IDEXX Laboratories Announces Second Quarter Results

- Catalyst® instrument placements at all-time record level of over 1,100 units and premium hematology placements at Q2 record level of over 900 units

- Achieves 13% normalized organic growth in CAG Diagnostics recurring revenues, supported by continued strong gains in instrument consumable and reference lab sales

- Delivers EPS of $0.60, up 9% from prior year or 18% adjusted for currency impacts

- Maintains 2015 revenue and EPS guidance

Jul 30, 2015, 07:00 ET from IDEXX Laboratories, Inc.

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.



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