WESTBROOK, Maine, Aug. 2, 2016 /PRNewswire/ -- IDEXX
Laboratories, Inc. (NASDAQ: IDXX) today reported revenues for the
second quarter of 2016 of $467
million, an increase of 13% compared to the prior year
period. Organic revenue growth for the quarter was also 13%,
supported by strong growth in the Companion Animal Group ("CAG")
and Water segments.
Earnings per diluted share ("EPS") for the quarter was
$0.74, an increase of 23% compared to
the prior year period, while absorbing a negative $0.06 per share impact related to net changes in
foreign exchange, resulting in constant currency EPS growth of
33%. The federal research and development tax credit, which
benefited the current but not the prior year period, had a 2%
favorable impact to EPS growth.
"We accelerated growth in the second quarter, further
demonstrating the benefits of bringing our innovations to an
attractive global market with an expanded commercial presence,
including our move to a fully-direct sales strategy in the US
companion animal market in 2015," said Jonathan Ayers, the Company's Chairman and Chief
Executive Officer. "Our teams accomplished strong revenue gains
across US and all international regions, with flow-through benefits
that drove very strong profit results.
"We successfully launched SediVue Dx, our novel urine sediment
point-of-care analyzer, with placements of 467 units in the
quarter. This performance reflects the positive customer response
to the streamlined workflow, high quality images, and consistency
of results from the analyzer compared to the traditionally
challenging manual process involving microscopic
interpretation.
"We also achieved continued productivity gains in our commercial
capabilities to drive another highly successful quarter for
placements of Catalyst chemistry instruments, with placement of
1,334 systems, including 502 in North
America. Impressively, an estimated 663 of our worldwide
placements were to new and competitive accounts. Our global
momentum in instrument placements drove accelerated 14% global
reported and organic revenue gains in the recurring revenue of
instrument consumables.
"Strong global commercial execution further drove the revenue
growth of reference laboratory diagnostic and consulting services,
with 15% reported and 14% organic gains, including strong
double-digit growth in both the US and international regions.
Reference lab revenue performance was supported by the growing
appreciation of veterinarians around the world that IDEXX SDMA™ is
a more reliable indicator of kidney related health than the
traditional key kidney parameter, creatinine.
"We also continued to drive strong global growth in our Water
business, with revenues up 11% reported and 12% organically in the
quarter, expanding this base of highly profitable and durable
recurring revenue.
"IDEXX innovations are resonating with customers, and with our
expanded commercial capabilities, we are helping to transform the
role of diagnostics in our markets. We clearly are firing on all
cylinders.
"Given these strong results and related momentum, we are on
track towards delivering on the consistent, long-term 10%+
annual constant currency revenue growth potential we see
for our business," said Ayers.
Second Quarter Financial Performance
Highlights
Companion Animal Group revenue grew 14%, or 13% on an organic
basis, in the second quarter. These results were driven by 13%
reported and 12% organic growth in CAG Diagnostics recurring
revenues, and 35% reported and organic revenue growth in CAG
Diagnostics instruments. As noted, CAG Diagnostics recurring
revenue gains were supported by strong growth in reference
laboratory diagnostic and consulting services and IDEXX
VetLab® consumables. Rapid assay reported and organic
revenue growth increased 7% due to higher volume and timing of
promotional programs.
Water revenue grew 11%, or 12% on an organic basis, in the
second quarter, driven by worldwide increases in core coliform and
E.coli products, as well as an approximate 4% growth benefit
from project related revenues and incremental revenues associated
with the 2015 Crypto outbreak in the UK.
Livestock, Poultry and Dairy ("LPD") revenue increased 2%, or 4%
on an organic basis, in the second quarter, reflecting solid growth
in China and Latin America, partially offset by lower
bovine revenue in Europe.
Gross profit increased 12% compared to the prior year period.
Gross margin decreased from 56.3% to 55.8%, reflecting the
unfavorable impact of foreign exchange rates (including 1.2% of
negative gross margin impact related to the lapping of prior year
hedge gains). On a constant currency basis, gross margin improved
solidly driven by benefits from moderate price gains and
productivity achieved in our reference laboratory and veterinary
software service businesses, which offset mix impacts from higher
instrument revenues.
