IDEXX Laboratories Announces Fourth Quarter and Full-Year Financial Results - Delivers fourth quarter organic growth of 10.6%, driven by strong companion animal recurring revenue and instrument placements

- Reports full year EPS of $3.48 at high end of Company guidance

- Reaffirms outlook for higher organic revenue growth in 2014

WESTBROOK, Maine, Feb. 4, 2014 /PRNewswire/ -- IDEXX Laboratories, Inc. (NASDAQ: IDXX), today reported that revenues for the fourth quarter of 2013 increased 11% to $354.1 million. Organic revenue growth1 was also 11%. Earnings per diluted share ("EPS") for the quarter ended December 31, 2013 increased 5% to $0.82. Fourth quarter 2012 EPS of $0.78 included a $3.5 million milestone payment earned related to the 2008 sale of product rights previously included in our pharmaceutical product line, which added $0.04 to EPS.

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"I am very pleased with the strong organic growth we achieved in the quarter, reflecting solid gains across our business. Organic growth in recurring companion animal diagnostic revenue was over 11%, and strong placements of our premium chemistry and hematology instruments, computer systems, and digital radiography products also contributed to the strong performance," said Jonathan Ayers, the Company's Chairman and Chief Executive Officer.

"We are enthusiastic about results we saw in Q4 from our transformation of the diagnostic sales and marketing organization in North America in the middle of last year. This revenue performance is a validation of how our new, customer centric sales alignment and our diagnostic innovations are coming together to provide customer value.  Momentum in our international business is also very strong, with fourth quarter organic revenue growth in our Companion Animal Group of 12% in Europe and 23% in Asia Pacific," added Ayers.

"We are also pleased with the response to our announcement of the Catalyst One™ and Total T4 product launches in January. With our momentum and continued new product innovation, we believe we are well positioned to achieve our growth targets in 2014."

Revenue Performance for the Fourth Quarter

Please refer to the table below entitled "Revenues and Revenue Growth Analysis by Product and Service Categories" for the three months ended December 31, 2013 and 2012 in conjunction with the following discussion.

Companion Animal Group. Companion Animal Group ("CAG") revenues for the fourth quarter of 2013 were $293.6 million compared to $263.5 million for the fourth quarter of 2012. Organic revenue growth of 12.1% was due primarily to an increase in recurring revenues across our CAG portfolio, including reference laboratory diagnostic and consulting services, VetLab® consumables and, to a lesser extent, Rapid Assay products. Additionally, we also saw increased placements of our ProCyte Dx® and Catalyst Dx® instruments as compared to the same period of the prior year.

The revenue increase in reference laboratory diagnostic and consulting services was due to higher sales volumes and price increases. Increased sales volumes were driven by higher testing from existing customers, the acquisition of new customers and improved customer retention. The revenue increase in VetLab consumables was primarily the result of higher sales volumes of consumables used with our Catalyst Dx instruments, reflecting our increasing installed base of instruments and the quality of our instrument placements. To a lesser extent, VetLab consumables also benefited from improved price realization due to changes in our sales channels and price increases, including a higher selling price to our non-exclusive distributor in North America and the move to a direct sales model in the Nordics. Higher sales of our Rapid Assay products were the result of both price increases and higher U.S. canine practice-level sales volumes.

Water. Water revenues for the fourth quarter of 2013 were $21.7 million compared to $20.9 million for the fourth quarter of 2012. Organic revenue growth of 3.3% was due primarily to higher sales volumes of our Quanti-Tray® products driven by new account acquisitions. Revenue from business acquisitions contributed 1.4% to reported revenue growth, which was partly offset by the impact of changes in foreign currency exchange rates.

Livestock, Poultry and Dairy. Livestock, Poultry and Dairy ("LPD") revenues for the fourth quarter of 2013 were $32.4 million compared to $28.9 million for the fourth quarter of 2012. The 3.9% increase in organic revenue was due primarily to higher sales volumes of certain bovine, poultry and swine tests, partly offset by lower sales volumes of Bovine Spongiform Encephalopathy tests resulting from changes in European testing requirements. Revenue from business acquisitions and changes in foreign currency exchange rates contributed 7.3% and 0.8%, respectively, to reported revenue growth.

