(Mark One) | |||||||||||
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) | ||||||||||
(Address of principal executive offices) | (ZIP Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
Term/Abbreviation | Definition | |||||||
AI | Artificial intelligence | |||||||
AOCI | Accumulated other comprehensive income or loss | |||||||
ASC | Accounting Standards Codification | |||||||
ASU | Accounting Standards Update | |||||||
CAG | Companion Animal Group, a reporting segment that provides veterinarians diagnostic products and services and information management solutions that enhance the health and well-being of pets. | |||||||
cGMP | The FDA’s current Good Manufacturing Practice regulations. | |||||||
Clinical visits | The reason for the visit involves an interaction between a clinician and a pet. | |||||||
Credit Facility | Our $1.25 billion five-year unsecured credit facility under an amended and restated credit agreement; consisting of i) $1 billion revolving credit facility, also referred to as line of credit, and ii) $250 million three-year term loan. | |||||||
Customer commitment arrangements | Customer contractual arrangements offer customers incentives in exchange for multi-year commitments to purchase annual minimum amounts of products and services. | |||||||
ELISA | Enzyme-linked immunosorbent assay | |||||||
EPA | U.S. Environmental Protection Agency | |||||||
EPS | Earnings per share, if not specifically stated, EPS refers to earnings per share on a diluted basis. | |||||||
EU | European Union | |||||||
FASB | U.S. Financial Accounting Standards Board | |||||||
FDA | U.S. Food and Drug Administration | |||||||
Instrument rebate programs | Our customer instrument rebate programs, previously referred to as IDEXX Instrument Marketing Programs, which 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. | |||||||
IVLS | IDEXX VetLab Station, connects and integrates the diagnostic information from all the IDEXX VetLab analyzers and thus provides reference laboratory information management system capability. | |||||||
Kits and consumables | Rapid assay kits and IDEXX VetLab consumables | |||||||
LPD | Livestock, Poultry and Dairy, a reporting segment that provides diagnostic products and services for livestock and poultry health and ensures the quality and safety of milk and improves producer efficiency. | |||||||
OCI | Other comprehensive income or loss | |||||||
OPTI Medical | OPTI Medical Systems, Inc., a wholly owned subsidiary of IDEXX Laboratories Inc., located in Roswell, Georgia. This business provides point-of-care and laboratory diagnostics (including electrolyte and blood gas analyzers and related consumable products) for the human medical diagnostics sector. The Roswell facility also manufactures electrolytes slides (instrument consumables) to run Catalyst One®, Catalyst Dx®, and blood gas analyzers and consumables for the veterinary market; also referred to as OPTI. | |||||||
Organic revenue growth | A non-GAAP financial measure that represents the percentage change in revenue, compared to the same period for the prior year, net of the effect of changes in foreign currency exchange rates, certain business acquisitions and divestitures. Organic revenue growth should be considered in addition to, and not as a replacement for or as a superior measure to, revenues reported in accordance with U.S. GAAP, and may not be comparable to similarly titled measures reported by other companies. | |||||||
Ortho | Ortho Clinical Diagnostics, Inc., a subsidiary of QuidelOrtho Corporation, a supplier of dry slide consumables used in our Catalyst One and Catalyst Dx Chemistry Analyzers and VetTest Chemistry Analyzer. | |||||||
Prime rate | The prime rate is an interest rate determined by individual banks. It is often used as a reference rate for many types of loans. | |||||||
PACS | Picture archiving and communication software, our software solution for accessing, storing, and sharing diagnostic images. | |||||||
PCR | Polymerase chain reaction, a technique used to amplify small segments of DNA. | |||||||
R&D | Research and Development | |||||||
Reagent rentals | Instruments being placed at customer sites at little or no cost in exchange for a long-term customer commitment to purchase instrument consumables. | |||||||
Reported revenue growth | The percentage change in revenue reported in accordance with U.S. GAAP, compared to the same period in the prior year. |
S&P | Standard & Poor’s | |||||||
S&P 500 Health Care Index | The index for the S&P 500 Health Care (U.S. companies) measures the performance of companies that are classified as members in the Global Industry Classification Standard of health care services sub-industry. | |||||||
S&P 500 Index | The S&P 500 Index is a U.S. stock market index based on the market capitalization of 500 large companies having common stock listed on the New York Stock Exchange or NASDAQ, including IDEXX. | |||||||
SaaS | Software-as-a-service | |||||||
SDMA | Symmetrical dimethyl arginine, a biomarker that detects kidney disease. | |||||||
SEC | U.S. Securities and Exchange Commission | |||||||
Senior Note Agreements | Note purchase agreements for the private placement of senior notes, referred to as senior notes or long-term debt. | |||||||
SOFR | The secured overnight financing rate as administered by the Federal Reserve Board of New York (or a successor administrator of the secured overnight financing rate) | |||||||
U.S. GAAP | Accounting principles generally accepted in the United States of America | |||||||
USDA | U.S. Department of Agriculture | |||||||
Water | Water, a reporting segment that provides water microbiology testing products. |
Item No. | Page No. | |||||||
PART I | ||||||||
PART II | ||||||||
PART III | ||||||||
PART IV | ||||||||
Self-Identified Racial or Ethnic Background (1) | |||||||||||
Black/African American | 9.2 | % | |||||||||
Asian | 6.7 | % | |||||||||
Hispanic/Latinx | 6.2 | % | |||||||||
Other (2) | 2.3 | % | |||||||||
White | 74.4 | % |
Percentage who self- identify as women | |||||||||||
Global People Managers | 49.4 | % | |||||||||
Global Senior Leadership Team (1) | 36.7 | % | |||||||||
Global Senior Executive Team (2) | 18.8 | % |
Location | Functions | Own/Lease | ||||||
Westbrook, Maine | Worldwide Headquarters, principal executive offices | Own | ||||||
Hoofddorp, Netherlands | Distribution center, warehousing, International administrative offices | Lease | ||||||
Baar, Switzerland | EMEA administrative offices | Lease | ||||||
Scarborough, Maine | Water, LPD and Supply Chain | Own | ||||||
Memphis, Tennessee | Distribution Center and Reference Lab | Lease | ||||||
North Grafton, Massachusetts | Reference Lab | Own | ||||||
West Sacramento, California | Reference Lab | Own | ||||||
Kornwestheim, Germany | Reference Lab | Own | ||||||
Wetherby, United Kingdom | Reference Lab | Lease | ||||||
Newmarket, United Kingdom | Water manufacturing | Lease | ||||||
Bern, Switzerland | LPD manufacturing | Lease | ||||||
Montpellier, France | LPD manufacturing | Lease | ||||||
Roswell, Georgia | OPTI Medical manufacturing | Lease |
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share (b) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) (c) | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs (1) (d) | ||||||||||||||||||||||
October 1, 2023 to October 31, 2023 | 27,000 | $ | 404.85 | 27,000 | 2,936,817 | |||||||||||||||||||||
November 1, 2023 to November 30, 2023 | 62,509 | $ | 426.15 | 62,509 | 2,874,308 | |||||||||||||||||||||
December 1, 2023 to December 31, 2023 | 141 | $ | 482.60 | — | 2,874,308 | |||||||||||||||||||||
Total | 89,650 | (2) | 89,509 | 2,874,308 | ||||||||||||||||||||||
2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |||||||||||||||||||||||||||||||||
IDEXX Laboratories, Inc. | $100.00 | $140.38 | $268.72 | $353.97 | $219.31 | $298.38 | ||||||||||||||||||||||||||||||||
NASDAQ Index | $100.00 | $136.69 | $198.10 | $242.03 | $163.28 | $236.17 | ||||||||||||||||||||||||||||||||
S&P 500 Index | $100.00 | $131.49 | $155.68 | $200.37 | $164.08 | $207.21 | ||||||||||||||||||||||||||||||||
S&P 500 Health Care Index | $100.00 | $120.82 | $137.07 | $172.89 | $169.51 | $172.99 |
(units in thousands) | Installed Base | |||||||||||||||||||
Instrument | December 31, 2023 | December 31, 2022 | December 31, 2021 | |||||||||||||||||
Catalyst | 69.1 | 63.1 | 56.6 | |||||||||||||||||
Premium Hematology | 47.8 | 43.1 | 38.2 | |||||||||||||||||
SediVue | 18.1 | 15.6 | 13.2 |
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
Net Revenue (dollars in thousands) | 2023 | 2022 | Dollar Change | Reported Revenue Growth (1) | Percentage Change from Currency | Percentage Change from Acquisitions | Organic Revenue Growth (1) | |||||||||||||||||||||||||||||||||||||
CAG | $ | 3,352,356 | $ | 3,058,793 | $ | 293,563 | 9.6 | % | (0.2 | %) | — | 9.8 | % | |||||||||||||||||||||||||||||||
United States | 2,282,507 | 2,073,222 | 209,285 | 10.1 | % | — | — | 10.1 | % | |||||||||||||||||||||||||||||||||||
International | 1,069,849 | 985,571 | 84,278 | 8.6 | % | (0.6 | %) | — | 9.1 | % | ||||||||||||||||||||||||||||||||||
Water | $ | 168,149 | $ | 155,720 | $ | 12,429 | 8.0 | % | (0.3 | %) | 1.1 | % | 7.2 | % | ||||||||||||||||||||||||||||||
United States | 83,838 | 76,875 | 6,963 | 9.1 | % | — | 0.5 | % | 8.5 | % | ||||||||||||||||||||||||||||||||||
International | 84,311 | 78,845 | 5,466 | 6.9 | % | (0.6 | %) | 1.6 | % | 5.9 | % | |||||||||||||||||||||||||||||||||
LPD | $ | 121,659 | $ | 122,607 | $ | (948) | (0.8 | %) | — | — | (0.8 | %) | ||||||||||||||||||||||||||||||||
United States | 18,961 | 16,633 | 2,328 | 14.0 | % | — | — | 14.0 | % | |||||||||||||||||||||||||||||||||||
International | 102,698 | 105,974 | (3,276) | (3.1 | %) | 0.1 | % | — | (3.1 | %) | ||||||||||||||||||||||||||||||||||
Other | $ | 18,789 | $ | 30,204 | $ | (11,415) | (37.8 | %) | — | — | (37.8 | %) | ||||||||||||||||||||||||||||||||
Total Company | $ | 3,660,953 | $ | 3,367,324 | $ | 293,629 | 8.7 | % | (0.2 | %) | 0.1 | % | 8.8 | % | ||||||||||||||||||||||||||||||
United States | 2,391,427 | 2,182,959 | 208,468 | 9.5 | % | — | — | 9.5 | % | |||||||||||||||||||||||||||||||||||
International | 1,269,526 | 1,184,365 | 85,161 | 7.2 | % | (0.5 | %) | 0.1 | % | 7.6 | % |
For the Years Ended December 31, | Change | |||||||||||||||||||||||||||||||||||||
Total Company - Results of Operations (dollars in thousands) | 2023 | Percent of Revenue | 2022 | Percent of Revenue | Amount | Percentage | ||||||||||||||||||||||||||||||||
Revenues | $ | 3,660,953 | $ | 3,367,324 | $ | 293,629 | 8.7 | % | ||||||||||||||||||||||||||||||
Cost of revenue | 1,470,983 | 1,362,986 | 107,997 | 7.9 | % | |||||||||||||||||||||||||||||||||
Gross profit | 2,189,970 | 59.8 | % | 2,004,338 | 59.5 | % | 185,632 | 9.3 | % | |||||||||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||||||||
Sales and marketing | 566,066 | 15.5 | % | 524,505 | 15.6 | % | 41,561 | 7.9 | % | |||||||||||||||||||||||||||||
General and administrative | 335,825 | 9.2 | % | 326,248 | 9.7 | % | 9,577 | 2.9 | % | |||||||||||||||||||||||||||||
Research and development | 190,951 | 5.2 | % | 254,820 | 7.6 | % | (63,869) | (25.1 | %) | |||||||||||||||||||||||||||||
Total operating expenses | 1,092,842 | 29.9 | % | 1,105,573 | 32.8 | % | (12,731) | (1.2 | %) | |||||||||||||||||||||||||||||
Income from operations | $ | 1,097,128 | 30.0 | % | $ | 898,765 | 26.7 | % | $ | 198,363 | 22.1 | % |
For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||
Net Revenue (dollars in thousands) | 2023 | 2022 | Dollar Change | Reported Revenue Growth (1) | Percentage Change from Currency | Percentage Change from Acquisitions | Organic Revenue Growth (1) | |||||||||||||||||||||||||||||||||||||
CAG Diagnostics recurring revenue: | $ | 2,935,425 | $ | 2,660,280 | $ | 275,145 | 10.3 | % | (0.2 | %) | — | 10.5 | % | |||||||||||||||||||||||||||||||
IDEXX VetLab consumables | 1,188,261 | 1,057,236 | 131,025 | 12.4 | % | (0.3 | %) | — | 12.7 | % | ||||||||||||||||||||||||||||||||||
Rapid assay products | 344,494 | 313,667 | 30,827 | 9.8 | % | (0.2 | %) | — | 10.0 | % | ||||||||||||||||||||||||||||||||||
Reference laboratory diagnostic and consulting services | 1,278,617 | 1,178,113 | 100,504 | 8.5 | % | (0.1 | %) | — | 8.6 | % | ||||||||||||||||||||||||||||||||||
CAG Diagnostics services and accessories | 124,053 | 111,264 | 12,789 | 11.5 | % | (0.3 | %) | — | 11.8 | % | ||||||||||||||||||||||||||||||||||
CAG Diagnostics capital - instruments | 137,603 | 147,326 | (9,723) | (6.6 | %) | (0.1 | %) | — | (6.5 | %) | ||||||||||||||||||||||||||||||||||
Veterinary software, services and diagnostic imaging systems: | 279,328 | 251,187 | 28,141 | 11.2 | % | (0.2 | %) | — | 11.4 | % | ||||||||||||||||||||||||||||||||||
Recurring revenue | 214,597 | 180,973 | 33,624 | 18.6 | % | (0.2 | %) | — | 18.8 | % | ||||||||||||||||||||||||||||||||||
Systems and hardware | 64,731 | 70,214 | (5,483) | (7.8 | %) | (0.2 | %) | — | (7.6 | %) | ||||||||||||||||||||||||||||||||||
Net CAG revenue | $ | 3,352,356 | $ | 3,058,793 | $ | 293,563 | 9.6 | % | (0.2 | %) | — | 9.8 | % | |||||||||||||||||||||||||||||||
(1) Reported revenue growth and organic revenue growth may not recalculate due to rounding. |
For the Years Ended December 31, | Change | |||||||||||||||||||||||||||||||||||||
Results of Operations (dollars in thousands) | 2023 | Percent of Revenue | 2022 | Percent of Revenue | Amount | Percentage | ||||||||||||||||||||||||||||||||
Revenues | $ | 3,352,356 | $ | 3,058,793 | $ | 293,563 | 9.6 | % | ||||||||||||||||||||||||||||||
Cost of revenue | 1,349,930 | 1,252,216 | 97,714 | 7.8 | % | |||||||||||||||||||||||||||||||||
Gross profit | 2,002,426 | 59.7 | % | 1,806,577 | 59.1 | % | 195,849 | 10.8 | % | |||||||||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||||||||
Sales and marketing | 517,258 | 15.4 | % | 480,655 | 15.7 | % | 36,603 | 7.6 | % | |||||||||||||||||||||||||||||
General and administrative | 299,701 | 8.9 | % | 288,746 | 9.4 | % | 10,955 | 3.8 | % | |||||||||||||||||||||||||||||
Research and development | 172,727 | 5.2 | % | 236,227 | 7.7 | % | (63,500) | (26.9 | %) | |||||||||||||||||||||||||||||
Total operating expenses | 989,686 | 29.5 | % | 1,005,628 | 32.9 | % | (15,942) | (1.6 | %) | |||||||||||||||||||||||||||||
Income from operations | $ | 1,012,740 | 30.2 | % | $ | 800,949 | 26.2 | % | $ | 211,791 | 26.4 | % |
For the Years Ended December 31, | Change | |||||||||||||||||||||||||||||||||||||
Results of Operations (dollars in thousands) | 2023 | Percent of Revenue | 2022 | Percent of Revenue | Amount | Percentage | ||||||||||||||||||||||||||||||||
Revenues | $ | 168,149 | $ | 155,720 | $ | 12,429 | 8.0 | % | ||||||||||||||||||||||||||||||
Cost of revenue | 52,148 | 45,861 | 6,287 | 13.7 | % | |||||||||||||||||||||||||||||||||
Gross profit | 116,001 | 69.0 | % | 109,859 | 70.5 | % | 6,142 | 5.6 | % | |||||||||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||||||||
Sales and marketing | 21,249 | 12.6 | % | 18,564 | 11.9 | % | 2,685 | 14.5 | % | |||||||||||||||||||||||||||||
General and administrative | 15,655 | 9.3 | % | 14,353 | 9.2 | % | 1,302 | 9.1 | % | |||||||||||||||||||||||||||||
Research and development | 4,757 | 2.8 | % | 4,423 | 2.8 | % | 334 | 7.6 | % | |||||||||||||||||||||||||||||
Total operating expenses | 41,661 | 24.8 | % | 37,340 | 24.0 | % | 4,321 | 11.6 | % | |||||||||||||||||||||||||||||
Income from operations | $ | 74,340 | 44.2 | % | $ | 72,519 | 46.6 | % | $ | 1,821 | 2.5 | % |
For the Years Ended December 31, | Change | |||||||||||||||||||||||||||||||||||||
Results of Operations (dollars in thousands) | 2023 | Percent of Revenue | 2022 | Percent of Revenue | Amount | Percentage | ||||||||||||||||||||||||||||||||
Revenues | $ | 121,659 | $ | 122,607 | $ | (948) | (0.8 | %) | ||||||||||||||||||||||||||||||
Cost of revenue | 56,219 | 49,606 | 6,613 | 13.3 | % | |||||||||||||||||||||||||||||||||
Gross profit | 65,440 | 53.8 | % | 73,001 | 59.5 | % | (7,561) | (10.4 | %) | |||||||||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||||||||
Sales and marketing | 25,798 | 21.2 | % | 23,491 | 19.2 | % | 2,307 | 9.8 | % | |||||||||||||||||||||||||||||
General and administrative | 17,174 | 14.1 | % | 17,119 | 14.0 | % | 55 | 0.3 | % | |||||||||||||||||||||||||||||
Research and development | 12,493 | 10.3 | % | 12,582 | 10.3 | % | (89) | (0.7 | %) | |||||||||||||||||||||||||||||
Total operating expenses | 55,465 | 45.6 | % | 53,192 | 43.4 | % | 2,273 | 4.3 | % | |||||||||||||||||||||||||||||
Income from operations | $ | 9,975 | 8.2 | % | $ | 19,809 | 16.2 | % | $ | (9,834) | (49.6 | %) |
For the Years Ended December 31, | Change | |||||||||||||||||||||||||||||||||||||
Results of Operations (dollars in thousands) | 2023 | Percent of Revenue | 2022 | Percent of Revenue | Amount | Percentage | ||||||||||||||||||||||||||||||||
Revenues | $ | 18,789 | $ | 30,204 | $ | (11,415) | (37.8 | %) | ||||||||||||||||||||||||||||||
Cost of revenue | 12,686 | 15,303 | (2,617) | (17.1 | %) | |||||||||||||||||||||||||||||||||
Gross profit | 6,103 | 32.5 | % | 14,901 | 49.3 | % | (8,798) | (59.0 | %) | |||||||||||||||||||||||||||||
Operating Expenses: | ||||||||||||||||||||||||||||||||||||||
Sales and marketing | 1,761 | 9.4 | % | 1,795 | 5.9 | % | (34) | (1.9 | %) | |||||||||||||||||||||||||||||
General and administrative | 3,295 | 17.5 | % | 6,030 | 20.0 | % | (2,735) | (45.4 | %) | |||||||||||||||||||||||||||||
Research and development | 974 | 5.2 | % | 1,588 | 5.3 | % | (614) | (38.7 | %) | |||||||||||||||||||||||||||||
Total operating expenses | 6,030 | 32.1 | % | 9,413 | 31.2 | % | (3,383) | (35.9 | %) | |||||||||||||||||||||||||||||
Income from operations | $ | 73 | 0.4 | % | $ | 5,488 | 18.2 | % | $ | (5,415) | (98.7 | %) |
For the Years Ended December 31, | ||||||||||||||
Cash and cash equivalents (in thousands) | 2023 | 2022 | ||||||||||||
U.S. | $ | 324,434 | $ | 16,112 | ||||||||||
Foreign | 129,498 | 96,434 | ||||||||||||
Total | $ | 453,932 | $ | 112,546 | ||||||||||
Total cash, cash equivalents and marketable securities held in U.S. dollars by our foreign subsidiaries | $ | 13,170 | $ | 6,647 |
For the Three Months Ended | ||||||||||||||||||||||||||||||||
December 31, 2023 | September 30, 2023 | June 30, 2023 | March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||
Days sales outstanding (1) | 46.1 | 45.6 | 43.9 | 42.9 | 43.4 | |||||||||||||||||||||||||||
Inventory turns (2) | 1.3 | 1.3 | 1.3 | 1.3 | 1.3 |
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | Dollar Change | ||||||||||||||||||
Net cash provided by operating activities | $ | 906,510 | $ | 542,984 | $ | 363,526 | ||||||||||||||
Net cash used by investing activities | (125,254) | (195,350) | 70,096 | |||||||||||||||||
Net cash used by financing activities | (441,996) | (370,936) | (71,060) | |||||||||||||||||
Net effect of changes in exchange rates on cash | 2,126 | (8,606) | 10,732 | |||||||||||||||||
Net change in cash and cash equivalents | $ | 341,386 | $ | (31,908) | $ | 373,294 |
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | Dollar Change | ||||||||||||||||||
Accounts receivable | $ | (53,871) | $ | (41,398) | $ | (12,473) | ||||||||||||||
Inventories | (28,651) | (121,731) | 93,080 | |||||||||||||||||
Accounts payable | (557) | 3,467 | (4,024) | |||||||||||||||||
Deferred revenue | (3,032) | (11,019) | 7,987 | |||||||||||||||||
Other assets and liabilities | 13,682 | (102,849) | 116,531 | |||||||||||||||||
Total change in cash due to changes in operating assets and liabilities | $ | (72,429) | $ | (273,530) | $ | 201,101 |
(in thousands) | Twelve Months Ended | ||||
Trailing 12 Months Adjusted EBITDA: | December 31, 2023 | ||||
Net income attributable to stockholders | $ | 845,042 | |||
Interest expense | 41,581 | ||||
Provision for income taxes | 216,134 | ||||
Depreciation and amortization | 114,908 | ||||
Acquisition-related expense | 27 | ||||
Share-based compensation expense | 59,739 | ||||
Extraordinary and other non-recurring non-cash charges | 1,484 | ||||
Adjusted EBITDA | $ | 1,278,915 | |||
(dollars in thousands) | Twelve Months Ended | ||||
Debt to Adjusted EBITDA Ratio: | December 31, 2023 | ||||
Line of credit | $ | 250,000 | |||
Current and long-term portion of long-term debt | 697,880 | ||||
Total debt | 947,880 | ||||
Acquisition-related consideration payable | 287 | ||||
Deferred financing costs | 308 | ||||
Gross debt | $ | 948,475 | |||
Gross debt to Adjusted EBITDA ratio | 0.74 | ||||
Cash and cash equivalents | $ | (453,932) | |||
Net debt | $ | 494,543 | |||
Net debt to Adjusted EBITDA ratio | 0.39 |
For the Years Ended December 31, | ||||||||||||||||||||
(in thousands, except per share amounts) | 2023 | 2022 | 2021 | |||||||||||||||||
Revenue (decrease) increase | $ | (4,603) | $ | (108,812) | $ | 46,001 | ||||||||||||||
Operating profit (decrease) increase, excluding hedge activity and exchange impacts on settlement of foreign currency denominated transactions | $ | (5,489) | $ | (56,420) | $ | 28,557 | ||||||||||||||
