WESTBROOK, Maine, Feb. 1, 2018 /PRNewswire/ --
- Achieves revenue growth in Q4 of 14% on a reported basis and
12% on an organic basis, driven by CAG Diagnostics recurring
revenue growth of 15% reported and 13% organic
- Reports unprecedented 3,650 premium instrument placements in
Q4, representing 15% year-over-year growth, supported by 25% growth
in Catalyst® placements and 37% growth in
SediVue Dx® placements to 747 units
- Delivers full year diluted EPS of $2.94, including $31
million or a $0.34 per share
one-time charge related to U.S. Tax Reform. Full year 2017 EPS
increased 20% year over year on a reported basis and 21% on a
comparable constant currency basis
- Increases 2018 revenue guidance by $65 million to $2,205
million - $2,245 million,
reflecting expected reported revenue growth of 12% - 14% and
organic revenue growth of 9.5% - 11.5%
- Raises 2018 EPS outlook range by $0.55 from the midpoint of prior guidance to
$4.04 - $4.18, reflecting expectations for continued
strong operating performance, a lower effective tax rate related to
U.S. Tax Reform, and benefits from foreign exchange
IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in
veterinary diagnostics, veterinary practice software and water
microbiology testing, reports revenues of $506 million for the fourth quarter of 2017, an
increase of 14% 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 broad-based strength across the
IDEXX portfolio and regions. Earnings per diluted share ("EPS")
were $0.43 on a reported basis for
the fourth quarter, reflecting a decline of 26% year over year,
burdened with a one-time negative impact of $0.34 per share related to the enactment of the
2017 Tax Cuts and Jobs Act ("U.S. Tax Reform"), due to the deemed
repatriation of the Company's foreign profits, net of the
remeasurement of deferred taxes at the lower enacted corporate tax
rate. Normalizing for this one-time negative tax impact, and
for a $0.07 per share benefit from
other tax items, EPS growth was 19% on a comparable constant
currency basis in the fourth quarter.
Revenue for the full year of $1,969
million increased 11% on a reported basis and 10% on an
organic basis, driven by 13% reported and organic growth in global
CAG Diagnostics recurring revenue. For the full year 2017, EPS of
$2.94 increased 20% on a reported
basis and 21% on a comparable constant currency basis, supported by
a reported 130 basis points of operating margin improvement, or 140
basis points on a constant currency basis.
Based on its continued momentum, strong 2017 performance and
favorable foreign exchange rate changes, the Company is raising its
full year 2018 revenue growth outlook to 12% – 14% on a reported
basis and 9.5% - 11.5% on an organic basis. This updated
outlook includes an estimated $10
million of revenue benefit from the implementation of ASU
2014-09, Revenue from Contracts with Customers (the "New Revenue
Standard"), or approximately 0.5% contribution to the organic
revenue growth rate. The Company is also increasing its EPS
guidance range to $4.04 –
$4.18 per share, an increase of
$0.55 at the midpoint of prior
guidance, reflecting approximately $0.06 per share in incremental benefits from
strong operating profit performance trends, $0.10 of additional EPS related to updated
foreign exchange assumptions, and $0.39 per share in benefits related to lower
effective U.S. tax rates. This EPS outlook is consistent with the
Company's goals for constant currency operating margin improvement
of 75 - 125 basis points. This outlook incorporates expectations
for an incremental $10 million in
operating expense investments in innovation and employees, and
$5 million of additional capital
investment, resulting from the opportunity presented by U.S. Tax
Reform.
"Around the world, we're seeing sustained, positive momentum in
our markets, as the pet-human bond continues to strengthen, the
appropriate use of diagnostics in the delivery of pet care gains
further traction, and our exceptional commercial teams collaborate
with veterinarians to support their practices' growth with IDEXX's
unique diagnostic and software solutions," said Jonathan Ayers, the Company's Chairman and Chief
Executive Officer.
"Our CAG Diagnostics recurring revenue grew 13% organically in
the quarter. This growth was fueled by our continued expansion of
the global installed base of premium instruments, up 20% year over
year, including a remarkable 29% increase internationally and very
strong 14% increase in North
America. We had an unprecedented number of quarterly
Catalyst placements worldwide, up 25% versus fourth quarter 2016,
including 25% growth in Catalyst placements at new and competitive
accounts in North America.
"The outlook for the year ahead looks exceptional, driven by
continued strong growth in our CAG Diagnostics recurring revenues,
and our continued introduction of advanced innovation to veterinary
practices globally with our IDEXX SDMA® on a slide,
fully launched in North America on
January 16th, and
SNAP® Fecal DxTM for the North
American market, expected to be launched this coming summer.
"With great runway ahead, and building from a strong 2017
performance with the further tailwind of U.S. Tax Reform, we're
pleased to be raising our revenue and earnings outlook for 2018,
continuing to deliver on our long-term financial goals. With
the opportunity presented by U.S. Tax Reform, we are augmenting
investments in software, data and related innovation. We will
also be supporting our U.S. employees by raising the Company's
match for our 401(k) retirement plan, where we have tremendous U.S.
employee participation."
