IDEXX Laboratories Announces Fourth Quarter and Full Year 2020 Results
WESTBROOK, Maine, Feb. 2, 2021 /PRNewswire/ --
-- Achieves fourth quarter reported revenue growth of 19% and organic
growth of 17%, driven by CAG Diagnostics recurring revenue reported
growth of 23% and organic growth of 21%
-- High revenue growth supported by sustained strong global trends in pet
healthcare
-- Delivers full year EPS of $6.71, an increase of 37% on a reported basis
and 31% on a comparable constant currency basis
-- Strong full year EPS results supported by operating margin expansion of
270 basis points on a reported basis and 340 basis points on a
comparable constant currency basis
-- Provides initial outlook for 2021 revenue of $3,065 million - $3,120
million, reflecting reported growth of 13% - 15.5% and organic growth of
11.5% - 13.5%
-- Estimates 2021 EPS of $7.39 - $7.71, an increase of 10% - 14% as
reported and 15% - 20% on a comparable constant currency basis
IDEXX Laboratories, Inc. (NASDAQ: IDXX), today announced fourth quarter and full year results, as well as market condition updates.
Fourth Quarter and Full Year Results
The Company reports revenues of $721 million for the fourth quarter of 2020, an increase of 19% compared to the prior year period on a reported basis and 17% on an organic basis. Fourth quarter results were driven by continued high gains in Companion Animal Group ("CAG") Diagnostics recurring revenue globally, as well as sustained strong growth in the Company's Livestock, Poultry and Dairy ("LPD") business. Fourth quarter growth also benefited by 1.5% from revenues associated with OPTI Medical Systems COVID-19 human PCR testing. Overall revenue gains were moderated by COVID-19 pandemic-related impacts that constrained new CAG instrument placement levels and non-compliance related testing in the Company's Water business.
Earnings per diluted share ("EPS") were $2.01 for the fourth quarter, an increase of 93% as reported, including a one-time positive impact of $0.25 per share related to the enactment of tax reform in Switzerland and $0.13 per share in share-based compensation tax benefits.
Revenue for the full year of $2,707 million increased 12% on a reported and organic basis, driven by 16% reported and 15% organic growth in CAG Diagnostics recurring revenue.
For the full year 2020, EPS of $6.71 increased 37% on a reported basis and 31% on a comparable constant currency basis. EPS results benefited from strong CAG Diagnostics recurring revenue growth and operating expense leverage, resulting in 270 basis points of operating margin improvement on a reported basis, and 340 basis points on a comparable constant currency basis. Further information and a reconciliation of non-GAAP financial measures, such as comparable constant currency growth measures, are provided in the Company's footnotes.
The Company expects full year 2021 revenue growth of 13% - 15.5% on a reported basis and 11.5% - 13.5% revenue growth on an organic basis. The Company also expects EPS of $7.39 - $7.71, reflecting a targeted 50 - 100 basis points of comparable constant currency operating margin improvement, building on strong 2020 performance.
"IDEXX had an exceptional finish to 2020, supported by continued robust global market trends in companion animal healthcare and outstanding execution by the IDEXX organization globally. Performance was strong across our major geographic markets, enabling us to deliver 12% organic growth overall and 31% EPS growth on a comparable constant currency basis for the full year, above our long-term goals. The IDEXX team stayed focused on serving our customers in an exceptional way through the COVID-19 pandemic. The team's high level of engagement and focus on execution enabled us to be well-positioned to benefit from a strong market recovery in pet healthcare. We are planning to drive continued strong growth in our companion animal business, as reflected in our initial financial 2021 outlook, leveraging our expanded global commercial capability and unique innovations, which support higher standards of healthcare for pets," said Jay Mazelsky, the Company's President and Chief Executive Officer.
Companion Animal Diagnostics Trends Update
Companion animal healthcare markets benefited from continued positive trends in the fourth quarter globally. U.S. veterinary practices experienced sustained strong clinical demand benefiting from high growth in both non-wellness and wellness clinical visits. In the U.S., same-store clinical visit growth reached 8% in the fourth quarter, including 7% growth in non-wellness visits and sustained 10% growth in wellness visits. Clinical visits continued to benefit from an increase in new clinical patient visits. Revenue growth at U.S. veterinary practices was 12% in the fourth quarter, driven by growth in service and diagnostics revenues, reflecting increased frequency and utilization of diagnostics. Additional U.S. companion animal practice weekly key metrics are available in the Q4 2020 Earnings Snapshot accessible on the IDEXX website, www.idexx.com/investors.
