Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 27, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-19271 | |
Entity Registrant Name | IDEXX LABORATORIES INC /DE | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 01-0393723 | |
Entity Address, Address Line One | One IDEXX Drive | |
Entity Address, City or Town | Westbrook | |
Entity Address, State or Province | ME | |
Entity Address, Postal Zip Code | 04092 | |
City Area Code | 207 | |
Local Phone Number | 556-0300 | |
Title of 12(b) Security | Common Stock, $0.10 par value per share | |
Trading Symbol | IDXX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Outstanding (in shares) | 84,932,969 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0000874716 | |
Current Fiscal Year End Date | --12-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash and cash equivalents | $ 81,395 | $ 90,326 |
Accounts receivable, net | 299,983 | 269,312 |
Inventories | 211,644 | 195,019 |
Other current assets | 128,329 | 124,982 |
Total current assets | 721,351 | 679,639 |
Long-Term Assets: | ||
Property and equipment, net | 546,158 | 533,845 |
Operating lease right-of-use assets | 78,612 | 80,607 |
Goodwill | 233,211 | 239,724 |
Intangible assets, net | 57,948 | 58,468 |
Other long-term assets | 248,965 | 240,192 |
Total long-term assets | 1,164,894 | 1,152,836 |
TOTAL ASSETS | 1,886,245 | 1,832,475 |
Current Liabilities: | ||
Accounts payable | 74,210 | 72,172 |
Accrued liabilities | 247,179 | 322,938 |
Line of credit | 486,824 | 288,765 |
Current portion of deferred revenue | 38,028 | 41,462 |
Total current liabilities | 846,241 | 725,337 |
Long-Term Liabilities: | ||
Deferred income tax liabilities | 38,908 | 33,024 |
Long-term debt | 697,363 | 698,910 |
Long-term deferred revenue, net of current portion | 49,042 | 48,743 |
Long-term operating lease liabilities | 65,343 | 67,472 |
Other long-term liabilities | 81,293 | 81,164 |
Total long-term liabilities | 931,949 | 929,313 |
Total liabilities | 1,778,190 | 1,654,650 |
Commitments and Contingencies (Note 16) | ||
Stockholders’ Equity: | ||
Common stock, $0.10 par value: Authorized: 120,000 shares; Issued: 105,914 shares in 2020 and 105,711 shares in 2019; Outstanding: 84,929 shares in 2020 and 85,471 shares in 2019 | 10,591 | 10,571 |
Additional paid-in capital | 1,230,485 | 1,213,517 |
Deferred stock units: Outstanding: 144 units in 2020 and 143 units in 2019 | 4,508 | 4,462 |
Retained earnings | 1,705,646 | 1,595,648 |
Accumulated other comprehensive loss | (55,246) | (46,182) |
Treasury stock, at cost: 20,985 shares in 2020 and 20,240 shares in 2019 | (2,788,310) | (2,600,543) |
Total IDEXX Laboratories, Inc. stockholders’ equity | 107,674 | 177,473 |
Noncontrolling interest | 381 | 352 |
Total stockholders’ equity | 108,055 | 177,825 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,886,245 | $ 1,832,475 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in USD per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, shares issued (in shares) | 105,914,000 | 105,711,000 |
Common stock, shares outstanding (in shares) | 84,929,000 | 85,471,000 |
Deferred stock units, outstanding (in shares) | 144,000 | 143,000 |
Treasury stock, shares (in shares) | 20,985,000 | 20,240,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue: | ||
Total revenue | $ 626,336 | $ 576,056 |
Cost of Revenue: | ||
Total cost of revenue | 266,746 | 244,459 |
Gross profit | 359,590 | 331,597 |
Expenses: | ||
Sales and marketing | 116,143 | 106,584 |
General and administrative | 65,812 | 60,361 |
Research and development | 33,310 | 31,514 |
Income from operations | 144,325 | 133,138 |
Interest expense | (7,692) | (8,386) |
Interest income | 140 | 40 |
Income before provision for income taxes | 136,773 | 124,792 |
Provision for income taxes | 24,917 | 22,083 |
Net income | 111,856 | 102,709 |
Less: Net income attributable to noncontrolling interest | 29 | 28 |
Net income attributable to IDEXX Laboratories, Inc. stockholders | $ 111,827 | $ 102,681 |
Earnings per Share: | ||
Basic (in dollars per share) | $ 1.31 | $ 1.19 |
Diluted (in dollars per share) | $ 1.29 | $ 1.17 |
Weighted Average Shares Outstanding: | ||
Basic (in shares) | 85,427 | 86,204 |
Diluted (in shares) | 86,705 | 87,549 |
Product revenue | ||
Revenue: | ||
Total revenue | $ 364,773 | $ 334,058 |
Cost of Revenue: | ||
Total cost of revenue | 125,454 | 117,383 |
Service revenue | ||
Revenue: | ||
Total revenue | 261,563 | 241,998 |
Cost of Revenue: | ||
Total cost of revenue | $ 141,292 | $ 127,076 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 111,856 | $ 102,709 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | (22,206) | (1,423) |
Unrealized gain on Euro-denominated notes, net of tax expense of $330 in 2020 and $466 in 2019 | 1,047 | 1,480 |
Unrealized (loss) gain on investments, net of tax (benefit) expense of $(89) in 2020 and $128 in 2019 | (279) | 407 |
Unrealized gain (loss) on derivative instruments: | ||
Unrealized gain on foreign currency exchange contracts, net of tax expense of $2,052 in 2020 and $224 in 2019 | 9,426 | 1,043 |
Unrealized gain on cross currency swaps, net of tax expense of $869 in 2020 and $307 in 2019 | 4,049 | 1,431 |
Reclassification adjustment for gain included in net income, net of tax (expense) of $(240) in 2020 and $(249) in 2019 | (1,101) | (1,162) |
Unrealized gain on derivative instruments | 12,374 | 1,312 |
Other comprehensive (loss) gain, net of tax | (9,064) | 1,776 |
Comprehensive income | 102,792 | 104,485 |
Less: Comprehensive income attributable to noncontrolling interest | 29 | 28 |
Comprehensive income attributable to IDEXX Laboratories, Inc. | $ 102,763 | $ 104,457 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Unrealized gain on Euro-denominated notes, tax expense | $ 330 | $ 466 |
Unrealized (loss) gain on investments, tax (benefit) expense | (89) | 128 |
Unrealized gain on foreign currency exchange contracts, tax expense | 2,052 | 224 |
Unrealized gain on cross currency swaps, tax expense | 869 | 307 |
Reclassification adjustment for (gain) loss included in net income, tax expense | $ (240) | $ (249) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Deferred Stock Units | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interest |
Balance beginning of period (in shares) at Dec. 31, 2018 | 105,087 | |||||||
Balance beginning of period at Dec. 31, 2018 | $ (9,233) | $ 10,509 | $ 1,138,216 | $ 4,524 | $ 1,167,928 | $ (41,791) | $ (2,288,899) | $ 280 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 102,709 | 102,681 | 28 | |||||
Other comprehensive loss, net | 1,776 | 1,776 | ||||||
Repurchases of common stock, net | (61,135) | (61,135) | ||||||
Common stock issued under stock plans (in shares) | 258 | |||||||
Common stock issued under stock plans | 11,419 | $ 26 | 11,393 | |||||
Share-based compensation cost | 6,334 | 6,266 | 68 | |||||
Balance end of period (in shares) at Mar. 31, 2019 | 105,345 | |||||||
Balance end of period at Mar. 31, 2019 | $ 51,870 | $ 10,535 | 1,155,875 | 4,592 | 1,270,609 | (40,015) | (2,350,034) | 308 |
Balance beginning of period (in shares) at Dec. 31, 2019 | 105,711 | 105,711 | ||||||
Balance beginning of period at Dec. 31, 2019 | $ 177,825 | $ 10,571 | 1,213,517 | 4,462 | 1,595,648 | (46,182) | (2,600,543) | 352 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 111,856 | 111,827 | 29 | |||||
Other comprehensive loss, net | (9,064) | (9,064) | ||||||
Repurchases of common stock, net | (187,767) | (187,767) | ||||||
Common stock issued under stock plans (in shares) | 203 | |||||||
Common stock issued under stock plans | 9,750 | $ 20 | 9,730 | |||||
Share-based compensation cost | $ 7,284 | 7,238 | 46 | |||||
Balance end of period (in shares) at Mar. 31, 2020 | 105,914 | 105,914 | ||||||
Balance end of period at Mar. 31, 2020 | $ 108,055 | $ 10,591 | $ 1,230,485 | $ 4,508 | $ 1,705,646 | $ (55,246) | $ (2,788,310) | $ 381 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - $ / shares | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Stockholders' Equity [Abstract] | ||||
Common stock, par value (in USD per share) | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net income | $ 111,856 | $ 102,709 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 23,204 | 21,355 |
Provision for credit losses | 4,229 | 365 |
Benefit of deferred income taxes | 2,853 | 3,294 |
Share-based compensation expense | 7,284 | 6,334 |
Other | (13) | 263 |
Changes in assets and liabilities: | ||
Accounts receivable | (38,062) | (33,421) |
Inventories | (14,434) | (14,521) |
Other assets and liabilities | (64,881) | (49,601) |
Accounts payable | (1,755) | 699 |
Deferred revenue | (2,410) | (3,098) |
Net cash provided by operating activities | 27,871 | 34,378 |
Cash Flows from Investing Activities: | ||
Purchases of property and equipment | (49,002) | (38,206) |
Acquisitions of intangible assets | (668) | 0 |
Net cash used by investing activities | (49,670) | (38,206) |
Cash Flows from Financing Activities: | ||
Borrowing (repayments) on revolving credit facilities, net | 198,110 | (52,024) |
Issuance of senior notes | 0 | 100,000 |
Debt issuance costs | 0 | (30) |
Payment of acquisition-related contingent consideration | 0 | (573) |
Repurchases of common stock, net | (182,815) | (54,302) |
Proceeds from exercises of stock options and employee stock purchase plans | 10,210 | 11,551 |
Shares withheld for statutory tax withholding on restricted stock | (8,604) | (7,403) |
Net cash provided (used) by financing activities | 16,901 | (2,781) |
Net effect of changes in exchange rates on cash | (4,033) | (569) |
Net decrease in cash and cash equivalents | (8,931) | (7,178) |
Cash and cash equivalents at beginning of period | 90,326 | 123,794 |
Cash and cash equivalents at end of period | 81,395 | 116,616 |
Supplemental Cash Flow Information: | ||
Cash paid for income taxes | 12,020 | 8,717 |
Unpaid property and equipment, reflected in accounts payable and accrued liabilities | $ 14,123 | $ 9,007 |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Principles of Consolidation | BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying unaudited condensed consolidated financial statements of IDEXX Laboratories, Inc. and its subsidiaries have been prepared in accordance with U.S. GAAP for interim financial information and with the requirements of Regulation S-X, Rule 10-01 for financial statements required to be filed as a part of this Quarterly Report on Form 10-Q. Unless the context requires otherwise, references in this Quarterly Report on Form 10-Q to “ IDEXX, ” the “ Company, ” “ we, ” “ our, ” or “ us ” refer to IDEXX Laboratories, Inc. and its subsidiaries. The accompanying unaudited condensed consolidated financial statements include the accounts of IDEXX Laboratories, Inc. and our wholly-owned and majority-owned subsidiaries. We do not have any variable interest entities for which we are the primary beneficiary. All intercompany transactions and balances have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements reflect, in the opinion of our management, all adjustments necessary for a fair statement of our financial position and results of operations. All such adjustments are of a recurring nature. The consolidated balance sheet data at December 31, 2019 , was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The results of operations for the three months ended March 31, 2020 , are not necessarily indicative of the results to be expected for the full year or any future period, particularly in light of the COVID-19 pandemic and its effects on the domestic and global economies as described below. These unaudited condensed consolidated financial statements should be read in conjunction with this Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 , and our Annual Report on Form 10-K for the year ended December 31, 2019 , (the “ 2019 Annual Report”) filed with the SEC. To limit the spread of COVID-19, governments have taken various actions including the issuance of stay-at-home policies and social distancing procedures and guidelines, causing some businesses, including those that we serve, to adjust, reduce, or suspend business and operating activities. The primary impacts of the COVID-19 pandemic have been seen in our CAG business. While veterinary care is widely recognized as an “essential” service for pet owners, and veterinarians continue to deliver essential medical care for sick and injured pets, stay-at-home policies being deployed to combat the spread of COVID-19 have resulted in a decrease in companion animal clinical visits, including delay of elective procedures and wellness visits. While our reference laboratories and manufacturing facilities are operating and have been designated as essential businesses, disruptions or reductions to operations may occur as the impacts from the COVID-19 pandemic and related responses continue to develop. The extent to which the COVID-19 pandemic impacts our business, results of operations and financial condition, including the potential for write-offs or impairments of assets and suspension of capital investments, will depend on future developments. We are unable to predict with certainty the effects of the COVID-19 pandemic on our customers, suppliers, and vendors, as well as the actions of governments, and when and to what extent normal economic and operating conditions can resume; these effects may differ from those assumed in our projected estimates. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic impact that has occurred or may occur in the future. The preparation of our condensed consolidated financial statements requires us to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis we evaluate our estimates, judgments and methodologies. We base our estimates on historical experience and on various other assumptions that we believe are reasonable, the results of which form the basis for making judgments about the carrying values of assets, liabilities and equity and the amount of revenues and expenses. We have made estimates of the impact of the COVID-19 pandemic within our financial statements, and our actual results may differ from these estimates and there may be changes to those estimates in future periods. We have included certain terms and abbreviations used throughout this Quarterly Report on Form 10-Q in the "Glossary of Terms and Selected Abbreviations." |
Accounting Policies
Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Accounting Policies | ACCOUNTING POLICIES Significant Accounting Policies The significant accounting policies used in preparation of these unaudited condensed consolidated financial statements for the three months ended March 31, 2020 , are consistent with those discussed in Note 2 to the consolidated financial statements in our 2019 Annual Report, except as noted below. New Accounting Pronouncements Adopted We adopted ASU 2018-13, Fair Value Measurement (Topic 820), as of January 1, 2020, which modifies the disclosure requirements on fair value measurements under ASC Topic No. 820, Fair Value Measurement, as amended (“ASC 820”). ASU 2018-13 removes (a) the prior requirement to disclose the amount and reason for transfers between Level 1 and Level 2 of the fair value hierarchy contained in ASC 820, (b) the policy for timing of transfers between levels, and (c) the valuation processes used for Level 3 fair value measurements. ASU 2018-13 also adds, among other things, a requirement to disclose the range and weighted average of significant unobservable inputs used in Level 3 fair value measurements. The adoption did not have a material impact on our consolidated financial statements. Effective January 1, 2020, we adopted ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” using the modified retrospective transition method. This ASU amends the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables and leased equipment. The amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. We recorded a non-cash cumulative effect adjustment to retained earnings of $1.8 million , net of $0.6 million of income taxes, on our opening consolidated balance sheet as of January 1, 2020. This adjustment, before the impact of income taxes, was comprised of $2.2 million related to our contract assets and sales-type leases, and $0.2 million related to accounts receivable. See Note 6. Credit Losses, for more information on our presentation of credit losses. New Accounting Pronouncements Not Yet Adopted For a discussion of other accounting standards that have been issued by the FASB prior to January 1, 2020, but are not yet effective, refer to Note 2. Summary of Significant Accounting Policies - New Accounting Pronouncements Not Yet Adopted in our 2019 Annual Report. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | REVENUE RECOGNITION Our revenue is recognized when, or as, performance obligations under the terms of a contract are satisfied, which occurs when control of the promised products or services is transferred to a customer. We exclude sales, use, value-added, and other taxes we collect on behalf of third parties from revenue. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or services to a customer. To accurately present the consideration received in exchange for promised products or services, we apply the five-step model outlined below: 1. Identification of a contract or agreement with a customer 2. Identification of our performance obligations in the contract or agreement 3. Determination of the transaction price 4. Allocation of the transaction price to the performance obligations 5. Recognition of revenue when, or as, we satisfy a performance obligation We enter into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The timing of revenue recognition, billings, and cash collections results in accounts receivable, contract assets and lease receivables as a result of revenue recognized in advance of billings (included within other assets), and contract liabilities or deferred revenue as a result of receiving consideration in advance of revenue recognition within our unaudited condensed consolidated balance sheet. Our general payment terms range from 30 to 60 days, with exceptions in certain geographies. Below is a listing of our major categories of revenue for our products and services: Diagnostic Products and Accessories . Diagnostic products and accessories revenues, including IDEXX VetLab ® consumables and accessories, rapid assay, LPD, Water, and OPTI testing products, are predominantly recognized and invoiced at the time of shipment, which is when the customer obtains control of the product based on legal title transfer and we have the right to payment. Shipping costs reimbursed by the customer are included in revenue and cost of sales. As a practical expedient, we do not account for shipping activities as a separate performance obligation. Reference Laboratory Diagnostic and Consulting Services . Reference laboratory revenues are recognized and invoiced when the laboratory diagnostic service is performed. Instruments, Software and Systems . CAG Diagnostics capital instruments, veterinary software and diagnostic imaging systems revenues are recognized and invoiced when the customer obtains control of the products based on legal title transfer and we have the right to payment, which generally occurs at the time of installation and customer acceptance. Our instruments, software, and systems are often included in one of our significant customer programs, as further described below. For veterinary software systems that include multiple performance obligations, such as perpetual software licenses and computer hardware, we allocate revenue to each performance obligation based on estimates of the price that we would charge the customer for each promised product or service if it were sold on a standalone basis. Lease Revenue . Revenues from instrument rental agreements and reagent rental programs are recognized either as operating leases on a ratable basis over the term of the agreement or as sales-type leases at the time of installation and customer acceptance. Customers typically pay for the right to use instruments under rental agreements in equal monthly amounts over the term of the rental agreement. Our reagent rental programs provide our customers the right to use our instruments upon entering into agreements to purchase specified amounts of consumables, which are considered embedded leases. For some agreements, the customers are provided with the right to purchase the instrument at the end of the lease term. Lease revenues from these agreements are presented in product revenue on our unaudited condensed consolidated income statement. Lease revenue was approximately $4.2 million and $4.6 million for the three months ended March 31, 2020 and 2019 , respectively, including both operating leases and sales-type leases under ASC 842, Leases, for leases entered into after January 1,2019, and ASC 840, Leases, for leases entered into prior to 2019. See below for revenue recognition under our reagent rental programs. Extended Warranties and Post-Contract Support . CAG Diagnostics capital instruments and diagnostic imaging systems extended warranties typically provide customers with continued coverage for a period of one to five years beyond the first-year standard warranty. Customers can either pay in full for the extended warranty at the time of instrument or system purchase or can be billed on a quarterly basis over the term of the contract. We recognize revenue associated with extended warranties over time on a ratable basis using a time elapsed measure of performance over the contract term, which approximates the expected timing in which applicable services are performed. Veterinary software post-contract support provides customers with access to technical support when and as needed through access to call centers and online customer assistance. Post-contract support contracts typically have a term of 12 months and customers are billed for post-contract support in equal quarterly amounts over the term. We recognize revenue for post-contract support services over time on a ratable basis using a time elapsed measure of performance over the contract term, which approximates the expected timing in which applicable services are performed. On December 31, 2019 , our deferred revenue related to extended warranties and post-contract support was $38.0 million , of which approximately $13.7 million was recognized during the three months ended March 31, 2020 . Furthermore, as a result of new agreements, our deferred revenue related to extended warranties and post-contract support was $36.6 million at March 31, 2020 . We do not disclose information about remaining performance obligations that are part of contracts with an original expected duration of one year or less and do not adjust for the effect of the financing components when the period between customer payment and revenue recognition is one year or less. Deferred revenue related to extended warranties and post-contract support with an original duration of more than one year was $23.1 million at March 31, 2020 , of which approximately 29% , 34% , 22% , 10% , and 5% are expected to be recognized during the remainder of 2020 , the full years 2021 , 2022 , 2023 , and thereafter, respectively. Additionally, we have determined these agreements do not include a significant financing component. SaaS Subscriptions . We offer a variety of veterinary software and diagnostic imaging SaaS subscriptions including IDEXX Neo ® , Animana ® , Pet Health Network ® Pro, Petly ® Plans, Web PACS, rVetLink ® , and Smart Flow ™ . We recognize revenue for our SaaS subscriptions over time on a ratable basis over the contract term, beginning on the date our service is made available to the customer. Our subscription contracts vary in term from monthly to two years . Customers typically pay for our subscription contracts in equal monthly amounts over the term of the agreement. Deferred revenue related to our SaaS subscriptions is not material. Contracts with Multiple Performance Obligations . We enter into contracts where customers purchase a combination of IDEXX products and services. Determining whether products and services are considered distinct performance obligations that should be accounted for separately requires significant judgment. We determine the transaction price for a contract based on the consideration we expect to receive in exchange for the transferred goods or services. To the extent the transaction price includes variable consideration, such as volume rebates or expected price adjustments, we apply judgment in constraining the estimated variable consideration due to factors that may cause reversal of revenue recognized. We evaluate constraints based on our historical and projected experience with similar customer contracts. We allocate revenue to each performance obligation in proportion to the relative standalone selling prices and recognize revenue when transfer of the related goods or services has occurred for each obligation. We utilize the observable standalone selling price when available, which represents the price charged for the performance obligation when sold separately. When standalone selling prices for our products or services are not directly observable, we determine the standalone selling prices using relevant information available and apply suitable estimation methods including, but not limited to, the cost plus a margin approach. We recognize revenue as each performance obligation is satisfied, either at a point in time or over time, as described in the revenue categories above. We do not disclose information about remaining performance obligations that are part of contracts with an original expected duration of one year or less. The following customer programs represent our most significant customer contracts which contain multiple performance obligations: Customer Commitment Programs . We offer customer incentives upon entering into multi-year agreements to purchase annual minimum amounts of products and services. Up-Front Customer Loyalty Programs . Our up-front loyalty programs provide customers with incentives in the form of cash payments or IDEXX Points upon entering into multi-year agreements to purchase annual minimum amounts of future products or services. If a customer breaches its agreement, they are required to refund all or a portion of the up-front cash or IDEXX Points, or make other repayments, remedial actions, or both. Up-front incentives to customers in the form of cash or IDEXX Points are not made in exchange for distinct goods or services and are capitalized as customer acquisition costs within other current and long-term assets, which are subsequently recognized as a reduction to revenue over the term of the customer agreement. If these up-front incentives are subsequently utilized to purchase instruments, we allocate total consideration, including future committed purchases less up-front incentives and estimates of expected price adjustments, based on relative standalone selling prices to identified performance obligations and recognize instrument revenue and cost at the time of installation and customer acceptance. We have determined these agreements do not include a significant financing component. Differences between estimated and actual customer purchases may impact the amount and timing of revenue recognition. On December 31, 2019 , our capitalized customer acquisition costs were $137.4 million , of which approximately $10.3 million was recognized as a reduction of revenue during the three months ended March 31, 2020 . Furthermore, as a result of new up-front customer loyalty payments, net of subsequent recognition, our capitalized customer acquisition costs were $138.2 million at March 31, 2020 . We monitor customer purchases over the term of their agreement to assess the realizability of our capitalized customer acquisition costs and review estimates of variable consideration. Impairments, revenue adjustments that relate to performance obligations satisfied in prior periods, and contract modifications during the three months ended March 31, 2020 , were not material. Volume Commitment Programs . Our volume commitment programs, such as our IDEXX 360 program, provide customers with a free or discounted instrument or system upon entering into multi-year agreements to purchase annual minimum amounts of products and services. We allocate total consideration, including future committed purchases and expected price adjustments, based on relative standalone selling prices to identified performance obligations and recognize instrument revenue and cost at the time of installation and customer acceptance in advance of billing the customer, which is also when the customer obtains control of the instrument based on legal title transfer. Our right to future consideration related to instrument revenue is recorded as a contract asset within other current and long-term assets. The contract asset is transferred to accounts receivable when customers are billed for future products and services over the term of the contract. We have determined these agreements do not include a significant financing component. Differences between estimated and actual customer purchases may impact the amount and timing of revenue recognition. On December 31, 2019 , our volume commitment contract assets were $83.9 million , of which approximately $4.9 million was reclassified to accounts receivable when customers were billed for related products and services during the three months ended March 31, 2020 . Furthermore, as a result of new placements under volume commitment programs, net of subsequent amounts reclassified to accounts receivable, and allowances established for credit losses upon adoption of ASU 2016-13, our contract assets were $87.9 million at March 31, 2020 . We monitor customer purchases over the term of their agreement to assess the realizability of our contract assets and review estimates of variable consideration. Impairments, revenue adjustments that relate to performance obligations satisfied in prior periods, and contract modifications during the three months ended March 31, 2020 , were not material. For our up-front customer loyalty and volume commitment programs, we estimate future revenues related to multi-year agreements to be approximately $1.9 billion , of which approximately 19% , 23% , 21% , 18% , and 19% are expected to be recognized during the remainder of 2020 , the full years 2021 , 2022 , 2023 , and thereafter, respectively. These future revenues relate to performance obligations not yet satisfied, for which customers have committed to purchase goods and services, net of the expected revenue reductions from customer acquisition costs and expected price adjustments, and as a result, are lower than stated contractual commitments by our customers. Instrument Rebate Programs . Our instrument rebate programs, previously referred to as IDEXX Instrument Marketing Programs, require an instrument purchase and provide customers the opportunity to earn future rebates based on the volume of products and services they purchase over the term of the program. We account for the customer’s right to earn rebates on future purchases as a separate performance obligation and determine the standalone selling price based on an estimate of rebates the customer will earn over the term of the program. Total consideration allocated to identified performance obligations is limited to goods and services that the customer is presently obligated to purchase and does not include estimates of future purchases that are optional. We allocate total consideration to identified performance obligations, including the customer’s right to earn rebates on future purchases, which is deferred and recognized upon the purchase of future products and services, offsetting future rebates as they are earned. On December 31, 2019 , our deferred revenue related to instrument rebate programs was $49.1 million , of which approximately $4.4 million was recognized when customers purchased eligible products and services and earned rebates during the three months ended March 31, 2020 . Furthermore, as a result of new instrument purchases under rebate programs, net of subsequent recognition, our deferred revenue was $46.5 million at March 31, 2020 , of which approximately 27% , 28% , 20% , 13% , and 12% are expected to be recognized during the remainder of 2020 , the full years 2021 , 2022 , 2023 , and thereafter, respectively. Reagent Rental Programs . Our reagent rental programs provide our customers the right to use our instruments upon entering into multi-year agreements to purchase annual minimum amounts of consumables. These types of agreements include an embedded lease for the right to use our instrument and we determine the amount of lease revenue allocated to the instrument based on relative standalone selling prices. We evaluate the terms of these embedded leases to determine classification as either a sales-type lease or an operating lease. Sales-type Reagent Rental Programs . Our reagent rental programs that effectively transfer control of instruments to our customers are classified as sales-type leases and we recognize instrument revenue and cost in advance of billing the customer, at the time of installation and customer acceptance. Our right to future consideration related to instrument revenue is recorded as a lease receivable within other current and long-term assets, and is transferred to accounts receivable when customers are billed for future products and services over the term of the contract. On December 31, 2019 , our lease receivable assets were $7.2 million , of which approximately $0.4 million was reclassified to accounts receivable when customers were billed for related products and services during the three months ended March 31, 2020 . Furthermore, as a result of new placements under sales-type reagent rental programs, net of subsequent amounts reclassified to accounts receivable, and allowances established for credit losses upon adoption of ASU 2016-13, our lease receivable assets were $7.7 million at March 31, 2020 . The impacts of discounting and unearned income at March 31, 2020 , were not material. Profit and loss recognized at the commencement date and interest income during the three months ended March 31, 2020 , were not material. We monitor customer purchases over the term of their agreement to assess the realizability of our lease receivable assets. Impairments during the three months ended March 31, 2020 , were not material. Operating-type Reagent Rental Programs . Our reagent rental programs that do not effectively transfer control of instruments to our customers are classified as operating leases and we recognize instrument revenue and costs ratably over the term of the agreement. The cost of the instrument is capitalized within property and equipment. During the three months ended March 31, 2020 and 2019 , we transferred instruments of $2.3 million and $2.0 million , respectively, from inventory to property and equipment. We estimate future revenue to be recognized related to our reagent rental programs of approximately $28.8 million , of which approximately 30% , 32% , 20% , 10% , and 8% are expected to be recognized during the remainder of 2020 , the full years 2021 , 2022 , 2023 , and thereafter, respectively. These future revenues relate to performance obligations not yet satisfied for which customers have committed to future purchases, net of any expected price adjustments, and as a result, may be lower than stated contractual commitments by our customers. Other Customer Incentive Programs . Certain agreements with customers include discounts or rebates on the sale of products and services applied retrospectively, such as volume rebates achieved by purchasing a specified purchase threshold of goods and services. We account for these discounts as variable consideration and estimate the likelihood of a customer meeting the threshold in order to determine the transaction price using the most predictive approach. We typically use the most-likely-amount method for incentives that are offered to individual customers and the expected-value method for programs that are offered to a broad group of customers. Revenue adjustments that relate to performance obligations satisfied in prior periods during the three months ended March 31, 2020 , were not material. Refund obligations related to customer incentive programs are recorded in accrued liabilities for the actual issuance of incentives, incentives earned but not yet issued and estimates of incentives to be earned in the future. Program Combinations . At times, we combine elements of our significant customer programs within a single customer contract. We separate each significant program element and include the contract assets, customer acquisition costs, deferred revenues and estimated future revenues within the most relevant program disclosures above. Each customer contract is presented as a net contract asset or net contract liability on our unaudited condensed consolidated balance sheet. IDEXX Points . IDEXX Points may be applied to trade receivables due to us, converted to cash, or applied against the purchase price of IDEXX products and services. We consider IDEXX Points equivalent to cash. IDEXX Points that have not yet been used by customers are included in accrued liabilities until utilized or expired. Breakage is not material because customers can apply IDEXX Points to trade receivables at any time. Accounts Receivable . We recognize revenue when it is probable that we will collect substantially all of the consideration to which we will be entitled, based on the customer’s intent and ability to pay the promised consideration. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. We have no significant customers that accounted for greater than 10% of our consolidated revenues, and we have no concentration of credit risk as of March 31, 2020 . Disaggregated Revenues . We present disaggregated revenue for our CAG segment based on major product and service categories. Our Water segment is comprised of a single major product category. Although our LPD segment does not meet the quantitative thresholds to be reported as a separate segment, we believe it is important to disaggregate these revenues as a major product and service category within our Other reportable segment given its distinct markets, and therefore we have elected to report LPD as a reportable segment. The following table presents disaggregated revenue by major product and service categories: (in thousands) For the Three Months Ended 2020 2019 CAG segment revenue: CAG Diagnostics recurring revenue: $ 487,925 $ 443,791 IDEXX VetLab consumables 188,713 167,211 Rapid assay products 57,430 54,431 Reference laboratory diagnostic and consulting services 220,261 202,658 CAG Diagnostics services and accessories 21,521 19,491 CAG Diagnostics capital - instruments 23,833 28,749 Veterinary software, services and diagnostic imaging systems 40,238 36,378 CAG segment revenue 551,996 508,918 Water segment revenue 34,149 30,310 LPD segment revenue 34,154 31,506 Other segment revenue 6,037 5,322 Total revenue $ 626,336 $ 576,056 Revenue by principal geographic area, based on customers’ domiciles, was as follows: (in thousands) For the Three Months Ended 2020 2019 United States $ 396,783 $ 358,288 Europe, the Middle East and Africa 129,766 121,746 Asia Pacific Region 63,512 60,075 Canada 24,247 23,224 Latin America 12,028 12,723 Total $ 626,336 $ 576,056 Costs to Obtain a Contract . We capitalize sales commissions and the related fringe benefits earned by our sales force when considered incremental and recoverable costs of obtaining a contract. Our contracts include performance obligations related to various goods and services, some of which are satisfied at a point in time and others over time. Commission costs related to performance obligations satisfied at a point in time are expensed at the time of sale, which is when revenue is recognized. Commission costs related to long-term service contracts and performance obligations satisfied over time, including extended warranties and SaaS subscriptions, are deferred and recognized on a systematic basis that is consistent with the transfer of the goods or services to which the asset relates. We apply judgment in estimating the amortization period, which ranges from 3 to 7 years, by taking into consideration our customer contract terms, history of renewals, expected length of customer relationship, as well as the useful life of the underlying technology and products. Amortization expense is included in sales and marketing expenses in the accompanying unaudited condensed consolidated statements of income. Deferred commission costs are periodically reviewed for impairment. On December 31, 2019 , our deferred commission costs, included within other assets, were $15.6 million , of which approximately $1.4 million of commission expense was recognized during the three months ended March 31, 2020 . Furthermore, as a result of commissions related to new extended warranties and SaaS subscriptions, net of subsequent recognition, our deferred commission costs were $16.0 million at March 31, 2020 . Impairments of deferred commission costs during the three months ended March 31, 2020 , were not material. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS We believe that our acquisitions of businesses and other assets enhance our existing businesses by either expanding our geographic range and customer base or expanding our existing product lines. From time to time we may acquire the assets of small reference labs that we account for as an asset purchase. During the fourth quarter of 2019 we acquired the assets of a multi-site reference laboratory in the midwest of the U.S. for $50.0 million in cash. This acquisition expands our national reference laboratory presence in the U.S., and was accounted for as a business combination. We finalized the valuation the fair value of the assets acquired during the first quarter of 2020. The fair value of the assets acquired consists of $26.9 million in intangible assets, primarily for customer relationships, with a weighted average life of 13.8 years , $0.2 million of tangible assets, and $22.9 million |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION The fair value of options, restricted stock units, deferred stock units, and employee stock purchase rights awarded during the three months ended March 31, 2020 , totaled $36.3 million as compared to $34.4 million for the three months ended March 31, 2019 . The total unrecognized compensation expense, net of estimated forfeitures, for unvested share-based compensation awards outstanding at March 31, 2020 , was $75.1 million , which will be recognized over a weighted average period of approximately 1.9 years . During the three months ended March 31, 2020 , we recognized expenses of $7.3 million as compared to $6.3 million for the three months ended March 31, 2019 , related to share-based compensation. We determine the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at each grant date. As such, we may use different assumptions for options granted throughout the year. Option awards are granted with an exercise price equal to the closing market price of our common stock at the date of grant. We have never paid any cash dividends on our common stock, and we have no intention to pay such a dividend at this time; therefore, we assume that no dividends will be paid over the expected terms of option awards. The weighted averages of the valuation assumptions used to determine the fair value of each option award on the date of grant and the weighted average estimated fair values were as follows: For the Three Months Ended 2020 2019 Share price at grant $ 288.78 $ 206.94 Expected stock price volatility 27 % 26 % Expected term, in years 6.0 6.0 Risk-free interest rate 1.5 % 2.5 % Weighted average fair value of options granted $ 84.21 $ 63.55 |
Credit Losses
Credit Losses | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
Credit Losses | CREDIT LOSSES We are exposed to credit losses primarily through our sales of products and services to our customers. We maintain allowances for credit losses for potentially uncollectible receivables. We base our estimates on a detailed analysis of specific customer situations and a percentage of our accounts receivable by aging category. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current economic conditions. See Note 2. Accounting Policies, for more information on our adoption of ASU 2016-13 on January 1, 2020, using the modified retrospective transition method. Additional allowances may be required if either the financial condition of our customers was to deteriorate, or a strengthening U.S. dollar impacts the ability of foreign customers to make payments to us on their U.S. dollar-denominated purchases. We monitor our ongoing credit exposure through active review of counterparty balances against contract terms and due dates. Our activities include timely account reconciliations, dispute resolution and payment confirmations. We may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. Account balances are charged off against the allowance when we believe it is probable the receivable will not be recovered. We may require collateralized asset support or a prepayment to mitigate credit risk. We do not have any off-balance sheet credit exposure related to our customers. Accounts Receivable The allowance for credit losses associated with accounts receivable was $7.0 million and $3.6 million at March 31, 2020 and December 31, 2019, respectively. Accounts receivable reflected on the balance sheet is net of this reserve. Based on an aging analysis, at March 31, 2020, approximately 84% of our accounts receivable had not yet reached the invoice due date and approximately 16% was considered past due. Of the amounts that were past due, approximately 1.3% was greater than 60 days past due. At December 31, 2019, approximately 84% of our accounts receivable had not yet reached the invoice due date and approximately 16% was considered past due. Of the amounts that were past due, approximately 1.5% was greater than 60 days past due. Contract assets and lease receivables The allowance for credit losses associated with the contract assets and lease receivables was $2.9 million , at March 31, 2020. The assets reflected on the balance sheet are net of these reserves. Historically, we have experienced low credit loss rates on our customer commitment programs and lease receivables. We apply judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory, Net [Abstract] | |
Inventories | INVENTORIES Inventories are stated at the lower of cost (first-in, first-out) or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The components of inventories were as follows: (in thousands) March 31, December 31, Raw materials $ 42,290 $ 41,202 Work-in-process 20,970 20,077 Finished goods 148,384 133,740 Inventories $ 211,644 $ 195,019 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | LEASES The majority of our facilities are occupied under operating lease arrangements with various expiration dates through 2067, some of which include options to extend the life of the lease, and some of which include options to terminate the lease within 1 year. In certain instances, we are responsible for the real estate taxes and operating expenses related to these facilities. Additionally, we enter into operating leases for certain vehicles and office equipment in the normal course of business. We determine the expected term of any executed agreements using the non-cancelable lease term plus any renewal options by which the failure to renew imposes a penalty in such amount that renewal is reasonably assured. The derived expected term is then used in the determination of a financing or operating lease and in the calculation of straight-line rent expense. Rent escalations are considered in the calculation of minimum lease payments in our capital lease tests and in determining straight-line rent expense for operating leases. Minimum lease payments include the fixed lease component of the agreement, as well as fixed rate increases that are initially measured at the lease commencement date. Variable lease payments based on an index, payments associated with non-lease components and short-term rentals (leases with terms less than 12 months) are expensed as incurred. Consideration is allocated to the lease and non-lease components based on the estimated standalone prices. We determine if an arrangement is a lease at its inception. Operating leases are included in operating lease right-of-use assets, accrued liabilities, and long-term operating lease liabilities in our consolidated balance sheets. Our financing leases are not material to our financial statements. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease liabilities and right-of-use assets are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an explicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Rent expense for lease payments is recognized on a straight-line basis over the lease term. The operating lease right-of-use assets also includes any rent prepayments, lease incentives upon receipt and straight-line rent expense impacts, which represent the difference between our operating lease liabilities and right-of-use assets. Maturities of operating lease liabilities were as follows: (in thousands, except lease term and discount rate) March 31, 2020 (remainder of year) $ 13,498 2021 17,676 2022 14,695 2023 10,300 2024 6,813 Thereafter 33,376 Total lease payments 96,358 Less imputed interest (15,522 ) Total $ 80,836 Current operating lease liabilities, included in accrued liabilities $ 15,493 Long-term operating lease liabilities $ 65,343 Weighted average remaining lease term - operating leases 10.2 years Weighted average discount rate - operating leases 3.5 % Total minimum future lease payments of approximately $4.4 million for leases that have not commenced as of March 31, 2020, are not included in the condensed consolidated financial statements, as we do not yet control the underlying assets. These leases are expected to commence between 2020 and 2021 with lease terms of approximately 5 years to 11 years . Rent expense charged to operations under operating leases was approximately $5.4 million and $5.2 million during the three months ended March 31, 2020 and 2019 , respectively. Variable rent and short-term lease expenses were not material. Supplemental cash flow information for leases was as follows: (in thousands) For the Three Months Ended Cash paid for amounts included in the measurement of operating leases liabilities $ 5,015 Right-of-use assets obtained in exchange for operating lease obligations, net of early lease terminations $ 2,796 |
Other Current and Long-Term Ass
Other Current and Long-Term Assets | 3 Months Ended |
Mar. 31, 2020 | |
Other Assets, Noncurrent [Abstract] | |
Other Current and Long-Term Assets | OTHER CURRENT AND LONG-TERM ASSETS Other current assets consisted of the following: (in thousands) March 31, December 31, Customer acquisition costs $ 39,719 $ 39,329 Prepaid expenses 32,403 31,992 Contract assets, net 18,670 17,659 Taxes receivable 15,150 20,516 Deferred sales commissions 5,302 5,202 Other assets 17,085 10,284 Other current assets $ 128,329 $ 124,982 Other long-term assets consisted of the following: (in thousands) March 31, December 31, Customer acquisition costs $ 98,463 $ 98,117 Contract assets, net 69,196 66,226 Taxes receivable 14,960 14,960 Investment in long-term product supply arrangements 13,785 13,657 Deferred sales commissions 10,672 10,442 Deferred income taxes 7,172 8,100 Other assets 34,717 28,690 Other long-term assets $ 248,965 $ 240,192 |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Liabilities | ACCRUED LIABILITIES Accrued liabilities consisted of the following: (in thousands) March 31, December 31, Accrued employee compensation and related expenses $ 71,568 $ 127,174 Accrued expenses 66,742 86,296 Accrued customer incentives and refund obligations 60,025 63,079 Accrued taxes 33,351 31,108 Current lease liabilities 15,493 15,281 Accrued liabilities $ 247,179 $ 322,938 Other long-term liabilities consisted of the following: (in thousands) March 31, December 31, Accrued taxes $ 68,118 $ 67,463 Other accrued long-term expenses 13,175 13,701 Other long-term liabilities $ 81,293 $ 81,164 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Senior Notes The following describes all of our currently outstanding unsecured senior notes issued and sold in private placements (collectively, the "Senior Notes") as of March 31, 2020: (Principal Amount in thousands) Issue Date Due Date Series Principal Amount Coupon Rate Senior Note Agreement (1) 12/11/2013 12/11/2023 2023 Series A Notes $ 75,000 3.94 % NY Life 2013 Note Agreement 12/11/2013 12/11/2025 2025 Series B Notes $ 75,000 4.04 % NY Life 2013 Note Agreement 09/04/2014 09/04/2026 2026 Senior Notes $ 75,000 3.72 % NY Life 2014 Note Agreement 07/21/2014 07/21/2021 2021 Series A Notes $ 50,000 3.32 % Prudential 2015 Amended Agreement 07/21/2014 07/21/2024 2024 Series B Notes $ 75,000 3.76 % Prudential 2015 Amended Agreement 06/18/2015 06/18/2025 2025 Series C Notes € 88,857 1.785 % Prudential 2015 Amended Agreement 02/12/2015 02/12/2022 2022 Series A Notes $ 75,000 3.25 % MetLife 2014 Note Agreement 02/12/2015 02/12/2027 2027 Series B Notes $ 75,000 3.72 % MetLife 2014 Note Agreement 03/14/2019 03/14/2029 2029 Series C Notes $ 100,000 4.19 % MetLife 2014 Note Agreement (1) In each case, as amended. Senior Notes - Subsequent Event The following describes unsecured senior notes issued and sold in private placements after March 31, 2020: (Principal Amount in thousands) Issue Date Due Date Series Principal Amount Coupon Rate Senior Note Agreement (1) 04/02/2020 04/02/2030 MetLife 2030 Series D Notes $ 125,000 2.50 % MetLife 2014 Note Agreement 04/14/2020 04/14/2030 Prudential 2030 Series D Notes $ 75,000 2.50 % Prudential 2015 Amended Agreement (1) In each case, as