WESTBROOK, Maine, Feb. 2,
2017 /PRNewswire/ -- IDEXX Laboratories, Inc. (NASDAQ: IDXX), a
global leader in veterinary diagnostics, veterinary practice
software and water microbiology testing, reports revenues for the
fourth quarter of 2016 of $443
million, an increase of 11% compared to the prior year
period on a reported basis and 12% on an organic basis. Fourth
quarter results were supported by accelerated gains in Companion
Animal Group ("CAG") Diagnostics recurring revenue and continued
high growth in premium instrument placements. Earnings per diluted
share ("EPS") was $0.58 for the
fourth quarter, representing 21% growth year-over-year on a
reported basis, and 33% on a constant currency basis.
Revenue for the full year of $1,775
million increased 11% on both a reported and organic basis,
driven by 12% reported and organic growth in global CAG Diagnostics
recurring revenue. For the full year 2016, EPS of $2.44 grew 19% versus 2015 on a reported basis
and 25% on an Adjusted constant currency basis, supported by 100
basis points of reported operating margin improvement, or 170 basis
points of improvement on an Adjusted constant currency basis. Based
on its strong 2016 performance and momentum in executing its
innovation and commercial strategies, the Company is reaffirming
its full year 2017 organic revenue growth outlook of 9% – 10.5%,
and raising its EPS guidance range to $2.85
- $3.01, supported by continued operating margin expansion
aligned with its long-term goals. The higher 2017 EPS
guidance reflects $0.07 per share in
sustained improvement from higher than expected 2016 operating
profits, as well as from higher estimated EPS benefits related to
the implementation of the new accounting standard for the tax
benefit of employee share-based compensation, which offset impacts
from updated foreign exchange estimates.
"Our fourth quarter and full year performance demonstrates the
power of innovation to improve the standard of care for pets and
drive the growth of veterinary services. We are delighted to have
delivered such strong results for our shareholders, achieving the
high end of our 2016 revenue guidance and beating our earnings
expectations," said Jonathan Ayers,
the Company's Chairman and Chief Executive Officer. "Through our
best-in-class commercial organization, we continue to deepen our
partnership with our customers, furthering the growth of the
profession and our recurring revenues.
"Our foundation has never been stronger. In 2016, we placed a
record number of premium chemistry instruments, premium hematology
instruments and 1,575 IDEXX SediVue® Dx instruments, the
industry's first-and-only in-house urine sediment analyzer. Our
expanding global installed base of instruments will support
continued attractive growth of our durable, recurring consumable
revenue stream.
"IDEXX is positioned to thrive in a positive economic growth
environment. We're pleased to reaffirm our revenue guidance and
raise our earnings outlook for 2017, based on our strong 2016
performance, consistent with our long-term financial goals."
Fourth Quarter Performance Highlights
Fourth quarter revenue increased 11% to $443 million, after absorbing an approximately 1%
headwind attributable to foreign exchange impact. EPS for the
quarter was $0.58, an increase of 21%
compared to the fourth quarter 2015. EPS growth on a constant
currency basis for the quarter was 33%, excluding a $0.06 per share impact related to net unfavorable
changes in foreign exchange.
Companion Animal Group
CAG generated 13% reported and 14% organic revenue growth for
the quarter, supported by CAG Diagnostics recurring organic revenue
growth of 13% and instrument organic revenue growth of 24%.
- IDEXX VetLab® consumables
reported revenue grew 17% and organic revenue grew 18%, propelled
by our expanding premium instrument base in US and international
markets. IDEXX VetLab premium diagnostic instrument
placements grew 15% to a record number of 3,167, including 1,493
Catalysts, 1,128 premium hematology instruments and 546 IDEXX
SediVue Dx analyzers.
- Reference laboratory diagnostic and consulting services
revenue grew 12% on a reported and 13% on an organic basis, with
strong contributions across regions, and continued traction of
IDEXX SDMA™, our novel kidney function test, now launched
worldwide.
- Rapid assay products generated solid reported and
organic revenue growth of 6%, supported by continued growth in SNAP
4Dx® Plus Test and Specialty SNAP revenues.
Livestock, Poultry and Dairy ("LPD")
Reported and organic revenue declined 1% for the quarter as
declines in bovine disease eradication testing in Europe and in herd health screening were
partially offset by strong testing gains in emerging markets.
Water
Reported revenue growth was 1% and organic revenue growth was 3%
for the quarter, supported by continued strong volume growth in our
core Colilert® franchise across major regions, offset by
inventory adjustments related to go-direct initiatives and by
lapping of strong revenue in fourth quarter 2015 associated with
the 2015 launch of the Quanti-Tray® Sealer PLUS and
increased testing due to a cryptosporidium outbreak in the UK.