Additional Operating Results for the Fourth Quarter

Gross profit for the fourth quarter of 2013 increased 11.6%, to $188.7 million from $169.1 million for the fourth quarter of 2012. As a percentage of total revenue, gross profit increased to 53.3% from 52.9%. The increase in the gross profit percentage was due primarily to price realization for our reference laboratory diagnostic and consulting services, VetLab consumables and Rapid Assay products, partly offset by the impact of higher relative sales of lower margin VetLab instruments. Improved price realization was due to price increases and the aforementioned changes in our sales channels.

Selling, general and administrative ("SG&A") expense for the fourth quarter of 2013 was $104.8 million, or 29.6% of revenue, compared to $84.6 million, or 26.5% of revenue, for the fourth quarter of 2012. The increase in SG&A expense was due primarily to higher personnel-related costs and a milestone payment earned in the fourth quarter of 2012 related to the 2008 sale of pharmaceutical product rights, which was reflected as a reduction to general and administrative expenses. Higher personnel-related costs were due in part to the result of our North American sales force expansion and related marketing efforts. Our sales force expansion and transition to diagnostic consultants, who now represent all CAG diagnostic modalities is complete, which added approximately 15% to our North American sales force. Additionally, we have increased our sales force and other personnel internationally, including a direct sales force in the Nordics and through the acquisition of a Brazilian distributor. Research and development ("R&D") expense for the fourth quarter of 2013 was $22.5 million, or 6.4% of revenue, compared to $21.1 million, or 6.6% of revenue for the fourth quarter of 2012. The increase in R&D expense resulted primarily from higher personnel-related costs and product development costs.

Year-to-Date Results

Revenues for the year ended December 31, 2013 increased 6.5% to $1.377 billion, from $1.293 billion for the year ended December 31, 2012. Organic revenue growth of 6.7% for the year ended December 31, 2013 excludes the impact of changes in foreign currency exchange rates, which reduced revenue growth by 0.7% and revenue from acquisitions, which contributed 0.5% to revenue growth for the year ended December 31, 2013.

Gross profit for the year ended December 31, 2013 increased 8.1%, to $756.1 million from $699.1 million for the year ended December 31, 2012. As a percentage of total revenue, gross profit increased to 54.9% from 54.1%.

Operating profit for the year ended December 31, 2013 increased 1.6% to $266.8 million, or 19.4% of revenue, compared to $262.6 million, or 20.3% of revenue, for the prior year.  When normalized for the items included in the GAAP and non-GAAP Measures table below, non-GAAP operating profit margin2 for the year ended December 31, 2013 of 20.1% is essentially flat with the prior year.

EPS for the year ended December 31, 2013 increased 9.8% to $3.48, compared to $3.17 for the prior year.  When normalized for the items included in the GAAP and non-GAAP Measures table below, non-GAAP EPS2 for the year ended December 31, 2013 increased 12.3% compared to the prior year.  

GAAP and Non-GAAP Measures:  

We believe the following non-GAAP2 measures of normalized operating profit and EPS for the years ended December 31, 2013 and 2012 are useful to provide supplemental information regarding the performance of our business and for period-over-period comparisons of the performance of our business.

 

Amounts in millions except per share data (Unaudited)










2013




2012



Operating

Profit

Operating

Margin

EPS


Operating

Profit

Operating

Margin

EPS









GAAP measures

$266.8

19.4%

$3.48


$262.6

20.3%

$3.17

GAAP growth measures

1.6%

(0.9%)

9.8%













Pharmaceutical milestone payment

-

-

-


($3.5)

(0.3%)

($0.04)

Third-party service provider bankruptcy

$3.9

0.3%

$0.05


-

-

-

Net changes in foreign currency rates

$7.7

0.4%

$0.10


-

-

-

Federal R&D tax credit related to 2012

-

-

($0.05)


-

-

$0.05









Non-GAAP measures

$278.4

20.1%

$3.58


$259.1

20.0%

$3.18

Non-GAAP growth measures

7.4%

0.1%

12.3%














 

Supplementary Analysis of Results

The accompanying financial tables provide more information concerning our revenue and other operating results for the three and twelve months ended December 31, 2013.

Outlook for 2014

The Company provides the following updated guidance for 2014.