Operating expenses increased 8% in the second quarter, in line
with first quarter growth levels and relatively lower than
expected, in part reflecting delays in timing for certain
investments. Operating margin was 22.3% in the second quarter, up
from prior year period operating margin of 21.4%, reflecting
flow-through benefits from very strong second quarter revenue
growth.
Outlook for 2016
The Company is increasing its 2016 revenue guidance by
$25 million and its 2016 EPS guidance
by $0.14 per share to reflect its
strong second quarter operating results, positive revenue growth
trends, and expectations for relatively higher operating
margins.
At the revised current foreign exchange rates assumptions below,
the effect of the stronger US dollar compared to rates in effect in
2015 will adversely impact 2016 reported revenue growth by
approximately 1%, EPS by an estimated $0.20 per share (including lapping of prior year
hedge gains), EPS growth by 10%, and Adjusted EPS growth by 9%.
The Company provides the following updated guidance for
2016:
Amounts in
millions except per share data and percentages
|
|
Guidance
Range
|
Growth
Definition
|
Year-over-Year
Growth
|
|
|
|
|
Revenue
|
$1,755 -
$1,775
|
Reported
Organic Revenue
Growth
|
9.5% to
11.0%
10.0% to
11.5%
|
|
|
|
|
EPS
|
$2.32 -
$2.39
|
Reported
Adjusted
Constant Currency
Adjusted
|
13% to 17%
10% to 13%
19% to 23%
|
|
|
|
|
Operating Cash
Flow
|
~135% of net
income
|
|
Free Cash
Flow
|
~100% of net
income
|
|
Capital
Expenditures
|
~$90
million
|
|
|
The guidance above assumes that the value of the US dollar
relative to other currencies will reflect the euro at $1.10, the British pound at $1.30, the Canadian dollar at $0.77, the Australian dollar at $0.75 and the Japanese yen at ¥104 to the US
dollar for the remainder of 2016.
We now expect that operating margins for the full year will be
approximately 19.0%. Adjusted for foreign currency impacts
(including comparisons to 2015 hedge gains) and the 2015 software
impairment charge, we have targeted operating margin improvement of
approximately 100 basis points from 2015 levels.
We continue to expect an effective tax rate of approximately
30.5% to 31.0%. We are now projecting a reduction in weighted
average shares outstanding of approximately 3.0%, and expect
interest expense, net of interest income, of approximately
$29 million reflecting current and
projected borrowings.
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 800-230-1096 or 612-332-0107 and
reference confirmation code 397786. An audio replay will be
available through Tuesday, August 9,
2016 by dialing 800-475-6701 or 320-365-3844 and referencing
replay code 397786.
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 7,000 people
and offers products to customers in over 175 countries.
Statement Regarding Non-GAAP Financial Measures
The following provides information regarding certain measures
used in this earnings release and/or the accompanying earnings
conference call that are not required by, or presented in
accordance with, generally accepted accounting principles in
the United States of America
("GAAP"), otherwise referred to 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 liquidity and are useful for
period-over-period comparisons of the performance of the Company's
business and its liquidity and to the performance and liquidity of
our peers. 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.
The following section defines terms and conventions used in this
earnings release and/or the accompanying earnings conference call,
including non-GAAP financial measures, and includes applicable
information regarding reconciliations of these non-GAAP financial
measures to the most directly comparable GAAP financial measures,
as appropriate:
Adjusted EPS and Adjusted EPS growth - Adjusted EPS and Adjusted
EPS growth are non-GAAP financial measures. Adjusted EPS
excludes non-recurring items. Management believes that
reporting Adjusted EPS provides useful information to investors by
facilitating easier comparisons of our EPS performance with prior
and future periods. The 2016 projected Adjusted EPS growth
calculation uses Adjusted 2015 EPS, which excludes from 2015
reported earnings the third quarter 2015 non-cash software
impairment charge of $8.2 million or
$0.06 per share.