Global companion animal market trends have supported continued high demand for CAG diagnostic products and services. Global CAG Diagnostics recurring revenues sustained their growth at high levels through the fourth quarter with strength across regions.
Fourth Quarter Performance Highlights
Companion Animal Group
The Companion Animal Group generated 19% reported and 17% organic revenue growth for the fourth quarter. CAG Diagnostics recurring revenue growth remained very strong at 23% reported and 21% organic. Growth was high across IDEXX's major modalities globally reflecting continued strong growth in clinical visits and expanded utilization of diagnostic products and services. Overall CAG revenue growth was constrained by a 10% organic decline in IDEXX VetLab instrument revenues, impacted by COVID-19 related restrictions on access to veterinary practices.
-- IDEXX VetLab® consumables generated 27% reported and 25% organic
revenue growth, supported by benefits from diagnostics utilization
growth, expansion of our premium instrument installed base, and moderate
net price gains.
-- Reference laboratory diagnostic and consulting services generated 21%
reported and 19% organic revenue growth, led by continued high organic
growth in the U.S. and mid-to-high-teen growth in international markets.
Reference lab gains were supported by high same-store volume growth,
with strong gains across testing categories.
-- Rapid assay products generated revenue growth of 20% on a reported and
organic basis, supported by continued gains in SNAP® 4Dx® Plus Tests,
feline and specialty rapid assay test volumes, benefiting from strong
overall market conditions including high demand for both wellness and
non-wellness testing.
Veterinary software, services and diagnostic imaging systems revenue growth increased 1% on a reported and organic basis, supported by double-digit growth in subscription-based service revenues and strong growth in new veterinary software system placements. Overall growth was moderated by declines in diagnostic imaging systems placements compared to strong prior year placement levels.
Water
Water achieved revenue growth of 1% on a reported basis and modest revenue growth on an organic basis, reflecting continued improvements in compliance testing volumes which were offset by COVID-19 pandemic-related pressures on non-compliance testing volumes.
Livestock, Poultry and Dairy ("LPD")
LPD revenue increased 16% on a reported basis and 13% on an organic basis. LPD results were supported by continued strength in core swine testing volumes and African Swine Fever diagnostic testing programs in Asia. These gains were moderated by lower herd health screening levels, compared to strong prior year results.
Gross Profit and Operating Profit
Gross profits increased 24%, and gross margins of 56.8% increased 210 basis points compared to prior year results on a reported basis and 270 basis points on a constant currency basis. Gross margin results reflected reference laboratory productivity gains on high revenue growth, favorable mix from strong consumable revenue and lower instrument revenue, as well as benefits from moderate price gains.
Operating margin was 25.7% in the quarter, 660 basis points higher than the prior year period results on a reported basis and 460 basis points on a comparable constant currency basis, excluding the prior year negative impact of the CEO transition charges. Operating expenses increased 4% on a reported basis, and 10% on a comparable constant currency basis, excluding the CEO transition charges. Operating expense growth in the fourth quarter reflects higher employee incentive and healthcare costs, R&D investments, and global commercial capability enhancements.
2021 Growth and Financial Performance Outlook
The following table provides the company's initial estimates for annual key financial metrics in 2021:
Amounts in millions except per share data and percentages
Growth and Financial Performance Outlook 2021
---
Revenue $3,065 $3,120
Reported growth 13% 15.5%
Organic growth 11.5% 13.5%
CAG Diagnostics Recurring Revenue Growth
Reported growth 13.5% 16%
Organic growth 12% 14.5%
Operating Margin 27.3% 27.8%
Operating margin expansion 170 220 bps
Comparable constant currency margin expansion 50 100 bps
EPS $7.39 $7.71
Reported growth 10% 14%
Comparable constant currency growth 15% 20%
Other Key Metrics
Net interest expense $30 $31
Share-based compensation tax benefit $7.5 $9.5
Share-based compensation tax rate benefit ~ 1 %
Effective tax rate 20% 21%
Share-based compensation EPS impact $0.09 $0.11
Change in average shares outstanding 0% (0.5)%
Operating Cash Flow 100% -110% of net income
Free Cash Flow 80% -90% of net income
Capital Expenditures
$120 - $140
The following table outlines estimates of foreign currency exchange rate impacts, net of foreign currency hedging transactions, and foreign currency exchange rate assumptions reflected in the above financial performance outlook for 2021.
