WESTBROOK, Maine, Oct. 29, 2020 /PRNewswire/ --
- Achieves revenue growth of 19% on a reported basis and 18%
on an organic basis driven by Companion Animal Group Diagnostics
recurring revenue growth of 23% reported and 21% organic
- High revenue growth supported by sustained strong global
recovery in the pet healthcare market
- Delivers EPS of $1.69,
representing 36% growth on a reported basis and 47% on a comparable
constant currency basis, reflecting benefits from high CAG
Diagnostics recurring revenue gains and proactive cost
controls
IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in
veterinary diagnostics, veterinary practice software and water
microbiology testing, today announced third quarter results, as
well as business and market condition updates related to the 2019
novel coronavirus (COVID-19) pandemic.
Third Quarter Results
The Company reports revenues of $722
million for the third quarter of 2020, an increase of 19% on
a reported and 18% on an organic basis. Third quarter results were
driven by Companion Animal Group ("CAG") Diagnostics recurring
revenue growth of 23% reported and 21% organic, supported by
similarly high organic gains in both U.S. and International
markets, as well as revenue growth of 18% in the Livestock, Poultry
and Dairy ("LPD") business. Third quarter growth
benefited by approximately 1% from revenues associated with OPTI
Medical Systems COVID-19 human PCR testing. Third quarter results
were moderated by constrained new CAG instrument placement levels
and lower Water business revenues, reflecting pressures on
non-compliance water testing, impacted by factors related to the
COVID-19 pandemic.
Earnings per diluted share ("EPS") was $1.69 for the third quarter, representing 36%
growth on a reported basis and 47% growth on a comparable constant
currency basis, which excludes $0.24
per share impact from an ongoing litigation matter involving a
royalty claim under an expired patent license agreement and tax
benefits from share-based compensation of $0.18 per share. Comparable constant currency
growth measures are non-GAAP financial measures and have been
modified to exclude the related operating expense impact of
$27.5 million, in addition to
share-based compensation tax benefits, as described in our
footnotes. EPS results reflected benefits from strong CAG
Diagnostics recurring revenue growth, which supported gross margin
gains and operating expense leverage, augmented by proactive cost
control efforts. Overall operating margins improved 70 basis points
on a reported basis compared to prior year levels and 470 basis
points on a comparable constant currency basis.
"We are very pleased to report excellent third quarter financial
results, which reflect impressive global growth in our CAG business
and outstanding efforts by the IDEXX team to support the needs of
our customers during a dynamic global pandemic environment," said
Jay Mazelsky, the Company's
President and Chief Executive Officer. "We are very encouraged by
the sustained strong recovery in pet healthcare, which reinforces
our optimism in the long-term growth potential for our companion
animal diagnostics business and positions us well to deliver
continued strong financial results."
Market Trend and COVID-19 Pandemic Impact Update
Companion animal healthcare markets continued to build on the
sharp V-shaped recovery seen in the second quarter globally. U.S.
veterinary practices have experienced strong clinical demand
benefiting from continued solid non-wellness visit growth,
incremental growth from postponed wellness visits and an increase
in new patient visits. In the U.S., same-store clinical visit
growth sustained at 6% within the third quarter, supported by 3%
growth in non-wellness visits and 11% growth in wellness visits,
benefiting from pent-up demand. Revenue growth at veterinary
practices is also benefiting from higher growth in services,
including an increasing utilization of diagnostics, which supported
11% growth in same-store practice revenue in the U.S. in the third
quarter. Solid same-store clinical visit gains have continued in
October, reflected in 5% same-store clinical visit growth for the
two-week period ended October 16.
U.S. companion animal practice weekly key metrics are available in
the Q3 2020 Earnings Snapshot accessible on the IDEXX
website, www.idexx.com/investors.
Strong global companion animal market trends have supported
exceptional demand for CAG diagnostic products and services. Global
CAG Diagnostics recurring revenues sustained their growth at high
levels through the third quarter reflected in greater than 20%
growth early in the quarter and growth closer to 20% in the later
part of the quarter, benefiting in part from pent-up demand for
wellness diagnostic testing in the U.S..
These trends are encouraging and reflect the resilience of the
pet healthcare market. 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 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 continues to be limited.
