IDEXX Laboratories Announces Fourth Quarter and Full Year 2020 Results

 

 


WESTBROOK, Maine, Feb. 2, 2021 /PRNewswire/ — 


  • Achieves fourth quarter reported revenue growth of 19% and organic growth of 17%, driven by CAG Diagnostics recurring revenue reported growth of 23% and organic growth of 21%
  • High revenue growth supported by sustained strong global trends in pet healthcare
  • Delivers full year EPS of $6.71, an increase of 37% on a reported basis and 31% on a comparable constant currency basis
  • Strong full year EPS results supported by operating margin expansion of 270 basis points on a reported basis and 340 basis points on a comparable constant currency basis
  • Provides initial outlook for 2021 revenue of $3,065 million$3,120 million, reflecting reported growth of 13% – 15.5% and organic growth of 11.5%13.5%
  • Estimates 2021 EPS of $7.39 $7.71, an increase of 10% – 14% as reported and 15% – 20% on a comparable constant currency basis

IDEXX Laboratories, Inc.. (NASDAQ: IDXX), today announced fourth quarter and full year results, as well as market condition updates.


Fourth Quarter and Full Year Results


The Company reports revenues of $721 million for the fourth quarter of 2020, an increase of 19% compared to the prior year period on a reported basis and 17% on an organic basis. Fourth quarter results were driven by continued high gains in Companion Animal Group (“CAG”) Diagnostics recurring revenue globally, as well as sustained strong growth in the Company’s Livestock, Poultry and Dairy (“LPD”) business. Fourth quarter growth also benefited by 1.5% from revenues associated with OPTI Medical Systems COVID-19 human PCR testing. Overall revenue gains were moderated by COVID-19 pandemic-related impacts that constrained new CAG instrument placement levels and non-compliance related testing in the Company’s Water business.


Earnings per diluted share (“EPS”) were $2.01 for the fourth quarter, an increase of 93% as reported, including a one-time positive impact of $0.25 per share related to the enactment of tax reform in Switzerland and $0.13 per share in share-based compensation tax benefits.


Revenue for the full year of $2,707 million increased 12% on a reported and organic basis, driven by 16% reported and 15% organic growth in CAG Diagnostics recurring revenue.


For the full year 2020, EPS of $6.71 increased 37% on a reported basis and 31% on a comparable constant currency basis. EPS results benefited from strong CAG Diagnostics recurring revenue growth and operating expense leverage, resulting in 270 basis points of operating margin improvement on a reported basis, and 340 basis points on a comparable constant currency basis. Further information and a reconciliation of non-GAAP financial measures, such as comparable constant currency growth measures, are provided in the Company’s footnotes.


The Company expects full year 2021 revenue growth of 13% – 15.5% on a reported basis and 11.5% – 13.5% revenue growth on an organic basis. The Company also expects EPS of $7.39$7.71, reflecting a targeted 50 – 100 basis points of comparable constant currency operating margin improvement, building on strong 2020 performance.


“IDEXX had an exceptional finish to 2020, supported by continued robust global market trends in companion animal healthcare and outstanding execution by the IDEXX organization globally. Performance was strong across our major geographic markets, enabling us to deliver 12% organic growth overall and 31% EPS growth on a comparable constant currency basis for the full year, above our long-term goals. The IDEXX team stayed focused on serving our customers in an exceptional way through the COVID-19 pandemic. The team’s high level of engagement and focus on execution enabled us to be well-positioned to benefit from a strong market recovery in pet healthcare. We are planning to drive continued strong growth in our companion animal business, as reflected in our initial financial 2021 outlook, leveraging our expanded global commercial capability and unique innovations, which support higher standards of healthcare for pets,” said Jay Mazelsky, the Company’s President and Chief Executive Officer.


Companion Animal Diagnostics Trends Update


Companion animal healthcare markets benefited from continued positive trends in the fourth quarter globally. U.S. veterinary practices experienced sustained strong clinical demand benefiting from high growth in both non-wellness and wellness clinical visits. In the U.S., same-store clinical visit growth reached 8% in the fourth quarter, including 7% growth in non-wellness visits and sustained 10% growth in wellness visits. Clinical visits continued to benefit from an increase in new clinical patient visits. Revenue growth at U.S. veterinary practices was 12% in the fourth quarter, driven by growth in service and diagnostics revenues, reflecting increased frequency and utilization of diagnostics. Additional U.S. companion animal practice weekly key metrics are available in the Q4 2020 Earnings Snapshot accessible on the IDEXX website, www.idexx.com/investors.


Global companion animal market trends have supported continued high demand for CAG diagnostic products and services. Global CAG Diagnostics recurring revenues sustained their growth at high levels through the fourth quarter with strength across regions. 


Fourth Quarter Performance Highlights


Companion Animal Group 


The Companion Animal Group generated 19% reported and 17% organic revenue growth for the fourth quarter. CAG Diagnostics recurring revenue growth remained very strong at 23% reported and 21% organic. Growth was high across IDEXX’s major modalities globally reflecting continued strong growth in clinical visits and expanded utilization of diagnostic products and services. Overall CAG revenue growth was constrained by a 10% organic decline in IDEXX VetLab instrument revenues, impacted by COVID-19 related restrictions on access to veterinary practices.


