WESTBROOK, Maine, July 31, 2020 /PRNewswire/ --
- Reports revenue growth of 3% on a reported basis and 4% on
an organic basis driven by Companion Animal Group Diagnostics
recurring revenue growth of 7% reported and organic
- Revenue results supported by global "V-shaped" recovery in
the pet healthcare market
- Delivers EPS of $1.72,
representing 20% growth on a reported basis and 23% on a comparable
constant currency basis, reflecting solid revenue gains and
benefits from proactive cost controls
IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in
veterinary diagnostics, veterinary practice software and water
microbiology testing, today announced second quarter results, as
well as business and market condition updates related to the 2019
novel coronavirus (COVID-19) pandemic.
Second Quarter Results
The Company reports revenues of $638
million for the second quarter of 2020, an increase of 3% on
a reported and 4% on an organic basis. Second quarter results were
driven by Companion Animal Group ("CAG") Diagnostics recurring
revenue growth of 7% reported and organic, supported by high
single-digit organic gains in both U.S. and International markets.
Overall growth in the second quarter benefited by approximately 1%
from revenues associated with OPTI Medical Systems COVID-19 human
PCR testing. Second quarter results were moderated by declines in
new CAG instrument placement levels and Water business revenues,
including pressures in non-compliance water testing, impacted by
factors related to the COVID-19 pandemic.
Earnings per diluted share ("EPS") was $1.72 for the second quarter, reflecting benefits
from strong CAG Diagnostics recurring revenue growth and lower
operating expenses, reflecting proactive cost control efforts,
which supported 380 basis points of operating margin improvement on
a reported basis compared to prior-year levels and 410 basis points
of improvement on a constant currency basis.
"We are very pleased to report excellent second quarter
financial results, supported by a sharp, global recovery in our CAG
business and outstanding efforts by the IDEXX team to sustain high
levels of service to our customers through the COVID-19 pandemic.
These results confirm the health and resilience of the global
companion animal healthcare market, supported by the continued
deepening of the pet-owner bond," said Jay
Mazelsky, the Company's President and Chief Executive
Officer. "We are encouraged by recent market trends and confident
in our ability to effectively manage through the near-term
challenges presented by the COVID-19 pandemic, as we continue to
execute our strategy to advance the standard of care for companion
animal healthcare globally."
COVID-19 Pandemic Update
The primary impacts of the COVID-19 pandemic have been seen in
IDEXX's CAG business. While veterinary care is widely recognized as
an "essential" service, stay-at-home policies deployed to combat
the spread of COVID-19 constrained visits to veterinary practices
significantly in late March through early April, pressuring
diagnostic testing volumes. Restrictions on sales professionals'
access to veterinary clinics also contributed to deferrals on new
CAG instrument placements.
As stay-at-home policies were relaxed, there was significant
improvement in clinical visit activity which accelerated through
the second quarter. Weekly U.S. companion animal practice data,
available in the Q2 2020 Earnings Snapshot accessible on the
IDEXX website, www.idexx.com/investors, show improvement in same
store clinical visit trends since mid-April. Same store clinical
visit growth was 7% in June, supported by high growth in wellness
visits. Solid same store clinical visit gains have continued in
July, reflected in 6% same store clinical visit growth for the
three-week period ended July 17.
Companion animal market improvement trends globally have
supported a strong recovery in demand for CAG diagnostic products
and services. Global CAG Diagnostics recurring revenues which
declined ~16% in April, increased ~8% in May and grew ~30% in June,
in part supported by pent-up demand for diagnostic
testing.
While these trends are encouraging, potential effects related to
ongoing COVID-19 case management efforts are challenging to predict
and may pressure future revenues should enhanced social distancing
policies and higher infection rates impact veterinary clinic
operations in certain regions.
In addition to impacts on IDEXX's CAG business, the Company has
also seen pressure on Water testing volumes. There was some
disruption to compliance Water testing early in the second quarter
related to business lockdown effects, as well as beach and pool
closures. In addition, approximately 20% of our Water revenues are
related to non-compliance testing, which has seen declines related
to reduced overall business activity and prioritization of
laboratory spending. We anticipate that near-to-moderate-term
demand for non-compliance testing will continue to be impacted by
pandemic and related economic pressures.
In managing IDEXX businesses, the Company continues to provide
high levels of service delivery and product support for customers
during this time and maintains high health and safety standards to
protect its employees and ensure business continuity. In an effort
to continue to protect the health and safety of our workforce and
their families and communities, the majority of IDEXX employees
continue to work remotely and travel remains highly restricted. In
this context, the Company has introduced new employee benefits to
support remote workers. Given improved market and business trends,
the Company has discontinued temporary reductions in employee
salaries and benefits and Board of Directors compensation.
