IDEXX Laboratories Announces Fourth Quarter and Full Year Results
WESTBROOK, Maine, Jan. 29 /PRNewswire-FirstCall/ -- IDEXX Laboratories, Inc. (Nasdaq: IDXX), today reported that revenues for the fourth quarter of 2009 increased 11% to $270.3 million, from $243.3 million for the fourth quarter of 2008. Organic revenue growth, as defined below, was 6%. Earnings per diluted share ("EPS") for the quarter ended December 31, 2009 were $0.51, compared to $0.39 for the same period in the prior year. EPS grew 16% when compared to fourth quarter 2008 non-GAAP EPS, which adjusted EPS for the 2008 disposition of the pharmaceutical product lines and related restructuring. Please refer to the non-GAAP financial measures table below.
Organic revenue growth excludes the impact of changes in currency exchange rates, which contributed approximately 5% to revenue growth, and revenue from businesses acquired or divested subsequent to the beginning of the prior year period, which had minimal impact on revenue growth.
"IDEXX had a strong fourth quarter that exceeded our expectations," stated Jonathan W. Ayers, Chairman and Chief Executive Officer. "Organic revenue growth, led by our Companion Animal Group, increased modestly to 6%, as strong demand for certain products such as our Catalyst Dx® chemistry analyzer offset continued economic weakness and soft consumer spending."
"Sales of instruments and consumables, our largest business, benefited from Catalyst sales as we placed 763 units in the fourth quarter and over 2,046 units for the year."
"International markets, particularly the Asia Pacific region, continued to perform very well. In that region, organic growth was 30% for the quarter and 20% for the year, reflecting a further acceleration of growth in this region."
"Throughout the year, we continued to identify opportunities for increased operating efficiency while maintaining investment in areas critical to achieving our longer-term strategic and operational objectives. This focus on operational efficiency enabled us to exceed our earnings guidance for the year, despite weaker than anticipated top-line growth."
"As we look to 2010, we remain confident in our growth strategies due to the fundamental attractiveness of our markets, our unique and innovative product and service offering, and our global footprint. We also are targeting earnings to grow faster than revenue, reflecting operating margin expansion in our two largest businesses, instruments and consumables and reference laboratory services."
Revenue Performance
Please refer to the table below entitled "Revenues and Revenue Growth Analysis by Product and Service Categories" in conjunction with the following discussion.
Companion Animal Group. Companion Animal Group ("CAG") revenues for the fourth quarter of 2009 were $217.9 million compared to $196.5 million for the fourth quarter of 2008. Changes in foreign currency exchange rates and revenues from a recently acquired business contributed approximately 4% and 1%, respectively, to revenue growth. Organic growth of 6% was the result of increased sales volume, primarily in the IDEXX VetLab® and laboratory and consulting services product lines. In the IDEXX VetLab® product line, higher sales volume was driven by sales of our Catalyst Dx® chemistry analyzer and instrument consumables. In the laboratory and consulting services product line, revenue growth was due to higher volume and higher unit sales prices on reference laboratory tests. These favorable impacts were partly offset by lower sales volume and lower average unit sales prices for LaserCyte® hematology analyzers.
Water. Water segment revenues for the fourth quarter of 2009 were $18.5 million compared to $17.2 million for the fourth quarter of 2008. Changes in foreign currency exchange rates contributed approximately 5% to revenue growth. Organic revenue growth of 3% was the result of higher unit sales prices due, in part, to higher relative sales in geographies where products are sold at higher unit sales prices.
Production Animal Segment. Production Animal Segment ("PAS") revenues for the fourth quarter of 2009 were $23.4 million compared to $20.3 million for the fourth quarter of 2008. Changes in foreign currency exchange rates contributed approximately 10% to revenue growth. Organic revenue growth of 5% was the result of higher sales volumes, partly offset by lower unit sales prices.
Year-to-Date Results
Revenues for the year ended December 31, 2009 increased 1% to $1.032 billion, from $1.024 billion for the year ended December 31, 2008. Organic growth for the year ended December 31, 2009, was 5%. Changes in currency exchange rates and the impact of divestitures and discontinued products, net of revenues from businesses recently acquired, reduced revenue growth by approximately 4%.