  • IDEXX VetLab® consumables generated 27% reported and 25% organic revenue growth, supported by benefits from diagnostics utilization growth, expansion of our premium instrument installed base, and moderate net price gains.
  • Reference laboratory diagnostic and consulting services generated 21% reported and 19% organic revenue growth, led by continued high organic growth in the U.S. and mid-to-high-teen growth in international markets. Reference lab gains were supported by high same-store volume growth, with strong gains across testing categories.
  • Rapid assay products generated revenue growth of 20% on a reported and organic basis, supported by continued gains in SNAP® 4Dx® Plus Tests, feline and specialty rapid assay test volumes, benefiting from strong overall market conditions including high demand for both wellness and non-wellness testing.

Veterinary software, services and diagnostic imaging systems revenue growth increased 1% on a reported and organic basis, supported by double-digit growth in subscription-based service revenues and strong growth in new veterinary software system placements. Overall growth was moderated by declines in diagnostic imaging systems placements compared to strong prior year placement levels.


Water


Water achieved revenue growth of 1% on a reported basis and modest revenue growth on an organic basis, reflecting continued improvements in compliance testing volumes which were offset by COVID-19 pandemic-related pressures on non-compliance testing volumes.


Livestock, Poultry and Dairy (“LPD”)


LPD revenue increased 16% on a reported basis and 13% on an organic basis. LPD results were supported by continued strength in core swine testing volumes and African Swine Fever diagnostic testing programs in Asia. These gains were moderated by lower herd health screening levels, compared to strong prior year results.


Gross Profit and Operating Profit


Gross profits increased 24%, and gross margins of 56.8% increased 210 basis points compared to prior year results on a reported basis and 270 basis points on a constant currency basis. Gross margin results reflected reference laboratory productivity gains on high revenue growth, favorable mix from strong consumable revenue and lower instrument revenue, as well as benefits from moderate price gains.


Operating margin was 25.7% in the quarter, 660 basis points higher than the prior year period results on a reported basis and 460 basis points on a comparable constant currency basis, excluding the prior year negative impact of the CEO transition charges. Operating expenses increased 4% on a reported basis, and 10% on a comparable constant currency basis, excluding the CEO transition charges. Operating expense growth in the fourth quarter reflects higher employee incentive and healthcare costs, R&D investments, and global commercial capability enhancements.


2021 Growth and Financial Performance Outlook


The following table provides the company’s initial estimates for annual key financial metrics in 2021:


Amounts in millions except per share data and percentages 


























Growth and Financial Performance Outlook

 

2021

 
           

Revenue

 

$3,065

$3,120

 

Reported growth

 

13%

15.5%

 

Organic growth

 

11.5%

13.5%

 

CAG Diagnostics Recurring Revenue Growth

         

Reported growth

 

13.5%

16%

 

Organic growth

 

12%

14.5%

 

Operating Margin

 

27.3%

27.8%

 

Operating margin expansion

 

170

220 bps

 

Comparable constant currency margin expansion

 

50

100 bps

 

EPS

 

$7.39

$7.71

 

Reported growth

 

10%

14%

 

Comparable constant currency growth

 

15%

20%

 

Other Key Metrics

         

Net interest expense

 

$30

$31

 

Share-based compensation tax benefit

 

$7.5

$9.5

 

Share-based compensation tax rate benefit

 

~ 1 %

 

Effective tax rate

 

20%

21%

 

Share-based compensation EPS impact

 

$0.09

$0.11

 

Change in average shares outstanding

 

0%

(0.5)%

 

Operating Cash Flow

 

100% – 110% of net income

 

Free Cash Flow

 

80% – 90% of net income

 

Capital Expenditures

 

$120  – $140

 


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 2021.





















Estimated Foreign Currency Exchange Rates and Impacts

 

2021

 
           

Revenue growth rate impact

 

1.5%

2.0%

 

CAG Diagnostics recurring revenue growth rate impact

 

~ 1.5%

 

Operating margin growth impact

 

~ 10 bps

 

EPS impact

 

~ $0.14

 

EPS growth impact

 

~ 2.0%

 
           

Foreign Currency Exchange Rate Assumptions

         

In U.S. dollars

         

euro

 

$1.19

 

British pound

 

$1.34

 

Canadian dollar

 

$0.77

 

Australian dollar

 

$0.76

 

Relative to the U.S. dollar

         

Japanese yen

 

¥105.00

 

Chinese renminbi

 

¥6.57

 

Brazilian real

 

R$5.36

 
             


Conference Call and Webcast Information


IDEXX Laboratories, Inc. will host a conference call today at 8:30 a.m. (Eastern) to discuss its fourth quarter and full year 2020 results and management’s outlook. To participate in the conference call, dial 1-888-771-4371 or 1-847-585-4405 and reference access code 50070596. Individuals can access a live webcast of the conference call through a link on the IDEXX website, www.idexx.com/investors. An archived edition of the webcast will be available after 1:00 p.m. (Eastern) on that day via the same link and will remain available for one year.


About IDEXX Laboratories, Inc.