Fourth Quarter Performance Highlights
Fourth quarter revenue increased 14% to $506 million, benefited by a 2% favorable foreign
exchange impact. EPS for the quarter was $0.43, net of a $0.34 per share one-time charge related to the
enactment of U.S. Tax Reform, $0.06
per share in benefit from share-based compensation accounting
adoption and less than $0.01 in
discrete tax benefit from the expected utilization of foreign tax
credits.
Companion Animal Group
CAG generated 14% reported and 12% organic revenue growth for
the quarter, supported by CAG Diagnostics recurring organic revenue
growth of 13%, with consistent strong growth in U.S. and
international regions. Veterinary software services and diagnostic
imaging systems revenue growth was strong, at 14% on a reported
basis and 13% on an organic basis.
- Reference laboratory diagnostic and consulting services
revenue grew 15% on a reported and 12% on an organic basis, reduced
by approximately 1% related to fewer equivalent days. These results
were driven by double-digit organic growth in the U.S., supported
by strong organic volume gains with existing customers, solid net
price realization and net customer additions. International
reference lab organic revenue growth was also solid in the quarter,
driven by gains in the European region.
- IDEXX VetLab® consumables
reported revenue grew 16% and organic revenue grew 14%, propelled
by an expanding premium instrument base in U.S. and international
markets. IDEXX VetLab premium diagnostic instrument
placements grew 15% to a record number of 3,650, including 1,863
Catalyst placements, reflecting a 25% increase year over year,
1,040 premium hematology instruments and a record number of 747
IDEXX SediVue Dx analyzer placements.
- Rapid assay products generated strong revenue growth of
11% reported and 10% organic, benefitted by approximately 1%, due
to favorable international distributor inventory changes, partially
offset by fewer equivalent days. This continued solid growth was
supported by volume growth in SNAP 4Dx® Plus Test and
specialty SNAP tests, as well as continued progress in regaining
share in first generation products in the U.S.
Livestock, Poultry and Dairy ("LPD")
LPD delivered 13% reported and 8% organic revenue growth for the
quarter, ahead of the Company's expectations. The major drivers of
this growth were higher than projected year-end government program
and distributor ordering, as well as solid gains in recurring
revenues, supported by growth of our pregnancy testing platform.
These positive factors were partially offset by continued pressure
on dairy and swine markets in China, which have constrained emerging market
growth.
Water
Water achieved strong revenue growth of 19% on a reported basis
and 16% on an organic basis in the fourth quarter, benefited by
favorable comparisons to prior year channel inventory adjustments
in advance of our go-direct initiative in Brazil. Excluding this impact, Water organic
revenue growth is estimated at approximately 9% in the quarter,
supported by continued solid volume growth in our core
Colilert® franchise across major regions and net price
realization.
Gross Profit and Operating Profit
Gross profits increased 13%, and gross margin decreased slightly
to 53.8% from 54.3% in the prior year period. Constant currency
gross margin was 54.0% for the quarter, 30 basis points lower than
fourth quarter 2016, as continued solid net price and productivity
gains were offset by investments in lab capacity, operations and
IT; relatively higher year-over-year LPD and Water costs; as well
as relatively lower average instrument margins, which were related
to strong international growth resulting in lower average
instrument prices.
Operating margins were 19.3% in the quarter, 40 basis points
higher than the prior year period operating margin of 18.9%, on
both a reported and constant currency basis, reflecting benefits
from strong revenue gains.
2018 Financial Outlook
The Company is increasing its 2018 revenue outlook by
$65 million to $2,205 million - $2,245
million, or reported growth of 12% - 14%, reflecting its
strong 2017 performance, an estimated $10
million benefit from the New Revenue Standard, and an
estimated $35 million benefit related
to updated assumptions for foreign exchange rates, as noted below.
At these new rate assumptions compared to market rates in 2017, we
estimate that the effect of the weaker U.S. dollar will benefit
2018 reported revenue growth by approximately 2.0% - 2.5%, EPS
growth by approximately 4%, and EPS by an estimated $0.12 per share, including the net impact from
projected hedge losses of approximately $7
million in 2018.
We are increasing our 2018 EPS outlook to $4.04 - $4.18 per
share, an increase of $0.55, or
targeted growth of 37% - 42% on a reported basis and 29% - 33% on a
comparable constant currency basis. The Company is projecting free
cash flow at approximately 80% - 85% of net income in 2018,
including an estimated 15% impact related to $50 million of incremental capital spending
related to our Westbrook, Maine
headquarters expansion and the relocation and expansion of our core
laboratory in Germany, in addition
to approximately $5 million in
additional funding of our capital plan to support incremental
growth initiatives. For 2018, the Company projects capital spending
of approximately $140 million.