EPS for 2009 were $2.01, compared to $1.87 for the year ended December 31, 2008. EPS grew 6% when compared to 2008 non-GAAP diluted EPS of $1.90. Please refer to the non-GAAP financial measures table below.
Additional Operating Results for the Fourth Quarter
Gross profit for the fourth quarter of 2009 increased $12.4 million, or 10%, to $132.9 million from $120.5 million for the fourth quarter of 2008. As a percentage of total revenue, gross profit decreased slightly to 49%. The decrease in gross profit percentage was due primarily to the unfavorable net impact of foreign currency exchange rates, as the favorable impact on revenue of changes in foreign currency exchange rates was more than offset by losses on foreign currency hedge contracts and by the unfavorable impact on foreign currency denominated expenses. Gross profit percentage was also impacted by higher relative sales of lower margin IDEXX VetLab® instruments and laboratory and consulting services and lower average sales prices in certain product lines. These unfavorable items were partly offset by gross profit improvement in our laboratory and consulting services product line, lower royalty expense, and lower depreciation expense associated with IDEXX VetLab® instruments that are under rental agreements with customers.
Research and development ("R&D") expense for the fourth quarter of 2009 was $16.0 million, or 6% of revenue, compared to $17.1 million, or 7% of revenue for the fourth quarter of 2008. The decrease in R&D expense was due to the absence of pharmaceutical business R&D spending in the fourth quarter of 2009, resulting from the disposition of substantially all of our pharmaceutical product line and assets in the fourth quarter of 2008.
Selling, general and administrative ("SG&A") expense for the fourth quarter of 2009 was $72.8 million, or 27% of revenue, compared to $66.1 million, or 27% of revenue, for the fourth quarter of 2008. The increase in SG&A expense resulted primarily from higher personnel costs in selling, customer support and administrative functions, and the unfavorable impact of exchange rate changes on foreign currency denominated expenses. Fourth quarter 2008 SG&A included a charge of $1.5 million related to the 2008 disposition and the related restructuring of the remaining pharmaceutical product line.
Supplementary Analysis of Results
The accompanying financial tables provide more information concerning our revenue and other operating results for the three and twelve months ended December 31, 2009, as well as a reconciliation of earnings per share to non-GAAP EPS.
Outlook for 2010
The Company provides the following updated guidance for the full year of 2010. This guidance reflects an assumption that the value of the U.S. dollar relative to other currencies will remain at its current level for the balance of 2010. Fluctuations in foreign currency exchange rates from current levels could have a significant positive or negative impact on our actual results of operations in 2010.
- Revenues are expected to be $1.1 to $1.115 billion, which represents reported revenue growth of 7% to 8% and organic revenue growth of 5% to 6%. This guidance is higher than the previous guidance of $1.08 to $1.1 billion, provided in October 2009, as a slight increase in anticipated organic revenue growth is anticipated to be partially offset by lower estimated currency benefits from the weakening of the U.S. Dollar relative to other major currencies.
- EPS are expected to be $2.20 to $2.25, compared to our previous guidance of $2.15 to $2.25.
- Free cash flow is expected to be approximately 110% of net income.
Conference Call and Webcast Information
IDEXX Laboratories will be hosting a conference call today at 9:00 a.m. (eastern) to discuss its fourth quarter results. To participate in the conference call, dial 1-612-288-0329 or 1-800-288-8967 and reference confirmation code 143973. An audio replay will be available through February 5, 2010 by dialing 1-320-365-3844 and referencing replay code 143973.
The call will also be available via live or archived Webcast on the IDEXX Laboratories' web site at www.idexx.com.
About IDEXX Laboratories
IDEXX Laboratories, Inc. is a leader in pet healthcare innovation, serving practicing veterinarians around the world with a broad range of diagnostic and information technology-based products and services. IDEXX products enhance the ability of veterinarians to provide advanced medical care, improve staff efficiency and to build more economically successful practices. IDEXX is also a worldwide leader in providing diagnostic tests and information for the production animal industry and tests for the quality and safety of water and milk. Headquartered in Maine, IDEXX Laboratories employs more than 4,800 people and offers products to customers in over 100 countries.