Estimated Foreign
Currency Exchange
Rates and Impacts 2021
---
Revenue growth
rate impact 1.5% 2.0%
CAG Diagnostics
recurring revenue
growth rate
impact ~ 1.5%
Operating margin
growth impact ~ 10 bps
EPS impact ~ $0.14
EPS growth impact ~ 2.0%
Foreign Currency
Exchange Rate
Assumptions
---
In U.S. dollars
euro $1.19
British pound $1.34
Canadian dollar $0.77
Australian dollar $0.76
Relative to the
U.S. dollar
Japanese yen
YEN105.00
Chinese renminbi
YEN6.57
Brazilian real
R$5.36
Conference Call and Webcast Information
IDEXX Laboratories, Inc. will host a conference call today at 8:30 a.m. (Eastern) to discuss its fourth quarter and full year 2020 results and management's outlook. To participate in the conference call, dial 1-888-771-4371 or 1-847-585-4405 and reference access code 50070596. Individuals can access a live webcast of the conference call through a link on the IDEXX website, www.idexx.com/investors. An archived edition of the webcast will be available after 1:00 p.m. (Eastern) on that day via the same link and will remain available for one year.
About IDEXX Laboratories, Inc.
IDEXX Laboratories, Inc. is a member of the S&P 500® Index and is a leader in pet healthcare innovation, offering diagnostic and software products and services that deliver solutions and insights to practicing veterinarians around the world. IDEXX products enhance the ability of veterinarians to provide advanced medical care, improve staff efficiency and build more economically successful practices. IDEXX is also a worldwide leader in providing diagnostic tests and information for livestock and poultry and tests for the quality and safety of water and milk and point-of-care and laboratory diagnostics for human medicine. Headquartered in Maine, IDEXX employs more than 9,000 people and offers products to customers in over 175 countries. For more information about IDEXX, visit: www.idexx.com.
Note Regarding Forward-Looking Statements
This earnings release contains statements about the Company's business prospects and estimates of the Company's financial results for future periods that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are included above under "Fourth Quarter and Full Year Results", "2021 Growth and Financial Performance Outlook", and elsewhere and can be identified by the use of words such as "expects", "may", "anticipates", "intends", "would", "will", "plans", "believes", "estimates", "projected", "should", and similar words and expressions. Our forward-looking statements include statements relating to revenue growth and EPS outlooks; operating and free cash flow forecast; projected impact of foreign currency exchange rates; projected operating margins and expenses and capital expenditures; projected tax, tax rate and EPS benefits from share-based compensation arrangements; and projected effective tax rates, reduction of average shares outstanding and net interest expense. These statements are intended to provide management's expectation of future events as of the date of this earnings release; are based on management's estimates, projections, beliefs and assumptions as of the date of this earnings release; and are not guarantees of future performance. These forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, among other things, the matters described under the headings "Business," "Risk Factors," "Legal Proceedings," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosures About Market Risk" in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 and in the corresponding sections of the Company's Quarterly Report on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020, as well as those described from time to time in the Company's other filings with the U.S. Securities and Exchange Commission available at www.sec.gov. The Company specifically disclaims any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
Statement Regarding Non-GAAP Financial Measures
The following defines terms and conventions and provides reconciliations regarding certain measures used in this earnings release and/or the accompanying earnings conference call that are not required by, or presented in accordance with, generally accepted accounting principles in the United States of America ("GAAP"), otherwise referred to as non-GAAP financial measures. To supplement the Company's consolidated results presented in accordance with GAAP, the Company has disclosed non-GAAP financial measures that exclude or adjust certain items. Management believes these non-GAAP financial measures provide useful supplemental information for its and investors' evaluation of the Company's business performance and liquidity and are useful for period-over-period comparisons of the performance of the Company's business and its liquidity and to the performance and liquidity of our peers. While management believes that these non-GAAP financial measures are useful in evaluating the Company's business, this information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.
Constant currency - Constant currency references are non-GAAP financial measures which exclude the impact of changes in foreign currency exchange rates and are consistent with how management evaluates our performance and comparisons with prior and future periods. We estimated the net impacts of currency on our revenue, gross profit, operating profit, and EPS results by restating results to the average exchange rates or exchange rate assumptions for the comparative period, which includes adjusting for the estimated impacts of foreign currency hedging transactions and certain impacts on our effective tax rates. These estimated currency changes impacted fourth quarter 2020 results as follows: increased gross profit growth by 0.6%, decreased gross margin growth by 60 basis points, increased operating expense growth by 0.5%, decreased operating profit margin growth by 20 basis points, and increased EPS growth by 1%. Estimated currency changes impacted full year 2020 results as follows: decreased operating profit margin growth by 20 basis points, and decreased EPS growth by 1%. Constant currency revenue growth represents the percentage change in revenue during the applicable period, as compared to the prior year period, excluding the impact of changes in foreign currency exchange rates. See the supplementary analysis of results below for revenue percentage change from currency for the three months and year ended December 31, 2020 and refer to the Growth and Financial Performance Outlook section of this press release for estimated foreign currency exchange rate impacts on 2021 projections and estimates.