Due to the continued uncertainty around the scope and duration
of the pandemic and the timing of a global recovery, the Company is
unable, at this time, to reliably estimate the future impact on
business operations and financial results.
Second Quarter Performance Highlights
Companion Animal Group
The Companion Animal Group generated 3% reported and 4% organic
revenue growth for the quarter, supported by CAG Diagnostics
recurring revenue growth of 7% on a reported and organic basis.
Growth across IDEXX's major modalities improved through the second
quarter, reflecting the broader market recovery for clinical visits
and related diagnostic products and services. Overall CAG
revenue growth was constrained by new instrument placement
declines, resulting from continued restrictions on access to some
veterinary practices and deferral of purchasing decisions. Despite
these impacts, IDEXX's premium instrument installed base expanded
14% compared to the prior year, supported by high customer
retention levels.
- IDEXX VetLab® consumables generated 12% reported and 13%
organic revenue growth, supported by ongoing expansion of our
global premium instrument installed base, continued strong customer
retention, increases in testing utilization and moderate net price
gains.
- Reference laboratory diagnostic and consulting services
generated 7% reported and 6% organic revenue growth, supported by
volume gains with existing customers, moderate net price
realization and benefits from net new customer additions.
- Rapid assay products revenues declined 6% on a
reported basis and 5% on an organic basis, impacted primarily by
early quarter volume pressure related to the COVID-19 pandemic, as
well as unfavorable revenue impacts related to promotional program
timing.
Veterinary software, services and diagnostic imaging systems
revenue declined 4% on a reported and 3% on an organic basis,
supported by double-digit growth in subscription-based service
revenues, moderated by declines in new veterinary software and
diagnostic imaging systems placements.
Water
Water revenues declined 19% on a reported basis and 16% on an
organic basis for the quarter, including reductions in
non-compliance testing volumes due to restrictions in business
operations and closures related to the COVID-19 pandemic, and the
unfavorable impact from the reversal of accelerated customer
stocking orders related to the COVID-19 pandemic in the first
quarter of approximately $2 million
which reduced revenue growth by 7%.
Livestock, Poultry and Dairy ("LPD")
LPD revenues declined 3% on a reported basis and increased by 2%
on an organic basis for the second quarter, including the
unfavorable impact from the reversal of accelerated customer
stocking orders related to the COVID-19 pandemic in the first
quarter of approximately $2.5 million
which reduced revenue growth by 8%. LPD results were supported by
improvements in core swine testing volumes, continued benefits from
new African Swine Fever diagnostic testing programs in Asia, and growth in poultry testing. These
gains were constrained by lower herd health screening levels,
compared to strong prior-year results.
Gross Profit and Operating Profit
Gross profits increased 6% on a reported basis and 8% on a
constant currency basis. Gross margin of 59.5% increased 180 basis
points compared to prior-year period results on a reported basis
and 210 basis points on a constant currency basis. Gross margin
results reflected favorable mix from strong consumable revenue and
lower instrument revenue, reference laboratory cost controls and
productivity improvement, as well as net benefits from moderate
price gains.
Operating margin was 30.3% in the quarter, 380 basis points
higher than the prior-year period results on a reported basis and
410 basis points higher on a constant currency basis, supported by
operating expense leverage on stronger than expected revenue
growth. Operating expenses declined 4% on a reported and 2% on a
constant currency basis, driven by disciplined cost management to
mitigate potential impacts from the COVID-19 pandemic and lower
health benefit costs from delayed employee healthcare visits.
Operating expenses included an estimated $13
million in benefit from temporary salary and employee
benefit reductions that have now been discontinued. The Company
plans to advance prioritized investments in support of its growth
strategy in the second half of 2020, while maintaining a prudent
approach to overall cost management.
2020 Financial Outlook
The Company is maintaining suspension of full-year 2020 guidance
due to the unpredictability of potential future impacts from the
COVID-19 pandemic.
Conference Call and Webcast Information
IDEXX Laboratories, Inc. will be hosting a conference call today
at 8:30 a.m. (EDT) to discuss its
second quarter 2020 results and management's outlook. To
participate in the conference call, dial 1-888- 771-4371 or
1-847-585-4405 and reference confirmation number 49844277.
Individuals can access a live webcast of the conference call
through a link on the IDEXX website, www.idexx.com/investors.
An archived edition of the webcast will be available after
1:00 p.m. (EDT) on that day via the
same link and will remain available for one year.
2020 Virtual Investor Day
IDEXX Laboratories, Inc. will host its 2020 virtual Investor Day
on Thursday, August 13, 2020 from
10:00 am to 12:00 pm (EDT). A live
audio webcast and accompanying slide presentations will be
available at www.idexx.com/investors. An archived webcast replay of
the event will be available approximately one hour following the
event at www.idexx.com/investors.
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 and
point-of-care and laboratory diagnostics for human medicine.