Constant currency - Constant currency references are non-GAAP
financial measures and exclude the impact of changes in foreign
currency exchange rates. Management believes that providing
constant currency information provides valuable supplemental
information regarding our revenue, gross profit and margin,
operating profit and margin, and EPS performance because it is
consistent with how management evaluates our performance and
facilitates comparisons with prior and future periods. We estimated
the net impacts of currency on our revenue, gross profit, operating
profit, EPS and Adjusted EPS results by restating results to the
average exchange rates or exchange rate assumptions for the
comparative period, which includes adjusting for the estimated
impacts of foreign currency hedging transactions and certain
impacts on our effective tax rates. These estimated currency
changes reduced second quarter 2016 gross profit growth by 3%,
operating profit growth by 8%, and EPS growth by 10%, and reduced
projected 2016 revenue growth by 1%, projected 2016 EPS growth by
10%, and projected 2016 Adjusted EPS growth by 9%. Constant
currency revenue growth represents the percentage change in revenue
during the applicable period, as compared to the prior year period,
excluding the impact of changes in foreign currency exchange rates.
See the supplementary analysis of results below for revenue
percentage change from currency for the three and six months ended
June 30, 2016.
Free cash flow - Free cash flow is a non-GAAP financial measure
and means, with respect to a measurement period, the cash generated
from operations during that period, including tax benefits
attributable to share-based compensation arrangements, reduced by
the Company's investments in property and equipment.
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
property and equipment that are required to operate the business.
See the supplementary analysis of results below for our calculation
of free cash flow for the six months ended June 30, 2016 and 2015. To estimate
projected 2016 free cash flow we have deducted approximately
$90 million for projected purchases
of property and equipment and added approximately $10 million for the projected tax benefits from
share-based compensation arrangements.
Growth and organic growth - All references to growth and organic
growth refer to growth compared to the equivalent prior year period
unless specifically noted.
Organic revenue growth - Organic revenue growth is a non-GAAP
financial 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 the performance of our peers.
Organic revenue growth for the second quarter of 2016 excludes the
impact of changes in foreign currency exchange rates, which had a
0.4% 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 and six months ended June
30, 2016. With respect to the projected 2016 organic
revenue growth for the Company it excludes the negative impact of
changes in foreign currency exchange rates, which is projected to
be 1%, and excludes the positive impact of revenue from business
acquisitions, which is projected to contribute 0.5%.
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 "Outlook for 2016" 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; operating and free cash flow
forecast; projected impact of foreign currency exchange rates; and
projected operating margins, capital expenditures, tax benefits
from share-based compensation arrangements, effective tax rate,
weighted average shares outstanding and interest expense. 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
former 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 consolidation in our customer base,