Growth and organic revenue growth - All references to growth and organic growth refer to growth compared to the equivalent prior year period unless specifically noted. Organic revenue growth is a non-GAAP financial measure that excludes the impact of changes in foreign currency exchange rates and revenue from business acquisitions. Management believes that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers. See the supplementary analysis of results below for a reconciliation of reported revenue growth to organic revenue growth for the three and twelve months ended December 31, 2020. See the constant currency note above for the impacts of estimated currency changes to fourth quarter and full year 2020, as well estimated full year 2021 organic revenue growth for the Company and CAG Diagnostics recurring revenue. The percentage change in revenue resulting from acquisitions represents incremental revenues attributable to business acquisitions that have occurred since the beginning of the prior year period. Revenue from acquisitions is expected to have an immaterial impact on projected full year 2021 revenue growth and CAG Diagnostics recurring revenue growth.
Comparable constant currency operating expense growth, operating profit growth, and operating margin gain (or growth) - Comparable constant currency operating expense growth, operating profit growth, and operating profit margin gain (or growth) are non-GAAP financial measures and exclude the impact of changes in foreign currency exchange rates and non-recurring or unusual items (if any). Management believes that reporting comparable constant currency operating expense growth, operating profit growth, and operating margin gain (or growth) provides useful information to investors because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding key metrics used by management. Comparable constant currency operating expense growth, operating profit growth, and operating margin gain (or growth) should be considered in addition to, and not as replacements of or superior measures to, operating expense growth, operating profit growth, and operating margin gain reported in accordance with GAAP.
The reconciliation of these non-GAAP financial measures is as follows:
Three Months Ended Year-over- Twelve Months Ended Year-over-
Year Year
December 31, December 31, Change December 31, December 31, Change
Dollar amounts in thousands 2020 2019 2020 2019
---
4 8
%
Operating Expenses (as reported) $
224,407 $
215,518 $
876,516 $
812,703 %
Adjustments
CEO transition charges (13,400) (13,400)
Expired royalty litigation matter (27,500)
Change from currency (1,111) 2,827
10 7
%
Comparable constant currency operating expense growth $
223,296 $
202,118 $
851,843 $
799,303 %
60 26
%
Income from operations (as reported) $
185,095 $
115,631 $
694,524 $
552,846 %
Operating margin 25.7 19.1 660 bps 25.7 23.0
%
%
%
% 270 bps
Adjustments
CEO transition charges 13,400 13,400
Expired royalty litigation matter 27,500
Change from currency (865) 7,097
43 29
%
Comparable constant currency income from operations growth $
184,230 $
129,031 $
729,121 $
566,246 %
Comparable constant currency operating margin expansion 25.9 21.3 460 bps 27.0 23.5
%
%
%
% 340 bps
---
Amounts presented may not recalculate due to rounding.
These impacts and those described in the constant currency note above reconcile reported operating expense growth, operating profit growth, and operating margin gain (including projected 2021 operating margin expansion) to comparable constant currency operating expense growth, operating profit growth, and operating margin gain for the Company.
Comparable constant currency EPS growth - Comparable constant currency EPS growth is a non-GAAP financial measure that excludes the impact of changes in foreign currency exchange rates, the tax benefits of share-based compensation activity under ASU 2016-09 and non-recurring or unusual items (if any). Management believes comparable constant currency EPS growth is a more useful way to measure the Company's business performance than EPS growth because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding a key metric used by management.
The reconciliation of this non-GAAP financial measure is as follows:
Three Months Ended Year-over- Twelve Months Ended Year-over-
Year Year
December 31, December 31, Growth December 31, December 31, Growth
2020 2019 2020 2019
93 37
Earnings per share (diluted) $
2.01 $
1.04 % $
6.71 $
4.89 %
Adjustments
Share-based compensation activity (0.13) (0.05) (0.45) (0.22)
CEO transition charges 0.14 0.14
Expired royalty litigation matter 0.24
Swiss tax reform impact (0.25) (0.25)
Change from currency (0.01) 0.06
---
43 31
Comparable constant currency EPS growth 1.62 1.13 % 6.31 4.81 %
---
Amounts presented may not recalculate due to rounding.
These impacts and those described in the constant currency note above reconcile reported EPS growth (including projected 2021 reported EPS growth) to comparable constant currency EPS growth for the Company.