  • Revenues for the full year are expected to be in the range of $1.48 billion to $1.50 billion, which represents reported revenue growth of 7.5% to 8.5% and organic revenue growth of 7% to 8% compared to 2013.  When adjusted for the deferred revenue impacts of our Catalyst One introductory offer in 2014, we expect organic revenue growth of 7.5% to 8.5%.
  • EPS for the full year are expected to be in the range of $3.76 to $3.86. Our guidance assumes the R&D tax credit will not be extended in 2014. When normalized for the items included in the GAAP and non-GAAP Outlook table below, non-GAAP EPS3 growth is projected to be 11% to 14%, in line with the preliminary guidance provided on October 22, 2013.   
  • Free cash flow4 for the full year is expected to be approximately 95% to 100% of net income.
  • Capital expenditures for the full year are expected to be approximately $80 million.

The above guidance reflects an assumption that the value of the U.S. dollar relative to other currencies will remain at our current assumptions of the euro at $1.36, the British pound at $1.66, the Canadian dollar at $0.90, the Australian dollar at $0.88 and the Japanese yen at ¥102 to the U.S. dollar for the balance of 2014. A 1% strengthening of the U.S. dollar would decrease revenue by approximately $5.0 million and operating profit by approximately $0.8 million on an annual basis. Fluctuations in foreign currency exchange rates from current assumptions could have a significant positive or negative impact on our actual results of operations in both years.

GAAP and Non-GAAP Outlook: 

We believe that including the following GAAP and non-GAAP3 measures of normalized EPS in our outlook for the year ended December 31, 2014 is useful to provide supplemental information regarding the performance of our business, and for period-over-period comparisons of the performance of our business.


Guidance Range

2014


 

2013


Low

High



GAAP EPS

$3.76

$3.86


$3.48

GAAP EPS Growth

8%

11%








Third-party service provider bankruptcy




$0.05

Federal R&D tax credit related to 2012 and 2013




($0.10)

Net changes in foreign currency rates

$0.06

$0.06








Non-GAAP measures

$3.82

$3.92


$3.43

Non-GAAP growth measures

11%

14%



 

Conference Call and Webcast Information

IDEXX Laboratories will be hosting a conference call today at 8:30 a.m. (Eastern) to discuss its fourth quarter results and management's outlook. To participate in the conference call, dial 1-612-332-0932 or 1-877-209-9922 and reference confirmation code 317200. An audio replay will be available through February 11, 2014 by dialing 1-320-365-3844 and referencing replay code 317200.

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


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, milk and food. Headquartered in Maine, IDEXX Laboratories employs over 5,500 people and offers products to customers in over 175 countries.

Statement Regarding Non-GAAP Financial Measures

The following provides information regarding non-GAAP financial measures used in this earnings release: To supplement the Company's consolidated results presented in accordance with accounting principles generally accepted in the United States (GAAP), the Company has disclosed non-GAAP financial measures of operating results 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 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 entitled measures reported by other companies.  See reconciliations, if any, included elsewhere in this release for a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures.

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. Forward-looking statements 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. 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 Company's ability to achieve cost improvements in its worldwide network of laboratories and in the manufacture 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 Company's ability to manufacture complex biologic products; the impact of a weak economy on demand for the Company's products and services; the effectiveness of the Company's sales and marketing activities; 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 a change in the status of one of the Company's distributors on the Company's results of operations;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 impact of distributor purchasing decisions on sales of the Company's products that are sold through distribution; the impact of competition, technological change, veterinary hospital consolidation, and the prevalence of buying consortiums on the markets for the Company's products; changes or trends in veterinary medicine that affect the rate of use of the Company's products and services by veterinarians; the impact of the Company's inexperience and small scale in the human point-of-care market; the effects of operations outside the U.S., including  from currency fluctuations, different regulatory, political and economic conditions, and different market conditions; the effects of interruptions to the Company's operations due to natural disasters or system failures; the impact of any class action litigation due to stock price volatility; the effect on the Company's stock price if quarterly or annual operations results do not meet expectations of market analysts or investors in future periods; and potential exposures related to our worldwide provision for income taxes and the potential loss of tax incentives. A further description of these and other factors can be found in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013,in the section captioned "Risk Factors."

