WESTBROOK, Maine, April 29 /PRNewswire-FirstCall/ -- IDEXX Laboratories, Inc. , today reported that revenue for the first quarter of 2005 increased 14% to $152.4 million from $133.4 million for the first quarter of 2004.
Net income was $17.7 million for the quarter ended March 31, 2005, compared to $17.8 million for the same period in the prior year. Net income, as expected, was flat relative to the first quarter of 2004 primarily as a result of anticipated increases in sales and marketing expense related to the expansion of the Companion Animal Group sales and support personnel in 2004 and integration costs associated with the acquisitions of Vet Med Lab and Dr. Bommeli AG in the fourth quarter 2004.
Earnings per diluted share for the quarter were $0.51, a 4% increase over earnings per diluted share of $0.49 for the quarter ended March 31, 2004. During the quarter ended March 31, 2005 the Company incurred acquisition integration costs of $0.02 per diluted share associated with the acquisitions of Vet Med Lab and Dr. Bommeli AG. Excluding the effects of these discrete costs in the first quarter of 2005, earnings per diluted share grew 8%.
Companion Animal Group (CAG) revenue for the first quarter of 2005 increased 14% to $124.9 million from $109.8 million for the first quarter of 2004. This increase resulted primarily from increased sales of laboratory and consulting services, instruments and consumables and, to a lesser degree, pharmaceutical products and rapid assay products. The increase in laboratory and consulting services revenue was due, in part, to the inclusion of sales from laboratories acquired during 2004, which contributed approximately 7% to CAG revenue growth during the quarter. The favorable impact of foreign currency contributed 1% to CAG revenue growth.
Water segment revenue for the first quarter increased 8% to $12.8 million from $11.9 million for the first quarter of 2004 primarily due to higher worldwide sales volume. The favorable impact of foreign currency contributed 2% to Water revenue growth.
Food Diagnostics Group (FDG) revenue for the first quarter increased 26% to $14.7 million from $11.7 million for the first quarter of 2004 primarily due to higher production animal diagnostics sales in Europe. Approximately 11% of FDG growth resulted from sales from businesses acquired in 2004. The impact of foreign currency contributed 3% to FDG revenue growth.
"Our first quarter revenues were in line with our expectations and earnings per share slightly exceeded expectations primarily as a result of higher than anticipated gross margin," said Jonathan Ayers, Chairman and CEO. "Our results reflect our first full quarter of operations of Vet Med Lab and Dr. Bommeli AG, which we acquired in the fourth quarter of 2004. To date we are very pleased with the performance of these businesses and we are excited about the possibilities for market expansion that these Europe-based companies bring to IDEXX."
"Overall we continue to view 2005 as a year in which we integrate our recently acquired businesses and continue to invest in new product and operating initiatives that will position us to achieve our long-term growth objectives."
Outlook
The Company offers the following guidance for the second quarter of 2005:
* Revenue is expected to be approximately $160 to $162 million.
* Diluted earnings per share are expected to be approximately $0.56 to
$0.58, which includes approximately $0.01 of anticipated acquisition
integration costs.
The Company offers the following guidance for the full year of 2005:
* Revenue is expected to be approximately $630 to $640 million.
* Diluted earnings per share are expected to be approximately $2.25 to
$2.28, which includes approximately $0.05 of anticipated acquisition
integration costs.
Annual Meeting to be Broadcast Live on Internet
IDEXX Laboratories, Inc. today announced that it will host a simultaneous Webcast of its Annual Meeting of Stockholders, to be held on Wednesday, May 18, 2005, at 10:00 a.m. (eastern) at the Eastland Park Hotel in Portland, Maine.
Chairman and CEO Jonathan Ayers will chair the meeting. Investors may listen to the Annual Meeting and view a simultaneous presentation live via a link on the Company's Web site, idexx.com. An archived edition of the Meeting will be available after 1:00 p.m. (eastern) on that day via the same link.