Free cash flow - Free cash flow is a non-GAAP financial measure and means, with respect to a measurement period, the cash generated from operations during that period, reduced by the Company's investments in property and equipment. Management believes free cash flow is a useful measure because it indicates the cash the operations of the business are generating after appropriate reinvestment for recurring investments in property and equipment that are required to operate the business. See the supplementary analysis of results below for our calculation of free cash flow for the years ended December 31, 2020 and 2019. To estimate projected 2021 free cash flow, we have deducted projected purchases of property and equipment (also referred to as capital expenditures) of approximately $120 - $140 million.
Debt to Adjusted EBITDA (Leverage Ratios) - Adjusted EBITDA, gross debt, and net debt are non-GAAP financial measures. Adjusted EBITDA is a non-GAAP financial measure of earnings before interest, taxes, depreciation, amortization, non-recurring transaction
expenses incurred in connection with acquisitions, share-based compensation expense, and certain other non-cash losses and charges. Management believes that reporting Adjusted EBITDA, gross debt and net debt in the Debt to Adjusted EBITDA ratios provides
supplemental analysis to help investors further evaluate the Company's business performance and available borrowing capacity under
the Company's credit facility. For further information on how Adjusted EBITDA and the Debt to Adjusted EBITDA Ratios are calculated, see the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.
After-Tax Return on Invested Capital, Excluding Cash and Investments ("ROIC"): After-Tax Return on Invested Capital, Excluding Cash and Investments, is a non-GAAP financial measure. After-tax return on invested capital, excluding cash and investments, represents our after-tax income from operations, divided by our average invested capital, excluding cash and investments, using beginning and ending balance sheet values. Management believes that reporting ROIC provides useful information to investors for evaluating the efficiency and effectiveness of our use of capital. See the supplementary table below for reconciliation of this non-GAAP financial measure.
Notes and Definitions
CEO transition charges - Effective November 1, 2019, Jonathan W. Ayers, our former Chairman of the Board, President and Chief Executive Officer, stepped down as Chairman of our Board, ceased to be an employee of the Company and transitioned to the role of external Senior Advisor to the Company. Mr. Ayers continues to serve as a member of our Board. Pursuant to a mutual separation agreement between the Company and Mr. Ayers, we recognized a charge to operating income of approximately $13.4 million in the fourth quarter of 2019, representing the cost of severance payments and an acceleration of the cost of his equity awards, which was offset by a reduction to our provision for income taxes of approximately $1.2 million, resulting in a total charge to net income of approximately $12.2 million, net of tax impacts.
Swiss tax reform impact - A one-time positive income tax impact related to the enactment of tax reform in Switzerland reflected in the fourth quarter of 2020, when the Company recorded an approximately $22 million deferred tax asset related to transitional benefits.
Expired royalty litigation matter - The Company established an accrual of $27.5 million in the third quarter of 2020 related to an ongoing matter involving an alleged breach of contract for underpayment of royalty payments made from 2004 through 2017 under an expired patent license agreement. The accrual amount represents the amount of a possible loss that we have determined to be probable and estimable, and the actual cost of resolving this matter may be higher or lower than the amount accrued.
IDEXX Laboratories, Inc. and Subsidiaries
Condensed Consolidated Statement of Operations
Amounts in thousands except per share data (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Revenue:
Revenue $720,938 $605,446 $2,706,655 $2,406,908
Expenses and Income:
Cost of revenue 311,436 274,297 1,135,615 1,041,359
Gross profit 409,502 331,149 1,571,040 1,365,549
Sales and marketing 115,909 105,694 434,435 418,193
General and administrative 69,721 74,664 300,832 261,317
Research and development 38,777 35,160 141,249 133,193
Income from operations 185,095 115,631 694,524 552,846
Interest expense, net (7,659) (7,125) (32,539) (30,628)
Income before provision for income taxes 177,436 108,506 661,985 522,218
Provision for income taxes 2,478 17,962 79,854 94,426
Net Income:
Net income 174,958 90,544 582,131 427,792
Less: Noncontrolling interest in subsidiary's 168 48 355 72
earnings
Net income attributable to stockholders $174,790 $90,496 $581,776 $427,720
Earnings per share: Basic $2.04 $1.05 $6.82 $4.97
Earnings per share: Diluted $2.01 $1.04 $6.71 $4.89
Shares outstanding: Basic 85,490 85,848 85,342 86,115
Shares outstanding: Diluted 86,904 87,212 86,722 87,542
IDEXX Laboratories, Inc. and Subsidiaries
Selected Operating Information (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Operating Ratios
Gross profit 56.8 54.7 58.0 56.7
% % % %
(as a percentage of revenue):
Sales, marketing, general and administrative 25.7 29.8 27.2 28.2
% % % %
expense
Research and development expense 5.4 5.8 5.2 5.5
% % % %
Income from operations(1) 25.7 19.1 25.7 23.0
% % % %
(1)Amounts presented may not recalculate due to rounding.