The updated guidance for 2018 reflects recent trends, and
assumes that the value of the U.S. dollar relative to other
currencies will be: the euro at $1.22; the British pound at $1.40; the Canadian dollar at $0.79; the Australian dollar at $0.78; the Japanese yen at ¥111; the Chinese
renminbi at RMB 6.45; and the
Brazilian real at R$3.21 to the U.S.
dollar for the full year of 2018.
The Company provides the following updated guidance for
2018:
Amounts in
millions except per share data and percentages
|
|
|
Guidance
Range
|
Growth
Definition
|
Year-over-year
Growth
|
|
|
|
|
Revenue
|
$2,205 -
$2,245
|
Reported
|
12% - 14%
|
|
|
Organic Revenue
Growth
|
9.5% -
11.5%
|
|
|
|
|
EPS
|
$4.04 -
$4.18
|
Reported
|
37% - 42%
|
|
|
Constant
Currency
Comparable Constant
Currency
|
42% - 46%
29% - 33%
|
|
|
|
|
Operating Cash
Flow
|
|
~120% - 125% of net
income
|
|
|
|
|
|
Free Cash
Flow
|
|
~80% - 85% of net
income
|
|
|
|
|
|
Capital
Expenditures
|
|
~$140
million
|
|
We expect an effective tax rate of 20.0% - 21.0%, including
recurring benefits related to the enactment of U.S. Tax Reform, and
approximately 300 basis points related to the accounting standard
for the projected tax benefit of employee share-based compensation.
We are projecting a reduction in weighted average shares
outstanding of approximately 1.0% - 1.5%, and interest expense, net
of interest income, of approximately $35
million - $36 million,
reflecting current and projected borrowings.
For a quick-reference snapshot of the Company's quarterly and
full year 2017 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 and full year 2017 results and management's outlook.
To participate in the conference call, dial 1-800-230-1092 or
1-612-288-0337 and reference confirmation code 443123. An audio
replay will be available through Thursday,
February 8, 2018 by dialing 1-800-475-6701 or 1-320-365-3844
and referencing replay code 443123.
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 the S&P
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
employs more than 7,000 people and offers products to customers in
over 175 countries. For more information about IDEXX, visit:
www.idexx.com.
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 "2018 Financial
Outlook" and elsewhere and can be identified by the use of words
such as "expects," "may," "anticipates," "intends," "would,"
"will," "plans," "believes," "estimates," "projected", "should,"
and similar words and expressions. Our forward-looking statements
include statements relating to our product launches; revenue growth
and EPS outlooks; operating and free cash flow forecast; projected
impacts of U.S. Tax Reform and New Revenue Standard; projected
operating expense investments, including with respect to employee
benefits; projected impact of foreign currency exchange rates and
instrument placement program mix; and projected operating margins
and expenses, capital expenditures, losses from foreign currency
hedging transactions, tax and EPS benefits from share-based
compensation arrangements, discrete tax benefits related to foreign
tax credits, effective tax rates, 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. These forward-looking statements involve known
and unknown risks and uncertainties that may cause the Company's
actual results, levels of activity, performance or achievements to
be materially different from those expressed or implied by these
forward-looking statements. The Company undertakes no obligation to
publicly update any forward-looking statement, whether as a result
of new information, future events or otherwise. A description of
the risks and uncertainties that could cause results to differ
materially from those described in the forward-looking statements
can be found in the Company's 2016 Annual Report on Form 10-K and
the Company's other filings with the U.S. Securities and Exchange
Commission available at www.sec.gov.
Statement Regarding Non-GAAP Financial Measures
The following defines terms and conventions and provides
reconciliations 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.
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, and 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 increased fourth quarter 2017 revenue growth by
2%, increased gross profit growth by 2%, reduced gross profit
margin growth by 20 basis points, had an immaterial impact on
operating profit margin growth, and increased EPS growth by 2%;
increased full year 2017 revenue growth by approximately 0.3%,
reduced operating profit margin growth by 10 basis points, and
reduced 2017 EPS growth by approximately 1%; are expected to
increase projected full year 2018 revenue growth by approximately
2% - 2.5%, increase projected operating profit margin growth by
approximately 20 basis points, and increase projected 2018 EPS
growth by approximately 4%. 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, 2017.
Growth and organic revenue growth - All references to growth and
organic growth refer to growth compared to the equivalent prior
year period unless specifically noted. Organic revenue growth is a
non-GAAP financial measure that 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, 2017. See the constant currency note above for the
impacts of estimated currency changes to the projected 2018 organic
revenue growth for the Company. The percentage change in
revenue resulting from acquisitions represents incremental revenues
attributable to acquisitions that have occurred since the beginning
of the prior year period. For the calculation of projected 2018
organic revenue growth, the impacts of revenue from acquisitions is
immaterial.
