10-QPeriod: Q1 FY2012

IDEXX LABORATORIES INC /DE Quarterly Report for Q1 Ended Mar 31, 2012

Filed April 20, 2012For Securities:IDXX

Summary

IDEXX LABORATORIES INC /DE (IDXX) reported a solid first quarter for 2012, with total revenue increasing by 10.3% year-over-year to $322.7 million. This growth was primarily driven by the Companion Animal Group (CAG) segment, which saw a 11.4% increase in revenue, bolstered by strong performance in reference laboratory services and instruments/consumables. The company also demonstrated improved profitability, with net income attributable to IDEXX stockholders rising by 11.3% to $40.7 million, leading to a diluted EPS of $0.72. Operationally, the company generated $15.2 million in cash from operating activities, though this was lower than the prior year due to working capital changes. Investing activities used $7.3 million, primarily for capital expenditures, and financing activities used $6.6 million, including reduced share repurchases compared to the prior year. The company maintained a strong liquidity position with $185.5 million in cash and cash equivalents and $45.0 million in remaining borrowing availability under its credit facility, indicating continued financial stability.

Financial Highlights

50 data points
Beta

Revenue

$322.68M

54.2% Gross Margin

Net Income

$40.74M

12.6% Net Margin

EPS (Diluted)

$0.36

Total Assets

$1.06B

Cash & Equivalents

$185.49M

Free Cash Flow

$5.74M

Financial Statements
Beta
Revenue$322.68M
Cost of Revenue$147.90M
Gross Profit$174.77M
R&D Expenses$20.56M
Operating Income$60.41M
Interest Expense$1.19M
Net Income$40.74M
EPS (Basic)$0.37
EPS (Diluted)$0.36
Shares Outstanding (Basic)110.42M
Shares Outstanding (Diluted)112.88M

Key Highlights

  • 1Total revenue increased 10.3% to $322.7 million for the first quarter of 2012 compared to the same period in 2011.
  • 2Net income attributable to IDEXX stockholders increased 11.3% to $40.7 million, with diluted EPS of $0.72, up from $0.62 in the prior year.
  • 3The Companion Animal Group (CAG) segment, the largest revenue contributor, grew 11.4% year-over-year, driven by strong performance in reference laboratory services and instruments/consumables.
  • 4Gross profit increased by 12.8% to $174.8 million, and operating income grew 12.8% to $60.4 million.
  • 5Cash from operations was $15.2 million, a decrease from $25.2 million in the prior year, primarily due to changes in working capital.
  • 6The company had $185.5 million in cash and cash equivalents and $45.0 million in availability under its credit facility as of March 31, 2012.
  • 7Share repurchases were reduced to $27.6 million in Q1 2012 from $39.9 million in Q1 2011.

Frequently Asked Questions

The primary driver of revenue growth was the Companion Animal Group (CAG) segment, which experienced an 11.4% increase year-over-year. This growth was fueled by strong performance in reference laboratory diagnostic and consulting services, as well as increased sales of instruments and consumables.

Profitability improved significantly. Net income attributable to IDEXX stockholders rose by 11.3% to $40.7 million, and diluted earnings per share increased to $0.72 from $0.62 in the prior year's comparable period. This was supported by a higher gross profit and operating income.

IDEXX maintained a strong liquidity position with $185.5 million in cash and cash equivalents. Additionally, the company had $45.0 million in borrowing availability under its $300 million credit facility, indicating ample resources to fund operations and growth initiatives.

Yes, the company is involved in an ongoing investigation by the U.S. Federal Trade Commission (FTC) regarding its marketing and sales practices for companion animal veterinary products and services. While IDEXX is taking steps to address the FTC's concerns, the duration and outcome of this investigation are uncertain and could potentially lead to restrictions on certain marketing and sales practices.