including 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 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 of any adverse changes in the financial
markets on the value of the Company's investment portfolio; 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, 2015 and the
Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 2016,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
|
|
|
|
|
|
|
Condensed
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,
|
|
|
|
2016
|
2015
|
|
2016
|
2015
|
Revenue:
|
Revenue
|
|
$
466,569
|
$
413,343
|
|
$
884,119
|
$
795,820
|
Expenses
and
|
|
|
|
|
|
|
|
Income:
|
Cost of
revenue
|
|
206,026
|
180,586
|
|
396,039
|
347,519
|
|
Gross
profit
|
|
260,543
|
232,757
|
|
488,080
|
448,301
|
|
Sales and
marketing
|
|
76,652
|
75,217
|
|
156,481
|
150,353
|
|
General and
administrative
|
|
54,317
|
44,920
|
|
103,612
|
87,519
|
|
Research and
development
|
|
25,412
|
24,317
|
|
50,032
|
49,323
|
|
Income from
operations
|
|
104,162
|
88,303
|
|
177,955
|
161,106
|
|
Interest expense,
net
|
|
(7,276)
|
(6,700)
|
|
(14,760)
|
(12,579)
|
|
Income before
provision for income taxes
|
|
96,886
|
81,603
|
|
163,195
|
148,527
|
|
Provision for income
taxes
|
|
29,680
|
24,665
|
|
49,964
|
45,011
|
Net
Income:
|
Net income
|
|
67,206
|
56,938
|
|
113,231
|
103,516
|
|
Less: Noncontrolling
interest in subsidiary's
|
|
|
|
|
|
|
|
earnings
|
|
4
|
26
|
|
10
|
10
|
|
Net income
attributable to stockholders
|
$
67,202
|
$
56,912
|
|
$
113,221
|
$
103,506
|
|
Earnings per share:
Basic
|
|
$0.75
|
$0.61
|
|
$1.26
|
$1.10
|
|
Earnings per share:
Diluted
|
|
$0.74
|
$0.60
|
|
$1.25
|
$1.09
|
|
Shares outstanding:
Basic
|
|
89,824
|
93,384
|
|
89,874
|
93,829
|
|
Shares outstanding:
Diluted
|
|
90,817
|
94,306
|
|
90,858
|
94,934
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Selected Operating
Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
June
30,
|
June
30,
|
|
June
30,
|
June
30,
|
|
|
|
2016
|
2015
|
|
2016
|
2015
|
Operating
|
Gross
profit
|
|
55.8%
|
56.3%
|
|
55.2%
|
56.3%
|
Ratios (as
a
|
Sales, marketing,
general and
|
|
|
|
|
|
|
percentage
of
|
administrative
expense
|
|
28.1%
|
29.1%
|
|
29.4%
|
29.9%
|
revenue):
|
Research and
development expense
|
|
5.4%
|
5.9%
|
|
5.7%
|
6.2%
|
|
Income from
operations1
|
|
22.3%
|
21.4%
|
|
20.1%
|
20.2%
|
|
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
|
|
|
|
2016
|
Revenue
|
|
2015
|
Revenue
|
Revenue:
|
CAG
|
|
$
400,223
|
|
|
$
351,620
|
|
|
Water
|
|
27,829
|
|
|
25,051
|
|
|
LPD
|
|
32,856
|
|
|
32,059
|
|
|
Other
|
|
5,661
|
|
|
4,613
|
|
|
Total
|
|
$
466,569
|
|
|
$
413,343
|
|
|
|
|
|
|
|
|
|
Gross
Profit1:
|
CAG
|
|
$
220,003
|
55.0%
|
|
$
192,756
|
54.8%
|
|
Water
|
|
19,380
|
69.6%
|
|
18,013
|
71.9%
|
|
LPD
|
|
19,178
|
58.4%
|
|
20,170
|
62.9%
|
|
Other
|
|
2,291
|
40.5%
|
|
1,665
|
36.1%
|
|
Unallocated
Amounts
|
|
(309)
|
N/A
|
|
153
|
N/A
|
|
Total
|
|
$
260,543
|
55.8%
|
|
$
232,757
|
56.3%
|
|
|
|
|
|
|
|
|
Income
from
|
|
|
|
|
|
|
|
Operations1:
|
CAG
|
|
$
91,019
|
22.7%
|
|
$
68,085
|
19.4%
|
|
Water
|
|
12,743
|
45.8%
|
|
11,951
|
47.7%
|
|
LPD
|
|
5,069
|
15.4%
|
|
6,579
|
20.5%
|
|
Other
|
|
(920)
|
(16.3%)
|
|
(933)
|
(20.2%)
|
|
Unallocated
Amounts
|
|
(3,749)
|
N/A
|
|
2,621
|
N/A
|
|
Total
|
|
$
104,162
|
22.3%
|
|
$
88,303
|
21.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
|
June
30,
|
Percent
of
|
|
June
30,
|
Percent
of
|
|
|
|
2016
|
Revenue
|
|
2015
|
Revenue
|
Revenue:
|
CAG
|
|
$
757,862
|
|
|
$
676,151
|
|
|
Water
|
|
51,381
|
|
|
46,749
|
|
|
LPD
|
|
63,712
|
|
|
63,329
|
|
|
Other
|
|
11,164
|
|
|
9,591
|
|
|
Total
|
|
$
884,119
|
|
|
$
795,820
|
|
|
|
|
|
|
|
|
|
Gross
Profit1:
|
CAG
|
|
$
410,795
|