Headquartered in Maine, IDEXX
employs more than 9,000 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 "Second Quarter
Results," "COVID-19 Pandemic Update" and "Gross Profit and
Operating Profit" 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, among other things, the impact of
the COVID-19 pandemic and the Company's planned future investments
and cost-management approach. These statements are intended to
provide management's expectation of future events as of the date of
this earnings release; are based on management's estimates,
projections, beliefs and assumptions as of the date of this
earnings release; and are not guarantees of future performance.
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. These risks and uncertainties include, among other
things, the adverse impact, and the duration, of the effects of the
ongoing COVID-19 pandemic on our business, results of operations,
liquidity, financial condition and stock price, as well as the
other matters described under the headings "Business," "Risk
Factors," "Legal Proceedings," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
"Quantitative and Qualitative Disclosures About Market Risk" in the
Company's Annual Report on Form 10-K for the year ended
December 31, 2019 and in the
corresponding sections of the Company's Quarterly Reports on Form
10-Q for the quarters ended March 31,
2020 and June 30, 2020, as
well as those described from time to time in the Company's other
filings with the U.S. Securities and Exchange Commission available
at www.sec.gov. The Company specifically disclaims any obligation
to publicly update any forward-looking statement, whether as a
result of new information, future events or otherwise.
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 impacted second quarter 2020 results as follows:
decreased gross profit growth by approximately 2%, decreased gross
profit margin growth by 30 basis points, decreased operating
expense growth by 2%, decreased operating profit growth by 2%,
decreased operating profit margin growth by 30 basis points, and
decreased EPS growth by 3%. Estimated currency changes also
decreased first half 2020 EPS growth by 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 ended
June 30, 2020.
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 certain
business acquisitions. 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, 2020. The percentage change in
revenue resulting from acquisitions represents incremental revenues
attributable to business acquisitions that have occurred since the
beginning of the prior-year period. We exclude only acquisitions
that are considered to be a business from organic revenue growth.
For more detail on what acquisitions we consider to be a business
in computing organic growth, please see Management's Discussion and
Analysis of Financial Conditions and Results of Operations,
Non-GAAP Financial Measures, contained in the Company's Quarterly
Report on Form 10-Q for the quarter ended June 30, 2020.
Comparable constant currency EPS growth - Comparable
constant currency EPS growth is a non-GAAP financial measure that
excludes the impact of changes in foreign currency exchange rates
and the tax benefits of share-based compensation activity under ASU
2016-09 and non-recurring or unusual items (if any). Management
believes comparable constant currency EPS growth is a more useful
way to measure the Company's business performance than EPS growth
because it enables better period-over-period comparisons of the
fundamental financial results by excluding items that vary
independent of performance and provides greater transparency to
investors regarding a key metric used by management. Share-based
compensation tax benefits increased second quarter 2020 EPS by
$0.06 per share, first half 2020 EPS
by $0.13 per share, second quarter
2019 EPS by $0.06 per share, and
first half 2019 EPS by $0.12 per
share. These impacts and those described in the constant currency
note above reconcile reported EPS growth to comparable constant
currency EPS growth for the second quarter and first half of
2020.
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, 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,
2020 and 2019.
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, non-recurring
transaction expenses incurred in connection with acquisitions,
share-based compensation expense, and certain other non-cash losses
and charges. Management believes that reporting Adjusted
EBITDA, gross debt and net debt in the Debt to Adjusted EBITDA
ratios provides supplemental analysis to help investors further
evaluate the Company's business performance and available borrowing
capacity under the Company's credit facility. For further
information on how Adjusted EBITDA and the Debt to Adjusted EBITDA
ratios are calculated, see the Company's Quarterly Report on Form
10-Q for the quarter ended June 30,
2020.