Third Quarter Performance Highlights
Companion Animal Group
The Companion Animal Group generated 20% reported and 18%
organic revenue growth for the quarter, supported by CAG
Diagnostics recurring revenue growth of 23% on a reported and
21% on an organic basis. Growth was similarly high across
IDEXX's major modalities in the third quarter, reflecting continued
strong growth in clinical visits and related diagnostic products
and services. Overall CAG revenue growth was constrained by
lower instrument placements, which improved relative to second
quarter trends, but continue to be impacted by COVID-19 related
restrictions on access to veterinary practices. Despite these
constraints, IDEXX achieved 3,173 premium instrument placements,
supporting a 14% expansion of IDEXX's global premium instrument
installed base.
- IDEXX VetLab® consumables generated 23% reported and 22%
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 24% reported and 21% organic revenue growth, led by
growth in U.S. markets benefiting from strong market growth
including high demand for wellness testing, as well as moderate net
price realization and benefits from net new customer
additions.
- Rapid assay products revenues grew 20% on a reported and
organic basis, led by high growth in SNAP® 4Dx® Plus sales volumes
in U.S. markets benefiting from strong overall market conditions
including high demand for wellness testing.
Veterinary software, services and diagnostic imaging systems
revenues grew 4% on a reported and organic basis, supported by
double-digit growth in subscription-based service revenues and
strong growth in new veterinary software system placements. Overall
growth was moderated by declines in diagnostic imaging systems
placements.
Water
Water revenues declined 5% on a reported basis and 4% on an
organic basis for the quarter, reflecting continued pressures in
non-compliance testing volumes impacted by the COVID-19
pandemic.
Livestock, Poultry and Dairy ("LPD")
LPD revenues grew 18% on a reported and organic basis, driven by
strong growth in the Asia Pacific
region. LPD results were supported by improvements in core swine
testing volumes, continued benefits from African Swine Fever
diagnostic testing programs in Asia, and growth in poultry testing. These
gains were moderated by lower herd health screening levels,
compared to strong prior year results.
Gross Profit and Operating Profit
Gross profits increased 23% on a reported and constant currency
basis. Gross margin of 58.5% increased 150 basis points compared to
prior year period results on a reported basis and 200 basis points
on a constant currency basis. Gross margin results reflected
reference laboratory productivity gains on high revenue growth,
favorable mix from strong consumable revenue and lower instrument
revenue, as well as benefits from moderate price gains.
Operating margin was 23.8% in the quarter, 70 basis points
higher than the prior year period results on a reported basis and
470 basis points higher on a comparable constant currency basis,
supported by operating expense leverage on stronger than expected
revenue growth. Operating expenses increased 22% on a reported
basis, reflecting the $27.5 million
accrual related to the ongoing litigation noted earlier, and
increased 9% on a comparable constant currency basis. Operating
expenses in the third quarter included a $10
million contribution to establish the IDEXX Foundation, a
donor-advised charitable fund, focused on making a positive impact
on our communities. Priorities for the IDEXX Foundation will
include supporting education in the veterinary and STEM fields,
including advancing diversity, equity and inclusion in animal
healthcare. Given the strong recovery in its core CAG business, the
Company plans to advance prioritized investments in support of its
long-term growth strategy and anticipates sustaining a relatively
higher rate of operating expense growth moving forward.
2020 and 2021 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 and is not providing preliminary 2021 guidance at
this time.
Conference Call and Webcast Information
IDEXX Laboratories, Inc. will be hosting a conference call today
at 8:30 a.m. (EDT) to discuss its
third 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 49967945. 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.
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 "Third Quarter
Results," "Market Trend and 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 operating expense growth. 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, June 30, 2020 and
September 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 third quarter 2020 results as follows:
decreased gross profit growth by approximately 0.1%, decreased
gross profit margin growth by 50 basis points, decreased operating
expense growth by 0.2%, decreased operating profit margin growth by
20 basis points, and had an immaterial impact on EPS growth.
Estimated currency changes also decreased 2020 EPS growth by 2% for
the nine months ended September 30,
2020. Constant currency revenue growth represents the
percentage change in revenue during the applicable period, as
compared to the prior year period, excluding the impact of changes
in foreign currency exchange rates. See the supplementary analysis
of results below for revenue percentage change from currency for
the three and nine months ended September
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 nine months ended September 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 September 30, 2020.