Comparable constant currency EPS growth - Comparable constant
currency EPS growth is a non-GAAP financial measure that excludes
the impact of the Company's adoption of share-based compensation
accounting change (ASU 2016-09) for the periods after its adoption
on January 1, 2017, a one-time
negative impact related to U.S. Tax Reform, and a discrete tax
benefit related to the expected utilization of foreign tax
credits. The adoption of ASU 2016-09 increased fourth quarter
2017 EPS growth by 10%, increased full year 2017 EPS growth by 13%,
and is expected to reduce projected full year 2018 EPS growth by
approximately 5%. A one-time negative impact related to the
enactment of the Tax Cuts and Jobs Act for the fourth quarter, due
to the deemed repatriation of the Company's foreign profits, net of
the remeasurement of deferred taxes at the lower enacted corporate
tax rate, reduced fourth quarter 2017 EPS growth by 59%, reduced
full year 2017 EPS growth by 14%, and is expected to increase
projected full year 2018 EPS growth by approximately 12%. A
discrete tax benefit related to the expected utilization of foreign
tax credits increased fourth quarter 2017 EPS growth by 2%,
increased full year 2017 EPS growth by 2%, and is expected to
reduce projected full year 2018 EPS growth by approximately 1%.
These impacts and those described in the constant currency note
above reconcile reported EPS growth to comparable constant currency
EPS growth for the Company.
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, 2017 and
2016. Since adoption of ASU 2016-09 in 2017, the tax benefit
from share-based compensation is included in cash generated from
operations and will no longer be an adjustment in our free cash
flow calculation. To estimate projected 2018 free cash flow,
we have deducted projected purchases of property and equipment
(also referred to as capital expenditures) of ~$140 million.
Debt to Adjusted EBITDA (Leverage Ratios) - Adjusted EBITDA,
gross debt, and net debt are non-GAAP financial measures.
Adjusted EBITDA is a non-GAAP financial measure of earnings before
interest, taxes, depreciation, amortization and share-based
compensation. Management believes that using Adjusted EBITDA,
gross debt and net debt in the Adjusted EBITDA ratio is a useful
and recognized measure for evaluating financial leverage. For
further information on how Adjusted EBITDA and the Debt to Adjusted
EBITDA Ratio are calculated, see the Company's Annual Report on
Form 10-K for the year ended December 31,
2016.
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
Condensed
Consolidated Statement of Operations
|
|
Amounts in
thousands except per share data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
|
December
31,
|
December
31,
|
|
December
31,
|
December
31,
|
|
|
|
|
2017
|
2016
|
|
2017
|
2016
|
Revenue:
|
|
Revenue
|
|
$506,121
|
$442,996
|
|
$1,969,058
|
$1,775,423
|
|
|
|
|
|
|
|
|
|
Expenses and
Income:
|
|
Cost of
revenue
|
|
233,647
|
202,370
|
|
871,676
|
799,987
|
|
|
Gross
profit
|
|
272,474
|
240,626
|
|
1,097,382
|
975,436
|
|
|
Sales and
marketing
|
|
90,539
|
80,605
|
|
354,294
|
317,058
|
|
|
General and
administrative
|
|
55,318
|
50,778
|
|
220,878
|
207,017
|
|
|
Research and
development
|
|
28,809
|
25,418
|
|
109,182
|
101,122
|
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
97,808
|
83,825
|
|
413,028
|
350,239
|
|
|
Interest expense,
net
|
|
(8,122)
|
(6,698)
|
|
(31,971)
|
(28,393)
|
|
|
Income before
provision for income taxes
|
|
89,686
|
77,127
|
|
381,057
|
321,846
