WESTBROOK, Maine, Nov. 1, 2018 /PRNewswire/ — 

  • Reports revenue growth of 11% on a reported basis and 12% on an organic basis, driven by CAG Diagnostics recurring revenue growth of 12% reported and 13% organic  
  • Delivers EPS of $1.05, a 33% increase year-over-year on a reported basis or 39% on a comparable constant currency basis
  • Refines 2018 reported revenue guidance to $2,205 billion$2,215 billion, reflecting revenue growth of 12% – 12.5% on a reported basis and 11.5% – 12% on an organic basis
  • Increases 2018 EPS guidance range to $4.16$4.21, $0.04 above the midpoint of prior guidance, reflecting higher expectations for 2018 share-based compensation tax benefits and an improved operational outlook
  • Provides preliminary 2019 financial guidance for revenue growth of 8% – 9.5% on a reported basis, 9.5% – 11% on an organic basis, and EPS of $4.61$4.75, an increase of 10% – 14% on a reported basis and 15% – 18% on a comparable constant currency basis

IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in veterinary diagnostics, veterinary practice software and water microbiology testing, reports revenues for the third quarter of 2018 of $545 million, an increase of 11% compared to the prior year period on a reported basis and 12% on an organic basis. Third quarter results were driven by 13% global organic growth in Companion Animal Group (“CAG”) Diagnostics recurring revenue, supported by high-teens IDEXX VetLab® consumables revenue growth, double-digit reference laboratory diagnostic and consulting services gains, and continued solid growth in rapid assay sales. Continued mid-teen gains in U.S. reference laboratory diagnostic and consulting services revenues were mitigated by moderate growth in international laboratory revenues in the quarter, impacted in part by weather conditions.  Third quarter revenue results also reflected mid-teens gains in veterinary software, services and diagnostic imaging systems and high single-digit organic growth in the Water and Livestock, Poultry and Dairy (“LPD”) businesses.

The Company is adjusting its full-year 2018 revenue guidance to a tighter range relative to previous guidance, reflecting overall organic revenue growth expectations of 11.5% – 12%, and CAG Diagnostics recurring revenue organic growth consistent with year-to-date trends, which include approximately 1% of growth benefit attributable to the adoption of ASU 2014-09, Revenue from Contracts with Customers (the “New Revenue Standard”).

The Company is updating 2018 guidance for earnings per diluted share (“EPS”) to $4.16$4.21, raising it by approximately $0.04 per share at the midpoint relative to guidance previously provided on the second quarter call, and reflecting an outlook for 41% – 43% in reported EPS growth, or 33% – 35% in comparable constant currency EPS growth. This outlook incorporates refined expectations for 110 – 130 basis points in full-year operating margin improvement on a constant currency basis, at the higher end of earlier estimates. The Company is also providing preliminary 2019 guidance for organic revenue growth of 9.5% – 11%, driven by projected continued strong growth in CAG Diagnostics recurring revenues, and EPS of $4.61$4.75, supported by expectations of 50 to 100 basis points of constant currency operating margin expansion. The 2019 EPS guidance reflects projected year-over-year EPS growth of 15% – 18% on a comparable constant currency basis, excluding the estimated 2019 impact of share-based compensation tax benefits of approximately $0.10$0.13 per share, which is $0.10$0.13 per share below higher than expected 2018 levels.

“We continue to see strong demand for higher-quality pet health care and our ongoing business momentum reflected in our sustained 13% organic growth in CAG Diagnostics recurring revenues,” said Jonathan Ayers, the Company’s Chairman and Chief Executive Officer. “We are also seeing continued positive global market reception for our point-of-care offering that reflects our best-in-class technology, expanding menu including Catalyst® SDMA, and the implementation of our economic value index (EVI) incentive model around the world. Catalyst chemistry analyzer placements were strong in the third quarter, expanding our global installed base by 22% year-over-year, supported by 26% growth in placements at competitive or greenfield accounts. These global instrument placements drove accelerated 19% organic growth in instrument consumable revenues in the quarter.”

“We are on track to deliver strong revenue and EPS gains this year. Our sustained momentum and continued investments in expanded customer-facing professionals provide a foundation for us to deliver continued strong financial performance in 2019, driven by sustained high CAG Diagnostics recurring revenue growth, consistent with our long-term revenue and earnings goals.”