amended. MetLife 2014 Note Agreement On March 23, 2020, we entered into the Second Amendment to the MetLife 2014 Note Agreement (the “MetLife Second Amendment”), in order to (i) increase the facility size from $150 million to $300 million , (ii) extend the facility issuance period to December 20, 2022, (iii) make various implementing and administrative changes in order to facilitate a $125 million notes issuance on April 2, 2020 and (iv) allow the amount available to be issued under the facility to equal $300 million less the amount of notes outstanding from time to time during the issuance period. On April 2, 2020, we issued and sold to MetLife and other purchasers $125 million of our unsecured senior notes (the “MetLife 2030 Series D Notes”) pursuant to the MetLife Second Amendment. The entire outstanding principal balance of the MetLife 2030 Series D Notes is due and payable on April 2, 2030, and the MetLife 2030 Series D Notes bear interest at the rate of 2.50% per annum. We anticipate using the proceeds received from the MetLife 2030 Series D Notes for general corporate purposes. Prudential 2015 Amended Agreement On April 10, 2020, we entered into the Second Amendment to the Prudential 2015 Amended Agreement (the “Prudential Second Amendment”), in order to (i) increase the facility size to $425 million , (ii) extend the facility issuance period to April 10, 2023, (iii) make various implementing and administrative changes in order to facilitate a $75 million notes issuance on April 14, 2020, (iv) allow the amount available to be issued under the facility to equal $425 million less the amount of notes outstanding from time to time during the issuance period and (v) modify several defined terms, schedules and covenant baskets in the Prudential 2015 Amended Agreement to create additional operating flexibility, and in particular to align such provisions with similar modifications we made substantially concurrently in our other debt facilities. On April 14, 2020, we issued and sold to Prudential and other purchasers $75 million of our unsecured senior notes (the “Prudential 2030 Series D Notes”) pursuant to the Prudential Second Amendment. The entire outstanding balance of the Prudential 2030 Series D Notes is due and payable on April 14, 2030, and the Prudential 2030 Series D Notes bear interest at the rate of 2.50% per annum. We anticipate using the proceeds received from the Prudential 2030 Series D Notes for general corporate purposes. NY Life 2013 and 2014 Note Agreements On April 10, 2020, we amended the NY Life 2013 Note Agreement and the NY Life 2014 Note Agreement by entering into two Amendments to Note Purchase Agreement with New York Life Insurance Company and the other parties thereto, which modified several defined terms, schedules and covenant baskets in the NY Life 2013 Agreement and the NY Life 2014 Note Agreement to create additional operating flexibility, and in particular to align such provisions with similar modifications we made substantially concurrently in our other debt facilities. Credit Facility - Subsequent Event On April 14, 2020, we, along with IDEXX Distribution, Inc., IDEXX Operations, Inc., OPTI Medical Systems, Inc., IDEXX Laboratories Canada Corporation, IDEXX Europe B.V., and IDEXX Holding B.V., our wholly-owned subsidiaries (whether directly or indirectly held) (collectively, the “Borrowers”), entered into a third amended and restated credit agreement (the "Credit Agreement") relating to a three-year unsecured revolving credit facility in the principal amount of $1 billion , among the Borrowers, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Toronto agent, and the other parties thereto. The Credit Agreement amends and restates that certain second amended and restated credit agreement dated as of December 4, 2015, (which provided for a $850 million five-year unsecured revolving credit facility) to extend the maturity to April 14, 2023 and to increase the aggregate commitments available for borrowing by the Borrowers to $1 billion with the option to increase the aggregate commitments by $250 million , for an aggregate maximum of up to $1.25 billion , subject to the Borrowers obtaining commitments from existing or new lenders and satisfying other conditions specified in the Credit Agreement. |
Repurchases Of Common Stock
Repurchases Of Common Stock | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Repurchases Of Common Stock | REPURCHASES OF COMMON STOCK We primarily acquire shares by repurchases in the open market. However, we also acquire shares that are surrendered by employees in payment for the minimum required statutory withholding taxes due on the vesting of restricted stock units and the settlement of deferred stock units, otherwise referred to herein as employee surrenders. We issue shares of treasury stock upon the vesting of certain restricted stock units and upon the exercise of certain stock options. The number of shares of treasury stock issued during the three months ended March 31, 2020 and 2019 , was not material. The following is a summary of our open market common stock repurchases, reported on a trade date basis, and shares acquired through employee surrender: (in thousands, except per share amounts) For the Three Months Ended 2020 2019 Shares repurchased in the open market 721 267 Shares acquired through employee surrender for statutory tax withholding 30 36 Total shares repurchased 751 303 Cost of shares repurchased in the open market $ 179,623 $ 53,862 Cost of shares for employee surrenders 8,604 7,403 Total cost of shares $ 188,227 $ 61,265 Average cost per share - open market repurchases $ 249.20 $ 201.41 Average cost per share - employee surrenders $ 288.78 $ 206.35 Average cost per share - total $ 250.77 $ 202.00 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Our effective income tax rate was 18.2% for the three months ended March 31, 2020 , as compared to 17.7% for the three months ended March 31, 2019 . The increase in our effective tax rate for the three months ended March 31, 2020 , as compared to the same period in the prior year, was primarily driven by regional earnings mix, with relatively lower statutory earnings subject to lower international tax rates than domestic tax rates, partially offset by higher tax benefits from share-based compensation. The effective tax rate for the three months ended March 31, 2020, differed from the U.S. statutory tax rate of 21% primarily due to tax benefits from share-based compensation. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Mar. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | ACCUMULATED OTHER COMPREHENSIVE INCOME The changes in AOCI, net of tax, consisted of the following: For the Three Months Ended March 31, 2020 Unrealized (Loss) Gain on Cash Flow Hedges, Net of Tax Unrealized Gain on Net Investment Hedges, Net of Tax (in thousands) Unrealized Gain (Loss) on Investments, Net of Tax Foreign Currency Exchange Contracts Euro-Denominated Notes Cross Currency Swaps Cumulative Translation Adjustment Total Balance as of December 31, 2019 $ 110 $ (736 ) $ 1,396 $ 3,467 $ (50,419 ) $ (46,182 ) Other comprehensive (loss) income before reclassifications (279 ) 9,426 1,047 4,049 (22,206 ) (7,963 ) Gain reclassified from accumulated other comprehensive income — (1,101 ) — — — (1,101 ) Balance as of March 31, 2020 $ (169 ) $ 7,589 $ 2,443 $ 7,516 $ (72,625 ) $ (55,246 ) For the Three Months Ended March 31, 2019 Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax Unrealized (Loss) Gain on Net Investment Hedges, Net of Tax (in thousands) Unrealized (Loss) Gain on Investments, Foreign Currency Exchange Contracts Euro-Denominated Notes Cross Currency Swaps Cumulative Translation Total Balance as of December 31, 2018 $ (157 ) $ 6,229 $ (394 ) $ 1,360 $ (48,829 ) $ (41,791 ) Other comprehensive income (loss) before reclassifications 407 1,043 1,480 1,431 (1,423 ) 2,938 Gain reclassified from accumulated other comprehensive income — (1,162 ) — — — (1,162 ) Balance as of March 31, 2019 $ 250 $ 6,110 $ 1,086 $ 2,791 $ (50,252 ) $ (40,015 ) The following tables present components and amounts reclassified out of AOCI to net income: (in thousands) Affected Line Item in the Statements of Income Amounts Reclassified from AOCI For the Three Months Ended March 31, 2020 2019 Gain on derivative instruments classified as cash flow hedges included in net income: Foreign currency exchange contracts Cost of revenue $ 1,341 $ 1,411 Tax expense 240 249 Gain, net of tax $ 1,101 $ 1,162 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share is computed by dividing net income attributable to our stockholders by the weighted average number of shares of common stock and vested deferred stock units outstanding during the year. The computation of diluted earnings per share is similar to the computation of basic earnings per share, except that the denominator is increased for the assumed exercise of dilutive options and assumed issuance of unvested restricted stock units and unvested deferred stock units using the treasury stock method unless the effect is anti-dilutive. The treasury stock method assumes that proceeds, including cash received from the exercise of employee stock options and the total unrecognized compensation expense for unvested share-based compensation awards, would be used to purchase our common stock at the average market price during the period. Vested deferred stock units outstanding are included in shares outstanding for basic and diluted earnings per share because the associated shares of our common stock are issuable for no cash consideration, the number of shares of our common stock to be issued is fixed and issuance is not contingent. See Note 5 to the consolidated financial statements in our 2019 Annual Report for additional information regarding deferred stock units. The following is a reconciliation of weighted average shares outstanding for basic and diluted earnings per share: (in thousands) For the Three Months Ended 2020 2019 Shares outstanding for basic earnings per share 85,427 86,204 Shares outstanding for diluted earnings per share: Shares outstanding for basic earnings per share 85,427 86,204 Dilutive effect of share-based payment awards 1,278 1,345 86,705 87,549 Certain awards and options to acquire shares have been excluded from the calculation of shares outstanding for diluted earnings per share because they were anti-dilutive. The following table presents information concerning those anti-dilutive awards and options: (in thousands) For the Three Months Ended 2020 2019 Weighted average number of shares underlying anti-dilutive awards 34 1 Weighted average number of shares underlying anti-dilutive options 197 463 |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Guarantees | COMMITMENTS, CONTINGENCIES AND GUARANTEES Commitments See "Note 8 . Leases ", for more information regarding our lease commitments. Contingencies and Guarantees We are subject to claims that may arise in the ordinary course of business, including with respect to actual and threatened litigation and other matters. We accrue for loss contingencies when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. However, the results of legal actions cannot be predicted with certainty, and therefore our actual losses with respect to these contingencies could exceed our accruals. At March 31, 2020 , our accruals with respect to actual and threatened litigation were not material. From time to time, we have received notices alleging that our products infringe third-party proprietary rights, although we are not aware of any pending litigation with respect to such claims. Patent litigation frequently is complex and expensive, and the outcome of patent litigation can be difficult to predict. There can be no assurance that we will prevail in any infringement proceedings that may be commenced against us. If we lose any such litigation, we may be stopped from selling certain products and/or we may be required to pay damages as a result of the litigation. We have had no significant changes to our contingencies and guarantees discussed in Note 15 to the consolidated financial statements in our 2019 Annual Report. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | SEGMENT REPORTING Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer. Our reportable segments include diagnostic and information technology-based products and services for the veterinary market, which we refer to as the Companion Animal Group (“CAG”), water quality products (“Water”) and diagnostic products and services for livestock and poultry health and to ensure the quality and safety of milk and improve dairy efficiency, which we refer to as Livestock, Poultry and Dairy (“LPD”). Our Other operating segment combines and presents products for the human medical diagnostics ("OPTI Medical") market with our out-licensing arrangements. Assets are not allocated to segments for internal reporting purposes. Effective January 1, 2020, we modified our management reporting to the Chief Operating Decision Maker to provide a more comprehensive view of the performance of our operating segments by including costs that previously were not allocated to our segments. Prior to January 1, 2020, certain costs were not allocated to our operating segments and were instead reported under the caption “Unallocated Amounts”. These costs primarily consist of our R&D function, regional or country expenses and unusual items. Corporate support function costs (such as information technology, facilities, human resources, finance and legal), health benefits and incentive compensation were charged to our business segments at pre-determined budgeted amounts or rates. Beginning January 1, 2020, the segments will reflect these actual costs allocated to the segment based on various allocation methods, including revenue and headcount. Foreign exchange losses on settlements of foreign currency denominated transactions are not allocated to our operating segments and are instead reported within our Other reporting segment. The following table reflects adjustments to previously reported costs in our Unallocated segment, that are now allocated to our CAG, Water, LPD and Other segments for the three months ended March 31, 2019: (in thousands) CAG Water LPD Other Unallocated Cost of sales $ (182 ) $ (8 ) $ (10 ) $ (4 ) $ 204 Gross profit 182 8 10 4 (204 ) Operating Expenses: Sales and marketing $ 129 $ 6 $ 7 $ — $ (142 ) General and administrative (202 ) (40 ) (47 ) 215 74 Research and development 3,558 9 11 — (3,578 ) Total operating expenses 3,485 (25 ) (29 ) 215 (3,646 ) Income from operations $ (3,303 ) $ 33 $ 39 $ (211 ) $ 3,442 The following is a summary of segment performance: (in thousands) For the Three Months Ended March 31, CAG Water LPD Other Consolidated Total 2020 Revenue $ 551,996 $ 34,149 $ 34,154 $ 6,037 $ 626,336 Income from operations $ 118,659 $ 15,882 $ 9,663 $ 121 $ 144,325 Interest expense, net (7,552 ) Income before provision for income taxes 136,773 Provision for income taxes 24,917 Net income 111,856 Less: Net income attributable to noncontrolling interest 29 Net income attributable to IDEXX Laboratories, Inc. stockholders $ 111,827 2019 Revenue $ 508,918 $ 30,310 $ 31,506 $ 5,322 $ 576,056 Income from operations $ 111,719 $ 13,815 $ 6,289 $ 1,315 $ 133,138 Interest expense, net (8,346 ) Income before provision for income taxes 124,792 Provision for income taxes 22,083 Net income 102,709 Less: Net income attributable to noncontrolling interest 28 Net income attributable to IDEXX Laboratories, Inc. stockholders $ 102,681 See “Note 3 . Revenue Recognition ” for a summary of disaggregated revenue by reportable segment and by major product and service category for the three months ended March 31, 2020 and 2019 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS U.S. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. We have certain financial assets and liabilities that are measured at fair value on a recurring basis, certain nonfinancial assets and liabilities that may be measured at fair value on a non-recurring basis and certain financial assets and liabilities that are not measured at fair value in our unaudited condensed consolidated balance sheets but for which we disclose the fair value. The fair value disclosures of these assets and liabilities are based on a three-level hierarchy, which is defined as follows: Level 1 Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. We did not have any transfers between Level 1 and Level 2 or transfers in or out of Level 3 of the fair value hierarchy during the three months ended March 31, 2020 . Our cross currency swap contracts are measured at fair value on a recurring basis in our accompanying unaudited condensed consolidated balance sheets. We measure the fair value of our cross currency swap contracts classified as derivative instruments using prevailing market conditions as of the close of business on each balance sheet date. The product of this calculation is then adjusted for counterparty risk. Our foreign currency exchange contracts are measured at fair value on a recurring basis in our accompanying unaudited condensed consolidated balance sheets. We measure the fair value of our foreign currency exchange contracts classified as derivative instruments using an income approach, based on prevailing market forward rates less the contract rate multiplied by the notional amount. The product of this calculation is then adjusted for counterparty risk. The amounts outstanding under our unsecured revolving credit facility (“Credit Facility” or “line of credit”) and senior notes (“long-term debt”) are measured at carrying value in our unaudited condensed consolidated balance sheets though we disclose the fair value of these financial instruments. We determine the fair value of the amount outstanding under our Credit Facility and long-term debt using an income approach, utilizing a discounted cash flow analysis based on current market interest rates for debt issues with similar remaining years to maturity, adjusted for applicable credit risk. Our Credit Facility and long-term debt are valued using Level 2 inputs. The estimated fair value of our Credit Facility approximates its carrying value. The estimated fair value and carrying value of our long-term debt were $790.7 million and $698.0 million , respectively, as of March 31, 2020 , and $753.6 million and $699.4 million , respectively, as of December 31, 2019 . The following tables set forth our assets and liabilities that were measured at fair value on a recurring basis by level within the fair value hierarchy: (in thousands) As of March 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at Assets Money market funds (1) $ 76 $ — $ — $ 76 Equity mutual funds (2) $ 1,278 $ — $ — $ 1,278 Cross currency swaps (3) $ — $ 9,883 $ — $ 9,883 Foreign currency exchange contracts (3) $ — $ 9,643 $ — $ 9,643 Liabilities Foreign currency exchange contracts (3) $ — $ 39 $ — $ 39 Deferred compensation (4) $ 1,278 $ — $ — $ 1,278 (in thousands) As of December 31, 2019 Quoted Prices Significant Significant Balance at Assets Money market funds (1) $ 71 $ — $ — $ 71 Equity mutual funds (2) $ 1,676 $ — $ — $ 1,676 Cross currency swaps (3) $ — $ 4,559 $ — $ 4,559 Foreign currency exchange contracts (3) $ — $ 1,791 $ — $ 1,791 Liabilities Foreign currency exchange contracts (3) $ — $ 2,886 $ — $ 2,886 Deferred compensation (4) $ 1,676 $ — $ — $ 1,676 (1) Money market funds with an original maturity of less than ninety days are included within cash and cash equivalents. The remaining balance of cash and cash equivalents as of March 31, 2020 and December 31, 2019 , consisted of demand deposits. (2) Equity mutual funds relate to a deferred compensation plan that was assumed as part of a previous business combination. This amount is included within other long-term assets. See footnote (4) below for a discussion of the related deferred compensation liability. (3) Cross currency swaps and foreign currency exchange contracts are included within other current assets, other long-term assets, accrued liabilities, or other long-term liabilities depending on the gain (loss) position and anticipated settlement date. (4) A deferred compensation plan assumed as part of a previous business combination is included within accrued liabilities and other long-term liabilities. The fair value of our deferred compensation plan is indexed to the performance of the underlying equity mutual funds discussed in footnote (2) above. The estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximate carrying value due to their short maturity. |