1 Organic revenue is not a measure defined by generally accepted accounting principles in the United States of America ("GAAP"), otherwise referred to herein as a non-GAAP measure. 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 our peers. Organic revenue growth for the fourth quarter of 2013 excludes the impact of changes in foreign currency exchange rates, which reduced revenue growth by 0.8% and revenue from business acquisitions, which contributed 1.0% to revenue growth. See the Supplementary Analysis of Results below for a reconciliation of reported revenue growth to organic revenue growth.

2 Operating profit and margin on a non-GAAP basis excludes a $3.5 million milestone payment earned in 2012 related to the 2008 sale of product rights previously included in our pharmaceutical product line, a $3.9 million charge resulting from a third-party service provider bankruptcy, and the net unfavorable impacts of changes in foreign currency exchange rates.  EPS on a non-GAAP basis excludes the aforementioned items and the impact of the retroactive extension of the federal research and development tax credit associated with 2012 but recorded in 2013.

3 EPS on a non-GAAP basis excludes a $3.9 million charge resulting from a third-party service provider bankruptcy in 2013, the impact of the retroactive extension of the federal research and development tax credit associated with 2012 and 2013 that were both recorded in 2013, and the net unfavorable impacts of changes in foreign currency exchange rates. 

4 Free cash flow is a non-GAAP measure. We calculate free cash flow as cash generated from operations, excluding tax benefits attributable to share-based compensation arrangements, reduced by our 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. Refer to our reconciliation below for our calculation of free cash flow for the years ended December 31, 2013 and 2012. With respect to this particular forward-looking projection, the Company is unable to provide a quantitative reconciliation at this time as the inputs to the measurement are difficult to predict and estimate, and are primarily dependent on future events.

 

Contact: Ed Garber, Director, Investor Relations, 1-207-556-8155

 

 

IDEXX Laboratories, Inc. and Subsidiaries







Consolidated Statement of Operations







Amounts in thousands except per share data (Unaudited)
















Three Months Ended


Twelve Months Ended




December 31,

December 31,


December 31,

December 31,




2013

2012


2013

2012

Revenue:

Revenue


$ 354,073

$ 319,538


$ 1,377,058

$ 1,293,338

Expenses and








Income:

Cost of revenue


165,408

150,488


620,940

594,190


Gross profit


188,665

169,050


756,118

699,148


Sales and marketing


66,694

52,724


243,492

216,962


General and administrative


38,147

31,849


157,861

137,609


Research and development


22,496

21,050


88,003

82,014


Income from operations


61,328

63,427


266,762

262,563


Interest expense, net


(1,369)

(343)


(3,501)

(1,946)


Income before provision for income taxes


59,959

63,084


263,261

260,617


Provision for income taxes


16,722

19,724


75,467

82,330

Net Income:

Net income


43,237

43,360


187,794

178,287


Less: Noncontrolling interest in subsidiary's







(losses) earnings


(21)

6


(6)

20


Net income attributable to stockholders

$ 43,258

$ 43,354


$ 187,800

$ 178,267


Earnings per share: Basic


$ 0.83

$ 0.79


$ 3.53

$ 3.24


Earnings per share: Diluted


$ 0.82

$ 0.78


$ 3.48

$ 3.17


Shares outstanding: Basic


51,961

54,717


53,159

54,985


Shares outstanding: Diluted


52,737

55,790


53,985

56,155









 

 

IDEXX Laboratories, Inc. and Subsidiaries







Selected Operating Information (Unaudited)


















Three Months Ended


Twelve Months Ended




December 31,

December 31,


December 31,

December 31,




2013

2012


2013

2012

Operating

Gross profit


53.3%

52.9%


54.9%

54.1%

Ratios (as a

Sales, marketing, general and







percentage of

administrative expense


29.6%

26.5%


29.1%

27.4%

revenue):

Research and development expense


6.4%

6.6%


6.4%

6.3%


Income from operations(1)


17.3%

19.8%


19.4%

20.3%

















International

International revenue (in thousands)


$     154,059

$      136,545


$     574,712

$      533,919

Revenue:

International revenue as percentage of







total revenue


43.5%

42.7%


41.7%

41.3%









(1)Amounts presented may not recalculate due to rounding.