Hedge gains (losses) - current period | 3,512 | 25,733 | (7,121) | |||||||||||||||||
Exchange (losses) on settlements of foreign currency denominated transactions - current period | (1,078) | (3,408) | (2,111) | |||||||||||||||||
Operating profit (decrease) increase - current period | $ | (3,055) | $ | (34,095) | $ | 19,325 | ||||||||||||||
Hedge (gains) losses - prior period | (25,733) | 7,121 | (829) | |||||||||||||||||
Exchange losses (gains) on settlement of foreign currency denominated transactions - prior period | 3,408 | 2,111 | (699) | |||||||||||||||||
Operating profit (decrease) increase - compared to prior period | $ | (25,380) | $ | (24,863) | $ | 17,797 | ||||||||||||||
Diluted earnings per share (decrease) increase - compared to prior period | $ | (0.24) | $ | (0.22) | $ | 0.16 |
The following documents are filed as part of this Form 10-K: | ||||||||
(a)(1) and (a)(2) | The financial statements set forth in the Index to Consolidated Financial Statements and the Consolidated Financial Statement Schedule are filed as a part of this Annual Report on Form 10-K commencing on page F-1. | |||||||
(a)(3) and (b) | The exhibits listed in the accompanying Exhibit Index are filed as part of this Annual Report on Form 10-K and either filed herewith or incorporated by reference herein, as applicable. |
Page No. | |||||
December 31, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Current Assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance of $ | |||||||||||
Inventories | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Long-Term Assets: | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use assets | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Other long-term assets | |||||||||||
Total long-term assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current Liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Credit facility | |||||||||||
Current portion of long-term debt | |||||||||||
Current portion of deferred revenue | |||||||||||
Total current liabilities | |||||||||||
Long-Term Liabilities: | |||||||||||
Deferred income tax liabilities | |||||||||||
Long-term debt, net of current portion | |||||||||||
Long-term deferred revenue, net of current portion | |||||||||||
Long-term operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and Contingencies (Note 16) | |||||||||||
Stockholders’ Equity: | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Deferred stock units: Outstanding: | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Treasury stock, at cost: | ( | ( | |||||||||
Total IDEXX Laboratories, Inc. stockholders’ equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements. |
For the Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Revenue: | ||||||||||||||||||||
Product revenue | $ | $ | $ | |||||||||||||||||
Service revenue | ||||||||||||||||||||
Total revenue | ||||||||||||||||||||
Cost of Revenue: | ||||||||||||||||||||
Cost of product revenue | ||||||||||||||||||||
Cost of service revenue | ||||||||||||||||||||
Total cost of revenue | ||||||||||||||||||||
Gross profit | ||||||||||||||||||||
Expenses: | ||||||||||||||||||||
Sales and marketing | ||||||||||||||||||||
General and administrative | ||||||||||||||||||||
Research and development | ||||||||||||||||||||
Income from operations | ||||||||||||||||||||
Interest expense | ( | ( | ( | |||||||||||||||||
Interest income | ||||||||||||||||||||
Income before provision for income taxes | ||||||||||||||||||||
Provision for income taxes | ||||||||||||||||||||
Net income | ||||||||||||||||||||
Less: Net (loss) attributable to noncontrolling interest | ( | |||||||||||||||||||
Net income attributable to IDEXX Laboratories, Inc. stockholders | $ | $ | $ | |||||||||||||||||
Earnings per Share: | ||||||||||||||||||||
Basic | $ | $ | $ | |||||||||||||||||
Diluted | $ | $ | $ | |||||||||||||||||
Weighted Average Shares Outstanding: | ||||||||||||||||||||
Basic | ||||||||||||||||||||
Diluted | ||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements. |
For the Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Net income | $ | $ | $ | |||||||||||||||||
Other comprehensive income (loss), net of tax: | ||||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ||||||||||||||||||
Defined benefit plans, net of tax expense of $( | ( | ( | ||||||||||||||||||
Reclassification adjustment for defined benefit plans included in net income, net of tax of $ | ||||||||||||||||||||
Unrealized gain (loss) on Euro-denominated notes, net of tax expense (benefit) of $( | ( | |||||||||||||||||||
Unrealized gain (loss) on investments, net of tax expense (benefit) of $ | ( | |||||||||||||||||||
Unrealized gain (loss) on derivative instruments: | ||||||||||||||||||||
Unrealized gain (loss) on foreign currency exchange contracts, net of tax expense (benefit) of $( | ( | |||||||||||||||||||
Unrealized gain (loss) on cross currency swaps, net of tax expense (benefit) of $( | ( | |||||||||||||||||||
Unrealized gain (loss) on interest rate swap, net of tax expense (benefit) of $ | ||||||||||||||||||||
Reclassification adjustment for (gain) loss included in net income, net of tax (expense) benefit of $( | ( | ( | ||||||||||||||||||
Unrealized gain (loss) on derivative instruments | ( | ( | ||||||||||||||||||
Other comprehensive gain (loss), net of tax | ( | |||||||||||||||||||
Comprehensive income | ||||||||||||||||||||
Less: comprehensive income attributable to noncontrolling interest | ( | |||||||||||||||||||
Comprehensive income attributable to IDEXX Laboratories, Inc. | $ | $ | $ | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements. |
Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares | $ | Additional Paid-in Capital | Deferred Stock Units | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interest | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2020 | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive gain, net | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of noncontrolling interest (Note 4) | — | — | ( | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock, net | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Common stock issued under stock plans, net | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Deferred stock units activity | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation cost | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2021 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Acquisition of noncontrolling interest (Note 4) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock, net | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Common stock issued under stock plans, net | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Deferred stock units activity | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation cost | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2022 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock, net | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Common stock issued under stock plans, net | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Deferred stock units activity | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation cost | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2023 | $ | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements. |
For the Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Cash Flows from Operating Activities: | ||||||||||||||||||||
Net income | $ | $ | $ | |||||||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Impairment charge | ||||||||||||||||||||
Provision for uncollectible accounts | ||||||||||||||||||||
Deferred income taxes | ( | ( | ( | |||||||||||||||||
Share-based compensation expense | ||||||||||||||||||||
Other | ||||||||||||||||||||
Changes in assets and liabilities: | ||||||||||||||||||||
Accounts receivable | ( | ( | ( | |||||||||||||||||
Inventories | ( | ( | ( | |||||||||||||||||
Accounts payable | ( | |||||||||||||||||||
Deferred revenue | ( | ( | ( | |||||||||||||||||
Other assets and liabilities | ( | ( | ||||||||||||||||||
Net cash provided by operating activities | ||||||||||||||||||||
Cash Flows from Investing Activities: | ||||||||||||||||||||
Purchases of property and equipment | ( | ( | ( | |||||||||||||||||
Acquisitions of intangible assets | ( | |||||||||||||||||||
Equity investments | ( | |||||||||||||||||||
Acquisitions of businesses, net of cash acquired | ( | ( | ||||||||||||||||||
Proceeds from net investment hedges | ||||||||||||||||||||
Net cash used by investing activities | ( | ( | ( | |||||||||||||||||
Cash Flows from Financing Activities: | ||||||||||||||||||||
(Repayments) borrowings on credit facility, net | ( | |||||||||||||||||||
Payments of senior notes | ( | ( | ( | |||||||||||||||||
Debt issuance costs | ( | ( | ||||||||||||||||||
Purchase of minority interest | ( | |||||||||||||||||||
Repurchases of common stock, net | ( | ( | ( | |||||||||||||||||
Proceeds from exercises of stock options and employee stock purchase plans | ||||||||||||||||||||
Payment of acquisition-related contingent consideration and holdbacks | ( | ( | ( | |||||||||||||||||
Shares withheld for statutory tax withholding payments on restricted stock | ( | ( | ( | |||||||||||||||||
Net cash used by financing activities | ( | ( | ( | |||||||||||||||||
Net effect of changes in exchange rates on cash | ( | ( | ||||||||||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ( | ||||||||||||||||||
Cash and cash equivalents at beginning of period | ||||||||||||||||||||
Cash and cash equivalents at end of period | $ | $ | $ | |||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements. |
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
CAG segment revenue: | ||||||||||||||||||||
CAG Diagnostics recurring revenue: | $ | $ | $ | |||||||||||||||||
IDEXX VetLab consumables | ||||||||||||||||||||
Rapid assay products | ||||||||||||||||||||
Reference laboratory diagnostic and consulting services | ||||||||||||||||||||
CAG Diagnostics services and accessories | ||||||||||||||||||||
CAG Diagnostics capital - instruments | ||||||||||||||||||||
Veterinary software, services and diagnostic imaging systems: | ||||||||||||||||||||
Recurring revenue | ||||||||||||||||||||
Systems and hardware | ||||||||||||||||||||
CAG segment revenue | ||||||||||||||||||||
Water segment revenue | ||||||||||||||||||||
LPD segment revenue | ||||||||||||||||||||
Other segment revenue | ||||||||||||||||||||
Total revenue | $ | $ | $ |
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Americas | ||||||||||||||||||||
United States | $ | $ | $ | |||||||||||||||||
Canada | ||||||||||||||||||||
Latin America & Caribbean | ||||||||||||||||||||
Europe, the Middle East and Africa | ||||||||||||||||||||
Germany | ||||||||||||||||||||
United Kingdom | ||||||||||||||||||||
France | ||||||||||||||||||||
Italy | ||||||||||||||||||||
Spain | ||||||||||||||||||||
Switzerland | ||||||||||||||||||||
Netherlands | ||||||||||||||||||||
Other | ||||||||||||||||||||
Asia Pacific Region | ||||||||||||||||||||
Australia | ||||||||||||||||||||
Japan | ||||||||||||||||||||
China | ||||||||||||||||||||
Other | ||||||||||||||||||||
Total | $ | $ | $ |
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Share-based compensation expense included in cost of revenue | $ | $ | $ | |||||||||||||||||
Share-based compensation expense included in operating expenses | ||||||||||||||||||||
Total share-based compensation expense included in consolidated statements of income | ||||||||||||||||||||
Income tax benefit resulting from share-based compensation expense | ( | ( | ( | |||||||||||||||||
Net share-based compensation expense included in consolidated statements of income, excluding tax benefit from settlement of share-based awards | ||||||||||||||||||||
Income tax benefit resulting from settlement of share-based awards | ( | ( | ( | |||||||||||||||||
Net expense related to share-based compensation arrangements included in consolidated statements of income | $ | $ | $ |
For the Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Expected stock price volatility | % | % | % | |||||||||||||||||
Expected term, in years | ||||||||||||||||||||
Risk-free interest rate | % | % | % | |||||||||||||||||
Weighted average fair value of options granted | $ | $ | $ |
Number of Options (000) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term | Aggregate Intrinsic Value ($000) | |||||||||||||||||||||||
Outstanding as of December 31, 2022 | $ | |||||||||||||||||||||||||
Granted | $ | |||||||||||||||||||||||||
Exercised | ( | $ | ||||||||||||||||||||||||
Forfeited | ( | $ | ||||||||||||||||||||||||
Expired | ( | $ | ||||||||||||||||||||||||
Outstanding as of December 31, 2023 | $ | $ | ||||||||||||||||||||||||
Fully vested as of December 31, 2023 | $ | $ | ||||||||||||||||||||||||
Fully vested and expected to vest as of December 31, 2023 (1) | $ | $ | ||||||||||||||||||||||||
(1) Includes options that are vested as of December 31, 2023, and outstanding options that are expected to vest in the future, net of estimated forfeitures. |
Number of Units (000) | Weighted Average Grant-Date Fair Value | |||||||||||||
Nonvested as of December 31, 2022 | $ | |||||||||||||
Granted | ||||||||||||||
Vested | ( | |||||||||||||
Forfeited | ( | |||||||||||||
Nonvested as of December 31, 2023 | $ | |||||||||||||
Expected to vest as of December 31, 2023 (1) | $ | |||||||||||||
(1) Outstanding units that are expected to vest in the future, net of estimated forfeitures. |
(in thousands) | December 31, 2023 | December 31, 2022 | ||||||||||||
Raw materials | $ | $ | ||||||||||||
Work-in-process | ||||||||||||||
Finished goods | ||||||||||||||
Inventories | $ | $ |
(in thousands) | December 31, 2023 | ||||
2024 | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Total lease payments | |||||
Less imputed interest | ( | ||||
Total lease liabilities (current and long-term) | $ |
December 31, 2023 | December 31, 2022 | ||||||||||
Weighted average remaining lease term - operating leases | |||||||||||
Weighted average discount rate - operating leases | % | % |
For the Years Ended December 31, | |||||||||||
(in thousands) | 2023 | 2022 | |||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | $ | |||||||||
Right-of-use assets obtained in exchange for operating lease obligations, net of early lease terminations | $ | $ |
Asset Classification | Estimated Useful Life | |||||||
Buildings and improvements | ||||||||
Leasehold improvements | Shorter of remaining lease term or useful life of improvements | |||||||
Machinery and equipment | ||||||||
Office furniture and equipment | ||||||||
Computer hardware and software |
(in thousands) | December 31, 2023 | December 31, 2022 | ||||||||||||
Land and improvements | $ | $ | ||||||||||||
Buildings and improvements | ||||||||||||||
Leasehold improvements | ||||||||||||||
Machinery and equipment | ||||||||||||||
Office furniture and equipment | ||||||||||||||
Computer hardware and software | ||||||||||||||
Construction in progress | ||||||||||||||
Less accumulated depreciation and amortization | ||||||||||||||
Total property and equipment, net | $ | $ |
For the Years Ended December 31, | ||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2021 | |||||||||||||||||
Depreciation and amortization expense | $ | $ | $ | |||||||||||||||||
Capitalization of internal-use software development costs during the period | $ | $ | $ | |||||||||||||||||
Unpaid property and equipment, reflected in accounts payable and accrued liabilities at end of year | $ | $ | $ | |||||||||||||||||
Rental and operating-type reagent rental program instruments transferred from inventory to property and equipment during the period (Note 3) | $ | $ | $ |
(in thousands) | December 31, 2023 | December 31, 2022 | ||||||||||||
Contract assets, net (1) | $ | $ | ||||||||||||
Consideration paid to customers (2) | ||||||||||||||
Prepaid expenses | ||||||||||||||
Taxes receivable | ||||||||||||||
Other | ||||||||||||||
Other current assets | $ | $ |
(in thousands) | December 31, 2023 | December 31, 2022 | ||||||||||||
Contract assets, net (1) | $ | $ | ||||||||||||
Consideration paid to customers (2) | ||||||||||||||
Deferred income taxes | ||||||||||||||
Equity investments | ||||||||||||||
Investment in long-term product supply arrangements | ||||||||||||||
Other | ||||||||||||||
Other long-term assets | $ | $ |
(in thousands) | CAG | Water | LPD | Other | Consolidated Total | |||||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Business combinations | ||||||||||||||||||||||||||||||||
Impact of changes in foreign currency exchange rates | ( | ( | ( | ( | ||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Business combinations | ||||||||||||||||||||||||||||||||
Impact of changes in foreign currency exchange rates | ( | ( | ( | |||||||||||||||||||||||||||||
Balance as of December 31, 2022 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Business combinations | ||||||||||||||||||||||||||||||||
Impact of changes in foreign currency exchange rates | ||||||||||||||||||||||||||||||||
Balance as of December 31, 2023 | $ | $ | $ | $ | $ |
Asset Classification | Estimated Useful Life | |||||||
Customer-related intangible assets (1) | ||||||||
Product rights (2) | ||||||||
Noncompete agreements |
(in thousands) | December 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||||
Cost | Accumulated Amortization | Net | Cost | Accumulated Amortization | Net | |||||||||||||||||||||||||||||||||
Customer-related intangible assets (1) | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
Product rights (2) | ||||||||||||||||||||||||||||||||||||||
Noncompete agreements | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
(in thousands) | Amortization Expense | ||||
2024 | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
$ |
(in thousands) | For the Years Ended December 31, | ||||||||||
2023 | 2022 | ||||||||||
Payment obligations outstanding at the beginning of the period | $ | $ | |||||||||
Payment obligation additions during the period | |||||||||||
Payment obligations settled during the period | ( | ( | |||||||||
Payment obligations outstanding at the end of the period | $ | $ |
(in thousands) | December 31, 2023 | December 31, 2022 | ||||||||||||
Accrued employee compensation and related expenses | $ | $ | ||||||||||||
Accrued expenses | ||||||||||||||
Accrued taxes | ||||||||||||||
Accrued customer incentives and refund obligations | ||||||||||||||
Current lease liabilities | ||||||||||||||
$ | $ |
(in thousands) | December 31, 2023 | December 31, 2022 | ||||||||||||
Accrued taxes | $ | $ | ||||||||||||
Other accrued long-term expenses | ||||||||||||||
Other long-term liabilities | $ | $ |
(Principal Amount in thousands) | ||||||||||||||||||||||||||||||||
Issue Date | Due Date | Series | Principal Amount | Coupon Rate | Senior Note Agreement | |||||||||||||||||||||||||||
12/11/2013 | 12/11/2025 | 2025 Series B Notes | $ | % | NY Life 2013 Note Agreement | |||||||||||||||||||||||||||
9/4/2014 | 9/4/2026 | 2026 Senior Notes | $ | % | NY Life 2014 Note Agreement | |||||||||||||||||||||||||||
7/21/2014 | 7/21/2024 | 2024 Series B Notes | $ | % | Prudential 2015 Amended Agreement | |||||||||||||||||||||||||||
6/18/2015 | 6/18/2025 | 2025 Series C Notes | € | % | Prudential 2015 Amended Agreement | |||||||||||||||||||||||||||
2/12/2015 | 2/12/2027 | 2027 Series B Notes | $ | % | MetLife 2014 Note Agreement | |||||||||||||||||||||||||||
3/14/2019 | 3/14/2029 | 2029 Series C Notes | $ | % | MetLife 2014 Note Agreement | |||||||||||||||||||||||||||
4/2/2020 | 4/2/2030 | MetLife 2030 Series D Notes | $ | % | MetLife 2014 Note Agreement | |||||||||||||||||||||||||||
4/14/2020 | 4/14/2030 | Prudential 2030 Series D Notes | $ | % | Prudential 2015 Amended Agreement |
(in thousands) | ||||||||
Years Ending December 31, | Amount | |||||||
2024 | $ | |||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
Thereafter | ||||||||
$ |
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Domestic | $ | $ | $ | |||||||||||||||||
International | ||||||||||||||||||||
$ | $ | $ |
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Current | ||||||||||||||||||||
Federal | $ | $ | $ | |||||||||||||||||
State | ||||||||||||||||||||
International | ||||||||||||||||||||
Deferred | ||||||||||||||||||||
Federal | ( | ( | ( | |||||||||||||||||
State | ( | ( | ( | |||||||||||||||||
International | ( | |||||||||||||||||||
( | ( | ( | ||||||||||||||||||
$ | $ | $ |
For the Years Ended December 31, | ||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
U.S. federal statutory rate | % | % | % | |||||||||||||||||
State income tax, net of federal tax benefit | ||||||||||||||||||||
Taxation on international earnings | ( | ( | ||||||||||||||||||
Foreign derived intangible income | ( | ( | ( | |||||||||||||||||
Share-based compensation from settlements | ( | ( | ( | |||||||||||||||||
Research and development credit | ( | ( | ( | |||||||||||||||||
Other, net | ||||||||||||||||||||
Effective tax rate | % | % | % |
(in thousands) | December 31, 2023 | December 31, 2022 | ||||||||||||