Hedging Instruments
Hedging Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Hedging Instruments | HEDGING INSTRUMENTS Disclosure within this note is presented to provide transparency about how and why we use derivative and non-derivative instruments (collectively “hedging instruments”), how the instruments and related hedged items are accounted for, and how the instruments and related hedged items affect our financial position, results of operations and cash flows. We are exposed to certain risks related to our ongoing business operations. The primary risk that we currently manage by using hedging instruments is foreign currency exchange risk. We may also enter into interest rate swaps to minimize the impact of interest rate fluctuations associated with borrowings under our variable-rate Credit Facility. Our subsidiaries enter into foreign currency exchange contracts to manage the exchange risk associated with their forecasted intercompany inventory purchases and sales for the next year. From time to time, we may also enter into other foreign currency exchange contracts, cross currency swaps or foreign-denominated debt issuances to minimize the impact of foreign currency fluctuations associated with specific balance sheet exposures, including net investments in certain foreign subsidiaries. The primary purpose of our foreign currency hedging activities is to protect against the volatility associated with foreign currency transactions, including transactions denominated in the euro, British pound, Japanese yen, Canadian dollar, and Australian dollar. We also utilize natural hedges to mitigate our transaction and commitment exposures. Our corporate policy prescribes the range of allowable hedging activity. We enter into foreign currency exchange contracts with well-capitalized multinational financial institutions, and we do not hold or engage in transactions involving derivative instruments for purposes other than risk management. Our accounting policies for these contracts are based on the designation of such instruments as hedging transactions. We recognize all hedging instruments on the balance sheet at fair value at the balance sheet date. Instruments that do not qualify for hedge accounting treatment must be recorded at fair value through earnings. To qualify for hedge accounting treatment, cash flow and net investment hedges must be highly effective in offsetting changes to expected future cash flows or fair value on hedged transactions. If the instrument qualifies for hedge accounting, changes in the fair value of the hedging instrument from the effective portion of the hedge are deferred in AOCI, net of tax, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. We immediately record in earnings the extent to which a hedging instrument is not effective in achieving offsetting changes in fair value. We de-designate hedging instruments from hedge accounting when the likelihood of the hedged transaction occurring becomes less than probable. For de-designated instruments, the gain or loss from the time of de-designation through maturity of the instrument is recognized in earnings. Any gain or loss in AOCI at the time of de-designation is reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. See “Note 14 . Accumulated Other Comprehensive Income ” for further information regarding the effect of hedging instruments on our unaudited condensed consolidated statements of income for the three months ended March 31, 2020 and 2019 . We enter into master netting arrangements with the counterparties to our derivative transactions which permit certain outstanding receivables and payables to be offset in the event of default. Our derivative contracts do not require either party to post cash collateral. We elect to present our derivative assets and liabilities in the unaudited condensed consolidated balance sheets on a gross basis. All cash flows related to our foreign currency exchange contracts are classified as operating cash flows, which is consistent with the cash flow treatment of the underlying items being hedged. Cash Flow Hedges We have designated our foreign currency exchange contracts as cash flow hedges as these derivative instruments mitigate the exposure to variability in the cash flows of forecasted transactions attributable to foreign currency exchange. Unless noted otherwise, we have also designated our derivative instruments as qualifying for hedge accounting treatment. We did not de-designate any instruments from hedge accounting treatment during either the three months ended March 31, 2020 or 2019 . At March 31, 2020 , the estimated amount of net gains, net of tax, which are expected to be reclassified out of AOCI and into earnings within the next 12 months , is $6.5 million if exchange rates do not fluctuate from the levels at March 31, 2020 . We hedge approximately 85% of the estimated exposure from intercompany product purchases and sales denominated in the euro, British pound, Canadian dollar, Japanese yen, and Australian dollar. We have additional unhedged foreign currency exposures related to foreign services and emerging markets where it is not practical to hedge. We primarily utilize foreign currency exchange contracts with durations of less than 24 months . Quarterly, we enter into contracts to hedge incremental portions of anticipated foreign currency transactions for the current and following year. As a result, our risk with respect to foreign currency exchange rate fluctuations and the notional value of foreign currency exchange contracts may vary throughout the year. The U.S. dollar is the currency purchased or sold in all of our foreign currency exchange contracts. The notional amount of foreign currency exchange contracts to hedge forecasted intercompany inventory purchases and sales totaled $202.3 million and $210.9 million at March 31, 2020 and December 31, 2019 , respectively. The following tables present the effect of cash flow hedge accounting on our unaudited condensed consolidated statements of income and comprehensive income, and provide information regarding the location and amounts of pretax gains or losses of derivatives: (in thousands) Three Months Ended March 31, 2020 2019 Financial statement line items in which effects of cash flow hedges are recorded Cost of revenue $ 266,746 $ 244,459 Foreign exchange contracts Amount of gain reclassified from accumulated other comprehensive income into income $ 1,341 $ 1,411 Net Investment Hedges In June 2015, we issued and sold through a private placement an aggregate principal amount of €88.9 million in euro-denominated 1.785% Series C Senior Notes due June 18, 2025. We have designated these euro-denominated notes as a hedge of our euro net investment in certain foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in foreign currency exchange rates in the euro relative to the U.S. dollar. As a result of this designation, gains and losses from the change in translated U.S. dollar value of these euro-denominated notes are recorded in AOCI rather than to earnings. We recorded gains of $1.0 million and $1.5 million , net of tax, within AOCI as a result of this net investment hedge for the three months ended March 31, 2020 and 2019 , respectively. The related cumulative unrealized gain recorded at March 31, 2020 , will not be reclassified in earnings until the complete or substantially complete liquidation of the net investment in the hedged foreign operations or a portion of the hedge no longer qualifies for hedge accounting treatment. See Note 12 to the consolidated financial statements included in our 2019 Annual Report for further information regarding the issuance of these euro-denominated notes. During May 2018, January 2019, March 2019, and November 2019, we entered into cross currency swap contracts as a hedge of our net investment in foreign operations to offset foreign currency translation gains and losses on the net investment. The cross currency swaps have a maturity date of June 30, 2023. At maturity of the cross currency swap contracts, we will deliver the notional amount of €90.0 million and will receive approximately $104.5 million from the counterparties. The change in fair value of the cross currency swap contracts are recorded in AOCI and will be reclassified to earnings when the foreign subsidiaries are sold or substantially liquidated. During the three months ended March 31, 2020 and 2019 , we recorded gains of $4.0 million and $1.4 million , net of tax, within AOCI as a result of these net investment hedges, respectively. We will receive quarterly interest payments from the counterparties based on a fixed interest rate until maturity of the cross currency swaps. This interest rate component is excluded from the assessment of hedge effectiveness and, thus is recognized as a reduction to interest expense over the life of the hedge instrument. We recognized approximately $0.7 million and $0.5 million related to the excluded component as a reduction of interest expense for the three months ended March 31, 2020 and 2019 , respectively. Fair Values of Hedging Instruments Designated as Hedges in Consolidated Balance Sheets The fair values of hedging instruments and their respective classification on our unaudited condensed consolidated balance sheets and amounts subject to offset under master netting arrangements consisted of the following derivative instruments, unless otherwise noted: (in thousands) Hedging Assets March 31, 2020 December 31, 2019 Derivatives and non-derivatives designated as hedging instruments Balance Sheet Classification Foreign currency exchange contracts Other current assets $ 8,346 $ 1,791 Cross currency swaps Other long-term assets 9,883 4,559 Foreign currency exchange contracts Other long-term assets 1,297 — Total derivative instruments presented as hedge instruments on the balance sheet 19,526 6,350 Gross amounts subject to master netting arrangements not offset on the balance sheet (39 ) (1,354 ) Net amount $ 19,487 $ 4,996 (in thousands) Hedging Liabilities March 31, 2020 December 31, 2019 Derivatives and non-derivatives designated as hedging instruments Balance Sheet Classification Foreign currency exchange contracts Accrued liabilities $ 39 $ 2,886 Total derivative instruments presented as cash flow hedges on the balance sheet 39 2,886 Non-derivative foreign currency denominated debt designated as net investment hedge on the balance sheet (1) Long-term debt 98,045 99,422 Total hedging instruments presented on the balance sheet 98,084 102,308 Gross amounts subject to master netting arrangements not offset on the balance sheet (39 ) (1,354 ) Net amount $ 98,045 $ 100,954 (1) Amounts represent reported carrying amounts of our foreign currency denominated debt. See "Note 18 . Fair Value Measurements " for information regarding the fair value of our long-term debt. |
Subsequent Events (Notes)
Subsequent Events (Notes) | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS In April of 2020, we issued an additional $200 million in long-term, fixed-rate senior notes and amended the existing Credit Facility to extend the term to 2023 and expand the borrowing capacity to $1 billion . For more information, see "Note 11 . Debt ." |
Accounting Policies (Policies)
Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements Adopted and Not Yet Adopted | New Accounting Pronouncements Adopted We adopted ASU 2018-13, Fair Value Measurement (Topic 820), as of January 1, 2020, which modifies the disclosure requirements on fair value measurements under ASC Topic No. 820, Fair Value Measurement, as amended (“ASC 820”). ASU 2018-13 removes (a) the prior requirement to disclose the amount and reason for transfers between Level 1 and Level 2 of the fair value hierarchy contained in ASC 820, (b) the policy for timing of transfers between levels, and (c) the valuation processes used for Level 3 fair value measurements. ASU 2018-13 also adds, among other things, a requirement to disclose the range and weighted average of significant unobservable inputs used in Level 3 fair value measurements. The adoption did not have a material impact on our consolidated financial statements. Effective January 1, 2020, we adopted ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments,” using the modified retrospective transition method. This ASU amends the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables and leased equipment. The amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. We recorded a non-cash cumulative effect adjustment to retained earnings of $1.8 million , net of $0.6 million of income taxes, on our opening consolidated balance sheet as of January 1, 2020. This adjustment, before the impact of income taxes, was comprised of $2.2 million related to our contract assets and sales-type leases, and $0.2 million related to accounts receivable. See Note 6. Credit Losses, for more information on our presentation of credit losses. New Accounting Pronouncements Not Yet Adopted For a discussion of other accounting standards that have been issued by the FASB prior to January 1, 2020, but are not yet effective, refer to Note 2. Summary of Significant Accounting Policies - New Accounting Pronouncements Not Yet Adopted in our 2019 Annual Report. |
Share-based Compensation | We determine the assumptions used in the valuation of option awards as of the date of grant. Differences in the expected stock price volatility, expected term or risk-free interest rate may necessitate distinct valuation assumptions at each grant date. As such, we may use different assumptions for options granted throughout the year. Option awards are granted with an exercise price equal to the closing market price of our common stock at the date of grant. We have never paid any cash dividends on our common stock, and we have no intention to pay such a dividend at this time; therefore, we assume that no dividends will be paid over the expected terms of option awards. |
Credit Losses | We are exposed to credit losses primarily through our sales of products and services to our customers. We maintain allowances for credit losses for potentially uncollectible receivables. We base our estimates on a detailed analysis of specific customer situations and a percentage of our accounts receivable by aging category. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current economic conditions. See Note 2. Accounting Policies, for more information on our adoption of ASU 2016-13 on January 1, 2020, using the modified retrospective transition method. Additional allowances may be required if either the financial condition of our customers was to deteriorate, or a strengthening U.S. dollar impacts the ability of foreign customers to make payments to us on their U.S. dollar-denominated purchases. We monitor our ongoing credit exposure through active review of counterparty balances against contract terms and due dates. Our activities include timely account reconciliations, dispute resolution and payment confirmations. We may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. Account balances are charged off against the allowance when we believe it is probable the receivable will not be recovered. We may require collateralized asset support or a prepayment to mitigate credit risk. We do not have any off-balance sheet credit exposure related to our customers. |
Inventories | |
Earnings Per Share | |