Third Quarter Performance Highlights

Companion Animal Group

The Companion Animal Group generated 12% reported and 13% organic revenue growth for the quarter. CAG Diagnostics recurring revenue growth remained strong at 12% reported and 13% organic, including a $5 million, or approximately 1% in growth rate benefit attributable to the New Revenue Standard accounting changes, primarily related to the modified retrospective restatement. Veterinary software services and diagnostic imaging systems revenues grew 15% on a reported basis and 13% on an organic basis.

  • IDEXX VetLab consumables generated reported revenue growth of 18% and organic revenue growth of 19% in the quarter. Quarterly growth was supported by continued expansion of our premium instrument base in international regions and in North America, as well as continued strong customer retention, ongoing increases in testing utilization and moderate price gains.  IDEXX VetLab premium diagnostic instrument placements grew 10% to 3,026, including 1,611 Catalysts, 821 premium hematology instruments and 594 IDEXX SediVue Dx® analyzers. 922 of the Catalyst instrument placements were to competitive or greenfield practices, a 26% increase compared to the prior year period.
  • Reference laboratory diagnostic and consulting services revenue grew 10% on a reported basis and 11% on an organic basis, with continued momentum in the U.S. with mid-teen, volume-driven reference lab revenue growth. Global reference lab revenue growth was moderated by low to mid-single-digit gains in international regions, related in part to the particularly hot weather in Europe over the summer, which constrained patient visits.
  • Rapid assay products had revenue growth of 6% on both a reported and an organic basis. Rapid assay revenue growth was supported by continued growth in SNAP® 4Dx® Plus Tests, specialty and first generation rapid test volumes.

Water

Water reported revenue growth was 7% and organic revenue growth was 9% in the quarter, supported by solid growth across all major regions, including strong gains in Brazil.

Livestock, Poultry and Dairy

LPD revenue grew 4% on a reported basis and 7% on an organic basis for the quarter, benefiting from favorable comparisons to prior year period revenue growth related to herd health screening in the Asia-Pacific region, and overall growth in poultry testing. These increases were partially offset by the impact of an African swine fever outbreak in China, which reduced demand for diagnostic testing in the region. LPD recurring revenue remains constrained by soft end-market conditions, including impacts from lower milk prices globally, reducing producer demand for antibiotic residue testing.

Gross Profit and Operating Profit

Gross profits increased 12% and gross margin increased to 56.0% from 55.7% on a reported basis in the prior year. On a constant currency basis, gross margin was 40 basis points higher than third quarter 2017, net of a 25 basis point negative impact from reclassification of selected operating expenses to cost of revenue in the reference laboratory diagnostic and consulting services business. The increase in the Company’s gross margin benefited from lower product costs and business mix effects in our LPD business, as well as solid net price realization and productivity gains in our CAG business. These impacts were partially offset by incremental investments in reference laboratory capacity and employee benefits, as well as unfavorable impacts from instrument program mix under the New Revenue Standard.

Operating margin was 21.5% in the quarter, compared to 20.4% on a reported basis in the prior year period. On a constant currency basis, operating margin improved 140 basis points, compared to the prior year period, supported by operating expense leverage.

2018 and 2019 Financial Outlook

The following guidance for 2018 and 2019 reflects the assumptions that for the remainder of 2018 and the full year 2019, the value of foreign currencies will remain at the following rates in U.S. dollars:

  • the euro at $1.13;
  • the British pound at $1.29;
  • the Canadian dollar at $0.76; and
  • the Australian dollar at $0.70;

and relative to the U.S. dollar:

  • the Japanese yen at ¥115;
  • the Chinese renminbi at RMB 7.00; and
  • the Brazilian real at R$3.79.

Outlook for 2018

We are refining our 2018 revenue outlook to $2,205 million$2,215 million, narrowing the previous guidance range for organic revenue growth by decreasing the higher end of the range by 50 basis points to 11.5% – 12%. The Company expects full-year CAG Diagnostics recurring revenue growth to be consistent with year-to-date trends, including approximately 1% of growth rate attributable to New Revenue Standard accounting changes. The Company now expects that the additional growth acceleration targeted for the second half of 2018 will be constrained by lower LPD revenues, reflecting end-market factors, and relatively moderated growth in our international laboratory business. We are updating our 2018 EPS outlook to $4.16$4.21 per share, reflecting an increase of $0.04 per share at the midpoint of the earlier guidance range, including approximately $0.03 in higher expected share-based compensation tax benefits, and approximately $0.01 per share in operational benefit supported by expectations for constant currency operating margin expansion of 110 – 130 basis points, at the high end of earlier projections. For the full year, we expect foreign exchange benefit of $0.01 per share, in line with previous estimates. The updated outlook represents EPS growth of 41% – 43% on a reported basis, and 33% – 35% on a comparable constant currency growth basis.