Note Regarding Forward-Looking Statements
This press 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. These statements are based on management's expectations of future events as of the date of this press release, and the Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments. Actual results could differ materially from management's expectations. Factors that could cause or contribute to such differences include the following: the Company's ability to develop, manufacture, introduce and market new products and enhancements to existing products; the impact of a weak economy on demand for the Company's products and services; the impact of changes and disruptions in financial and currency markets; the effectiveness of the Company's sales and marketing activities; disruptions, shortages or pricing changes that affect the Company's purchases of products and materials from third parties, including from sole source suppliers; the Company's ability to identify acquisition opportunities, complete acquisitions and integrate acquired businesses; the impact of competition, technological change, and veterinary hospital consolidation on the markets for the Company's products; the Company's ability to manufacture complex biologic products; the effect of government regulation on the Company's business, including government decisions about whether and when to approve the Company's products and decisions regarding labeling, manufacturing and marketing products; the impact of distributor purchasing decisions on sales of the Company's products that are sold through distribution; changes or trends in veterinary medicine that affect the rate of use of the Company's products and services by veterinarians; the Company's ability to obtain patent and other intellectual property protection for its products, successfully enforce its intellectual property rights and defend itself against third party claims against the Company; the effects of operations outside the U.S., including from currency fluctuations, different regulatory, political and economic conditions, and different market conditions; the effects of interruptions to the Company's operations due to natural disasters or system failures; and the loss of key employees. A further description of these and other factors can be found in the Company's Annual Report on Form 10-K for the year ended December 31, 2008, and quarterly report on Form 10-Q for the quarter ended September 30, 2009, in the section captioned "Risk Factors."
Contact: Merilee Raines, Chief Financial Officer, 1-207-556-8155 |
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IDEXX Laboratories, Inc. and Subsidiaries Consolidated Statement of
Operations
Amounts in thousands except per share data (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2009 2008 2009 2008
Revenue: Revenue $270,335 $243,293 $1,031,633 $1,024,030
Expenses
and
Income: Cost of revenue 137,404 122,772 505,352 494,264
Gross profit 132,931 120,521 526,281 529,766
Sales and
marketing 43,383 39,951 167,748 169,693
General and
administrative 29,393 26,179 117,440 115,586
Research and
development 16,008 17,063 65,124 70,552
Loss on
disposition of
pharmaceutical
product lines
and related
restructuring - 1,479 - 1,479
Income from
operations 44,147 35,849 175,969 172,456
Interest
expense, net (243) (581) (1,430) (2,269)
Income before
provision for
income taxes 43,904 35,268 174,539 170,187
Provision for
income taxes 12,943 11,713 52,304 54,018
Net
Income: Net income 30,961 23,555 122,235 116,169
Less:
Noncontrolling
interest in
subsidiary's
earnings 10 - 10 -
Net income
attributable to
stockholders $30,951 $23,555 $122,225 $116,169
Earnings per
share: Basic $0.53 $0.40 $2.08 $1.94
Earnings per
share: Diluted $0.51 $0.39 $2.01 $1.87
Shares outstanding:
Basic 58,506 59,453 58,809 59,953
Shares outstanding:
Diluted 60,507 61,083 60,682 62,249
IDEXX Laboratories, Inc. and Subsidiaries
Key Operating Information (Unaudited)
Three Months Ended Twelve Months Ended
December December December December
31, 31, 31, 31,
2009 2008 2009 2008
Key Gross
Operating profit 49.2% 49.5% 51.0% 51.7%
Ratios (as Sales, marketing,
a percentage general and
of administrative
revenue): expense 26.9% 27.2% 27.6% 27.9%
Research and
development
expense 5.9% 7.0% 6.3% 6.9%
Loss on disposition
of pharmaceutical
product lines
and related
restructuring - 0.6% - 0.1%
Income from
operations(1) 16.3% 14.7% 17.1% 16.8%
International International
Revenue: revenue
(in thousands) $118,660 $97,071 $417,116 $413,973
International
revenue as
percentage of
total revenue 43.9% 39.9% 40.4% 40.4%
(1) The sum of individual items may not equal the total due to rounding.
