IDEXX Laboratories Announces Fourth Quarter and Full Year Results

Jan 29, 2010, 07:00 ET from IDEXX Laboratories, Inc.

WESTBROOK, Maine, Jan. 29 /PRNewswire-FirstCall/ -- IDEXX Laboratories, Inc. (Nasdaq: IDXX), today reported that revenues for the fourth quarter of 2009 increased 11% to $270.3 million, from $243.3 million for the fourth quarter of 2008. Organic revenue growth, as defined below, was 6%. Earnings per diluted share ("EPS") for the quarter ended December 31, 2009 were $0.51, compared to $0.39 for the same period in the prior year. EPS grew 16% when compared to fourth quarter 2008 non-GAAP EPS, which adjusted EPS for the 2008 disposition of the pharmaceutical product lines and related restructuring. Please refer to the non-GAAP financial measures table below.

Organic revenue growth excludes the impact of changes in currency exchange rates, which contributed approximately 5% to revenue growth, and revenue from businesses acquired or divested subsequent to the beginning of the prior year period, which had minimal impact on revenue growth.

"IDEXX had a strong fourth quarter that exceeded our expectations," stated Jonathan W. Ayers, Chairman and Chief Executive Officer. "Organic revenue growth, led by our Companion Animal Group, increased modestly to 6%, as strong demand for certain products such as our Catalyst Dx® chemistry analyzer offset continued economic weakness and soft consumer spending."

"Sales of instruments and consumables, our largest business, benefited from Catalyst sales as we placed 763 units in the fourth quarter and over 2,046 units for the year."

"International markets, particularly the Asia Pacific region, continued to perform very well. In that region, organic growth was 30% for the quarter and 20% for the year, reflecting a further acceleration of growth in this region."

"Throughout the year, we continued to identify opportunities for increased operating efficiency while maintaining investment in areas critical to achieving our longer-term strategic and operational objectives. This focus on operational efficiency enabled us to exceed our earnings guidance for the year, despite weaker than anticipated top-line growth."

"As we look to 2010, we remain confident in our growth strategies due to the fundamental attractiveness of our markets, our unique and innovative product and service offering, and our global footprint.  We also are targeting earnings to grow faster than revenue, reflecting operating margin expansion in our two largest businesses, instruments and consumables and reference laboratory services."

Revenue Performance

Please refer to the table below entitled "Revenues and Revenue Growth Analysis by Product and Service Categories" in conjunction with the following discussion.

Companion Animal Group. Companion Animal Group ("CAG") revenues for the fourth quarter of 2009 were $217.9 million compared to $196.5 million for the fourth quarter of 2008. Changes in foreign currency exchange rates and revenues from a recently acquired business contributed approximately 4% and 1%, respectively, to revenue growth. Organic growth of 6% was the result of increased sales volume, primarily in the IDEXX VetLab® and laboratory and consulting services product lines. In the IDEXX VetLab® product line, higher sales volume was driven by sales of our Catalyst Dx® chemistry analyzer and instrument consumables. In the laboratory and consulting services product line, revenue growth was due to higher volume and higher unit sales prices on reference laboratory tests. These favorable impacts were partly offset by lower sales volume and lower average unit sales prices for LaserCyte® hematology analyzers.

Water. Water segment revenues for the fourth quarter of 2009 were $18.5 million compared to $17.2 million for the fourth quarter of 2008. Changes in foreign currency exchange rates contributed approximately 5% to revenue growth. Organic revenue growth of 3% was the result of higher unit sales prices due, in part, to higher relative sales in geographies where products are sold at higher unit sales prices.

Production Animal Segment. Production Animal Segment ("PAS") revenues for the fourth quarter of 2009 were $23.4 million compared to $20.3 million for the fourth quarter of 2008. Changes in foreign currency exchange rates contributed approximately 10% to revenue growth. Organic revenue growth of 5% was the result of higher sales volumes, partly offset by lower unit sales prices.