Fair Value Measurements | U.S. GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. We have certain financial assets and liabilities that are measured at fair value on a recurring basis, certain nonfinancial assets and liabilities that may be measured at fair value on a non-recurring basis and certain financial assets and liabilities that are not measured at fair value in our unaudited condensed consolidated balance sheets but for which we disclose the fair value. The fair value disclosures of these assets and liabilities are based on a three-level hierarchy, which is defined as follows: Level 1 Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. We did not have any transfers between Level 1 and Level 2 or transfers in or out of Level 3 of the fair value hierarchy during the three months ended March 31, 2020 . Our cross currency swap contracts are measured at fair value on a recurring basis in our accompanying unaudited condensed consolidated balance sheets. We measure the fair value of our cross currency swap contracts classified as derivative instruments using prevailing market conditions as of the close of business on each balance sheet date. The product of this calculation is then adjusted for counterparty risk. Our foreign currency exchange contracts are measured at fair value on a recurring basis in our accompanying unaudited condensed consolidated balance sheets. We measure the fair value of our foreign currency exchange contracts classified as derivative instruments using an income approach, based on prevailing market forward rates less the contract rate multiplied by the notional amount. The product of this calculation is then adjusted for counterparty risk. |
Derivatives | We are exposed to certain risks related to our ongoing business operations. The primary risk that we currently manage by using hedging instruments is foreign currency exchange risk. We may also enter into interest rate swaps to minimize the impact of interest rate fluctuations associated with borrowings under our variable-rate Credit Facility. Our subsidiaries enter into foreign currency exchange contracts to manage the exchange risk associated with their forecasted intercompany inventory purchases and sales for the next year. From time to time, we may also enter into other foreign currency exchange contracts, cross currency swaps or foreign-denominated debt issuances to minimize the impact of foreign currency fluctuations associated with specific balance sheet exposures, including net investments in certain foreign subsidiaries. The primary purpose of our foreign currency hedging activities is to protect against the volatility associated with foreign currency transactions, including transactions denominated in the euro, British pound, Japanese yen, Canadian dollar, and Australian dollar. We also utilize natural hedges to mitigate our transaction and commitment exposures. Our corporate policy prescribes the range of allowable hedging activity. We enter into foreign currency exchange contracts with well-capitalized multinational financial institutions, and we do not hold or engage in transactions involving derivative instruments for purposes other than risk management. Our accounting policies for these contracts are based on the designation of such instruments as hedging transactions. We recognize all hedging instruments on the balance sheet at fair value at the balance sheet date. Instruments that do not qualify for hedge accounting treatment must be recorded at fair value through earnings. To qualify for hedge accounting treatment, cash flow and net investment hedges must be highly effective in offsetting changes to expected future cash flows or fair value on hedged transactions. If the instrument qualifies for hedge accounting, changes in the fair value of the hedging instrument from the effective portion of the hedge are deferred in AOCI, net of tax, and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. We immediately record in earnings the extent to which a hedging instrument is not effective in achieving offsetting changes in fair value. We de-designate hedging instruments from hedge accounting when the likelihood of the hedged transaction occurring becomes less than probable. For de-designated instruments, the gain or loss from the time of de-designation through maturity of the instrument is recognized in earnings. Any gain or loss in AOCI at the time of de-designation is reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. See “Note 14 . Accumulated Other Comprehensive Income ” for further information regarding the effect of hedging instruments on our unaudited condensed consolidated statements of income for the three months ended March 31, 2020 and 2019 . We enter into master netting arrangements with the counterparties to our derivative transactions which permit certain outstanding receivables and payables to be offset in the event of default. Our derivative contracts do not require either party to post cash collateral. We elect to present our derivative assets and liabilities in the unaudited condensed consolidated balance sheets on a gross basis. All cash flows related to our foreign currency exchange contracts are classified as operating cash flows, which is consistent with the cash flow treatment of the underlying items being hedged. Cash Flow Hedges |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following table presents disaggregated revenue by major product and service categories: (in thousands) For the Three Months Ended 2020 2019 CAG segment revenue: CAG Diagnostics recurring revenue: $ 487,925 $ 443,791 IDEXX VetLab consumables 188,713 167,211 Rapid assay products 57,430 54,431 Reference laboratory diagnostic and consulting services 220,261 202,658 CAG Diagnostics services and accessories 21,521 19,491 CAG Diagnostics capital - instruments 23,833 28,749 Veterinary software, services and diagnostic imaging systems 40,238 36,378 CAG segment revenue 551,996 508,918 Water segment revenue 34,149 30,310 LPD segment revenue 34,154 31,506 Other segment revenue 6,037 5,322 Total revenue $ 626,336 $ 576,056 Revenue by principal geographic area, based on customers’ domiciles, was as follows: (in thousands) For the Three Months Ended 2020 2019 United States $ 396,783 $ 358,288 Europe, the Middle East and Africa 129,766 121,746 Asia Pacific Region 63,512 60,075 Canada 24,247 23,224 Latin America 12,028 12,723 Total $ 626,336 $ 576,056 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of weighted averages of the assumptions used in estimating the fair value of stock option awards | The weighted averages of the valuation assumptions used to determine the fair value of each option award on the date of grant and the weighted average estimated fair values were as follows: For the Three Months Ended 2020 2019 Share price at grant $ 288.78 $ 206.94 Expected stock price volatility 27 % 26 % Expected term, in years 6.0 6.0 Risk-free interest rate 1.5 % 2.5 % Weighted average fair value of options granted $ 84.21 $ 63.55 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory, Net [Abstract] | |
Schedule of components of inventories | The components of inventories were as follows: (in thousands) March 31, December 31, Raw materials $ 42,290 $ 41,202 Work-in-process 20,970 20,077 Finished goods 148,384 133,740 Inventories $ 211,644 $ 195,019 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Maturities of operating lease liabilities | Maturities of operating lease liabilities were as follows: (in thousands, except lease term and discount rate) March 31, 2020 (remainder of year) $ 13,498 2021 17,676 2022 14,695 2023 10,300 2024 6,813 Thereafter 33,376 Total lease payments 96,358 Less imputed interest (15,522 ) Total $ 80,836 Current operating lease liabilities, included in accrued liabilities $ 15,493 Long-term operating lease liabilities $ 65,343 Weighted average remaining lease term - operating leases 10.2 years Weighted average discount rate - operating leases 3.5 % |
Supplemental cash flow information | Supplemental cash flow information for leases was as follows: (in thousands) For the Three Months Ended Cash paid for amounts included in the measurement of operating leases liabilities $ 5,015 Right-of-use assets obtained in exchange for operating lease obligations, net of early lease terminations $ 2,796 |
Other Current and Long-Term A_2
Other Current and Long-Term Assets (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Other Assets, Noncurrent [Abstract] | |
Schedule of other current assets | Other current assets consisted of the following: (in thousands) March 31, December 31, Customer acquisition costs $ 39,719 $ 39,329 Prepaid expenses 32,403 31,992 Contract assets, net 18,670 17,659 Taxes receivable 15,150 20,516 Deferred sales commissions 5,302 5,202 Other assets 17,085 10,284 Other current assets $ 128,329 $ 124,982 |
Schedule of other long-term assets | Other long-term assets consisted of the following: (in thousands) March 31, December 31, Customer acquisition costs $ 98,463 $ 98,117 Contract assets, net 69,196 66,226 Taxes receivable 14,960 14,960 Investment in long-term product supply arrangements 13,785 13,657 Deferred sales commissions 10,672 10,442 Deferred income taxes 7,172 8,100 Other assets 34,717 28,690 Other long-term assets $ 248,965 $ 240,192 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consisted of the following: (in thousands) March 31, December 31, Accrued employee compensation and related expenses $ 71,568 $ 127,174 Accrued expenses 66,742 86,296 Accrued customer incentives and refund obligations 60,025 63,079 Accrued taxes 33,351 31,108 Current lease liabilities 15,493 15,281 Accrued liabilities $ 247,179 $ 322,938 |
Schedule of other long-term liabilities | Other long-term liabilities consisted of the following: (in thousands) March 31, December 31, Accrued taxes $ 68,118 $ 67,463 Other accrued long-term expenses 13,175 13,701 Other long-term liabilities $ 81,293 $ 81,164 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | The following describes all of our currently outstanding unsecured senior notes issued and sold in private placements (collectively, the "Senior Notes") as of March 31, 2020: (Principal Amount in thousands) Issue Date Due Date Series Principal Amount Coupon Rate Senior Note Agreement (1) 12/11/2013 12/11/2023 2023 Series A Notes $ 75,000 3.94 % NY Life 2013 Note Agreement 12/11/2013 12/11/2025 2025 Series B Notes $ 75,000 4.04 % NY Life 2013 Note Agreement 09/04/2014 09/04/2026 2026 Senior Notes $ 75,000 3.72 % NY Life 2014 Note Agreement 07/21/2014 07/21/2021 2021 Series A Notes $ 50,000 3.32 % Prudential 2015 Amended Agreement 07/21/2014 07/21/2024 2024 Series B Notes $ 75,000 3.76 % Prudential 2015 Amended Agreement 06/18/2015 06/18/2025 2025 Series C Notes € 88,857 1.785 % Prudential 2015 Amended Agreement 02/12/2015 02/12/2022 2022 Series A Notes $ 75,000 3.25 % MetLife 2014 Note Agreement 02/12/2015 02/12/2027 2027 Series B Notes $ 75,000 3.72 % MetLife 2014 Note Agreement 03/14/2019 03/14/2029 2029 Series C Notes $ 100,000 4.19 % MetLife 2014 Note Agreement (1) In each case, as amended. Senior Notes - Subsequent Event The following describes unsecured senior notes issued and sold in private placements after March 31, 2020: (Principal Amount in thousands) Issue Date Due Date Series Principal Amount Coupon Rate Senior Note Agreement (1) 04/02/2020 04/02/2030 MetLife 2030 Series D Notes $ 125,000 2.50 % MetLife 2014 Note Agreement 04/14/2020 04/14/2030 Prudential 2030 Series D Notes $ 75,000 2.50 % Prudential 2015 Amended Agreement (1) In each case, as amended. |
Repurchases of Common Stock (Ta
Repurchases of Common Stock (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of common stock repurchases | The following is a summary of our open market common stock repurchases, reported on a trade date basis, and shares acquired through employee surrender: (in thousands, except per share amounts) For the Three Months Ended 2020 2019 Shares repurchased in the open market 721 267 Shares acquired through employee surrender for statutory tax withholding 30 36 Total shares repurchased 751 303 Cost of shares repurchased in the open market $ 179,623 $ 53,862 Cost of shares for employee surrenders 8,604 7,403 Total cost of shares $ 188,227 $ 61,265 Average cost per share - open market repurchases $ 249.20 $ 201.41 Average cost per share - employee surrenders $ 288.78 $ 206.35 Average cost per share - total $ 250.77 $ 202.00 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of accumulated other comprehensive income | The changes in AOCI, net of tax, consisted of the following: For the Three Months Ended March 31, 2020 Unrealized (Loss) Gain on Cash Flow Hedges, Net of Tax Unrealized Gain on Net Investment Hedges, Net of Tax (in thousands) Unrealized Gain (Loss) on Investments, Net of Tax Foreign Currency Exchange Contracts Euro-Denominated Notes Cross Currency Swaps Cumulative Translation Adjustment Total Balance as of December 31, 2019 $ 110 $ (736 ) $ 1,396 $ 3,467 $ (50,419 ) $ (46,182 ) Other comprehensive (loss) income before reclassifications (279 ) 9,426 1,047 4,049 (22,206 ) (7,963 ) Gain reclassified from accumulated other comprehensive income — (1,101 ) — — — (1,101 ) Balance as of March 31, 2020 $ (169 ) $ 7,589 $ 2,443 $ 7,516 $ (72,625 ) $ (55,246 ) For the Three Months Ended March 31, 2019 Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax Unrealized (Loss) Gain on Net Investment Hedges, Net of Tax (in thousands) Unrealized (Loss) Gain on Investments, Foreign Currency Exchange Contracts Euro-Denominated Notes Cross Currency Swaps Cumulative Translation Total Balance as of December 31, 2018 $ (157 ) $ 6,229 $ (394 ) $ 1,360 $ (48,829 ) $ (41,791 ) Other comprehensive income (loss) before reclassifications 407 1,043 1,480 1,431 (1,423 ) 2,938 Gain reclassified from accumulated other comprehensive income — (1,162 ) — — — (1,162 ) Balance as of March 31, 2019 $ 250 $ 6,110 $ 1,086 $ 2,791 $ (50,252 ) $ (40,015 ) |
Summary of reclassifications out of other comprehensive income | The following tables present components and amounts reclassified out of AOCI to net income: (in thousands) Affected Line Item in the Statements of Income Amounts Reclassified from AOCI For the Three Months Ended March 31, 2020 2019 Gain on derivative instruments classified as cash flow hedges included in net income: Foreign currency exchange contracts Cost of revenue $ 1,341 $ 1,411 Tax expense 240 249 Gain, net of tax $ 1,101 $ 1,162 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of shares outstanding for basic and diluted earnings per share | The following is a reconciliation of weighted average shares outstanding for basic and diluted earnings per share: (in thousands) For the Three Months Ended 2020 2019 Shares outstanding for basic earnings per share 85,427 86,204 Shares outstanding for diluted earnings per share: Shares outstanding for basic earnings per share 85,427 86,204 Dilutive effect of share-based payment awards 1,278 1,345 86,705 87,549 |
Schedule of number of anti-dilutive stock options | The following table presents information concerning those anti-dilutive awards and options: (in thousands) For the Three Months Ended 2020 2019 Weighted average number of shares underlying anti-dilutive awards 34 1 Weighted average number of shares underlying anti-dilutive options 197 463 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of segment performance | The following table reflects adjustments to previously reported costs in our Unallocated segment, that are now allocated to our CAG, Water, LPD and Other segments for the three months ended March 31, 2019: (in thousands) CAG Water LPD Other Unallocated Cost of sales $ (182 ) $ (8 ) $ (10 ) $ (4 ) $ 204 Gross profit 182 8 10 4 (204 ) Operating Expenses: Sales and marketing $ 129 $ 6 $ 7 $ — $ (142 ) General and administrative (202 ) (40 ) (47 ) 215 74 Research and development 3,558 9 11 — (3,578 ) Total operating expenses 3,485 (25 ) (29 ) 215 (3,646 ) Income from operations $ (3,303 ) $ 33 $ 39 $ (211 ) $ 3,442 The following is a summary of segment performance: (in thousands) For the Three Months Ended March 31, CAG Water LPD Other Consolidated Total 2020 Revenue $ 551,996 $ 34,149 $ 34,154 $ 6,037 $ 626,336 Income from operations $ 118,659 $ 15,882 $ 9,663 $ 121 $ 144,325 Interest expense, net (7,552 ) Income before provision for income taxes 136,773 Provision for income taxes 24,917 Net income 111,856 Less: Net income attributable to noncontrolling interest 29 Net income attributable to IDEXX Laboratories, Inc. stockholders $ 111,827 2019 Revenue $ 508,918 $ 30,310 $ 31,506 $ 5,322 $ 576,056 Income from operations $ 111,719 $ 13,815 $ 6,289 $ 1,315 $ 133,138 Interest expense, net (8,346 ) Income before provision for income taxes 124,792 Provision for income taxes 22,083 Net income 102,709 Less: Net income attributable to noncontrolling interest 28 Net income attributable to IDEXX Laboratories, Inc. stockholders $ 102,681 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets and liabilities measured on recurring basis | The following tables set forth our assets and liabilities that were measured at fair value on a recurring basis by level within the fair value hierarchy: (in thousands) As of March 31, 2020 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Balance at Assets Money market funds (1) $ 76 $ — $ — $ 76 Equity mutual funds (2) $ 1,278 $ — $ — $ 1,278 Cross currency swaps (3) $ — $ 9,883 $ — $ 9,883 Foreign currency exchange contracts (3) $ — $ 9,643 $ — $ 9,643 Liabilities Foreign currency exchange contracts (3) $ — $ 39 $ — $ 39 Deferred compensation (4) $ 1,278 $ — $ — $ 1,278 (in thousands) As of December 31, 2019 Quoted Prices Significant Significant Balance at Assets Money market funds (1) $ 71 $ — $ — $ 71 Equity mutual funds (2) $ 1,676 $ — $ — $ 1,676 Cross currency swaps (3) $ — $ 4,559 $ — $ 4,559 Foreign currency exchange contracts (3) $ — $ 1,791 $ — $ 1,791 Liabilities Foreign currency exchange contracts (3) $ — $ 2,886 $ — $ 2,886 Deferred compensation (4) $ 1,676 $ — $ — $ 1,676 (1) Money market funds with an original maturity of less than ninety days are included within cash and cash equivalents. The remaining balance of cash and cash equivalents as of March 31, 2020 and December 31, 2019 , consisted of demand deposits. (2) Equity mutual funds relate to a deferred compensation plan that was assumed as part of a previous business combination. This amount is included within other long-term assets. See footnote (4) below for a discussion of the related deferred compensation liability. (3) Cross currency swaps and foreign currency exchange contracts are included within other current assets, other long-term assets, accrued liabilities, or other long-term liabilities depending on the gain (loss) position and anticipated settlement date. (4) |
