WESTBROOK, Maine, Oct. 1, 2014 /PRNewswire/ -- IDEXX
Laboratories, Inc. (NASDAQ: IDXX) today reported that it had
selected United Parcel Service (UPS) to provide third party
logistic services in support of its strategy to go all-direct with
US companion animal veterinary practices. This agreement builds on
IDEXX's distribution and logistics capability, and provides for
five warehouse and shipping locations strategically located across
the US, three of which are provided by UPS' third party logistics
services.
"Our selection of UPS, the world's largest package delivery
company, builds on our existing distribution and logistics
capability to provide cost effective free shipping and next-day
delivery for diagnostic kits and instrument consumables to
companion animal veterinary practices in the continental US," said
Jonathan Ayers, the Company's
Chairman and Chief Executive Officer.
"We are also very pleased to have launched a staffed, fully
trained and significantly expanded US customer sales center,
commencing our transition to all-direct product distribution in the
continental United States.
Customers who order direct from IDEXX in Q4 of 2014 and beyond will
receive free shipping and next day delivery, fulfilling our ongoing
commitment to excellent customer service."
"We continue to see strong business momentum in the US as a
result of our sales transformation completed a year ago. In
the third quarter, placements of Catalyst and hematology analyzers
with US customers each grew approximately 30% over prior year."
"This strong instrument placement growth is in advance of our
planned launch of Catalyst One in Q4, which expands the IDEXX
point-of-care chemistry market by offering premium Catalyst Dx
technology at a significantly lower entry price. Catalyst Dx and
Catalyst One offer the broadest, most complete and flexible test
menu, lowest cost per test, fastest time to results, unmatched
accuracy, full integration with leading practice management
software systems and, through its internet capability, access to
IDEXX's free VetConnect® PLUS cloud-based diagnostic
portal. VetConnect PLUS now supports instant notification of
completed patient results run on our in-house lab equipment and
with IDEXX Reference Laboratories, with both iPhone® and
Android™ apps," added Ayers.
"We also placed over 3,200 SNAP Pros in Q3, bringing
year-to-date placements to over 6,000 in our first seven months
since launch, and providing an ever increasing number of our rapid
assay customers the unique convenience, workflow and electronic
medical record benefits of this mobile device."
"Our momentum in instrument placement will be further
strengthened by ongoing expansion of our direct sales presence.
Since July, we have hired almost 100 sales and field support
representatives, over 80% of our goal to be fully staffed in the
expanded sales and support model by November
1, 2014. This expansion builds upon our successful North
American sales transformation and expansion undertaken in mid
2013."
"We continue to work with our US distributors to ensure a smooth
transition through the balance of the contract and calendar year,
as we both support our mutual customers' requirements for IDEXX's
unique diagnostic kits and instrument consumables. We plan to
support our distributors with supply for their order volume through
the end of the year with a combination of inventory and drop-ship
direct from IDEXX. This approach enables us to substantially reduce
the expected inventory levels held by distributors at the end of
2014 and the related carryover transitional impacts in 2015, "
added Ayers.
Update to Timing and Amount of Transitional Impacts Related
to One-Time Drawdown of Inventory Held by Distributors
Previously, the Company noted that transitional impacts in 2015
would be primarily related to the drawdown of inventory held by
distributors at the end of the year. The Company had estimated that
the drawdown of inventory held by distributors at year-end would
occur primarily in the first quarter of 2015 and would result in a
one-time reduction in revenue of $30 million
to $35 million, and in operating profit of $23 million to $27 million. The Company also had
expected to incur $2 million to $3
million in remaining project management expenses in early
2015.
Given progress in advancing operational plans to support the
transition to an all-direct product distribution model, the Company
now expects one-time transitional impacts related to the drawdown
of distributor inventories will occur primarily in Q4 of 2014. We
now expect the drawdown of distributor inventories will result in a
one-time reduction in revenue and operating profit of approximately
$20 million to $25 million and $16
million to $20 million,
respectively, in the fourth quarter. The higher end of the
estimated impact range corresponds with the full estimated impact
of the inventory drawdown impact related to the move to the
all-direct product distribution approach in the US. To the degree
that impacts are below the high end of the estimated impact range
in 2014, there may be limited carryover revenue and operating
profit impact in Q1 of 2015. The Company now expects limited
remaining project management expenses in early 2015.
About IDEXX Laboratories, Inc.
IDEXX Laboratories, Inc. is a leader in pet healthcare
innovation, serving practicing veterinarians around the world with
a broad range of diagnostic and information technology-based
products and services. IDEXX products enhance the ability of
veterinarians to provide advanced medical care, improve staff
efficiency and build more economically successful practices. IDEXX
is also a worldwide leader in providing diagnostic tests and
information for livestock and poultry and tests for the quality and
safety of water and milk. Headquartered in Maine, IDEXX Laboratories employs more than
5,900 people and offers products to customers in over 175
countries.
Note Regarding Forward-Looking Statements
This news release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are based on management's
current expectations and beliefs, as well as a number of
assumptions concerning future events. These statements are subject
to risks, uncertainties, assumptions and other important factors.
Readers are cautioned not to put undue reliance on such
forward-looking statements because actual results may vary
materially from those expressed or implied. The reports filed by
the Company pursuant to United
States securities laws contain discussions of these risks
and uncertainties. The Company assumes no obligation to, and
expressly disclaims any obligation to, update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. Readers are advised to review the
Company's filings with the United States Securities and Exchange
Commission (which are available from the SEC's EDGAR database at
www.sec.gov, at various SEC reference facilities in the United States and via the Company's
website at www.idexx.com).
Contact: Ed Garber, Director,
Investor Relations, 1-207-556-8155
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SOURCE IDEXX Laboratories, Inc.