54.2%
|
|
$369,690
|
54.7%
|
|
Water
|
|
35,486
|
69.1%
|
|
33,161
|
70.9%
|
|
LPD
|
|
37,155
|
58.3%
|
|
40,178
|
63.4%
|
|
Other
|
|
5,214
|
46.7%
|
|
4,138
|
43.1%
|
|
Unallocated
Amounts
|
|
(570)
|
N/A
|
|
1,134
|
N/A
|
|
Total
|
|
$
488,080
|
55.2%
|
|
$
448,301
|
56.3%
|
|
|
|
|
|
|
|
|
Income
from
|
|
|
|
|
|
|
|
Operations1:
|
CAG
|
|
$
152,397
|
20.1%
|
|
$
121,603
|
18.0%
|
|
Water
|
|
22,422
|
43.6%
|
|
21,312
|
45.6%
|
|
LPD
|
|
9,639
|
15.1%
|
|
13,535
|
21.4%
|
|
Other
|
|
(1,757)
|
(15.7%)
|
|
(1,255)
|
(13.1%)
|
|
Unallocated
Amounts
|
|
(4,746)
|
N/A
|
|
5,911
|
N/A
|
|
Total
|
|
$
177,955
|
20.1%
|
|
$
161,106
|
20.2%
|
|
|
|
|
|
|
|
|
1Effective January 1, 2016, we
modified our management reporting to provide a more comprehensive
view of the performance of our operating segments by including the
capitalization of variances between standard and actual
manufacturing costs, which adjusts the timing of cost recognition
from when the variance is created to the period in which the
related inventory is sold. Prior to January 1, 2016, the
capitalization and subsequent recognition of these variances were
not allocated to our operating segments and were instead reported
under the caption "Unallocated Amounts". The segment gross profit
and income (loss) from operations within this report for the three
and six months ended June 30, 2015 has been retrospectively revised
to reflect this change to our reportable segments.
|
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,
2016
|
|
|
June 30,
2015
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG
|
$
|
400,223
|
|
|
351,620
|
|
$
|
48,603
|
|
13.8%
|
|
(0.2%)
|
|
0.5%
|
|
13.5%
|
Water
|
|
27,829
|
|
|
25,051
|
|
|
2,778
|
|
11.1%
|
|
(1.2%)
|
|
-
|
|
12.3%
|
LPD
|
|
32,856
|
|
|
32,059
|
|
|
797
|
|
2.5%
|
|
(1.6%)
|
|
-
|
|
4.1%
|
Other
|
|
5,661
|
|
|
4,613
|
|
|
1,048
|
|
22.7%
|
|
0.2%
|
|
-
|
|
22.5%
|
Total
|
$
|
466,569
|
|
|
413,343
|
|
$
|
53,226
|
|
12.9%
|
|
(0.4%)
|
|
0.5%
|
|
12.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue
|
June
30, 2016
|
|
|
June 30,
2015
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
285,758
|
|
$
|
254,242
|
|
$
|
31,516
|
|
12.4%
|
|
-
|
|
0.2%
|
|
12.2%
|
International
|
|
180,811
|
|
|
159,101
|
|
|
21,710
|
|
13.6%
|
|
(1.0%)
|
|
0.8%
|
|
13.8%
|
Total
|
$
|
466,569
|
|
$
|
413,343
|
|
$
|
53,226
|
|
12.9%
|
|
(0.4%)
|
|
0.5%
|
|
12.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
Net CAG
Revenue
|
June 30,
2016
|
|
|
June 30,
2015
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG Diagnostics
recurring revenue:
|
$
|
338,298
|
|
$
|
300,146
|
|
$
|
38,152
|
|
12.7%
|
|
(0.2%)
|
|
0.6%
|
|
12.3%
|
IDEXX VetLab
consumables
|
|
114,561
|
|
|
100,743
|
|
|
13,818
|
|
13.7%
|
|
(0.2%)
|
|
-
|
|
13.9%
|
IDEXX VetLab
service and accessories
|
|
14,826
|
|
|
14,018
|
|
|
808
|
|
5.8%
|
|
0.2%
|
|
-
|
|
5.6%
|
Rapid assay
products
|
|
55,777
|
|
|
52,182
|
|
|
3,595
|
|
6.9%
|
|
0.2%
|
|
-
|
|
6.7%
|
Reference
laboratory diagnostic and
consulting services
|
|
153,134
|
|
|
133,203
|
|
|
19,931
|
|
15.0%
|
|
(0.3%)
|
|
1.4%
|
|
13.9%
|
CAG Diagnostics
capital - instruments
|
|
32,520
|
|
|
24,064
|
|
|
8,456
|
|
35.1%
|
|
(0.2%)
|
|
-
|
|
35.3%
|
Veterinary software,
services and diagnostic imaging
systems4
|
|
29,405
|
|
|
27,410
|
|
|
1,995
|
|
7.3%
|
|
(0.4%)
|
|
-
|
|
7.7%
|
Net CAG
revenue
|
$
|
400,223
|
|
$
|
351,620
|
|
$
|
48,603
|
|
13.8%
|
|
(0.2%)
|
|
0.5%
|
|
13.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1The
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, 2016 and the same period of the prior
year applied to foreign currency-denominated revenues for the three
months ended June 30, 2015.