IDEXX Laboratories, Inc. and Subsidiaries
Non-GAAP Financial Measures
Amounts in thousands except per share data (Unaudited)
Three Months Ended
Gross Profit Income from Operations
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2009 2008 2009 2008
GAAP measurement $132,931 $120,521 $44,147 $35,849
% of revenue 49.2% 49.5% 16.3% 14.7%
Disposition of
pharmaceutical
product lines and
related restructuring(1) - - - 1,479
Non-GAAP comparative
measurements(2) $132,931 $120,521 $44,147 $37,328
% of revenue 49.2% 49.5% 16.3% 15.3%
Net Income Attributable Earnings per
to Stockholders Share Diluted
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2009 2008 2009 2008
GAAP measurement $30,951 $23,555 $0.51 $0.39
% of revenue 11.4% 9.7%
Disposition of
pharmaceutical
product lines and
related restructuring(1) - 3,598 - 0.06
Non-GAAP comparative
measurements(2) $30,951 $27,153 $0.51 $0.44
% of revenue 11.4% 11.2%
Management believes adjusted diluted EPS is a useful non-GAAP financial
measure to evaluate the results of ongoing operations, excluding
significant specified events, period over period, and therefore
believes that investors may find this information useful in addition to
the GAAP results.
We use these supplemental non-GAAP financial measures to evaluate the
Company's comparative financial performance. The specified items that
are excluded in these non-GAAP measures are actual charges that impact
net income and cash flows, however, we believe that it is useful to
evaluate our core business performance period over period excluding
these specified items, in addition to relying upon GAAP financial
measures.
(1) We believe that the impact of the disposition of certain
pharmaceutical product lines and the related restructuring of the
remaining pharmaceutical business in 2008 is not indicative of future
performance because significant transactions and related costs of a
similar nature are not likely to recur within a reasonable period. In
the fourth quarter of 2008 we completed a transaction to sell our
ACAREXX and SURPASS pharmaceutical products and a product then
under development, which were a part of our CAG segment, and
subsequently restructured the remaining pharmaceutical business.
(2) The sum of the individual items may not equal the non-GAAP
measurement due to rounding of the individual items in this
presentation.
IDEXX Laboratories, Inc. and Subsidiaries
Non-GAAP Financial Measures
Amounts in thousands except per share data (Unaudited)
Twelve Months Ended
Gross Profit Income from Operations
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2009 2008 2009 2008
GAAP measurement $526,281 $529,766 $175,969 $172,456
% of revenue 51.0% 51.7% 17.1% 16.8%
Disposition of
pharmaceutical
product lines and
restructuring(1) - - - 1,479
Discrete income tax
benefits(2) - - - -
Non-GAAP comparative
measurements(3) $526,281 $529,766 $175,969 $173,935
% of revenue 51.0% 51.7% 17.1% 17.0%
Net Income Attributable Earnings per
to Stockholders Share Diluted
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
2009 2008 2009 2008
GAAP measurement $122,225 $116,169 $2.01 $1.87
% of revenue 11.8% 11.3%
Disposition of
pharmaceutical
product lines and
restructuring(1) - 3,598 - 0.06
Discrete income tax
benefits(2) - (1,472) - (0.02)
Non-GAAP comparative
measurements(3) $122,225 $118,295 $2.01 $1.90
% of revenue 11.8% 11.6%
Management believes adjusted diluted EPS is a useful non-GAAP financial
measure to evaluate the results of ongoing operations, excluding
significant specified events, period over period, and therefore
believes that investors may find this information useful in addition to
the GAAP results.
We use these supplemental non-GAAP financial measures to evaluate the
Company's comparative financial performance. The specified items that
are excluded in these non-GAAP measures are actual charges that impact
net income and cash flows; however, we believe that it is useful to
evaluate our core business performance period over period excluding
these specified items, in addition to relying upon GAAP financial
measures.