We now project $0.23 per share of EPS impact in 2018 from share-based compensation tax benefits, which reflects an estimated $21 million reduction in our tax provision. These impacts may vary significantly annually based on the timing of stock compensation settlement activity and changes in IDEXX’s stock price. We estimate that $0.10$0.13 of the projected full-year 2018 benefit of $0.23 per share reflects higher actual and projected stock option exercises in 2018, compared to preliminary projections for 2019.

At assumed foreign exchange rates, we estimate that the effect of the slightly stronger U.S. dollar will positively impact 2018 revenue by approximately 0.5% and 2018 EPS by $0.01, including the net effect of projected hedge losses of approximately $1 million in 2018 compared to the neutral hedge impact in 2017.

The Company provides the following updated guidance for 2018:
Amounts in millions except per share data and percentages

Guidance Range

Growth Definition

Y/Y Growth

Revenue

$2,205 – $2,215

Reported

12.0% – 12.5%

Organic Revenue Growth

11.5% – 12.0%

EPS

$4.16 – $4.21

Reported

41% – 43%

Comparable Constant Currency

33% – 35%

Operating Cash Flow

~110% – 115% of net income

Free Cash Flow

~70% – 75% of net income

Capital Expenditures

~$140 million

We expect an effective tax rate of approximately 18% – 18.5%, incorporating expectations for a benefit from share-based compensation accounting of approximately $21 million or 500 basis points. We are projecting a reduction in weighted average shares outstanding of approximately 1%, and interest expense, net of interest income, of approximately $34 million$35 million reflecting current and projected borrowings.

Preliminary Outlook for 2019

The Company provides the following preliminary guidance for 2019:
Amounts in millions except per share data and percentage

Guidance Range

Growth Definition

Y/Y Growth

Revenue

$2,385 – $2,425

Reported

8.0% – 9.5%

Organic Revenue Growth

9.5% – 11%

EPS

$4.61 – $4.75

Reported

10% – 14%

Comparable Constant Currency

15% – 18%

Our 2019 revenue growth outlook reflects expectations for sustained strong organic growth for CAG Diagnostics recurring revenues of 11.5% – 12.5%, in line with our 2018 organic growth outlook for these revenues adjusted for approximately 1% in estimated non-recurring growth rate benefit in 2018 from New Revenue Standard accounting changes. Our EPS outlook includes approximately $0.10$0.13 per share of projected benefit from share-based compensation tax benefits. Our preliminary outlook for our effective tax rate is 20% – 21% and for a reduction in weighted average shares outstanding from continued stock repurchases of approximately 1%. We are projecting interest expense, net of interest income, of approximately $38 million, reflecting current and projected borrowings and relatively higher floating interest rate costs.  At the foreign exchange rates assumed in this earnings release, we estimate that foreign exchange impacts will decrease 2019 reported revenue growth by approximately 1.5%, and EPS by approximately $0.03 per share.

The preliminary outlook represents EPS growth of 10% – 14% on a reported basis and 15% – 18% on a comparable constant currency basis, supported by an increase of 50 to 100 basis points in operating margin on a constant currency basis.

Conference Call and Webcast Information

IDEXX Laboratories, Inc. will be hosting a conference call today at 8:30 a.m. (Eastern) to discuss its third quarter results and management’s outlook. To participate in the conference call, dial 1-800-230-1766 or 1-612-332-0345 and reference confirmation code 454798. Replay of the conference call will be available through Thursday, November 8, 2018 by dialing 1-800-475-6701 or 1-320-365-3844 and referencing replay code 454798. 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. (Eastern) on that day via the same link and will remain available for one year.

IDEXX Laboratories, Inc. logo. (PRNewsFoto/IDEXX Laboratories, Inc.)