|
|
|
Provision for income
taxes
|
|
51,396
|
24,756
|
|
117,788
|
99,792
|
Net
Income:
|
|
Net income
|
|
38,290
|
52,371
|
|
263,269
|
222,054
|
|
|
Less: Noncontrolling
interest in subsidiary's earnings
|
33
|
2
|
|
125
|
9
|
|
|
Net income
attributable to stockholders
|
|
$38,257
|
$52,369
|
|
$263,144
|
$222,045
|
|
|
Earnings per share:
Basic
|
|
$0.44
|
$0.59
|
|
$3.00
|
$2.47
|
|
|
Earnings per share:
Diluted
|
|
$0.43
|
$0.58
|
|
$2.94
|
$2.44
|
|
|
Shares outstanding:
Basic
|
|
87,427
|
89,294
|
|
87,769
|
89,732
|
|
|
Shares outstanding:
Diluted
|
|
89,045
|
90,589
|
|
89,567
|
90,884
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Selected
Operating Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
December
31,
|
December
31,
|
|
December
31,
|
December
31,
|
|
|
|
2017
|
2016
|
|
2017
|
2016
|
Operating
Ratios
|
Gross
profit
|
|
53.8%
|
54.3%
|
|
55.7%
|
54.9%
|
(as a percentage
of revenue):
|
Sales, marketing,
general and administrative expense
|
28.8%
|
29.7%
|
|
29.2%
|
29.5%
|
|
Research and
development expense
|
|
5.7%
|
5.7%
|
|
5.5%
|
5.7%
|
|
Income from
operations 1
|
|
19.3%
|
18.9%
|
|
21.0%
|
19.7%
|
|
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
|
|
|
|
2017
|
Revenue
|
|
2016
|
Revenue
|
Revenue:
|
CAG
|
|
$433,516
|
|
|
$379,539
|
|
|
Water
|
|
28,864
|
|
|
24,336
|
|
|
LPD
|
|
37,215
|
|
|
32,980
|
|
|
Other
|
|
6,526
|
|
|
6,141
|
|
|
Total
|
|
$506,121
|
|
|
$442,996
|
|
|
|
|
|
|
|
|
|
Gross
Profit:
|
CAG
|
|
$230,876
|
53.3%
|
|
$201,354
|
53.1%
|
|
Water
|
|
19,609
|
67.9%
|
|
17,181
|
70.6%
|
|
LPD
|
|
20,957
|
56.3%
|
|
19,818
|
60.1%
|
|
Other
|
|
3,162
|
48.5%
|
|
3,562
|
58.0%
|
|
Unallocated
Amounts
|
|
(2,130)
|
N/A
|
|
(1,289)
|
N/A
|
|
Total
|
|
$272,474
|
53.8%
|
|
$240,626
|
54.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
Operations:
|
CAG
|
|
$85,700
|
19.8%
|
|
$71,484
|
18.8%
|
|
Water
|
|
12,195
|
42.2%
|
|
10,838
|
44.5%
|
|
LPD
|
|
6,584
|
17.7%
|
|
6,249
|
18.9%
|
|
Other
|
|
1,562
|
23.9%
|
|
1,633
|
26.6%
|
|
Unallocated
Amounts
|
|
(8,233)
|
N/A
|
|
(6,379)
|
N/A
|
|
Total
|
|
$97,808
|
19.3%
|
|
$83,825
|
18.9%
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
December
31,
|
Percent
of
|
|
December
31,
|
Percent
of
|
|
|
|
2017
|
Revenue
|
|
2016
|
Revenue
|
Revenue:
|
CAG
|
|
$1,703,377
|
|
|
$1,522,689
|
|
|
Water
|
|
114,395
|
|
|
103,579
|
|
|
LPD
|
|
128,481
|
|
|
126,491
|
|
|
Other
|
|
22,805
|
|
|
22,664
|
|
|
Total
|
|
$1,969,058
|
|
|
$1,775,423
|
|
|
|
|
|
|
|
|
|
Gross
Profit:
|
CAG
|
|
$936,798
|
55.0%
|
|
$820,322
|
53.9%
|
|
Water
|
|
79,365
|
69.4%
|
|
71,878
|
69.4%
|
|
LPD
|
|
72,140
|
56.1%
|
|
73,801
|
58.3%
|
|
Other
|
|
11,388
|
49.9%
|
|
11,561
|
51.0%
|
|
Unallocated
Amounts
|
|
(2,309)
|
N/A
|
|
(2,126)
|
N/A
|
|
Total
|
|
$1,097,382
|
55.7%
|
|
$975,436
|
54.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
Operations:
|
CAG
|
|
$363,557
|
21.3%
|
|
$301,342
|
19.8%
|
|
Water
|
|
50,616
|
44.2%
|
|
45,702
|
44.1%
|
|
LPD
|
|
16,464
|
12.8%
|
|
18,914
|
15.0%
|
|
Other
|
|
4,837
|
21.2%
|
|
884
|
3.9%
|
|
Unallocated
Amounts
|
|
(22,446)
|
N/A
|
|
(16,603)
|
N/A
|
|
Total
|
|
$413,028
|
21.0%
|
|
$350,239
|
19.7%
|
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
|
|
|
|
|
|
Percentage
|
|
Percentage
|
|
Organic
|
|
December
31,
|
|
December
31,
|
|
Dollar
|
|
Percentage
|
|
Change
from
|
|
Change
from
|
|
Revenue
|
Net
Revenue
|
2017
|
|
2016
|
|
Change
|
|
Change
|
|
Currency
|
|
Acquisitions
|
|
Growth
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG
|
$433,516
|
|
$379,539
|
|
$53,977
|
|
14.2%
|
|
2.1%
|
|
0.4%
|
|
11.8%
|
United
States
|
278,396
|
|
250,395
|
|
28,001
|
|
11.2%
|
|
-
|
|
0.4%
|
|
10.8%
|
International
|
155,120
|
|
129,144
|
|
25,976
|
|
20.1%
|
|
6.2%
|
|
0.4%
|
|
13.6%
|
Water
|
28,864
|
|
24,336
|
|
4,528
|
|
18.6%
|
|
2.5%
|
|
-
|
|
16.1%
|
United
States
|
13,125
|
|
12,493
|
|
632
|
|
5.1%
|
|
-
|
|
-
|
|
5.1%
|
International
|
15,739
|
|
11,843
|
|
3,896
|
|
32.9%
|
|
5.6%
|
|
-
|
|
27.3%
|
LPD
|
37,215
|
|
32,980
|
|
4,235
|
|
12.8%
|
|
4.4%
|
|
-
|
|
8.4%
|
United
States
|
3,615
|
|
3,289
|
|
326
|
|
9.9%
|
|
-
|
|
-
|
|
9.9%
|
International
|
33,600
|
|
29,691
|
|
3,909
|
|
13.2%
|
|
4.9%
|
|
-
|
|
8.3%
|
Other
|
6,526
|
|
6,141
|
|
385
|
|
6.3%
|
|
0.5%
|
|
-
|
|
5.8%
|
Total
Company
|
$506,121
|
|
$442,996
|
|
$63,125
|
|
14.2%
|
|
2.2%
|
|
0.3%
|
|
11.7%
|
United
States
|
297,782
|
|
267,730
|
|
30,052
|
|
11.2%
|
|
-
|
|
0.4%
|
|
10.9%
|
International
|
208,339
|
|
175,266
|
|
33,073
|
|
18.9%
|
|
5.7%
|
|
0.3%
|
|
12.9%
|
|
|
Three Months
Ended
|
|
|
|
|
|
Percentage
|
|
Percentage
|
|
Organic
|
|
December
31,
|
|
December
31,
|
|
Dollar
|
|
Percentage
|
|
Change
from
|
|
Change
from
|
|
Revenue
|
Net CAG
Revenue
|
2017
|
|
2016
|
|
Change
|
|
Change
|
|
Currency
|
|
Acquisitions
|
|
Growth
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG Diagnostics
recurring revenue:
|
$359,765
|
|
$312,162
|
|
$47,603
|
|
15.2%
|
|
2.1%
|
|
0.4%
|
|
12.8%
|
IDEXX VetLab
consumables
|
133,693
|
|
114,973
|
|
18,720
|
|
16.3%
|
|
2.2%
|
|
-
|
|
14.1%
|
Rapid assay
products
|
46,224
|
|
41,539
|
|
4,685
|
|
11.3%
|
|
1.1%
|
|
-
|
|
10.2%
|
Reference
laboratory diagnostic and consulting services
|
161,924
|
|
140,553
|
|
21,371
|
|
15.2%
|
|
2.2%
|
|
0.8%
|
|
12.2%
|
CAG Diagnostics
services and accessories
|
17,924
|
|
15,097
|
|
2,827
|
|
18.7%
|
|
2.6%
|
|
-
|
|
16.1%
|
CAG Diagnostics
capital – instruments
|
36,945
|
|
35,130
|
|
1,815
|
|
5.2%
|
|
3.3%
|
|
-
|
|
1.9%
|
Veterinary software,
services and diagnostic imaging systems
|
36,806
|
|
32,247
|
|
4,559
|
|
14.1%
|
|
0.5%
|
|
0.9%
|
|
12.7%
|
Net CAG
revenue
|
$433,516
|
|
$379,539
|
|
$53,977
|
|
14.2%
|
|
2.1%
|
|
0.4%
|
|
11.8%
|
|
1 See
Statements Regarding Non-GAAP Financial Measures, above. Amounts
presented may not recalculate due to rounding.
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
Percentage
|
|
Percentage
|
|
Organic
|
|
December
31,
|
|
December
31,
|
|
Dollar
|
|
Percentage
|
|
Change
from
|
|
Change
from
|
|
Revenue
|
Net
Revenue
|
2017
|
|
2016
|
|
Change
|
|
Change
|
|
Currency
|
|
Acquisitions
|
|
Growth
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG
|
$1,703,377
|
|
$1,522,689
|
|
$180,688
|
|
11.9%
|
|
0.3%
|
|
0.2%
|
|
11.4%
|
United
States
|
1,125,364
|
|
1,017,065
|
|
108,299
|
|
10.6%
|
|
-
|
|
0.2%
|
|
10.5%
|
International
|
578,013
|
|
505,624
|
|
72,389
|
|
14.3%
|
|
0.8%
|
|
0.4%
|
|
13.2%
|
Water
|
114,395
|
|
103,579
|
|
10,816
|
|
10.4%
|
|
0.3%
|
|
-
|
|
10.2%
|
United
States
|
55,482
|
|
52,852
|
|
2,630
|
|
5.0%
|
|
-
|
|
-
|
|
5.0%
|
International
|
58,913
|
|
50,727
|
|
8,186
|
|
16.1%
|
|
0.6%
|
|
-
|
|
15.6%
|
LPD
|
128,481
|
|
126,491
|
|
1,990
|
|
1.6%
|
|
1.1%
|
|
-
|
|
0.5%
|
United
States
|
14,108
|
|
13,253
|
|
855
|
|
6.5%
|
|
-
|
|
-
|
|
6.5%
|
International
|
114,373
|
|
113,238
|
|
1,135
|
|
1.0%
|
|
1.2%
|
|
-
|
|
(0.2%)
|
Other
|
22,805
|
|
22,664
|
|
141
|
|
0.6%
|
|
0.1%
|
|
-
|
|
0.5%
|
Total
Company
|
$1,969,058
|
|
$1,775,423
|
|
$193,635
|
|
10.9%
|
|
0.3%
|
|
0.2%
|