Comparable constant currency operating expense growth, operating
profit growth, and operating margin gain (or growth) -
Comparable constant currency operating expense growth, operating
profit growth, and operating profit margin gain (or growth) are
non-GAAP financial measures and exclude the impact of changes in
foreign currency exchange rates and non-recurring or unusual items
(if any). Management believes that reporting comparable constant
currency operating expense growth, operating profit growth, and
operating margin gain (or growth) provides useful information to
investors 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 key metrics used by management. Comparable
constant currency operating expense growth, operating profit
growth, and operating margin gain (or growth) should be
considered in addition to, and not as replacements of or superior
measures to, operating expense growth, operating profit growth, and
operating margin gain reported in accordance with GAAP. Comparable
constant currency operating expense growth, operating profit
growth, and operating margin gain (or growth) exclude a
$27.5 million operating expense
impact from an ongoing litigation matter involving a royalty claim
under an expired patent license agreement recorded in the third
quarter of 2020. This impact and those described in the
constant currency note above reconcile reported operating expense
growth, operating profit growth, and operating margin gain for the
third quarter of 2020 to comparable constant currency operating
expense growth, operating profit growth, and operating margin gain
(or growth) for the same period.
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 third quarter 2020 EPS by
$0.18 per share, and 2020 EPS by
$0.31 per share for the nine months
ended September 30, 2020. Comparable
constant currency EPS growth excludes a $27.5 million operating expense impact from an
ongoing litigation matter involving a royalty claim under an
expired patent license agreement recorded in the third quarter of
2020, which reduced third quarter 2020 EPS by $0.24 per share, and reduced 2020 EPS by
$0.24 per share for the nine months
ended September 30, 2019. These
impacts and those described in the constant currency note above
reconcile reported EPS growth to comparable constant currency EPS
growth for the third quarter and year-to-date through September 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 nine months ended September 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 September 30,
2020.
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
|
Condensed
Consolidated Statement of Operations
|
|
|
|
|
|
|
|
Amounts in
thousands except per share data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
Sept.
30,
|
|
Sept.
30,
|
|
Sept.
30,
|
|
Sept.
30,
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue:
|
|
Revenue
|
|
$721,789
|
|
|
$605,303
|
|
|
$1,985,717
|
|
|
$1,801,462
|
|
Expenses and
Income:
|
|
Cost of
revenue
|
|
299,183
|
|
|
260,353
|
|
|
824,179
|
|
|
767,062
|
|
|
|
Gross
profit
|
|
422,606
|
|
|
344,950
|
|
|
1,161,538
|
|
|
1,034,400
|
|
|
|
Sales and
marketing
|
|
108,202
|
|
|
104,551
|
|
|
318,526
|
|
|
312,499
|
|
|
|
General and
administrative
|
|
105,031
|
|
|
66,337
|
|
|
231,111
|
|
|
186,653
|
|
|
|
Research and
development
|
|
37,517
|
|
|
34,260
|
|
|
102,472
|
|
|
98,033
|
|
|
|
Income from
operations
|
|
171,856
|
|
|
139,802
|
|
|
509,429
|
|
|
437,215
|
|
|
|
Interest expense,
net
|
|
(7,902)
|
|
|
(7,004)
|
|
|
(24,880)
|
|
|
(23,503)
|
|
|
|
Income before
provision for income taxes
|
|
163,954
|
|
|
132,798
|
|
|
484,549
|
|
|
413,712
|
|
|
|
Provision for income
taxes
|
|
17,633
|
|
|
23,960
|
|
|
77,376
|
|
|
76,464
|
|
Net
Income:
|
|
Net income
|
|
146,321
|
|
|
108,838
|
|
|
407,173
|
|
|
337,248
|
|
|
|
Less: Noncontrolling
interest in subsidiary's earnings
|
|
102
|
|
|
1
|
|
|
187
|
|
|
24
|
|
|
|
Net income
attributable to stockholders
|
|
$146,219
|
|
|
$108,837
|
|
|
$406,986
|
|
|
$337,224
|
|
|
|
Earnings per share:
Basic
|
|
$1.71
|
|
|
$1.26
|
|
|
$4.77
|
|
|
$3.91
|
|
|
|
Earnings per share:
Diluted
|
|
$1.69
|
|
|
$1.24
|
|
|
$4.70
|
|
|
$3.85
|
|
|
|
Shares outstanding:
Basic
|
|
85,314
|
|
|
86,198
|
|
|
85,293
|
|
|
86,206
|
|
|
|
Shares outstanding:
Diluted
|
|
86,690
|
|
|
87,667
|
|
|
86,635
|
|
|
87,633
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
|
|
|
|
|
|
|
Selected Operating
Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
Sept. 30,
2020
|
|
Sept.