IDEXX Laboratories, Inc. is a member of the S&P 500® Index and is a leader in pet healthcare innovation, offering diagnostic and software products and services that deliver solutions and insights to practicing veterinarians around the world. IDEXX products enhance the ability of veterinarians to provide advanced medical care, improve staff efficiency and build more economically successful practices. IDEXX is also a worldwide leader in providing diagnostic tests and information for livestock and poultry and tests for the quality and safety of water and milk and point-of-care and laboratory diagnostics for human medicine.  Headquartered in Maine, IDEXX employs more than 9,000 people and offers products to customers in over 175 countries. For more information about IDEXX, visit: www.idexx.com.


Note Regarding Forward-Looking Statements 


This earnings release contains statements about the Company’s business prospects and estimates of the Company’s financial results for future periods that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are included above under “Fourth Quarter and Full Year Results”, “2021 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 revenue growth and EPS outlooks; operating and free cash flow forecast; projected impact of foreign currency exchange rates; projected operating margins and expenses and capital expenditures; projected tax, tax rate and EPS benefits from share-based compensation arrangements; and projected effective tax rates, reduction of average shares outstanding and net interest expense. 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, 2019 and in the corresponding sections of the Company’s Quarterly Report on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020, as well as those described from time to time in the Company’s other filings with the U.S. Securities and Exchange Commission available at www.sec.gov. The Company specifically disclaims any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.


Statement Regarding Non-GAAP Financial Measures


The following defines terms and conventions and provides reconciliations regarding certain measures used in this earnings release and/or the accompanying earnings conference call that are not required by, or presented in accordance with, generally accepted accounting principles in the United States of America (“GAAP”), otherwise referred to as non-GAAP financial measures. To supplement the Company’s consolidated results presented in accordance with GAAP, the Company has disclosed non-GAAP financial measures that exclude or adjust certain items. Management believes these non-GAAP financial measures provide useful supplemental information for its and investors’ evaluation of the Company’s business performance and liquidity and are useful for period-over-period comparisons of the performance of the Company’s business and its liquidity and to the performance and liquidity of our peers. While management believes that these non-GAAP financial measures are useful in evaluating the Company’s business, this information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.


Constant currency – Constant currency references are non-GAAP financial measures which exclude the impact of changes in foreign currency exchange rates and are consistent with how management evaluates our performance and comparisons with prior and future periods. We estimated the net impacts of currency on our revenue, gross profit, operating profit, and EPS results by restating results to the average exchange rates or exchange rate assumptions for the comparative period, which includes adjusting for the estimated impacts of foreign currency hedging transactions and certain impacts on our effective tax rates.  These estimated currency changes impacted fourth quarter 2020 results as follows:  increased gross profit growth by 0.6%, decreased gross margin growth by 60 basis points, increased operating expense growth by 0.5%, decreased operating profit margin growth by 20 basis points, and increased EPS growth by 1%. Estimated currency changes impacted full year 2020 results as follows: decreased operating profit margin growth by 20 basis points, and decreased EPS growth by 1%. Constant currency revenue growth represents the percentage change in revenue during the applicable period, as compared to the prior year period, excluding the impact of changes in foreign currency exchange rates. See the supplementary analysis of results below for revenue percentage change from currency for the three months and year ended December 31, 2020 and refer to the Growth and Financial Performance Outlook section of this press release for estimated foreign currency exchange rate impacts on 2021 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 excludes the impact of changes in foreign currency exchange rates and revenue from business acquisitions. 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. See the supplementary analysis of results below for a reconciliation of reported revenue growth to organic revenue growth for the three and twelve months ended December 31, 2020.  See the constant currency note above for the impacts of estimated currency changes to fourth quarter and full year 2020, as well estimated full year 2021 organic revenue growth for the Company and CAG Diagnostics recurring revenue.  The percentage change in revenue resulting from acquisitions represents incremental revenues attributable to business acquisitions that have occurred since the beginning of the prior year period. Revenue from acquisitions is expected to have an immaterial impact on projected full year 2021 revenue growth and CAG Diagnostics recurring revenue growth.


Comparable constant currency operating expense growth, operating profit growth, and operating margin gain (or growth) – Comparable constant currency operating expense growth, operating profit growth, and operating profit margin gain (or growth) are non-GAAP financial measures and exclude the impact of changes in foreign currency exchange rates and non-recurring or unusual items (if any). Management believes that reporting comparable constant currency operating expense growth, operating profit growth, and operating margin gain (or growth) provides useful information to investors because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding key metrics used by management. Comparable constant currency operating expense growth, operating profit growth, and operating margin gain (or growth)  should be considered in addition to, and not as replacements of or superior measures to, operating expense growth, operating profit growth, and operating margin gain reported in accordance with GAAP.