Gross Profit and Operating Profit
Gross profits increased 11%, and gross margin decreased slightly
to 54.3% from 54.5% in the prior year period. The decrease in gross
margin was due to currency impacts, primarily related to the
lapping of $6 million in 2015 foreign
exchange hedge gains. Constant currency gross margin was 55.4% for
the quarter, 90 basis points higher than fourth quarter 2015,
driven by solid price gains, volume leverage in consumable costs
and reference lab operations, as well as improvements in practice
management service offerings.
Operating margins were 18.9% in the quarter, 220 basis points
higher than the prior year period operating margin of 16.7%,
reflecting benefits from strong revenue gains and operating expense
leverage.
2017 Financial Outlook
The Company is maintaining its 2017 revenue outlook of
$1,910 million - $1,935 million,
reflecting our strong 2016 performance, offset by updated
assumptions related to foreign exchange rates, as noted below. At
these rates compared to rates in effect in 2016, we estimate that
the effect of the stronger US dollar will adversely impact 2017
reported revenue growth by approximately 1.5%, EPS growth by 2 -
3%, and EPS by an estimated $0.06 per
share, including the net impact from projected hedge gains of
approximately $7 million in 2017
compared to $4 million in 2016 hedge
gains.
We are increasing our 2017 EPS outlook to $2.85 - $3.01 per share, reflecting targeted
growth of 17% - 23% on a reported basis and 19% - 26% EPS constant
currency growth, reflecting the new Accounting Standards Update
2016-09 (ASU 2016-09), Improvements to Employee Share-Based Payment
Accounting, which we estimate will result in $0.12 - $0.16 of EPS benefit in 2017 (an increase
of $0.04 compared to earlier
estimates). The Company is projecting free cash flow at
approximately 95% of net income in 2017, reflecting continued
discipline in inventory management and capital spending. The
implementation of ASU 2016-09, which has the effect of increasing
reported net income with no impact on cash flow, is projected to
reduce the Company's free cash flow as a percentage of net income
by 5%, from what would have been approximately 100% of net income
under previous GAAP.
The guidance for 2017 reflects the assumptions that the value of
the US dollar relative to other currencies will remain at the
following rates: euro at $1.06,
British pound at $1.23, Canadian
dollar at $0.75, Australian dollar at
$0.75 and Japanese yen at ¥117,
Chinese yuan at ¥6.93, Brazilian real at R$3.23 to the US dollar for the full year of
2017.
The Company provides the following updated guidance for
2017:
Amounts in millions except per share data and
percentages
|
Guidance
Range
|
Growth
Definition
|
Year-over-year
Growth
|
|
|
|
|
Revenue
|
$1,910 -
$1,935
|
Reported
|
7.5% - 9%
|
|
|
Organic Revenue
Growth
|
9% - 10.5%
|
|
|
|
|
EPS
|
$2.85 -
$3.01
|
Reported
|
17% - 23%
|
|
|
Constant
Currency
|
19% - 26%
|
|
|
|
|
Operating Cash
Flow
|
|
~130% of net
income
|
|
|
|
|
|
Free Cash
Flow
|
|
~95% of net
income
|
|
|
|
|
|
Capital
Expenditures
|
|
~$90
million
|
|
We expect an effective tax rate of 26% - 27.5%, after a
projected reduction of 350 - 450 basis points related to the
implementation of the new accounting standard for the tax benefit
of employee share-based compensation. We are projecting a reduction
in weighted average shares outstanding of approximately 1.5%, net
of 0.5% related to the implementation of the new accounting
standard for the tax benefit of employee share-based compensation,
and interest expense, net of interest income, of approximately
$32 million - $33 million reflecting
current and projected borrowings.
For a quick-reference snapshot of the Company's quarterly and
full year performance, please visit www.idexx.com/investors.
Conference Call and Webcast Information
IDEXX Laboratories, Inc. will be hosting a conference call today
at 8:30 a.m. (Eastern) to discuss its
fourth quarter results and management's outlook. To participate in
the conference call, dial 1-800-230-1074 or 1-651-291-0278 and
reference confirmation code 415457. An audio replay will be
available through Thursday, February 9,
2017 by dialing 1-800-475-6701 or 1-320-365-3844 and
referencing replay code 415457.
The call will also be available via live or archived webcast on
the IDEXX Laboratories' website at
www.idexx.com/investors and will be available for
one year.
About IDEXX Laboratories, Inc.