Assets | ||||||||||||||
Accrued expenses | $ | $ | ||||||||||||
Accounts receivable reserves | ||||||||||||||
Deferred revenue | ||||||||||||||
Inventory basis differences | ||||||||||||||
Property-based differences | ||||||||||||||
Intangible asset basis differences | ||||||||||||||
Share-based compensation | ||||||||||||||
Other | ||||||||||||||
Net operating loss carryforwards | ||||||||||||||
Tax credit carryforwards | ||||||||||||||
Unrealized losses on foreign currency exchange contracts and investments | ||||||||||||||
Research and development expenditure differences | ||||||||||||||
Total assets | ||||||||||||||
Valuation allowance | ( | ( | ||||||||||||
Total assets, net of valuation allowance | ||||||||||||||
Liabilities | ||||||||||||||
Customer acquisition costs | ( | ( | ||||||||||||
Property-based differences | ( | ( | ||||||||||||
Intangible asset basis differences | ( | ( | ||||||||||||
Other | ( | ( | ||||||||||||
Unrealized gains on foreign currency exchange contracts and investments | ( | ( | ||||||||||||
Total liabilities | ( | ( | ||||||||||||
Net deferred tax assets | $ | $ |
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Balance at beginning of year | $ | $ | $ | |||||||||||||||||
Charges to costs and expense | ||||||||||||||||||||
Write-off/cash payments | ( | ( | ( | |||||||||||||||||
Foreign currency translation | ( | ( | ||||||||||||||||||
Balance at the end of the year | $ | $ | $ |
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Total amounts of unrecognized tax benefits, beginning of period | $ | $ | $ | |||||||||||||||||
Gross increases in unrecognized tax positions as a result of tax positions taken during a prior period | ||||||||||||||||||||
Gross increases in unrecognized tax positions as a result of tax positions taken in the current period | ||||||||||||||||||||
Decreases in unrecognized tax positions related to settlements with taxing authorities | ( | ( | ( | |||||||||||||||||
Decreases in unrecognized tax positions as a result of a lapse of the applicable statutes of limitations | ( | ( | ( | |||||||||||||||||
Total amounts of unrecognized tax benefits, end of period | $ | $ | $ |
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Shares outstanding for basic earnings per share: | ||||||||||||||||||||
Shares outstanding for diluted earnings per share: | ||||||||||||||||||||
Shares outstanding for basic earnings per share | ||||||||||||||||||||
Dilutive effect of share-based payment awards | ||||||||||||||||||||
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Weighted average number of shares underlying anti-dilutive options | ||||||||||||||||||||
Weighted average number of shares underlying anti-dilutive awards |
(in thousands) | For the Years Ended December 31, | |||||||||||||||||||||||||||||||
CAG | Water | LPD | Other | Consolidated Total | ||||||||||||||||||||||||||||
2023 | ||||||||||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Income from operations | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Interest expense, net | ( | |||||||||||||||||||||||||||||||
Income before provision for income taxes | ||||||||||||||||||||||||||||||||
Provision for income taxes | ||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interest | ||||||||||||||||||||||||||||||||
Net income attributable to IDEXX Laboratories, Inc. stockholders | $ | |||||||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2022 | ||||||||||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Income from operations | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Interest expense, net | ( | |||||||||||||||||||||||||||||||
Income before provision for income taxes | ||||||||||||||||||||||||||||||||
Provision for income taxes | ||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interest | ||||||||||||||||||||||||||||||||
Net income attributable to IDEXX Laboratories, Inc. stockholders | $ | |||||||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
2021 | ||||||||||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Income from operations | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Interest expense, net | ( | |||||||||||||||||||||||||||||||
Income before provision for income taxes | ||||||||||||||||||||||||||||||||
Provision for income taxes | ||||||||||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||||||||
Less: Net income attributable to noncontrolling interest | ( | |||||||||||||||||||||||||||||||
Net income attributable to IDEXX Laboratories, Inc. stockholders | $ | |||||||||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ |
(in thousands) | ||||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||
Americas | ||||||||||||||
United States | $ | $ | ||||||||||||
Brazil | ||||||||||||||
Canada | ||||||||||||||
Europe, the Middle East and Africa | ||||||||||||||
Germany | ||||||||||||||
United Kingdom | ||||||||||||||
Netherlands | ||||||||||||||
France | ||||||||||||||
Switzerland | ||||||||||||||
Other | ||||||||||||||
Asia Pacific Region | ||||||||||||||
Japan | ||||||||||||||
Australia | ||||||||||||||
Other | ||||||||||||||
Total | $ | $ |
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. |
(in thousands) | ||||||||||||||||||||||||||
As of December 31, 2023 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance at December 31, 2023 | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Money market funds (1) | $ | $ | $ | $ | ||||||||||||||||||||||
Equity mutual funds (2) | $ | $ | $ | $ | ||||||||||||||||||||||
Cross currency swaps (3) | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign currency exchange contracts (3) | $ | $ | $ | $ | ||||||||||||||||||||||
Interest rate swap (4) | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Cross currency swaps (3) | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign currency exchange contracts (3) | $ | $ | $ | $ | ||||||||||||||||||||||
Deferred compensation (5) | $ | $ | $ | $ |
(in thousands) | ||||||||||||||||||||||||||
As of December 31, 2022 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Balance at December 31, 2022 | ||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Equity mutual funds (2) | $ | $ | $ | $ | ||||||||||||||||||||||
Cross currency swaps (3) | $ | $ | $ | $ | ||||||||||||||||||||||
Foreign currency exchange contracts (3) | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Foreign currency exchange contracts (3) | $ | $ | $ | $ | ||||||||||||||||||||||
Deferred compensation (5) | $ | $ | $ | $ | ||||||||||||||||||||||
Contingent payments - acquisitions | $ | $ | $ | $ | ||||||||||||||||||||||
(in thousands) | Fair Value | |||||||
Contingent consideration as of December 31, 2021 | $ | |||||||
Payment of contingent consideration | ( | |||||||
Change in estimated fair value | ||||||||
Contingent consideration as of December 31, 2022 | ||||||||
Payment of contingent consideration | ( | |||||||
Change in estimated fair value | ( | |||||||
Contingent consideration as of December 31, 2023 | $ |
(in thousands) | Years Ended December 31, | |||||||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||||||||
Financial statement line items in which effects of cash flow hedges are recorded | Cost of revenue | $ | $ | $ | ||||||||||||||||||||||
Foreign exchange contracts | ||||||||||||||||||||||||||
Amount of gain (loss) reclassified from accumulated other comprehensive income into income | $ | $ | $ | ( | ||||||||||||||||||||||
Financial statement line items in which effects of cash flow hedges are recorded | Interest expense | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Interest rate swap contract | ||||||||||||||||||||||||||
Amount of gain reclassified from accumulated other comprehensive income into net income | $ | $ | $ | |||||||||||||||||||||||
(in thousands) | Hedging Assets | |||||||||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||||||||
Derivatives and non-derivatives designated as hedging instruments | Balance Sheet Classification | |||||||||||||||||||
Foreign currency exchange contracts | Other current assets | $ | $ | |||||||||||||||||
Cross currency swaps | Other current assets | |||||||||||||||||||
Interest rate swap contract | Other long-term assets | |||||||||||||||||||
Cross currency swaps | Other long-term assets | |||||||||||||||||||
Total derivative instruments presented as hedge instruments on the balance sheet | ||||||||||||||||||||
Gross amounts subject to master netting arrangements not offset on the balance sheet | ( | ( | ||||||||||||||||||
Net amount | $ | $ |
(in thousands) | Hedging Liabilities | |||||||||||||||||||
December 31, 2023 | December 31, 2022 | |||||||||||||||||||
Derivatives and non-derivatives designated as hedging instruments | Balance Sheet Classification | |||||||||||||||||||
Foreign currency exchange contracts | Accrued liabilities | $ | $ | |||||||||||||||||
Cross currency swaps | Other long-term liabilities | |||||||||||||||||||
Total derivative instruments presented as cash flow hedges on the balance sheet | ||||||||||||||||||||
Non-derivative foreign currency denominated debt designated as net investment hedge on the balance sheet (1) | Long-term debt | |||||||||||||||||||
Total hedging instruments presented on the balance sheet | ||||||||||||||||||||
Gross amounts subject to master netting arrangements not offset on the balance sheet | ( | ( | ||||||||||||||||||
Net amount | $ | $ |
(in thousands, except per share amounts) | For the Years Ended December 31, | |||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||
Shares repurchased in the open market | ||||||||||||||||||||
Shares acquired through employee surrenders for statutory tax withholding | ||||||||||||||||||||
Total shares repurchased | ||||||||||||||||||||
Cost of shares repurchased in the open market | $ | $ | $ | |||||||||||||||||
Cost of shares for employee surrenders | ||||||||||||||||||||
Total cost of shares | $ | $ | $ | |||||||||||||||||
Average cost per share - open market repurchases | $ | $ | $ | |||||||||||||||||
Average cost per share - employee surrenders | $ | $ | $ | |||||||||||||||||
Average cost per share - total | $ | $ | $ |
For the Years Ended December 31, 2023 and 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized Gain (Loss) on Cash Flow Hedges, Net of Tax | Unrealized Gain (Loss) on Net Investment Hedges, Net of Tax | |||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | Unrealized (Loss) Gain on Investments, Net of Tax | Foreign Currency Exchange Contracts | Interest Rate Swap | Euro-Denominated Notes | Cross Currency Swaps | Defined Benefit Plans, Net of Tax | Cumulative Translation Adjustment | Total | ||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | ( | $ | $ | $ | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income before reclassifications | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2022 | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) before reclassifications | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Amounts reclassified from accumulated other comprehensive income | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2023 | $ | ( | $ | ( | $ | $ | $ | $ | ( | $ | ( | $ | ( |
(in thousands) | Affected Line Item in the Statements of Income | Amounts Reclassified from AOCI for the Years Ended December 31, | ||||||||||||||||||||||||
2023 | 2022 | 2021 | ||||||||||||||||||||||||
Foreign currency exchange contracts | Cost of revenue | $ | $ | $ | ( | |||||||||||||||||||||
Tax (expense) benefit | ( | ( | ||||||||||||||||||||||||
Gains (losses), net of tax | $ | $ | $ | ( |
Interest rate swap contract | Interest expense | $ | $ | $ | ||||||||||||||||||||||
Tax (expense) | ( | |||||||||||||||||||||||||
Gain, net of tax | $ | $ | $ |
Defined benefit plans | Cost of revenue and operating expenses | $ | ( | $ | ( | $ | ||||||||||||||||||||
Tax benefit | ||||||||||||||||||||||||||
(Losses), net of tax | $ | ( | $ | ( | $ |
(in thousands) | December 31, 2023 | ||||
2024 | $ | ||||
2025 | $ | ||||
2026 | $ | ||||
2027 | $ | ||||
2028 | $ | ||||
2029 through 2033 | $ |
Incorporated by Reference | |||||||||||||||||
Exhibit No. | Exhibit Description | Form | Exhibit | Filing Date / Period End Date | Filed / Furnished Herewith | ||||||||||||
Articles of incorporation and by-laws | |||||||||||||||||
10-Q | 3(i) | 6/30/06 | |||||||||||||||
8-K | 3.2 | 7/15/22 | |||||||||||||||
Instruments defining the rights of security holders, including indenture | |||||||||||||||||
10-K | 4.1 | 12/31/19 | |||||||||||||||
8-K | 99.1 | 12/12/13 | |||||||||||||||
8-K | 99.1 | 7/25/14 | |||||||||||||||
8-K | 99.2 | 7/25/14 | |||||||||||||||
8-K | 10.4 | 4/16/20 | |||||||||||||||
8-K | 10.5 | 4/16/20 | |||||||||||||||
8-K | 99.1 | 6/24/15 | |||||||||||||||
8-K | 10.2 | 4/16/20 | |||||||||||||||
8-K | 10.3 | 4/16/20 | |||||||||||||||
8-K | 10.1 | 3/15/19 | |||||||||||||||
8-K | 10.2 | 3/15/19 | |||||||||||||||
8-K | 10.1 | 3/27/20 | |||||||||||||||
Material contracts | |||||||||||||||||
10-K | 10.1 | 12/31/21 | |||||||||||||||
10-K | 10.2 | 12/31/21 | |||||||||||||||
10-K | 10.4 | 12/31/07 | |||||||||||||||
10-K | 10.5 | 12/31/07 |
10-K | 10.5 | 12/31/21 | |||||||||||||||
10-K | 10.6 | 12/31/21 | |||||||||||||||
10-K | 10.27 | 12/31/17 | |||||||||||||||
10-Q | 10.1 | 9/30/21 | |||||||||||||||
10-K | 10.9 | 12/31/21 | |||||||||||||||
10-K | 10.10 | 12/31/21 | |||||||||||||||
10-K | 10.11 | 12/31/21 | |||||||||||||||
10-K | 10.8 | 12/31/07 | |||||||||||||||
10-K | 10.13 | 12/31/21 | |||||||||||||||
10-K | 10.14 | 12/31/21 | |||||||||||||||
10-Q | 10.2 | 9/30/21 | |||||||||||||||
10-K | 10.16 | 12/31/21 | |||||||||||||||
10-Q | 10.1 | 9/30/02 | |||||||||||||||
10-Q | 10.1 | 3/31/20 | |||||||||||||||
10-K | 10.19 | 12/31/21 | |||||||||||||||
10-Q | 10.1 | 9/30/20 | |||||||||||||||
10-Q | 10.1 | 9/30/23 | |||||||||||||||
10-Q | 10.3 | 6/30/13 | |||||||||||||||
10-K | 10.22 | 12/31/21 | |||||||||||||||
10-Q | 10.3 | 6/30/10 | |||||||||||||||
10-K | 10.19 | 12/31/20 | |||||||||||||||
S-8 | 99.1 | 12/30/13 | |||||||||||||||
DEF14A | Appendix | 3/28/18 | |||||||||||||||
X | |||||||||||||||||
10-K | 10.28 | 12/31/21 | |||||||||||||||
10-K | 10.29 | 12/31/21 | |||||||||||||||
10-K | 10.21 | 12/31/09 | |||||||||||||||
10-K | 10.20 | 12/31/15 | |||||||||||||||
10-K | 10.25 | 12/31/18 | |||||||||||||||
10-K | 10.28 | 12/31/19 | |||||||||||||||
10-K | 10.34 | 12/31/21 | |||||||||||||||
10-K | 10.26 | 12/31/18 | |||||||||||||||
10-K | 10.32 | 12/31/19 | |||||||||||||||
10-Q | 10.1 | 3/31/21 | |||||||||||||||
10-Q | 10.2 | 3/31/21 | |||||||||||||||
10-K | 10.41 | 12/31/21 | |||||||||||||||
10-K | 10.42 | 12/31/21 | |||||||||||||||
10-K | 10.43 | 12/31/21 | |||||||||||||||
10-K | 10.44 | 12/31/21 | |||||||||||||||
10-K | 10.27 | 12/31/18 | |||||||||||||||
8-K | 10.3 | 10/24/19 | |||||||||||||||
10-Q | 10.1 | 3/31/22 | |||||||||||||||
8-K | 10.6 | 4/16/20 | |||||||||||||||
8-K | 10.1 | 12/9/21 | |||||||||||||||
8-K | 10.1 | 10/20/22 | |||||||||||||||
X | |||||||||||||||||
Subsidiaries of the registrant | |||||||||||||||||
X | |||||||||||||||||
Consent of Independent Registered Public Accounting Firm | |||||||||||||||||
X | |||||||||||||||||
Rule 13a-14(a)/15-14(a) certifications | |||||||||||||||||
X | |||||||||||||||||
X |
Section 1350 certifications | |||||||||||||||||
X | |||||||||||||||||
X | |||||||||||||||||
Policy relating to recovery of erroneously awarded compensation | |||||||||||||||||
X | |||||||||||||||||
Interactive data file | |||||||||||||||||
101 | The following financial and related information from IDEXX Laboratories, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, formatted in Inline eXtensible Business Reportable Language (iXBRL) includes: (i) the Consolidated Balance Sheet; (ii) the Consolidated Statement of Income; (iii) the Consolidated Statements of Comprehensive Income; (iv) the Consolidated Statement of Changes in Stockholders' Equity (Deficit); (v) the Consolidated Statement of Cash Flows; and, (vi) Notes to Consolidated Financial Statements. | ||||||||||||||||
104 | The cover page from the Company's Annual Report of Form 10-K for the fiscal year ended December 31, 2023, formatted in Inline XBRL and contained in Exhibit 101. | ||||||||||||||||
* | Certain portions have been omitted as confidential information. | ||||||||||||||||
** | Management contract or compensatory arrangement required to be filed as an exhibit pursuant to Item 15(a)(3) of Form 10-K. |
IDEXX LABORATORIES, INC. | |||||
By: /s/ Jonathan J. Mazelsky | |||||
Date: February 22, 2024 | Jonathan J. Mazelsky | ||||
President and Chief Executive Officer |
SIGNATURE | TITLE | DATE | ||||||||||||||||||||||||
/s/ Jonathan J. Mazelsky | President, Chief Executive Officer and Director (Principal Executive Officer) | February 22, 2024 | ||||||||||||||||||||||||
Jonathan J. Mazelsky | ||||||||||||||||||||||||||
/s/ Brian P. McKeon | Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer) | February 22, 2024 | ||||||||||||||||||||||||
Brian P. McKeon | ||||||||||||||||||||||||||
/s/ Lawrence D. Kingsley | Non-Executive Board Chair | February 22, 2024 | ||||||||||||||||||||||||
Lawrence D. Kingsley | ||||||||||||||||||||||||||
/s/ Jonathan W. Ayers | Director | February 22, 2024 | ||||||||||||||||||||||||
Jonathan W. Ayers | ||||||||||||||||||||||||||
/s/ Irene Chang Britt | Director | February 22, 2024 | ||||||||||||||||||||||||
Irene Chang Britt | ||||||||||||||||||||||||||
/s/ Asha S. Collins, PhD | Director | February 22, 2024 | ||||||||||||||||||||||||
Asha S. Collins, PhD | ||||||||||||||||||||||||||
/s/ Bruce L. Claflin | Director | February 22, 2024 | ||||||||||||||||||||||||
Bruce L. Claflin | ||||||||||||||||||||||||||
/s/ Stuart M. Essig, PhD | Director | February 22, 2024 | ||||||||||||||||||||||||
Stuart M. Essig, PhD | ||||||||||||||||||||||||||
/s/ Daniel M. Junius | Director | February 22, 2024 | ||||||||||||||||||||||||
Daniel M. Junius | ||||||||||||||||||||||||||
/s/ Sam A. Samad | Director | February 22, 2024 | ||||||||||||||||||||||||
Sam A. Samad | ||||||||||||||||||||||||||
/s/ M. Anne Szostak | Director | February 22, 2024 | ||||||||||||||||||||||||
M. Anne Szostak | ||||||||||||||||||||||||||
/s/ Sophie V. Vandebroek, PhD | Director | February 22, 2024 | ||||||||||||||||||||||||
Sophie V. Vandebroek, PhD |
• | A financial performance factor (determined by measuring Company performance against specific financial metrics selected by the Compensation and Talent Committee); and |
• | A non-financial performance factor (determined by measuring the Company’s achievement of non-financial performance goals approved by the Board of Directors that are focused on strengthening and positioning the Company for sustained future growth and profitability). |
IDEXX LABORATORIES, INC. | ||||||||
SUBSIDIARIES OF THE REGISTRANT | ||||||||
Legal Entity Name | Jurisdiction of Incorporation or Formation | |||||||
342 Saco Street, LLC | Maine | |||||||
Beijing IDEXX Laboratories Co. Limited | China | |||||||
ezyVet US, Inc. | Delaware | |||||||
IDEXX Animana B.V. | Netherlands | |||||||
IDEXX Brasil Laboratórios Ltda. | Brazil | |||||||
IDEXX Brasil Participações Ltda. | Brazil | |||||||
IDEXX Diagnostic Limited | Ireland | |||||||
IDEXX Diavet AG | Schwyz | |||||||
IDEXX Distribution, Inc. | Massachusetts | |||||||
IDEXX GmbH | Germany | |||||||
IDEXX B.V. | Netherlands | |||||||
IDEXX Holding GmbH | Germany | |||||||
IDEXX Holdings GmbH | Zug | |||||||
IDEXX Holdings II GmbH | Zug | |||||||
IDEXX Holdings, Inc. | Delaware | |||||||
IDEXX Laboratories II (NZ) ULC | New Zealand | |||||||
IDEXX Laboratories (Proprietary) Limited | South Africa | |||||||
IDEXX Laboratories (Shanghai) Company Limited | China | |||||||
IDEXX Laboratories B.V. | Netherlands | |||||||
IDEXX Laboratories Canada 1, ULC | Nova Scotia | |||||||
IDEXX Laboratories Canada 2, ULC | Nova Scotia | |||||||
IDEXX Laboratories Canada Corporation | Canada | |||||||
IDEXX Laboratories Canada LP | Ontario | |||||||
IDEXX Laboratories Co., Ltd. | Thailand | |||||||
IDEXX Laboratories Danmark ApS | Denmark | |||||||
IDEXX Laboratories GmbH | Zug | |||||||
IDEXX Laboratories Inc. | Taiwan Province of China | |||||||
IDEXX Laboratories Italia S.r.l. | Italy | |||||||
IDEXX Laboratories, KK | Japan | |||||||
IDEXX Laboratories Limited | England & Wales | |||||||
IDEXX Laboratories Ltd. | Korea, Republic of | |||||||
IDEXX Laboratories Norge AS | Norway | |||||||
IDEXX Laboratories Oy | Finland | |||||||
IDEXX Laboratories Private Limited | India | |||||||
IDEXX Laboratories Pty Limited | New South Wales | |||||||
IDEXX Laboratories Singapore Pte. Ltd. | Singapore | |||||||
IDEXX Laboratories Sp. z o.o. | Poland |
IDEXX Laboratories SRL | Belgium | |||||||
IDEXX Laboratories Sverige AB | Sweden | |||||||
IDEXX Laboratories, S.de R.L. de C.V. | Mexico | |||||||
IDEXX Laboratories s.r.o. | Czech Republic | |||||||
IDEXX Laboratories Slovakia s.r.o. | Slovak Republic | |||||||
IDEXX Laboratorios, S.L. | Spain | |||||||
IDEXX Montpellier SAS | France | |||||||
IDEXX Operations, Inc. | Delaware | |||||||