The reconciliation of these non-GAAP financial measures is as follows:





















   

Three Months Ended

Year-over-Year

 

Twelve Months Ended

Year-over-Year

   

December 31,

 

December 31,

Change

 

December 31,

 

December 31,

Change

Dollar amounts in thousands

 

2020

 

2019

   

2020

 

2019

 

Operating Expenses (as reported)

 

$

224,407

   

$

215,518

 

4

%

 

$

876,516

   

$

812,703

 

8

%

Adjustments

                   

CEO transition charges

 

   

(13,400)

     

   

(13,400)

   

Expired royalty litigation matter

 

   

     

(27,500)

   

   

Change from currency

 

(1,111)

   

     

2,827

   

   

Comparable constant currency operating expense growth

 

$

223,296

   

$

202,118

 

10

%

 

$

851,843

   

$

799,303

 

7

%

                     

Income from operations (as reported)

 

$

185,095

   

$

115,631

 

60

%

 

$

694,524

   

$

552,846

 

26

%

Operating margin

 

25.7

%

 

19.1

%

660

bps

 

25.7

%

 

23.0

%

270

bps

Adjustments

                   

CEO transition charges

 

   

13,400

     

   

13,400

   

Expired royalty litigation matter

 

   

     

27,500

   

   

Change from currency

 

(865)

   

     

7,097

   

   

Comparable constant currency income from operations growth

 

$

184,230

   

$

129,031

 

43

%

 

$

729,121

   

$

566,246

 

29

%

Comparable constant currency operating margin expansion

 

25.9

%

 

21.3

%

460

bps

 

27.0

%

 

23.5

%

340

bps

Amounts presented may not recalculate due to rounding.


These impacts and those described in the constant currency note above reconcile reported operating expense growth, operating profit growth, and operating margin gain (including projected 2021 operating margin expansion) to comparable constant currency operating expense growth, operating profit growth, and operating margin gain for the Company.


Comparable constant currency EPS growth –  Comparable constant currency EPS growth is a non-GAAP financial measure that excludes the impact of changes in foreign currency exchange rates, the tax benefits of share-based compensation activity under ASU 2016-09 and non-recurring or unusual items (if any). Management believes comparable constant currency EPS growth is a more useful way to measure the Company’s business performance than EPS growth because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding a key metric used by management.


The reconciliation of this non-GAAP financial measure is as follows:














   

Three Months Ended

Year-over-Year

 

Twelve Months Ended

Year-over-Year

   

December 31,

 

December 31,

Growth

 

December 31,

 

December 31,

Growth

   

2020

 

2019

   

2020

 

2019

 

Earnings per share (diluted)

 

$

2.01

   

$

1.04

 

93

%

 

$

6.71

   

$

4.89

 

37

%

Adjustments

                   

Share-based compensation activity

 

(0.13)

   

(0.05)

     

(0.45)

   

(0.22)

   

CEO transition charges

 

   

0.14

     

   

0.14

   

Expired royalty litigation matter

 

   

     

0.24

   

   

Swiss tax reform impact

 

(0.25)

   

     

(0.25)

   

   

Change from currency

 

(0.01)

   

     

0.06

   

   

Comparable constant currency EPS growth

 

1.62

   

1.13

 

43

%

 

6.31

   

4.81

 

31

%

Amounts presented may not recalculate due to rounding.


These impacts and those described in the constant currency note above reconcile reported EPS growth (including projected 2021 reported EPS growth) to comparable constant currency EPS growth for the Company.


Free cash flow – Free cash flow is a non-GAAP financial measure and means, with respect to a measurement period, the cash generated from operations during that period, reduced by the Company’s investments in property and equipment.  Management believes free cash flow is a useful measure because it indicates the cash the operations of the business are generating after appropriate reinvestment for recurring investments in property and equipment that are required to operate the business. See the supplementary analysis of results below for our calculation of free cash flow for the years ended December 31, 2020 and 2019.  To estimate projected 2021 free cash flow, we have deducted projected purchases of property and equipment (also referred to as capital expenditures) of approximately $120  – $140 million.


Debt to Adjusted EBITDA (Leverage Ratios) – Adjusted EBITDA, gross debt, and net debt are non-GAAP financial measures.  Adjusted EBITDA is a non-GAAP financial measure of earnings before interest, taxes, depreciation, amortization, non-recurring transaction


expenses incurred in connection with acquisitions, share-based compensation expense, and certain other non-cash losses and charges.  Management believes that reporting Adjusted EBITDA, gross debt and net debt in the Debt to Adjusted EBITDA ratios provides


supplemental analysis to help investors further evaluate the Company’s business performance and available borrowing capacity under


the Company’s credit facility.  For further information on how Adjusted EBITDA and the Debt to Adjusted EBITDA Ratios are calculated, see the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.


After-Tax Return on Invested Capital, Excluding Cash and Investments (“ROIC”): After-Tax Return on Invested Capital, Excluding Cash and Investments, is a non-GAAP financial measure. After-tax return on invested capital, excluding cash and investments, represents our after-tax income from operations, divided by our average invested capital, excluding cash and investments, using beginning and ending balance sheet values. Management believes that reporting ROIC provides useful information to investors for evaluating the efficiency and effectiveness of our use of capital. See the supplementary table below for reconciliation of this non-GAAP financial measure.


Notes and Definitions


CEO transition charges – Effective November 1, 2019, Jonathan W. Ayers, our former Chairman of the Board, President and Chief Executive Officer, stepped down as Chairman of our Board, ceased to be an employee of the Company and transitioned to the role of external Senior Advisor to the Company.  Mr. Ayers continues to serve as a member of our Board. Pursuant to a mutual separation agreement between the Company and Mr. Ayers, we recognized a charge to operating income of approximately $13.4 million in the fourth quarter of 2019, representing the cost of severance payments and an acceleration of the cost of his equity awards, which was offset by a reduction to our provision for income taxes of approximately $1.2 million, resulting in a total charge to net income of approximately $12.2 million, net of tax impacts.