IDEXX Laboratories, Inc. is a member of Standard & Poor's
500® Index and 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 7,000 people and offers products to
customers in over 175 countries. For more information about IDEXX,
visit: www.idexx.com.
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, Adjusted EPS growth, Adjusted operating profit and
Adjusted operating margin - Adjusted EPS, Adjusted EPS growth,
Adjusted operating profit and Adjusted operating margin are
non-GAAP financial measures. Adjusted EPS, Adjusted operating
profit and Adjusted operating margin exclude from the prior year
period reported earnings, the third quarter 2015 non-cash software
impairment charge of $8.2 million,
which represents approximately 50 basis points in operating margin
and $0.06 per share in EPS for the
full year 2015. The Adjusted EPS growth calculation for the full
year 2016 uses Adjusted EPS for the applicable prior year
period.
Constant currency - Constant currency references are non-GAAP
financial measures which exclude the impact of changes in foreign
currency exchange rates and are consistent with how management
evaluates our performance and 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 fourth quarter 2016 gross profit
growth by 3%, gross margin by 1%, operating profit growth by 10%,
and Adjusted EPS growth by 11%; reduced full year 2016 revenue
growth by 3%, gross margin by less than 1%, operating profit growth
by 8%, and Adjusted EPS growth by 6%; reduced projected 2017
revenue growth by approximately 1.5% and projected 2017 constant
currency EPS growth by approximately 2-3%. 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 months and year ended
December 31, 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, 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 years ended December 31, 2016 and
2015. Upon our adoption of ASU 2016-09 in 2017, the tax
benefit from share-based compensation will be included in cash
generated from operations and will no longer be an adjustment in
our free cash flow calculation. To estimate projected 2017
free cash flow we have deducted projected purchases of property and
equipment (also referred to as capital expenditures) of
$90 million.
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. Organic revenue growth excludes the impact of
changes in foreign currency exchange rates and revenue from
business acquisitions. See the supplementary analysis of results
below for a reconciliation of reported revenue growth to organic
revenue growth for the three months and year ended December 31, 2016. See commentary above for
the impacts of constant currency to the projected 2017 organic
revenue growth for the Company. For projected 2017 revenue
growth, the impacts of revenue from acquisitions is
immaterial.
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 "2017 Financial Outlook" 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, gains from
foreign currency hedging transactions, 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 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,
decisions regarding labeling, manufacturing and marketing products
and regulations impacting the use of certain substances currently
used in our products or processes; the impact of consolidation and
reference laboratory vertical integration among our customers,
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 impact of disruptions, attacks or breaches of
information systems, including to our customers' information
systems via our products and services that connect to and are part
of the "Internet of Things"; 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 September 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.
Contact: Kerry Bennett,
Investor Relations, 1-207-556-8155