|
10.4%
|
United
States
|
1,203,547
|
|
1,089,595
|
|
113,952
|
|
10.5%
|
|
-
|
|
0.2%
|
|
10.3%
|
International
|
765,511
|
|
685,828
|
|
79,683
|
|
11.6%
|
|
0.8%
|
|
0.3%
|
|
10.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
|
|
Percentage
|
|
Percentage
|
|
Organic
|
|
December
31,
|
|
December
31,
|
|
Dollar
|
|
Percentage
|
|
Change
from
|
|
Change
from
|
|
Revenue
|
Net CAG
Revenue
|
2017
|
|
2016
|
|
Change
|
|
Change
|
|
Currency
|
|
Acquisitions
|
|
Growth
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAG Diagnostics
recurring revenue:
|
$1,451,701
|
|
$1,281,262
|
|
$170,439
|
|
13.3%
|
|
0.2%
|
|
0.3%
|
|
12.8%
|
IDEXX VetLab
consumables
|
518,774
|
|
451,456
|
|
67,318
|
|
14.9%
|
|
0.3%
|
|
-
|
|
14.6%
|
Rapid assay
products
|
205,309
|
|
189,122
|
|
16,187
|
|
8.6%
|
|
0.1%
|
|
-
|
|
8.5%
|
Reference
laboratory diagnostic and consulting services
|
660,142
|
|
581,067
|
|
79,075
|
|
13.6%
|
|
0.2%
|
|
0.6%
|
|
12.8%
|
CAG Diagnostics
services and accessories
|
67,476
|
|
59,617
|
|
7,859
|
|
13.2%
|
|
0.3%
|
|
-
|
|
12.9%
|
CAG Diagnostics
capital – instruments
|
119,963
|
|
121,191
|
|
(1,228)
|
|
(1.0%)
|
|
0.6%
|
|
-
|
|
(1.6%)
|
Veterinary software,
services and diagnostic imaging systems
|
131,713
|
|
120,236
|
|
11,477
|
|
9.5%
|
|
0.2%
|
|
0.5%
|
|
8.9%
|
Net CAG
revenue
|
$1,703,377
|
|
$1,522,689
|
|
$180,688
|
|
11.9%
|
|
0.3%
|
|
0.2%
|
|
11.4%
|
|
1 See
Statements Regarding Non-GAAP Financial Measures, above. Amounts
presented may not recalculate due to rounding.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Condensed
Consolidated Balance Sheet
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
December
31,
|
December
31,
|
|
|
|
2017
|
2016
|
Assets:
|
Current
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$187,675
|
$154,901
|
|
Marketable
securities
|
|
284,255
|
236,949
|
|
Accounts receivable,
net
|
|
234,597
|
204,494
|
|
Inventories
|
|
164,318
|
158,034
|
|
Other current
assets
|
|
101,140
|
91,206
|
|
Total current
assets
|
|
971,985
|
845,584
|
|
Property and
equipment, net
|
|
379,096
|
357,422
|
|
Other long-term
assets, net
|
|
362,335
|
327,698
|
|
Total
assets
|
|
$1,713,416
|
$1,530,704
|
|
|
|
|
|
Liabilities and
Stockholders'
|
|
|
|
|
Equity
(Deficit):
|
Current
Liabilities:
|
|
|
|
|
Accounts
payable
|
|
$66,968
|
$60,057
|
|
Accrued
liabilities
|
|
253,418
|
236,131
|
|
Line of
credit
|
|
655,000
|
611,000
|
|
Deferred
revenue
|
|
29,181
|
27,380
|
|
Total current
liabilities
|
|
1,004,567
|
934,568
|
|
Long-term
debt
|
|
606,075
|
593,110
|
|
Other long-term
liabilities, net
|
|
156,616
|
111,239
|
|
Total long-term
liabilities
|
|
762,691
|
704,349
|
|
|
|
|
|
|
Total stockholders'
equity (deficit)
|
|
(54,106)
|
(108,352)
|
|
Noncontrolling
interest
|
|
264
|
139
|
|
Total
stockholders' equity (deficit)
|
|
(53,842)
|
(108,213)
|
|
Total liabilities
and stockholders' equity (deficit)
|
|
$1,713,416
|
$1,530,704
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Selected
Balance Sheet Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
September
30,
|
June
30,
|
March
31,
|
December
31,
|
|
|
2017
|
2017
|
2017
|
2017
|
2016
|
Selected Balance
Sheet Information:
|
|
|
|
|
|
|
|
Days sales
outstanding 1
|
41.7
|
43.4
|
41.7
|
42.4
|
42.1
|
|
Inventory turns
2
|
2.2
|
1.9
|
2.0
|
1.9
|
2.0
|
|
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
|
Condensed
Consolidated Statement of Cash Flows
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
|
|
|
|
|
Years
Ended
|
|
|
|
December
31,
|
December