Year-to-Date Results

Revenues for the year ended December 31, 2009 increased 1% to $1.032 billion, from $1.024 billion for the year ended December 31, 2008. Organic growth for the year ended December 31, 2009, was 5%. Changes in currency exchange rates and the impact of divestitures and discontinued products, net of revenues from businesses recently acquired, reduced revenue growth by approximately 4%.

EPS for 2009 were $2.01, compared to $1.87 for the year ended December 31, 2008. EPS grew 6% when compared to 2008 non-GAAP diluted EPS of $1.90. Please refer to the non-GAAP financial measures table below.

Additional Operating Results for the Fourth Quarter

Gross profit for the fourth quarter of 2009 increased $12.4 million, or 10%, to $132.9 million from $120.5 million for the fourth quarter of 2008. As a percentage of total revenue, gross profit decreased slightly to 49%. The decrease in gross profit percentage was due primarily to the unfavorable net impact of foreign currency exchange rates, as the favorable impact on revenue of changes in foreign currency exchange rates was more than offset by losses on foreign currency hedge contracts and by the unfavorable impact on foreign currency denominated expenses. Gross profit percentage was also impacted by higher relative sales of lower margin IDEXX VetLab® instruments and laboratory and consulting services and lower average sales prices in certain product lines. These unfavorable items were partly offset by gross profit improvement in our laboratory and consulting services product line, lower royalty expense, and lower depreciation expense associated with IDEXX VetLab® instruments that are under rental agreements with customers.

Research and development ("R&D") expense for the fourth quarter of 2009 was $16.0 million, or 6% of revenue, compared to $17.1 million, or 7% of revenue for the fourth quarter of 2008. The decrease in R&D expense was due to the absence of pharmaceutical business R&D spending in the fourth quarter of 2009, resulting from the disposition of substantially all of our pharmaceutical product line and assets in the fourth quarter of 2008.

Selling, general and administrative ("SG&A") expense for the fourth quarter of 2009 was $72.8 million, or 27% of revenue, compared to $66.1 million, or 27% of revenue, for the fourth quarter of 2008. The increase in SG&A expense resulted primarily from higher personnel costs in selling, customer support and administrative functions, and the unfavorable impact of exchange rate changes on foreign currency denominated expenses. Fourth quarter 2008 SG&A included a charge of $1.5 million related to the 2008 disposition and the related restructuring of the remaining pharmaceutical product line.

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, 2009, as well as a reconciliation of earnings per share to non-GAAP EPS.

Outlook for 2010

The Company provides the following updated guidance for the full year of 2010. This guidance reflects an assumption that the value of the U.S. dollar relative to other currencies will remain at its current level for the balance of 2010. Fluctuations in foreign currency exchange rates from current levels could have a significant positive or negative impact on our actual results of operations in 2010.

  • Revenues are expected to be $1.1 to $1.115 billion, which represents reported revenue growth of 7% to 8% and organic revenue growth of 5% to 6%. This guidance is higher than the previous guidance of $1.08 to $1.1 billion, provided in October 2009, as a slight increase in anticipated organic revenue growth is anticipated to be partially offset by lower estimated currency benefits from the weakening of the U.S. Dollar relative to other major currencies.
  • EPS are expected to be $2.20 to $2.25, compared to our previous guidance of $2.15 to $2.25.
  • Free cash flow is expected to be approximately 110% of net income.

Conference Call and Webcast Information

IDEXX Laboratories will be hosting a conference call today at 9:00 a.m. (eastern) to discuss its fourth quarter results. To participate in the conference call, dial 1-612-288-0329 or 1-800-288-8967 and reference confirmation code 143973. An audio replay will be available through February 5, 2010 by dialing 1-320-365-3844 and referencing replay code 143973.

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 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 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 4,800 people and offers products to customers in over 100 countries.

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 impact of a weak economy on demand for the Company's products and services; the impact of changes and disruptions in financial and currency markets; 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 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; the effects of interruptions to the Company's operations due to natural disasters or system failures; 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, 2008, and quarterly report on Form 10-Q for the quarter ended September 30, 2009, in the section captioned "Risk Factors."