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Condensed
Consolidated Statement of Operations
|
|
|
|
|
|
|
Amounts in
thousands except per share data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
|
|
December
31,
|
December
31,
|
|
December
31,
|
December
31,
|
|
|
|
2016
|
2015
|
|
2016
|
2015
|
Revenue:
|
Revenue
|
|
$
442,996
|
$
399,685
|
|
$
1,775,423
|
$
1,601,892
|
Expenses
and
|
|
|
|
|
|
|
|
Income:
|
Cost of
revenue
|
|
202,370
|
181,990
|
|
799,987
|
711,622
|
|
Gross
profit
|
|
240,626
|
217,695
|
|
975,436
|
890,270
|
|
Sales and
marketing
|
|
80,605
|
76,495
|
|
317,058
|
299,955
|
|
General and
administrative
|
|
50,778
|
48,793
|
|
207,017
|
182,510
|
|
Research and
development
|
|
25,418
|
25,496
|
|
101,122
|
99,681
|
|
Impairment
charge
|
|
-
|
-
|
|
-
|
8,212
|
|
Income from
operations
|
|
83,825
|
66,911
|
|
350,239
|
299,912
|
|
Interest expense,
net
|
|
(6,698)
|
(7,126)
|
|
(28,393)
|
(26,771)
|
|
Income before
provision for income taxes
|
|
77,127
|
59,785
|
|
321,846
|
273,141
|
|
Provision for income
taxes
|
|
24,756
|
15,395
|
|
99,792
|
81,006
|
Net
Income:
|
Net income
|
|
52,371
|
44,390
|
|
222,054
|
192,135
|
|
Less: Noncontrolling
interest in subsidiary's
|
|
|
|
|
|
|
|
earnings
|
|
2
|
41
|
|
9
|
57
|
|
Net income
attributable to stockholders
|
$
52,369
|
$
44,349
|
|
$
222,045
|
$
192,078
|
|
Earnings per share:
Basic
|
|
$
0.59
|
$
0.49
|
|
$
2.47
|
$
2.07
|
|
Earnings per share:
Diluted
|
|
$
0.58
|
$
0.48
|
|
$
2.44
|
$
2.05
|
|
Shares outstanding:
Basic
|
|
89,294
|
90,841
|
|
89,732
|
92,601
|
|
Shares outstanding:
Diluted
|
|
90,589
|
91,788
|
|
90,884
|
93,649
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Selected Operating
Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
|
|
December
31,
|
December
31,
|
|
December
31,
|
December
31,
|
|
|
|
2016
|
2015
|
|
2016
|
2015
|
Operating
|
Gross
profit
|
|
54.3%
|
54.5%
|
|
54.9%
|
55.6%
|
Ratios (as
a
|
Sales, marketing,
general and
|
|
|
|
|
|
|
percentage
of
|
administrative
expense
|
|
29.7%
|
31.3%
|
|
29.5%
|
30.6%
|
revenue):
|
Research and
development expense
|
|
5.7%
|
6.4%
|
|
5.7%
|
6.2%
|
|
Income from
operations1
|
|
18.9%
|
16.7%
|
|
19.7%
|
18.7%
|
|
|
|
|
|
|
|
|
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
|
|
|
|
December
31,
|
Percent
of
|
|
December
31,
|
Percent
of
|
|
|
|
2016
|
Revenue
|
|
2015
|
Revenue
|
Revenue:
|
CAG
|
|
$
379,539
|
|
|
$
336,055
|
|
|
Water
|
|
24,336
|
|
|
24,178
|
|
|
LPD
|
|
32,980
|
|
|
33,366
|
|
|
Other
|
|
6,141
|
|
|
6,086
|
|
|
Total
|
|
$
442,996
|
|
|
$
399,685
|
|
|
|
|
|
|
|
|
|
Gross
Profit1:
|
CAG
|
|
$
201,354
|
53.1%
|
|
$
175,690
|
52.3%
|
|
Water
|
|
17,181
|
70.6%
|
|
17,292
|
71.5%
|
|
LPD
|
|
19,818
|
60.1%
|
|
21,024
|
63.0%
|
|
Other
|
|
3,562
|
58.0%
|
|
2,980
|
49.0%
|
|
Unallocated
Amounts
|
|
(1,289)
|
N/A
|
|
709
|
N/A
|
|
Total
|
|
$
240,626
|
54.3%
|
|
$
217,695
|
54.5%
|
|
|
|
|
|
|
|
|
Income
from
|
|
|
|
|
|
|
|
Operations1:
|
CAG
|
|
$
71,484
|
18.8%
|
|
$
50,233
|
14.9%
|
|
Water
|
|
10,838
|
44.5%
|
|
10,798
|
44.7%
|
|
LPD
|
|
6,249
|
18.9%
|
|
7,561
|
22.7%
|
|
Other
|
|
1,633
|
26.6%
|
|
549
|
9.0%
|
|
Unallocated
Amounts
|
|
(6,379)
|
N/A
|
|
(2,230)
|
N/A
|
|
Total
|
|
$
83,825
|
18.9%
|
|
$
66,911
|
16.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year
Ended
|
|
Year
Ended
|
|
|
|
December
31,
|
Percent
of
|
|
December
31,
|
Percent
of
|
|
|
|
2016
|
Revenue
|
|
2015
|
Revenue
|
Revenue:
|
CAG
|
|
$
1,522,689
|
|
|
$
1,356,287
|
|
|
Water
|
|
103,579
|
|
|
96,884
|
|
|
LPD
|
|
126,491
|
|
|
127,143
|
|
|
Other
|
|
22,664
|
|
|
21,578
|
|
|
Total
|
|
$
1,775,423
|
|
|
$
1,601,892
|
|
|
|
|
|
|
|
|
|
Gross
Profit1:
|
CAG
|
|
$
820,322
|
53.9%
|
|
$
729,303
|
53.8%
|
|
Water
|
|
71,878
|
69.4%
|
|
68,953
