false
IDEXX LABORATORIES INC /DE
0000874716
0000874716
2024-10-31
2024-10-31
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K/A
(Amendment
No. 1)
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of report (Date of earliest event reported): October 31, 2024
IDEXX
LABORATORIES, INC.
(Exact
name of registrant as specified in its charter)
| Delaware |
|
000-19271 |
|
01-0393723 |
| (State
or other jurisdiction |
|
(Commission
File Number) |
|
(IRS
Employer Identification No.) |
| of
incorporation) |
|
|
|
|
| One IDEXX Drive, Westbrook, Maine |
|
|
|
04092 |
(Address
of principal executive offices) |
|
|
|
(ZIP
Code) |
207.556.0300
(Registrant's
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions (see General Instruction A.2. below):
| |
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
¨ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
| Common
Stock, $0.10 par value per share |
|
IDXX |
|
NASDAQ
Global Select Market |
Indicate
by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of
1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Explanatory Note
On October 31, 2024, IDEXX Laboratories, Inc. (the
“Company”) filed a Current Report on Form 8-K (the “Original 8-K”) with the U.S. Securities and Exchange Commission
(“SEC”), which included as Exhibit 99.1 to the Original 8-K an earnings release (the “Original Earnings Release”).
The Company is filing this Amendment No. 1 to the Original Form 8-K (the “Amended 8-K”) solely to correct the range of projected
2024 comparable operating profit margin expansion set forth in the “2024 Growth and Financial Performance Outlook” section
of the Company’s Original Earnings Release. All other information contained in the Original 8-K, including the Original Earnings
Release included as an exhibit thereto, remains unchanged.
| Item 2.02 | Results of Operations and Financial Condition. |
On October 31, 2024, the Company filed the Original
8-K, which included the Original Earnings Release. This Amended 8-K replaces the Original Earnings Release with the amended earnings release,
which is attached as Exhibit 99.1 to the Amended 8-K (the “Amended Earnings Release”).
This Amended Earnings Release corrects and replaces
the range of projected 2024 comparable operating profit margin expansion of 70 to 100 basis points set forth in the “2024 Growth
and Financial Performance Outlook” section of the Company’s Original Earnings Release with 30 to 60 basis points. All other
information contained in the Original Earnings Release remains unchanged. See “Note Regarding Forward-Looking Statements”
and “Statement Regarding Non-GAAP Financial Measures” for additional information.
In accordance with general instructions to Form
8-K, the information in this Amended 8-K and the Exhibit 99.1 attached hereto is being furnished under Item 2.02 and shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject
to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or
the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
The following exhibit relating to Item
2.02 shall be deemed to be furnished, and not filed.
| Exhibit No. |
Description of Exhibit |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
|
IDEXX LABORATORIES, INC. |
| |
|
| Date: October 31, 2024 |
By: |
/s/ Brian P. McKeon |
| |
|
Brian P. McKeon |
| |
|
Executive Vice President,
Chief Financial Officer and Treasurer |
Exhibit 99.1
| FOR
IMMEDIATE RELEASE |
Contact:
John Ravis, Investor Relations, 1-207-556-8155 |
IDEXX
Laboratories Announces Third Quarter Results
| ▪ | Achieves third quarter revenue growth of 7% as reported and 6%
organic, supported by CAG Diagnostics recurring revenue growth of 7% as reported and organic. |
| ▪ | Organic revenue growth supported by benefits from IDEXX execution
drivers including continued solid new business gains and double-digit year-over-year global
premium installed base growth. |
| ▪ | Delivers EPS of $2.80, an increase of 11% as reported and 12%
on a comparable basis, supported by operating margin expansion of 110 basis points as reported
and 100 basis points on a comparable basis. |
| ▪ | Adjusts 2024 revenue guidance to $3,865 million - $3,890 million,
a reduction of $38 million or ~1% at midpoint, incorporating expectations for near-term negative
impacts on growth related to macro and sector conditions constraining pet owner visits and
demand at U.S. veterinary clinics. |
| ▪ | Updates 2024 revenue growth guidance to 5.5% - 6.2% as reported
and 5.3% - 6.0% organic, driven by projected CAG Diagnostics recurring revenue growth of
5.6% - 6.2% as reported and 5.8% - 6.4% organic. |
| ▪ | Narrows 2024 EPS outlook to $10.37 - $10.53, maintaining consistent
EPS midpoint compared to prior guidance, supported by consistent outlook for solid operating
margin performance and benefits from lower projected interest expense and effective tax rate. |
WESTBROOK, Maine, October 31, 2024— IDEXX Laboratories,
Inc. (NASDAQ: IDXX), a global leader in pet healthcare innovation, today announced third quarter results.
Third Quarter Results
The Company reports revenues of $976 million for the third quarter
of 2024, an increase of 7% as reported and 6% organic, driven by Companion Animal Group ("CAG") growth of 7% as reported and
6% organic, and Water revenue growth of 13% as reported and organic. CAG Diagnostics recurring revenue growth of 7% as reported and organic
was supported by sustained double-digit growth in international regions and global benefits from IDEXX execution drivers including 10%
annual growth in IDEXX's global premium instrument installed base. IDEXX veterinary software, services and diagnostic imaging systems
revenue increased 11% as reported and 6% organic, reflecting high recurring revenue growth and continued momentum in cloud-based software
placements.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 2 of 16
Third quarter earnings per diluted share (“EPS”) were
$2.80, an increase of 11% as reported and 12% on a comparable basis, supported by operating margin expansion of 110 basis points as reported
and 100 basis points on a comparable basis.
“IDEXX teams continued their strong execution in the third quarter
as demonstrated by solid net customer gains, continued growth in our premium IDEXX VetLab® instrument installed base,
and nearly 700 pre-orders of IDEXX inVue Dx™ Cellular Analyzer, which will begin shipping later in the fourth quarter,”
said Jay Mazelsky, President and Chief Executive Officer. "Customers especially value IDEXX technology solutions like inVue Dx that
provide meaningful clinical insights while giving time back to busy practice staff.”
Third Quarter Performance Highlights
Companion Animal Group
The Companion Animal Group generated revenue growth of 7% as reported
and 6% organic for the quarter. Solid growth was supported by CAG Diagnostics recurring revenue growth of 7% as reported and organic.
CAG Diagnostics recurring revenue growth was supported by 10% reported and organic gains in international regions. U.S. CAG Diagnostics
recurring revenue growth of 5% as reported and organic continued to outpace sector growth levels in the third quarter.
Additional U.S. companion animal practice key metrics are available
in the Q3 2024 Earnings Snapshot accessible on the IDEXX website, www.idexx.com/investors.