Contact: Merilee Raines, Chief Financial Officer, 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,
                                 2009         2008         2009         2008
    Revenue: Revenue         $270,335     $243,293   $1,031,633   $1,024,030
    Expenses
    and
    Income:  Cost of revenue  137,404      122,772      505,352      494,264
             Gross profit     132,931      120,521      526,281      529,766
             Sales and
              marketing        43,383       39,951      167,748      169,693
             General and
              administrative   29,393       26,179      117,440      115,586
             Research and
              development      16,008       17,063       65,124       70,552
             Loss on
              disposition of    
              pharmaceutical
              product lines
              and related   
              restructuring         -        1,479            -        1,479
             Income from
              operations       44,147       35,849      175,969      172,456
             Interest
              expense, net       (243)        (581)      (1,430)      (2,269)
             Income before
              provision for
              income taxes     43,904       35,268      174,539      170,187
             Provision for
              income taxes     12,943       11,713       52,304       54,018
    Net 
    Income:  Net income        30,961       23,555      122,235      116,169
             Less: 
              Noncontrolling
              interest in
              subsidiary's
              earnings             10            -           10            -
             Net income
              attributable to
              stockholders    $30,951      $23,555     $122,225     $116,169
             Earnings per
              share: Basic      $0.53        $0.40        $2.08        $1.94
             Earnings per
              share: Diluted    $0.51        $0.39        $2.01        $1.87
             Shares outstanding: 
              Basic            58,506       59,453       58,809       59,953
             Shares outstanding: 
              Diluted          60,507       61,083       60,682       62,249
    
    
    
    IDEXX Laboratories, Inc. and Subsidiaries
    Key Operating Information (Unaudited)
    
                                      Three Months Ended Twelve Months Ended
                                      December  December  December  December
                                           31,       31,       31,       31,
                                          2009      2008      2009      2008
    Key           Gross
     Operating     profit                49.2%     49.5%     51.0%     51.7%
     Ratios (as   Sales, marketing,
     a percentage  general and
     of            administrative
     revenue):     expense               26.9%     27.2%     27.6%     27.9%
                  Research and
                   development
                   expense                5.9%      7.0%      6.3%      6.9%
                  Loss on disposition
                   of pharmaceutical
                   product lines
                   and related
                   restructuring             -      0.6%         -      0.1%
                  Income from
                   operations(1)         16.3%     14.7%     17.1%     16.8%
    
    International International
     Revenue:      revenue
                   (in thousands)     $118,660   $97,071  $417,116  $413,973
                  International
                   revenue as 
                   percentage of
                   total revenue         43.9%     39.9%     40.4%     40.4%
    
    
    (1) The sum of individual items may not equal the total due to rounding. 
    
    
    
    IDEXX Laboratories, Inc. and Subsidiaries
    Non-GAAP Financial Measures
    Amounts in thousands except per share data (Unaudited)
    
                                        Three Months Ended
    
                                   Gross Profit        Income from Operations
                                Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31, 
                                   2009        2008        2009        2008  
    
    GAAP measurement           $132,931    $120,521     $44,147     $35,849 
      % of revenue                49.2%       49.5%       16.3%       14.7% 
    Disposition of
     pharmaceutical
     product lines and
     related restructuring(1)         -           -           -       1,479
    Non-GAAP comparative
     measurements(2)           $132,931    $120,521     $44,147     $37,328  
      % of revenue                49.2%       49.5%       16.3%       15.3%  
    
    
                              Net Income Attributable        Earnings per 
                                  to Stockholders           Share Diluted
                                Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31, 
                                   2009        2008        2009        2008  
    
    GAAP measurement            $30,951     $23,555       $0.51       $0.39
      % of revenue                11.4%        9.7%
    Disposition of
     pharmaceutical
     product lines and
     related restructuring(1)         -       3,598           -        0.06
    Non-GAAP comparative
     measurements(2)            $30,951     $27,153       $0.51       $0.44
      % of revenue                11.4%       11.2%
    
    
    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 impact of the disposition of certain
        pharmaceutical product lines and the related restructuring of the
        remaining pharmaceutical business in 2008 is not indicative of future
        performance because significant transactions and related costs of a
        similar nature are not likely to recur within a reasonable period. In
        the fourth quarter of 2008 we completed a transaction to sell our
        ACAREXX and SURPASS pharmaceutical products and a product then
        under development, which were a part of our CAG segment, and
        subsequently restructured the remaining pharmaceutical business.
    