IDEXX Pharmaceuticals, LLC | Delaware | |||||||
IDEXX Real Estate Holdings GmbH | Germany | |||||||
IDEXX Real Estate Holdings, LLC | Maine | |||||||
IDEXX Reference Laboratories Ltd. | Canada | |||||||
IDEXX SARL | France | |||||||
IDEXX Switzerland GmbH | Bern/Berne | |||||||
IDEXX Technologies GmbH | Bern/Berne | |||||||
IDEXX Technologies Limited | England & Wales | |||||||
IDEXX UK Acquisition Limited | England & Wales | |||||||
IDEXX Vet Med Labor GmbH | Austria | |||||||
Laboratoire IDEXX SARL | France | |||||||
labor-zentral.ch AG für veterinärmedizinische Diagnostik | Switzerland | |||||||
OPTI Medical Systems, Inc. | Delaware | |||||||
Vet Med Lab (UK) Limited | England & Wales | |||||||
Vet Med Labor GmbH | Germany |
/s/PricewaterhouseCoopers LLP | |||||
Boston, Massachusetts | |||||
February 22, 2024 |
Date: February 22, 2024 | /s/ Jonathan J. Mazelsky | ||||
Jonathan J. Mazelsky | |||||
President and Chief Executive Officer | |||||
(Principal Executive Officer) |
Date: February 22, 2024 | /s/ Brian P. McKeon | ||||
Brian P. McKeon | |||||
Executive Vice President, Chief Financial Officer | |||||
and Treasurer | |||||
(Principal Financial Officer) |
/s/ Jonathan J. Mazelsky | |||||
February 22, 2024 | Jonathan J. Mazelsky President and Chief Executive Officer |
/s/ Brian P. McKeon | |||||
February 22, 2024 | Brian P. McKeon Executive Vice President, Chief Financial Officer and Treasurer |
/s/ Brian P. McKeon | |||||
February 22, 2024 | Brian P. McKeon Executive Vice President, Chief Financial Officer and Treasurer |
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Audit Information |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Firm ID | 238 |
Auditor Location | Boston, Massachusetts |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 9,501 | $ 8,265 |
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) | 107,506,000 | 107,193,000 |
Common stock, shares outstanding (in shares) | 83,032,000 | 82,894,000 |
Deferred stock units, outstanding (in shares) | 59,000 | 58,000 |
Treasury stock, shares (in shares) | 24,474,000 | 24,299,000 |
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Revenue: | |||
Total revenue | $ 3,660,953 | $ 3,367,324 | $ 3,215,360 |
Cost of Revenue: | |||
Total cost of revenue | 1,470,983 | 1,362,986 | 1,325,928 |
Gross profit | 2,189,970 | 2,004,338 | 1,889,432 |
Expenses: | |||
Sales and marketing | 566,066 | 524,505 | 486,735 |
General and administrative | 335,825 | 326,248 | 309,660 |
Research and development | 190,951 | 254,820 | 161,009 |
Income from operations | 1,097,128 | 898,765 | 932,028 |
Interest expense | (41,581) | (39,858) | (29,808) |
Interest income | 5,629 | 1,065 | 434 |
Income before provision for income taxes | 1,061,176 | 859,972 | 902,654 |
Provision for income taxes | 216,134 | 180,883 | 157,810 |
Net income | 845,042 | 679,089 | 744,844 |
Less: Net (loss) attributable to noncontrolling interest | 0 | 0 | (1) |
Net income attributable to IDEXX Laboratories, Inc. stockholders | $ 845,042 | $ 679,089 | $ 744,845 |
Earnings per Share: | |||
Basic (in USD per share) | $ 10.17 | $ 8.12 | $ 8.74 |
Diluted (in USD per share) | $ 10.06 | $ 8.03 | $ 8.60 |
Weighted Average Shares Outstanding: | |||
Basic (in shares) | 83,066 | 83,623 | 85,200 |
Diluted (in shares) | 83,978 | 84,600 | 86,572 |
Product revenue | |||
Revenue: | |||
Total revenue | $ 2,089,936 | $ 1,928,773 | $ 1,875,308 |
Cost of Revenue: | |||
Total cost of revenue | 717,951 | 656,511 | 656,823 |
Service revenue | |||
Revenue: | |||
Total revenue | 1,571,017 | 1,438,551 | 1,340,052 |
Cost of Revenue: | |||
Total cost of revenue | $ 753,032 | $ 706,475 | $ 669,105 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Statement of Comprehensive Income [Abstract] | |||
Defined benefit plans, tax expense | $ (267) | $ (613) | $ 0 |
Reclassification adjustment for defined benefit plans included in net income, tax | 111 | 99 | 0 |
Unrealized gain (loss) on Euro-denominated notes, tax expense (benefit) | (811) | 1,411 | 2,011 |
Unrealized gain (loss) on investments, tax expense (benefit) | 3 | (14) | 46 |
Unrealized gain (loss) on foreign currency exchange contracts, tax expense (benefit) | (143) | 5,954 | 2,133 |
Unrealized gain (loss) on cross currency swaps, tax expense (benefit) | (1,754) | 1,190 | 1,699 |
Unrealized gain (loss) on interest rate swap, net of tax expense (benefit) | 976 | 0 | 0 |
Reclassification adjustment for (gain) loss included in net income, tax (expense) benefit | $ (1,699) | $ (6,742) | $ 1,347 |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) - $ / shares |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Statement of Stockholders' Equity [Abstract] | ||||
Common stock, par value (in USD per share) | $ 0.10 | $ 0.10 | $ 0.10 | $ 0.10 |
NATURE OF BUSINESS, BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS, BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION | NATURE OF BUSINESS, BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements of IDEXX Laboratories, Inc. and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and with the requirements of Regulation S-X. These statements include the accounts of IDEXX Laboratories, Inc., and our wholly-owned and majority-owned subsidiaries (“IDEXX,” the “Company,” “we,” or “our”). 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. We have included certain terms and abbreviations used throughout these financial statements in the “Glossary of Terms and Selected Abbreviations.” We develop, manufacture, and distribute products and provide services primarily for the companion animal veterinary, livestock and poultry, dairy, and water testing industries. We also sell human medical point-of-care products and laboratory diagnostics. Our principal line of business, which we refer to as our Companion Animal Group (“CAG”) operating segment, provides diagnostic capabilities and information management solutions for the companion animal veterinary industry, as well as the biomedical research community. Our principal regions for these products and services are North America, Europe, Australia, and Japan, but we also sell to customers and distributors in many other countries around the world. Our Water operating segment provides innovative testing solutions for the quality and safety of water principally in the U.S. and Europe, and Brazil, but we also sell to customers in many other countries around the world. Our Livestock, Poultry and Dairy (“LPD”) operating segment provides diagnostic tests and related instrumentation and performs services that are used to manage the health status of livestock and poultry, to improve producer efficiency, and to ensure the quality and safety of milk. Our principal regions for these products and services are Europe, the United States, China, Australia, and Brazil, but we also sell to customers in many other countries around the world. We also operate a smaller operating segment that is comprised of our human medical diagnostic products and services business (“OPTI Medical”). Financial information about our OPTI Medical operating segment is combined and presented with our out-licensing arrangements remaining from our pharmaceutical business in an “Other” category because they do not meet the quantitative or qualitative thresholds for reportable segments. Refer to “Note 3. Revenue” for additional information regarding disaggregated revenue by segment, major product and service categories, and geographical areas. Refer to “Note 17. Segment Reporting” for additional information regarding our reportable operating segments.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Estimates The preparation of these consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an ongoing basis, we evaluate these estimates, including those related to reserves for accounts receivable, customer contract assets and lease receivables; goodwill and other intangible assets; income taxes; inventory valuation; revenue recognition, including product returns and customer contracts with multiple performance obligations; share-based compensation; warranty reserves; self-insurance reserves; fair value measurements; and loss contingencies. We accrue contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from these estimates. (b) Cash and Cash Equivalents We consider all highly liquid investments with original maturities of ninety days or less to be cash equivalents. Cash and cash equivalents consist primarily of demand deposits, money market funds, and short-duration agency bonds and commercial paper as described above, which management believes are subject to minimal credit and market risk. There is no restricted cash on our consolidated balance sheets for the years ended December 31, 2023 and 2022. (c) Inventories – Refer to Note 7 (d) Property and Equipment – Refer to Note 9 (e) Goodwill and Other Intangible Assets – Refer to Note 11 (f) Warranty Reserves We provide a standard twelve-month warranty on all diagnostic instruments sold. We recognize the cost of instrument warranties in cost of product revenue at the time revenue is recognized based on the estimated cost to repair the instrument over its warranty period. Cost of product revenue reflects not only estimated warranty expense for instruments sold in the current period, but also any changes in estimated warranty expense for the portion of the aggregate installed base that is under warranty. Estimated warranty expense is based on a variety of inputs, including historical instrument performance in the customers’ environments, historical and estimated costs incurred in servicing instruments, and projected instrument reliability. Should actual service rates or costs differ from our estimates, revisions to the estimated warranty liability would be required. The liability for warranties is included in accrued liabilities in the accompanying consolidated balance sheets. The amount of warranty reserve during the years ended December 31, 2023 and 2022 was not material. (g) Income Taxes – Refer to Note 14 (h) Taxes Remitted to Governmental Authorities by IDEXX on Behalf of Customers We calculate, collect from our customers, and remit to governmental authorities sales, value-added, and excise taxes assessed by governmental authorities in connection with revenue-producing transactions with our customers. We report these taxes on a net basis and do not include these tax amounts in revenue or cost of product or service revenue. (i) Revenue – Refer to Note 3 (j) Research and Development Costs Research and development costs, which consist of employee compensation and benefits, certain licensing costs, materials, external consulting, and product development costs, are expensed as incurred. We evaluate our research and development costs for capitalization after the technological feasibility has been established for software and products containing software to be sold; however, no costs were capitalized during the years ended December 31, 2023, 2022, and 2021. Software developed to deliver hosted services to our customers has been designated as internal-use, and we capitalize certain costs incurred in connection with developing or obtaining software designated for internal use based on three distinct stages of development. Refer to “Note 9. Property and Equipment, Net” for further information on internal-use software. (k) Advertising Costs Advertising costs, which are recognized as sales and marketing expense in the period in which they are incurred, were $4.2 million, $5.0 million, and $3.3 million for the years ended December 31, 2023, 2022, and 2021, respectively. (l) Legal Costs Legal costs are considered period costs and, accordingly, are expensed in the year services are provided. (m) Share-Based Compensation – Refer to Note 5 (n) Leases – Refer to Note 8 (o) Earnings per Share – Refer to Note 15 (p) Foreign Currency The functional currency of most of our foreign subsidiaries is their local currency, and a small number of our foreign subsidiaries that conduct business primarily in U.S. dollars have the U.S. dollar as their functional currency. Assets and liabilities of our other foreign subsidiaries, whose functional currency is their local currency, are translated to the U.S. dollar using the exchange rate in effect at the balance sheet date. Revenue and expense accounts are translated to the U.S. dollar using the exchange rate at the date at which those elements are recognized, and where it is impractical to do so, an average exchange rate in effect during the period is used to translate those elements. Cumulative translation gains and losses are shown in the accompanying consolidated balance sheets as a separate component of accumulated other comprehensive income (“AOCI”). Revenues and expenses denominated in a currency other than the respective subsidiary’s functional currency are recorded at the current exchange rate when the transaction is recognized. Monetary assets and liabilities denominated in a currency other than the respective subsidiary’s functional currency are remeasured at each balance sheet date using the exchange rate in effect at each balance sheet date. These foreign currency gains and losses are included in general and administrative expenses within our Other segment. We recognized aggregate foreign currency losses of $1.1 million, $3.4 million, and $2.1 million for the years ended December 31, 2023, 2022, and 2021, respectively. (q) Hedging Instruments – Refer to Note 19 (r) Fair Value Measurements – Refer to Note 18 (s) Comprehensive Income We report all changes in equity, including net income and transactions or other events and circumstances from non-owner sources during the period in which they are recognized. We have chosen to present comprehensive income, which encompasses net income, foreign currency translation adjustments, gains and losses on our net investment hedges, defined benefit plan adjustments, and the difference between the cost and the fair market value of investments in debt and equity securities, forward currency exchange contracts, and interest rate swap contracts in the consolidated statements of comprehensive income. Refer to “Note 21. Accumulated Other Comprehensive Income” for information about the effects on net income of significant amounts reclassified out of each component of AOCI for the years ended December 31, 2023, 2022, and 2021. (t) Equity and Cost Methods of Accounting for Investments Investments where we have the ability to exercise significant influence, but do not control the entity, are accounted for under the equity method of accounting. Significant influence generally exists if we have a 20% to 50% ownership interest in the investee. Equity investments in entities for which we do not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost less impairment, if any, adjusted for changes resulting from qualifying observable price changes for the identical investment of the same issuer should they occur. We evaluate our investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an investment is determined to be other than temporary, a loss is recorded in earnings in the current period. Our equity investments of $30.3 million, for both the years ended December 31, 2023 and 2022, are recorded at cost in other long-term assets. Refer to “Note 4. Acquisitions, Asset Purchases and Investments” for additional information regarding our acquisition of certain equity investments. (u) Concentrations of Risk Financial Instruments. Financial instruments that potentially subject us to concentrations of credit risk are principally cash, cash equivalents, accounts receivable, contract assets, lease receivables, and derivatives. To mitigate such risk with respect to cash and cash equivalents, we place our cash with highly-rated financial institutions, in non-interest bearing accounts that are insured by the U.S. government and money market funds invested in government securities. To reduce credit risk with respect to accounts receivable, contract assets, and lease receivables, we routinely assess the financial strength of our most significant customers and monitor the amounts owed to us, taking appropriate action when necessary. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers that purchase our products and services, and we have no significant customers that accounted for greater than 10% of our consolidated revenues during the year ended December 31, 2023. As a result, we believe that accounts receivable, contract assets, and lease receivables credit risk exposure is limited. We maintain allowances for expected credit losses, but historically have not experienced material losses related to an individual customer or group of customers in any particular industry or geographic area. To mitigate concentration of credit risk with respect to derivatives, we enter into transactions with highly-rated financial institutions, enter into master netting arrangements with counterparties to our derivative transactions, and frequently monitor the creditworthiness of our counterparties. Our master netting arrangements reduce our exposure in that they permit outstanding receivables and payables with the counterparties to our derivative transactions to be offset in the event of default. We have not incurred such losses and consider the risk of counterparty default to be minimal. Sole and Single-Source Suppliers. Many of the third parties that provide us with the instruments we sell, as well as certain components, raw materials and consumables used in or with our products, are sole or single-source suppliers. Some of the products that we purchase from these suppliers are proprietary or complex in nature, and, therefore, cannot be readily or easily replaced by alternative sources. We have a process of qualifying alternative third-party suppliers for select components and materials, which must meet approvals internally and from various regulatory agencies before we are able to use and sell products using these alternative sources. If we are unable to obtain adequate quantities of inventory, we could face cost increases or delays or discontinuations in product shipments, which could have a material adverse effect on our results of operations. Under certain long-term supply arrangements we paid the supplier for costs related to molds, dies and other tools used for the production of products we purchase. These payments are capitalized in other assets, as we do not have title or control of the underlying production assets, and are amortized to cost of sales. (v) New Accounting Pronouncements Adopted Effective January 1, 2021, we adopted ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The new guidance is intended to simplify the accounting for income taxes by removing certain exceptions and by updating accounting requirements around goodwill recognized for tax purposes and the allocation of current and deferred tax expense among legal entities, among other minor changes. The adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements. In July 2021, the FASB issued ASU 2021-05, “Leases (Topic 842); Lessors - Certain Leases with Variable Lease Payments.” ASU 2021-05 requires a lessor to classify a lease with variable payments that do not depend on an index or rate as an operating lease if another lease classification (i.e., sales-type or direct financing) would result in recognition of a day-one loss. We elected to adopt this standard as of the third quarter of 2021, on a prospective basis. The adoption of ASU 2021-05 did not have a material impact on our consolidated financial statements. We adopted ASU 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,” as of January 1, 2023, which adds certain disclosure requirements for a buyer in a supplier finance program. The amendments in this update require that a buyer in a supplier finance program discloses sufficient information about the program to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. Refer to “Note 12. Accounts Payable, Accrued Liabilities and Other Long-Term Liabilities.” We adopted ASU 2021-08, “Business Combinations (Topic 805): Accounting for Acquired Contract Assets and Contract Liabilities,” as of January 1, 2023. ASU 2021-08 is intended to improve comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination by providing consistent recognition guidance. The adoption of ASU 2021-08 did not have a material impact on our consolidated financial statements. (w) New Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The amendments will require disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit and loss. The amendments are effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating ASU 2023-07 to determine its impact on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of income tax rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024, with early adoption permitted, and may be applied either prospectively or retrospectively. We are currently evaluating ASU 2023-09 to determine its impact on our consolidated financial statements.