Solid global growth was achieved across IDEXX's testing modalities.
| ▪ | IDEXX VetLab® consumables generated 11%
reported and organic revenue growth, with double-digit gains in the U.S. and International
regions supported by strong installed base growth across premium instrument platforms and
benefits from equivalent days effects. |
| ▪ | Reference
laboratory diagnostic and consulting services generated 3% reported and 2% organic revenue
growth, driven by solid International growth. |
| ▪ | Rapid assay products revenues grew 6% as reported and
organic, driven by solid gains in the U.S., including benefits from higher net price realization
and equivalent days effects. |
Veterinary software, services and diagnostic imaging systems revenues
grew 11% as reported and 6% organically, driven by continued high levels of organic growth in software and diagnostic imaging recurring
revenues and benefits from a recent software and data platform acquisition.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 3 of 16
Water
Water revenues grew 13% as reported and organic for the quarter, reflecting
double-digit gains in the U.S. and continued solid growth in Europe.
Livestock, Poultry and Dairy (“LPD”)
LPD revenues declined 3% as reported and 2% organic for the quarter.
Solid gains in the U.S. and for poultry tests globally were offset by lower Asia Pacific revenues, including impacts from reduced swine
testing and herd health screening levels.
Gross Profit and Operating Profit
Gross profits increased 9% as reported and on a comparable basis.
Gross margin of 61.1% increased 120 basis points as reported and 140 basis points on a comparable basis supported by benefits from business
mix, led by high growth in IDEXX VetLab consumable revenues and veterinary software, services, and diagnostic imaging recurring revenues
and lower instrument costs.
Operating margin was 31.2% for the quarter, higher than the prior
year by 110 basis points as reported and 100 basis points on a comparable basis. Operating margin results reflect 7% operating expense
growth as reported and 8% on a comparable basis. Operating expense growth was driven by higher sales and marketing expense and higher
R&D spend related to advancing the Company's growth and innovation agenda.
2024 Growth and Financial Performance Outlook
The Company is updating its full year revenue growth guidance range
to $3,865 million - $3,890 million, or reported growth of 5.5% - 6.2%, a reduction of $38 million at midpoint. This reflects an adjustment
of ~1.5% at midpoint to full year estimates for organic revenue growth, which is now projected at 5.3% - 6.0%, reflecting recent trends
in U.S. clinical visit and demand levels. The updated guidance range includes ~$15 million of favorable impact from more recent foreign
exchange estimates.
The Company maintained a consistent full year reported operating margin
outlook of 28.7% - 29.0%, including ~160 basis points of impact related to the previously reported discrete litigation expense accrual.
At midpoint, projected full year comparable operating profit margin expansion of 30 - 60 basis points includes a ~40 basis point negative
growth impact from lapping a customer contract resolution payment in the first quarter of 2023.
The Company narrowed its EPS outlook range to $10.37 - $10.53, maintaining
a consistent midpoint. 2024 EPS results include a $0.56 negative impact from a discrete litigation expense accrual recorded in the second
quarter. Negative EPS impacts related to adjustments to the organic revenue outlook were offset by $0.02 in favorable adjustments to
foreign exchange estimates and favorable refinements to interest expense and effective tax rate estimates. The updated EPS growth outlook
is 3% - 5% as reported and 10% - 11% on comparable basis, including a ~2% negative growth impact from lapping a customer contract resolution
payment in the first quarter of 2023.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 4 of 16
The following table provides the Company's updated outlook for annual
key financial metrics in 2024 with a comparison to the prior outlook:
Amounts in millions except per share data and percentages
2024 Growth and Financial Performance Outlook
| |
|
Updated |
|
Prior |
| Revenue |
|
$3,865 -
$3,890 |
|
$3,885 - $3,945
|
| Reported growth |
|
5.5% -
6.2% |
|
6.2% -
7.8% |
| Organic growth |
|
5.3% -
6.0% |
|
6.2% -
7.8% |
| CAG Diagnostics Recurring Revenue Growth |
|
|
|
|
| Reported growth |
|
5.6% -
6.2% |
|
5.7% -
7.3% |
| Organic growth |
|
5.8% -
6.4% |
|
6.2% -
7.8% |
| Operating Margin |
|
28.7% - 29.0% |
|
28.7% -
29.0% |
| Operating margin
expansion |
|
(130 bps) -
(100 bps) |
|
(130 bps) -
(100 bps) |
| Negative impact of
ongoing litigation matter |
|
~160 bps |
|
~160 bps |
| Comparable margin
expansion |
|
30 bps -
60 bps |
|
30 bps -
60 bps |
| Negative impact of
2023 customer contract resolution payment |
|
~ 40 bps |
|
~ 40 bps |
| EPS |
|
$ 10.37 -
$10.53 |
|
$10.31
- $10.59 |
| Reported growth |
|
3% -
5% |
|
2% -
5% |
| Negative impact of
ongoing litigation matter |
|
~6% |
|
~6% |
| Comparable growth |
|
10% -
11% |
|
9% -
12% |
| Negative impact of
2023 customer contract resolution payment |
|
~2% |
|
~2% |
| Other Key Metrics |
|
|
|
|
| Net interest expense |
|
~$19 |
|
~$20 |
| Share-based compensation
tax benefit |
|
~$9 |
|
~$10 |
| Share-based compensation
tax rate benefit |
|
~1% |
|
~1% |
| Effective tax rate |
|
~20.7% |
|
~21.5% |
| Share-based compensation
EPS impact |
|
~$0.11 |
|
~$0.12 |
| Reduction in average
shares outstanding |
|
0.5% - 1% |
|
0.5% - 1% |
| Operating Cash Flow (% of Net Income) |
|
110% - 115% |
|
110% - 115% |
| Free Cash Flow (% of Net Income) |
|
90% - 95% |
|
90% - 95% |
| Capital Expenditures |
|
~ $160 |
|
~ $180 |
IDEXX Announces Third Quarter Results
October 31, 2024
Page 5 of 16
The following table outlines estimates of foreign currency exchange
rate impacts, net of foreign currency hedging transactions, and foreign currency exchange rate assumptions reflected in the above financial
performance outlook for 2024.
| Estimated
Foreign Currency Exchange Rate Impacts |
|
2024 |
|
| Revenue growth rate impact |
|
(~ 20
bps) |
|
| CAG Diagnostics recurring revenue
growth rate impact |
|
(~ 20
bps) |
|
| Operating margin growth impact |
|
~ 0
bps |
|
| EPS impact |
|
(~ $0.03) |
|
| EPS growth impact |
|
~ 0% |
|
| Go-Forward Foreign Currency Exchange Rate
Assumptions | |
2024 | |
| In U.S. dollars | |
| | |
| euro | |
$ | 1.08 | |
| British pound | |
$ | 1.29 | |
| Canadian dollar | |
$ | 0.72 | |
| Australian dollar | |
$ | 0.66 | |
| Relative to the U.S. dollar | |
| | |
| Japanese yen | |
¥ | 152 | |
| Chinese renminbi | |
¥ | 7.18 | |
| Brazilian real | |
| R$5.66 | |
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 2024 results and management’s outlook. 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. The live call also will be accessible by
telephone. To listen to the live conference call, please dial 1-800-289-0462 or 1-323-794-2442 and reference passcode 205740.