|
|
2The
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, 2016 compared to the three
months ended June 30, 2015 attributed to acquisitions subsequent to
March 31, 2014.
|
|
3Organic revenue growth is a
non-GAAP financial measure and represents the percentage change in
revenue during the three months ended June 30, 2016 compared to the
three months ended June 30, 2015 net of acquisitions and the effect
of changes in foreign currency exchange rates.
|
|
4During the second quarter of 2016,
we renamed our customer information management and diagnostic
imaging systems line of business in the CAG segment to veterinary
software, services and diagnostic imaging systems. Financial
results were not adjusted as a result of this name
change.
|
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,
2016
|
|
June
30,
2015
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG
|
$
|
757,862
|
|
$
|
676,151
|
|
$
|
81,711
|
|
12.1
|
%
|
|
(0.8%)
|
|
0.5
|
%
|
|
12.4
|
%
|
Water
|
|
51,381
|
|
|
46,749
|
|
|
4,632
|
|
9.9
|
%
|
|
(1.9%)
|
|
-
|
|
|
11.8
|
%
|
LPD
|
|
63,712
|
|
|
63,329
|
|
|
383
|
|
0.6
|
%
|
|
(3.2%)
|
|
-
|
|
|
3.8
|
%
|
Other
|
|
11,164
|
|
|
9,591
|
|
|
1,573
|
|
16.4
|
%
|
|
-
|
|
-
|
|
|
16.4
|
%
|
Total
|
$
|
884,119
|
|
$
|
795,820
|
|
$
|
88,299
|
|
11.1
|
%
|
|
(1.1%)
|
|
0.4
|
%
|
|
11.8
|
%
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
Net
Revenue
|
June
30,
2016
|
|
June
30,
2015
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United
States
|
$
|
544,697
|
|
$
|
489,650
|
|
$
|
55,047
|
|
11.2
|
%
|
|
-
|
|
0.2
|
%
|
|
11.0
|
%
|
|
|
International
|
|
339,422
|
|
|
306,170
|
|
|
33,252
|
|
10.9
|
%
|
|
(2.9%)
|
|
0.8
|
%
|
|
13.0
|
%
|
|
|
Total
|
$
|
884,119
|
|
$
|
795,820
|
|
$
|
88,299
|
|
11.1
|
%
|
|
(1.1%)
|
|
0.4
|
%
|
|
11.8
|
%
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
Net CAG
Revenue
|
June
30,
2016
|
|
|
June
30,
2015
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG Diagnostics
recurring revenue:
|
$
|
643,808
|
|
$
|
578,911
|
|
$
|
64,897
|
|
11.2
|
%
|
|
(0.9%)
|
|
0.6
|
%
|
|
11.5
|
%
|
IDEXX VetLab
consumables
|
|
222,520
|
|
|
199,135
|
|
|
23,385
|
|
11.7
|
%
|
|
(1.0%)
|
|
-
|
|
|
12.7
|
%
|
IDEXX VetLab
service and accessories
|
|
28,583
|
|
|
27,548
|
|
|
1,035
|
|
3.8
|
%
|
|
(0.6%)
|
|
-
|
|
|
4.4
|
%
|
Rapid assay
products
|
|
98,863
|
|
|
95,819
|
|
|
3,044
|
|
3.2
|
%
|
|
(0.1%)
|
|
-
|
|
|
3.3
|
%
|
Reference
laboratory diagnostic and
consulting services
|
|
293,842
|
|
|
256,409
|
|
|
37,433
|
|
14.6
|
%
|
|
(1.1%)
|
|
1.4
|
%
|
|
14.3
|
%
|
CAG Diagnostics
capital - instruments
|
|
55,494
|
|
|
44,178
|
|
|
11,316
|
|
25.6
|
%
|
|
(1.0%)
|
|
-
|
|
|
26.6
|
%
|
Veterinary software,
services and
diagnostic imaging systems4
|
|
58,560
|
|
|
53,062
|
|
|
5,498
|
|
10.4
|
%
|
|
(0.5%)
|
|
-
|
|
|
10.9
|
%
|
Net CAG
revenue
|
$
|
757,862
|
|
$
|
676,151
|
|
$
|
81,711
|
|
12.1
|
%
|
|
(0.8%)
|
|
0.5
|
%
|
|
12.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1The
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, 2016 and the same period of the prior
year applied to foreign currency-denominated revenues for the six
months ended June 30, 2015.