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REVENUE |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE | REVENUE Revenue Recognition We recognize revenue 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, and 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 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 where customers purchase 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, lease receivables, and contract assets arising when revenue is recognized in advance of billings, and contract liabilities or deferred revenue as a result of receiving consideration in advance of revenue recognition within our consolidated balance sheet. Customer payment terms are typically 30 to 60 days, and these terms vary by location based on local business practices and by customer. Customer contracts are modified primarily to create new, or change existing, enforceable rights and obligations. Customer contract modifications typically create new performance obligations to deliver additional goods and/or services that are distinct from the goods and/or services transferred before the modification, and the related increase in consideration does not reflect the standalone selling price for the additional goods and/or services. We account for these modifications prospectively as if it were a termination of the existing contract and the creation of a new contract, and we allocate the sum of the remaining consideration of the original contract that has not been recognized as revenue and the incremental consideration promised as part of the modification to the remaining performance obligations. From time to time we have other types of contract modifications. Contract modifications that create new performance obligations to deliver additional goods and/or services that are distinct from the goods and/or services transferred before the modification, and the related increase in consideration approximates the standalone selling price for the additional goods and/or services, are accounted for as separate contracts. Contract modifications that do not create new performance obligations, but the goods and/or services to be delivered after the contract modification date are distinct from the goods and/or services transferred before the modification, are accounted for as a termination of the existing contract and the creation of a new contract. Revenues by Product and Service Categories and by Principal Geographic Areas We present disaggregated revenue for our CAG segment based on major product and service categories. Our Water and LPD segments are comprised of a single major product category. The following table presents revenue by major product and service categories:
The following table presents revenue by principal geographic area, based on customers’ domiciles:
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. We also provide customers with certain consumables that are recognized upon utilization by the customer, which is when we have the right to payment and the risks and rewards of ownership transfer. 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. Laboratory Diagnostic and Consulting Services. Laboratory diagnostic and consulting services revenues are recognized and invoiced when the laboratory diagnostic service is performed. Instruments, Software and Systems. CAG Diagnostics capital instruments, diagnostic imaging systems, veterinary software licenses and computer hardware 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. SaaS Subscriptions. We offer a variety of veterinary software and diagnostic imaging SaaS subscriptions including ezyVet, Animana, Neo, Pet Health Network Pro, Petly Plans, Web PACS, rVetLink, SmartFlow, and Vet Radar. 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 arrangement. Deferred revenue related to our SaaS subscriptions is not material. 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 to 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 twelve 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. Contracts with Multiple Performance Obligations We enter into arrangements with multiple performance obligations 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 total 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 arrangements. 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 promised product or service 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 arrangements with an original expected duration of one year or less. The following customer arrangements represent our most significant customer contracts that contain multiple performance obligations: Customer Commitment Arrangements. We offer customers incentives upon entering into multi-year arrangements to purchase annual minimum amounts of products and services. Free or Discounted Instruments and Systems. Many of our customer commitment arrangements, such as our IDEXX 360 program, provide customers with free or discounted instruments or systems upon entering into multi-year arrangements 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 products and services over the term of the arrangement. We have determined that these arrangements do not include a significant financing component. On December 31, 2022, our contract assets were $190.8 million, of which approximately $43.2 million was reclassified to accounts receivable when customers were billed for related products and services during the year ended December 31, 2023. Furthermore, as a result of new placements under commitment arrangements, net of subsequent amounts reclassified to accounts receivable and allowances established for credit losses, our contract assets were $223.1 million at December 31, 2023. We monitor customer purchases over the term of their arrangement to assess the realizability of our contract assets and review estimates of variable consideration. Impairments and revenue adjustments that relate to performance obligations satisfied in prior periods, including cumulative catch-up adjustments to revenue arising from contract modifications, during the years ended December 31, 2023 and 2022, were not material. Up-Front Consideration Paid to Customers. We provide customers with incentives in the form of IDEXX Points upon entering into multi-year arrangements to purchase annual minimum amounts of future products and/or services (previously referred to as “up-front customer loyalty programs”). If a customer breaches their agreement, they are required to refund all or a portion of the up-front consideration, or make other repayments, remedial actions, or both. Up-front incentives to customers (previously referred to as “customer acquisition costs”) in the form of IDEXX Points or, from time to time, cash, are not made in exchange for distinct goods or services and are capitalized as consideration paid to customers within other current and long-term assets, which are subsequently recognized as a reduction to revenue over the term of the customer arrangement. 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. To the extent invoiced instrument revenue exceeds recognized instrument revenue, we record deferred revenue as a contract liability, which is subsequently recognized upon the purchase of products and services over the term of the contract. We have determined these arrangements do not include a significant financing component. On December 31, 2022, our capitalized consideration paid to customers was $158.0 million, of which approximately $50.9 million was recognized as a reduction of revenue during the year ended December 31, 2023. Furthermore, as a result of new payments to customers, net of subsequent recognition, our capitalized consideration paid to customer was $168.9 million at December 31, 2023. We monitor customer purchases over the term of their arrangement to assess the realizability of our capitalized consideration paid to customers and review estimates of variable consideration. Impairments and revenue adjustments that relate to performance obligations satisfied in prior periods, including cumulative catch-up adjustments to revenue arising from contract modifications, during the years ended December 31, 2023 and 2022, were not material. Rebate Arrangements. Our rebate arrangements provide customers the opportunity to earn future rebates based on the volume of products and/or services they purchase over the term of the arrangement. Rebate incentives are typically offered in multi-year arrangements that include customer commitments to purchase annual minimum amounts of products and services, or, to a lesser extent, are sometimes offered without future purchase commitments. 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 arrangement. 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 subsequently recognized upon the purchase of products and/or services, partly offsetting rebates as they are earned. On December 31, 2022, our deferred revenue related to rebate and up-front consideration arrangements was $36.1 million, of which approximately $12.6 million was recognized when customers purchased eligible products and services during the year ended December 31, 2023. Furthermore, as a result of new customer purchases under rebate and up-front consideration arrangements, net of subsequent recognition, our deferred revenue was $32.9 million at December 31, 2023, of which approximately 33%, 26%, 19%, 13%, and 9% are expected to be recognized during 2024, 2025, 2026, 2027, and thereafter, respectively. For our customer commitment arrangements, we estimate future revenues related to multi-year arrangements to be approximately $3.8 billion, of which approximately 28%, 24%, 20%, 15%, and 13% are expected to be recognized during 2024, 2025, 2026, 2027, and thereafter, respectively. These future revenues relate to performance obligations not yet satisfied, for which customers have committed to future purchases, net of the expected revenue reductions from consideration paid to customers and expected price adjustments, and as a result, are lower than stated contractual commitments by our customers. Instrument Rental Arrangements. Revenues from instrument rental and reagent rental arrangements are recognized either as operating leases on a ratable basis over the term of the arrangement or as sales-type leases at the time of installation and customer acceptance. Customers typically pay for the right to use instruments under rental arrangements in equal monthly amounts over the term of the rental arrangement. For some arrangements, customers are provided with the right to purchase the instrument at the end of the lease term. Our reagent rental arrangements provide customers the right to use our instruments upon entering into multi-year arrangements to purchase annual minimum amounts of consumables. These types of arrangements 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. Lease revenues are presented in product revenue on our consolidated income statement. Lease revenue was approximately $20.7 million, $20.3 million, and $20.8 million for the years ended December 31, 2023, 2022, and 2021, respectively, including both operating leases and sales-type leases. Sales-type Reagent Rental Arrangements. Our reagent rental arrangements 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 products and services over the term of the arrangement. On December 31, 2022, our lease receivable assets were $18.4 million, of which approximately $4.3 million was reclassified to accounts receivable when customers were billed for related products and services during the year ended December 31, 2023. Furthermore, as a result of new placements under sales-type reagent rental arrangements, net of subsequent amounts reclassified to accounts receivable, and allowances established for credit losses, our lease receivable assets were $23.1 million at December 31, 2023. The impacts of discounting and unearned income at December 31, 2023, were not material. Profit and loss recognized at the commencement date and interest income during the year ended December 31, 2023, were not material. We monitor customer purchases over the term of their arrangement to assess the realizability of our lease receivable assets. Impairments during the year ended December 31, 2023, were not material. Operating-type Reagent Rental Arrangements. Our reagent rental arrangements 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 arrangement. The cost of the instrument is capitalized within property and equipment. During the year ended December 31, 2023, we transferred instruments of $14.6 million compared to $17.4 million during the year ended December 31, 2022, from inventory to property and equipment. We estimate future revenue to be recognized related to our reagent rental arrangements of approximately $56.4 million, of which approximately 26%, 23%, 18%, 15%, and 18% are expected to be recognized during 2024, 2025, 2026, 2027, and thereafter, respectively. These future revenues relate to performance obligations not yet satisfied for which customers have committed to future purchases, net of expected price adjustments, and as a result, may be lower than stated contractual commitments by our customers. Other Customer Incentive Arrangements. Certain arrangements 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 arrangements that are offered to a broad group of customers. Revenue adjustments that relate to performance obligations satisfied in prior periods, including cumulative catch-up adjustments to revenue arising from contract modifications, during the years ended December 31, 2023 and 2022, were not material. Refund obligations related to customer incentive arrangements 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. Combined Arrangements. At times, we combine aspects of customer commitment arrangements, instrument rental arrangements and other incentives within a single customer arrangement. We separate each significant element and include the contract assets, consideration paid to customers, deferred revenues, and estimated future revenues within the most relevant disclosures above. Each customer contract is presented as a net contract asset or net contract liability on our consolidated balance sheet. Deferred Extended Warranties and Post-Contract Support Revenue On December 31, 2022, our deferred revenue related to extended warranties and post-contract support was $26.4 million, of which approximately $19.8 million was recognized during the year ended December 31, 2023. Furthermore, as a result of new arrangements, our deferred revenue related to extended warranties and post-contract support was $26.0 million at December 31, 2023. 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 $9.7 million at December 31, 2023, of which approximately 43%, 29%, 16%, 7%, and 5% are expected to be recognized during 2024, 2025, 2026, 2027, and thereafter, respectively. We have determined these arrangements do not include a significant financing component. 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. 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 that includes future performance obligations. 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, and 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 consolidated statements of income. Deferred commission costs are periodically reviewed for impairment. On December 31, 2022, our deferred commission costs, included within other current and long-term assets, were $19.2 million, of which approximately $6.5 million of commission expense was recognized during the year ended December 31, 2023. Furthermore, as a result of commissions related to new extended warranties and SaaS subscriptions, net of subsequent recognition, our deferred commission costs were $19.7 million at December 31, 2023. Impairments of deferred commission costs during the years ended December 31, 2023 and 2022, were not material.
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ACQUISITIONS, ASSET PURCHASES AND INVESTMENTS |
12 Months Ended |
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Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS, ASSET PURCHASES AND INVESTMENTS | ACQUISITIONS, ASSET PURCHASES AND INVESTMENTS We believe that our acquisitions of businesses and other assets enhance our existing businesses by either expanding our geographic range, customer base, or existing product and service lines. From time to time, we may acquire small reference laboratories or radiology practices that we account for as either asset purchases or business combinations. Asset Purchases and Investments During 2022, we entered into two discrete arrangements to license intellectual property for which we paid $65.0 million and accrued $15.0 million in subsequent payments, all of which was charged to research and development expense. The $15.0 million milestone payment was issued in the first quarter of 2023. These two arrangements were treated as asset acquisitions under U.S. GAAP and resulted in the full amount being expensed to research and development expense as in-process research and development costs with no alternative future use. The acquisitions of these licensing arrangements supports new instrument platform advancements. We also made a $10.0 million payment for a perpetual intellectual property license, which will be amortized over 10 years. The research and development expense and amortization expense were recorded in our CAG segment. During 2022, we also purchased $25.0 million of preferred shares for a noncontrolling minority interest in one of the entities with which we have a license agreement. We have elected to measure the investment as an equity security investment, under ASC 321, “Investments - Equity Securities,” and recorded the investment at cost. The investment is included in other long-term assets. Business Combinations During the third quarter of 2022, we acquired the assets of an international water testing company located in Canada for approximately $12.8 million in cash, including a holdback of approximately $1.3 million, which was paid in the fourth quarter of 2023. This acquisition expands our product offering in the Water segment. The fair values of the assets and liabilities acquired consist of technology intangibles of approximately $3.4 million, with a life of 10 years; customer relationship intangibles of approximately $1.2 million, with a life of 10 years; approximately $6.9 million of goodwill, representing synergies with our Water testing portfolio; and approximately $1.3 million of tangible assets, including inventory and accounts receivable. Goodwill related to this acquisition is expected to be deductible for tax purposes. Pro forma information has not been presented for this acquisition because such information is not material to the financial statements. The results of operations have been included in our Water segment since the acquisition date. The acquisition expenses were not material. During the fourth quarter of 2021, we acquired the shares of a reference laboratory located in Finland for approximately $13.4 million in cash, including a holdback of approximately $1.4 million, which was paid in the first quarter of 2023. This acquisition expands our international reference laboratory presence and was accounted for as a business combination. The fair values of the assets acquired consist of customer relationship intangibles of approximately $7.4 million, with a life of 10 years; a non-compete agreement of approximately $0.8 million, with a life of 3 years; approximately $6.9 million of goodwill, representing synergies within our broader CAG portfolio; and approximately $1.7 million in net liabilities, including deferred taxes associated with the acquired intangible assets. Goodwill related to this acquisition is not expected to be deductible for tax purposes. Pro forma information has not been presented for this acquisition because such information is not material to the financial statements. The results of operations have been included in our CAG segment since the acquisition date. The acquisition expenses were not material. During the third quarter of 2021, we acquired the assets of a teleradiology business for approximately $5.4 million, including a contingent payment of $0.3 million. This acquisition expands our current teleradiology capability. The acquired assets primarily consist of a customer relationship intangible of approximately $1.7 million, with a weighted average life of 10 years, and approximately $3.7 million in goodwill. Goodwill related to this acquisition is expected to be deductible for tax purposes. Pro forma information has not been presented for this acquisition because such information is not material to the financial statements. The results of operations have been included in our CAG segment since the acquisition date. The acquisition expenses were not material. During the second quarter of 2021, we acquired the assets of the ezyVet cloud-based veterinary software businesses and the shares of ezyVet US, Inc., as well as the Vet Radar business assets, for approximately $157.2 million, including an estimated contingent payment of $5.0 million. The acquired assets include the ezyVet cloud-native practice management system software and the Vet Radar cloud-based workflow management software. The acquisition expands our cloud-based software offerings to support our customers with technology solutions that raise the standards of care for patients and improve practice efficiency. The fair values of assets acquired were as follow: approximately $32.0 million in a customer-related intangible with a weighted average life of 10 years; approximately $8.4 million in technology-related intangibles with a weighted average life of 6 years; approximately $2.4 million in trademarks with a weighted average life of 14 years; approximately $1.8 million in non-compete agreements with a weighted average life of 5 years; approximately $109.4 million in goodwill, representing synergies within our broader CAG portfolio; and approximately $3.2 million in net tangible assets. Goodwill has been allocated to multiple reporting units based upon the fair value of projected earnings as of the date of the acquisition. The goodwill was allocated as follows: approximately $23.4 million to IDEXX VetLab, approximately $27.0 million to Reference Laboratories, approximately $11.1 million to Rapid Assay, and approximately $47.9 million to Veterinary Software Services. Goodwill related to this acquisition is expected to be deductible for tax purposes. Pro forma information has not been presented for this acquisition because such information is not material to the financial statements. The results of operations have been included in our CAG segment since the acquisition date. During the fourth quarter of 2021, we increased the contingent payable by $2.0 million, for a total expected payment of $7.0 million, which was subsequently paid during 2022. The increase to the contingent payment was expensed as the adjustment was made after the measurement period. The acquisition expenses were approximately $2.2 million. During the first quarter of 2021, we acquired the shares of a reference laboratory located in Switzerland for approximately $5.5 million in cash, including holdback and contingent payments of approximately $1.1 million. This acquisition expands our international reference laboratory presence and was accounted for as a business combination. The fair values of the assets acquired consist of approximately $4.3 million in intangible assets, primarily for customer relationships, which will be amortized over 9 years, approximately $1.8 million for goodwill, representing synergies within our broader CAG portfolio, and approximately $0.6 million of net liabilities, including deferred taxes associated with the acquired intangible assets. Goodwill related to this acquisition is not deductible for tax purposes. Pro forma information has not been presented for this acquisition because such information is not material to the financial statements. The results of operations have been included in our CAG segment since the acquisition date. The acquisition expenses were not material. Acquisition of noncontrolling interest During the fourth quarter of 2021, we acquired the remaining 5% interest of our sole foreign joint venture operation for approximately $1.0 million. As a result, we no longer record any minority interest in the equity section of our consolidated balance sheet. This transaction is recorded as an equity transaction, with no gain or loss reflected in the consolidated statements of income. Subsequent event On February 1, 2024, we acquired the assets of a privately-owned software and data platform business based in the U.S. that extends our practice management system cloud-native workflow and delivers strategic data solutions to our customers and their clients, for approximately $77 million in cash, and also agreed to make contingent payments of up to $30 million during the subsequent three years, based on the achievement of certain goals.
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SHARE-BASED COMPENSATION |
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SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION We provide for various forms of share-based compensation awards to our employees and non-employee directors. Our share-based compensation plans allow for the issuance of a mix of stock options, restricted stock, stock appreciation rights, employee stock purchase rights, and other stock unit awards. With the exception of stock options, the fair value of our awards is equal to the closing stock price of IDEXX common stock on the date of grant. We calculate the fair value of our stock option awards using the Black-Scholes-Merton option-pricing model. For stock options, restricted stock units (“RSUs”), and deferred stock units (“DSUs”), share-based compensation expense is estimated based on awards ultimately expected to vest, reduced for estimated forfeitures, on a straight-line basis over the requisite service period of the award. For performance-based restricted stock units (“PBRSUs”), share-based compensation expense is estimated based on awards ultimately expected to vest, reduced for estimated forfeitures, on a graded vesting methodology over the requisite service period. Stock options permit a holder to buy IDEXX stock upon vesting at the stock option exercise price set on the day of grant. An RSU is an agreement to issue shares of IDEXX stock at the time of vesting. A PBRSU is an agreement to issue shares of IDEXX stock at the time of vesting upon successful completion of certain performance goals. DSUs are granted under our Executive Deferred Compensation Plan (the “Executive Plan”) and non-employee Director Deferred Compensation Plan (the “Director Plan”). DSUs may or may not have vesting conditions depending on the plan under which they are issued. We did not issue any restricted stock or stock appreciation rights during the years ended December 31, 2023, 2022, and 2021, nor were any restricted stock or stock appreciation rights outstanding as of those years then ended. We primarily issue shares of common stock to satisfy stock option exercises and employee stock purchase rights and to settle RSUs, PBRSUs, and DSUs. We issue shares of treasury stock to settle certain RSUs and upon the exercise of certain stock options, which were not material for the years ended December 31, 2023, 2022, and 2021. The number of shares of common stock and treasury stock issued are equivalent to the number of awards exercised or settled. With the exception of employee stock purchase rights, equity awards are issued to employees and non-employee directors under the 2018 Stock Incentive Plan (the “2018 Stock Plan”). Our Board of Directors has authorized the issuance of 7.5 million shares of our common stock under the 2018 Stock Plan. Any shares that are subject to awards of stock options or stock appreciation rights will be counted against the share limit as one share for every share granted. Any shares that are issued other than stock options and stock appreciation rights will be counted against the share limit as 2.4 shares for every share granted. If any shares issued under our prior plans are forfeited, settled for cash, or expire, these shares, to the extent of such forfeiture, cash settlement, or expiration, will again be available for issuance under the 2018 Stock Plan. As of December 31, 2023, there were approximately 6.1 million remaining shares available for issuance under the 2018 Stock Plan. Share-Based Compensation Share-based compensation costs are classified in the consolidated financial statements consistent with the classification of cash compensation paid to the employees receiving such share-based compensation. The following is a summary of share-based compensation costs and related tax benefits recorded in our consolidated statements of income:
There were no material modifications to the terms of outstanding options, RSUs, PBRSUs, or DSUs during the years ended December 31, 2023, 2022, or 2021. Share-based compensation expense is reduced for an estimate of the number of awards that are expected to be forfeited. We use historical data and other factors to estimate expected employee terminations and to evaluate whether particular groups of employees have significantly different forfeiture expectations. Our share-based awards granted in certain years include a retirement provision for all employees based on age and length of service. These grants are subject to accelerated expensing if the holder meets the retirement definition set forth in the applicable equity and incentive plan document. The total unrecognized compensation expense, net of estimated forfeitures, for unvested share-based compensation awards at December 31, 2023, was $60.2 million, which will be recognized over a weighted average period of approximately 1.3 years. Stock Options Prior to December 4, 2019, all options granted to employees primarily vest ratably over five years on each anniversary of the date of grant. Options granted to non-employee directors vest fully on the earlier of the first anniversary of grant or date of the following annual meeting. Employee grants after December 4, 2019 vest ratably over four years. Vesting of option awards issued is conditional upon continuous service, unless the employee retires under the retirement provision, for grants issued in 2018, 2019, 2022, and 2023, for which they will vest for additional years following the retirement date. Options granted after May 8, 2013 have a contractual term of ten years. Upon any change in control of the company, 25% of the unvested stock options then outstanding will vest and become exercisable. However, if the acquiring entity does not assume outstanding options, then all options will vest immediately prior to the change in control. We use the Black-Scholes-Merton option-pricing model to determine the fair value of options granted. Option-pricing models require the input of highly subjective assumptions, particularly for the expected stock price volatility and the expected term of options. Changes in the subjective input assumptions can affect the fair value estimate. Our expected stock price volatility assumptions are based on the historical volatility of our stock over periods that are similar to the expected terms of grants and other relevant factors. We derive the expected term based on historical experience and other relevant factors concerning expected employee behavior with regard to option exercise. The risk-free interest rate is based on U.S. Treasury yields for a maturity approximating the expected term calculated at the date of grant. We have never paid cash dividends on our common stock and we have no intention to pay a dividend at this time; therefore, we assume that no dividends will be paid over the expected terms of option awards. 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 those grant dates. As such, we may use different assumptions for options granted throughout the year. 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:
A summary of the status of options granted under our share-based compensation plans at December 31, 2023, and changes during the year then ended, are presented in the table below:
The total fair value of options vested were $22.5 million, $20.4 million, and $17.3 million during the years ended December 31, 2023, 2022, and 2021, respectively. Intrinsic value of stock options exercised represents the amount by which the market price of the common stock exceeded the exercise price before applicable income taxes. The total intrinsic values of stock options exercised were $75.5 million, $54.6 million, and $147.9 million during the years ended December 31, 2023, 2022, and 2021, respectively. Restricted Stock Units Prior to December 4, 2019, the majority of RSUs, including our PBRSUs, granted to employees vest ratably over five years on each anniversary of the date of grant. The majority of employee grants after December 4, 2019, vest ratably over four years. A minority of some employee grants cliff-vest three years from date of grant. PBRSUs granted to employees vest based on meeting performance goals set on the day of grant. Vesting as it relates to RSUs and PBRSUs issued is conditional upon continuous service, unless the employee retires under the retirement provision, for grants issued in 2018, 2019, 2022, and 2023, for which they will vest for additional years following the retirement date. Upon any change in control of the company, 25% of the unvested RSUs and PBRSUs then outstanding will vest, provided, however, that if the acquiring entity does not assume the RSUs and PBRSUs, then all such units will vest immediately prior to the change in control. At time of grant, we assume all PBRSUs will meet performance goals to vest. RSUs granted to non-employee directors vest fully on the first anniversary of the date of grant. A summary of the status of RSUs and PBRSUs granted under our share-based compensation plans at December 31, 2023, and changes during the period then ended, are presented in the table below:
The total fair values of RSUs and PBRSUs vested were $31.1 million, $32.9 million, and $46.1 million during the years ended December 31, 2023, 2022, and 2021, respectively. The aggregate intrinsic value of nonvested RSUs and PBRSUs as of December 31, 2023, which is equal to the fair value of IDEXX’s common stock as of December 31, 2023, multiplied by the number of nonvested units as of December 31, 2023, was $78.0 million. Deferred Stock Units Under our Director Plan, non-employee directors may defer a portion of their cash fees in the form of vested DSUs. Prior to 2014, certain members of our management could elect to defer a portion of their cash compensation in the form of vested deferred stock units under our Executive Plan. Each DSU represents the right to receive one unissued share of our common stock. These recipients receive a number of DSUs equal to the amount of cash fees or compensation deferred divided by the closing sale price of the common stock on the date of deferral. Also under the Director Plan, non-employee directors are awarded annual grants of either RSUs or DSUs that vest fully on the earlier of the first anniversary of grant or date of the following annual meeting. Vesting for these annual RSU and DSU grants is conditional upon continuous service. Vested DSUs are distributed as shares of common stock on the distribution date elected by the participant and pursuant to the terms of the Director or Executive Plan, as applicable. There were approximately 59,000 and 58,000 vested DSUs outstanding under our share-based compensation plans as of December 31, 2023 and 2022, respectively. During 2023, approximately 300 DSUs were distributed as shares of common stock. Unvested DSUs as of December 31, 2023 and 2022, were not material. Employee Stock Purchase Rights Employee stock purchase rights are issued under the 1997 Employee Stock Purchase Plan, under which we reserved and may issue up to an aggregate of 4.7 million shares of common stock in periodic offerings. Under this plan, stock is sold to employees at a 15% discount off the closing price of the stock on the last day of each quarter. The dollar value of this discount is equal to the fair value of purchase rights recognized as share-based compensation. We issued approximately 36,300, 44,600, and 29,500 shares of common stock in connection with the Employee Stock Purchase Plan during the years ended December 31, 2023, 2022, and 2021, respectively. As of December 31, 2023, there were approximately 1.0 million remaining shares available for issuance under the 1997 Employee Stock Purchase Plan.