(1) We believe that the impact of the disposition of certain
pharmaceutical product lines and the related restructuring of the
remaining pharmaceutical business in the fourth quarter of 2008 is not
indicative of future performance because significant transactions and
related costs of a similar nature are not likely to recur within a
reasonable period. In the fourth quarter of 2008 we completed a
transaction to sell our ACAREXX and SURPASS pharmaceutical products
and a product then under development, which were a part of our
CAG segment, and subsequently restructured the remaining
pharmaceutical business.
(2) We believe that certain significant discrete income tax items create
impacts on financial measures that are not indicative of future
performance because the items are not likely to recur within a
reasonable period. For 2008, the separately identified discrete income
tax benefit was due to a reduction in international deferred tax
liabilities due to lower anticipated international tax rates.
(3) The sum of the individual items may not equal the non-GAAP
measurement due to rounding of the individual items in this
presentation.
IDEXX Laboratories, Inc. and Subsidiaries
Segment Information
Amounts in thousands (Unaudited)
Three Months Ended Twelve Months Ended
December December December December
31, 31, 31, 31,
2009 2008 2009 2008
Revenue: CAG $217,861 $196,523 $843,303 $834,056
Water 18,507 17,182 73,214 74,469
PAS 23,360 20,310 77,208 80,762
Other 10,607 9,278 37,908 34,743
Total $270,335 $243,293 $1,031,633 $1,024,030
Gross Profit: CAG $100,346 $90,359 $410,356 $412,199
Water 11,272 11,479 47,233 47,052
PAS 15,592 14,307 51,256 55,005
Other 5,605 4,289 17,067 15,131
Unallocated 116 87 369 379
Total $132,931 $120,521 $526,281 $529,766
Income from
Operations: CAG $29,304 $24,210 $136,121 $129,620
Water 7,279 7,893 31,615 31,330
PAS 6,269 6,936 17,271 21,760
Other 3,570 919 3,425 1,555
Unallocated (2,275) (4,109) (12,463) (11,809)
Total $44,147 $35,849 $175,969 $172,456
Gross Profit
(as a percentage
of revenue): CAG 46.1% 46.0% 48.7% 49.4%
Water 60.9% 66.8% 64.5% 63.2%
PAS 66.7% 70.4% 66.4% 68.1%
Other 52.8% 46.2% 45.0% 43.6%
Income from
Operations
(as a percentage
of revenue): CAG 13.5% 12.3% 16.1% 15.5%
Water 39.3% 45.9% 43.2% 42.1%
PAS 26.8% 34.2% 22.4% 26.9%
Other 33.7% 9.9% 9.0% 4.5%
IDEXX Laboratories, Inc. and Subsidiaries
Revenues and Revenue Growth Analysis by Product and Service
Categories
Amounts in thousands (Unaudited)
Three Months Ended
December 31, December 31, Dollar Percentage
Net Revenue 2009 2008 Change Change
CAG $217,861 $196,523 $21,338 10.9%
Water 18,507 17,182 1,325 7.7%
PAS 23,360 20,310 3,050 15.0%
Other 10,607 9,278 1,329 14.3%
Total $270,335 $243,293 $27,042 11.1%
Percentage
Change Net of
Percentage Acquisitions/
Percentage Change from Divestitures
Change from Acquisitions/ and Currency
Net Revenue Currency(1) Divestitures(2) Effect(3)
CAG 4.3% 0.5% 6.1%
Water 4.7% - 3.0%
PAS 9.6% - 5.4%
Other 2.6% - 11.7%
Total 4.7% 0.4% 6.0%
Three Months Ended
December 31, December 31, Dollar Percentage
Net CAG Revenue 2009 2008 Change Change
Instruments and
consumables $92,817 $81,559 $11,258 13.8%
Rapid assay products 30,081 30,240 (159) (0.5%)
Laboratory and
consulting services 75,423 65,260 10,163 15.6%
Practice information
systems and
digital radiography 19,540 18,918 622 3.3%
Pharmaceutical products - 546 (546) (100.0%)
Net CAG revenue $217,861 $196,523 $21,338 10.9%
Percentage
Change Net of
Percentage Acquisitions/
Percentage Change from Divestitures
Change from Acquisitions/ and Currency
Net CAG Revenue Currency(1) Divestitures(2) Effect(3)
Instruments and
consumables 4.3% - 9.5%
Rapid assay products 1.8% - (2.3%)
Laboratory and consulting
services 6.1% 2.1% 7.4%
Practice information
systems and
digital radiography 1.9% 0.6% 0.8%
Pharmaceutical products - (100.0%) -
Net CAG revenue 4.3% 0.5% 6.1%
(1) Represents the percentage change in revenue attributed to the effect
of changes in currency rates from the three months ended December 31,
2008 to the three months ended December 31, 2009.