|
71.2%
|
|
LPD
|
|
73,801
|
58.3%
|
|
79,987
|
62.9%
|
|
Other
|
|
11,561
|
51.0%
|
|
10,281
|
47.6%
|
|
Unallocated
Amounts
|
|
(2,126)
|
N/A
|
|
1,746
|
N/A
|
|
Total
|
|
$
975,436
|
54.9%
|
|
$
890,270
|
55.6%
|
|
|
|
|
|
|
|
|
Income
from
|
|
|
|
|
|
|
|
Operations1:
|
CAG
|
|
$
301,342
|
19.8%
|
|
$
233,319
|
17.2%
|
|
Water
|
|
45,702
|
44.1%
|
|
44,752
|
46.2%
|
|
LPD
|
|
18,914
|
15.0%
|
|
27,157
|
21.4%
|
|
Other
|
|
884
|
3.9%
|
|
(137)
|
(0.6%)
|
|
Unallocated
Amounts
|
|
(16,603)
|
N/A
|
|
(5,179)
|
N/A
|
|
Total
|
|
$
350,239
|
19.7%
|
|
$
299,912
|
18.7%
|
|
|
|
|
|
|
|
|
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 adjust 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 twelve months ended December 31, 2015 has been retrospectively
revised to reflect this change to our reportable
segments.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Revenues and
Revenue Growth Analysis by Domestic and International Markets and
by Product and Service Categories
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue
|
December 31,
2016
|
|
|
December
31,
2015
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic
Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG
|
$
|
379,539
|
|
|
336,055
|
|
$
|
43,484
|
|
12.9%
|
|
(0.8%)
|
|
-
|
|
13.7%
|
United
States
|
|
250,395
|
|
|
222,065
|
|
|
28,330
|
|
12.8%
|
|
-
|
|
-
|
|
12.8%
|
International
|
|
129,144
|
|
|
113,990
|
|
|
15,154
|
|
13.3%
|
|
(2.4%)
|
|
-
|
|
15.7%
|
Water
|
|
24,336
|
|
|
24,178
|
|
|
158
|
|
0.7%
|
|
(2.0%)
|
|
-
|
|
2.7%
|
United
States
|
|
12,493
|
|
|
11,498
|
|
|
995
|
|
8.7%
|
|
-
|
|
-
|
|
8.7%
|
International
|
|
11,843
|
|
|
12,680
|
|
|
(837)
|
|
(6.6%)
|
|
(3.5%)
|
|
-
|
|
(3.1%)
|
LPD
|
|
32,980
|
|
|
33,366
|
|
|
(386)
|
|
(1.2%)
|
|
(0.4%)
|
|
-
|
|
(0.8%)
|
United
States
|
|
3,289
|
|
|
3,760
|
|
|
(471)
|
|
(12.5%)
|
|
-
|
|
-
|
|
(12.5%)
|
International
|
|
29,691
|
|
|
29,606
|
|
|
85
|
|
0.3%
|
|
(0.5%)
|
|
-
|
|
0.8%
|
Other
|
|
6,141
|
|
|
6,086
|
|
|
55
|
|
0.9%
|
|
(0.1%)
|
|
-
|
|
1.0%
|
Total
Company
|
$
|
442,996
|
|
$
|
399,685
|
|
$
|
43,311
|
|
10.8%
|
|
(0.9%)
|
|
-
|
|
11.7%
|
United
States
|
$
|
267,730
|
|
$
|
238,595
|
|
$
|
29,135
|
|
12.2%
|
|
-
|
|
-
|
|
12.2%
|
International
|
$
|
175,266
|
|
$
|
161,090
|
|
$
|
14,176
|
|
8.8%
|
|
(2.0%)
|
|
-
|
|
10.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
Net CAG
Revenue
|
December 31,
2016
|
|
|
December 31,
2015
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG Diagnostics
recurring revenue5:
|
$
|
312,162
|
|
$
|
277,402
|
|
$
|
34,760
|
|
12.5%
|
|
(0.9%)
|
|
-
|
|
13.4%
|
IDEXX VetLab
consumables
|
|
114,973
|
|
|
98,433
|
|
|
16,540
|
|
16.8%
|
|
(1.1%)
|
|
-
|
|
17.9%
|
Rapid assay
products
|
|
41,539
|
|
|
39,317
|
|
|
2,222
|
|
5.7%
|
|
-
|
|
-
|
|
5.7%
|
Reference
laboratory diagnostic and consulting services
|
|
140,553
|
|
|
125,411
|
|
|
15,142
|
|
12.1%
|
|
(1.0%)
|
|
-
|
|
13.1%
|
CAG Diagnostics
service and accessories5
|
|
15,097
|
|
|
14,241
|
|
|
856
|
|
6.0%
|
|
(0.6%)
|
|
-
|
|
6.6%
|
CAG Diagnostics
capital – instruments5
|
|
35,130
|
|
|
28,547
|
|
|
6,583
|
|
23.1%
|
|
(0.9%)
|
|
-
|
|
24.0%
|
Veterinary software,
services and diagnostic imaging systems4
|
|
32,247
|
|
|
30,106
|
|
|
2,141
|
|
7.1%
|
|
-
|
|
-
|
|
7.1%
|
Net CAG
revenue
|
$
|
379,539
|
|
$
|
336,055
|
|
$
|
43,484
|
|
12.9%
|
|
(0.8%)
|
|
-
|
|
13.7%
|
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 December 31, 2016 and the same period of the
prior year applied to foreign currency-denominated revenues for the
three months ended December 31, 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 December 31, 2016 compared to the
three months ended December 31, 2015 attributed to acquisitions
since the beginning of the prior year period.