30, 2019
|
|
Sept. 30,
2020
|
|
Sept. 30,
2019
|
|
|
|
|
|
|
Operating
Ratios
|
|
Gross
profit
|
|
58.5
|
%
|
|
57.0
|
%
|
|
58.5
|
%
|
|
57.4
|
%
|
(as a percentage
of revenue):
|
|
Sales, marketing,
general and administrative expense
|
|
29.5
|
%
|
|
28.2
|
%
|
|
27.7
|
%
|
|
27.7
|
%
|
|
|
Research and
development expense
|
|
5.2
|
%
|
|
5.7
|
%
|
|
5.2
|
%
|
|
5.4
|
%
|
|
|
Income from
operations1
|
|
23.8
|
%
|
|
23.1
|
%
|
|
25.7
|
%
|
|
24.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
Sept. 30,
2020
|
|
Percent of
Revenue
|
Sept. 30,
2019
|
|
Percent of
Revenue
|
|
|
|
|
|
|
Revenue:
|
|
CAG
|
|
$638,017
|
|
|
|
$533,130
|
|
|
|
|
|
Water
|
|
33,272
|
|
|
|
34,906
|
|
|
|
|
|
LPD
|
|
36,971
|
|
|
|
31,370
|
|
|
|
|
|
Other
|
|
13,529
|
|
|
|
5,897
|
|
|
|
|
|
Total
|
|
$721,789
|
|
|
|
$605,303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit1:
|
|
CAG
|
|
$368,297
|
|
|
57.7
|
%
|
$298,517
|
|
|
56.0
|
%
|
|
|
Water
|
|
23,064
|
|
|
69.3
|
%
|
25,389
|
|
|
72.7
|
%
|
|
|
LPD
|
|
22,768
|
|
|
61.6
|
%
|
18,169
|
|
|
57.9
|
%
|
|
|
Other
|
|
8,477
|
|
|
62.7
|
%
|
2,875
|
|
|
48.8
|
%
|
|
|
Total
|
|
$422,606
|
|
|
58.5
|
%
|
$344,950
|
|
|
57.0
|
%
|
|
|
|
|
|
|
|
|
|
|
Income from
Operations1:
|
|
CAG
|
|
$139,434
|
|
|
21.9
|
%
|
$117,691
|
|
|
22.1
|
%
|
|
|
Water
|
|
15,243
|
|
|
45.8
|
%
|
16,930
|
|
|
48.5
|
%
|
|
|
LPD
|
|
10,505
|
|
|
28.4
|
%
|
4,850
|
|
|
15.5
|
%
|
|
|
Other
|
|
6,674
|
|
|
49.3
|
%
|
331
|
|
|
5.6
|
%
|
|
|
Total
|
|
$171,856
|
|
|
23.8
|
%
|
$139,802
|
|
|
23.1
|
%
|
|
|
|
|
Nine Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
Sept. 30,
2020
|
|
Percent of
Revenue
|
|
Sept. 30,
2019
|
|
Percent of
Revenue
|
|
|
|
|
|
|
Revenue:
|
|
CAG
|
|
$1,756,113
|
|
|
|
|
$1,589,397
|
|
|
|
|
|
Water
|
|
95,537
|
|
|
|
|
99,980
|
|
|
|
|
|
LPD
|
|
103,369
|
|
|
|
|
95,980
|
|
|
|
|
|
Other
|
|
30,698
|
|
|
|
|
16,105
|
|
|
|
|
|
Total
|
|
$1,985,717
|
|
|
|
|
$1,801,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit1:
|
|
CAG
|
|
$1,012,107
|
|
|
57.6
|
%
|
|
$897,482
|
|
|
56.5
|
%
|
|
|
Water
|
|
67,491
|
|
|
70.6
|
%
|
|
72,397
|
|
|
72.4
|
%
|
|
|
LPD
|
|
63,919
|
|
|
61.8
|
%
|
|
56,897
|
|
|
59.3
|
%
|
|
|
Other
|
|
18,021
|
|
|
58.7
|
%
|
|
7,624
|
|
|
47.3
|
%
|
|
|
Total
|
|
$1,161,538
|
|
|
58.5
|
%
|
|
$1,034,400
|
|
|
57.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Income from
Operations1:
|
|
CAG
|
|
$426,062
|
|
|
24.3
|
%
|
|
$370,600
|
|
|
23.3
|
%
|
|
|
Water
|
|
43,383
|
|
|
45.4