IDEXX Laboratories, Inc. and Subsidiaries
Segment Information
Amounts in thousands (Unaudited)
Three Months Ended Three Months Ended
December 31, Percent of December 31, Percent of
2020 Revenue 2019 Revenue
Revenue:
CAG $629,652 $529,786
Water 33,088 32,870
LPD 42,476 36,655
Other 15,722 6,135
Total $720,938 $605,446
Gross Profit:
CAG $351,079 55.8 $283,525 53.5
% %
Water 22,889 69.2 23,549 71.6
% %
LPD 25,283 59.5 21,607 58.9
% %
Other 10,251 65.2 2,468 40.2
% %
Total $409,502 56.8 $331,149 54.7
% %
Income from Operations:
CAG $148,825 23.6 $92,005 17.4
% %
Water 15,484 46.8 14,456 44.0
% %
LPD 11,591 27.3 7,028 19.2
% %
Other 9,195 58.5 2,142 34.9
% %
Total $185,095 25.7 $115,631 19.1
% %
Twelve Months Ended Twelve Months Ended
December 31, Percent of December 31, Percent of
2020 Revenue 2019 Revenue
Revenue:
CAG $2,385,765 $2,119,183
Water 128,625 132,850
LPD 145,845 132,635
Other 46,420 22,240
Total $2,706,655 $2,406,908
Gross Profit:
CAG $1,363,186 57.1 $1,181,007 55.7
% %
Water 90,380 70.3 95,946 72.2
% %
LPD 89,202 61.2 78,504 59.2
% %
Other 28,272 60.9 10,092 45.4
% %
Total $1,571,040 58.0 $1,365,549 56.7
% %
Income from Operations:
CAG $574,887 24.1 $462,605 21.8
% %
Water 58,867 45.8 61,923 46.6
% %
LPD 40,008 27.4 24,735 18.6
% %
Other 20,762 44.7 3,583 16.1
% %
Total $694,524 25.7 $552,846 23.0
% %
IDEXX Laboratories, Inc. and Subsidiaries
Revenues and Revenue Growth Analysis by Product and Service Categories and by Domestic and International Markets
Amounts in thousands (Unaudited)
Three Months Ended
Reported Percentage Percentage Organic
December 31, December 31, Dollar Revenue Change from Change from Revenue
Net Revenue 2020 2019 Change Growth(1) Currency Acquisitions Growth(1)
---
CAG $629,652 $529,786 $99,866 18.9 1.8 17.0
% % %
United States 405,362 347,563 57,799 16.6 0.1 16.6
% % %
International 224,290 182,223 42,067 23.1 5.3 17.8
% % %
Water $33,088 $32,870 $218 0.7 0.2 0.4
% % %
United States 14,573 14,516 57 0.4 0.4
% %
International 18,515 18,354 161 0.9 0.4 0.5
% % %
LPD $42,476 $36,655 $5,821 15.9 3.2 12.7
% % %
United States 3,730 4,009 (279) (7.0) (7.0)
% %
International 38,746 32,646 6,100 18.7 3.7 15.0
% % %
Other $15,722 $6,135 $9,587 156.2 156.2
% %
---
Total Company $720,938 $605,446 $115,492 19.1 1.8 17.2
% % %
United States 433,607 368,169 65,438 17.8 0.1 17.7
% % %
International 287,331 237,277 50,054 21.1 4.6 16.5
% % %
---
Three Months Ended
Reported Percentage Percentage Organic
December 31, December 31, Dollar Revenue Change from Change from Revenue
Net CAG Revenue 2020 2019 Change Growth(1) Currency Acquisitions Growth(1)
---
CAG Diagnostics recurring revenue: $548,244 $446,133 $102,111 22.9 1.9 0.1 20.9
% % % %
IDEXX VetLab consumables 220,997 173,714 47,283 27.2 2.4 24.8
% % %
Rapid assay products 60,337 50,183 10,154 20.2 0.6 19.6
% % %
Reference laboratory diagnostic 242,968 201,028 41,940 20.9 1.8 0.1 18.9
% % % %
and consulting services
CAG Diagnostics services and 23,942 21,208 2,734 12.9 1.7 11.2
% % %
accessories
CAG Diagnostics capital - 36,910 39,802 (2,892) (7.3) 2.5 (9.7)
%
% %
instruments
Veterinary software, services and 44,498 43,851 647 1.5 0.3 1.2
% % %
diagnostic imaging systems
---
Net CAG revenue $629,652 $529,786 $99,866 18.9 1.8 17.0
% % %
---
(1)See Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding.
