Exhibit 99.1
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Contact: Merilee Raines, Chief Financial Officer, (207) 856-8155 |
FOR IMMEDIATE RELEASE
IDEXX Laboratories Announces First Quarter Results
WESTBROOK, Maine, April 29, 2005 — IDEXX Laboratories, Inc. (NASDAQ: IDXX), today reported that revenue for the first quarter of 2005 increased 14% to $152.4 million from $133.4 million for the first quarter of 2004.
Net income was $17.7 million for the quarter ended March 31, 2005, compared to $17.8 million for the same period in the prior year. Net income, as expected, was flat relative to the first quarter of 2004 primarily as a result of anticipated increases in sales and marketing expense related to the expansion of the Companion Animal Group sales and support personnel in 2004 and integration costs associated with the acquisitions of Vet Med Lab and Dr. Bommeli AG in the fourth quarter 2004.
Earnings per diluted share for the quarter were $0.51, a 4% increase over earnings per diluted share of $0.49 for the quarter ended March 31, 2004. During the quarter ended March 31, 2005 the Company incurred acquisition integration costs of $0.02 per diluted share associated with the acquisitions of Vet Med Lab and Dr. Bommeli AG. Excluding the effects of these discrete costs in the first quarter of 2005, earnings per diluted share grew 8%.
Companion Animal Group (CAG) revenue for the first quarter of 2005 increased 14% to $124.9 million from $109.8 million for the first quarter of 2004. This increase resulted primarily from increased sales of laboratory and consulting services, instruments and consumables and, to a lesser degree, pharmaceutical products and rapid assay products. The increase in laboratory and consulting services revenue was due, in part, to the inclusion of sales from laboratories acquired during 2004, which contributed approximately 7% to CAG revenue growth during the quarter. The favorable impact of foreign currency contributed 1% to CAG revenue growth.
Water segment revenue for the first quarter increased 8% to $12.8 million from $11.9 million for the first quarter of 2004 primarily due to higher worldwide sales volume. The favorable impact of foreign currency contributed 2% to Water revenue growth.
Food Diagnostics Group (FDG) revenue for the first quarter increased 26% to $14.7 million from $11.7 million for the first quarter of 2004 primarily due to higher production animal diagnostics sales in Europe. Approximately 11% of FDG growth resulted from sales from businesses acquired in 2004. The impact of foreign currency contributed 3% to FDG revenue growth.
IDEXX Announces First Quarter Results
April 29, 2005
Page 2 of 7
“Our first quarter revenues were in line with our expectations and earnings per share slightly exceeded expectations primarily as a result of higher than anticipated gross margin,” said Jonathan Ayers, Chairman and CEO. “Our results reflect our first full quarter of operations of Vet Med Lab and Dr. Bommeli AG, which we acquired in the fourth quarter of 2004. To date we are very pleased with the performance of these businesses and we are excited about the possibilities for market expansion that these Europe-based companies bring to IDEXX.”
“Overall we continue to view 2005 as a year in which we integrate our recently acquired businesses and continue to invest in new product and operating initiatives that will position us to achieve our long-term growth objectives.”
Outlook
The Company offers the following guidance for the second quarter of 2005:
| • | Revenue is expected to be approximately $160 to $162 million. |
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| • | Diluted earnings per share are expected to be approximately $0.56 to $0.58, which includes approximately $0.01 of anticipated acquisition integration costs. |
The Company offers the following guidance for the full year of 2005:
| • | Revenue is expected to be approximately $630 to $640 million. |
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| • | Diluted earnings per share are expected to be approximately $2.25 to $2.28, which includes approximately $0.05 of anticipated acquisition integration costs. |
Annual Meeting to be Broadcast Live on Internet
IDEXX Laboratories, Inc. today announced that it will host a simultaneous Webcast of its Annual Meeting of Stockholders, to be held on Wednesday, May 18, 2005, at 10:00 a.m. (eastern) at the Eastland Park Hotel in Portland, Maine.
Chairman and CEO Jonathan Ayers will chair the meeting. Investors may listen to the Annual Meeting and view a simultaneous presentation live via a link on the Company’s Web site, idexx.com. An archived edition of the Meeting will be available after 1:00 p.m. (eastern) on that day via the same link.