|
%
|
|
47,467
|
|
|
47.5
|
%
|
|
|
LPD
|
|
28,417
|
|
|
27.5
|
%
|
|
17,707
|
|
|
18.4
|
%
|
|
|
Other
|
|
11,567
|
|
|
37.7
|
%
|
|
1,441
|
|
|
8.9
|
%
|
|
|
Total
|
|
$509,429
|
|
|
25.7
|
%
|
|
$437,215
|
|
|
24.3
|
%
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 30,
2020
|
|
Sept. 30,
2019
|
|
Dollar
Change
|
|
Reported
Revenue
Growth1
|
|
Percentage
Change from
Currency
|
|
Percentage
Change from
Acquisitions
|
|
Organic
Revenue
Growth1
|
Net
Revenue
|
|
|
|
|
|
|
|
CAG
|
|
$638,017
|
|
|
$533,130
|
|
|
$104,887
|
|
|
19.7
|
%
|
|
1.0
|
%
|
|
0.7
|
%
|
|
18.0
|
%
|
United
States
|
|
428,105
|
|
|
357,810
|
|
|
70,295
|
|
|
19.6
|
%
|
|
—
|
|
|
1.1
|
%
|
|
18.6
|
%
|
International
|
|
209,912
|
|
|
175,320
|
|
|
34,592
|
|
|
19.7
|
%
|
|
2.9
|
%
|
|
—
|
|
|
16.8
|
%
|
Water
|
|
33,272
|
|
|
34,906
|
|
|
(1,634)
|
|
|
(4.7)
|
%
|
|
(0.7)
|
%
|
|
—
|
|
|
(4.0)
|
%
|
United
States
|
|
16,634
|
|
|
16,794
|
|
|
(160)
|
|
|
(1.0)
|
%
|
|
—
|
|
|
—
|
|
|
(1.0)
|
%
|
International
|
|
16,638
|
|
|
18,112
|
|
|
(1,474)
|
|
|
(8.1)
|
%
|
|
(1.2)
|
%
|
|
—
|
|
|
(6.9)
|
%
|
LPD
|
|
36,971
|
|
|
31,370
|
|
|
5,601
|
|
|
17.8
|
%
|
|
0.3
|
%
|
|
—
|
|
|
17.5
|
%
|
United
States
|
|
3,784
|
|
|
3,649
|
|
|
135
|
|
|
3.7
|
%
|
|
—
|
|
|
—
|
|
|
3.7
|
%
|
International
|
|
33,187
|
|
|
27,721
|
|
|
5,466
|
|
|
19.7
|
%
|
|
0.4
|
%
|
|
—
|
|
|
19.3
|
%
|
Other
|
|
13,529
|
|
|
5,897
|
|
|
7,632
|
|
|
129.5
|
%
|
|
—
|
|
|
—
|
|
|
129.5
|
%
|
Total
Company
|
|
$721,789
|
|
|
$605,303
|
|
|
$116,486
|
|
|
19.2
|
%
|
|
0.8
|
%
|
|
0.6
|
%
|
|
17.8
|
%
|
United
States
|
|
454,836
|
|
|
380,184
|
|
|
74,652
|
|
|
19.6
|
%
|
|
—
|
|
|
1.0
|
%
|
|
18.6
|
%
|
International
|
|
266,953
|
|
|
225,119
|
|
|
41,834
|
|
|
18.6
|
%
|
|
2.2
|
%
|
|
—
|
|
|
16.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 30,
2020
|
|
Sept. 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:
|
|
$567,416
|
|
|
$460,974
|
|
|
$106,442
|
|
|
23.1
|
%
|
|
1.0
|
%
|
|
0.8
|
%
|
|
21.3
|
%
|
IDEXX VetLab
consumables
|
|
218,605
|
|
|
177,276
|
|
|
41,329
|
|
|
23.3
|
%
|
|
1.2
|
%
|
|
—
|
|
|
22.1
|
%
|
Rapid assay
products
|
|
70,593
|
|
|
58,930
|
|
|
11,663
|
|
|
19.8
|
%
|
|
—
|
%
|
|
—
|
|
|
19.8
|
%
|
Reference
laboratory diagnostic
and consulting services
|
|
254,223
|
|
|
204,919
|
|
|
49,304
|
|
|
24.1
|
%
|
|
1.2
|
%
|
|
1.8
|
%
|
|
21.1
|
%
|
CAG Diagnostics
services and
accessories
|
|
23,995
|
|
|
19,849
|
|
|
4,146
|
|
|
20.9
|
%
|
|
1.0
|
%
|
|
—
|
|
|
19.9
|
%
|