(2) Represents the percentage change in revenue during the three months
ended December 31, 2009 compared to the three months ended December
31, 2008 attributed to incremental revenues from businesses acquired
or revenues lost from businesses divested or discontinued subsequent
to September 30, 2008.
(3) Organic Growth
IDEXX Laboratories, Inc. and Subsidiaries
Revenues and Revenue Growth Analysis by Product and Service
Categories
Amounts in thousands (Unaudited)
Twelve Months Ended
December 31, December 31, Dollar Percentage
Net Revenue 2009 2008 Change Change
CAG $843,303 $834,056 $9,247 1.1%
Water 73,214 74,469 (1,255) (1.7%)
PAS 77,208 80,762 (3,554) (4.4%)
Other 37,908 34,743 3,165 9.1%
Total $1,031,633 $1,024,030 $7,603 0.7%
Percentage
Change Net of
Percentage Acquisitions/
Percentage Change from Divestitures
Change from Acquisitions/ and Currency
Net Revenue Currency(1) Divestitures(2) Effect(3)
CAG (2.3%) (2.0%) 5.4%
Water (3.4%) - 1.7%
PAS (3.4%) - (1.0%)
Other (0.4%) - 9.5%
Total (2.4%) (1.6%) 4.7%
Twelve Months Ended
December 31, December 31, Dollar Percentage
Net CAG Revenue 2009 2008 Change Change
Instruments and
consumables $332,706 $318,533 $14,173 4.4%
Rapid assay products 147,078 146,867 211 0.1%
Laboratory and consulting
services 298,410 288,244 10,166 3.5%
Practice information systems
and digital radiography 65,055 61,291 3,764 6.1%
Pharmaceutical products 54 19,121 (19,067) (99.7%)
Net CAG revenue $843,303 $834,056 $9,247 1.1%
Percentage
Change Net of
Percentage Acquisitions/
Percentage Change from Divestitures
Change from Acquisitions/ and Currency
Net CAG Revenue Currency(1) Divestitures(2) Effect(3)
Instruments and
consumables (2.7%) - 7.1%
Rapid assay products (0.7%) - 0.8%
Laboratory and consulting
services (3.0%) 0.7% 5.8%
Practice information systems
and digital radiography (0.8%) 0.2% 6.7%
Pharmaceutical products - (99.6%) (0.1%)
Net CAG revenue (2.3%) (2.0%) 5.4%
(1) Represents the percentage change in revenue attributed to the effect
of changes in currency rates from the twelve months ended December 31,
2008 to the twelve months ended December 31, 2009.
(2) Represents the percentage change in revenue during the twelve months
ended December 31, 2009 compared to the twelve months ended December
31, 2008 attributed to incremental revenues from businesses acquired
or revenues lost from businesses divested or discontinued subsequent
to December 31, 2007.
