|
(12.1%)
|
|
-
|
|
0.6%
|
Other
|
|
|
9,591
|
|
|
12,042
|
|
|
(2,451)
|
|
(20.4%)
|
|
(1.1%)
|
|
-
|
|
(19.3%)
|
Total
|
|
$
|
795,820
|
|
$
|
750,325
|
|
$
|
45,495
|
|
6.1%
|
|
(6.2%)
|
|
0.5%
|
|
11.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue
|
|
June
30,
2015
|
|
June
30,
2014
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic
Revenue Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
|
$
|
489,650
|
|
$
|
432,930
|
|
$
|
56,720
|
|
13.1%
|
|
-
|
|
0.2%
|
|
12.9%
|
International
|
|
|
306,170
|
|
|
317,395
|
|
|
(11,225)
|
|
(3.5%)
|
|
(14.6%)
|
|
0.9%
|
|
10.2%
|
Total
|
|
$
|
795,820
|
|
$
|
750,325
|
|
$
|
45,495
|
|
6.1%
|
|
(6.2%)
|
|
0.5%
|
|
11.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
Net CAG
Revenue
|
|
June
30,
2015
|
|
June
30,
2014
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic
Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG Diagnostics
recurring revenue:
|
|
$
|
578,911
|
|
$
|
532,830
|
|
$
|
46,081
|
|
8.6%
|
|
(5.9%)
|
|
0.4%
|
|
14.1%
|
VetLab
consumables
|
|
|
199,135
|
|
|
173,434
|
|
|
25,701
|
|
14.8%
|
|
(7.1%)
|
|
-
|
|
21.9%
|
VetLab service and
accessories
|
|
|
27,548
|
|
|
26,504
|
|
|
1,044
|
|
3.9%
|
|
(6.5%)
|
|
-
|
|
10.4%
|
Rapid assay
products
|
|
|
95,819
|
|
|
92,552
|
|
|
3,267
|
|
3.5%
|
|
(2.9%)
|
|
-
|
|
6.4%
|
Reference
laboratory diagnostic
and consulting
services
|
|
|
256,409
|
|
|
240,340
|
|
|
16,069
|
|
6.7%
|
|
(6.1%)
|
|
0.9%
|
|
11.9%
|
CAG Diagnostics
capital - instruments
|
|
|
44,178
|
|
|
37,580
|
|
|
6,598
|
|
17.6%
|
|
(11.1%)
|
|
-
|
|
28.7%
|
Customer information
management and digital imaging systems
|
|
|
53,062
|
|
|
50,447
|
|
|
2,615
|
|
5.2%
|
|
(0.7%)
|
|
3.2%
|
|
2.7%
|
Net CAG
revenue
|
|
$
|
676,151
|
|
$
|
620,857
|
|
$
|
55,294
|
|
8.9%
|
|
(5.7%)
|
|
0.6%
|
|
14.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 The
percentage change from currency is a non-GAAP financial measure.
This measure represents the percentage change in revenue resulting
from the difference between the average exchange rates during the
six months ended June 30, 2015 and the same period of the prior
year applied to foreign currency-denominated revenues for the six
months ended June 30, 2014.
|
|
2 The
percentage change from acquisitions is a non-GAAP financial
measure. This measure represents the percentage change in revenue
during the six months ended June 30, 2015 compared to the six
months ended June 30, 2014 attributed to acquisitions subsequent to
December 31, 2013.
|
|
3
Organic revenue growth is a non-GAAP financial measure and
represents the percentage change in revenue during the six months
ended June 30, 2015 compared to the six months ended June 30, 2014
net of acquisitions and the effect of changes in foreign currency
exchange rates.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Consolidated
Balance Sheet
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
December
31,
|
|
|
|
|
|
|
2015
|
2014
|
Assets:
|
Current
Assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
$ 163,152
|
$
322,536
|
|
Marketable
securities
|
|
|
|
|
180,870
|
-
|
|
Accounts receivable,
net
|
|
|
|
|
199,444
|
152,380
|
|
Inventories
|
|
|
|
|
184,500
|
160,342
|
|
Other current
assets
|
|
|
|
|
105,068
|
124,140
|
|
Total current
assets
|
|
|
|
|
833,034
|
759,398
|
|
Property and
equipment, net
|
|
|
|
326,041
|
303,587
|
|
Other long-term
assets, net
|
|
|
|
318,295
|
321,226
|
|
Total
assets
|
|
|
|
|
$ 1,477,370
|
$ 1,384,211
|
Liabilities
and
|
|
|
|
|
|
|
|
Stockholders'
|
|
|
|
|
|
|
|
Equity:
|
Current
Liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
|
|
$
58,212
|
$
44,743
|
|
Accrued
liabilities
|
|
|
|
|
190,441
|
195,351
|
|
Line of
credit
|
|
|
|
|
498,000
|
549,000
|
|
Deferred
revenue
|
|
|
|
|
28,775
|
31,812
|
|
Total current
liabilities
|
|
|
|
|
775,428
|
820,906
|
|
Long-term
debt
|
|
|
|
|
598,925
|
350,000
|
|
Other long-term
liabilities
|
|
|
|
|
94,466
|
95,716
|
|
Total long-term
liabilities
|
|
|
|
|
693,391
|
445,716
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
|
8,468
|
117,516
|
|
Noncontrolling
interest
|
|
|
|
83
|
73
|
|
Total
equity
|
|
|
|
8,551
|
117,589
|
|
Total liabilities
and stockholders' equity
|
|
|
$ 1,477,370
|
$ 1,384,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Selected Balance
Sheet Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
December
31,
|
|
September
30,
|
June
30,
|
|
|
2015
|
|
2015
|
2014
|
|
2014
|
2014
|
Selected
|
|
|
|
|
|
|
|
|
Balance
Sheet
|
Days sales
outstanding1
|
43.7
|
|
41.6
|
40.6
|
|
39.2
|
40.8
|
Information:
|
Inventory
turns2
|
1.5
|
|
1.6
|
1.7
|
|
1.8
|
1.8
|
|
|
|
|
|
|
|
|
|
1 Days
sales outstanding represents the average of the accounts receivable
balances at the beginning and end of each quarter divided by
revenue for that quarter, the result of which is then multiplied by
91.25 days.