    (2) The sum of the individual items may not equal the non-GAAP
        measurement due to rounding of the individual items in this
        presentation.
    
    
    
    IDEXX Laboratories, Inc. and Subsidiaries
    Non-GAAP Financial Measures
    Amounts in thousands except per share data (Unaudited)
    
                                      Twelve Months Ended
    
                                   Gross Profit        Income from Operations
                                Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31, 
                                   2009        2008        2009        2008  
    
    GAAP measurement           $526,281    $529,766    $175,969    $172,456 
      % of revenue                51.0%       51.7%       17.1%       16.8% 
    Disposition of
     pharmaceutical
     product lines and
     restructuring(1)                 -           -           -       1,479 
    Discrete income tax
     benefits(2)                      -           -           -           - 
    Non-GAAP comparative
     measurements(3)           $526,281    $529,766    $175,969    $173,935 
      % of revenue                51.0%       51.7%       17.1%       17.0% 
    
    
                              Net Income Attributable       Earnings per 
                                  to Stockholders           Share Diluted
                                Dec. 31,    Dec. 31,    Dec. 31,    Dec. 31, 
                                   2009        2008        2009        2008  
    
    GAAP measurement           $122,225    $116,169       $2.01       $1.87
      % of revenue                11.8%       11.3%
    Disposition of
     pharmaceutical
     product lines and
     restructuring(1)                 -       3,598           -        0.06
    Discrete income tax
     benefits(2)                      -      (1,472)          -       (0.02)
    Non-GAAP comparative
     measurements(3)           $122,225    $118,295       $2.01       $1.90
      % of revenue                11.8%       11.6%
    
    
    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 impact of the disposition of certain
        pharmaceutical product lines and the related restructuring of the
        remaining pharmaceutical business in the fourth quarter of 2008 is not
        indicative of future performance because significant transactions and
        related costs of a similar nature are not likely to recur within a
        reasonable period. In the fourth quarter of 2008 we completed a
        transaction to sell our ACAREXX and SURPASS pharmaceutical products 
        and a product then under development, which were a part of our 
        CAG segment, and subsequently restructured the remaining 
        pharmaceutical business.
    
    (2) We believe that certain significant discrete income tax items create
        impacts on financial measures that are not indicative of future
        performance because the items are not likely to recur within a
        reasonable period. For 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.
    
    (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 Laboratories, Inc. and Subsidiaries 
    Segment Information
    Amounts in thousands (Unaudited)
    
                                Three Months Ended      Twelve Months Ended
                               December    December     December    December
                                    31,         31,          31,         31,
                                   2009        2008         2009        2008
    Revenue:       CAG          $217,861    $196,523     $843,303    $834,056
                   Water          18,507      17,182       73,214      74,469
                   PAS            23,360      20,310       77,208      80,762
                   Other          10,607       9,278       37,908      34,743
                   Total        $270,335    $243,293   $1,031,633  $1,024,030
    
    Gross Profit:  CAG          $100,346     $90,359     $410,356    $412,199
                   Water          11,272      11,479       47,233      47,052
                   PAS            15,592      14,307       51,256      55,005
                   Other           5,605       4,289       17,067      15,131
                   Unallocated       116          87          369         379
                   Total        $132,931    $120,521     $526,281    $529,766
    
    Income from
    Operations:    CAG           $29,304     $24,210     $136,121    $129,620
                   Water           7,279       7,893       31,615      31,330
                   PAS             6,269       6,936       17,271      21,760
                   Other           3,570         919        3,425       1,555
                   Unallocated    (2,275)     (4,109)     (12,463)    (11,809)
                   Total         $44,147     $35,849     $175,969    $172,456
    