IDEXX Laboratories, Inc. and Subsidiaries
Revenues and Revenue Growth Analysis by Product and Service Categories and by Domestic and International Markets
Amounts in thousands (Unaudited)
Twelve Months Ended
Reported Percentage Percentage Organic
December 31, December 31, Dollar Revenue Change from Change from Revenue
Net Revenue 2020 2019 Change Growth(1) Currency Acquisitions Growth(1)
---
CAG $2,385,765 $2,119,183 $266,582 12.6 0.2 0.5 11.9
%
% % %
United States 1,593,855 1,410,278 183,577 13.0 0.8 12.2
% % %
International 791,910 708,905 83,005 11.7 0.5 11.2
%
% %
Water $128,625 $132,850 ($4,225) (3.2) (1.6) (1.6)
% % %
United States 62,083 62,673 (590) (0.9) (0.9)
% %
International 66,542 70,177 (3,635) (5.2) (3.0) (2.2)
% % %
LPD $145,845 $132,635 $13,210 10.0 (1.1) 11.0
% % %
United States 14,533 14,230 303 2.1 2.1
% %
International 131,312 118,405 12,907 10.9 (1.2) 12.1
% % %
Other $46,420 $22,240 $24,180 108.7 108.7
% %
---
Total Company $2,706,655 $2,406,908 $299,747 12.5 0.5 12.0
% % %
United States 1,691,224 1,495,516 195,708 13.1 0.8 12.3
% % %
International 1,015,431 911,392 104,039 11.4 (0.1) 11.5
% % %
---
Twelve Months Ended
Reported Percentage Percentage Organic
December 31, December 31, Dollar Revenue Change from Change from Revenue
Net CAG Revenue 2020 2019 Change Growth(1) Currency Acquisitions Growth(1)
---
CAG Diagnostics recurring revenue: $2,113,839 $1,828,329 $285,510 15.6 0.1 0.6 14.8
% % % %
IDEXX VetLab consumables 824,376 693,360 131,016 18.9 0.1 18.8
%
% %
Rapid assay products 253,018 232,149 20,869 9.0 (0.2) 9.2
% % %
Reference laboratory diagnostic 946,268 822,497 123,771 15.0 0.3 1.4 13.4
%
% % %
and consulting services
CAG Diagnostics services and 90,177 80,323 9,854 12.3 12.3
% %
accessories
CAG Diagnostics capital - 108,950 132,685 (23,735) (17.9) 0.4 (18.2)
% % %
instruments
Veterinary software, services and 162,976 158,169 4,807 3.0 3.0
% %
diagnostic imaging systems
---
Net CAG revenue $2,385,765 $2,119,183 $266,582 12.6 0.2 0.5 11.9
% % % %
---
(1)See Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding.
IDEXX Laboratories, Inc. and Subsidiaries
Condensed Consolidated Balance Sheet
Amounts in thousands (Unaudited)
December 31, December 31,
2020 2019
Assets:
Current Assets:
Cash and cash equivalents $383,928 $90,326
Accounts receivable, net 331,429 269,312
Inventories 209,873 195,019
Other current assets 137,508 124,982
Total current assets 1,062,738 679,639
Property and equipment, net 555,167 533,845
Other long-term assets, net 676,656 618,991
Total assets $2,294,561 $1,832,475
Liabilities and Stockholders'
Equity:
Current Liabilities:
Accounts payable $74,558 $72,172
Accrued liabilities 415,648 322,938
Line of credit 288,765
Current portion of long-term debt 49,988
Deferred revenue 42,567 41,462
Total current liabilities 582,761 725,337
Long-term debt, net of current portion 858,492 698,910
Other long-term liabilities, net 220,513 230,403
Total long-term liabilities 1,079,005 929,313
Total stockholders' equity 632,088 177,473
Noncontrolling interest 707 352
Total stockholders' equity 632,795 177,825
Total liabilities and stockholders' equity $2,294,561 $1,832,475
IDEXX Laboratories, Inc. and Subsidiaries
Select Balance Sheet Information (Unaudited)
December 31, September 30, June 30, March 31, December 31,
2020 2020 2020 2020 2019
Selected Balance Sheet Information:
Days sales 42.2 41.5 44.4 41.5 40.5
outstanding(1)
Inventory turns(2) 2.1 1.9 1.6 1.9 2.2
(1)Days sales outstanding represents the average of the accounts receivable balances at the beginning and end of each quarter divided by revenue for that
quarter, the result of which is then multiplied by 91.25 days.