Contact: John Ravis, 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
|
|
Six Months
Ended
|
|
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue:
|
|
Revenue
|
|
$637,592
|
|
|
$620,103
|
|
|
$1,263,928
|
|
|
$1,196,159
|
|
Expenses and
Income:
|
|
Cost of
revenue
|
|
258,250
|
|
|
262,250
|
|
|
524,996
|
|
|
506,709
|
|
|
|
Gross
profit
|
|
379,342
|
|
|
357,853
|
|
|
738,932
|
|
|
689,450
|
|
|
|
Sales and
marketing
|
|
94,181
|
|
|
101,364
|
|
|
210,324
|
|
|
207,948
|
|
|
|
General and
administrative
|
|
60,268
|
|
|
59,955
|
|
|
126,080
|
|
|
120,316
|
|
|
|
Research and
development
|
|
31,645
|
|
|
32,259
|
|
|
64,955
|
|
|
63,773
|
|
|
|
Income from
operations
|
|
193,248
|
|
|
164,275
|
|
|
337,573
|
|
|
297,413
|
|
|
|
Interest expense,
net
|
|
(9,426)
|
|
|
(8,153)
|
|
|
(16,978)
|
|
|
(16,499)
|
|
|
|
Income before
provision for income taxes
|
|
183,822
|
|
|
156,122
|
|
|
320,595
|
|
|
280,914
|
|
|
|
Provision for income
taxes
|
|
34,826
|
|
|
30,421
|
|
|
59,743
|
|
|
52,504
|
|
Net
Income:
|
|
Net income
|
|
148,996
|
|
|
125,701
|
|
|
260,852
|
|
|
228,410
|
|
|
|
Less: Noncontrolling
interest in subsidiary's earnings
|
|
56
|
|
|
(5)
|
|
|
85
|
|
|
23
|
|
|
|
Net income
attributable to stockholders
|
|
$148,940
|
|
|
$125,706
|
|
|
$260,767
|
|
|
$228,387
|
|
|
|
Earnings per share:
Basic
|
|
$1.75
|
|
|
$1.46
|
|
|
$3.06
|
|
|
$2.65
|
|
|
|
Earnings per share:
Diluted
|
|
$1.72
|
|
|
$1.43
|
|
|
$3.01
|
|
|
$2.61
|
|
|
|
Shares outstanding:
Basic
|
|
85,134
|
|
|
86,215
|
|
|
85,282
|
|
|
86,210
|
|
|
|
Shares outstanding:
Diluted
|
|
86,402
|
|
|
87,615
|
|
|
86,568
|
|
|
87,594
|
|
|
|
|
|
|
|
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Selected Operating
Information (Unaudited)
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
|
|
|
|
|
Operating
Ratios
|
|
Gross
profit
|
|
59.5
|
%
|
|
57.7
|
%
|
|
58.5
|
%
|
|
57.6
|
%
|
(as a percentage
of revenue):
|
|
Sales, marketing,
general and administrative expense
|
|
24.2
|
%
|
|
26.0
|
%
|
|
26.6
|
%
|
|
27.4
|
%
|
|
|
Research and
development expense
|
|
5.0
|
%
|
|
5.2
|
%
|
|
5.1
|
%
|
|
5.3
|
%
|
|
|
Income from
operations1
|
|
30.3
|
%
|
|
26.5
|
%
|
|
26.7
|
%
|
|
24.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
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,
2020
|
Percent of
Revenue
|
June 30,
2019
|
|
Percent of
Revenue
|
|
|
|
|
|
|
Revenue:
|
|
CAG
|
|
$566,100
|
|
|
|
$547,349
|
|
|
|
|
Water
|
|
28,116
|
|
|
|
34,764
|
|
|
|
|
LPD
|
|
32,244
|
|
|
|
33,104
|
|
|
|
|
Other
|
|
11,132
|
|
|
|
4,886
|
|
|
|
|
Total
|
|
$637,592
|
|
|
|
$620,103
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit1:
|
|
CAG
|
|
$334,467
|
|
59.1
|
%
|
|
$311,295
|
|
56.9
|
%
|
|
|
Water
|
|
19,678
|
|
70.0
|
%
|
|
24,861
|
|
71.5
|
%
|
|
|
LPD
|
|
18,839
|
|
58.4
|
%
|
|
19,679
|
|
59.4
|
%
|
|
|
Other
|
|
6,358
|
|
57.1
|
%
|
|
2,018
|
|
41.3
|
%
|
|
|
Total
|
|
$379,342
|
|
59.5
|
%
|
|
$357,853
|
|
57.7
|
%
|
|
|
|
|
|
|
|
|
|
Income from
Operations1:
|
|
CAG
|
|
$167,969
|
|
29.7
|
%
|
|
$141,190
|
|
25.8
|
%
|
|
|
Water
|
|
12,258
|
|
43.6
|
%
|
|
16,722
|
|
48.1
|
%
|
|
|
LPD
|
|
8,249
|
|
25.6
|
%
|
|
6,568
|
|
19.8
|
%
|
|
|
Other
|
|
4,772
|
|
42.9
|
%
|
|
(205)
|
|
(4.2)
|
%
|
|
|
Total
|
|
$193,248
|
|
30.3
|
%
|
|
$164,275