About IDEXX Laboratories, Inc.
IDEXX is a global leader in pet healthcare innovation. Our diagnostic
and software products and services create clarity in the complex, constantly evolving world of veterinary medicine. We support longer,
fuller lives for pets by delivering insights and solutions that help the veterinary community around the world make confident decisions—to
advance medical care, improve efficiency, and build thriving practices. Our innovations also help ensure the safety of milk and water
across the world and maintain the health and well-being of people and livestock. IDEXX Laboratories, Inc. is a member of the S&P
500® Index. Headquartered in Maine, IDEXX employs approximately 11,000 people and offers solutions and products to customers in more
than 175 countries and territories. For more information about IDEXX, visit www.idexx.com.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 6 of 16
Note Regarding Forward-Looking Statements
This earnings release and the statements to be made in the accompanying
earnings conference call contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including
statements about the Company’s business prospects and estimates of the Company’s financial results for future periods. Forward-looking
statements are included above under "Third Quarter Results", "2024 Growth and Financial Performance Outlook", 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 our expectations regarding financial
performance; revenue growth and EPS outlooks; operating and free cash flow forecast; projected impact of foreign currency exchange rates
and interest rates; projected operating margins and expenses and capital expenditures; projected tax, tax rate and EPS benefits from
share-based compensation arrangements; projected effective tax rates (including benefit from an expected release of a non-recurring tax
reserve), reduction of average shares outstanding and net interest expense; U.S. clinical visit trends, including macro and sector trends
affecting pet owner visits and demand at U.S. veterinary clinics; net price realization improvement; anticipated benefits from corporate
account contract expansions; projected impact of recent severe weather events; software placement and user-base growth; and future product
and service launches and expansions. 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 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, 2023 and in the corresponding sections of the Company's
Quarterly Reports on Form 10-Q for the quarter ended March 31, 2024, June 30, 2024, and September 30, 2024, 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 2024 results as follows: decreased gross profit growth by 0.2%, decreased
gross margin growth by 20 basis points, decreased operating expense growth by 0.8%, increased operating profit growth by 0.4%, increased
operating profit margin growth by 10 basis points, and increased EPS growth by 0.4%. 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, 2024 and refer to the 2024 Growth and Financial Performance Outlook section of this earnings release
for estimated foreign currency exchange rate impacts on 2024 projections and estimates.
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 represents the percent change in revenue, as compared to the same period for the prior year, net of
the impact of changes in foreign currency exchange rates, certain business acquisitions, and divestitures. Management believes that reporting
organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior
and future periods and to the performance of our peers. Organic revenue growth should be considered in addition to, and not as a replacement
of or a superior measure to, revenue growth reported in accordance with GAAP. 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, 2024. Please refer to the constant
currency note above for a summary of foreign currency exchange rate impacts. Please refer to the 2024 Growth and Financial Performance
Outlook section of this earnings release for estimated full year 2024 organic revenue growth for the Company and CAG Diagnostics recurring
revenue growth. The percentage change in revenue resulting from acquisitions represents revenues during the current year period, limited
to the initial 12 months from the date of the acquisition, that are directly attributable to business acquisitions. Revenue from acquisitions
is expected to benefit projected full year 2024 revenue growth by 0.4% and
have no impact on CAG Diagnostics recurring revenue growth.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 7 of 16
Comparable growth metrics - Comparable gross profit growth,
comparable gross margin gain (or growth), comparable operating expense growth, comparable operating profit growth and comparable operating
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). Please refer to the constant currency note above for a summary of foreign currency exchange rate impacts.
Management believes that reporting comparable gross profit growth, comparable gross margin gain (or growth), comparable operating expense
growth, comparable operating profit growth and comparable 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 gross profit growth,
comparable gross margin gain (or growth), comparable operating expense growth, comparable operating profit growth and comparable operating
margin gain (or growth) should be considered in addition to, and not as replacements of or superior measures to, gross profit growth,
gross margin gain, operating expense growth, operating profit growth and operating margin gain reported in accordance with GAAP.
The reconciliation of these non-GAAP financial measures is as follows:
| | |
Three
Months Ended | | |
Year-over-Year | | |
Nine
Months Ended | | |
Year-over-Year | |
| | |
September 30, | | |
September 30, | | |
Change | | |
September 30, | | |
September 30, | | |
Change | |
| Dollar amounts in
thousands | |
2024 | | |
2023 | | |
| | |
2024 | | |
2023 | | |
| |
| Gross Profit (as reported) | |
$ | 596,038 | | |
$ | 547,982 | | |
| 9 | % | |
$ | 1,808,267 | | |
$ | 1,663,803 | | |
| 9 | % |
| Gross margin | |
| 61.1 | % | |
| 59.9 | % | |
| 120
bps | | |
| 61.4 | % | |
| 60.3 | % | |
| 110
bps | |
| Less: comparability adjustments | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Change from currency | |
| (1,081 | ) | |
| — | | |
| | | |
| (4,201 | ) | |
| — | | |
| | |
| Comparable gross profit growth | |
$ | 597,119 | | |
$ | 547,982 | | |
| 9 | % | |
$ | 1,812,468 | | |
$ | 1,663,803 | | |
| 9 | % |
| Comparable gross margin and gross margin gain
(or growth) | |
| 61.2 | % | |
| 59.9 | % | |
| 140
bps | | |
| 61.5 | % | |
| 60.3 | % | |
| 120
bps | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Operating expenses (as reported) | |
$ | 292,146 | | |
$ | 272,699 | | |
| 7 | % | |
$ | 941,616 | | |
$ | 811,977 | | |
| 16 | % |
| Less: comparability adjustments | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Change from currency | |
| (2,286 | ) | |
| — | | |
| | | |
| (2,591 | ) | |
| — | | |
| | |
| Ongoing litigation
matter | |
| — | | |
| — | | |
| | | |
| 61,500 | | |
| — | | |
| | |
| Comparable operating expense growth | |
$ | 294,432 | | |
$ | 272,699 | | |
| 8 | % | |
$ | 882,707 | | |
$ | 811,977 | | |
| 9 | % |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Income from operations (as reported) | |
$ | 303,892 | | |
$ | 275,283 | | |
| 10 | % | |
$ | 866,651 | | |
$ | 851,826 | | |
| 2 | % |
| Operating margin | |
| 31.2 | % | |
| 30.1 | % | |
| 110
bps | | |
| 29.4 | % | |
| 30.9 | % | |
| (140)
bps | |
| Less: comparability adjustments | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Change from currency | |
| 1,205 | | |
| — | | |
| | | |
| (1,610 | ) | |
| — | | |
| | |
| Ongoing litigation
matter | |
| — | | |
| — | | |
| | | |
| (61,500 | ) | |
| — | | |
| | |
| Comparable operating profit growth | |
$ | 302,687 | | |
$ | 275,283 | | |
| 10 | % | |
$ | 929,761 | | |
$ | 851,826 | | |
| 9 | % |
| Comparable operating margin
and operating margin gain (or growth) | |
| 31.0 | % | |
| 30.1 | % | |
| 100
bps | | |
| 31.5 | % | |
| 30.9 | % | |
| 70
bps | |
Amounts presented may
not recalculate due to rounding.