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CREDIT LOSSES |
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Dec. 31, 2023 | |
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. Additionally, our estimates are developed based on historical credit loss experience, estimates of recoveries, current economic conditions, and future expectations. Adjustments to historical loss information are made for differences in current economic conditions. 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 $9.5 million and $8.3 million at December 31, 2023 and 2022, respectively. The amount of accounts receivable reflected on the balance sheet is net of this reserve. At December 31, 2023, approximately 83% of our accounts receivable had not yet reached the invoice due date and approximately 17% was considered past due, of which approximately 1.7% was greater than 60 days past due. At December 31, 2022, approximately 86% of our accounts receivable had not yet reached the invoice due date and approximately 14% was considered past due, of which approximately 2.0% was greater than 60 days past due. Write-offs and recoveries related to credit losses during the years ended December 31, 2023, 2022, and 2021 were not material. Contract assets and lease receivables The allowance for credit losses associated with contract assets and lease receivables was $6.4 million and $5.5 million at December 31, 2023 and 2022, respectively. 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. Write-offs and recoveries related to credit losses during the years ended December 31, 2023, 2022, and 2021 were not material.
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INVENTORIES |
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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. We write down the carrying value of inventory for estimated obsolescence by an amount equal to the difference between the cost of inventory and the estimated market value when warranted based on assumptions of future demand, market conditions, remaining shelf life, or product functionality. If actual market conditions or results of estimated functionality are less favorable than those we estimated, additional inventory write-downs may be required, which would have a negative effect on results of operations. Unpaid inventory reflected within accounts payable in our consolidated balance sheets was $58.9 million, $59.4 million, and $64.4 million at December 31, 2023, 2022, and 2021, respectively. Instrument inventory transferred to property and equipment related to rental and operating-type reagent rental programs was $14.6 million, $17.4 million, $11.6 million during the years ended December 31, 2023, 2022, and 2021, respectively. The components of inventories are as follows:
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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 one 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 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 and payments associated with non-lease components and short-term rentals (leases with terms less than twelve 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 the 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 include any rent prepayments, lease incentives upon receipt, and straight-line rent expense impacts, which represent the differences between our operating lease liabilities and right-of-use assets. Maturities of operating lease liabilities are as follows:
Total minimum future lease payments for leases that have not commenced as of December 31, 2023, are not material.
Expenses incurred related to operating leases, excluding variable and short-term leases, were approximately $29.1 million and $26.8 million during the years ended December 31, 2023 and 2022, respectively. Total expenses incurred related to operating leases, including variable rent and short-term leases, were approximately $31.7 million and $28.7 million for the years ended December 31, 2023 and 2022, respectively. Supplemental cash flow information for leases is as follows:
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PROPERTY AND EQUIPMENT, NET |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT, NET | PROPERTY AND EQUIPMENT, NET Property and equipment are stated at cost, net of accumulated depreciation and amortization. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. When an item is sold or retired, the cost and related accumulated depreciation are relieved, and the resulting gain or loss, if any, is recognized in the consolidated statements of income. We evaluate our property and equipment for impairment periodically or as changes in circumstances or the occurrence of events suggest the remaining value is not recoverable from future cash flows. If the carrying value of our property and equipment is impaired, an impairment charge is recorded for the amount by which the carrying value of the property and equipment exceeds its fair value. We provide for depreciation and amortization primarily using the straight-line method by charges to the consolidated statements of income in amounts that allocate the cost of property and equipment over their estimated useful lives as follows:
We capitalize interest on the acquisition and construction of significant assets that require a substantial period of time to be made ready for use. The capitalized interest is included in the cost of the completed asset and depreciated over the asset’s estimated useful life. The amount of interest capitalized during the years ended December 31, 2023 and 2022, was not material. We capitalize certain costs incurred in connection with developing or obtaining software designated for internal use based on three distinct stages of development. Qualifying costs incurred during the application development stage, which consist primarily of internal payroll and direct fringe benefits and external direct project costs, including labor and travel, are capitalized and amortized on a straight-line basis over the estimated useful life of the asset. Costs incurred during the preliminary project and post-implementation and operation phases are expensed as incurred. These costs relate primarily to the determination of performance requirements, data conversion, and training. Software developed to deliver hosted services to our customers has been designated as internal use. Property and equipment, net, consisted of the following:
Below are the amounts of depreciation and amortization of property and equipment, capitalized computer software for internal use, unpaid property and equipment reflected in accounts payable and accrued expenses, and rental and reagent rental program instruments transferred from inventory to property and equipment:
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OTHER CURRENT AND LONG-TERM ASSETS |
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OTHER CURRENT AND LONG-TERM ASSETS | OTHER CURRENT AND LONG-TERM ASSETS Other current assets consisted of the following:
(1) Contract assets, net, are net of allowances for credit losses. Refer to “Note 6. Credit Losses.” (2) Refer to “Note 3. Revenue, Up-Front Consideration Paid to Customers,” for more information regarding consideration paid to customers, previously referred to as customer acquisition costs. Other long-term assets consisted of the following:
(1) Contract assets, net, are net of allowances for credit losses. Refer to “Note 6. Credit Losses.” (2) Refer to “Note 3. Revenue, Up-Front Consideration Paid to Customers,” for more information regarding consideration paid to customers, previously referred to as customer acquisition costs.
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GOODWILL AND INTANGIBLE ASSETS, NET |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND INTANGIBLE ASSETS, NET | GOODWILL AND INTANGIBLE ASSETS, NET A significant portion of the purchase price for acquired businesses is generally assigned to intangible assets. Intangible assets other than goodwill are initially valued at fair value. If a quoted price in an active market for the identical asset is not readily available at the measurement date, the fair value of the intangible asset is estimated based on discounted cash flows using market participant assumptions, which are assumptions that are not specific to IDEXX. The selection of appropriate valuation methodologies and the estimation of discounted cash flows require significant assumptions about the timing and amounts of future cash flows, risks, appropriate discount rates, and the useful lives of intangible assets. When significant, we typically utilize independent valuation experts to advise and assist us in determining the fair values of the identified intangible assets acquired in connection with a business acquisition and in determining appropriate amortization methods and periods for those intangible assets. Goodwill is initially valued based on the excess of the purchase price of a business combination over the fair value of acquired net assets recognized and represents the future economic benefits arising from other assets acquired that could not be separately identified and recognized. Our business combinations regularly include contingent consideration arrangements that require additional consideration to be paid based on the achievement of established objectives, most commonly related to customer retention or revenue growth of the customer base during the post-combination period. We assess contingent consideration to determine if it should be recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved, with changes in fair value recognized in earnings if changes in estimates are made after the measurement period. Refer to “Note 18. Fair Value Measurements” for changes in the fair value of contingent consideration and differences arising upon settlements. We assess goodwill for impairment annually, at the reporting unit level in the fourth quarter, and whenever events or circumstances indicate impairment may exist. In evaluating goodwill for impairment, we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test. The more likely than not threshold is defined as having a likelihood of more than 50%. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we assess the fair value of the reporting unit and compare its fair value to its carrying value to determine if the carrying value exceeds its fair value. Any excess of the carrying value of the goodwill above its fair value would be recognized as an impairment loss. In contrast, we can opt to bypass the qualitative assessment for any reporting unit in any period and proceed directly to assessing the fair value of the reporting unit(s), and compare the fair value of the reporting unit to its carrying value to determine if any impairment exists. Doing so does not preclude us from performing the qualitative assessment in any subsequent period. A prolonged economic downturn that results in lower long-term growth rates and reduced long-term profitability may reduce the fair value of our reporting units. Industry specific events or circumstances could have a negative impact on our reporting units and may also reduce the fair value of our reporting units. Should such events occur, and it becomes more likely than not that a reporting unit’s fair value has fallen below its carrying value, we will perform an interim goodwill impairment test, in addition to the annual impairment test. Future impairment tests may result in an impairment of goodwill. An impairment of goodwill would be reported as a non-cash charge to earnings. In the fourth quarter of 2023, we performed a qualitative assessment of goodwill impairment and concluded that there were no indications the carrying values of any of our reporting units exceeded their fair values. We had no goodwill impairments during the years ended December 31, 2023, 2022, or 2021. We assess the realizability of intangible assets other than goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If an impairment review is triggered, we evaluate the carrying value of intangible assets, other than goodwill, based on estimated undiscounted future cash flows over the remaining useful life of the primary asset of the asset group and compare that value to the carrying value of the asset group. The asset group is the lowest level for which identifiable cash flows associated with the intangible asset are largely independent. The cash flows that are used contain our best estimates, using appropriate and customary assumptions and projections at the time. If the net carrying value of the asset group exceeds the related estimated undiscounted future cash flows, an impairment loss to adjust the intangible asset to its fair value would be reported as a non-cash charge to earnings. If necessary, we would calculate the fair value of an intangible asset using the present value of the estimated future cash flows to be generated by the intangible asset and apply a risk-adjusted discount rate. We had no impairments of our intangible assets during the years ended December 31, 2023, 2022, and 2021. The changes in the carrying amount of goodwill for the years ended December 31, 2023, 2022, and 2021, were as follows:
Refer to “Note 4. Acquisitions, Asset Purchases and Investments” for information regarding goodwill and other intangible assets recognized in connection with the acquisition of businesses and other assets during the years ended December 31, 2023, 2022, and 2021. We provide for amortization primarily using the straight-line method by charges to income in amounts that allocate the intangible assets over their estimated useful lives as follows:
Intangible assets other than goodwill consisted of the following:
The above table excludes fully amortized intangible assets for the periods presented. (1)Customer-related intangible assets are comprised of customer lists and customer relationships acquired from third parties. (2)Product rights comprise certain technologies, intellectual property, licenses, and trade names acquired from third parties. Amortization expense of intangible assets other than goodwill was $13.8 million, $15.0 million, and $12.1 million for the years ended December 31, 2023, 2022, and 2021, respectively. At December 31, 2023, the aggregate amortization expense associated with intangible assets is estimated to be as follows for each of the next five years and thereafter:
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ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES |
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ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES | ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES Accounts Payable - Supplier Financing Program We have an agreement with a third party to provide a supplier finance program, which facilitates participating suppliers’ ability to finance payment obligations from us with a designated third-party financial institution. Participating suppliers may, at their sole discretion, make offers to finance one or more of our payment obligations prior to their scheduled due dates at a discounted price. Our obligations to our suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to finance amounts under these arrangements. The terms of payments are consistent with the terms of our trade payables. Activity related to the obligations is presented within operating activities on the consolidated statements of cash flows. The changes in our outstanding payment obligations under the supplier financing arrangement, which are included in on the consolidated balance sheets, are as follows:
Accrued liabilities consisted of the following:
Other long-term liabilities consisted of the following:
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DEBT |
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Debt Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Credit Facility On October 20, 2022, we, along with IDEXX Distribution, Inc., IDEXX Operations, Inc., OPTI Medical Systems, Inc., IDEXX Laboratories Canada Corporation, IDEXX B.V., IDEXX Laboratories B.V., and IDEXX Laboratories GmbH, each a wholly-owned subsidiary (whether directly or indirectly held) (collectively, the “Borrowers”), together with the lenders party to that certain Existing Credit Agreement (as defined below), JPMorgan Chase Bank, N.A., as administrative agent (“Agent”), and the other parties thereto, entered into Amendment No. 1 (the “Amendment”), to that certain fourth amended and restated credit agreement, dated as of December 9, 2021, relating to a five-year unsecured revolving credit facility in the principal amount of $1.0 billion (the “Existing Credit Agreement,” and as amended by the Amendment, the “Credit Agreement”), among the Borrowers, the lenders, the Agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Toronto agent, and the other parties thereto. The Amendment amended the Existing Credit Agreement to (i) provide for a borrowing by us effective October 20, 2022, of an incremental term loan in an aggregate principal amount of $250.0 million, (ii) convert all existing borrowings, which have interest rates determined by reference to a LIBOR-based interest rate, to borrowings determined by reference to a SOFR-based interest rate, (iii) provide for an option by us to obtain incremental borrowings under the Credit Agreement of term loans and/or revolving credit commitments of up to an aggregate principal amount of $250.0 million, which would represent an aggregate maximum of up to $1.5 billion, subject to the Borrowers obtaining commitments from existing or new lenders and satisfying other conditions specified in the Credit Agreement, and (iv) add certain implementing mechanics relating to the foregoing. On October 20, 2022, pursuant to the terms of the Credit Agreement, the term lenders thereunder provided us, as borrower, an incremental term loan in an aggregate principal amount of $250.0 million (the “Term Loan”). The Term Loan matures on October 20, 2025. The net proceeds of the Term Loan were used to repay previously incurred revolver borrowings under the Existing Credit Agreement. The Term Loan is subject to the same affirmative and negative covenants and events of default as the borrowings previously incurred pursuant to the Existing Credit Agreement. The applicable interest rate for the Term Loan is consistent with our line of credit, and is calculated at a per annum rate equal to either (at our option) (i) a prime rate plus a margin ranging from 0.0% to 0.375% based on our consolidated leverage ratio, (ii) an adjusted term SOFR rate, plus 0.10%, plus a margin ranging from 0.875% to 1.375% based on our consolidated leverage ratio, or (iii) an adjusted daily simple SOFR rate, plus 0.10%, plus a margin ranging from 0.875% to 1.375% based on our consolidated leverage ratio. Issuance costs for the incremental Term Loan were immaterial. In March 2023, we entered into an interest rate swap contract to manage the economic effects of $250.0 million of variable interest borrowings under our Credit Facility. Refer to” Note 19. Hedging Instruments” for a discussion of our derivative instruments and hedging activity. Although the revolving line of credit does not mature until December 9, 2026, and the Term Loan does not mature until October 20, 2025, all individual borrowings under the terms of the Credit Facility with an interest rate based on the prevailing Prime or SOFR rate (as selected by the Borrower) have a stated term between 1 and 180 days. At the end of each term, the obligation is either repaid or rolled over into a new borrowing or replaced by a borrowing based on a specific benchmark rate (where interest is then paid monthly). The Credit Facility contains a subjective material adverse event notification clause, which allows the debt holders to call the loans under the Credit Facility if we fail to provide prompt written notice to the syndicate of such an event. Based on the stated terms and the existence of the subjective material adverse event clause, this Credit Facility is reflected in the current liabilities section of our consolidated balance sheets. At December 31, 2023, we had $250.0 million outstanding on our line of credit, all of which is the $250.0 million Term Loan, with a weighted average effective interest rate of 6.0%, excluding any impact of our interest rate swap. Our weighted average borrowing rate for the year ended December 31, 2022, was 3.1%. At December 31, 2022, we had $579.0 million outstanding borrowings under our Credit Facility. The funds available under the Credit Facility reflect a further reduction due to the issuance of letters of credit, which were primarily issued in connection with our workers’ compensation policy, for $1.5 million in the years ended December 31, 2023 and 2022. The obligations under the Credit Facility may be accelerated upon the occurrence of an event of default under the Credit Facility, which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, the failure to pay specified indebtedness, cross-acceleration to specified indebtedness, and a change of control default. The Credit Facility contains affirmative, negative, and financial covenants customary for financings of this type. The negative covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental changes, investments, transactions with affiliates, and certain restrictive agreements. The sole financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization, and share-based compensation, which is defined as the consolidated leverage ratio under the terms of the Credit Facility, not to exceed 3.5-to-1. At December 31, 2023, we were in compliance with the covenants of the Credit Facility. 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 December 31, 2023:
The following narrative describes our Senior Note activity: NY Life 2013 and 2014 Note Agreements, Including Amendments In December 2013, we issued and sold through a private placement an aggregate principal amount of $150.0 million of unsecured senior notes consisting of $75.0 million of 3.94% Series A Senior Notes due December 11, 2023 (the “2023 Series A Notes”) and $75.0 million of 4.04% Series B Senior Notes due December 11, 2025 (the “2025 Series B Notes”) under a Note Purchase Agreement among the Company, New York Life Insurance Company, and the accredited institutional purchasers named therein (as amended on April 10, 2020, the “NY Life 2013 Note Agreement”). In December 2023, we paid off our $75.0 million 2023 Series A Notes. In September 2014, we issued and sold through a private placement an aggregate principal amount of $75.0 million of unsecured 3.72% senior notes due September 4, 2026 (the “2026 Senior Notes”) under a Note Purchase Agreement dated as of July 22, 2014, among the Company, New York Life Insurance Company, and the accredited institutional purchasers named therein (as amended April 10, 2020, the “NY Life 2014 Note Agreement”). 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. Prudential 2015 Amended Agreement, Including Amendments In July 2014, we issued and sold through a private placement an aggregate principal amount of $125.0 million of unsecured senior notes consisting of $50.0 million of 3.32% Series A Senior Notes due July 21, 2021 (the “2021 Series A Notes”) and $75.0 million of 3.76% Series B Senior Notes due July 21, 2024 (the “2024 Series B Notes”) under a Note Purchase and Private Shelf Agreement among the Company, Prudential Investment Management, Inc. (“Prudential”), and the accredited institutional purchasers named therein (the “Prudential 2014 Note Agreement”). The $50.0 million 3.32% Series A Senior Note was repaid in full on the July 21, 2021 due date. In June 2015, we entered into an Amended and Restated Multi-Currency Note Purchase and Private Shelf Agreement (the “Original Prudential 2015 Amended Agreement”), among the Company, Prudential, and the accredited institutional purchasers named therein, which amends and restates the Prudential 2014 Note Agreement. Pursuant to the Original Prudential 2015 Amended Agreement, we issued and sold through an aggregated private placement an aggregate principal amount of €88.9 million of unsecured 1.785% Series C Senior Notes due June 18, 2025 (the “2025 Series C Notes”). On May 9, 2019, we entered into the Amendment to Note Purchase and Private Shelf Agreement (the “Prudential First Amendment”) with Prudential and the other parties thereto, which amended certain reporting provisions in the Original 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 $425.0 million, (ii) extend the facility issuance period to April 10, 2023, (iii) make various implementing and administrative changes in order to facilitate a $75.0 million notes issuance on April 14, 2020, (iv) allow the amount available to be issued under the facility to equal $425.0 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 Original Prudential 2015 Amended Agreement, as amended by the Prudential First Amendment, to create additional operating flexibility, and in particular to align such provisions with similar modifications we made substantially concurrently in our other debt facilities. We refer to the Original Prudential 2015 Agreement, as amended by the Prudential First Amendment and the Prudential Second Amendment, as the “Prudential 2015 Amended Agreement.” On April 14, 2020, we issued and sold to Prudential and other purchasers $75.0 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 used the proceeds received from the Prudential 2030 Series D Notes for general corporate purposes. MetLife 2014 Note Agreement, Including Amendments We entered into a Multicurrency Note Purchase and Private Shelf Agreement, dated as of December 19, 2014 (the “Original MetLife 2014 Note Agreement”), among the Company, Metropolitan Life Insurance Company (“MetLife”), and the accredited institutional purchasers named therein pursuant to which we agreed to issue and sell an aggregate principal amount of $150.0 million of unsecured senior notes consisting of $75.0 million of our 3.25% Series A Senior Notes having a seven-year term (the “2022 Series A Notes”), and $75.0 million of our 3.72% Series B Senior Notes having a twelve-year term (“2027 Series B Notes”). The issuance, sale and purchase of these notes occurred in February 2015. The aggregate principal amount of our 2022 Series A Notes for $75.0 million was paid on February 12, 2022. On March 14, 2019, we amended the Original MetLife 2014 Note Agreement. Pursuant to the Original MetLife 2014 Note Agreement, as so amended, we issued and sold through a private placement an aggregate principal amount of $100.0 million of unsecured senior notes at a 4.19% per annum rate, due March 14, 2029 (the “2029 Series C Notes”). On March 23, 2020, we entered into the Second Amendment to the Original MetLife 2014 Note Agreement (the “MetLife Second Amendment”), in order to (i) increase the facility size from $150.0 million to $300.0 million, (ii) extend the facility issuance period to December 20, 2022, (iii) make various implementing and administrative changes in order to facilitate a $125.0 million notes issuance on April 2, 2020, and (iv) allow the amount available to be issued under the facility to equal $300.0 million, less the amounts outstanding on 2029 Series C Notes and MetLife 2030 Series D Notes. On April 2, 2020, we issued and sold to MetLife and other purchasers $125.0 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 used the proceeds received from the MetLife 2030 Series D Notes for general corporate purposes. We refer to the Original MetLife 2014 Agreement, as so amended, as the “MetLife 2014 Agreement,” and together with the NY Life 2013 Note Agreement, NY Life 2014 Note Agreement, and Prudential 2015 Amended Note Agreement, collectively, as the “Senior Note Agreements.” Senior Note Agreements The Senior Note Agreements contain affirmative, negative, and financial covenants customary for agreements of this type. The negative covenants include restrictions on liens, indebtedness of our subsidiaries, priority indebtedness, fundamental changes, investments, transactions with affiliates, certain restrictive agreements, and violations of laws and regulations. The sole financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation, amortization, and share-based compensation, as defined in the Senior Note Agreements, not to exceed 3.5-to-1. At December 31, 2023, we were in compliance with the covenants of the Senior Note Agreements. Should we elect to prepay the Senior Notes, such aggregate prepayment will include the applicable make-whole amount(s), as defined within the applicable Senior Note Agreements. Additionally, in the event of a change in control of the Company or upon the disposition of certain assets of the Company the proceeds of which are not reinvested (as defined in the Senior Note Agreements), we may be required to prepay all or a portion of the Senior Notes. The obligations under the Senior Notes may be accelerated upon the occurrence of an event of default under the applicable Senior Note Agreement, each of which includes customary events of default including payment defaults, defaults in the performance of the affirmative, negative and financial covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, the failure to pay specified indebtedness, and cross-acceleration to specified indebtedness. We used the net proceeds from the issuances and sale of the Senior Notes for general corporate purposes. Future maturities of long-term debt at December 31, 2023, are as follows:
Total interest paid on all debt (including our Credit Facility) for the years ended December 31, 2023, 2022, and 2021, was $41.0 million, $40.3 million, and $30.5 million, respectively.