    Gross Profit
    (as a percentage
    of revenue):   CAG              46.1%       46.0%        48.7%       49.4%
                   Water            60.9%       66.8%        64.5%       63.2%
                   PAS              66.7%       70.4%        66.4%       68.1%
                   Other            52.8%       46.2%        45.0%       43.6%
    
    Income from
    Operations
    (as a percentage
    of revenue):   CAG              13.5%       12.3%        16.1%       15.5%
                   Water            39.3%       45.9%        43.2%       42.1%
                   PAS              26.8%       34.2%        22.4%       26.9%
                   Other            33.7%        9.9%         9.0%        4.5%
    
    
    
    IDEXX Laboratories, Inc. and Subsidiaries
    Revenues and Revenue Growth Analysis by Product and Service
     Categories
    Amounts in thousands (Unaudited)
    
                                      Three Months Ended
    
                           December 31,  December 31,   Dollar Percentage 
    Net Revenue                   2009          2008    Change     Change 
    
    CAG                       $217,861      $196,523   $21,338       10.9% 
    Water                       18,507        17,182     1,325        7.7% 
    PAS                         23,360        20,310     3,050       15.0% 
    Other                       10,607         9,278     1,329       14.3% 
      Total                   $270,335      $243,293   $27,042       11.1% 
    
                                                                 Percentage  
                                                              Change Net of
                                                Percentage    Acquisitions/
                               Percentage      Change from     Divestitures
                              Change from     Acquisitions/    and Currency 
    Net Revenue                Currency(1)   Divestitures(2)      Effect(3)
    
    CAG                              4.3%              0.5%           6.1%
    Water                            4.7%                -            3.0%
    PAS                              9.6%                -            5.4%
    Other                            2.6%                -           11.7%
      Total                          4.7%              0.4%           6.0%
    
    
                                         Three Months Ended
    
                           December 31,  December 31,   Dollar  Percentage 
    Net CAG Revenue               2009          2008    Change    Change 
    
    Instruments and
     consumables               $92,817       $81,559   $11,258      13.8% 
    Rapid assay products        30,081        30,240      (159)     (0.5%) 
    Laboratory and
     consulting services        75,423        65,260    10,163      15.6% 
    Practice information
     systems and
     digital radiography        19,540        18,918       622       3.3%  
    Pharmaceutical products          -           546      (546)   (100.0%) 
      Net CAG revenue         $217,861      $196,523   $21,338      10.9% 
    
    
                                                                 Percentage  
                                                              Change Net of
                                                Percentage    Acquisitions/
                               Percentage      Change from     Divestitures
                              Change from     Acquisitions/    and Currency 
    Net CAG Revenue            Currency(1)   Divestitures(2)      Effect(3)
    
    Instruments and
     consumables                     4.3%                -            9.5%
    Rapid assay products             1.8%                -           (2.3%)
    Laboratory and consulting
     services                        6.1%              2.1%           7.4%
    Practice information
     systems and
     digital radiography             1.9%              0.6%           0.8%
    Pharmaceutical products            -            (100.0%)            -
      Net CAG revenue                4.3%              0.5%           6.1%
    
    
    (1) Represents the percentage change in revenue attributed to the effect 
        of changes in currency rates from the three months ended December 31, 
        2008 to the three months ended December 31, 2009.
    
    (2) Represents the percentage change in revenue during the three months 
        ended December 31, 2009 compared to the three months ended December 
        31, 2008 attributed to incremental revenues from businesses acquired 
        or revenues lost from businesses divested or discontinued subsequent 
        to September 30, 2008.
    