Projected 2024 comparable operating margin expansion outlined in the
2024 Growth and Financial Performance Outlook section of this earnings release reflects: (i) projected full year 2024 reported operating
margin is adjusted for impacts of the discrete expense accrual related to an ongoing litigation matter in the second quarter of 2024;
and (ii) projected full year 2024 reported operating margin includes an immaterial impact from year-over-year foreign currency exchange
rate changes at noted exchange rates.
These impacts described above reconcile reported gross profit growth,
gross margin gain, operating expense growth, operating profit growth and operating margin gain (including projected 2024 operating margin
expansion) to comparable gross profit growth, comparable gross margin gain, comparable operating expense growth, comparable operating
profit growth and comparable operating margin gain for the Company.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 8 of 16
Comparable EPS growth - Comparable EPS growth is a non-GAAP
financial measure that represents the percentage change in earnings per share (diluted) ("EPS") for a measurement period, as
compared to the prior base period, net of the impact of changes in foreign currency exchange rates from the prior base period and excluding
the tax benefits of share-based compensation activity under ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements
to Employee Share-Based Payment Accounting, and non-recurring or unusual items (if any). Management believes comparable 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. Comparable EPS growth should be considered in addition to, and not as a replacement
of or a superior measure to, EPS growth reported in accordance with GAAP. Please refer to the constant currency note above for a summary
of foreign currency exchange rate impacts.
The reconciliation of this non-GAAP financial measure is as follows:
| | |
Three
Months Ended | | |
Year-over-Year | | |
Nine
Months Ended | | |
Year-over-Year | |
| | |
September 30, | | |
September 30, | | |
Growth | | |
September 30, | | |
September 30, | | |
Growth | |
| | |
2024 | | |
2023 | | |
| | |
2024 | | |
2023 | | |
| |
| Earnings per share (diluted) | |
$ | 2.80 | | |
$ | 2.53 | | |
| 11 | % | |
$ | 8.05 | | |
$ | 7.75 | | |
| 4 | % |
| Less: comparability adjustments | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Share-based compensation activity | |
| — | | |
| 0.04 | | |
| | | |
| 0.11 | | |
| 0.14 | | |
| | |
| Ongoing litigation matter | |
| — | | |
| — | | |
| | | |
| (0.56 | ) | |
| — | | |
| | |
| Change from currency | |
| 0.01 | | |
| — | | |
| | | |
| (0.01 | ) | |
| — | | |
| | |
| Comparable EPS growth | |
| 2.79 | | |
| 2.49 | | |
| 12 | % | |
| 8.51 | | |
| 7.61 | | |
| 12 | % |
Amounts presented may
not recalculate due to rounding.
Projected 2024 comparable EPS growth outlined in the 2024 Growth and
Financial Performance Outlook section of this earnings release reflects adjustments to projected full year 2024 reported EPS for: (i)
estimated positive share-based compensation activity of ~$0.11; (ii) a negative $0.56 impact from a discrete expense accrual related
to an ongoing litigation matter in the second quarter of 2024; and (iii) estimated negative year-over-year foreign currency exchange
rate change impact of ~$0.03 at noted exchange rates.
These impacts and those described in the constant currency note above
reconcile reported EPS growth (including projected 2024 reported EPS growth) to comparable 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. Free cash flow should be considered in addition to, and not as a replacement of or a superior measure to, net cash
provided by operating activities. See the supplementary analysis of results below for our calculation of free cash flow for the three
and nine months ended September 30, 2024 and 2023. To estimate projected 2024 free cash flow, we have deducted projected purchases of
property and equipment (also referred to as capital expenditures) of approximately $160 million. Free cash flow conversion, or the net
income to free cash flow ratio, is a non-GAAP financial measure that is defined as free cash flow, with respect to a measurement period,
divided by net income for the same period. To calculate trailing twelve-month net income to free cash flow ratio for the twelve months
ended September 30, 2024, we have deducted purchases of property and equipment of approximately $124 million from net cash provided from
operating activities of approximately $917 million, divided by net income of approximately $866 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, 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. Adjusted
EBITDA, gross debt, and net debt should be considered in addition to, and not as replacements of or superior measures to, net income
or total debt reported in accordance with GAAP. For further information on how Adjusted EBITDA and the Debt to Adjusted EBITDA Ratios
are calculated, see the Company's Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Report on Form 10-Q for
the quarter ended September 30, 2024.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 9 of 16
Notes and Definitions
Discrete litigation expense accrual - During the second quarter
of 2024, the Company increased its previously established $27.5 million accrual related to an ongoing litigation matter by $61.5 million.
Ongoing litigation matter - The Company is a defendant in an
ongoing litigation matter involving an alleged breach of contract for underpayment of royalty payments made from 2004 through 2017 under
an expired patent license agreement. The Company's total accrual of $89.0 million for this matter includes the discrete $61.5 million
litigation expense accrual recorded in the second quarter of 2024 and represents our best estimate of the amount of the probable loss.
