10-QPeriod: Q1 FY2010

IDEXX LABORATORIES INC /DE Quarterly Report for Q1 Ended Mar 31, 2010

Filed April 23, 2010For Securities:IDXX

Summary

IDEXX Laboratories, Inc. (IDXX) reported solid revenue growth for the first quarter of 2010, with total revenue increasing by 13.6% year-over-year to $268.5 million. This growth was primarily driven by a 14.3% increase in the Companion Animal Group (CAG) segment, which benefits from strong performance in laboratory diagnostic and consulting services and instruments/consumables. The company also saw positive contributions from its Water and Production Animal Segments. Net income attributable to IDEXX stockholders rose significantly to $33.0 million, or $0.55 per diluted share, up from $26.1 million, or $0.43 per diluted share, in the prior year's quarter. Despite some headwinds from economic conditions impacting routine veterinary visits and increased spending on sales and marketing, the company's operational efficiency and revenue growth led to a substantial increase in operating income. IDEXX continues to invest in its business, with capital expenditures planned for headquarters expansion, and actively repurchasing shares. The company maintained sufficient liquidity and ended the quarter with a strong cash position, indicating a stable financial outlook.

Financial Highlights

27 data points
Beta

Revenue

$268.52M

53.0% Gross Margin

Net Income

$33.03M

12.3% Net Margin

EPS (Diluted)

$0.28

Cash & Equivalents

$106.35M

Free Cash Flow

$10.73M

Financial Statements
Beta
Revenue$268.52M
Cost of Revenue$126.16M
Gross Profit$142.36M
R&D Expenses$16.71M
Operating Income$48.43M
Interest Expense$365K
Net Income$33.03M
EPS (Basic)$0.28
EPS (Diluted)$0.28
Shares Outstanding (Basic)116.07M
Shares Outstanding (Diluted)120.06M

Key Highlights

  • 1Total revenue increased 13.6% to $268.5 million in Q1 2010 compared to Q1 2009.
  • 2Companion Animal Group (CAG) revenue grew 14.3% to $221.4 million, driven by laboratory services and instruments/consumables.
  • 3Net income attributable to IDEXX stockholders rose to $33.0 million ($0.55 per diluted share) from $26.1 million ($0.43 per diluted share).
  • 4Operating income increased by 26.0% to $48.4 million.
  • 5The company's cash and cash equivalents remained stable at $106.4 million.
  • 6IDEXX repurchased $57.7 million of its common stock in Q1 2010.
  • 7Despite some economic pressures, the company maintained a strong liquidity position and expects sufficient resources for the next twelve months.

Frequently Asked Questions

The primary driver of revenue growth was the Companion Animal Group (CAG) segment, which experienced a 14.3% increase in revenue, largely due to higher sales volumes in laboratory diagnostic and consulting services, as well as instruments and consumables. The Water and Production Animal Segments also contributed positively to overall revenue growth.

Management noted that the weakened economic conditions continued to impact the business, particularly by depressing patient visits to veterinary clinics for routine care and elective procedures. This led to a slower growth rate in certain product categories within the CAG segment and increased customer sensitivity to pricing. However, the company's overall performance remained strong due to robust demand in other areas and effective cost management.

IDEXX maintained a strong liquidity position, with $106.4 million in cash and cash equivalents at the end of the quarter. Operating activities provided $19.2 million in cash, an increase from the prior year. The company believes its current cash, operational cash flow, and available credit facility will be sufficient to meet its needs for the next twelve months.

Yes, IDEXX actively repurchased its common stock during the first quarter of 2010, spending $57.7 million on share buybacks. This is part of an ongoing program to return value to shareholders and offset the dilutive effect of stock-based compensation.