    (3) Organic Growth
    
    
    
    IDEXX Laboratories, Inc. and Subsidiaries
    Revenues and Revenue Growth Analysis by Product and Service
     Categories
    Amounts in thousands (Unaudited)
    
                                           Twelve Months Ended
    
                           December 31,  December 31,  Dollar  Percentage
    Net Revenue                   2009          2008   Change      Change 
    
    CAG                          $843,303      $834,056   $9,247        1.1% 
    Water                          73,214        74,469   (1,255)      (1.7%)
    PAS                            77,208        80,762   (3,554)      (4.4%)
    Other                          37,908        34,743    3,165        9.1% 
       Total                   $1,031,633    $1,024,030   $7,603        0.7% 
    
                                                                 Percentage
                                                              Change Net of
                                                  Percentage  Acquisitions/
                                 Percentage      Change from   Divestitures
                                Change from    Acquisitions/   and Currency
    Net Revenue                   Currency(1)  Divestitures(2)      Effect(3)
    
    CAG                               (2.3%)           (2.0%)          5.4%
    Water                             (3.4%)              -            1.7%
    PAS                               (3.4%)              -           (1.0%)
    Other                             (0.4%)              -            9.5%
      Total                           (2.4%)           (1.6%)          4.7%
    
    
                                      Twelve Months Ended
    
                               December 31,  December 31,  Dollar  Percentage
    Net CAG Revenue                   2009          2008   Change      Change
    
    Instruments and
     consumables                 $332,706      $318,533  $14,173        4.4%  
    Rapid assay products          147,078       146,867      211        0.1%  
    Laboratory and consulting
     services                     298,410       288,244   10,166        3.5% 
    Practice information systems
     and digital radiography       65,055        61,291    3,764        6.1% 
    Pharmaceutical products            54        19,121  (19,067)     (99.7%) 
      Net CAG revenue            $843,303      $834,056   $9,247        1.1% 
    
    
                                                                 Percentage
                                                              Change Net of
                                                  Percentage  Acquisitions/
                                 Percentage      Change from   Divestitures
                                Change from    Acquisitions/   and Currency
    Net CAG Revenue               Currency(1)  Divestitures(2)      Effect(3)
    
    Instruments and
     consumables                      (2.7%)              -            7.1%
    Rapid assay products              (0.7%)              -            0.8%
    Laboratory and consulting
     services                         (3.0%)            0.7%           5.8%
    Practice information systems
     and digital radiography          (0.8%)            0.2%           6.7%
    Pharmaceutical products              -            (99.6%)         (0.1%)
      Net CAG revenue                 (2.3%)           (2.0%)          5.4%
    
    
    (1) Represents the percentage change in revenue attributed to the effect 
        of changes in currency rates from the twelve months ended December 31,
        2008 to the twelve months ended December 31, 2009.
    
    (2) Represents the percentage change in revenue during the twelve months 
        ended December 31, 2009 compared to the twelve months ended December 
        31, 2008 attributed to incremental revenues from businesses acquired 
        or revenues lost from businesses divested or discontinued subsequent 
        to December 31, 2007.
    
    (3) Organic Growth
    
    
    
    IDEXX Laboratories, Inc. and Subsidiaries
    Consolidated Balance Sheet
    Amounts in thousands (Unaudited)
    
                                                 December 31,   December 31,
                                                        2009           2008
    Assets:       Current Assets:
                  Cash and cash equivalents         $106,728        $78,868
                  Accounts receivable, net           115,107        111,498
                  Inventories                        110,425        115,926
                  Other current assets                44,078         49,598
                  Total current assets               376,338        355,890
                  Property and equipment, at cost    346,592        320,198
                  Less: accumulated depreciation     146,646        130,552
                  Property and equipment, net        199,946        189,646
                  Other long-term assets, net        232,243        219,901
                  Total assets                      $808,527       $765,437
    Liabilities
    and
    Stockholders'
    Equity:       Current Liabilities:
                  Accounts payable                   $19,133        $28,006
                  Accrued expenses                   104,959        104,616
                  Debt                               119,603        151,385
                  Deferred revenue                    12,610         11,285
                  Total current liabilities          256,305        295,292
                  Long-term debt, net of
                   current portion                     4,281          5,094
                  Other long-term liabilities         33,362         26,857
                  Total long-term liabilities         37,643         31,951
    
                  Total stockholders' equity         514,569        438,194
                  Noncontrolling interest                 10              -
                  Total equity                       514,579        438,194
                  Total liabilities and
                   stockholders' equity             $808,527       $765,437
    
    
    