|
|
26.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2020
|
Percent of
Revenue
|
|
June 30,
2019
|
Percent of
Revenue
|
|
|
|
|
|
Revenue:
|
|
CAG
|
|
$1,118,096
|
|
|
|
$1,056,267
|
|
|
|
|
Water
|
|
62,265
|
|
|
|
65,074
|
|
|
|
|
LPD
|
|
66,398
|
|
|
|
64,610
|
|
|
|
|
Other
|
|
17,169
|
|
|
|
10,208
|
|
|
|
|
Total
|
|
$1,263,928
|
|
|
|
$1,196,159
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit1:
|
|
CAG
|
|
$643,810
|
|
57.6
|
%
|
|
$598,965
|
|
56.7
|
%
|
|
|
Water
|
|
44,427
|
|
71.4
|
%
|
|
47,008
|
|
72.2
|
%
|
|
|
LPD
|
|
41,151
|
|
62.0
|
%
|
|
38,728
|
|
59.9
|
%
|
|
|
Other
|
|
9,544
|
|
55.6
|
%
|
|
4,749
|
|
46.5
|
%
|
|
|
Total
|
|
$738,932
|
|
58.5
|
%
|
|
$689,450
|
|
57.6
|
%
|
|
|
|
|
|
|
|
|
|
Income from
Operations1:
|
|
CAG
|
|
$286,628
|
|
25.6
|
%
|
|
$252,909
|
|
23.9
|
%
|
|
|
Water
|
|
28,140
|
|
45.2
|
%
|
|
30,537
|
|
46.9
|
%
|
|
|
LPD
|
|
17,912
|
|
27.0
|
%
|
|
12,857
|
|
19.9
|
%
|
|
|
Other
|
|
4,893
|
|
28.5
|
%
|
|
1,110
|
|
10.9
|
%
|
|
|
Total
|
|
$337,573
|
|
26.7
|
%
|
|
$297,413
|
|
24.9
|
%
|
|
1 Effective January 1, 2020, we
modified our management reporting to the Chief Operating Decision
Maker to provide a more comprehensive view of the performance of
our operating segments by including costs that were previously not
allocated to our segments. Prior to January 1, 2020, certain costs
were not allocated to our operating segments and were instead
reported under the caption "Unallocated Amounts". These costs
included costs primarily consisting of our R&D
function, regional or country expenses and unusual items.
Corporate support function costs (such as information technology,
facilities, human resources, finance and legal), health benefits
and incentive compensation were charged to our business segments at
pre-determined budgeted amounts or rates. Beginning January 1,
2020, the segments will reflect these actual costs allocated to the
segment based on various allocation methods, including revenue and
headcount. Foreign exchange losses on settlements of foreign
currency denominated transactions are not allocated to our
operating segments and are instead reported under our Other
reporting segment.
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Dollar
Change
|
|
Reported
Revenue
Growth1
|
|
Percentage
Change
from Currency
|
|
Percentage
Change from
Acquisitions
|
|
Organic
Revenue
Growth1
|
Net
Revenue
|
|
|
|
|
|
|
|
CAG
|
|
$566,100
|
|
|
$547,349
|
|
|
$18,751
|
|
|
3.4
|
%
|
|
(1.0)
|
%
|
|
0.7
|
%
|
|
3.8
|
%
|
United
States
|
|
387,113
|
|
|
367,031
|
|
|
20,082
|
|
|
5.5
|
%
|
|
—
|
|
|
1.0
|
%
|
|
4.5
|
%
|
International
|
|
178,987
|
|
|
180,318
|
|
|
(1,331)
|
|
|
(0.7)
|
%
|
|
(3.1)
|
%
|
|
—
|
|
|
2.3
|
%
|
Water
|
|
28,116
|
|
|
34,764
|
|
|
(6,648)
|
|
|
(19.1)
|
%
|
|
(3.0)
|
%
|
|
—
|
|
|
(16.2)
|
%
|
United
States
|
|
13,935
|
|
|
16,759
|
|
|
(2,824)
|
|
|
(16.8)
|
%
|
|
—
|
|
|
—
|
|
|
(16.8)
|
%
|
International
|
|
14,181
|
|
|
18,005
|
|
|
(3,824)
|
|
|
(21.2)
|
%
|
|
(5.8)
|
%
|
|
—
|
|
|
(15.5)
|
%
|
LPD
|
|
32,244
|
|
|
33,104
|
|
|
(860)
|
|
|
(2.6)
|
%
|
|
(4.3)
|
%
|
|
—
|
|
|
1.7
|
%
|
United
States
|
|
3,242
|
|
|
3,309
|
|
|
(67)
|
|
|
(2.0)
|
%
|
|
—
|
|
|
—
|
|
|
(2.0)
|
%
|
International
|
|
29,002
|
|
|
29,795
|
|
|
(793)
|
|
|
(2.6)