Swiss tax reform impact – A one-time positive income tax impact related to the enactment of tax reform in Switzerland reflected in the fourth quarter of 2020, when the Company recorded an approximately $22 million deferred tax asset related to transitional benefits.


Expired royalty litigation matter –  The Company established an accrual of $27.5 million in the third quarter of 2020 related to an ongoing matter involving an alleged breach of contract for underpayment of royalty payments made from 2004 through 2017 under an expired patent license agreement. The accrual amount represents the amount of a possible loss that we have determined to be probable and estimable, and the actual cost of resolving this matter may be higher or lower than the amount accrued.


 




































IDEXX Laboratories, Inc. and Subsidiaries

       

Condensed 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,

       

2020

 

2019

 

2020

 

2019

Revenue:

 

Revenue

 

$720,938

   

$605,446

   

$2,706,655

   

$2,406,908

 

Expenses and Income:

 

Cost of revenue

 

311,436

   

274,297

   

1,135,615

   

1,041,359

 
   

Gross profit

 

409,502

   

331,149

   

1,571,040

   

1,365,549

 
   

Sales and marketing

 

115,909

   

105,694

   

434,435

   

418,193

 
   

General and administrative

 

69,721

   

74,664

   

300,832

   

261,317

 
   

Research and development

 

38,777

   

35,160

   

141,249

   

133,193

 
   

Income from operations

 

185,095

   

115,631

   

694,524

   

552,846

 
   

Interest expense, net

 

(7,659)

   

(7,125)

   

(32,539)

   

(30,628)

 
   

Income before provision for income taxes

 

177,436

   

108,506

   

661,985

   

522,218

 
   

Provision for income taxes

 

2,478

   

17,962

   

79,854

   

94,426

 

Net Income:

 

Net income

 

174,958

   

90,544

   

582,131

   

427,792

 
   

Less: Noncontrolling interest in subsidiary’s

earnings

 

168

   

48

   

355

   

72

 
   

Net income attributable to stockholders

 

$174,790

   

$90,496

   

$581,776

   

$427,720

 
   

Earnings per share: Basic

 

$2.04

   

$1.05

   

$6.82

   

$4.97

 
   

Earnings per share: Diluted

 

$2.01

   

$1.04

   

$6.71

   

$4.89

 
   

Shares outstanding: Basic

 

85,490

   

85,848

   

85,342

   

86,115

 
   

Shares outstanding: Diluted

 

86,904

   

87,212

   

86,722

   

87,542

 
           

IDEXX Laboratories, Inc. and Subsidiaries

         

Selected Operating Information (Unaudited)

         
       

Three Months Ended

 

Twelve Months Ended

       

December 31,

 

December 31,

 

December 31,

 

December 31,

       

2020

 

2019

 

2020

 

2019

Operating Ratios

 

Gross profit

 

56.8

%

 

54.7

%

 

58.0

%

 

56.7

%

(as a percentage of revenue):

 

Sales, marketing, general and administrative

expense

 

25.7

%

 

29.8

%

 

27.2

%

 

28.2

%

   

Research and development expense

 

5.4

%

 

5.8

%

 

5.2

%

 

5.5

%

   

Income from operations1

 

25.7

%

 

19.1

%

 

25.7

%

 

23.0

%

                     

1Amounts presented may not recalculate due to rounding.

           


 















































IDEXX Laboratories, Inc. and Subsidiaries

Segment Information

Amounts in thousands (Unaudited)

             
       

Three Months Ended

 

Three Months Ended

       

December 31,

 

Percent of

 

December 31,

 

Percent of

       

2020

 

Revenue

 

2019

 

Revenue

Revenue:

 

CAG

 

$629,652

       

$529,786

     
   

Water

 

33,088

       

32,870

     
   

LPD

 

42,476

       

36,655

     
   

Other

 

15,722

       

6,135

     
   

Total

 

$720,938

       

$605,446

     
                     

Gross Profit:

 

CAG

 

$351,079

   

55.8

%

 

$283,525

   

53.5

%

   

Water

 

22,889

   

69.2

%

 

23,549

   

71.6

%

   

LPD

 

25,283

   

59.5

%

 

21,607

   

58.9

%

   

Other

 

10,251

   

65.2

%

 

2,468

   

40.2

%

   

Total

 

$409,502

   

56.8

%

 

$331,149

   

54.7

%

                     

Income from Operations:

 

CAG

 

$148,825

   

23.6

%

 

$92,005

   

17.4

%

   

Water

 

15,484

   

46.8

%

 

14,456

   

44.0

%

   

LPD

 

11,591

   

27.3

%

 

7,028

   

19.2

%

   

Other

 

9,195

   

58.5

%

 

2,142

   

34.9

%

   

Total

 

$185,095

   

25.7

%

 

$115,631

   

19.1

%

 
       

Twelve Months Ended

 

Twelve Months Ended

       

December 31,

 

Percent of

 

December 31,

 

Percent of

       

2020

 

Revenue

 

2019

 

Revenue

Revenue:

 

CAG

 

$2,385,765

       

$2,119,183

     
   

Water

 

128,625

       

132,850

     
   

LPD

 

145,845

       

132,635

     
   

Other

 

46,420

       

22,240

     
   