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 Laboratories employs more than 8,000 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 and 2019 Financial Outlook,” “Outlook for 2018,” “Preliminary Outlook for 2019” 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 revenue growth and EPS outlooks; operating and free cash flow forecast; projected impacts of U.S. Tax Reform; projected operating expense investments, including with respect to global commercial presence and the U.S. field organization; projected impact of foreign currency exchange rates; and projected operating margins and expenses, capital expenditures, gains or losses from foreign currency hedging transactions, tax and EPS benefits from share-based compensation arrangements, 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 specifically disclaims any 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 2017 Annual Report on Form 10-K, the Company’s Quarterly Report on Form 10-Q  filed with the U.S. Securities and Exchange Commission (SEC) on August 1, 2018 and the Company’s other filings with the SEC 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 impacted third-quarter 2018 results as follows: decreased revenue growth by 1%, decreased gross profit growth by 1%, had an immaterial impact on gross profit margin growth, decreased operating profit growth by 3%, decreased operating expense growth by 1%, decreased operating profit margin growth by 30 basis points, and decreased EPS growth by 4%. Estimated currency changes are expected to increase projected full-year 2018 revenue growth by approximately 0.5%, increase projected full-year 2018 CAG Diagnostics recurring revenue growth by approximately 0.5%, decrease projected fourth-quarter 2018 revenue growth by approximately 2%, decrease full-year 2018 operating profit margin growth by 10 bps, and have an immaterial impact on projected full-year 2018 EPS growth. Estimated currency changes are expected to decrease projected full-year 2019 revenue growth and full-year 2019 CAG Diagnostics recurring revenue by approximately 1.5%, decrease full-year 2019 operating profit margin growth by 20 bps and decrease full-year 2019 EPS growth by 1%. 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, 2018.

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 and nine months ended September 30, 2018.  See the constant currency note above for the impacts of estimated currency changes to the projected full-year and fourth-quarter 2018 and full-year 2019 organic revenue growth for the Company.  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. Effective January 1, 2018, we exclude only acquisitions that are considered to be a business (consistent with ASU 2017-01, “Business Combinations: (Topic 850) Clarifying the Definition of 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, 2018. For the calculation of projected full-year and fourth-quarter 2018 organic revenue growth, projected full-year 2018 CAG Diagnostics recurring organic revenue growth, projected full-year 2019 organic revenue growth, and projected full-year 2019 CAG Diagnostics recurring 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 tax effects of share-based compensation activity under ASU 2016-09, a one-time negative impact related to the 2017 Tax Cuts and Jobs Act (“U.S. Tax Reform”), and a discrete tax benefit related to the expected utilization of foreign tax credits.  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 activity increased third quarter 2018 EPS by $0.08 compared to $0.04 in the third quarter of 2017, is expected to increase projected EPS by $0.10 to $0.13 for the full-year 2019, increase projected EPS by $0.23 for the full-year 2018, and increased EPS by $0.30 for full-year 2017.  A one-time negative impact related to the enactment of the U.S. Tax Reform for the fourth quarter of 2017, 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 full-year 2017 EPS by $0.34.  A discrete tax benefit related to the expected utilization of foreign tax credits in 2017 increased third quarter 2017 EPS by $0.03 and full-year 2017 EPS by $0.04. 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 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, 2018 and 2017.  To estimate projected 2018 free cash flow, we have deducted projected purchases of property and equipment (also referred to as capital expenditures) of approximately $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, gross debt, net debt and the Debt to Adjusted EBITDA Ratio are calculated, see the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018.

Contact: Kerry Bennett, Investor Relations, 1-207-556-8155

 

IDEXX Laboratories, Inc. and Subsidiaries

Condensed Consolidated Statement of Operations

Amounts in thousands except per share data (Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,

2018

2017

2018

2017

Revenue:

Revenue

$545,448

$491,976

$1,663,856

$1,462,937

Expenses and Income:

Cost of revenue

239,805

217,974

722,675

638,029

Gross profit

305,643

274,002

941,181

824,908

Sales and marketing

95,146

88,818

291,502

263,755

General and administrative

63,955

57,186

185,966

165,560

Research and development

29,192

27,585

87,725

80,373

Income from operations

117,350

100,413

375,988

315,220

Interest expense, net

(8,311)

(8,364)

(25,291)