|
%
|
|
(4.8)
|
%
|
|
—
|
|
|
2.2
|
%
|
Other
|
|
11,132
|
|
|
4,886
|
|
|
6,246
|
|
|
127.8
|
%
|
|
—
|
|
|
—
|
|
|
127.8
|
%
|
Total
Company
|
|
$637,592
|
|
|
$620,103
|
|
|
$17,489
|
|
|
2.8
|
%
|
|
(1.3)
|
%
|
|
0.6
|
%
|
|
3.6
|
%
|
United
States
|
|
405,998
|
|
|
388,875
|
|
|
17,123
|
|
|
4.4
|
%
|
|
—
|
|
|
0.9
|
%
|
|
3.5
|
%
|
International
|
|
231,594
|
|
|
231,228
|
|
|
366
|
|
|
0.2
|
%
|
|
(3.6)
|
%
|
|
—
|
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Dollar
Change
|
|
Reported
Revenue
Growth1
|
|
Percentage
Change
from Currency
|
|
Percentage
Change from
Acquisitions
|
|
Organic
Revenue
Growth1
|
Net CAG
Revenue
|
|
|
|
|
|
|
|
CAG Diagnostics
recurring revenue:
|
|
$510,254
|
|
|
$477,431
|
|
|
$32,823
|
|
|
6.9
|
%
|
|
(1.1)
|
%
|
|
0.8
|
%
|
|
7.2
|
%
|
IDEXX VetLab
consumables
|
|
196,061
|
|
|
175,159
|
|
|
20,902
|
|
|
11.9
|
%
|
|
(1.6)
|
%
|
|
—
|
|
|
13.5
|
%
|
Rapid assay
products
|
|
64,658
|
|
|
68,605
|
|
|
(3,947)
|
|
|
(5.8)
|
%
|
|
(0.6)
|
%
|
|
—
|
|
|
(5.1)
|
%
|
Reference
laboratory diagnostic and consulting services
|
|
228,816
|
|
|
213,892
|
|
|
14,924
|
|
|
7.0
|
%
|
|
(0.8)
|
%
|
|
1.7
|
%
|
|
6.1
|
%
|
CAG Diagnostics
services and accessories
|
|
20,719
|
|
|
19,775
|
|
|
944
|
|
|
4.8
|
%
|
|
(1.3)
|
%
|
|
—
|
|
|
6.1
|
%
|
CAG Diagnostics
capital – instruments
|
|
18,871
|
|
|
31,526
|
|
|
(12,655)
|
|
|
(40.1)
|
%
|
|
(1.0)
|
%
|
|
—
|
|
|
(39.1)
|
%
|
Veterinary software,
services and diagnostic imaging systems
|
|
36,975
|
|
|
38,392
|
|
|
(1,417)
|
|
|
(3.7)
|
%
|
|
(0.3)
|
%
|
|
—
|
|
|
(3.4)
|
%
|
Net CAG
revenue
|
|
$566,100
|
|
|
$547,349
|
|
|
$18,751
|
|
|
3.4
|
%
|
|
(1.0)
|
%
|
|
0.7
|
%
|
|
3.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1See
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)
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Dollar
Change
|
|
Reported
Revenue
Growth1
|
|
Percentage
Change from Currency
|
|
Percentage
Change from
Acquisitions
|
|
Organic
Revenue
Growth1
|
Net
Revenue
|
|
|
|
|
|
|
|
CAG
|
|
$1,118,096
|
|
|
$1,056,267
|
|
|
$61,829
|
|
|
5.9
|
%
|
|
(1.0)
|
%
|
|
0.7
|
%
|
|
6.1
|
%
|
United
States
|
|
760,388
|
|
|
704,905
|
|
|
55,483
|
|
|
7.9
|
%
|
|
—
|
|
|
1.1
|
%
|
|
6.8
|
%
|
International
|
|
357,708
|
|
|
351,362
|
|
|
6,346
|
|
|
1.8
|
%
|
|
(2.9)
|
%
|
|
—
|
|
|
4.7
|
%
|
Water
|
|
62,265
|
|
|
65,074
|
|
|
(2,809)
|
|
|
(4.3)
|
%
|
|
(3.0)
|
%
|
|
—
|
|
|
(1.4)
|
%
|
United
States
|
|
30,876
|
|
|
31,363
|
|
|
(487)
|
|
|
(1.6)
|
%
|
|
—
|
|
|
—
|
|
|
(1.6)
|
%
|
International
|
|
31,389
|
|
|
33,711
|
|
|
(2,322)
|
|
|
(6.9)
|
%
|
|
(5.7)
|
%
|
|
—
|
|
|
(1.2)
|
%
|
LPD
|
|
66,398
|
|
|
64,610
|
|
|
1,788
|
|
|
2.8
|
%
|
|
(4.0)
|
%
|
|
—
|
|
|
6.8
|
%
|
United
States
|
|
7,019
|
|
|
6,572
|
|
|
447
|
|
|
6.8
|
%
|
|
—
|
|
|
—
|
|
|
6.8
|
%
|
International
|
|
59,379
|
|
|
58,038
|
|
|
1,341
|
|
|
2.3
|
%
|
|
(4.4)
|
%
|
|
—
|
|
|
6.8
|
%
|
Other
|
|
17,169
|
|
|
10,208
|
|
|
6,961
|
|
|
68.2
|
%
|
|
—
|
|
|
—
|
|
|
68.2
|
%
|
Total
Company
|
|
$1,263,928
|
|
|
$1,196,159
|
|
|
$67,769
|
|
|
5.7
|
%
|
|
(1.2)
|
%
|
|
0.6
|
%
|
|
6.3
|
%
|
United
States
|
|
802,781
|
|
|
747,163
|
|
|
55,618
|
|
|
7.4
|
%
|
|
—
|
|
|
1.0
|
%
|
|
6.4
|
%
|
International
|
|
461,147
|
|
|
448,996
|
|
|
12,151
|
|
|
2.7
|
%
|
|