CAG Diagnostics
capital –
instruments
|
|
29,336
|
|
|
32,608
|
|
|
(3,272)
|
|
|
(10.0)
|
%
|
|
1.2
|
%
|
|
—
|
|
|
(11.2)
|
%
|
Veterinary software,
services and
diagnostic imaging systems
|
|
41,265
|
|
|
39,548
|
|
|
1,717
|
|
|
4.3
|
%
|
|
0.2
|
%
|
|
—
|
|
|
4.2
|
%
|
Net CAG
revenue
|
|
$638,017
|
|
|
$533,130
|
|
|
$104,887
|
|
|
19.7
|
%
|
|
1.0
|
%
|
|
0.7
|
%
|
|
18.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 30,
2020
|
|
Sept. 30,
2019
|
|
Dollar
Change
|
|
Reported
Revenue
Growth1
|
|
Percentage
Change from
Currency
|
|
Percentage
Change from
Acquisitions
|
|
Organic
Revenue
Growth1
|
Net
Revenue
|
|
|
|
|
|
|
|
CAG
|
|
$1,756,113
|
|
|
$1,589,397
|
|
|
$166,716
|
|
|
10.5
|
%
|
|
(0.4)
|
%
|
|
0.7
|
%
|
|
10.1
|
%
|
United
States
|
|
1,188,493
|
|
|
1,062,715
|
|
|
125,778
|
|
|
11.8
|
%
|
|
—
|
|
|
1.1
|
%
|
|
10.8
|
%
|
International
|
|
567,620
|
|
|
526,682
|
|
|
40,938
|
|
|
7.8
|
%
|
|
(1.1)
|
%
|
|
—
|
|
|
8.9
|
%
|
Water
|
|
95,537
|
|
|
99,980
|
|
|
(4,443)
|
|
|
(4.4)
|
%
|
|
(2.1)
|
%
|
|
—
|
|
|
(2.3)
|
%
|
United
States
|
|
47,510
|
|
|
48,157
|
|
|
(647)
|
|
|
(1.3)
|
%
|
|
—
|
|
|
—
|
|
|
(1.3)
|
%
|
International
|
|
48,027
|
|
|
51,823
|
|
|
(3,796)
|
|
|
(7.3)
|
%
|
|
(4.1)
|
%
|
|
—
|
|
|
(3.2)
|
%
|
LPD
|
|
103,369
|
|
|
95,980
|
|
|
7,389
|
|
|
7.7
|
%
|
|
(2.7)
|
%
|
|
—
|
|
|
10.4
|
%
|
United
States
|
|
10,803
|
|
|
10,221
|
|
|
582
|
|
|
5.7
|
%
|
|
—
|
|
|
—
|
|
|
5.7
|
%
|
International
|
|
92,566
|
|
|
85,759
|
|
|
6,807
|
|
|
7.9
|
%
|
|
(3.0)
|
%
|
|
—
|
|
|
10.9
|
%
|
Other
|
|
30,698
|
|
|
16,105
|
|
|
14,593
|
|
|
90.6
|
%
|
|
—
|
|
|
—
|
|
|
90.6
|
%
|
Total
Company
|
|
$1,985,717
|
|
|
$1,801,462
|
|
|
$184,255
|
|
|
10.2
|
%
|
|
(0.6)
|
%
|
|
0.6
|
%
|
|
10.2
|
%
|
United
States
|
|
1,257,617
|
|
|
1,127,347
|
|
|
130,270
|
|
|
11.6
|
%
|
|
—
|
|
|
1.0
|
%
|
|
10.6
|
%
|
International
|
|
728,100
|
|
|
674,115
|
|
|
53,985
|
|
|
8.0
|
%
|
|
(1.6)
|
%
|
|
—
|
|
|
9.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 30,
2020
|
|
Sept. 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:
|
|
$1,565,595
|
|
|
$1,382,196
|
|
|
$183,399
|
|
|
13.3
|
%
|
|
(0.4)
|
%
|
|
0.8
|
%
|
|
12.8
|
%
|
IDEXX VetLab
consumables
|
|
603,379
|
|
|
519,646
|
|
|
83,733
|
|
|
16.1
|
%
|
|
(0.6)
|
%
|
|
—
|
|
|
16.7
|
%
|
Rapid assay
products
|
|
192,681
|
|
|
181,966
|
|
|
10,715
|
|
|
5.9
|
%
|
|
(0.4)
|
%
|
|
—
|
|
|
6.3
|
%
|
Reference
laboratory diagnostic
and consulting services
|
|
703,300
|
|
|
621,469