|
|
3Organic revenue growth is a
non-GAAP financial measure and represents the percentage change in
revenue during the three months ended December 31, 2016 compared to
the three months ended December 31, 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.
|
|
5
During the fourth quarter of 2016, we modified our management
reporting to rename IDEXX VetLab service and accessories to CAG
Diagnostics service and accessories and reclassified the location
of SNAP Pro service plans previously located in CAG Diagnostics
capital - instruments to CAG Diagnostics service and accessories.
The amount of revenue reclassified was $0.3 million during the
fourth quarter of 2015, and $0.4 million during the fourth quarter
of 2016.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Revenues and
Revenue Growth Analysis by Domestic and International Markets and
by Product and Service Categories
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years
Ended
|
|
|
|
|
|
|
|
|
|
|
Net
Revenue
|
December 31,
2016
|
|
|
December
31,
2015
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic
Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG
|
|
1,522,689
|
|
|
1,356,287
|
|
|
166,402
|
|
12.3%
|
|
(0.6%)
|
|
0.3%
|
|
12.6%
|
United
States
|
|
1,017,065
|
|
|
912,822
|
|
|
104,243
|
|
11.4%
|
|
-
|
|
0.2%
|
|
11.2%
|
International
|
|
505,624
|
|
|
443,465
|
|
|
62,159
|
|
14.0%
|
|
(2.0%)
|
|
0.5%
|
|
15.5%
|
Water
|
|
103,579
|
|
|
96,884
|
|
|
6,695
|
|
6.9%
|
|
(1.8%)
|
|
-
|
|
8.7%
|
United
States
|
|
52,852
|
|
|
48,677
|
|
|
4,175
|
|
8.6%
|
|
-
|
|
-
|
|
8.6%
|
International
|
|
50,727
|
|
|
48,207
|
|
|
2,520
|
|
5.2%
|
|
(3.7%)
|
|
-
|
|
8.9%
|
LPD
|
|
126,491
|
|
|
127,143
|
|
|
(652)
|
|
(0.5%)
|
|
(1.6%)
|
|
-
|
|
1.1%
|
United
States
|
|
13,253
|
|
|
14,041
|
|
|
(788)
|
|
(5.6%)
|
|
-
|
|
-
|
|
(5.6%)
|
International
|
|
113,238
|
|
|
113,102
|
|
|
136
|
|
0.1%
|
|
(1.8%)
|
|
-
|
|
1.9%
|
Other
|
|
22,664
|
|
|
21,578
|
|
|
1,086
|
|
5.0%
|
|
(0.1%)
|
|
-
|
|
5.1%
|
Total
Company
|
|
1,775,423
|
|
|
1,601,892
|
|
|
173,531
|
|
10.8%
|
|
(0.8%)
|
|
0.2%
|
|
11.4%
|
United
States
|
|
1,089,595
|
|
|
980,321
|
|
|
109,274
|
|
11.1%
|
|
0.1%
|
|
0.2%
|
|
10.9%
|
International
|
|
685,828
|
|
|
621,571
|
|
|
64,257
|
|
10.3%
|
|
(2.1%)
|
|
0.4%
|
|
12.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years
Ended
|
|
|
|
|
|
|
|
|
|
|
Net CAG
Revenue
|
December
31,
2016
|
|
|
December
31,
2015
|
|
Dollar
Change
|
|
Percentage
Change
|
|
Percentage
Change
from
Currency1
|
|
Percentage
Change
from
Acquisitions2
|
|
Organic
Revenue
Growth3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG Diagnostics
recurring revenue5:
|
$
|
1,281,262
|
|
$
|
1,147,026
|
|
$
|
134,236
|
|
11.7%
|
|
(0.7%)
|
|
|
0.4%
|
|
12.0%
|
IDEXX VetLab
consumables
|
|
451,456
|
|
|
396,526
|
|
|
54,930
|
|
13.9%
|
|
(0.8%)
|
|
|
-
|
|
14.7%
|
Rapid assay
products
|
|
189,122
|
|
|
182,670
|
|
|
6,452
|
|
3.5%
|
|
-
|
|
|
-
|
|
3.5%
|
Reference
laboratory diagnostic and consulting services
|
|
581,067
|
|
|
512,155
|
|
|
68,912
|
|
13.5%
|
|
(0.9%)
|
|
|
0.8%
|
|
13.6%
|
CAG Diagnostics
service and accessories5
|
|
59,617
|
|
|
55,675
|
|
|
3,942
|
|
7.1%
|
|
(0.3%)
|
|
|
-
|
|
7.4%
|
CAG Diagnostics
capital – instruments5
|
|
121,191
|
|
|
98,502
|
|
|
22,689
|
|
23.0%
|
|
(0.7%)
|
|
|
-
|
|
23.7%
|
Veterinary software,
services and diagnostic imaging
systems4
|
|