    IDEXX Laboratories, Inc. and Subsidiaries
    Key Balance Sheet Information (Unaudited)
    
                              December   September      June   March  December
                                   31,         30,        30,    31,     31,
                                  2009        2009       2009   2009    2008
    Key Balance  Days sales
     Sheet       outstanding      38.9        41.2       40.2   43.8    41.9
    Information: Inventory turns   2.2         1.8        1.8    1.6     2.0
    
    
    
    IDEXX Laboratories, Inc. and Subsidiaries
    Consolidated Statement of Cash Flows
    Amounts in thousands (Unaudited)
    
                                                     Twelve Months Ended
                                                 December 31,  December 31,
                                                         2009          2008
    Operating: Cash Flows from Operating Activities:
               Net income attributable to
                stockholders                         $122,225      $116,169
               Noncontrolling interest in 
                subsidiary's earnings                      10             -
               Net income                             122,235       116,169
               Non-cash charges                        63,042        60,650
               Changes in current assets and
                liabilities, net of
                acquisitions and disposals            (11,559)      (33,511)
               Net cash provided by
                operating activities                 $173,718      $143,308
    Investing: Cash Flows from Investing Activities:
               Purchase of property and
                equipment                             (49,418)      (89,237)
               Proceeds from disposition of
                pharmaceutical product lines            3,377         7,025
               Proceeds from sale of property
                and equipment                           2,079             -
               Acquisitions of intangible assets and
                businesses, net of cash acquired       (7,180)       (8,649)
               Acquisition of equipment leased
                to customers                           (1,245)         (734)
               Net cash used by investing
                activities                           $(52,387)     $(91,595)
    Financing: Cash Flows from Financing Activities:
               Borrowings (payments) on revolving
                credit facilities, net                (32,830)       79,550
               Payment of other notes payable            (926)         (595)
               Purchase of treasury stock             (83,099)     (132,342)
               Proceeds from the exercise of
                stock options and
                employee stock purchase plans          16,366        16,360
               Tax benefit from exercise of 
                stock options and
                vesting of restricted stock units       5,194         6,237
               Net cash used by financing
                activities                           $(95,295)     $(30,790)
               Net effect of changes in
                exchange rates on cash                  1,824        (2,415)
               Net increase in cash and cash
                equivalents                            27,860        18,508
               Cash and cash equivalents,
                beginning of period                    78,868        60,360
               Cash and cash equivalents,
                end of period                        $106,728       $78,868
    
    
    
    IDEXX Laboratories, Inc. and Subsidiaries
    Free Cash Flow
    Amounts in thousands (Unaudited)
    
                                                     Twelve Months Ended
                                                 December 31,  December 31,
                                                         2009          2008
    Free Cash
    Flow:      Net cash provided by
                operating activities                 $173,718      $143,308
               Financing cash flows attributable
                to tax benefits from exercise of
                stock options and vesting of
                restricted stock units                  5,194         6,237
               Purchase of property and
                equipment                             (49,418)      (89,237)
               Acquisition of equipment leased
                to customers                           (1,245)         (734)
               Free cash flow                        $128,249       $59,574
    
    
    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 Laboratories, Inc. and Subsidiaries
    Cash Flow Impact of Pharmaceutical Transactions and Restructuring
    Amounts in thousands (Unaudited)
    
                                                               December 31,
                                                                       2008
    Proceeds                                                         $8,402
    Restructuring and transaction expenses incurred                    (671)
    Tax charge related to disposal of nondeductible goodwill         (2,666)
    Realization of deferred tax assets                                4,228
    Tax benefit realized from transaction loss                          401
    Net cash flow realized from transaction and restructuring        $9,694
    
    
    
    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,
                                  2009         2008         2009         2008
    Share repurchases
     during the period             486          297        1,919        2,640
    Average price paid per
     share                      $51.69       $33.41       $43.30       $50.14
    
    
    Shares remaining under
     repurchase authorization
     as of December 31, 2009:                 2,294

SOURCE IDEXX Laboratories, Inc.



RELATED LINKS

http://www.idexx.com