Total

 

$2,706,655

       

$2,406,908

     
                     

Gross Profit:

 

CAG

 

$1,363,186

   

57.1

%

 

$1,181,007

   

55.7

%

   

Water

 

90,380

   

70.3

%

 

95,946

   

72.2

%

   

LPD

 

89,202

   

61.2

%

 

78,504

   

59.2

%

   

Other

 

28,272

   

60.9

%

 

10,092

   

45.4

%

   

Total

 

$1,571,040

   

58.0

%

 

$1,365,549

   

56.7

%

                     

Income from Operations:

 

CAG

 

$574,887

   

24.1

%

 

$462,605

   

21.8

%

   

Water

 

58,867

   

45.8

%

 

61,923

   

46.6

%

   

LPD

 

40,008

   

27.4

%

 

24,735

   

18.6

%

   

Other

 

20,762

   

44.7

%

 

3,583

   

16.1

%

   

Total

 

$694,524

   

25.7

%

 

$552,846

   

23.0

%


 





































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

   

December 31,

 

December 31,

 

Dollar

 

Revenue

 

Change from

 

Change from

 

Revenue

Net Revenue

 

2020

 

2019

 

Change

 

Growth1

 

Currency

 

Acquisitions

 

Growth1

CAG

 

$629,652

   

$529,786

   

$99,866

   

18.9

%

 

1.8

%

 

   

17.0

%

United States

 

405,362

   

347,563

   

57,799

   

16.6

%

 

   

0.1

%

 

16.6

%

International

 

224,290

   

182,223

   

42,067

   

23.1

%

 

5.3

%

 

   

17.8

%

Water

 

$33,088

   

$32,870

   

$218

   

0.7

%

 

0.2

%

 

   

0.4

%

United States

 

14,573

   

14,516

   

57

   

0.4

%

 

   

   

0.4

%

International

 

18,515

   

18,354

   

161

   

0.9

%

 

0.4

%

 

   

0.5

%

LPD

 

$42,476

   

$36,655

   

$5,821

   

15.9

%

 

3.2

%

 

   

12.7

%

United States

 

3,730

   

4,009

   

(279)

   

(7.0)

%

 

   

   

(7.0)

%

International

 

38,746

   

32,646

   

6,100

   

18.7

%

 

3.7

%

 

   

15.0

%

Other

 

$15,722

   

$6,135

   

$9,587

   

156.2

%

 

   

   

156.2

%

Total Company

 

$720,938

   

$605,446

   

$115,492

   

19.1

%

 

1.8

%

 

   

17.2

%

United States

 

433,607

   

368,169

   

65,438

   

17.8

%

 

   

0.1

%

 

17.7

%

International

 

287,331

   

237,277

   

50,054

   

21.1

%

 

4.6

%

 

   

16.5

%

 
   

Three Months Ended

                   
               

Reported

 

Percentage

 

Percentage

 

Organic

   

December 31,

 

December 31,

 

Dollar

 

Revenue

 

Change from

 

Change from

 

Revenue

Net CAG Revenue

 

2020

 

2019

 

Change

 

Growth1

 

Currency

 

Acquisitions

 

Growth1

CAG Diagnostics recurring revenue:

 

$548,244

   

$446,133

   

$102,111

   

22.9

%

 

1.9

%

 

0.1

%

 

20.9

%

IDEXX VetLab consumables

 

220,997

   

173,714

   

47,283

   

27.2

%

 

2.4

%

 

   

24.8

%

Rapid assay products

 

60,337

   

50,183

   

10,154

   

20.2

%

 

0.6

%

 

   

19.6

%

Reference laboratory diagnostic

and consulting services

 

242,968

   

201,028

   

41,940

   

20.9

%

 

1.8

%

 

0.1

%

 

18.9

%

CAG Diagnostics services and

accessories

 

23,942

   

21,208

   

2,734

   

12.9

%

 

1.7

%

 

   

11.2

%

CAG Diagnostics capital –

instruments

 

36,910

   

39,802

   

(2,892)

   

(7.3)

%

 

2.5

%

 

   

(9.7)

%

Veterinary software, services and

diagnostic imaging systems

 

44,498

   

43,851

   

647

   

1.5

%

 

0.3

%

 

   

1.2

%

Net CAG revenue

 

$629,652

   

$529,786

   

$99,866

   

18.9

%

 

1.8

%

 

   

17.0

%

                             

1See Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding.


 





































IDEXX Laboratories, Inc. and Subsidiaries

Revenues and Revenue Growth Analysis by Product and Service Categories and by Domestic and International Markets

Amounts in thousands (Unaudited)

   

Twelve Months Ended

                   
               

Reported

 

Percentage

 

Percentage

 

Organic

   

December 31,

 

December 31,

 

Dollar

 

Revenue

 

Change from

 

Change from

 

Revenue

Net Revenue

 

2020

 

2019

 

Change

 

Growth1

 

Currency

 

Acquisitions

 

Growth1

CAG

 

$2,385,765

   

$2,119,183

   

$266,582

   

12.6

%

 

0.2

%

 

0.5

%

 

11.9

%

United States

 

1,593,855

   

1,410,278

   

183,577

   

13.0

%

 

   

0.8

%

 

12.2

%

International

 

791,910

   