About IDEXX Laboratories
IDEXX Laboratories, Inc. is a leader in companion animal health, serving practicing veterinarians around the world with innovative, technology-based offerings, including a broad range of diagnostic products and services, practice-management systems and therapeutics. Our products enhance the ability of veterinarians to provide advanced medical care and to build more economically successful practices. IDEXX is also a worldwide leader in providing diagnostic tests and information for the production animal industry and tests for the quality and safety of water and milk. Headquartered in Westbrook, Maine, IDEXX Laboratories employs more than 3,000 people and offers products to customers in over 100 countries.
IDEXX Announces First Quarter Results
April 29, 2005
Page 3 of 7
Note Regarding Forward-Looking Statements
This press release contains statements about the Company’s business prospects and estimates of the Company’s financial results for future periods that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on management’s expectations of future events as of the date of this press release, and the Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments. Actual results could differ materially from management’s expectations. Factors that could cause or contribute to such differences include the following: the Company’s ability to develop, manufacture, introduce and market new products and enhancements to existing products; the effectiveness of the Company’s sales and marketing activities; the Company’s ability to develop, license or obtain rights to new technologies; the Company’s ability to identify acquisition opportunities, complete acquisitions and integrate acquired businesses; the impact of competition and technological change on the markets for the Company’s products; the effect of government regulation on the Company’s business, including government decisions about whether and when to approve the Company’s products and decisions regarding labeling, manufacturing and marketing products; the impact of distributor purchasing decisions on sales of our products that are sold through distribution; changes or trends in veterinary medicine that affect the rate of use of the Company’s products and services by veterinarians; the Company’s ability to obtain patent and other intellectual property protection for its products, successfully enforce its intellectual property rights and defend itself against third party claims against the Company; disruptions, shortages or pricing changes that affect the Company’s purchases of products and materials from third parties, including from sole source suppliers; the effects of government regulatory decisions, customer demand, pricing and other factors on the realizability of the Company’s inventories; the Company’s ability to manufacture complex biologic products; the effects of operations outside the U.S., including from currency fluctuations, different regulatory, political and economic conditions, and different market conditions; and the loss of key employees. A further description of these and other factors can be found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
IDEXX Announces First Quarter Results
April 29, 2005
Page 4 of 7
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Operations
Amounts in thousands except per share data (Unaudited)
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| Three Months Ended |
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| March 31, |
| March 31, |
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Revenue: |
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| Revenue |
| $ | 152,426 |
| $ | 133,417 |
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Expenses and |
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Income: |
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| Cost of revenue |
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| 76,346 |
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| 66,371 |
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| Gross profit |
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| 76,080 |
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| 67,046 |
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| Sales and marketing |
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| 25,070 |
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| 20,983 |
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| General and administrative |
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| 15,098 |
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| 12,242 |
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| Research and development |
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| 9,774 |
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| 8,520 |
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| Income from operations |
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| 26,138 |
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| 25,301 |
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| Interest income, net |
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| 503 |
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| 729 |
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| Income before provision for income taxes and partner’s interest |
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| 26,641 |
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| 26,030 |
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| Partner’s share of consolidated loss |
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| 101 |
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| 133 |
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| Provision for income taxes |
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| 9,052 |
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| 8,372 |
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Net Income: |
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| Net income |
| $ | 17,690 |
| $ | 17,791 |
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| Earnings per share: Basic |
| $ | 0.54 |
| $ | 0.51 |
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| Earnings per share: Diluted |
| $ | 0.51 |
| $ | 0.49 |
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| Shares outstanding: Basic |
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| 32,955 |
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| 34,775 |
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| Shares outstanding: Diluted |
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| 34,439 |
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| 36,437 |
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IDEXX Laboratories, Inc. and Subsidiaries
Key Operating Ratios (Unaudited)
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| Three Months Ended |
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| March 31, |
| March 31, |
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Key Operating |
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Ratios (as a |
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percentage of |
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revenue): |
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| Gross profit |
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| 49.9 | % |
| 50.3 | % |
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| Sales, marketing, general and administrative expense |
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| 26.4 | % |
| 24.9 | % |
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| Research and development expense |
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| 6.4 | % |
| 6.4 | % |
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| Income from operations |
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| 17.1 | % |
| 19.0 | % |
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International |
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Revenue: |
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| International revenue |
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| 35.1 | % |
| 31.3 | % |
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IDEXX Announces First Quarter Results
April 29, 2005
Page 5 of 7
IDEXX Laboratories, Inc. and Subsidiaries
Segment Information
Amounts in thousands (Unaudited)
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| Three Months Ended |
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| March 31, |
| March 31, |
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Revenue: |
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| Companion Animal Group |
| $ | 124,880 |
| $ | 109,830 |
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| Water |
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| 12,806 |
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| 11,854 |
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| Food Diagnostics Group |