 

 


IDEXX Laboratories, Inc. and Subsidiaries





Segment Information







Amounts in thousands (Unaudited)
















Three Months Ended


Three Months Ended




December 31,

Percent of


December 31,

Percent of




2013

Revenue


2012

Revenue

Revenue:

CAG


$     293,552



$     263,487



Water


21,662



20,892



LPD


32,363



28,895



Other


6,496



6,264



Total


$     354,073



$     319,538










Gross Profit:

CAG


$     152,034

51.8%


$     135,176

51.3%


Water


14,082

65.0%


13,883

66.5%


LPD


18,264

56.4%


16,365

56.6%


Other


3,415

52.6%


2,494

39.8%


Unallocated Amounts


870

N/A


1,132

N/A


Total


$     188,665

53.3%


$     169,050

52.9%









Income from








Operations:

CAG


$       51,268

17.5%


$       45,899

17.4%


Water


8,639

39.9%


9,068

43.4%


LPD


4,983

15.4%


5,245

18.2%


Other


517

8.0%


3,216

51.3%


Unallocated Amounts


(4,079)

N/A


(1)

N/A


Total


$       61,328

17.3%


$       63,427

19.8%









































Twelve Months Ended


Twelve Months Ended




December 31,

Percent of


December 31,

Percent of




2013

Revenue


2012

Revenue

Revenue:

CAG


$     1,150,169



$     1,072,211



Water


87,959



84,680



LPD


113,811



111,308



Other


25,119



25,139



Total


$   1,377,058



$     1,293,338










Gross Profit:

CAG


$      616,335

53.6%


$        561,043

52.3%


Water


58,218

66.2%


56,133

66.3%


LPD


62,534

54.9%


66,166

59.4%


Other


12,650

50.4%


10,645

42.3%


Unallocated Amounts


6,381

N/A


5,161

N/A


Total


$     756,118

54.9%


$        699,148

54.1%









Income from








Operations:

CAG


$     218,645

19.0%


$       203,236

19.0%


Water


37,321

42.4%


37,687

44.5%


LPD


14,159

12.4%


20,808

18.7%


Other


2,405

9.6%


2,902

11.5%


Unallocated Amounts


(5,768)

N/A


(2,070)

N/A


Total


$     266,762

19.4%


$       262,563

20.3%









 

 


IDEXX Laboratories, Inc. and Subsidiaries













Revenues and Revenue Growth Analysis by Product and Service Categories













Amounts in thousands (Unaudited)





























Three Months Ended












Net Revenue

December
31,
2013



December
31,
2012


Dollar

Change


Percentage

Change


Percentage

Change from

Currency(1)


Percentage

Change from

Acquisitions(2)


Organic Revenue
Growth
(3)






















CAG

$

293,552


$

263,487


$

30,065


11.4%


(1.0)%


0.3%


12.1%

Water


21,662



20,892



770


3.7%


(1.0)%


1.4%


3.3%

LPD


32,363



28,895



3,468


12.0%


0.8%


7.3%


3.9%

Other


6,496



6,264



232


3.7%


0.3%


-


3.4%

Total

$

354,073


$

319,538


$

34,535


10.8%


(0.8)%


1.0%


10.6%






















































































Three Months Ended













Net CAG Revenue

December
31, 2013



December 31, 2012


Dollar

Change


Percentage

Change


Percentage

Change from

Currency(1)


Percentage

Change from

Acquisitions(2)


Organic Revenue
Growth
(3)






















CAG Diagnostics recurring revenue

$

238,935


$

216,185


$

22,750


10.5%


(0.9%)



0.1%


11.3%

VetLab consumables


81,555



72,420



9,135


12.6%


(0.7%)



-


13.3%

VetLab service and accessories


13,666



12,442



1,224


9.8%


(1.9%)



-


11.7%

Rapid assay products


36,365



33,676



2,689


8.0%


(0.8%)



-


8.8%

Reference laboratory diagnostic
            and consulting services


107,349



97,647



9,702


9.9%


(0.9%)



0.2%


10.6%

CAG Diagnostics capital – VetLab instruments


27,752



24,624



3,128


12.7%


(2.5%)



-


15.2%

Customer information management and digital imaging systems


26,865



22,678



4,187


18.5%


(0.4%)



2.8%


16.1%

Net CAG revenue

$

293,552


$

263,487


$

30,065


11.4%


(1.0%)



0.3%


12.1%






















 (1) The percentage change from currency is a non-GAAP measure. It represents the percentage change in revenue resulting from the difference between the average exchange rates during the three months ended December 31, 2013 and the same period of the prior year applied to foreign currency denominated revenues for the three months ended December 31, 2013.






