(3) Organic Growth
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Balance Sheet
Amounts in thousands (Unaudited)
December 31, December 31,
2009 2008
Assets: Current Assets:
Cash and cash equivalents $106,728 $78,868
Accounts receivable, net 115,107 111,498
Inventories 110,425 115,926
Other current assets 44,078 49,598
Total current assets 376,338 355,890
Property and equipment, at cost 346,592 320,198
Less: accumulated depreciation 146,646 130,552
Property and equipment, net 199,946 189,646
Other long-term assets, net 232,243 219,901
Total assets $808,527 $765,437
Liabilities
and
Stockholders'
Equity: Current Liabilities:
Accounts payable $19,133 $28,006
Accrued expenses 104,959 104,616
Debt 119,603 151,385
Deferred revenue 12,610 11,285
Total current liabilities 256,305 295,292
Long-term debt, net of
current portion 4,281 5,094
Other long-term liabilities 33,362 26,857
Total long-term liabilities 37,643 31,951
Total stockholders' equity 514,569 438,194
Noncontrolling interest 10 -
Total equity 514,579 438,194
Total liabilities and
stockholders' equity $808,527 $765,437
IDEXX Laboratories, Inc. and Subsidiaries
Key Balance Sheet Information (Unaudited)
December September June March December
31, 30, 30, 31, 31,
2009 2009 2009 2009 2008
Key Balance Days sales
Sheet outstanding 38.9 41.2 40.2 43.8 41.9
Information: Inventory turns 2.2 1.8 1.8 1.6 2.0
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Amounts in thousands (Unaudited)
Twelve Months Ended
December 31, December 31,
2009 2008
Operating: Cash Flows from Operating Activities:
Net income attributable to
stockholders $122,225 $116,169
Noncontrolling interest in
subsidiary's earnings 10 -
Net income 122,235 116,169
Non-cash charges 63,042 60,650
Changes in current assets and
liabilities, net of
acquisitions and disposals (11,559) (33,511)
Net cash provided by
operating activities $173,718 $143,308
Investing: Cash Flows from Investing Activities:
Purchase of property and
equipment (49,418) (89,237)
Proceeds from disposition of
pharmaceutical product lines 3,377 7,025
Proceeds from sale of property
and equipment 2,079 -
Acquisitions of intangible assets and
businesses, net of cash acquired (7,180) (8,649)
Acquisition of equipment leased
to customers (1,245) (734)
Net cash used by investing
activities $(52,387) $(91,595)
Financing: Cash Flows from Financing Activities:
Borrowings (payments) on revolving
credit facilities, net (32,830) 79,550
Payment of other notes payable (926) (595)
Purchase of treasury stock (83,099) (132,342)
Proceeds from the exercise of
stock options and
employee stock purchase plans 16,366 16,360
Tax benefit from exercise of
stock options and
vesting of restricted stock units 5,194 6,237
Net cash used by financing
activities $(95,295) $(30,790)
Net effect of changes in
exchange rates on cash 1,824 (2,415)
Net increase in cash and cash
equivalents 27,860 18,508
Cash and cash equivalents,
beginning of period 78,868 60,360
Cash and cash equivalents,
end of period $106,728 $78,868
IDEXX Laboratories, Inc. and Subsidiaries
Free Cash Flow
Amounts in thousands (Unaudited)
Twelve Months Ended
December 31, December 31,
2009 2008
Free Cash
Flow: Net cash provided by
operating activities $173,718 $143,308
Financing cash flows attributable
to tax benefits from exercise of
stock options and vesting of
restricted stock units 5,194 6,237
Purchase of property and
equipment (49,418) (89,237)
Acquisition of equipment leased
to customers (1,245) (734)
Free cash flow $128,249 $59,574
Free cash flow indicates the cash generated from operations and tax
benefits attributable to stock option exercises, reduced by investments
in fixed assets. We feel 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 fixed assets that
are required to operate the business. We believe this is a common
financial measure useful to further evaluate the results of operations.
IDEXX Laboratories, Inc. and Subsidiaries
Cash Flow Impact of Pharmaceutical Transactions and Restructuring
Amounts in thousands (Unaudited)
December 31,
2008
Proceeds $8,402
Restructuring and transaction expenses incurred (671)
Tax charge related to disposal of nondeductible goodwill (2,666)
Realization of deferred tax assets 4,228
Tax benefit realized from transaction loss 401
Net cash flow realized from transaction and restructuring $9,694
IDEXX Laboratories, Inc. and Subsidiaries
Common Stock Repurchases
Amounts in thousands except per share data (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2009 2008 2009 2008
Share repurchases
during the period 486 297 1,919 2,640
Average price paid per
share $51.69 $33.41 $43.30 $50.14
Shares remaining under
repurchase authorization
as of December 31, 2009: 2,294
SOURCE IDEXX Laboratories, Inc.
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