|
|
|
81,831
|
|
|
13.2
|
%
|
|
(0.2)
|
%
|
|
1.8
|
%
|
|
11.5
|
%
|
CAG Diagnostics
services and
accessories
|
|
66,235
|
|
|
59,115
|
|
|
7,120
|
|
|
12.0
|
%
|
|
(0.6)
|
%
|
|
—
|
|
|
12.7
|
%
|
CAG Diagnostics
capital –
instruments
|
|
72,040
|
|
|
92,883
|
|
|
(20,843)
|
|
|
(22.4)
|
%
|
|
(0.4)
|
%
|
|
—
|
|
|
(22.0)
|
%
|
Veterinary software,
services and
diagnostic imaging systems
|
|
118,478
|
|
|
114,318
|
|
|
4,160
|
|
|
3.6
|
%
|
|
(0.1)
|
%
|
|
—
|
|
|
3.8
|
%
|
Net CAG
revenue
|
|
$1,756,113
|
|
|
$1,589,397
|
|
|
$166,716
|
|
|
10.5
|
%
|
|
(0.4)
|
%
|
|
0.7
|
%
|
|
10.1
|
%
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
September 30,
2020
|
|
December 31,
2019
|
|
|
|
|
|
Assets:
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$175,587
|
|
|
$90,326
|
|
|
|
Accounts receivable,
net
|
|
337,593
|
|
|
269,312
|
|
|
|
Inventories
|
|
217,597
|
|
|
195,019
|
|
|
|
Other current
assets
|
|
137,902
|
|
|
124,982
|
|
|
|
Total current
assets
|
|
868,679
|
|
|
679,639
|
|
|
|
Property and
equipment, net
|
|
547,624
|
|
|
533,845
|
|
|
|
Other long-term
assets, net
|
|
631,104
|
|
|
618,991
|
|
|
|
Total
assets
|
|
$2,047,407
|
|
|
$1,832,475
|
|
Liabilities and
Stockholders'
|
|
|
|
|
|
|
Equity:
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$71,933
|
|
|
$72,172
|
|
|
|
Accrued
liabilities
|
|
362,326
|
|
|
322,938
|
|
|
|
Line of
credit
|
|
—
|
|
|
288,765
|
|
|
|
Current portion of
long-term debt
|
|
49,983
|
|
|
—
|
|
|
|
Deferred
revenue
|
|
42,599
|
|
|
41,462
|
|
|
|
Total current
liabilities
|
|
526,841
|
|
|
725,337
|
|
|
|
Long-term debt, net
of current portion
|
|
853,316
|
|
|
698,910
|
|
|
|
Other long-term
liabilities, net
|
|
226,135
|
|
|
230,403
|
|
|
|
Total long-term
liabilities
|
|
1,079,451
|
|
|
929,313
|
|
|
|
Total stockholders'
equity
|
|
440,576
|
|
|
177,473
|
|
|
|
Noncontrolling
interest
|
|
539
|
|
|
352
|
|
|
|
Total
stockholders' equity
|
|
441,115
|
|
|
177,825
|
|
|
|
Total liabilities
and stockholders' equity
|
|
$2,047,407
|
|
|
$1,832,475
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Select Balance Sheet
Information (Unaudited)
|
|
|
|
|
September 30,
2020
|
|
June 30,
2020
|
|
March 31,
2020
|
|
December
31,
2019
|
|
September
30,
2019
|
Selected Balance
Sheet Information:
|
|
Days sales
outstanding1
|
|
41.5
|
|
|
44.4
|
|
|
41.5
|
|
|
40.5
|
|
|
41.8
|
|
|
|
Inventory
turns2
|
|
1.9
|
|
|
1.6
|
|
|
1.9
|
|
|
2.2
|
|
|
2.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
Sept.