708,905

   

83,005

   

11.7

%

 

0.5

%

 

   

11.2

%

Water

 

$128,625

   

$132,850

   

($4,225)

   

(3.2)

%

 

(1.6)

%

 

   

(1.6)

%

United States

 

62,083

   

62,673

   

(590)

   

(0.9)

%

 

   

   

(0.9)

%

International

 

66,542

   

70,177

   

(3,635)

   

(5.2)

%

 

(3.0)

%

 

   

(2.2)

%

LPD

 

$145,845

   

$132,635

   

$13,210

   

10.0

%

 

(1.1)

%

 

   

11.0

%

United States

 

14,533

   

14,230

   

303

   

2.1

%

 

   

   

2.1

%

International

 

131,312

   

118,405

   

12,907

   

10.9

%

 

(1.2)

%

 

   

12.1

%

Other

 

$46,420

   

$22,240

   

$24,180

   

108.7

%

 

   

   

108.7

%

Total Company

 

$2,706,655

   

$2,406,908

   

$299,747

   

12.5

%

 

   

0.5

%

 

12.0

%

United States

 

1,691,224

   

1,495,516

   

195,708

   

13.1

%

 

   

0.8

%

 

12.3

%

International

 

1,015,431

   

911,392

   

104,039

   

11.4

%

 

(0.1)

%

 

   

11.5

%

 
   

Twelve Months Ended

                   
               

Reported

 

Percentage

 

Percentage

 

Organic

   

December 31,

 

December 31,

 

Dollar

 

Revenue

 

Change from

 

Change from

 

Revenue

Net CAG Revenue

 

2020

 

2019

 

Change

 

Growth1

 

Currency

 

Acquisitions

 

Growth1

CAG Diagnostics recurring revenue:

 

$2,113,839

   

$1,828,329

   

$285,510

   

15.6

%

 

0.1

%

 

0.6

%

 

14.8

%

IDEXX VetLab consumables

 

824,376

   

693,360

   

131,016

   

18.9

%

 

0.1

%

 

   

18.8

%

Rapid assay products

 

253,018

   

232,149

   

20,869

   

9.0

%

 

(0.2)

%

 

   

9.2

%

Reference laboratory diagnostic

and consulting services

 

946,268

   

822,497

   

123,771

   

15.0

%

 

0.3

%

 

1.4

%

 

13.4

%

CAG Diagnostics services and

accessories

 

90,177

   

80,323

   

9,854

   

12.3

%

 

   

   

12.3

%

CAG Diagnostics capital –

instruments

 

108,950

   

132,685

   

(23,735)

   

(17.9)

%

 

0.4

%

 

   

(18.2)

%

Veterinary software, services and

diagnostic imaging systems

 

162,976

   

158,169

   

4,807

   

3.0

%

 

   

   

3.0

%

Net CAG revenue

 

$2,385,765

   

$2,119,183

   

$266,582

   

12.6

%

 

0.2

%

 

0.5

%

 

11.9

%

                             

1See Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding.


 































IDEXX Laboratories, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet

Amounts in thousands (Unaudited)

       

December 31,

 

December 31,

       

2020

 

2019

Assets:

 

Current Assets:

       
   

Cash and cash equivalents

 

$383,928

   

$90,326

 
   

Accounts receivable, net

 

331,429

   

269,312

 
   

Inventories

 

209,873

   

195,019

 
   

Other current assets

 

137,508

   

124,982

 
   

Total current assets

 

1,062,738

   

679,639

 
   

Property and equipment, net

 

555,167

   

533,845

 
   

Other long-term assets, net

 

676,656

   

618,991

 
   

Total assets

 

$2,294,561

   

$1,832,475

 

Liabilities and Stockholders’

           

Equity:

 

Current Liabilities:

       
   

Accounts payable

 

$74,558

   

$72,172

 
   

Accrued liabilities

 

415,648

   

322,938

 
   

Line of credit

 

   

288,765

 
   

Current portion of long-term debt

 

49,988

   

 
   

Deferred revenue

 

42,567

   

41,462

 
   

Total current liabilities

 

582,761

   

725,337

 
   

Long-term debt, net of current portion

 

858,492

   

698,910

 
   

Other long-term liabilities, net

 

220,513

   

230,403

 
   

Total long-term liabilities

 

1,079,005

   

929,313

 
   

Total stockholders’ equity

 

632,088

   

177,473

 
   

Noncontrolling interest

 

707

   

352

 
   

Total stockholders’ equity

 

632,795

   

177,825

 
   

Total liabilities and stockholders’ equity

 

$2,294,561

   

$1,832,475

 


 










IDEXX Laboratories, Inc. and Subsidiaries

Select Balance Sheet Information (Unaudited)

       

December 31,

2020

 

September 30,

2020

 

June 30,
2020

 

March 31,

2020

 

December 31,

2019

Selected Balance Sheet Information:

 

Days sales

outstanding1

 

42.2

   

41.5

   

44.4

   

41.5

   

40.5

 
   

Inventory turns2

 

2.1

   

1.9

   

1.6

   

1.9

   

2.2

 
                         

1Days sales outstanding represents the average of the accounts receivable balances at the beginning and end of each quarter divided by revenue for that

quarter, the result of which is then multiplied by 91.25 days.