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the estimated future tax effects of temporary differences between book and tax treatment of assets and liabilities and carryforwards to the extent they are realizable. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. In assessing the need for a valuation allowance, we consider future taxable income and ongoing prudent and feasible tax planning strategies. In the event that we determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, a reduction of the valuation allowance would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, a reduction to the deferred tax asset would be charged to income in the period such determination was made. We record a liability for uncertain tax positions that do not meet the more likely than not standard as prescribed by the authoritative guidance for income tax accounting. We record tax benefits for only those positions that we believe will more likely than not be sustained. Unrecognized tax benefits are the differences between tax positions taken, or expected to be taken, in tax returns, and the benefits recognized for accounting purposes. We classify uncertain tax positions as long-term liabilities. Significant judgment is required in determining our worldwide provision for income taxes and our income tax filings are regularly under audit by tax authorities. Any audit result differing from amounts recorded would increase or decrease income in the period that we determine such adjustment is likely. Interest expense and penalties associated with the underpayment of income taxes are included in income tax expense. Earnings before income taxes were as follows:
The provision (benefit) for income taxes comprised the following:
The provision for income taxes differs from the amounts computed by applying the statutory federal income tax rate as follows:
Our effective income tax rate was 20.4% for the year ended December 31, 2023, and 21.0% for the year ended December 31, 2022. Our effective tax rate for the year ended December 31, 2023, was lower primarily due to the release of valuation allowances against deferred tax assets in certain international and state jurisdictions where we determined, due to changes in circumstances during the current period, that it is more likely than not that we will realize the associated deferred tax assets. Income taxes paid, net of refunds received, for the periods ended December 31, 2023, 2022, and 2021, were $192.5 million, $239.8 million, and $161.7 million, respectively. Prior to January 1, 2022, we received benefits from a tax ruling in the Netherlands that documented our mutual understanding of how prior tax laws applied to our circumstances. Primarily as a result of this tax ruling, our net income was higher by $21.4 million for the year ended December 31, 2021. The benefits from these tax rulings are reflected within the overall benefits received from taxation on international earnings during 2021 in the table above. On December 31, 2021, the Netherlands adopted legislation eliminating the tax benefits related to this tax ruling for tax years beginning after December 31, 2021. The year ending December 31, 2021 was the final year that tax benefits were received as a benefit from the tax ruling. We have determined that unremitted earnings are not indefinitely reinvested to the extent they can be distributed without incurring a significant tax liability. As such, we have recorded a deferred tax liability for foreign withholding tax that will be incurred with respect to the unremitted earnings upon repatriation. We consider all other outside basis differences to be indefinitely reinvested to the extent reversal would incur a significant tax liability. It is not practicable to calculate a deferred tax liability related to such outside basis differences. The components of the net deferred tax assets (liabilities) included in the accompanying consolidated balance sheets are as follows:
As of December 31, 2023, we recorded valuation allowances against certain deferred tax assets related to temporary differences, including intangible asset basis differences and net operating loss (“NOL”) and tax credit carryforwards, as it is more likely than not that they will not be realized or utilized within the carryforward period. The following table summarizes the changes in valuation allowance for deferred tax assets:
As of December 31, 2023, we have NOLs in certain state and international jurisdictions of approximately $39.3 million available to offset future taxable income. Most of these NOLs will expire at various dates between 2024 and 2030 and the remainder have indefinite lives. The following table summarizes the changes in unrecognized tax positions:
Of the total unrecognized tax benefits at December 31, 2023 and 2022, $21.2 million and $20.9 million, respectively, comprise unrecognized tax positions that would, if recognized, affect our effective tax rate. Unrecognized tax benefits of approximately $8.9 million are subject to the lapse in the statutes of limitations during 2024 in various U.S. and international tax jurisdictions. During the years ended December 31, 2023, 2022, and 2021, we recorded interest expense and penalties related to income taxes, of $2.9 million, $1.3 million, and $1.1 million, respectively, as income tax expense in our consolidated statement of income. At December 31, 2023, 2022, and 2021, we had $3.8 million, $4.2 million, and $3.8 million, respectively, of estimated interest expense and penalties accrued in our consolidated balance sheets. In the ordinary course of our business, our income tax filings are regularly under audit by tax authorities. While we believe we have appropriately provided for all uncertain tax positions, amounts asserted by taxing authorities could be greater or less than our accrued position. Accordingly, additional provisions on income tax matters, or reductions of previously accrued provisions, could be recorded in the future as we revise our estimates due to changing facts and circumstances or the underlying matters are settled or otherwise resolved. We are currently under tax examinations in various jurisdictions. We anticipate that these examinations will be concluded within the next two years. With few exceptions, we are no longer subject to income tax examinations for years before 2015 in any jurisdiction in which we conduct significant taxable activities.
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EARNINGS PER SHARE |
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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. Refer to “Note 5. Share-Based Compensation” for additional information regarding deferred stock units. The following is a reconciliation of weighted average shares outstanding for basic and diluted earnings per share:
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:
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COMMITMENTS, CONTINGENCIES AND GUARANTEES |
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Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS, CONTINGENCIES AND GUARANTEES | COMMITMENTS, CONTINGENCIES AND GUARANTEES Commitments Refer to “Note 8. Leases” for more information regarding our lease commitments. In the ordinary course of business we enter into purchase obligations that include agreements and purchase orders to purchase goods or services that are contractually enforceable and that specify all significant terms, including fixed or minimum quantities, pricing, and approximate timing of purchases. As of December 31, 2023, we had approximately $196.3 million in purchase obligations due in 2024. Our purchase obligations beyond 2024 are approximately $55.2 million. The expected timing of payments of our purchase obligations is estimated based on current information. Timing of payments and actual amounts paid may be different, depending on the time of receipt of goods or services, or changes to agreed-upon amounts for some obligations. Contingencies 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. Except for the litigation matter described below, at December 31, 2023, our accruals with respect to actual and threatened litigation were not material. We are a defendant in an ongoing litigation matter involving an alleged breach of contract for underpayment of royalty payments made from 2004 through 2017 under an expired patent license agreement. The plaintiff has asserted a claim of approximately $50 million inclusive of interest through June 30, 2020, alleging that the incorrect royalty provision was applied to certain licensed products and services throughout the agreement term and that royalties were also due on non-licensed diagnostic services that were provided concurrently with licensed services. The trial court previously ruled in favor of the plaintiff in this matter. The appellate court reversed the trial court’s decision, and the state supreme court granted the plaintiff’s petition for review. The state supreme court held a hearing to review the appellate court decision in January 2024, and a ruling is pending. While we believe the claim is without merit and will continue to vigorously defend ourselves against the plaintiff’s allegations, litigation is inherently unpredictable, and there can be no assurance that we will prevail in this matter. During the third quarter of 2020, we established an accrual of $27.5 million related to this ongoing matter, which represents the amount of the contingent loss that we have determined to be probable and estimable. We have not made any adjustments to this accrual since it was established. The actual cost of resolving this matter may be higher or lower than the amount we have accrued. 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. Guarantees We enter into agreements with third parties in the ordinary course of business under which we are obligated to indemnify such third parties for and against various risks and losses. The precise terms of such indemnities vary with the nature of the agreement. In many cases, we limit the maximum amount of our indemnification obligations, but in some cases, those obligations may be theoretically unlimited. We have not incurred material expenses in discharging any of these indemnification obligations and, based on our analysis of the nature of the risks involved, we believe that the fair value of potential indemnification under these agreements is minimal. Accordingly, we have recorded no liabilities for these obligations at December 31, 2023 and 2022. When acquiring a business, we sometimes assume liability for certain events or occurrences that took place prior to the date of acquisition. As of December 31, 2023 and 2022, we do not have any material pre-acquisition liabilities recorded.
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SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING We operate primarily through three business segments: Companion Animal Group (“CAG”), Water quality products (“Water”), and Livestock, Poultry and Dairy (“LPD”). CAG provides products and services for veterinarians and the biomedical research community, primarily related to diagnostics and information management. Water provides innovative testing solutions for the detection and quantification of various microbiological parameters in water. LPD provides diagnostic tests, services, and related instrumentation that are used to manage the health status of livestock and poultry, to improve producer efficiency, and to ensure the quality and safety of milk. Our Other operating segment combines and presents our human medical diagnostic business (“OPTI Medical”) with our out-licensing arrangements because they do not meet the quantitative or qualitative thresholds for reportable segments. OPTI Medical develops, manufactures, and distributes human medical diagnostic products and services. 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: CAG, Water, LPD, and Other. Assets are not allocated to segments for internal reporting purposes. Intersegment revenues, which are not included in the table below, were not material for the years ended December 31, 2023, 2022, and 2021. The following is a summary of segment performance:
Refer to “Note 3. Revenue” for a summary of disaggregated revenue by reportable segment and by major product and service category for the years ended December 31, 2023, 2022, and 2021. Net long-lived assets, consisting of net property and equipment, are subject to geographic risks because they are generally difficult to move and to effectively utilize in another geographic area in a reasonable time period and because they are relatively illiquid. Net long-lived assets by principal geographic areas were as follows:
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FAIR VALUE MEASUREMENTS |
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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 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:
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 years ended December 31, 2023 and 2022. Our cross currency swap contracts are measured at fair value on a recurring basis in our accompanying consolidated balance sheets and are classified as derivative instruments. We measure the fair value of our cross currency swap contracts 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 consolidated balance sheets and are classified as derivative instruments. We measure the fair value of our foreign currency exchange contracts 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. Our interest rate swap contract is measured at fair value on a recurring basis in our accompanying consolidated balance sheets and is classified as a derivative instrument. We measure the fair value of our interest rate swap using current market interest rates for debt issues with similar remaining years to maturity, adjusted for applicable credit 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 accompanying 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. At December 31, 2023, the estimated fair value and carrying value of our long-term debt were $670.0 million and $698.2 million, respectively. At December 31, 2022, the estimated fair value and carrying value of our long-term debt were $725.6 million and $769.8 million, respectively. 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:
(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 December 31, 2023, 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 current assets. Refer to footnote (5) 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)The interest rate swap is included within other long-term assets. (5)A deferred compensation plan assumed as part of a previous business combination is included within accrued 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 values of certain financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable, approximate carrying value due to their short maturity. Contingent Consideration We have classified our liabilities for contingent consideration related to acquisitions within Level 3 of the fair value hierarchy because the fair value is determined using significant unobservable inputs, which includes the achievements of future revenues. The contingent consideration is included within other short-term liabilities. We record changes in the estimated fair value of contingent consideration in the consolidated statements of income. Changes in contingent consideration liabilities are measured at fair value on a recurring basis using unobservable inputs (Level 3) and during the years ended December 31, 2023, and 2022, are as follows:
During the second quarter of 2022, we determined that the $7.0 million contingent consideration associated with our ezyVet acquisition in the second quarter of 2021 would be earned based on revenue achievements obtained. This amount was paid out during the second and third quarters of 2022. During the third quarter of 2022, we also issued a contingent payment related to a separate acquisition for approximately $0.1 million.
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HEDGING INSTRUMENTS |
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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. We utilize hedging instruments to manage a portion of our foreign currency exchange risk and interest rate risk. During the first quarter of 2023, we entered into an interest rate swap to manage the impact of interest rate fluctuations associated with $250.0 million of borrowings under our variable-rate Credit Facility. We have designated the interest rate swap as a cash flow hedge. 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 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 large, 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 our designation of such instruments as hedging transactions. We recognize all hedging instrument assets and liabilities 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. Refer to “Note 21. Accumulated Other Comprehensive Income” for further information regarding the effect of hedging instruments on the consolidated statements of income for the years ended December 31, 2023, 2022, and 2021. 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 accompanying 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. Refer to “Note 18. Fair Value Measurements” for additional information regarding the fair value of our derivative instruments and “Note 21. Accumulated Other Comprehensive Income” for additional information regarding the effect of derivative instruments designated as cash flow hedges on the consolidated statements of income. Cash Flow Hedges We have designated our foreign currency exchange contracts and our interest rate swap as cash flow hedges as these derivative instruments manage our exposure to variability in the cash flows of forecasted transactions attributable to foreign currency exchange and to interest rates on variable interest obligations under the terms of our Credit Facility. 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 the years ended December 31, 2023, 2022, and 2021. Gains and losses related to hedge ineffectiveness recognized in earnings during the years ended December 31, 2023, 2022, and 2021 were not material. At December 31, 2023, the estimated amount of losses, net of tax, from our foreign exchange contracts which are expected to be reclassified out of AOCI and into earnings within the next twelve months is $2.4 million if exchange rates do not fluctuate from the levels at December 31, 2023. At December 31, 2023, the estimated amount of gains, net of tax, from our interest rate swap contract which are expected to be reclassified out of AOCI and into earnings within the next twelve months is $1.7 million if interest rates do not fluctuate from the levels as of December 31, 2023. Foreign Currency Exchange Contracts: We target to hedge approximately 75% to 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 intercompany foreign transactions 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 $294.0 million and $258.2 million at December 31, 2023 and 2022, respectively. Interest Rate Swap: We entered into an interest rate swap contract to manage the economic effect of variable interest obligations on amounts borrowed under the terms of the Credit Facility. Beginning on March 31, 2023, the variable interest rate associated with $250.0 million of borrowings outstanding under the Credit Facility became effectively fixed at 3.9% plus the applicable credit spread, through October 20, 2025. The following table presents the effect of cash flow hedge accounting on our consolidated statements of income and comprehensive income, and provides information regarding the location and amounts of pretax gains or losses of derivatives:
Net Investment Hedges, Euro-Denominated Notes 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 a loss of $2.6 million, a gain of $4.5 million, and a gain of $6.4 million, net of tax, within AOCI as a result of this net investment hedge for the years ended December 31, 2023, 2022, and 2021, respectively. The related cumulative unrealized gain recorded at December 31, 2023, will not be reclassified in earnings until the complete or substantially complete liquidation of the net investment in the hedged foreign operations or all or a portion of the hedge no longer qualifies for hedge accounting treatment. Refer to “Note 13. Debt” to the consolidated financial statements included in this Annual Report on Form 10-K for further information regarding the issuance of these euro-denominated notes. Net Investment Hedges, Cross Currency Swaps We have entered into several 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. These cross currency swaps have maturity dates beginning on June 30, 2025, through June 30, 2028. At maturity of the cross currency swap contracts we will deliver the notional amount of €15 million and will receive approximately $17.5 million from the counterparties on June 18, 2025; we will deliver the notional amount of €35 million and will receive $37.8 million from the counterparties on March 31, 2028; and we will deliver the notional amount of €90 million and will receive $98.2 million from the counterparties on June 30, 2028.The changes in fair values 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. We recorded a loss of $5.6 million, a gain of $3.8 million, and a gain of $5.4 million, net of tax, within AOCI as a result of these net investment hedges, during the years ended December 31, 2023, 2022, and 2021, 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 $2.1 million and $2.8 million related to the excluded component as a reduction of interest expense for the years ended December 31, 2023 and 2022, respectively. During the second quarter of 2023, the notional amount of €90.0 million in cross currency swaps matured, resulting in a net cash receipt of $6.3 million. The receipt of cash is reflected within investing activities on the Consolidated Statements of Cash Flows. Fair Values of Hedging Instruments Designated as Hedges in Consolidated Balance Sheets The fair values of hedging instruments, their respective classification on the consolidated balance sheets, and amounts subject to offset under master netting arrangements consisted of the following derivative instruments, unless otherwise noted:
(1)Amounts represent reported carrying amounts of our foreign currency denominated debt. Refer to “Note 18. Fair Value Measurements” for information regarding the fair value of our long-term debt.
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REPURCHASES OF COMMON STOCK |
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REPURCHASES OF COMMON STOCK | REPURCHASES OF COMMON STOCK As of December 31, 2023, our Board of Directors has authorized the repurchase of up to 73.0 million shares of our common stock in the open market or in negotiated transactions pursuant to the Company’s share repurchase program. We believe that the repurchase of our common stock is a favorable means of returning value to our stockholders, and we also repurchase to offset the dilutive effect of our share-based compensation programs. Repurchases of our common stock may vary depending upon the level of other investing and deployment activities, as well as share price and prevailing interest rates. As of December 31, 2023, there are approximately 2.9 million remaining shares available for repurchase under this authorization. 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 years ended December 31, 2023, 2022, and 2021, was not material. The Inflation Reduction Act of 2022, which was enacted into law on August 16, 2022, imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022, and is included in the cost of treasury stock acquired in repurchases in the open market for the current year. The following is a summary of our open market common stock repurchases, reported on a trade date basis, and shares acquired through employee surrenders:
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ACCUMULATED OTHER COMPREHENSIVE INCOME |
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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:
The following table presents components and amounts reclassified out of AOCI to net income:
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PREFERRED STOCK |
12 Months Ended |
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Dec. 31, 2023 | |
Preferred Stock, Number of Shares, Par Value and Other Disclosure [Abstract] | |
PREFERRED STOCK | PREFERRED STOCK Our Board of Directors is authorized, subject to any limitations prescribed by law, without further stockholder approval, to issue from time to time up to 500,000 shares of Preferred Stock, $1.00 par value per share (“Preferred Stock”), in one or more series. Each such series of Preferred Stock shall have such number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as shall be determined by the Board of Directors, which may include, among others, dividend rights, voting rights, redemption and sinking fund provisions, liquidation preferences, conversion rights, and preemptive rights. There are no shares of Preferred Stock outstanding as of December 31, 2023 and 2022.
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IDEXX RETIREMENT AND INCENTIVE SAVINGS PLAN |
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
IDEXX RETIREMENT AND INCENTIVE SAVINGS PLAN | IDEXX RETIREMENT AND INCENTIVE SAVINGS PLAN We have established the IDEXX Retirement and Incentive Savings Plan (the “401(k) Plan”). U.S. employees eligible to participate in the 401(k) Plan may contribute specified percentages of their salaries. We match a portion of these contributions, not to exceed 5% of participants’ eligible compensation. We matched $30.3 million, $28.3 million, and $25.8 million for the years ended December 31, 2023, 2022, and 2021, respectively. In addition, we may make contributions to the 401(k) Plan at the discretion of the Board of Directors. There were no discretionary contributions in 2023, 2022 or 2021. We also have established defined contribution plans for regional employees in Europe and in Canada. With respect to these plans, our contributions over the past three years have not been material. Defined Benefit Pension Obligations Our Swiss defined benefit pension plans (“Swiss Plans”) are government-mandated retirement plans that provide employees with a minimum investment return. We account for our Swiss Plans in accordance with ASC 715-30, “Defined Benefit Plans - Pension.” As of December 31, 2023, our Swiss Plans had an unfunded net pension obligation of $5.6 million, with a fair value of plan assets of $14.4 million. The investments of the plan assets are measured using a mix of Level 1, Level 2, and Level 3 inputs. For the year ended December 31, 2023, we recognized $1.1 million in expense related to the Swiss Plans. The expense was reflected in cost of revenue, sales & marketing expense, general and administrative expense, and research and development expense, based on employee classification. Future benefits expected to be paid as of December 31, 2023, are as follows:
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
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Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
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Pay vs Performance Disclosure | |||
Net Income (Loss) | $ 845,042 | $ 679,089 | $ 744,845 |
Insider Trading Arrangements |
3 Months Ended |
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Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimates | Estimates The preparation of these consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an ongoing basis, we evaluate these estimates, including those related to reserves for accounts receivable, customer contract assets and lease receivables; goodwill and other intangible assets; income taxes; inventory valuation; revenue recognition, including product returns and customer contracts with multiple performance obligations; share-based compensation; warranty reserves; self-insurance reserves; fair value measurements; and loss contingencies. We accrue contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from these estimates.