30,
2020
|
|
Sept.
30,
2019
|
|
|
|
|
|
Operating:
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
Net income
|
|
$407,173
|
|
|
$337,248
|
|
|
|
Non-cash adjustments
to net income
|
|
98,798
|
|
|
91,945
|
|
|
|
Changes in assets and
liabilities
|
|
(76,842)
|
|
|
(125,448)
|
|
|
|
Net cash provided by
operating activities
|
|
429,129
|
|
|
303,745
|
|
Investing:
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(92,768)
|
|
|
(109,058)
|
|
|
|
Acquisition of
intangible assets / business / equity investment
|
|
(918)
|
|
|
(559)
|
|
|
|
Net cash used by
investing activities
|
|
(93,686)
|
|
|
(109,617)
|
|
Financing:
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
Repayments on
revolving credit facilities, net
|
|
(289,625)
|
|
|
(169,532)
|
|
|
|
Issuance of senior
notes
|
|
200,000
|
|
|
100,000
|
|
|
|
Debt issuance
costs
|
|
(4,995)
|
|
|
(154)
|
|
|
|
Payment of
acquisition-related contingent consideration
|
|
(1,580)
|
|
|
(2,255)
|
|
|
|
Repurchases of common
stock
|
|
(182,815)
|
|
|
(160,969)
|
|
|
|
Proceeds from
exercises of stock options and employee stock purchase
plans
|
|
39,230
|
|
|
28,739
|
|
|
|
Shares withheld for
statutory tax withholding on restricted stock
|
|
(9,029)
|
|
|
(7,849)
|
|
|
|
Net cash used by
financing activities
|
|
(248,814)
|
|
|
(212,020)
|
|
|
|
Net effect of changes
in exchange rates on cash
|
|
(1,368)
|
|
|
(1,906)
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
85,261
|
|
|
(19,798)
|
|
|
|
Cash and cash
equivalents, beginning of period
|
|
90,326
|
|
|
123,794
|
|
|
|
Cash and cash
equivalents, end of period
|
|
$175,587
|
|
|
$103,996
|
|
IDEXX
Laboratories, Inc. and Subsidiaries
|
Free Cash
Flow
|
Amounts in
thousands except per share data (Unaudited)
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
Sept.
30,
2020
|
|
Sept.
30,
2019
|
|
|
|
|
|
Free Cash
Flow:
|
|
Net cash provided by
operating activities
|
|
$429,129
|
|
|
$303,745
|
|
|
|
Investing cash flows
attributable to purchases of property and equipment
|
|
(92,768)
|
|
|
(109,058)
|
|
|
|
Free cash
flow1
|
|
$336,361
|
|
|
$194,687
|
|
|
|
|
|
|
|
|
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
|
|
Nine Months
Ended
|
|
|
Sept. 30,
2020
|
|
Sept. 30,
2019
|
|
Sept. 30,
2020
|
|
Sept. 30,
2019
|
|
|
|
|
Shares repurchased in
the open market
|
|
—
|
|
|
330
|
|
|
721
|
|
|
683
|
|
Shares acquired
through employee surrender for statutory tax withholding
|
|
1
|
|
|
1
|
|
|
31
|
|
|
38
|
|
Total shares
repurchased
|
|
1
|
|
|
331
|
|
|
752
|
|
|
721
|
|
|
|
|
|
|
|
|
|
|
Cost of shares
repurchased in the open market
|
|
$—
|
|
|
$91,051
|
|
|
$179,623
|
|
|
$165,198
|
|
Cost of shares for
employee surrenders
|
|
360
|
|
|
277
|
|
|
9,029
|
|
|
7,849
|
|
Total cost of
shares
|
|
$360
|
|
|
$91,328
|
|
|
$188,652
|
|
|
$173,047
|
|
|
|
|
|
|
|
|
|
|
Average cost per
share – open market repurchases
|
|
$—
|
|
|
$275.50
|
|
|
$249.20
|
|
|
$241.56
|
|
Average cost per
share – employee surrenders
|
|
$393.12
|
|
|
$286.65
|
|
|
$292.03
|
|
|
$209.20
|
|
Average cost per
share – total
|
|
$393.12
|
|
|
$275.53
|
|
|
$250.96
|
|
|
$239.87
|
|
Contact: John Ravis, Investor
Relations, 1-207-556-8155
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SOURCE IDEXX Laboratories, Inc.