About IDEXX Laboratories
IDEXX Laboratories, Inc. is a leader in companion animal health, serving practicing veterinarians around the world with innovative, technology-based offerings, including a broad range of diagnostic products and services, practice-management systems and therapeutics. Our products enhance the ability of veterinarians to provide advanced medical care 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 Westbrook, Maine, IDEXX Laboratories employs more than 3,000 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 effectiveness of the Company's sales and marketing activities; the Company's ability to develop, license or obtain rights to new technologies; the Company's ability to identify acquisition opportunities, complete acquisitions and integrate acquired businesses; the impact of competition and technological change on the markets for the Company's 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 our 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; disruptions, shortages or pricing changes that affect the Company's purchases of products and materials from third parties, including from sole source suppliers; the effects of government regulatory decisions, customer demand, pricing and other factors on the realizability of the Company's inventories; the Company's ability to manufacture complex biologic products; the effects of operations outside the U.S., including from currency fluctuations, different regulatory, political and economic conditions, and different market conditions; 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, 2004, in the section captioned "Management's Discussion and Analysis of Financial Condition and Results of Operations."
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Operations
Amounts in thousands except per share data (Unaudited)
Three Months Ended
March 31 March 31
2005 2004
Revenue: Revenue $152,426 $133,417
Expenses and
Income: Cost of revenue 76,346 66,371
Gross profit 76,080 67,046
Sales and marketing 25,070 20,983
General and administrative 15,098 12,242
Research and development 9,774 8,520
Income from operations 26,138 25,301
Interest income, net 503 729
Income before provision for income
taxes and partner's interest 26,641 26,030
Partner's share of consolidated
loss 101 133
Provision for income taxes 9,052 8,372
Net Income: Net income $17,690 $17,791
Earnings per share: Basic $0.54 $0.51
Earnings per share: Diluted $0.51 $0.49
Shares outstanding: Basic 32,955 34,775
Shares outstanding: Diluted 34,439 36,437
IDEXX Laboratories, Inc. and Subsidiaries
Key Operating Ratios (Unaudited)
Three Months Ended
March 31 March 31
2005 2004
Key Operating
Ratios (as a
percentage of
revenue): Gross profit 49.9% 50.3%
Sales, marketing, general and
administrative expense 26.4% 24.9%
Research and development expense 6.4% 6.4%
Income from operations 17.1% 19.0%
International
Revenue: International revenue 35.1% 31.3%
IDEXX Laboratories, Inc. and Subsidiaries
Segment Information
Amounts in thousands (Unaudited)
Three Months Ended
March 31 March 31
2005 2004
Revenue: Companion Animal Group $124,880 $109,830
Water 12,806 11,854
Food Diagnostics Group 14,740 11,733
Total $152,426 $133,417
Gross Profit: Companion Animal Group $59,263 $52,076
Water 8,477 7,993
Food Diagnostics Group 8,340 6,977
Total $76,080 $67,046
Income from
Operations: Companion Animal Group $18,888 $18,248
Water 5,504 5,055
Food Diagnostics Group 2,578 2,923
Other (832) (925)
Total $26,138 $25,301
Gross Profit
(as a percentage
of revenue): Companion Animal Group 47.5% 47.4%
Water 66.2% 67.4%
Food Diagnostics Group 56.6% 59.5%
Operating
Profit (as a
percentage of
revenue): Companion Animal Group 15.1% 16.6%
Water 43.0% 42.6%
Food Diagnostics Group 17.5% 24.9%
IDEXX Laboratories, Inc. and Subsidiaries
Revenues by Product and Service Categories
Amounts in thousands (Unaudited)
Three Months Ended
March 31 March 31