Hedging Instruments (Tables)
Hedging Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Details of net investment hedges and Income Statement impact of hedging instruments | The following tables present the effect of cash flow hedge accounting on our unaudited condensed consolidated statements of income and comprehensive income, and provide information regarding the location and amounts of pretax gains or losses of derivatives: (in thousands) Three Months Ended March 31, 2020 2019 Financial statement line items in which effects of cash flow hedges are recorded Cost of revenue $ 266,746 $ 244,459 Foreign exchange contracts Amount of gain reclassified from accumulated other comprehensive income into income $ 1,341 $ 1,411 |
Schedule of hedging instruments | The fair values of hedging instruments and their respective classification on our unaudited condensed consolidated balance sheets and amounts subject to offset under master netting arrangements consisted of the following derivative instruments, unless otherwise noted: (in thousands) Hedging Assets March 31, 2020 December 31, 2019 Derivatives and non-derivatives designated as hedging instruments Balance Sheet Classification Foreign currency exchange contracts Other current assets $ 8,346 $ 1,791 Cross currency swaps Other long-term assets 9,883 4,559 Foreign currency exchange contracts Other long-term assets 1,297 — Total derivative instruments presented as hedge instruments on the balance sheet 19,526 6,350 Gross amounts subject to master netting arrangements not offset on the balance sheet (39 ) (1,354 ) Net amount $ 19,487 $ 4,996 (in thousands) Hedging Liabilities March 31, 2020 December 31, 2019 Derivatives and non-derivatives designated as hedging instruments Balance Sheet Classification Foreign currency exchange contracts Accrued liabilities $ 39 $ 2,886 Total derivative instruments presented as cash flow hedges on the balance sheet 39 2,886 Non-derivative foreign currency denominated debt designated as net investment hedge on the balance sheet (1) Long-term debt 98,045 99,422 Total hedging instruments presented on the balance sheet 98,084 102,308 Gross amounts subject to master netting arrangements not offset on the balance sheet (39 ) (1,354 ) Net amount $ 98,045 $ 100,954 (1) Amounts represent reported carrying amounts of our foreign currency denominated debt. See "Note 18 . Fair Value Measurements " for information regarding the fair value of our long-term debt. |
Accounting Policies (Details)
Accounting Policies (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Non-cash cumulative effect adjustment to retained earnings, net of tax | $ 1,829 | ||
Reserve for contract assets and sales-type leases | $ 2,900 | ||
Accounts receivable allowance for credit losses | $ 7,000 | $ 3,600 | |
Accounting Standards Update 2016-13 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Reserve for contract assets and sales-type leases | 2,200 | ||
Accounts receivable allowance for credit losses | 200 | ||
Retained Earnings | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Non-cash cumulative effect adjustment to retained earnings, net of tax | 1,829 | ||
Retained Earnings | Accounting Standards Update 2016-13 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Non-cash cumulative effect adjustment to retained earnings, net of tax | 1,800 | ||
Non-cash cumulative effect adjustment to retained earnings, tax | $ 600 |
Revenue Recognition (General Na
Revenue Recognition (General Narrative) (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Payment term | 30 days |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Payment term | 60 days |
Revenue Recognition (Lease Reve
Revenue Recognition (Lease Revenue) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Lease revenue | $ 4.2 | $ 4.6 |
Revenue Recognition (Extended W
Revenue Recognition (Extended Warranties and Post-Contract Support) (Details) - Extended warranties and post contract support - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Post-contract support contract, term | 12 months | |
Deferred revenue | $ 36.6 | $ 38 |
Deferred revenue recognized | 13.7 | |
Estimation of future revenues | $ 23.1 | |
Minimum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Extended product warranty, term | 1 year | |
Maximum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Extended product warranty, term | 5 years |
Revenue Recognition (Remaining
Revenue Recognition (Remaining Performance Obligation) (Details) | Mar. 31, 2020 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | Extended warranties and post contract support | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 29.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | Up front customer loyalty programs and volume commitment programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 19.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | Instrument rebate programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 27.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | Reagent rental programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 30.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Extended warranties and post contract support | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 34.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Up front customer loyalty programs and volume commitment programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 23.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Instrument rebate programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 28.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | Reagent rental programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 32.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Extended warranties and post contract support | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 22.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Up front customer loyalty programs and volume commitment programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 21.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Instrument rebate programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 20.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Reagent rental programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 20.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Extended warranties and post contract support | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 10.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Up front customer loyalty programs and volume commitment programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 18.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Instrument rebate programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 13.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Reagent rental programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 10.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Extended warranties and post contract support | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 5.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Up front customer loyalty programs and volume commitment programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 19.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Instrument rebate programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 12.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Reagent rental programs | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 8.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
Revenue Recognition (SaaS Subsc
Revenue Recognition (SaaS Subscriptions) (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Maximum | |
Disaggregation of Revenue [Line Items] | |
SaaS Subscription, term of contract | 2 years |
Revenue Recognition (Up-Front C
Revenue Recognition (Up-Front Customer Loyalty Programs) (Details) - Up front customer loyalty programs - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Capitalized customer acquisition costs | $ 138.2 | $ 137.4 |
Recognized as a reduction of revenue | $ 10.3 |
Revenue Recognition (Volume Com
Revenue Recognition (Volume Commitment Programs) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Volume commitment programs | ||
Disaggregation of Revenue [Line Items] | ||
Commitment contract assets | $ 87.9 | $ 83.9 |
Commitment contract assets reclassified to accounts receivable | 4.9 | |
Up front customer loyalty programs and volume commitment programs | ||
Disaggregation of Revenue [Line Items] | ||
Estimation of future revenues | $ 1,900 |
Revenue Recognition (Instrument
Revenue Recognition (Instrument Rebate Programs) (Details) - Instrument rebate programs - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred revenue | $ 46.5 | $ 49.1 |
Deferred revenue recognized | $ 4.4 |
Revenue Recognition (Reagent Re
Revenue Recognition (Reagent Rental Programs) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Lease receivable asset | $ 7.7 | $ 7.2 | |
Lease receivable asset reclassified to accounts receivable | 0.4 | ||
Operating-type reagent rental programs | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Instruments transferred to property and equipment | 2.3 | $ 2 | |
Reagent rental programs | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Estimation of future revenues | $ 28.8 |
Revenue Recognition (Disaggrega
Revenue Recognition (Disaggregation of Revenue by Major Product and Service Categories) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 626,336 | $ 576,056 |
CAG segment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 551,996 | 508,918 |
Water segment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 34,149 | 30,310 |
LPD segment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 34,154 | 31,506 |
Other segment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 6,037 | 5,322 |
Cag Diagnostics recurring revenue | CAG segment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 487,925 | 443,791 |
IDEXX VetLab consumables | CAG segment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 188,713 | 167,211 |
Rapid assay products | CAG segment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 57,430 | 54,431 |
Reference laboratory diagnostic and consulting services | CAG segment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 220,261 | 202,658 |
CAG Diagnostics services and accessories | CAG segment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 21,521 | 19,491 |
CAG Diagnostics capital - instruments | CAG segment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 23,833 | 28,749 |
Veterinary software, services and diagnostic imaging systems | CAG segment revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 40,238 | $ 36,378 |
Revenue Recognition (Disaggre_2
Revenue Recognition (Disaggregation of Revenue by Principal Geographic Area, Based on Customers' Domiciles) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 626,336 | $ 576,056 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 396,783 | 358,288 |
Europe, the Middle East and Africa | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 129,766 | 121,746 |
Asia Pacific Region | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 63,512 | 60,075 |
Canada | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | 24,247 | 23,224 |
Latin America | ||
Disaggregation of Revenue [Line Items] | ||
Total revenue | $ 12,028 | $ 12,723 |
Revenue Recognition (Costs to O
Revenue Recognition (Costs to Obtain a Contract) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Deferred commission costs | $ 16 | $ 15.6 |
Commissions expense recognized | $ 1.4 | |
Minimum | ||
Disaggregation of Revenue [Line Items] | ||
Amortization period | 3 years | |
Maximum | ||
Disaggregation of Revenue [Line Items] | ||
Amortization period | 7 years |
Acquisitions Acquisitions (Deta
Acquisitions Acquisitions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||
Goodwill | $ 233,211 | $ 239,724 |
Midwest U.S.-based multi-site reference laboratory | ||
Business Acquisition [Line Items] | ||
Consideration transferred | $ 50,000 | |
Intangible assets acquired | 26,900 | |
Tangible assets acquired | 200 | |
Goodwill | $ 22,900 | |
Customer Relationships | Midwest U.S.-based multi-site reference laboratory | ||
Business Acquisition [Line Items] | ||
Weighted average useful life of finite-lived intangible assets (in years) | 13 years 9 months 18 days |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Fair value of share-based compensation awards, granted | $ 36.3 | $ 34.4 |
Unrecognized compensation expense, net of estimated forfeitures, for unvested share-based compensation awards outstanding | $ 75.1 | |
Weighted average recognition period for unrecognized compensation expense, in years | 1 year 10 months 24 days | |
Share-based compensation expense | $ 7.3 | $ 6.3 |
Share-Based Compensation (Assum
Share-Based Compensation (Assumptions Used) (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Share price at grant (in dollars per share) | $ 288.78 | $ 206.94 |
Expected stock price volatility | 27.00% | 26.00% |
Expected term, in years | 6 years | 6 years |
Risk-free interest rate | 1.50% | 2.50% |
Weighted average fair value of options granted (in dollars per share) | $ 84.21 | $ 63.55 |
Credit Losses (Details)
Credit Losses (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Accounts receivable allowance for credit losses | $ 7 | $ 3.6 |
Percent of accounts receivable not past due | 84.00% | 84.00% |
Percent of accounts receivable past due | 16.00% | 16.00% |
Accounts receivable, noncurrent, threshold period past due | 60 days | 60 days |
Reserve for contract assets and sales-type leases | $ 2.9 | |
Greater than 60 Days Past Due | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Percent of accounts receivable past due | 1.30% | 1.50% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory, Net [Abstract] | ||
Raw materials | $ 42,290 | $ 41,202 |
Work-in-process | 20,970 | 20,077 |
Finished goods | 148,384 | 133,740 |
Inventories | $ 211,644 | $ 195,019 |
Leases (Maturities of Operating
Leases (Maturities of Operating Lease Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 (remainder of year) | $ 13,498 | |
2021 | 17,676 | |
2022 | 14,695 | |
2023 | 10,300 | |
2024 | 6,813 | |
Thereafter | 33,376 | |
Total lease payments | 96,358 | |
Less imputed interest | (15,522) | |
Total | 80,836 | |
Current operating lease liabilities, included in accrued liabilities | 15,493 | $ 15,281 |
Long-term operating lease liabilities | $ 65,343 | $ 67,472 |
Weighted average remaining lease term - operating leases | 10 years 2 months 12 days | |
Weighted average discount rate - operating leases | 3.50% |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Total minimum future lease payments | $ 4.4 | |
Rent expense | $ 5.4 | $ 5.2 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease not yet commenced, lease term | 5 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease not yet commenced, lease term | 11 years |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow Information) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Leases [Abstract] | |
Cash paid for operating leases obligations | $ 5,015 |
Right-of-use assets obtained in exchange for operating lease obligations | $ 2,796 |
Other Current and Long-Term A_3
Other Current and Long-Term Assets (Schedule Of Other Current Assets) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other Assets, Noncurrent [Abstract] | ||
Customer acquisition costs | $ 39,719 | $ 39,329 |
Prepaid expenses | 32,403 | 31,992 |
Contract assets, net | 18,670 | 17,659 |
Taxes receivable | 15,150 | 20,516 |
Deferred sales commissions | 5,302 | 5,202 |
Other assets | 17,085 | 10,284 |
Other current assets | $ 128,329 | $ 124,982 |
Other Current and Long-Term A_4
Other Current and Long-Term Assets (Schedule Of Other Long-term Assets) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Other Assets, Noncurrent [Abstract] | ||
Customer acquisition costs | $ 98,463 | $ 98,117 |
Contract assets, net | 69,196 | 66,226 |
Taxes receivable | 14,960 | 14,960 |
Investment in long-term product supply arrangements | 13,785 | 13,657 |
Deferred sales commissions | 10,672 | 10,442 |
Deferred income taxes | 7,172 | 8,100 |
Other assets | 34,717 | 28,690 |
Other long-term assets | $ 248,965 | $ 240,192 |
Accrued Liabilities (Schedule O
Accrued Liabilities (Schedule Of Accrued Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Liabilities, Current [Abstract] | ||
Accrued employee compensation and related expenses | $ 71,568 | $ 127,174 |
Accrued expenses | 66,742 | 86,296 |
Accrued customer incentives and refund obligations | 60,025 | 63,079 |
Accrued taxes | 33,351 | 31,108 |
Current lease liabilities | 15,493 | 15,281 |
Accrued liabilities | $ 247,179 | $ 322,938 |
Accrued Liabilities (Schedule_2
Accrued Liabilities (Schedule Of Other Long-term Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued Liabilities, Current [Abstract] | ||
Accrued taxes | $ 68,118 | $ 67,463 |
Other accrued long-term expenses | 13,175 | 13,701 |
Other long-term liabilities | $ 81,293 | $ 81,164 |
Debt Debt (Schedule of Current
Debt Debt (Schedule of Current Senior Notes Outstanding) (Details) - Senior Notes | Apr. 14, 2020USD ($) | Apr. 10, 2020 | Apr. 02, 2020USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2020EUR (€) |
2023 Series A Notes | |||||
Line of Credit Facility [Line Items] | |||||
Principal Amount | $ 75,000,000 | ||||