The actual loss associated with this matter may be higher or lower than the accrued amount depending on the ultimate outcome of this
matter. For further information, see the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 10 of 16
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, | |
| | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Revenue: | |
Revenue | |
$ | 975,543 | | |
$ | 915,527 | | |
$ | 2,943,216 | | |
$ | 2,759,352 | |
| Expenses and Income: | |
Cost of revenue | |
| 379,505 | | |
| 367,545 | | |
| 1,134,949 | | |
| 1,095,549 | |
| | |
Gross profit | |
| 596,038 | | |
| 547,982 | | |
| 1,808,267 | | |
| 1,663,803 | |
| | |
Sales and marketing | |
| 146,281 | | |
| 135,698 | | |
| 438,399 | | |
| 424,034 | |
| | |
General and administrative | |
| 91,887 | | |
| 89,034 | | |
| 341,154 | | |
| 248,804 | |
| | |
Research and development | |
| 53,978 | | |
| 47,967 | | |
| 162,063 | | |
| 139,139 | |
| | |
Income from operations | |
| 303,892 | | |
| 275,283 | | |
| 866,651 | | |
| 851,826 | |
| | |
Interest expense, net | |
| (4,983 | ) | |
| (7,392 | ) | |
| (13,207 | ) | |
| (30,318 | ) |
| | |
Income before provision for income taxes | |
| 298,909 | | |
| 267,891 | | |
| 853,444 | | |
| 821,508 | |
| | |
Provision for income taxes | |
| 66,068 | | |
| 55,660 | | |
| 181,726 | | |
| 170,987 | |
| Net Income: | |
Net income attributable to stockholders | |
$ | 232,841 | | |
$ | 212,231 | | |
$ | 671,718 | | |
$ | 650,521 | |
| | |
Earnings per share: Basic | |
$ | 2.83 | | |
$ | 2.55 | | |
$ | 8.12 | | |
$ | 7.83 | |
| | |
Earnings per share: Diluted | |
$ | 2.80 | | |
$ | 2.53 | | |
$ | 8.05 | | |
$ | 7.75 | |
| | |
Shares outstanding: Basic | |
| 82,304 | | |
| 83,097 | | |
| 82,675 | | |
| 83,058 | |
| | |
Shares outstanding: Diluted | |
| 83,056 | | |
| 83,993 | | |
| 83,478 | | |
| 83,990 | |
IDEXX
Laboratories, Inc. and Subsidiaries
Selected
Operating Information (Unaudited)
| | |
| |
Three
Months Ended | | |
Nine
Months Ended | |
| | |
| |
September 30, | | |
September 30, | | |
September 30, | | |
September 30, | |
| | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| Operating Ratios | |
Gross profit | |
| 61.1 | % | |
| 59.9 | % | |
| 61.4 | % | |
| 60.3 | % |
| (as a percentage of revenue): | |
Sales, marketing, general and administrative expense | |
| 24.4 | % | |
| 24.5 | % | |
| 26.5 | % | |
| 24.4 | % |
| | |
Research and development expense | |
| 5.5 | % | |
| 5.2 | % | |
| 5.5 | % | |
| 5.0 | % |
| | |
Income
from operations1 | |
| 31.2 | % | |
| 30.1 | % | |
| 29.4 | % | |
| 30.9 | % |
1Amounts
presented may not recalculate due to rounding.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 11 of 16
IDEXX
Laboratories, Inc. and Subsidiaries
Segment
Information
Amounts
in thousands (Unaudited)
| | |
| |
Three Months Ended | |
| | |
| |
September 30,
2024 | | |
Percent of
Revenue | | |
September 30,
2023 | | |
Percent of
Revenue | |
| Revenue: | |
CAG | |
$ | 891,990 | | |
| | | |
$ | 837,160 | | |
| | |
| | |
Water | |
| 50,162 | | |
| | | |
| 44,450 | | |
| | |
| | |
LPD | |
| 28,992 | | |
| | | |
| 29,747 | | |
| | |
| | |
Other | |
| 4,399 | | |
| | | |
| 4,170 | | |
| | |
| | |
Total | |
$ | 975,543 | | |
| | | |
$ | 915,527 | | |
| | |
| | |
| |
| | | |
| | | |
| | | |
| | |
| Gross Profit: | |
CAG | |
$ | 544,461 | | |
| 61.0 | % | |
$ | 499,291 | | |
| 59.6 | % |
| | |
Water | |
| 34,755 | | |
| 69.3 | % | |
| 31,034 | | |
| 69.8 | % |
| | |
LPD | |
| 14,627 | | |
| 50.5 | % | |
| 15,836 | | |
| 53.2 | % |
| | |
Other | |
| 2,195 | | |
| 49.9 | % | |
| 1,821 | | |
| 43.7 | % |
| | |
Total | |
$ | 596,038 | | |
| 61.1 | % | |
$ | 547,982 | | |
| 59.9 | % |
| | |
| |
| | | |
| | | |
| | | |
| | |
| Income from Operations: | |
CAG | |
$ | 277,082 | | |
| 31.1 | % | |
$ | 253,358 | | |
| 30.3 | % |
| | |
Water | |
| 23,608 | | |
| 47.1 | % | |
| 20,328 | | |
| 45.7 | % |
| | |
LPD | |
| 889 | | |
| 3.1 | % | |
| 2,405 | | |
| 8.1 | % |
| | |
Other | |
| 2,313 | | |
| 52.6 | % | |
| (808 | ) | |
| (19.4 | )% |
| | |
Total | |
$ | 303,892 | | |
| 31.2 | % | |
$ | 275,283 | | |
| 30.1 | % |
| | |
| |
Nine Months Ended | |
| | |
| |
September 30,
2024 | | |
Percent of
Revenue | | |
September 30,
2023 | | |
Percent of
Revenue | |
| Revenue: | |
CAG | |
$ | 2,703,573 | | |
| | | |
$ | 2,531,091 | | |
| | |
| | |
Water | |
| 139,959 | | |
| | | |
| 126,362 | | |
| | |
| | |
LPD | |
| 87,503 | | |
| | | |
| 88,866 | | |
| | |
| | |
Other | |
| 12,181 | | |
| | | |
| 13,033 | | |
| | |
| | |
Total | |
$ | 2,943,216 | | |
| | | |
$ | 2,759,352 | | |
| | |
| | |
| |
| | | |
| | | |
| | | |
| | |
| Gross Profit: | |
CAG | |
$ | 1,659,768 | | |
| 61.4 | % | |
$ | 1,523,757 | | |
| 60.2 | % |
| | |
Water | |
| 97,326 | | |
| 69.5 | % | |
| 88,621 | | |
| 70.1 | % |
| | |
LPD | |
| 45,419 | | |
| 51.9 | % | |
| 46,975 | | |
| 52.9 | % |
| | |
Other | |
| 5,754 | | |
| 47.2 | % | |
| 4,450 | | |
| 34.1 | % |
| | |
Total | |
$ | 1,808,267 | | |
| 61.4 | % | |
$ | 1,663,803 | | |
| 60.3 | % |
| | |
| |
| | | |
| | | |
| | | |
| | |
| Income from Operations: | |