(2) The percentage change from acquisitions is a non-GAAP measure. It represents the percentage change in revenue during the three months ended December 31, 2013 compared to the three months ended December 31, 2012 attributed to acquisitions subsequent to September 30, 2012.






















(3) Organic revenue growth is a non-GAAP measure and represents the percentage change in revenue during the three months ended December 31, 2013 compared to the three months ended December 31, 2012 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









Amounts in thousands (Unaudited)



























Twelve Months Ended











Net Revenue

December
31,
2013



December 31, 2012


Dollar

Change


Percentage

Change


Percentage

Change from

Currency(1)


Percentage

Change from

Acquisitions(2)


Organic Revenue
Growth
(3)






















CAG

$

1,150,169


$

1,072,211


$

77,958


7.3%


(0.8%)


0.3%


7.8%

Water


87,959



84,680



3,279


3.9%


(0.6%)


0.3%


4.2%

LPD


113,811



111,308



2,503


2.2%


0.2%


2.6%


(0.6%)

Other


25,119



25,139



(20)


(0.1%)


0.1%


-


(0.2%)

Total

$

1,377,058


$

1,293,338


$

83,720


6.5%


(0.7%)


0.5%


6.7%

































































Twelve Months Ended











Net CAG Revenue

December
31, 2013



December 31, 2012


Dollar

Change


Percentage

Change


Percentage

Change from

Currency(1)


Percentage

Change from

Acquisitions(2)


Organic Revenue
Growth(3)






















CAG Diagnostics recurring revenue

$

974,004


$

896,449


$

77,555


8.7%


(0.8%)



0.1%


9.4%

VetLab consumables


311,359



278,818



32,541


11.7%


(0.7%)



-


12.4%

VetLab service and accessories


51,891



48,056



3,835


8.0%


(2.5%)



-


10.5%

Rapid assay products


169,547



162,232



7,315


4.5%


(0.7%)



-


5.2%

Reference laboratory diagnostic
            and consulting services


441,207



407,343



33,864


8.3%


(0.8%)



0.3%


8.8%

CAG Diagnostics capital – VetLab instruments


83,374



90,177



(6,803)


(7.5%)


(1.5%)



-


(6.0%)

Customer information management and digital imaging systems


92,791



85,585



7,206


8.4%


(0.3%)



3.1%


5.6%

Net CAG revenue

$

1,150,169


$

1,072,211


$

77,958


7.3%


(0.8%)



0.3%


7.8%






















(1) The percentage change from currency is a non-GAAP measure. It represents the percentage change in revenue resulting from the difference between the average exchange rates during the twelve months ended December 31, 2013 and the same period of the prior year applied to foreign currency denominated revenues for the twelve months ended December 31, 2013.






















(2) The percentage change from acquisitions is a non-GAAP measure. It represents the percentage change in revenue during the twelve months ended December 31, 2013 compared to the twelve months ended December 31, 2012 attributed to acquisitions subsequent to December 31, 2011.






















(3) Organic revenue growth is a non-GAAP measure and represents the percentage change in revenue during the twelve months ended December 31, 2013 compared to the twelve months ended December 31, 2012 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)












December 31,

December 31,




2013

2012

Assets:

Current Assets:





Cash and cash equivalents


$     279,058

$           223,986


Accounts receivable, net


158,038

138,324


Inventories


133,427

140,946


Other current assets


82,183

66,281


Total current assets


652,706

569,537


Property and equipment, net


281,214

245,177


Other long-term assets, net


296,596

288,888


Total assets


$  1,230,516

$        1,103,602

Liabilities and





Stockholders'





Equity:

Current Liabilities:





Accounts payable


$      29,941

$             35,288


Accrued liabilities


148,919

137,746


Debt


278,035

213,107


Deferred revenue


21,458

20,192


Total current liabilities


478,353

406,333


Long-term debt, net of current portion


150,359

1,394


Other long-term liabilities


83,590

59,618


Total long-term liabilities


233,949

61,012







Total stockholders' equity


518,186

636,223


Noncontrolling interest


28

34


Total equity


518,214

636,257


Total liabilities and stockholders' equity


$ 1,230,516

$1,103,602






























IDEXX Laboratories, Inc. and Subsidiaries








Selected Balance Sheet Information (Unaudited)























December 31,


September 30,


June 30,


March 31,


December 31,




2013


2013


2013


2013


2012

Selected                  












Balance Sheet

Days sales outstanding(1)


39.9


41.9


41.2


40.8


39.9

Information:

Inventory turns (2)


1.9


1.7


1.7


1.7


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)





















Twelve Months Ended







December 31,

December 31,







2013

2012(1)

Operating:

Cash Flows from Operating Activities:








Net income





$     187,794

$     178,287


Non-cash charges





75,423

64,408


Changes in assets and liabilities



(3,063)

(5,611)


Tax benefit from share-based compensation arrangements


(14,158)

(14,676)


Net cash provided by operating activities





245,996

222,408

Investing:

Cash Flows from Investing Activities:








Purchases of property and equipment





(77,612)

(57,618)


Proceeds from disposition of pharmaceutical product lines



3,500

3,000


Proceeds from sale of property and equipment




-

45


Acquisition of intangible assets



(1,024)

(900)


Acquisitions of businesses, net of cash acquired



(10,923)

(2,658)


Net cash used by investing activities




(86,059)

(58,131)

Financing:

Cash Flows from Financing Activities:








Borrowings (repayment) on revolving credit facilities, net



65,000

(31,000)


Issuance of senior notes





150,000

-


Debt issue costs





(976)

-


Payment of notes payable





(1,107)

(917)


Repurchases of common stock





(367,761)

(132,268)


Proceeds from the exercise of stock options and employee stock purchase plans


38,235

24,166


Tax benefit from share-based compensation arrangements


14,158

14,676


Net cash used by financing activities




(102,451)

(125,343)


Net effect of changes in exchange rates on cash





(2,414)

1,157


Net increase in cash and cash equivalents





55,072

40,091


Cash and cash equivalents, beginning of period




223,986

183,895


Cash and cash equivalents, end of period





$    279,058

$      223,986

















IDEXX Laboratories, Inc. and Subsidiaries







Free Cash Flow(2)







Amounts in thousands (Unaudited)













Twelve Months Ended







December 31,

December 31,







2013

2012(1)

Free Cash








Flow:

Net cash provided by operating activities





$     245,996

$     222,408


Royalty prepayment to obtain exclusive patent rights





-

6,250


Financing cash flows attributable to tax benefits from share-based compensation arrangements


14,158

14,676


Purchases of property and equipment





(77,612)

(57,618)


Free cash flow





$     182,542

$     185,716



















(1) Revisions were made to the Consolidated Statement of Cash Flows for the twelve months ended December 31, 2012 to correctly reflect non-cash purchases of property and equipment embedded in accounts payable, accrued liabilities, and inventory on the Consolidated Balance Sheet at December 31, 2012.  These revisions reduced net cash provided by operating activities by $7.9 million and reduced net cash used by investing activities by $7.9 million and had no change on the net increase in cash and cash equivalents or free cash flow for the twelve months ended December 31, 2012.


(2) Free cash flow is a non-GAAP measure. We calculate free cash flow as cash generated from operations, excluding our royalty prepayment in the first quarter of 2012, and tax benefits attributable to share-based compensation arrangements, reduced by our 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.


 

 

IDEXX Laboratories, Inc. and Subsidiaries





Common Stock Repurchases





Amounts in thousands except per share data (Unaudited)










Three Months Ended


Twelve Months Ended




December 31,

December 31,


December 31,

December 31,




2013

2012


2013

2012


Share repurchases during the period


814

438


4,001

1,527


Average price paid per share


$        104.44

$        94.23


$        93.05

$        89.65










Shares remaining under repurchase authorization as of December 31, 2013 totaled 2,961,827.                                 







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.

 

 

SOURCE IDEXX Laboratories, Inc.



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