Coupon Rate | 3.94% | 3.94% | |||
2025 Series B Notes | |||||
Line of Credit Facility [Line Items] | |||||
Principal Amount | $ 75,000,000 | ||||
Coupon Rate | 4.04% | 4.04% | |||
2026 Senior Notes | |||||
Line of Credit Facility [Line Items] | |||||
Principal Amount | $ 75,000,000 | ||||
Coupon Rate | 3.72% | 3.72% | |||
2021 Series A Notes | |||||
Line of Credit Facility [Line Items] | |||||
Principal Amount | $ 50,000,000 | ||||
Coupon Rate | 3.32% | 3.32% | |||
2024 Series B Notes | |||||
Line of Credit Facility [Line Items] | |||||
Principal Amount | $ 75,000,000 | ||||
Coupon Rate | 3.76% | 3.76% | |||
2025 Series C Notes | |||||
Line of Credit Facility [Line Items] | |||||
Principal Amount | € | € 88,857,000 | ||||
Coupon Rate | 1.785% | 1.785% | |||
2022 Series A Notes | |||||
Line of Credit Facility [Line Items] | |||||
Principal Amount | $ 75,000,000 | ||||
Coupon Rate | 3.25% | 3.25% | |||
2027 Series B Notes | |||||
Line of Credit Facility [Line Items] | |||||
Principal Amount | $ 75,000,000 | ||||
Coupon Rate | 3.72% | 3.72% | |||
2029 Series C Notes | |||||
Line of Credit Facility [Line Items] | |||||
Principal Amount | $ 100,000,000 | ||||
Coupon Rate | 4.19% | 4.19% | |||
Subsequent Event | MetLife 2030 Series D Notes | |||||
Line of Credit Facility [Line Items] | |||||
Principal Amount | $ 125,000,000 | ||||
Coupon Rate | 2.50% | ||||
Subsequent Event | Prudential 2030 Series D Notes | |||||
Line of Credit Facility [Line Items] | |||||
Principal Amount | $ 75,000,000 | ||||
Coupon Rate | 2.50% | 2.50% |
Debt Debt (Narrative) (Details)
Debt Debt (Narrative) (Details) - USD ($) | Apr. 14, 2020 | Dec. 04, 2015 | Apr. 10, 2020 | Apr. 02, 2020 | Mar. 23, 2020 | Mar. 22, 2020 |
MetLife | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 300,000,000 | $ 150,000,000 | ||||
Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 850,000,000 | |||||
Debt instrument term | 5 years | |||||
Subsequent Event | Prudential | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 425,000,000 | |||||
Subsequent Event | Revolving Credit Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Line of credit facility, maximum borrowing capacity | $ 1,000,000,000 | |||||
Debt instrument term | 3 years | |||||
Line of credit facility, increase limit | $ 250,000,000 | |||||
Line of credit facility, higher borrowing capacity option | 1,250,000,000 | |||||
MetLife 2030 Series D Notes | Senior Notes | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, face amount | $ 125,000,000 | |||||
Stated interest rate | 2.50% | |||||
Prudential 2030 Series D Notes | Senior Notes | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, face amount | $ 75,000,000 | |||||
Stated interest rate | 2.50% | 2.50% |
Repurchases of Common Stock (De
Repurchases of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Equity [Abstract] | ||
Shares repurchased in the open market (in shares) | 721 | 267 |
Shares acquired through employee surrender for statutory tax withholding (in shares) | 30 | 36 |
Total shares repurchased (in shares) | 751 | 303 |
Cost of shares repurchased in the open market | $ 179,623 | $ 53,862 |
Cost of shares for employee surrenders | 8,604 | 7,403 |
Total cost of shares | $ 188,227 | $ 61,265 |
Average cost per share - open market repurchases (in dollars per share) | $ 249.20 | $ 201.41 |
Average cost per share - employee surrenders (in dollars per share) | 288.78 | 206.35 |
Average cost per share - total (in dollars per share) | $ 250.77 | $ 202 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 18.20% | 17.70% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Schedule Of AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance beginning of period | $ 177,825 | $ (9,233) |
Other comprehensive (loss) income before reclassifications | (7,963) | 2,938 |
Gains (losses) reclassified from accumulated other comprehensive income | (1,101) | (1,162) |
Balance end of period | 108,055 | 51,870 |
Total | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance beginning of period | (46,182) | (41,791) |
Balance end of period | (55,246) | (40,015) |
Unrealized Gain (Loss) on Investments, Net of Tax | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance beginning of period | 110 | (157) |
Other comprehensive (loss) income before reclassifications | (279) | 407 |
Gains (losses) reclassified from accumulated other comprehensive income | 0 | 0 |
Balance end of period | (169) | 250 |
Foreign Currency Exchange Contracts | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance beginning of period | (736) | 6,229 |
Other comprehensive (loss) income before reclassifications | 9,426 | 1,043 |
Gains (losses) reclassified from accumulated other comprehensive income | (1,101) | (1,162) |
Balance end of period | 7,589 | 6,110 |
Euro-Denominated Notes | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance beginning of period | 1,396 | (394) |
Other comprehensive (loss) income before reclassifications | 1,047 | 1,480 |
Gains (losses) reclassified from accumulated other comprehensive income | 0 | 0 |
Balance end of period | 2,443 | 1,086 |
Cross Currency Swaps | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance beginning of period | 3,467 | 1,360 |
Other comprehensive (loss) income before reclassifications | 4,049 | 1,431 |
Gains (losses) reclassified from accumulated other comprehensive income | 0 | 0 |
Balance end of period | 7,516 | 2,791 |
Cumulative Translation Adjustment | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Balance beginning of period | (50,419) | (48,829) |
Other comprehensive (loss) income before reclassifications | (22,206) | (1,423) |
Gains (losses) reclassified from accumulated other comprehensive income | 0 | 0 |
Balance end of period | $ (72,625) | $ (50,252) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Schedule of Reclassifications out of AOCI) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Cost of revenue | $ 266,746 | $ 244,459 |
Tax expense | 24,917 | 22,083 |
Gain, net of tax | 111,856 | 102,709 |
Accumulated Net Gain (Loss) from Cash Flow Hedges | Amount of (Loss) Gain Reclassified from Accumulated Other Comprehensive Income into Income | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income on Derivatives [Line Items] | ||
Cost of revenue | 1,341 | 1,411 |
Tax expense | 240 | 249 |
Gain, net of tax | $ 1,101 | $ 1,162 |
Earnings Per Share (Schedule Of
Earnings Per Share (Schedule Of Reconciliation Of Shares Outstanding For Basic And Diluted Earnings Per Share) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Shares outstanding for basic earnings per share: | ||
Shares outstanding for basic earnings per share (in shares) | 85,427 | 86,204 |
Shares outstanding for diluted earnings per share: | ||
Shares outstanding for basic earnings per share (in shares) | 85,427 | 86,204 |
Dilutive effect of share-based payment awards (in shares) | 1,278 | 1,345 |
Shares outstanding for diluted earnings per share (in shares) | 86,705 | 87,549 |
Earnings Per Share (Schedule _2
Earnings Per Share (Schedule Of Number Of Anti-Dilutive Stock Options) (Details) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of shares underlying anti-dilutive shares (in shares) | 34 | 1 |
Options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Weighted average number of shares underlying anti-dilutive shares (in shares) | 197 | 463 |
Segment Reporting - Allocated C
Segment Reporting - Allocated Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Cost of sales | $ 266,746 | $ 244,459 |
Gross profit | 359,590 | 331,597 |
Sales and marketing | 116,143 | 106,584 |
Operating Expenses: | ||
General and administrative | 65,812 | 60,361 |
Research and development | 33,310 | 31,514 |
Income from operations | 144,325 | 133,138 |
Operating Segments | CAG | ||
Operating Expenses: | ||
Income from operations | 118,659 | 111,719 |
Operating Segments | Water | ||
Operating Expenses: | ||
Income from operations | 15,882 | 13,815 |
Operating Segments | LPD | ||
Operating Expenses: | ||
Income from operations | 9,663 | 6,289 |
Operating Segments | Other | ||
Operating Expenses: | ||
Income from operations | $ 121 | 1,315 |
Restatement Adjustment | Operating Segments | CAG | ||
Segment Reporting Information [Line Items] | ||
Cost of sales | (182) | |
Gross profit | 182 | |
Sales and marketing | 129 | |
Operating Expenses: | ||
General and administrative | (202) | |
Research and development | 3,558 | |
Total operating expenses | 3,485 | |
Income from operations | (3,303) | |
Restatement Adjustment | Operating Segments | Water | ||
Segment Reporting Information [Line Items] | ||
Cost of sales | (8) | |
Gross profit | 8 | |
Sales and marketing | 6 | |
Operating Expenses: | ||
General and administrative | (40) | |
Research and development | 9 | |
Total operating expenses | (25) | |
Income from operations | 33 | |
Restatement Adjustment | Operating Segments | LPD | ||
Segment Reporting Information [Line Items] | ||
Cost of sales | (10) | |
Gross profit | 10 | |
Sales and marketing | 7 | |
Operating Expenses: | ||
General and administrative | (47) | |
Research and development | 11 | |
Total operating expenses | (29) | |
Income from operations | 39 | |
Restatement Adjustment | Operating Segments | Other | ||
Segment Reporting Information [Line Items] | ||
Cost of sales | (4) | |
Gross profit | 4 | |
Sales and marketing | 0 | |
Operating Expenses: | ||
General and administrative | 215 | |
Research and development | 0 | |
Total operating expenses | 215 | |
Income from operations | (211) | |
Previously Reported | Unallocated | ||
Segment Reporting Information [Line Items] | ||
Cost of sales | 204 | |
Gross profit | (204) | |
Sales and marketing | (142) | |
Operating Expenses: | ||
General and administrative | 74 | |
Research and development | (3,578) | |
Total operating expenses | (3,646) | |
Income from operations | $ 3,442 |
Segment Reporting - Summary of
Segment Reporting - Summary of Segment Performance (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenue | $ 626,336 | $ 576,056 |
Income (loss) from operations | 144,325 | 133,138 |
Interest expense, net | (7,552) | (8,346) |
Income before provision for income taxes | 136,773 | 124,792 |
Provision for income taxes | 24,917 | 22,083 |
Net income | 111,856 | 102,709 |
Less: Net income (loss) attributable to noncontrolling interest | 29 | 28 |
Net income attributable to IDEXX Laboratories, Inc. stockholders | 111,827 | 102,681 |
CAG | ||
Segment Reporting Information [Line Items] | ||
Revenue | 551,996 | 508,918 |
Water | ||
Segment Reporting Information [Line Items] | ||
Revenue | 34,149 | 30,310 |
LPD | ||
Segment Reporting Information [Line Items] | ||
Revenue | 34,154 | 31,506 |
Other | ||
Segment Reporting Information [Line Items] | ||
Revenue | 6,037 | 5,322 |
Operating Segments | CAG | ||
Segment Reporting Information [Line Items] | ||
Revenue | 551,996 | 508,918 |
Income (loss) from operations | 118,659 | 111,719 |
Operating Segments | Water | ||
Segment Reporting Information [Line Items] | ||
Revenue | 34,149 | 30,310 |
Income (loss) from operations | 15,882 | 13,815 |
Operating Segments | LPD | ||
Segment Reporting Information [Line Items] | ||
Revenue | 34,154 | 31,506 |
Income (loss) from operations | 9,663 | 6,289 |
Operating Segments | Other | ||
Segment Reporting Information [Line Items] | ||
Revenue | 6,037 | 5,322 |
Income (loss) from operations | $ 121 | $ 1,315 |
Fair Value Measurements (Narrat
Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Estimated fair value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value disclosure | $ 790.7 | $ 753.6 |
Carrying value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, fair value disclosure | $ 698 | $ 699.4 |
Fair Value Measurements (Schedu
Fair Value Measurements (Schedule of Assets and Liabilities) (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 76 | $ 71 |
Money market funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 76 | 71 |
Money market funds | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Money market funds | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 0 | 0 |
Equity mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity mutual fund | 1,278 | 1,676 |
Equity mutual funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity mutual fund | 1,278 | 1,676 |
Equity mutual funds | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity mutual fund | 0 | 0 |
Equity mutual funds | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity mutual fund | 0 | 0 |
Cross Currency Swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 9,883 | 4,559 |
Cross Currency Swaps | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Cross Currency Swaps | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 9,883 | 4,559 |
Cross Currency Swaps | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Foreign currency exchange contracts | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 9,643 | 1,791 |
Derivative liability | 39 | 2,886 |
Foreign currency exchange contracts | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Foreign currency exchange contracts | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 9,643 | 1,791 |
Derivative liability | 39 | 2,886 |
Foreign currency exchange contracts | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative asset | 0 | 0 |
Derivative liability | 0 | 0 |
Deferred compensation | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation | 1,278 | 1,676 |
Deferred compensation | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation | 1,278 | 1,676 |
Deferred compensation | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation | 0 | 0 |
Deferred compensation | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation | $ 0 | $ 0 |
Hedging Instruments (Narrative)
Hedging Instruments (Narrative) (Details) $ in Thousands | Jun. 30, 2023USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | May 31, 2018EUR (€) | Jun. 30, 2015EUR (€) |
Derivative [Line Items] | ||||||
Estimated net amount of gains (losses) expected to be reclassified out of accumulated other comprehensive income and into earnings within next 12 months | $ (6,500) | |||||
Cash flow hedge, hedge percentage of estimated exposure from intercompany products purchases and sales | 85.00% | |||||
General duration of foreign currency exchange contracts | 24 months | |||||
Derivative, notional amount | $ 202,300 | $ 210,900 | ||||
Unrealized gain on Euro-denominated notes, net of tax | 1,047 | $ 1,480 | ||||
Unrealized gain on cross currency swaps, net of tax | 4,049 | 1,431 | ||||
Series C Senior Note | ||||||
Derivative [Line Items] | ||||||
Debt instrument, face amount | € | € 88,900,000 | |||||
Stated interest rate | 1.785% | |||||
Derivatives and non-derivatives designated as hedging instruments | Cross Currency Swaps | ||||||
Derivative [Line Items] | ||||||
Derivative, notional amount | € | € 90,000,000 | |||||
Excluded component recognized as reduction of interest | $ 700 | $ 500 | ||||
Scenario, Forecast | Derivatives and non-derivatives designated as hedging instruments | Cross Currency Swaps | ||||||
Derivative [Line Items] | ||||||
Proceeds from hedge | $ 104,500 |
Hedging Instruments (Derivative
Hedging Instruments (Derivatives Designated In Cash Flow Hedging Relationships) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Cost of revenue | $ 266,746 | $ 244,459 |
Foreign currency exchange contracts | Costs of revenue | ||
Foreign Currency Fair Value Hedge Derivative [Line Items] | ||
Amount of gain reclassified from accumulated other comprehensive income into income | $ 1,341 | $ 1,411 |
Hedging Instruments (Schedule O
Hedging Instruments (Schedule Of Fair Values And Balance Sheet Classifications Of Derivatives Designated As Hedging Instruments) (Details) - Derivatives and non-derivatives designated as hedging instruments - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Derivatives, Fair Value [Line Items] | ||
Total derivative instruments presented as hedge instruments on the balance sheet | $ 19,526 | $ 6,350 |
Gross amounts subject to master netting arrangements not offset on the balance sheet | (39) | (1,354) |
Net amount | 19,487 | 4,996 |
Total hedging instruments presented on the balance sheet | 98,084 | 102,308 |
Gross amounts subject to master netting arrangements not offset on the balance sheet | (39) | (1,354) |
Net amount | 98,045 | 100,954 |
Cross Currency Swaps | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Total derivative instruments presented as hedge instruments on the balance sheet | 9,883 | 4,559 |
Foreign currency borrowings designated as net investment hedge on the balance sheet | Long-term debt | ||
Derivatives, Fair Value [Line Items] | ||
Total hedging instruments presented on the balance sheet | 98,045 | 99,422 |
Cash Flow Hedging | ||
Derivatives, Fair Value [Line Items] | ||
Total hedging instruments presented on the balance sheet | 39 | 2,886 |
Cash Flow Hedging | Foreign currency exchange contracts | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Total derivative instruments presented as hedge instruments on the balance sheet | 8,346 | 1,791 |
Cash Flow Hedging | Foreign currency exchange contracts | Other long-term assets | ||
Derivatives, Fair Value [Line Items] | ||
Total derivative instruments presented as hedge instruments on the balance sheet | 1,297 | 0 |
Cash Flow Hedging | Foreign currency exchange contracts | Accrued liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Total hedging instruments presented on the balance sheet | $ 39 | $ 2,886 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Apr. 14, 2020 | Dec. 04, 2015 | Apr. 30, 2020 |
Subsequent Event | Senior Notes | |||
Debt Instrument [Line Items] | |||
Proceeds from issuance of long-term debt | $ 200,000,000 | ||
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Debt instrument term | 5 years | ||
Line of credit facility, maximum borrowing capacity | $ 850,000,000 | ||
Revolving Credit Facility | Subsequent Event | |||
Debt Instrument [Line Items] | |||
Debt instrument term | 3 years | ||
Line of credit facility, maximum borrowing capacity | $ 1,000,000,000 |