120,236
|
|
|
110,759
|
|
|
9,477
|
|
8.6%
|
|
(0.2%)
|
|
|
-
|
|
8.8%
|
Net CAG
revenue
|
$
|
1,522,689
|
|
$
|
1,356,287
|
|
$
|
166,402
|
|
12.3%
|
|
(0.6%)
|
|
|
0.3%
|
|
12.6%
|
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
year ended December 31, 2016 and the same period of the prior year
applied to foreign currency-denominated revenues for the year ended
December 31, 2015.
|
|
2The
percentage change from acquisitions is a non-GAAP financial
measure. This measure represents the percentage change in revenue
during the year ended December 31, 2016 compared to the year ended
December 31, 2015 attributed to acquisitions since the beginning of
the prior year period.
|
|
3Organic revenue growth is a
non-GAAP financial measure and represents the percentage change in
revenue during the year ended December 31, 2016 compared to the
year ended December 31, 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.
|
|
5
During the fourth quarter of 2016, we modified our management
reporting to rename IDEXX VetLab service and accessories to CAG
Diagnostics service and accessories and reclassified the location
of SNAP Pro service plans previously located in CAG Diagnostics
capital - instruments to CAG Diagnostics service and accessories.
The amount of revenue reclassified was $0.5 million during the year
ended December 31, 2015, and $1.4 million during the year ended
December 31, 2016.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheet
|
|
|
|
|
|
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
December
31,
|
|
|
|
|
|
|
2016
|
2015
|
Assets:
|
Current
Assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
$
154,901
|
$
128,994
|
|
Marketable
securities
|
|
|
|
|
236,949
|
213,591
|
|
Accounts receivable,
net
|
|
|
|
|
204,494
|
188,318
|
|
Inventories
|
|
|
|
|
158,034
|
188,833
|
|
Other current
assets
|
|
|
|
|
91,206
|
101,898
|
|
Total current
assets
|
|
|
|
|
845,584
|
821,634
|
|
Property and
equipment, net
|
|
|
|
|
357,422
|
333,026
|
|
Other long-term
assets, net
|
|
|
|
|
327,698
|
320,333
|
|
Total
assets
|
|
|
|
|
$
1,530,704
|
$
1,474,993
|
Liabilities
and
|
|
|
|
|
|
|
|
Stockholders'
|
|
|
|
|
|
|
|
Equity
(deficit):
|
Current
Liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
|
|
$
60,057
|
$
52,648
|
|
Accrued
liabilities
|
|
|
|
|
236,131
|
205,530
|
|
Line of
credit
|
|
|
|
|
611,000
|
573,000
|
|
Deferred
revenue
|
|
|
|
|
27,380
|
25,583
|
|
Total current
liabilities
|
|
|
|
|
934,568
|
856,761
|
|
Long-term
debt
|
|
|
|
|
593,110
|
597,085
|
|
Other long-term
liabilities, net
|
|
|
|
|
111,239
|
105,142
|
|
Total long-term
liabilities
|
|
|
|
|
704,349
|
702,227
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity (deficit)
|
|
|
(108,352)
|
(84,125)
|
|
Noncontrolling
interest
|
|
|
|
139
|
130
|
|
Total
stockholders' equity (deficit)
|
|
|
|
(108,213)
|
(83,995)
|
|
Total liabilities
and stockholders' equity (deficit)
|
|
|
|
$
1,530,704
|
$
1,474,993
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Selected Balance
Sheet Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
September
30,
|
June
30,
|
|
March
31,
|
December
31,
|
|
|
2016
|
|
2016
|
2016
|
|
2016
|
2015
|
Selected
|
|
|
|
|
|
|
|
|
Balance
Sheet
|
Days sales
outstanding1
|
42.1
|
|
42.4
|
41.5
|
|
43.7
|
43.3
|
Information:
|
Inventory
turns2
|
2.0
|
|
1.8
|
1.7
|
|
1.6
|
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.