CAG | |
$ | 798,328 | | |
| 29.5 | % | |
$ | 790,617 | | |
| 31.2 | % |
| | |
Water | |
| 63,542 | | |
| 45.4 | % | |
| 57,119 | | |
| 45.2 | % |
| | |
LPD | |
| 3,254 | | |
| 3.7 | % | |
| 5,664 | | |
| 6.4 | % |
| | |
Other | |
| 1,527 | | |
| 12.5 | % | |
| (1,574 | ) | |
| (12.1 | )% |
| | |
Total | |
$ | 866,651 | | |
| 29.4 | % | |
$ | 851,826 | | |
| 30.9 | % |
IDEXX Announces Third Quarter Results
October 31, 2024
Page 12 of 16
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 | |
2024 | | |
2023 | | |
Change | | |
Growth1 | | |
Currency | | |
Acquisitions | | |
Growth1 | |
| CAG | |
$ | 891,990 | | |
$ | 837,160 | | |
$ | 54,830 | | |
| 6.5 | % | |
| 0.1 | % | |
| 0.4 | % | |
| 6.0 | % |
| United States | |
| 604,170 | | |
| 573,830 | | |
| 30,340 | | |
| 5.3 | % | |
| — | | |
| 0.6 | % | |
| 4.6 | % |
| International | |
| 287,820 | | |
| 263,330 | | |
| 24,490 | | |
| 9.3 | % | |
| 0.3 | % | |
| — | | |
| 9.0 | % |
| Water | |
| 50,162 | | |
| 44,450 | | |
| 5,712 | | |
| 12.9 | % | |
| (0.3 | )% | |
| — | | |
| 13.2 | % |
| United States | |
| 26,671 | | |
| 22,804 | | |
| 3,867 | | |
| 17.0 | % | |
| — | | |
| — | | |
| 17.0 | % |
| International | |
| 23,491 | | |
| 21,646 | | |
| 1,845 | | |
| 8.5 | % | |
| (0.6 | )% | |
| — | | |
| 9.2 | % |
| LPD | |
| 28,992 | | |
| 29,747 | | |
| (755 | ) | |
| (2.5 | )% | |
| (0.2 | )% | |
| — | | |
| (2.4 | )% |
| United States | |
| 5,561 | | |
| 5,040 | | |
| 521 | | |
| 10.3 | % | |
| — | | |
| — | | |
| 10.3 | % |
| International | |
| 23,431 | | |
| 24,707 | | |
| (1,276 | ) | |
| (5.2 | )% | |
| (0.2 | )% | |
| — | | |
| (5.0 | )% |
| Other | |
| 4,399 | | |
| 4,170 | | |
| 229 | | |
| 5.5 | % | |
| — | | |
| — | | |
| 5.5 | % |
| Total Company | |
$ | 975,543 | | |
$ | 915,527 | | |
$ | 60,016 | | |
| 6.6 | % | |
| 0.1 | % | |
| 0.4 | % | |
| 6.1 | % |
| United States | |
| 638,058 | | |
| 603,046 | | |
| 35,012 | | |
| 5.8 | % | |
| — | | |
| 0.6 | % | |
| 5.2 | % |
| International | |
| 337,485 | | |
| 312,481 | | |
| 25,004 | | |
| 8.0 | % | |
| 0.2 | % | |
| — | | |
| 7.8 | % |
| | |
Three Months Ended | | |
| | |
Reported | | |
Percentage | | |
Percentage | | |
Organic | |
| | |
September 30, | | |
September 30, | | |
Dollar | | |
Revenue |
| |
Change from | | |
Change from | | |
Revenue | |
| Net
CAG Revenue | |
2024 | | |
2023 | | |
Change | | |
Growth1 | | |
Currency | | |
Acquisitions | | |
Growth1 | |
| CAG Diagnostics recurring revenue: | |
$ | 783,443 | | |
$ | 733,958 | | |
$ | 49,485 | | |
| 6.7 | % | |
| 0.1 | % | |
| — | | |
| 6.7 | % |
| IDEXX VetLab consumables | |
| 329,128 | | |
| 296,042 | | |
| 33,086 | | |
| 11.2 | % | |
| 0.1 | % | |
| — | | |
| 11.1 | % |
| Rapid assay products | |
| 92,774 | | |
| 87,562 | | |
| 5,212 | | |
| 6.0 | % | |
| (0.2 | )% | |
| — | | |
| 6.2 | % |
| Reference laboratory diagnostic and consulting services | |
| 328,383 | | |
| 320,294 | | |
| 8,089 | | |
| 2.5 | % | |
| 0.1 | % | |
| — | | |
| 2.4 | % |
| CAG Diagnostics services and accessories | |
| 33,158 | | |
| 30,060 | | |
| 3,098 | | |
| 10.3 | % | |
| 0.1 | % | |
| — | | |
| 10.2 | % |
| CAG Diagnostics capital – instruments | |
| 29,528 | | |
| 32,254 | | |
| (2,726 | ) | |
| (8.4 | )% | |
| 0.3 | % | |
| — | | |
| (8.7 | )% |
| Veterinary software, services and diagnostic imaging
systems: | |
| 79,019 | | |
| 70,948 | | |
| 8,071 | | |
| 11.4 | % | |
| 0.1 | % | |
| 5.2 | % | |
| 6.1 | % |
| Recurring revenue | |
| 64,644 | | |
| 54,607 | | |
| 10,037 | | |
| 18.4 | % | |
| 0.1 | % | |
| 6.8 | % | |
| 11.5 | % |
| Systems and hardware | |
| 14,375 | | |
| 16,341 | | |
| (1,966 | ) | |
| (12.0 | )% | |
| — | | |
| — | | |
| (12.0 | )% |
| Net CAG revenue | |
$ | 891,990 | | |
$ | 837,160 | | |
$ | 54,830 | | |
| 6.5 | % | |
| 0.1 | % | |
| 0.4 | % | |
| 6.0 | % |
| | |
Three Months Ended | | |
| | |
Reported | | |
Percentage | | |
Percentage | | |
Organic | |
| | |
September 30, | | |
September 30, | | |
Dollar | | |
Revenue | | |
Change from | | |
Change from | | |
Revenue | |
| | |
2024 | | |
2023 | | |
Change | | |
Growth1 | | |
Currency | | |
Acquisitions | | |
Growth1 | |
| CAG Diagnostics recurring revenue: | |
$ | 783,443 | | |
$ | 733,958 | | |
$ | 49,485 | | |
| 6.7 | % | |
| 0.1 | % | |
| — | | |
| 6.7 | % |
| United States | |
| 522,530 | | |
| 497,109 | | |
| 25,421 | | |
| 5.1 | % | |
| — | | |
| — | | |
| 5.1 | % |
| International | |
| 260,913 | | |
| 236,849 | | |
| 24,064 | | |
| 10.2 | % | |
| 0.3 | % | |
| — | | |
| 9.9 | % |
1See
Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 13 of 16
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 | |
2024 | | |
2023 | | |
Change | | |
Growth1 | | |
Currency | | |
Acquisitions | | |
Growth1 | |
| CAG | |
$ | 2,703,573 | | |
$ | 2,531,091 | | |
$ | 172,482 | | |
| 6.8 | % | |
| (0.2 | )% | |
| 0.4 | % | |
| 6.7 | % |
| United
States | |
| 1,835,049 | | |
| 1,732,752 | | |
| 102,297 | | |
| 5.9 | % | |
| — | | |
| 0.5 | % | |
| 5.4 | % |
| International | |
| 868,524 | | |
| 798,339 | | |
| 70,185 | | |
| 8.8 | % | |
| (0.6 | )% | |
| — | | |
| 9.4 | % |