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| 14,740 |
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| 11,733 |
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| Total |
| $ | 152,426 |
| $ | 133,417 |
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Gross Profit: |
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| Companion Animal Group |
| $ | 59,263 |
| $ | 52,076 |
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| Water |
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| 8,477 |
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| 7,993 |
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| Food Diagnostics Group |
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| 8,340 |
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| 6,977 |
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| Total |
| $ | 76,080 |
| $ | 67,046 |
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Income from |
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Operations: |
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| Companion Animal Group |
| $ | 18,888 |
| $ | 18,248 |
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| Water |
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| 5,504 |
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| 5,055 |
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| Food Diagnostics Group |
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| 2,578 |
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| 2,923 |
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| Other |
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| (832 | ) |
| (925 | ) |
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| Total |
| $ | 26,138 |
| $ | 25,301 |
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Gross Profit |
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(as a |
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percentage of |
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| Companion Animal Group |
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| 47.5 | % |
| 47.4 | % |
revenue): |
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| Water |
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| 66.2 | % |
| 67.4 | % |
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| Food Diagnostics Group |
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| 56.6 | % |
| 59.5 | % |
Operating |
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Profit (as a |
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percentage of |
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revenue): |
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| Companion Animal Group |
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| 15.1 | % |
| 16.6 | % |
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| Water |
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| 43.0 | % |
| 42.6 | % |
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| Food Diagnostics Group |
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| 17.5 | % |
| 24.9 | % |
IDEXX Laboratories, Inc. and Subsidiaries
Revenues by Product and Service Categories
Amounts in thousands (Unaudited)
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| Three Months Ended |
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| March 31, |
| March 31, |
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Net CAG Revenue: |
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| Instruments and consumables |
| $ | 52,873 |
| $ | 48,811 |
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| Rapid assay products |
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| 24,752 |
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| 24,245 |
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| Laboratory and consulting services |
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| 36,544 |
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| 27,105 |
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| Information products and services and digital radiography |
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| 7,461 |
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| 7,328 |
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| Pharmaceutical products |
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| 3,250 |
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| 2,341 |
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| Net CAG revenue |
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| 124,880 |
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| 109,830 |
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Net Water |
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Revenue: |
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| 12,806 |
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| 11,854 |
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Net FDG Revenue: |
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| Production animal products |
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| 10,862 |
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| 7,898 |
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| Dairy-testing products |
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| 3,878 |
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| 3,835 |
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| Net FDG revenue |
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| 14,740 |
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| 11,733 |
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Net Revenue: |
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| $ | 152,426 |
| $ | 133,417 |
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IDEXX Announces First Quarter Results
April 29, 2005
Page 6 of 7
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Balance Sheet
Amounts in thousands (Unaudited)
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| March 31, |
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| December 31, |
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Assets: |
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| Current Assets: |
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| Cash and cash equivalents |
| $ | 44,579 |
| $ | 47,156 |
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| Short-term investments |
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| 65,622 |
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| 90,116 |
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| Accounts receivable, net |
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| 75,617 |
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| 65,639 |
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| Inventories |
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| 78,481 |
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| 76,424 |
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| Other current assets |
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| 22,045 |
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| 22,257 |
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| Total current assets |
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| 286,344 |
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| 301,592 |
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| Long-term investments |
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| 12,037 |
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| 19,687 |
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| Property and equipment - cost |
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| 140,714 |
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| 137,851 |
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| Less - Accumulated depreciation |
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| 77,970 |
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| 75,221 |
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| Property and equipment, net |
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| 62,744 |
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| 62,630 |
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| Other long-term assets, net |
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| 126,793 |
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| 130,328 |
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| Total assets |
| $ | 487,918 |
| $ | 514,237 |
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Liabilities and |
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| Current Liabilities: |
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| Accounts payable |
| $ | 12,957 |
| $ | 14,723 |
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| Accrued expenses |
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| 62,951 |
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| 73,785 |