(2)Inventory turns represent inventory-related cost of product revenue for the twelve months preceding each quarter-end divided by the average inventory
balances at the beginning and end of each quarter.
IDEXX Laboratories, Inc. and Subsidiaries
Condensed Consolidated Statement of Cash Flows
Amounts in thousands (Unaudited)
Twelve Months Ended
December 31, December 31,
2020 2019
Operating:
Cash Flows from Operating Activities:
Net income $582,131 $427,792
Non-cash charges 97,693 136,335
Changes in assets and liabilities (31,761) (104,969)
Net cash provided by operating activities 648,063 459,158
Investing:
Cash Flows from Investing Activities:
Purchases of property and equipment (106,958) (154,969)
Acquisitions of intangible assets (668) (255)
Acquisitions of businesses and equity investment, net of cash acquired (1,750) (50,304)
Net cash (used) provided by investing activities (109,376) (205,528)
Financing:
Cash Flows from Financing Activities:
Repayments on revolving credit facilities, net (289,625) (110,275)
Issuance of senior notes 200,000 100,000
Debt issuance costs (5,025) (154)
Payment of acquisition-related contingent considerations (1,676) (2,375)
Repurchases of common stock (182,815) (301,658)
Proceeds from exercises of stock options and employee stock purchase plans 51,328 36,106
Shares withheld for statutory tax withholding on restricted stock (20,603) (8,053)
Net cash used by financing activities (248,416) (286,409)
Net effect of changes in exchange rates on cash 3,331 (689)
Net change in cash and cash equivalents 293,602 (33,468)
Cash and cash equivalents, beginning of period 90,326 123,794
Cash and cash equivalents, end of period $383,928 $90,326
IDEXX Laboratories, Inc. and Subsidiaries
Free Cash Flow
Amounts in thousands except per share data (Unaudited)
Twelve Months Ended
December 31, December 31,
2020 2019
Free Cash Flow:
Net cash provided by operating activities $648,063 $459,158
Investing cash flows attributable to purchases of property and equipment (106,958) (154,969)
Free cash flow(1) $541,105 $304,189
(1)See Statements Regarding Non-GAAP Financial Measures, above.
IDEXX Laboratories, Inc. and Subsidiaries
After-Tax Return on Invested Capital, Excluding Cash and Investments ("ROIC")
Amounts in thousands (Unaudited)
Numerator (amounts in thousands) For the Year Ended
December 31, 2020
---
Income from operations (as reported) $694,524
After-tax income from operations(1) $610,745
---
Denominator (dollar amounts in thousands) As of As of
December 31, 2020 December 31, 2019
--- ---
Total shareholders' equity $632,088 $177,473
Noncontrolling interest 707 352
Line of credit 288,765
Long-term debt, current portion 49,988
Long-term debt, net of current portion 858,492 698,910
Deferred income tax assets (31,549) (8,100)
Deferred income tax liabilities 11,707 33,024
Total invested capital $1,521,433 $1,190,424
Less cash and cash equivalents 383,928 90,326
Total invested capital, excluding cash and investments $1,137,505 $1,100,098
Average invested capital, excluding cash and investments(2) $1,118,802
---
After-tax return on invested capital, excluding cash and investments 55
%
---
(1)
After-tax income from operations represents income from operations reduced by our reported effective tax rate.
(2)
Average invested capital, excluding cash and investments, represents the average of the amount of total invested capital, excluding cash and investments.
IDEXX Laboratories, Inc. and Subsidiaries
Common Stock Repurchases
Amounts in thousands except per share data (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
2020 2019 2020 2019
Shares repurchased in the open market 532 721 1,215
Shares acquired through employee surrender for statutory tax withholding 27 1 58 39
Total shares repurchased 27 533 779 1,254
Cost of shares repurchased in the open market
$- $138,640 $179,623 $303,838
Cost of shares for employee surrenders 11,574 205 20,603 8,054
Total cost of shares $11,574 $138,845 $200,226 $311,892
Average cost per share - open market repurchases
$- $260.47 $249.20 $249.84
Average cost per share - employee surrenders $426.73 $251.58 $354.98 $210.10
Average cost per share - total $426.73 $260.46 $257.08 $248.62
Contact: John Ravis, Investor Relations, 1-207-556-8155
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SOURCE IDEXX Laboratories, Inc.