31,
|
|
|
|
2017
|
2016
|
Operating:
|
Cash Flows from
Operating Activities:
|
|
|
|
|
Net income
|
|
$263,269
|
$222,054
|
|
Non-cash
charges
|
|
101,627
|
124,217
|
|
Changes in assets and
liabilities
|
|
8,380
|
7,374
|
|
Tax benefit from
share-based compensation arrangements
|
|
-
|
(14,702)
|
|
Net cash provided by
operating activities
|
|
373,276
|
338,943
|
Investing:
|
Cash Flows from
Investing Activities:
|
|
|
|
|
Purchases of property
and equipment
|
|
(74,384)
|
(64,787)
|
|
Purchase of
marketable securities
|
|
(334,164)
|
(227,894)
|
|
Proceeds from the
sale and maturities of marketable securities
|
|
286,759
|
203,859
|
|
Acquisitions of
intangible assets
|
|
(2,320)
|
-
|
|
Acquisitions of
businesses, net of cash acquired
|
|
(14,579)
|
(1,964)
|
|
Net cash used by
investing activities
|
|
(138,688)
|
(90,786)
|
Financing:
|
Cash Flows from
Financing Activities:
|
|
|
|
|
Borrowings on
revolving credit facilities, net
|
|
44,000
|
38,000
|
|
Repurchases of common
stock
|
|
(282,565)
|
(304,086)
|
|
Debt issue
costs
|
|
-
|
(56)
|
|
Proceeds from
exercises of stock options and employee stock purchase
plans
|
|
38,622
|
38,344
|
|
Shares withheld for
statutory tax withholding on restricted stock
|
|
(8,073)
|
(4,372)
|
|
Payment of
acquisition-related contingent consideration
|
|
-
|
(4,728)
|
|
Tax benefit from
share-based compensation arrangements
|
|
-
|
14,702
|
|
Net cash used by
financing activities
|
|
(208,016)
|
(222,196)
|
|
Net effect of changes
in exchange rates on cash
|
|
6,202
|
(54)
|
|
Net increase in cash
and cash equivalents
|
|
32,774
|
25,907
|
|
Cash and cash
equivalents, beginning of period
|
|
154,901
|
128,994
|
|
Cash and cash
equivalents, end of period
|
|
$187,675
|
$154,901
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Free Cash
Flow
|
Amounts in
thousands except per share data (Unaudited)
|
|
|
|
|
|
|
|
|
|
Years
Ended
|
|
|
|
December
31,
|
December
31,
|
|
|
|
2017
|
2016
|
Free Cash
Flow:
|
Net cash provided by
operating activities
|
|
$373,276
|
$338,943
|
|
Financing cash flows
attributable to tax benefits from share-based compensation
arrangements
|
|
-
|
14,702
|
|
Investing cash flows
attributable to purchases of property and equipment
|
|
(74,384)
|
(64,787)
|
|
Free cash flow
1
|
|
$298,892
|
$288,858
|
|
1 See
Statements Regarding Non-GAAP Financial Measures, above.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Common Stock
Repurchases
|
Amounts in
thousands except per share data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
December
31,
|
December
31,
|
|
December
31,
|
December
31,
|
|
|
2017
|
2016
|
|
2017
|
2016
|
Shares repurchased in
the open market
|
|
351
|
1,951
|
|
1,749
|
3,071
|
Shares acquired
through employee surrender for statutory tax withholding
|
|
2
|
4
|
|
57
|
60
|
Total shares
repurchased
|
|
353
|
1,955
|
|
1,806
|
3,131
|
|
|
|
|
|
|
|
Cost of shares
repurchased in the open market
|
|
$54,977
|
$224,837
|
|
$270,297
|
$313,072
|
Cost of shares for
employee surrenders
|
|
245
|
422
|
|
8,074
|
4,372
|
Total cost of
shares
|
|
$55,222
|
$225,259
|
|
$278,371
|
$317,444
|
|
|
|
|
|
|
|
Average cost per
share – open market repurchases
|
|
$156.57
|
$115.22
|
|
$154.51
|
$101.96
|
Average cost per
share – employee surrenders
|
|
$156.44
|
$114.16
|
|
$142.55
|
$73.04
|
Average cost per
share – total
|
|
$156.57
|
$115.22
|
|
$154.13
|
$101.40
|
Contact: Kerry Bennett,
Investor Relations, 1-207-556-8155
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SOURCE IDEXX Laboratories, Inc.