(23,849)

Income before provision for income taxes

109,039

92,049

350,697

291,371

Provision for income taxes

15,825

21,535

59,327

66,392

Net Income:

Net income

93,214

70,514

291,370

224,979

Less: Noncontrolling interest in subsidiary’s
earnings

(37)

3

(23)

92

Net income attributable to stockholders

$93,251

$70,511

$291,393

$224,887

Earnings per share: Basic

$1.07

$0.81

$3.35

$2.56

Earnings per share: Diluted

$1.05

$0.79

$3.29

$2.51

Shares outstanding: Basic

86,756

87,537

87,029

87,884

Shares outstanding: Diluted

88,453

89,256

88,687

89,735

 

IDEXX Laboratories, Inc. and Subsidiaries

Selected Operating Information (Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,

2018

2017

2018

2017

Operating Ratios

Gross profit

56.0%

55.7%

56.6%

56.4%

(as a percentage of revenue):

Sales, marketing, general and administrative
expense

29.2%

29.7%

28.7%

29.3%

Research and development expense

5.4%

5.6%

5.3%

5.5%

Income from operations1

21.5%

20.4%

22.6%

21.5%

1 Amounts presented may not recalculate due to rounding.

 

IDEXX Laboratories, Inc. and Subsidiaries

Segment Information

Amounts in thousands (Unaudited)

Three Months Ended

Three Months Ended

September 30,

Percent of

September 30,

Percent of

2018

Revenue

2017

Revenue

Revenue:

CAG

$478,097

$426,686

Water

33,108

31,030

LPD

29,420

28,396

Other

4,823

5,864

Total

$545,448

$491,976

Gross Profit:

CAG

$261,862

54.8%

$234,766

55.0%

Water

23,423

70.7%

21,629

69.7%

LPD

17,233

58.6%

14,656

51.6%

Other

2,652

55.0%

3,612

61.6%

Unallocated Amounts

473

N/A

(661)

N/A

Total

$305,643

56.0%

$274,002

55.7%

Income from Operations:

CAG

$102,241

21.4%

$89,271

20.9%

Water

15,874

47.9%

14,505

46.7%

LPD

4,007

13.6%

902

3.2%

Other

443

9.2%

2,114

36.1%

Unallocated Amounts

(5,215)

N/A

(6,379)

N/A

Total

$117,350

21.5%

$100,413

20.4%

 

Nine Months Ended

Nine Months Ended

September 30,

Percent of

September 30,

Percent of

2018

Revenue

2017

Revenue

Revenue:

CAG

$1,456,417

$1,269,861

Water

94,909

85,531

LPD

96,658

91,266

Other

15,872

16,279

Total

$1,663,856

$1,462,937

Gross Profit:

CAG

$809,705

55.6%

$705,922

55.6%

Water

66,864

70.5%

59,756

69.9%

LPD

55,567

57.5%

51,183

56.1%

Other

7,339

46.2%

8,226

50.5%

Unallocated Amounts

1,706

N/A

(179)

N/A

Total

$941,181

56.6%

$824,908

56.4%

Income from Operations:

CAG

$332,435

22.8%

$277,857

21.9%

Water

43,458

45.8%

38,421

44.9%

LPD

13,439

13.9%

9,880

10.8%

Other

2,071

13.0%

3,275

20.1%

Unallocated Amounts

(15,415)

N/A

(14,213)

N/A

Total

$375,988

22.6%

$315,220

21.5%

 

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

Reported

Percentage

Percentage

Organic

September 30,

September 30,

Dollar

Revenue

Change from

Change from

Revenue

Net Revenue

2018

2017

Change

Growth1

Currency

Acquisitions

Growth1

CAG

$478,097

$426,686

$51,411

12.0%

(1.0%)

0.1%

12.9%

United States

319,561

280,651

38,910

13.9%

0.1%

13.7%

International

158,536

146,035

12,501

8.6%

(2.9%)

0.1%

11.4%

Water

33,108

31,030

2,078

6.7%

(2.2%)

8.9%

United States

15,878

14,972

906

6.0%

6.0%

International

17,230

16,058

1,172

7.3%

(4.4%)

11.8%

LPD

29,420

28,396

1,024

3.6%

(3.4%)

7.0%

United States

3,502

3,576

(74)

(2.1%)