| Water | |
| 139,959 | | |
| 126,362 | | |
| 13,597 | | |
| 10.8 | % | |
| (0.4 | )% | |
| — | | |
| 11.1 | % |
| United
States | |
| 73,331 | | |
| 63,932 | | |
| 9,399 | | |
| 14.7 | % | |
| — | | |
| — | | |
| 14.7 | % |
| International | |
| 66,628 | | |
| 62,430 | | |
| 4,198 | | |
| 6.7 | % | |
| (0.7 | )% | |
| — | | |
| 7.5 | % |
| LPD | |
| 87,503 | | |
| 88,866 | | |
| (1,363 | ) | |
| (1.5 | )% | |
| (0.6 | )% | |
| — | | |
| (0.9 | )% |
| United
States | |
| 15,840 | | |
| 14,005 | | |
| 1,835 | | |
| 13.1 | % | |
| — | | |
| — | | |
| 13.1 | % |
| International | |
| 71,663 | | |
| 74,861 | | |
| (3,198 | ) | |
| (4.3 | )% | |
| (0.7 | )% | |
| — | | |
| (3.6 | )% |
| Other | |
| 12,181 | | |
| 13,033 | | |
| (852 | ) | |
| (6.5 | )% | |
| — | | |
| — | | |
| (6.5 | )% |
| Total Company | |
$ | 2,943,216 | | |
$ | 2,759,352 | | |
$ | 183,864 | | |
| 6.7 | % | |
| (0.2 | )% | |
| 0.3 | % | |
| 6.6 | % |
| United
States | |
| 1,929,213 | | |
| 1,815,066 | | |
| 114,147 | | |
| 6.3 | % | |
| — | | |
| 0.5 | % | |
| 5.8 | % |
| International | |
| 1,014,003 | | |
| 944,286 | | |
| 69,717 | | |
| 7.4 | % | |
| (0.6 | )% | |
| — | | |
| 8.0 | % |
| | |
Nine
Months Ended | | |
| | |
Reported | | |
Percentage | | |
Percentage | | |
Organic | |
| | |
September
30, | | |
September
30, | | |
Dollar | | |
Revenue | | |
Change
from | | |
Change
from | | |
Revenue | |
| Net
CAG Revenue | |
2024 | | |
2023 | | |
Change | | |
Growth1 | | |
Currency | | |
Acquisitions | | |
Growth1 | |
| CAG Diagnostics
recurring revenue: | |
$ | 2,372,041 | | |
$ | 2,223,336 | | |
$ | 148,705 | | |
| 6.7 | % | |
| (0.2 | )% | |
| — | | |
| 6.9 | % |
| IDEXX
VetLab consumables | |
| 971,405 | | |
| 890,891 | | |
| 80,514 | | |
| 9.0 | % | |
| (0.3 | )% | |
| — | | |
| 9.3 | % |
| Rapid
assay products | |
| 282,379 | | |
| 266,934 | | |
| 15,445 | | |
| 5.8 | % | |
| (0.2 | )% | |
| — | | |
| 6.0 | % |
| Reference
laboratory diagnostic and consulting services | |
| 1,020,094 | | |
| 973,580 | | |
| 46,514 | | |
| 4.8 | % | |
| (0.1 | )% | |
| — | | |
| 4.9 | % |
| CAG
Diagnostics services and accessories | |
| 98,163 | | |
| 91,931 | | |
| 6,232 | | |
| 6.8 | % | |
| (0.4 | )% | |
| — | | |
| 7.2 | % |
| CAG Diagnostics capital
– instruments | |
| 98,912 | | |
| 99,452 | | |
| (540 | ) | |
| (0.5 | )% | |
| (0.4 | )% | |
| — | | |
| (0.1 | )% |
| Veterinary software, services
and diagnostic imaging systems: | |
| 232,620 | | |
| 208,303 | | |
| 24,317 | | |
| 11.7 | % | |
| — | | |
| 4.4 | % | |
| 7.3 | % |
| Recurring
revenue | |
| 187,461 | | |
| 160,039 | | |
| 27,422 | | |
| 17.1 | % | |
| — | | |
| 5.7 | % | |
| 11.5 | % |
| Systems
and hardware | |
| 45,159 | | |
| 48,264 | | |
| (3,105 | ) | |
| (6.4 | )% | |
| (0.1 | )% | |
| — | | |
| (6.4 | )% |
| Net
CAG revenue | |
$ | 2,703,573 | | |
$ | 2,531,091 | | |
$ | 172,482 | | |
| 6.8 | % | |
| (0.2 | )% | |
| 0.4 | % | |
| 6.7 | % |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
Nine Months Ended | | |
| | |
Reported | | |
Percentage | | |
Percentage | | |
Organic | |
| | |
September 30, | | |
September 30, | | |
Dollar | | |
Revenue | | |
Change from | | |
Change from | | |
Revenue | |
| | |
2024 | | |
2023 | | |
Change | | |
Growth1 | | |
Currency | | |
Acquisitions | | |
Growth1 | |
| CAG Diagnostics recurring revenue: | |
$ | 2,372,041 | | |
$ | 2,223,336 | | |
$ | 148,705 | | |
| 6.7 | % | |
| (0.2 | )% | |
| — | | |
| 6.9 | % |
| United States | |
| 1,590,037 | | |
| 1,505,837 | | |
| 84,200 | | |
| 5.6 | % | |
| — | | |
| — | | |
| 5.6 | % |
| International | |
| 782,004 | | |
| 717,499 | | |
| 64,505 | | |
| 9.0 | % | |
| (0.6 | )% | |
| — | | |
| 9.6 | % |
1See
Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 14 of 16
IDEXX
Laboratories, Inc. and Subsidiaries
Condensed
Consolidated Balance Sheet
Amounts
in thousands (Unaudited)
| | |
| |
September 30,
2024 | | |
December 31,
2023 | |
| Assets: | |
Current Assets: | |
| | | |
| | |
| | |
Cash and cash equivalents | |
$ | 308,636 | | |
$ | 453,932 | |
| | |
Accounts receivable, net | |
| 511,250 | | |
| 457,445 | |
| | |
Inventories | |
| 389,804 | | |
| 380,282 | |
| | |
Other current assets | |
| 224,054 | | |
| 203,595 | |
| | |
Total current assets | |
| 1,433,744 | | |
| 1,495,254 | |
| | |
Property and equipment, net | |
| 717,745 | | |
| 702,177 | |
| | |
Other long-term assets, net | |
| 1,199,277 | | |
| 1,062,494 | |
| | |
Total assets | |
$ | 3,350,766 | | |
$ | 3,259,925 | |
| | |
| |
| | | |
| | |
| Liabilities and Stockholders' Equity: | |
Current Liabilities: | |
| | | |
| | |
| | |
Accounts payable | |
$ | 110,603 | | |
$ | 110,643 | |
| | |
Accrued liabilities | |
| 511,047 | | |
| 478,712 | |
| | |
Line of credit | |
| 250,000 | | |
| 250,000 | |
| | |
Current portion of long-term debt | |
| 99,140 | | |
| 74,997 | |
| | |
Deferred revenue | |
| 38,434 | | |
| 37,195 | |
| | |
Total current liabilities | |
| 1,009,224 | | |
| 951,547 | |
| | |
Long-term debt, net of current portion | |
| 524,758 | | |
| 622,883 | |
| | |
Other long-term liabilities, net | |
| 198,730 | | |