2005 2004
Net CAG Revenue:
Instruments and consumables $52,873 $48,811
Rapid assay products 24,752 24,245
Laboratory and consulting services 36,544 27,105
Information products and services
and digital radiography 7,461 7,328
Pharmaceutical products 3,250 2,341
Net CAG revenue 124,880 109,830
Net Water
Revenue: 12,806 11,854
Net FDG Revenue:
Production animal products 10,862 7,898
Dairy-testing products 3,878 3,835
Net FDG revenue 14,740 11,733
Net Revenue: $152,426 $133,417
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Balance Sheet
Amounts in thousands (Unaudited)
March 31 December 31
2005 2004
Assets: Current Assets:
Cash and cash equivalents $44,579 $47,156
Short-term investments 65,622 90,116
Accounts receivable, net 75,617 65,639
Inventories 78,481 76,424
Other current assets 22,045 22,257
Total current assets 286,344 301,592
Long-term investments 12,037 19,687
Property and equipment - cost 140,714 137,851
Less - Accumulated depreciation 77,970 75,221
Property and equipment, net 62,744 62,630
Other long-term assets, net 126,793 130,328
Total assets $487,918 $514,237
Liabilities and
Stockholders'
Equity: Current Liabilities:
Accounts payable $12,957 $14,723
Accrued expenses 62,951 73,785
Notes payable 526 1,291
Deferred revenue 8,617 10,153
Total current liabilities 85,051 99,952
Total long-term liabilities 15,080 16,233
Partner's interest in subsidiary 342 392
Stockholders' Equity:
Common stock 4,533 4,522
Additional paid-in capital 414,397 410,817
Deferred equity-based compensation 1,174 665
Retained earnings 336,372 318,682
Treasury stock, at cost (377,867) (348,327)
Accumulated other
comprehensive income 8,836 11,301
Total stockholders' equity 387,445 397,660
Total liabilities and
stockholders' equity $487,918 $514,237
IDEXX Laboratories, Inc. and Subsidiaries
Key Balance Sheet Statistics (Unaudited)
March 31 December 31
2005 2004
Key
Balance Sheet
Statistics: Days sales outstanding 42 39
Inventory turns 1.8 1.9
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Amounts in thousands (Unaudited)
Three Months Ended
March 31 March 31
2005 2004
Operating: Cash Flows from Operating Activities:
Net income $17,690 $17,791
Non-cash charges 6,390 11,663
Changes in current assets and
liabilities, net of acquisitions
and disposals (23,798) (18,786)
Net cash provided by
operating activities $282 $10,668
Investing: Cash Flows from Investing Activities:
Decrease in investments, net 32,112 443
Purchase of property and equipment (4,536) (6,003)
Acquisition of businesses and
intangible assets (659) (5,342)
Acquisition of equipment leased
to customers (696) (466)
Net cash provided by (used by)
investing activities $26,221 $(11,368)
Financing: Cash Flows from Financing Activities:
Repayments of notes payable (1,271) (254)
Purchase of treasury stock (29,540) (22,417)
Proceeds from the exercise of
stock options 2,603 11,005
Net cash used by financing
activities $(28,208) $(11,666)
Net effect of exchange rate
changes (872) 184
Net decrease in cash and cash
equivalents (2,577) (12,182)
Cash and cash equivalents,
beginning of period 47,156 96,942
Cash and cash equivalents, end of
period $44,579 $84,760
IDEXX Laboratories, Inc. and Subsidiaries
Free Cash Flow (Unaudited)
Three Months Ended
March 31 March 31
2005 2004
Free Cash
Flow: Net cash provided by
operating activities $282 $10,668
Purchase of property
and equipment (4,536) (6,003)
Acquisition of equipment
leased to customers (696) (466)
Free cash flow $(4,950) $4,199
Free cash flow indicates the cash generated from operations reduced by
investments in capital and other long-term assets. Free cash flow excludes
financing activities, investments in monetary securities, and business
acquisitions and divestitures. 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.
CONTACT: Merilee Raines, Chief Financial Officer of IDEXX, +1-207-856-8155
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