(2.1%)

International

25,918

24,820

1,098

4.4%

(4.0%)

8.4%

Other

4,823

5,864

(1,041)

(17.7%)

(17.7%)

Total Company

$545,448

$491,976

$53,472

10.9%

(1.2%)

0.1%

12.0%

United States

340,692

301,457

39,235

13.0%

0.1%

12.9%

International

204,756

190,519

14,237

7.5%

(3.1%)

10.5%

 

Three Months Ended

Reported

Percentage

Percentage

Organic

September 30,

September 30,

Dollar

Revenue

Change from

Change from

Revenue

Net CAG Revenue

2018

2017

Change

Growth1

Currency

Acquisitions

Growth1

CAG Diagnostics recurring revenue:

$409,162

$364,937

$44,225

12.1%

(1.0%)

13.1%

IDEXX VetLab consumables

152,509

129,434

23,075

17.8%

(1.3%)

19.1%

Rapid assay products

53,821

50,924

2,897

5.7%

(0.6%)

6.3%

Reference laboratory diagnostic and consulting services

184,103

167,851

16,252

9.7%

(0.8%)

10.5%

CAG Diagnostics services and accessories

18,729

16,728

2,001

12.0%

(1.2%)

13.2%

CAG Diagnostics capital – instruments

31,561

29,119

2,442

8.4%

(2.1%)

10.4%

Veterinary software, services and diagnostic imaging systems

37,374

32,630

4,744

14.5%

(0.4%)

1.4%

13.5%

Net CAG revenue

$478,097

$426,686

$51,411

12.0%

(1.0%)

0.1%

12.9%

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

Reported

Percentage

Percentage

Organic

September 30,

September 30,

Dollar

Revenue

Change from

Change from

Revenue

Net Revenue

2018

2017

Change

Growth1

Currency

Acquisitions

Growth1

CAG

$1,456,417

$1,269,861

$186,556

14.7%

1.5%

0.1%

13.1%

United States

962,712

846,968

115,744

13.7%

0.1%

13.6%

International

493,705

422,893

70,812

16.7%

4.3%

12.4%

Water

94,909

85,531

9,378

11.0%

1.1%

9.8%

United States

45,539

42,357

3,182

7.5%

7.5%

International

49,370

43,174

6,196

14.4%

2.3%

12.1%

LPD

96,658

91,266

5,392

5.9%

3.1%

2.8%

United States

10,496

10,493

3

International

86,162

80,773

5,389

6.7%

3.5%

3.2%

Other

15,872

16,279

(407)

(2.5%)

0.5%

(3.0%)

Total Company

$1,663,856

$1,462,937

$200,919

13.7%

1.5%

0.1%

12.1%

United States

1,024,889

905,765

119,124

13.2%

0.1%

13.0%

International

638,967

557,172

81,795

14.7%

4.0%

10.7%

 

Nine Months Ended

Reported

Percentage

Percentage

Organic

September 30,

September 30,

Dollar

Revenue

Change from

Change from

Revenue

Net CAG Revenue

2018

2017

Change

Growth1

Currency

Acquisitions

Growth1

CAG Diagnostics recurring revenue:

$1,252,876

$1,091,936

$160,940

14.7%

1.5%

13.2%

IDEXX VetLab consumables

460,642

385,081

75,561

19.6%

1.7%

17.9%

Rapid assay products

169,200

159,085

10,115

6.4%

0.7%

5.7%

Reference laboratory diagnostic and consulting services

568,308

498,218

70,090

14.1%

1.6%

12.5%

CAG Diagnostics services and accessories

54,726

49,552

5,174

10.4%

1.6%

8.8%

CAG Diagnostics capital – instruments

97,000

83,018

13,982

16.8%

2.1%

14.7%

Veterinary software, services and diagnostic imaging systems

106,541

94,907

11,634

12.3%

0.3%

1.1%

10.8%

Net CAG revenue

$1,456,417

$1,269,861

$186,556

14.7%

1.5%

0.1%

13.1%

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,

December 31,

2018

2017

Assets:

Current Assets:

Cash and cash equivalents

$146,877

$187,675

Marketable securities

284,255

Accounts receivable, net

264,563

234,597

Inventories

179,684

164,318

Other current assets

113,073

101,140

Total current assets

704,197

971,985

Property and equipment, net

409,980

379,096

Other long-term assets, net

430,353

362,335

Total assets

$1,544,530

$1,713,416

Liabilities and Stockholders’