|
|
2The
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, 2016 compared to the six
months ended June 30, 2015 attributed to acquisitions subsequent to
December 31, 2014.
|
|
3Organic revenue growth is a
non-GAAP financial measure and represents the percentage change in
revenue during the six months ended June 30, 2016 compared to the
six months ended June 30, 2015 net of acquisitions and the effect
of changes in foreign currency exchange rates.
|
|
4During the second quarter of 2016,
we renamed our customer information management and diagnostic
imaging systems line of business in the CAG segment to veterinary
software, services and diagnostic imaging systems. Financial
results were not adjusted as a result of this name
change.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheet
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
December
31,
|
|
|
|
|
|
|
2016
|
2015
|
Assets:
|
Current
Assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
$
141,139
|
$
128,994
|
|
Marketable
securities
|
|
|
|
|
229,063
|
213,591
|
|
Accounts receivable,
net
|
|
|
|
|
212,229
|
188,318
|
|
Inventories
|
|
|
|
|
175,688
|
188,833
|
|
Other current
assets
|
|
|
|
|
62,991
|
101,898
|
|
Total current
assets
|
|
|
|
|
821,110
|
821,634
|
|
Property and
equipment, net
|
|
|
|
|
347,161
|
333,026
|
|
Other long-term
assets, net
|
|
|
|
|
320,970
|
320,333
|
|
Total
assets
|
|
|
|
|
$
1,489,241
|
$
1,474,993
|
Liabilities
and
|
|
|
|
|
|
|
|
Stockholders'
|
|
|
|
|
|
|
|
Deficit:
|
Current
Liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
|
|
$
50,085
|
$
52,648
|
|
Accrued
liabilities
|
|
|
|
|
188,842
|
205,530
|
|
Line of
credit
|
|
|
|
|
558,000
|
573,000
|
|
Deferred
revenue
|
|
|
|
|
25,849
|
25,583
|
|
Total current
liabilities
|
|
|
|
|
822,776
|
856,761
|
|
Long-term
debt
|
|
|
|
|
597,958
|
597,085
|
|
Other long-term
liabilities, net
|
|
|
|
|
77,005
|
105,142
|
|
Total long-term
liabilities
|
|
|
|
|
674,963
|
702,227
|
|
|
|
|
|
|
|
|
|
Total stockholders'
deficit
|
|
|
(8,638)
|
(84,125)
|
|
Noncontrolling
interest
|
|
|
|
140
|
130
|
|
Total
stockholders' deficit
|
|
|
|
(8,498)
|
(83,995)
|
|
Total liabilities
and stockholders' deficit
|
|
|
|
$
1,489,241
|
$
1,474,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Selected Balance
Sheet Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
December
31,
|
|
September
30,
|
June
30,
|
|
|
|
2016
|
|
2016
|
2015
|
|
2015
|
2015
|
|
Selected
|
|
|
|
|
|
|
|
|
|
Balance
Sheet
|
Days sales
outstanding1
|
41.5
|
|
43.7
|
43.3
|
|
43.8
|
43.7
|
|
Information:
|
Inventory
turns2
|
1.7
|
|
1.6
|
1.5
|
|
1.5
|
1.5
|
|
|
|
|
|
|
|
|
|
|
|
1Days
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.
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|
2Inventory
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.