(3.3)
|
%
|
|
—
|
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
Dollar
Change
|
|
Reported
Revenue
Growth1
|
|
Percentage
Change from
Currency
|
|
Percentage
Change from
Acquisitions
|
|
Organic
Revenue
Growth1
|
Net CAG
Revenue
|
|
|
|
|
|
|
|
CAG Diagnostics
recurring revenue:
|
|
$998,179
|
|
|
$921,222
|
|
|
$76,957
|
|
|
8.4
|
%
|
|
(1.0)
|
%
|
|
0.8
|
%
|
|
8.5
|
%
|
IDEXX VetLab
consumables
|
|
384,774
|
|
|
342,370
|
|
|
42,404
|
|
|
12.4
|
%
|
|
(1.4)
|
%
|
|
—
|
|
|
13.8
|
%
|
Rapid assay
products
|
|
122,088
|
|
|
123,036
|
|
|
(948)
|
|
|
(0.8)
|
%
|
|
(0.6)
|
%
|
|
—
|
|
|
(0.2)
|
%
|
Reference
laboratory diagnostic and consulting services
|
|
449,077
|
|
|
416,550
|
|
|
32,527
|
|
|
7.8
|
%
|
|
(0.8)
|
%
|
|
1.8
|
%
|
|
6.8
|
%
|
CAG Diagnostics
services and accessories
|
|
42,240
|
|
|
39,266
|
|
|
2,974
|
|
|
7.6
|
%
|
|
(1.4)
|
%
|
|
—
|
|
|
9.0
|
%
|
CAG Diagnostics
capital – instruments
|
|
42,704
|
|
|
60,275
|
|
|
(17,571)
|
|
|
(29.2)
|
%
|
|
(1.1)
|
%
|
|
—
|
|
|
(28.0)
|
%
|
Veterinary software,
services and diagnostic imaging systems
|
|
77,213
|
|
|
74,770
|
|
|
2,443
|
|
|
3.3
|
%
|
|
(0.3)
|
%
|
|
—
|
|
|
3.5
|
%
|
Net CAG
revenue
|
|
$1,118,096
|
|
|
$1,056,267
|
|
|
$61,829
|
|
|
5.9
|
%
|
|
(1.0)
|
%
|
|
0.7
|
%
|
|
6.1
|
%
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1See
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)
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
|
|
|
|
Assets:
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$105,293
|
|
|
$90,326
|
|
|
|
Accounts receivable,
net
|
|
320,320
|
|
|
269,312
|
|
|
|
Inventories
|
|
229,377
|
|
|
195,019
|
|
|
|
Other current
assets
|
|
124,622
|
|
|
124,982
|
|
|
|
Total current
assets
|
|
779,612
|
|
|
679,639
|
|
|
|
Property and
equipment, net
|
|
550,895
|
|
|
533,845
|
|
|
|
Other long-term
assets, net
|
|
630,206
|
|
|
618,991
|
|
|
|
Total
assets
|
|
$1,960,713
|
|
|
$1,832,475
|
|
Liabilities and
Stockholders'
|
|
|
|
|
|
|
Equity:
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$73,903
|
|
|
$72,172
|
|
|
|
Accrued
liabilities
|
|
308,768
|
|
|
322,938
|
|
|
|
Line of
credit
|
|
121,596
|
|
|
288,765
|
|
|
|
Deferred
revenue
|
|
36,317
|
|
|
41,462
|
|
|
|
Total current
liabilities
|
|
540,584
|
|
|
725,337
|
|
|
|
Long-term
debt
|
|
899,562
|
|
|
698,910
|
|
|
|
Other long-term
liabilities, net
|
|
247,167
|
|
|
230,403
|
|
|
|
Total long-term
liabilities
|
|
1,146,729
|
|
|
929,313
|
|
|
|
Total stockholders'
equity
|
|
272,963
|
|
|
177,473
|
|
|
|
Noncontrolling
interest
|
|
437
|
|
|
352
|
|
|
|
Total
stockholders' equity
|
|
273,400
|
|
|
177,825
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$1,960,713
|
|
|
$1,832,475
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Select Balance Sheet
Information (Unaudited)
|
|
|
|
|
June 30,
2020
|
|
March 31,
2020
|
|
December 31,
2019
|
|
September
30, 2019
|
|
June 30,
2019
|
Selected Balance
Sheet Information:
|
|
Days sales
outstanding1
|
|
44.4
|
|
|
41.5
|
|
|
40.5
|
|
|
41.8
|
|
|
41.7
|
|
|
|
Inventory
turns2
|
|
1.6
|
|
|
1.9
|
|
|
2.2
|
|
|
2.0
|
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 revenue for the
twelve months preceding each quarter-end divided by the average
inventory balances at the beginning and end of each
quarter.