Equity (Deficit):

Current Liabilities:

Accounts payable

$65,457

$66,968

Accrued liabilities

238,431

253,418

Line of credit

414,500

655,000

Deferred revenue

41,149

29,181

Total current liabilities

759,537

1,004,567

Long-term debt

602,416

606,075

Other long-term liabilities, net

183,940

156,616

Total long-term liabilities

786,356

762,691

Total stockholders’ deficit

(1,604)

(54,106)

Noncontrolling interest

241

264

Total stockholders’ deficit

(1,363)

(53,842)

Total liabilities and stockholders’ deficit

$1,544,530

$1,713,416

 

IDEXX Laboratories, Inc. and Subsidiaries

Select Balance Sheet Information (Unaudited)

September 30,
2018

June 30,
2018

March 31,
2018

December 31,
2017

September 30,
2017

Selected Balance Sheet Information:

Days sales outstanding1

44.3

41.2

42.0

41.7

43.4

Inventory turns2

2.1

2.2

2.0

2.2

1.9

1Days sales outstanding represents the average of the accounts receivable balances at the beginning and end of each quarter divided by revenue for that quarter, the result of which is then multiplied by 91.25 days.

2Inventory turns represent inventory-related cost of product sales for the twelve months preceding each quarter-end divided by the inventory balance at the end of the quarter.

 

IDEXX Laboratories, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows

Amounts in thousands (Unaudited)

Nine Months Ended

September 30,

September 30,

2018

2017

Operating:

Cash Flows from Operating Activities:

Net income

$291,370

$224,979

Non-cash charges

99,386

80,856

Changes in assets and liabilities

(126,320)

(53,685)

Net cash provided by operating activities

264,436

252,150

Investing:

Cash Flows from Investing Activities:

Purchases of property and equipment

(82,642)

(54,370)

Purchase of marketable securities

(87)

(269,798)

Proceeds from the sale and maturities of marketable securities

284,125

224,816

Acquisitions of intangible assets

(450)

(320)

Acquisitions of businesses, net of cash acquired

(22,500)

(14,529)

Net cash provided (used) by investing activities

178,446

(114,201)

Financing:

Cash Flows from Financing Activities:

(Repayments) borrowings on revolving credit facilities, net

(240,500)

75,250

Payment of acquisition-related contingent considerations

(1,266)

Repurchases of common stock

(263,712)

(228,693)

Proceeds from exercises of stock options and employee stock purchase plans

34,595

31,314

Shares withheld for statutory tax withholding on restricted stock

(9,110)

(7,829)

Net cash used by financing activities

(479,993)

(129,958)

Net effect of changes in exchange rates on cash

(3,687)

6,127

Net (decrease) increase in cash and cash equivalents

(40,798)

14,118

Cash and cash equivalents, beginning of period

187,675

154,901

Cash and cash equivalents, end of period

$146,877

$169,019

 

IDEXX Laboratories, Inc. and Subsidiaries

Free Cash Flow

Amounts in thousands except per share data (Unaudited)

Nine Months Ended

September 30,

September 30,

2018

2017

Free Cash Flow:

Net cash provided by operating activities

$264,436

$252,150

Investing cash flows attributable to purchases of property and equipment

(82,642)

(54,370)

Free cash flow1

$181,794

$197,780

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

September 30,

September 30,

September 30,

September 30,

2018

2017

2018

2017

Shares repurchased in the open market

302

312

1,284

1,398

Shares acquired through employee surrender for statutory tax withholding

1

2

50

55

Total shares repurchased

303

314

1,334

1,453

Cost of shares repurchased in the open market

$73,247

$50,413

$265,209

$215,320

Cost of shares for employee surrenders

390

370

9,110

7,829

Total cost of shares

$73,637

$50,783

$274,319

$223,149

Average cost per share – open market repurchases

$242.78

$161.57

$206.59

$153.99

Average cost per share – employee surrenders

$253.34

$155.14

$181.68

$142.15

Average cost per share – total

$242.83

$161.52

$205.65

$153.54

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/idexx-laboratories-announces-third-quarter-results-300741739.html

SOURCE IDEXX Laboratories, Inc.