| 200,965 | |
| | |
Total long-term liabilities | |
| 723,488 | | |
| 823,848 | |
| | |
Total stockholders' equity | |
| 1,618,054 | | |
| 1,484,530 | |
| | |
Total liabilities and stockholders' equity | |
$ | 3,350,766 | | |
$ | 3,259,925 | |
IDEXX
Laboratories, Inc. and Subsidiaries
Selected
Balance Sheet Information (Unaudited)
| | |
| |
September
30,
2024 | | |
June 30,
2024 | | |
March 31,
2024 | | |
December
31,
2023 | | |
September
30,
2023 | |
| Selected Balance Sheet Information: | |
Days
sales outstanding1 | |
| 48.9 | | |
| 47.3 | | |
| 45.7 | | |
| 46.1 | | |
| 45.6 | |
| | |
Inventory
turns2 | |
| 1.3 | | |
| 1.4 | | |
| 1.3 | | |
| 1.3 | | |
| 1.3 | |
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 are calculated as the ratio of four times our inventory-related cost of product revenue for the quarter, divided by the average
inventory balances at the beginning and end of each quarter.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 15 of 16
IDEXX
Laboratories, Inc. and Subsidiaries
Condensed
Consolidated Statement of Cash Flows
Amounts
in thousands (Unaudited)
| | |
| |
Nine Months Ended | |
| | |
| |
September 30,
2024 | | |
September 30,
2023 | |
| Operating: | |
Cash Flows from Operating Activities: | |
| | | |
| | |
| | |
Net income | |
$ | 671,718 | | |
$ | 650,521 | |
| | |
Non-cash adjustments to net income | |
| 119,761 | | |
| 120,390 | |
| | |
Changes in assets and liabilities | |
| (124,503 | ) | |
| (114,252 | ) |
| | |
Net cash provided by operating activities | |
| 666,976 | | |
| 656,659 | |
| Investing: | |
Cash Flows from Investing Activities: | |
| | | |
| | |
| | |
Purchases of property and equipment | |
| (91,667 | ) | |
| (101,075 | ) |
| | |
Acquisition of a business | |
| (76,694 | ) | |
| — | |
| | |
Proceeds from net investment hedges | |
| 1,142 | | |
| 6,256 | |
| | |
Net cash used by investing activities | |
| (167,219 | ) | |
| (94,819 | ) |
| Financing: | |
Cash Flows from Financing Activities: | |
| | | |
| | |
| | |
Repayments under credit facility, net | |
| — | | |
| (329,000 | ) |
| | |
Payments of senior notes | |
| (75,000 | ) | |
| — | |
| | |
Payments for the acquisition-related holdbacks | |
| — | | |
| (1,879 | ) |
| | |
Repurchases of common stock | |
| (591,042 | ) | |
| (35,070 | ) |
| | |
Proceeds from exercises of stock options and employee stock
purchase plans | |
| 31,237 | | |
| 35,704 | |
| | |
Shares withheld for statutory tax withholding
payments on restricted stock | |
| (10,486 | ) | |
| (9,907 | ) |
| | |
Net cash used by financing activities | |
| (645,291 | ) | |
| (340,152 | ) |
| | |
Net effect of changes in exchange rates on cash | |
| 238 | | |
| (2,538 | ) |
| | |
Net (decrease) increase in cash and cash equivalents | |
| (145,296 | ) | |
| 219,150 | |
| | |
Cash and cash equivalents, beginning
of period | |
| 453,932 | | |
| 112,546 | |
| | |
Cash and cash equivalents, end of period | |
$ | 308,636 | | |
$ | 331,696 | |
IDEXX
Laboratories, Inc. and Subsidiaries
Free
Cash Flow
Amounts
in thousands (Unaudited)
| | |
| |
Three Months Ended | | |
Nine Months Ended | |
| | |
| |
September 30,
2024 | | |
September 30,
2023 | | |
September 30,
2024 | | |
September 30,
2023 | |
| Free Cash Flow: | |
Net cash provided by operating activities | |
$ | 220,079 | | |
$ | 272,433 | | |
$ | 666,976 | | |
$ | 656,659 | |
| | |
Investing cash flows attributable to
purchases of property and equipment | |
| (28,089 | ) | |
| (34,094 | ) | |
| (91,667 | ) | |
| (101,075 | ) |
| | |
Free
cash flow1 | |
$ | 191,990 | | |
$ | 238,339 | | |
$ | 575,309 | | |
$ | 555,584 | |
1See
Statements Regarding Non-GAAP Financial Measures, above.
IDEXX Announces Third Quarter Results
October 31, 2024
Page 16 of 16
IDEXX
Laboratories, Inc. and Subsidiaries
Common
Stock Repurchases
Amounts
in thousands except per share data (Unaudited)
| | |
Three Months Ended | | |
Nine Months Ended | |
| | |
September 30,
2024 | | |
September 30,
2023 | | |
September 30,
2024 | | |
September 30,
2023 | |
| Shares repurchased in the open market | |
| 459 | | |
| 65 | | |
| 1,177 | | |
| 65 | |
| Shares acquired through employee surrender
for statutory tax withholding | |
| 1 | | |
| 1 | | |
| 19 | | |
| 20 | |
| Total shares repurchased | |
| 460 | | |
| 66 | | |
| 1,196 | | |
| 85 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cost of shares repurchased in the open market | |
$ | 224,945 | | |
$ | 35,070 | | |
$ | 600,216 | | |
$ | 35,070 | |
| Cost of shares for employee surrenders | |
| 218 | | |
| 231 | | |
| 10,486 | | |
| 9,907 | |
| Total cost of shares | |
$ | 225,163 | | |
$ | 35,301 | | |
$ | 610,702 | | |
$ | 44,977 | |
| | |
| | | |
| | | |
| | | |
| | |
| Average cost per share – open market repurchases | |
$ | 490.23 | | |
$ | 536.03 | | |
$ | 509.81 | | |
$ | 536.03 | |
| Average cost per share – employee surrenders | |
$ | 465.27 | | |
$ | 506.74 | | |
$ | 557.64 | | |
$ | 503.43 | |
| Average cost per share – total | |
$ | 490.20 | | |
$ | 535.83 | | |
$ | 510.57 | | |
$ | 528.49 | |
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