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| Notes payable |
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| 526 |
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| 1,291 |
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| Deferred revenue |
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| 8,617 |
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| 10,153 |
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| Total current liabilities |
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| 85,051 |
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| 99,952 |
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| Total long-term liabilities |
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| 15,080 |
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| 16,233 |
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| Partner’s interest in subsidiary |
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| 342 |
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| 392 |
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| Stockholders’ Equity: |
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| Common stock |
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| 4,533 |
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| 4,522 |
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| Additional paid-in capital |
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| 414,397 |
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| 410,817 |
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| Deferred equity-based compensation |
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| 1,174 |
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| 665 |
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| Retained earnings |
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| 336,372 |
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| 318,682 |
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| Treasury stock, at cost |
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| (377,867 | ) |
| (348,327 | ) |
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| Accumulated other comprehensive income |
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| 8,836 |
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| 11,301 |
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| Total stockholders’ equity |
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| 387,445 |
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| 397,660 |
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| Total liabilities and stockholders’ equity |
| $ | 487,918 |
| $ | 514,237 |
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IDEXX Laboratories, Inc. and Subsidiaries
Key Balance Sheet Statistics (Unaudited)
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| March 31, |
| December 31, |
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Key |
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Balance Sheet |
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Statistics: |
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| Days sales outstanding |
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| 42 |
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| 39 |
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| Inventory turns |
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| 1.8 |
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| 1.9 |
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IDEXX Announces First Quarter Results
April 29, 2005
Page 7 of 7
IDEXX Laboratories, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
Amounts in thousands (Unaudited)
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| Three Months Ended |
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| March 31, |
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| March 31, |
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Operating: |
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| Cash Flows from Operating Activities: |
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| Net income |
| $ | 17,690 |
| $ | 17,791 |
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| Non-cash charges |
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| 6,390 |
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| 11,663 |
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| Changes in current assets and liabilities, net of acquisitions and disposals |
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| (23,798 | ) |
| (18,786 | ) |
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| Net cash provided by operating activities |
| $ | 282 |
| $ | 10,668 |
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Investing: |
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| Cash Flows from Investing Activities: |
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| Decrease in investments, net |
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| 32,112 |
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| 443 |
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| Purchase of property and equipment |
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| (4,536 | ) |
| (6,003 | ) |
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| Acquisition of businesses and intangible assets |
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| (659 | ) |
| (5,342 | ) |
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| Acquisition of equipment leased to customers |
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| (696 | ) |
| (466 | ) |
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| Net cash provided by (used by) investing activities |
| $ | 26,221 |
| $ | (11,368 | ) |
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Financing: |
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| Cash Flows from Financing Activities: |
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| Repayments of notes payable |
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| (1,271 | ) |
| (254 | ) |
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| Purchase of treasury stock |
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| (29,540 | ) |
| (22,417 | ) |
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| Proceeds from the exercise of stock options |
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| 2,603 |
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| 11,005 |
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| Net cash used by financing activities |
| $ | (28,208 | ) | $ | (11,666 | ) |
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| Net effect of exchange rate changes |
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| (872 | ) |
| 184 |
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| Net decrease in cash and cash equivalents |
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| (2,577 | ) |
| (12,182 | ) |
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| Cash and cash equivalents, beginning of period |
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| 47,156 |
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| 96,942 |
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| Cash and cash equivalents, end of period |
| $ | 44,579 |
| $ | 84,760 |
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IDEXX Laboratories, Inc. and Subsidiaries
Free Cash Flow
Amounts in thousands (Unaudited)
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| Three Months Ended |
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| March 31, |
| March 31, |
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Free Cash |
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Flow: |
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| Net cash provided by operating activities |
| $ | 282 |
| $ | 10,668 |
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| Purchase of property and equipment |
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| (4,536 | ) |
| (6,003 | ) |
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| Acquisition of equipment leased to customers |
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| (696 | ) |
| (466 | ) |
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| Free cash flow |
| $ | (4,950 | ) | $ | 4,199 |
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| Free cash flow indicates the cash generated from operations reduced by investments in capital and other long-term assets. Free cash flow excludes financing activities, investments in monetary securities, and business acquisitions and divestitures. We feel free cash flow is a useful measure because it indicates the cash the operations of the business are generating after appropriate reinvestment for recurring investments in fixed assets that are required to operate the business. We believe this is a common financial measure useful to further evaluate the results of operations. |
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