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IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Condensed
Consolidated Statement of Cash Flows
|
|
|
|
|
|
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
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|
June
30,
|
June
30,
|
|
|
|
|
|
|
2016
|
2015
|
Operating:
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
113,231
|
$
103,516
|
|
Non-cash
charges
|
|
|
|
|
53,673
|
42,396
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|
Changes in assets and
liabilities
|
|
|
(27,972)
|
(71,644)
|
|
Tax benefit from
share-based compensation arrangements
|
|
(4,791)
|
(8,746)
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Net cash provided by
operating activities
|
|
|
|
|
134,141
|
65,522
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Investing:
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
|
|
(37,868)
|
(46,873)
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|
Purchase of
marketable securities
|
|
|
(123,809)
|
(190,370)
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|
Proceeds from the
sale and maturities of marketable securities
|
|
|
|
108,115
|
10,039
|
|
Acquisitions of
businesses, net of cash acquired
|
|
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|
-
|
(383)
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Net cash used by
investing activities
|
|
|
|
(53,562)
|
(227,587)
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Financing:
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
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Repayments on
revolving credit facilities, net
|
|
|
(15,000)
|
(51,000)
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Issuance of long-term
debt
|
|
|
-
|
250,097
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|
Repurchases of common
stock
|
|
|
|
|
(76,536)
|
(220,097)
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|
Debt issue
costs
|
|
|
|
|
(57)
|
(127)
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|
Proceeds from the
exercise of stock options and employee stock purchase
plans
|
|
17,554
|
15,650
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Payment of
acquisition-related contingent consideration
|
|
(2,717)
|
-
|
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Tax benefit from
share-based compensation arrangements
|
|
4,791
|
8,746
|
|
Net cash (used)
provided by financing activities
|
|
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(71,965)
|
3,269
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Net effect of changes
in exchange rates on cash
|
|
|
|
|
3,531
|
(588)
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|
Net increase
(decrease) in cash and cash equivalents
|
|
|
|
|
12,145
|
(159,384)
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Cash and cash
equivalents, beginning of period
|
|
|
|
128,994
|
322,536
|
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Cash and cash
equivalents, end of period
|
|
|
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|
$
141,139
|
$
163,152
|
|
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|
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|
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|
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|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Free Cash
Flow1
|
|
|
|
|
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|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
June
30,
|
June
30,
|
|
|
|
|
|
|
2016
|
2015
|
Free
Cash
|
|
|
|
|
|
|
|
Flow:
|
Net cash provided by
operating activities
|
|
|
|
|
$
134,141
|
$
65,522
|
|
Financing cash flows
attributable to tax benefits from share-based compensation
arrangements
|
|
4,791
|
8,746
|
|
Investing cash flows
attributable to purchases of property and equipment
|
|
(37,868)
|
(46,873)
|
|
Free cash
flow
|
|
|
|
|
$
101,064
|
$
27,395
|
|
|
|
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1Free cash
flow is a non-GAAP financial measure and is calculated from cash
generated from operations, including tax benefits attributable to
share-based compensation arrangements, reduced by the Company's
investments in property and equipment. 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 property and equipment
that are required to operate the business. Management also believes
this is a common financial measure useful to further evaluate the
results of operations.
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IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
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|
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,
|
|
|
|
2016
|
2015
|
|
2016
|
2015
|
|
Share repurchases
during the period
|
269
|
1,415
|
|
977
|
3,133
|
|
Shares surrendered by
employees in payment for minimum
|
|
|
|
required withholding
taxes due on share based compensation
|
2
|
2
|
|
54
|
64
|
|
Total number of
shares purchased1
|
271
|
1,417
|
|
1,031
|
3,197
|
|
Average price paid
per share
|
$86.46
|
$66.07
|
|
$74.38
|
$72.63
|
|
|
|
|
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|
|
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Shares remaining
under repurchase authorization as of June 30, 2016 totaled
5,829,035.
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1Shares
repurchased and acquired through employee surrender for payment of
minimum required withholding taxes on and before June 15, 2015 and
the associated average cost per share have been adjusted to reflect
the June 15, 2015 two-for-one stock split. Actual shares
repurchased were approximately 890,000 for the three months ended
June 30, 2015, and 1,749,000 for the six months ended June 30,
2015.
|
Contact: Ed Garber, Director,
Investor Relations, 1-207-556-8155
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SOURCE IDEXX Laboratories, Inc.