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Condensed
Consolidated Statement of Cash Flows
|
Amounts in
thousands (Unaudited)
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
|
|
|
|
Operating:
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
Net income
|
|
$260,852
|
|
|
$228,410
|
|
|
|
Non-cash
charges
|
|
70,576
|
|
|
60,381
|
|
|
|
Changes in assets and
liabilities
|
|
(95,415)
|
|
|
(117,311)
|
|
|
|
Net cash provided by
operating activities
|
|
236,013
|
|
|
171,480
|
|
Investing:
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(73,558)
|
|
|
(71,987)
|
|
|
|
Acquisition of
intangible assets and business
|
|
(668)
|
|
|
(304)
|
|
|
|
Net cash used by
investing activities
|
|
(74,226)
|
|
|
(72,291)
|
|
Financing:
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
Repayments on
revolving credit facilities, net
|
|
(167,692)
|
|
|
(147,519)
|
|
|
|
Issuance of senior
notes
|
|
200,000
|
|
|
100,000
|
|
|
|
Debt issuance
costs
|
|
(4,988)
|
|
|
(142)
|
|
|
|
Payment of
acquisition-related contingent consideration
|
|
(1,080)
|
|
|
(1,695)
|
|
|
|
Repurchases of common
stock
|
|
(182,815)
|
|
|
(74,994)
|
|
|
|
Proceeds from
exercises of stock options and employee stock purchase
plans
|
|
20,613
|
|
|
19,653
|
|
|
|
Shares withheld for
statutory tax withholding on restricted stock
|
|
(8,668)
|
|
|
(7,572)
|
|
|
|
Net cash used by
financing activities
|
|
(144,630)
|
|
|
(112,269)
|
|
|
|
Net effect of changes
in exchange rates on cash
|
|
(2,190)
|
|
|
131
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
14,967
|
|
|
(12,949)
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
90,326
|
|
|
123,794
|
|
|
|
Cash and cash
equivalents, end of period
|
|
$105,293
|
|
|
$110,845
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Free Cash
Flow
|
Amounts in
thousands except per share data (Unaudited)
|
|
|
|
|
Six Months
Ended
|
|
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
|
|
|
|
Free Cash
Flow:
|
|
Net cash provided by
operating activities
|
|
$236,013
|
|
|
$171,480
|
|
|
|
Investing cash flows
attributable to purchases of property and equipment
|
|
(73,558)
|
|
|
(71,987)
|
|
|
|
Free cash
flow1
|
|
$162,455
|
|
|
$99,493
|
|
|
|
|
|
|
|
|
1See
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
|
|
Six Months
Ended
|
|
|
June 30,
2020
|
|
June 30,
2019
|
|
June 30,
2020
|
|
June 30,
2019
|
|
|
|
|
Shares repurchased in
the open market
|
|
—
|
|
|
86
|
|
|
721
|
|
|
353
|
|
Shares acquired
through employee surrender for statutory tax withholding
|
|
—
|
|
|
1
|
|
|
30
|
|
|
37
|
|
Total shares
repurchased
|
|
—
|
|
|
87
|
|
|
751
|
|
|
390
|
|
|
|
|
|
|
|
|
|
|
Cost of shares
repurchased in the open market
|
|
$—
|
|
|
$20,285
|
|
|
$179,623
|
|
|
$74,147
|
|
Cost of shares for
employee surrenders
|
|
65
|
|
|
169
|
|
|
8,669
|
|
|
7,572
|
|
Total cost of
shares
|
|
$65
|
|
|
$20,454
|
|
|
$188,292
|
|
|
$81,719
|
|
|
|
|
|
|
|
|
|
|
Average cost per
share – open market repurchases
|
|
$—
|
|
|
$235.94
|
|
|
$249.20
|
|
|
$209.81
|
|
Average cost per
share – employee surrenders
|
|
$312.19
|
|
|
$249.77
|
|
|
$288.94
|
|
|
$207.16
|
|
Average cost per
share – total
|
|
$312.19
|
|
|
$236.04
|
|
|
$250.79
|
|
|
$209.56
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/idexx-laboratories-announces-second-quarter-results-301103564.html
SOURCE IDEXX Laboratories, Inc.