|
|
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.
|
|
|
|
|
|
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Condensed
Consolidated Statement of Cash Flows
|
|
|
|
|
|
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years
Ended
|
|
|
|
|
|
|
December
31,
|
December
31,
|
|
|
|
|
|
|
2016
|
2015
|
Operating:
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
222,054
|
$
192,135
|
|
Non-cash
charges
|
|
|
|
|
124,217
|
105,355
|
|
Changes in assets and
liabilities
|
|
|
3,002
|
(69,811)
|
|
Tax benefit from
share-based compensation
|
|
(14,702)
|
(11,315)
|
|
Net cash provided by
operating activities
|
|
|
|
|
334,571
|
216,364
|
Investing:
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
|
|
|
(64,787)
|
(82,921)
|
|
Purchase of
marketable securities
|
|
|
(227,894)
|
(271,958)
|
|
Proceeds from the
sale and maturities of marketable securities
|
|
|
|
203,859
|
56,775
|
|
Acquisitions of
businesses, net of cash acquired
|
|
|
|
(1,964)
|
(10,302)
|
|
Net cash used by
investing activities
|
|
|
|
(90,786)
|
(308,406)
|
Financing:
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
Borrowings
(repayments) on revolving credit facilities, net
|
|
|
38,000
|
24,000
|
|
Issuance of long-term
debt
|
|
|
-
|
250,097
|
|
Repurchases of common
stock
|
|
|
|
|
(304,086)
|
(401,981)
|
|
Debt issue
costs
|
|
|
|
|
(56)
|
(1,380)
|
|
Proceeds from the
exercise of stock options and employee stock purchase
plans
|
|
38,344
|
22,397
|
|
Payment of
acquisition-related contingent consideration
|
|
(4,728)
|
-
|
|
Tax benefit from
share-based compensation
|
|
14,702
|
11,315
|
|
Net cash used by
financing activities
|
|
|
|
(217,824)
|
(95,552)
|
|
Net effect of changes
in exchange rates on cash
|
|
|
|
|
(54)
|
(5,948)
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
|
|
|
25,907
|
(193,542)
|
|
Cash and cash
equivalents, beginning of period
|
|
|
|
128,994
|
322,536
|
|
Cash and cash
equivalents, end of period
|
|
|
|
|
$
154,901
|
$
128,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Free Cash
Flow1
|
|
|
|
|
|
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Years
Ended
|
|
|
|
|
|
|
December
31,
|
December
31,
|
|
|
|
|
|
|
2016
|
2015
|
Free
Cash
|
|
|
|
|
|
|
|
Flow:
|
Net cash provided by
operating activities
|
|
|
|
|
$
334,571
|
$
216,364
|
|
Financing cash flows
attributable to tax benefits from share-based
compensation
|
|
14,702
|
11,315
|
|
Investing cash flows
attributable to purchases of property and equipment
|
|
(64,787)
|
(82,921)
|
|
Free cash
flow
|
|
|
|
|
$
284,486
|
$
144,758
|
|
|
|
|
|
|
|
|
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, 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.
|
|
|
|
|
|
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
Common Stock
Repurchases
|
|
|
|
|
|
|
Amounts in
thousands except per share data (Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Years
Ended
|
|
|
|
December
31,
|
December
31,
|
|
December
31,
|
December
31,
|
|
|
|
2016
|
2015
|
|
2016
|
2015
|
|
Share repurchases
during the period
|
|
1,951
|
1,313
|
|
3,071
|
5,659
|
|
Shares surrendered by
employees in payment for minimum
|
|
|
|
|
|
|
|
required withholding
taxes due on share based compensation
|
|
4
|
4
|
|
60
|
69
|
|
Total number of
shares purchased1
|
|
1,955
|
1,317
|
|
3,131
|
5,728
|
|
Average price paid
per share1
|
|
$
115.22
|
$
71.08
|
|
$
101.96
|
$
71.90
|
|
|
|
|
|
|
|
|
|
Shares remaining
under repurchase authorization as of December 31, 2016 totaled
3,735,508.
|
|
|
|
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 2015 two-for-one stock split. Actual shares
repurchased
were approximately 4,313,000 for the year ended December 31,
2015.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/idexx-laboratories-announces-fourth-quarter-and-full-year-2016-results-300400933.html
SOURCE IDEXX Laboratories, Inc.