|
2 Inventory
turns represent inventory-related cost of product sales for the
twelve months preceding each quarter-end divided by the inventory
balance at the end of the quarter.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
Consolidated
Statement of Cash Flows
|
|
|
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
June
30,
|
|
|
|
2015
|
2014
|
Operating:
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net income
|
|
$ 103,516
|
$ 103,837
|
|
Non-cash
charges
|
|
42,396
|
32,582
|
|
Changes in assets and
liabilities
|
|
(71,644)
|
(13,179)
|
|
Tax benefit from
share-based compensation arrangements
|
|
(8,746)
|
(7,960)
|
|
Net cash provided by
operating activities
|
|
65,522
|
115,280
|
Investing:
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Purchases of property
and equipment
|
|
(46,873)
|
(25,410)
|
|
Purchase of
marketable securities
|
|
(190,370)
|
-
|
|
Proceeds from the
sale and maturities of marketable securities
|
|
10,039
|
-
|
|
Acquisitions of
intangible assets
|
|
-
|
(175)
|
|
Proceeds from sale of
equity investment
|
|
-
|
5,400
|
|
Acquisitions of a
business, net of cash acquired
|
|
(383)
|
(1,161)
|
|
Net cash used by
investing activities
|
|
(227,587)
|
(21,346)
|
Financing:
|
Cash Flows from
Financing Activities:
|
|
|
|
|
(Repayments)
borrowings on revolving credit facilities, net
|
|
(51,000)
|
107,000
|
|
Issuance of long-term
debt
|
|
250,097
|
-
|
|
Payment of notes
payable
|
|
-
|
(1,394)
|
|
Repurchases of common
stock
|
|
(220,097)
|
(196,626)
|
|
Debt issue
costs
|
|
(127)
|
(1,156)
|
|
Proceeds from the
exercise of stock options and employee stock purchase
plans
|
|
15,650
|
14,707
|
|
Tax benefit from
share-based compensation arrangements
|
|
8,746
|
7,960
|
|
Net cash provided
(used) by financing activities
|
|
3,269
|
(69,509)
|
|
Net effect of changes
in exchange rates on cash
|
|
(588)
|
1,565
|
|
Net (decrease)
increase in cash and cash equivalents
|
|
(159,384)
|
25,990
|
|
Cash and cash
equivalents, beginning of period
|
|
322,536
|
279,058
|
|
Cash and cash
equivalents, end of period
|
|
$ 163,152
|
$ 305,048
|
|
|
|
|
|
|
|
|
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
Free Cash
Flow1
|
|
|
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
June
30,
|
June
30,
|
|
|
|
2015
|
2014
|
Free
Cash
|
|
|
|
|
Flow:
|
Net cash provided by
operating activities
|
|
$ 65,522
|
$ 115,280
|
|
Financing cash flows
attributable to tax benefits from share-based compensation
arrangements
|
8,746
|
7,960
|
|
Purchases of property
and equipment
|
|
(46,873)
|
(25,410)
|
|
Free cash
flow
|
|
$ 27,395
|
$
97,830
|
|
|
|
|
|
|
|
|
|
|
1 Free
cash flow is a non-GAAP financial measure and is calculated from
cash generated from operations, excluding tax benefits attributable
to share-based compensation arrangements, reduced by the Company's
investments in fixed assets. Management believes 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. Management also believes this is a common financial
measure useful to further evaluate the results of
operations.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Common Stock
Repurchases
|
|
|
|
|
|
|
Amounts in
thousands except per share data (Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
June
30,
|
June
30,
|
|
June
30,
|
June
30,
|
|
|
|
2015
|
2014
|
|
2015
|
2014
|
|
Share repurchases
during the period
|
|
1,417
|
1,950
|
|
3,197
|
3,183
|
|
Average price paid
per share1
|
|
$ 66.07
|
$ 64.88
|
|
$ 72.63
|
$ 63.41
|
|
|
|
|
|
|
|
|
|
1 Shares
repurchased on and before June 15, 2015 and the associated average
cost per share have been adjusted to reflect the June 2015
two-for-one stock split. Actual shares repurchased and
acquired through employee surrender were 892,000 and 975,000 for
the three months ended June 30, 2015 and 2014, respectively and
1,781,000 and 1,591,000 for the six months ended June 30, 2015 and
2014, respectively.
Shares remaining
under repurchase authorization as of June 30, 2015 totaled
9,332,194.
|
|
Share repurchases
include shares surrendered by employees in payment for the minimum
required withholding taxes due on the vesting of restricted stock
units and the settlement of deferred stock units.
|
Contact: Ed Garber, Director,
Investor Relations, 1-207-556-8155
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SOURCE IDEXX Laboratories, Inc.