2Inventory turns represent inventory-related cost of product revenue for the twelve months preceding each quarter-end divided by the average inventory

balances at the beginning and end of each quarter.


 































IDEXX Laboratories, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows

Amounts in thousands (Unaudited)

       

Twelve Months Ended

       

December 31,

 

December 31,

       

2020

 

2019

Operating:

 

Cash Flows from Operating Activities:

       
   

Net income

 

$582,131

   

$427,792

 
   

Non-cash charges

 

97,693

   

136,335

 
   

Changes in assets and liabilities

 

(31,761)

   

(104,969)

 
   

Net cash provided by operating activities

 

648,063

   

459,158

 

Investing:

 

Cash Flows from Investing Activities:

       
   

Purchases of property and equipment

 

(106,958)

   

(154,969)

 
   

Acquisitions of intangible assets

 

(668)

   

(255)

 
   

Acquisitions of businesses and equity investment, net of cash acquired

 

(1,750)

   

(50,304)

 
   

Net cash (used) provided by investing activities

 

(109,376)

   

(205,528)

 

Financing:

 

Cash Flows from Financing Activities:

       
   

Repayments on revolving credit facilities, net

 

(289,625)

   

(110,275)

 
   

Issuance of senior notes

 

200,000

   

100,000

 
   

Debt issuance costs

 

(5,025)

   

(154)

 
   

Payment of acquisition-related contingent considerations

 

(1,676)

   

(2,375)

 
   

Repurchases of common stock

 

(182,815)

   

(301,658)

 
   

Proceeds from exercises of stock options and employee stock purchase plans

 

51,328

   

36,106

 
   

Shares withheld for statutory tax withholding on restricted stock

 

(20,603)

   

(8,053)

 
   

Net cash used by financing activities

 

(248,416)

   

(286,409)

 
   

Net effect of changes in exchange rates on cash

 

3,331

   

(689)

 
   

Net change in cash and cash equivalents

 

293,602

   

(33,468)

 
   

Cash and cash equivalents, beginning of period

 

90,326

   

123,794

 
   

Cash and cash equivalents, end of period

 

$383,928

   

$90,326

 


 













IDEXX Laboratories, Inc. and Subsidiaries

Free Cash Flow

Amounts in thousands except per share data (Unaudited)

       

Twelve Months Ended

       

December 31,

 

December 31,

       

2020

 

2019

Free Cash Flow:

 

Net cash provided by operating activities

 

$648,063

   

$459,158

 
   

Investing cash flows attributable to purchases of property and equipment

 

(106,958)

   

(154,969)

 
   

Free cash flow1

 

$541,105

   

$304,189

 
             

1See Statements Regarding Non-GAAP Financial Measures, above.


 
























IDEXX Laboratories, Inc. and Subsidiaries

     

After-Tax Return on Invested Capital, Excluding Cash and Investments (“ROIC”)

     

Amounts in thousands (Unaudited)

     

Numerator (amounts in thousands)

For the Year Ended
December 31, 2020

   

Income from operations (as reported)

$694,524

     

After-tax income from operations1

$610,745

     

Denominator (dollar amounts in thousands)

As of
December 31, 2020

 

As of
December 31, 2019

Total shareholders’ equity

$632,088

   

$177,473

 

Noncontrolling interest

707

   

352

 

Line of credit

   

288,765

 

Long-term debt, current portion

49,988

   

 

Long-term debt, net of current portion

858,492

   

698,910

 

Deferred income tax assets

(31,549)

   

(8,100)

 

Deferred income tax liabilities

11,707

   

33,024

 

Total invested capital

$1,521,433

   

$1,190,424

 

Less cash and cash equivalents

383,928

   

90,326

 

Total invested capital, excluding cash and investments

$1,137,505

   

$1,100,098

 

Average invested capital, excluding cash and investments2

$1,118,802

     

After-tax return on invested capital, excluding cash and investments

55

%

   
       

1After-tax income from operations represents income from operations reduced by our reported effective tax rate.

2Average invested capital, excluding cash and investments, represents the average of the amount of total invested capital, excluding cash and investments.


 



















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,

   

2020

 

2019

 

2020

 

2019

Shares repurchased in the open market

 

   

532

   

721

   

1,215

 

Shares acquired through employee surrender for statutory tax withholding

 

27

   

1

   

58

   

39

 

Total shares repurchased

 

27

   

533

   

779

   

1,254

 
                 

Cost of shares repurchased in the open market

 

$—

   

$138,640

   

$179,623

   

$303,838

 

Cost of shares for employee surrenders

 

11,574

   

205

   

20,603

   

8,054

 

Total cost of shares

 

$11,574

   

$138,845

   

$200,226

   

$311,892

 
                 

Average cost per share – open market repurchases

 

$—

   

$260.47

   

$249.20

   

$249.84

 

Average cost per share – employee surrenders

 

$426.73

   

$251.58

   

$354.98

   

$210.10

 

Average cost per share – total

 

$426.73

   

$260.46

   

$257.08

   

$248.62

 


 


Contact: John Ravis, Investor Relations, 1-207-556-8155


 



 


 


 


Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/idexx-laboratories-announces-fourth-quarter-and-full-year-2020-results-301219529.html


SOURCE IDEXX Laboratories, Inc.