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Cash and Cash Equivalents | Cash and Cash Equivalents We consider all highly liquid investments with original maturities of ninety days or less to be cash equivalents. Cash and cash equivalents consist primarily of demand deposits, money market funds, and short-duration agency bonds and commercial paper as described above, which management believes are subject to minimal credit and market risk.
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Warranty Reserves | Warranty ReservesWe provide a standard twelve-month warranty on all diagnostic instruments sold. We recognize the cost of instrument warranties in cost of product revenue at the time revenue is recognized based on the estimated cost to repair the instrument over its warranty period. Cost of product revenue reflects not only estimated warranty expense for instruments sold in the current period, but also any changes in estimated warranty expense for the portion of the aggregate installed base that is under warranty. Estimated warranty expense is based on a variety of inputs, including historical instrument performance in the customers’ environments, historical and estimated costs incurred in servicing instruments, and projected instrument reliability. Should actual service rates or costs differ from our estimates, revisions to the estimated warranty liability would be required. The liability for warranties is included in accrued liabilities in the accompanying consolidated balance sheets. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Taxes Remitted to Governmental Authorities by IDEXX on Behalf of Customer | Taxes Remitted to Governmental Authorities by IDEXX on Behalf of Customers We calculate, collect from our customers, and remit to governmental authorities sales, value-added, and excise taxes assessed by governmental authorities in connection with revenue-producing transactions with our customers. We report these taxes on a net basis and do not include these tax amounts in revenue or cost of product or service revenue.
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Research and Development Costs | Research and Development CostsResearch and development costs, which consist of employee compensation and benefits, certain licensing costs, materials, external consulting, and product development costs, are expensed as incurred. We evaluate our research and development costs for capitalization after the technological feasibility has been established for software and products containing software to be sold; however, no costs were capitalized during the years ended December 31, 2023, 2022, and 2021. Software developed to deliver hosted services to our customers has been designated as internal-use, and we capitalize certain costs incurred in connection with developing or obtaining software designated for internal use based on three distinct stages of development. Refer to “Note 9. Property and Equipment, Net” for further information on internal-use software. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising Costs | Advertising CostsAdvertising costs, which are recognized as sales and marketing expense in the period in which they are incurred | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal Costs | Legal Costs Legal costs are considered period costs and, accordingly, are expensed in the year services are provided.
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Foreign Currency | Foreign Currency The functional currency of most of our foreign subsidiaries is their local currency, and a small number of our foreign subsidiaries that conduct business primarily in U.S. dollars have the U.S. dollar as their functional currency. Assets and liabilities of our other foreign subsidiaries, whose functional currency is their local currency, are translated to the U.S. dollar using the exchange rate in effect at the balance sheet date. Revenue and expense accounts are translated to the U.S. dollar using the exchange rate at the date at which those elements are recognized, and where it is impractical to do so, an average exchange rate in effect during the period is used to translate those elements. Cumulative translation gains and losses are shown in the accompanying consolidated balance sheets as a separate component of accumulated other comprehensive income (“AOCI”). Revenues and expenses denominated in a currency other than the respective subsidiary’s functional currency are recorded at the current exchange rate when the transaction is recognized. Monetary assets and liabilities denominated in a currency other than the respective subsidiary’s functional currency are remeasured at each balance sheet date using the exchange rate in effect at each balance sheet date. These foreign currency gains and losses are included in general and administrative expenses within our Other segment.
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Comprehensive Income | Comprehensive IncomeWe report all changes in equity, including net income and transactions or other events and circumstances from non-owner sources during the period in which they are recognized. We have chosen to present comprehensive income, which encompasses net income, foreign currency translation adjustments, gains and losses on our net investment hedges, defined benefit plan adjustments, and the difference between the cost and the fair market value of investments in debt and equity securities, forward currency exchange contracts, and interest rate swap contracts in the consolidated statements of comprehensive income. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity and Cost Methods of Accounting for Investments | Equity and Cost Methods of Accounting for Investments Investments where we have the ability to exercise significant influence, but do not control the entity, are accounted for under the equity method of accounting. Significant influence generally exists if we have a 20% to 50% ownership interest in the investee. Equity investments in entities for which we do not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost less impairment, if any, adjusted for changes resulting from qualifying observable price changes for the identical investment of the same issuer should they occur. We evaluate our investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may be impaired. If a decline in the value of an investment is determined to be other than temporary, a loss is recorded in earnings in the current period.
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Concentrations of Risk | Concentrations of Risk Financial Instruments. Financial instruments that potentially subject us to concentrations of credit risk are principally cash, cash equivalents, accounts receivable, contract assets, lease receivables, and derivatives. To mitigate such risk with respect to cash and cash equivalents, we place our cash with highly-rated financial institutions, in non-interest bearing accounts that are insured by the U.S. government and money market funds invested in government securities. To reduce credit risk with respect to accounts receivable, contract assets, and lease receivables, we routinely assess the financial strength of our most significant customers and monitor the amounts owed to us, taking appropriate action when necessary. Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers that purchase our products and services, and we have no significant customers that accounted for greater than 10% of our consolidated revenues during the year ended December 31, 2023. As a result, we believe that accounts receivable, contract assets, and lease receivables credit risk exposure is limited. We maintain allowances for expected credit losses, but historically have not experienced material losses related to an individual customer or group of customers in any particular industry or geographic area. To mitigate concentration of credit risk with respect to derivatives, we enter into transactions with highly-rated financial institutions, enter into master netting arrangements with counterparties to our derivative transactions, and frequently monitor the creditworthiness of our counterparties. Our master netting arrangements reduce our exposure in that they permit outstanding receivables and payables with the counterparties to our derivative transactions to be offset in the event of default. We have not incurred such losses and consider the risk of counterparty default to be minimal. Sole and Single-Source Suppliers. Many of the third parties that provide us with the instruments we sell, as well as certain components, raw materials and consumables used in or with our products, are sole or single-source suppliers. Some of the products that we purchase from these suppliers are proprietary or complex in nature, and, therefore, cannot be readily or easily replaced by alternative sources. We have a process of qualifying alternative third-party suppliers for select components and materials, which must meet approvals internally and from various regulatory agencies before we are able to use and sell products using these alternative sources. If we are unable to obtain adequate quantities of inventory, we could face cost increases or delays or discontinuations in product shipments, which could have a material adverse effect on our results of operations. Under certain long-term supply arrangements we paid the supplier for costs related to molds, dies and other tools used for the production of products we purchase. These payments are capitalized in other assets, as we do not have title or control of the underlying production assets, and are amortized to cost of sales.
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New Accounting Pronouncements Adopted and New Accounting Pronouncements Not Yet Adopted | New Accounting Pronouncements Adopted Effective January 1, 2021, we adopted ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The new guidance is intended to simplify the accounting for income taxes by removing certain exceptions and by updating accounting requirements around goodwill recognized for tax purposes and the allocation of current and deferred tax expense among legal entities, among other minor changes. The adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements. In July 2021, the FASB issued ASU 2021-05, “Leases (Topic 842); Lessors - Certain Leases with Variable Lease Payments.” ASU 2021-05 requires a lessor to classify a lease with variable payments that do not depend on an index or rate as an operating lease if another lease classification (i.e., sales-type or direct financing) would result in recognition of a day-one loss. We elected to adopt this standard as of the third quarter of 2021, on a prospective basis. The adoption of ASU 2021-05 did not have a material impact on our consolidated financial statements. We adopted ASU 2022-04, “Liabilities - Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations,” as of January 1, 2023, which adds certain disclosure requirements for a buyer in a supplier finance program. The amendments in this update require that a buyer in a supplier finance program discloses sufficient information about the program to allow a user of financial statements to understand the program's nature, activity during the period, changes from period to period, and potential magnitude. Refer to “Note 12. Accounts Payable, Accrued Liabilities and Other Long-Term Liabilities.” We adopted ASU 2021-08, “Business Combinations (Topic 805): Accounting for Acquired Contract Assets and Contract Liabilities,” as of January 1, 2023. ASU 2021-08 is intended to improve comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination by providing consistent recognition guidance. The adoption of ASU 2021-08 did not have a material impact on our consolidated financial statements. New Accounting Pronouncements Not Yet AdoptedIn November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The amendments will require disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within segment profit and loss. The amendments are effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, with early adoption permitted, and will be applied retrospectively to all prior periods presented in the financial statements. We are currently evaluating ASU 2023-07 to determine its impact on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures,” which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of income tax rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024, with early adoption permitted, and may be applied either prospectively or retrospectively. We are currently evaluating ASU 2023-09 to determine its impact on our consolidated financial statements.
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Revenue Recognition | Revenue Recognition We recognize revenue 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, and 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 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
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Share-Based Compensation | We provide for various forms of share-based compensation awards to our employees and non-employee directors. Our share-based compensation plans allow for the issuance of a mix of stock options, restricted stock, stock appreciation rights, employee stock purchase rights, and other stock unit awards. With the exception of stock options, the fair value of our awards is equal to the closing stock price of IDEXX common stock on the date of grant. We calculate the fair value of our stock option awards using the Black-Scholes-Merton option-pricing model. For stock options, restricted stock units (“RSUs”), and deferred stock units (“DSUs”), share-based compensation expense is estimated based on awards ultimately expected to vest, reduced for estimated forfeitures, on a straight-line basis over the requisite service period of the award. For performance-based restricted stock units (“PBRSUs”), share-based compensation expense is estimated based on awards ultimately expected to vest, reduced for estimated forfeitures, on a graded vesting methodology over the requisite service period. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. Additionally, our estimates are developed based on historical credit loss experience, estimates of recoveries, current economic conditions, and future expectations. Adjustments to historical loss information are made for differences in current economic conditions. 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.
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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. We write down the carrying value of inventory for estimated obsolescence by an amount equal to the difference between the cost of inventory and the estimated market value when warranted based on assumptions of future demand, market conditions, remaining shelf life, or product functionality. If actual market conditions or results of estimated functionality are less favorable than those we estimated, additional inventory write-downs may be required, which would have a negative effect on results of operations.
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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 one 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 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 and payments associated with non-lease components and short-term rentals (leases with terms less than twelve 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 the 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 include any rent prepayments, lease incentives upon receipt, and straight-line rent expense impacts, which represent the differences between our operating lease liabilities and right-of-use assets.
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Property and Equipment | Property and equipment are stated at cost, net of accumulated depreciation and amortization. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. When an item is sold or retired, the cost and related accumulated depreciation are relieved, and the resulting gain or loss, if any, is recognized in the consolidated statements of income. We evaluate our property and equipment for impairment periodically or as changes in circumstances or the occurrence of events suggest the remaining value is not recoverable from future cash flows. If the carrying value of our property and equipment is impaired, an impairment charge is recorded for the amount by which the carrying value of the property and equipment exceeds its fair value. We provide for depreciation and amortization primarily using the straight-line method by charges to the consolidated statements of income in amounts that allocate the cost of property and equipment over their estimated useful lives as follows:
We capitalize interest on the acquisition and construction of significant assets that require a substantial period of time to be made ready for use. The capitalized interest is included in the cost of the completed asset and depreciated over the asset’s estimated useful life. The amount of interest capitalized during the years ended December 31, 2023 and 2022, was not material. We capitalize certain costs incurred in connection with developing or obtaining software designated for internal use based on three distinct stages of development. Qualifying costs incurred during the application development stage, which consist primarily of internal payroll and direct fringe benefits and external direct project costs, including labor and travel, are capitalized and amortized on a straight-line basis over the estimated useful life of the asset. Costs incurred during the preliminary project and post-implementation and operation phases are expensed as incurred. These costs relate primarily to the determination of performance requirements, data conversion, and training. Software developed to deliver hosted services to our customers has been designated as internal use.
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Goodwill and Other Intangible Assets | A significant portion of the purchase price for acquired businesses is generally assigned to intangible assets. Intangible assets other than goodwill are initially valued at fair value. If a quoted price in an active market for the identical asset is not readily available at the measurement date, the fair value of the intangible asset is estimated based on discounted cash flows using market participant assumptions, which are assumptions that are not specific to IDEXX. The selection of appropriate valuation methodologies and the estimation of discounted cash flows require significant assumptions about the timing and amounts of future cash flows, risks, appropriate discount rates, and the useful lives of intangible assets. When significant, we typically utilize independent valuation experts to advise and assist us in determining the fair values of the identified intangible assets acquired in connection with a business acquisition and in determining appropriate amortization methods and periods for those intangible assets. Goodwill is initially valued based on the excess of the purchase price of a business combination over the fair value of acquired net assets recognized and represents the future economic benefits arising from other assets acquired that could not be separately identified and recognized. Our business combinations regularly include contingent consideration arrangements that require additional consideration to be paid based on the achievement of established objectives, most commonly related to customer retention or revenue growth of the customer base during the post-combination period. We assess contingent consideration to determine if it should be recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved, with changes in fair value recognized in earnings if changes in estimates are made after the measurement period. Refer to “Note 18. Fair Value Measurements” for changes in the fair value of contingent consideration and differences arising upon settlements. We assess goodwill for impairment annually, at the reporting unit level in the fourth quarter, and whenever events or circumstances indicate impairment may exist. In evaluating goodwill for impairment, we have the option to first assess the qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test. The more likely than not threshold is defined as having a likelihood of more than 50%. If, after assessing the totality of events or circumstances, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we assess the fair value of the reporting unit and compare its fair value to its carrying value to determine if the carrying value exceeds its fair value. Any excess of the carrying value of the goodwill above its fair value would be recognized as an impairment loss. In contrast, we can opt to bypass the qualitative assessment for any reporting unit in any period and proceed directly to assessing the fair value of the reporting unit(s), and compare the fair value of the reporting unit to its carrying value to determine if any impairment exists. Doing so does not preclude us from performing the qualitative assessment in any subsequent period. A prolonged economic downturn that results in lower long-term growth rates and reduced long-term profitability may reduce the fair value of our reporting units. Industry specific events or circumstances could have a negative impact on our reporting units and may also reduce the fair value of our reporting units. Should such events occur, and it becomes more likely than not that a reporting unit’s fair value has fallen below its carrying value, we will perform an interim goodwill impairment test, in addition to the annual impairment test. Future impairment tests may result in an impairment of goodwill. An impairment of goodwill would be reported as a non-cash charge to earnings. In the fourth quarter of 2023, we performed a qualitative assessment of goodwill impairment and concluded that there were no indications the carrying values of any of our reporting units exceeded their fair values. We had no goodwill impairments during the years ended December 31, 2023, 2022, or 2021. We assess the realizability of intangible assets other than goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If an impairment review is triggered, we evaluate the carrying value of intangible assets, other than goodwill, based on estimated undiscounted future cash flows over the remaining useful life of the primary asset of the asset group and compare that value to the carrying value of the asset group. The asset group is the lowest level for which identifiable cash flows associated with the intangible asset are largely independent. The cash flows that are used contain our best estimates, using appropriate and customary assumptions and projections at the time. If the net carrying value of the asset group exceeds the related estimated undiscounted future cash flows, an impairment loss to adjust the intangible asset to its fair value would be reported as a non-cash charge to earnings. If necessary, we would calculate the fair value of an intangible asset using the present value of the estimated future cash flows to be generated by the intangible asset and apply a risk-adjusted discount rate. We had no impairments of our intangible assets during the years ended December 31, 2023, 2022, and 2021. We provide for amortization primarily using the straight-line method by charges to income in amounts that allocate the intangible assets over their estimated useful lives as follows:
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Accounts Payable - Supplier Financing Program | Accounts Payable - Supplier Financing Program We have an agreement with a third party to provide a supplier finance program, which facilitates participating suppliers’ ability to finance payment obligations from us with a designated third-party financial institution. Participating suppliers may, at their sole discretion, make offers to finance one or more of our payment obligations prior to their scheduled due dates at a discounted price. Our obligations to our suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to finance amounts under these arrangements. The terms of payments are consistent with the terms of our trade payables. Activity related to the obligations is presented within operating activities on the consolidated statements of cash flows.
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Income Taxes | The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the estimated future tax effects of temporary differences between book and tax treatment of assets and liabilities and carryforwards to the extent they are realizable. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. In assessing the need for a valuation allowance, we consider future taxable income and ongoing prudent and feasible tax planning strategies. In the event that we determine that we would be able to realize our deferred tax assets in the future in excess of the net recorded amount, a reduction of the valuation allowance would increase income in the period such determination was made. Likewise, should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, a reduction to the deferred tax asset would be charged to income in the period such determination was made. We record a liability for uncertain tax positions that do not meet the more likely than not standard as prescribed by the authoritative guidance for income tax accounting. We record tax benefits for only those positions that we believe will more likely than not be sustained. Unrecognized tax benefits are the differences between tax positions taken, or expected to be taken, in tax returns, and the benefits recognized for accounting purposes. We classify uncertain tax positions as long-term liabilities. Significant judgment is required in determining our worldwide provision for income taxes and our income tax filings are regularly under audit by tax authorities. Any audit result differing from amounts recorded would increase or decrease income in the period that we determine such adjustment is likely. Interest expense and penalties associated with the underpayment of income taxes are included in income tax expense.
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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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contingencies | 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 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:
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 years ended December 31, 2023 and 2022. Our cross currency swap contracts are measured at fair value on a recurring basis in our accompanying consolidated balance sheets and are classified as derivative instruments. We measure the fair value of our cross currency swap contracts 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 consolidated balance sheets and are classified as derivative instruments. We measure the fair value of our foreign currency exchange contracts 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. Our interest rate swap contract is measured at fair value on a recurring basis in our accompanying consolidated balance sheets and is classified as a derivative instrument. We measure the fair value of our interest rate swap using current market interest rates for debt issues with similar remaining years to maturity, adjusted for applicable credit 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 accompanying 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.
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Hedging Instruments | We are exposed to certain risks related to our ongoing business operations. We utilize hedging instruments to manage a portion of our foreign currency exchange risk and interest rate risk. During the first quarter of 2023, we entered into an interest rate swap to manage the impact of interest rate fluctuations associated with $250.0 million of borrowings under our variable-rate Credit Facility. We have designated the interest rate swap as a cash flow hedge. 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 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 large, 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 our designation of such instruments as hedging transactions. We recognize all hedging instrument assets and liabilities 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. Refer to “Note 21. Accumulated Other Comprehensive Income” for further information regarding the effect of hedging instruments on the consolidated statements of income for the years ended December 31, 2023, 2022, and 2021. 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 accompanying 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. Refer to “Note 18. Fair Value Measurements” for additional information regarding the fair value of our derivative instruments and “Note 21. Accumulated Other Comprehensive Income” for additional information regarding the effect of derivative instruments designated as cash flow hedges on the consolidated statements of income. Cash Flow Hedges We have designated our foreign currency exchange contracts and our interest rate swap as cash flow hedges as these derivative instruments manage our exposure to variability in the cash flows of forecasted transactions attributable to foreign currency exchange and to interest rates on variable interest obligations under the terms of our Credit Facility. Unless noted otherwise, we have also designated our derivative instruments as qualifying for hedge accounting treatment.
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REVENUE (Tables) |
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Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenues By Major Product and Service Category | The following table presents revenue by major product and service categories:
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Schedule of Revenue By Principal Geographic Area, Based On Customers’ Domiciles | The following table presents revenue by principal geographic area, based on customers’ domiciles:
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SHARE-BASED COMPENSATION (Tables) |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation Costs and Related Tax Benefits | The following is a summary of share-based compensation costs and related tax benefits recorded in our consolidated statements of income:
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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:
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Schedule of Stock Option Activity | A summary of the status of options granted under our share-based compensation plans at December 31, 2023, and changes during the year then ended, are presented in the table below:
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Schedule of Restricted Stock Unit Activity | A summary of the status of RSUs and PBRSUs granted under our share-based compensation plans at December 31, 2023, and changes during the period then ended, are presented in the table below:
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INVENTORIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Inventories | The components of inventories are as follows:
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LEASES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Operating Lease Liabilities | Maturities of operating lease liabilities are as follows:
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Schedule of Lease and Supplemental Cash Flow Information |
Supplemental cash flow information for leases is as follows:
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PROPERTY AND EQUIPMENT, NET (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Estimated Useful Lives for Property and Equipment | We provide for depreciation and amortization primarily using the straight-line method by charges to the consolidated statements of income in amounts that allocate the cost of property and equipment over their estimated useful lives as follows:
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Schedule of Property and Equipment | Property and equipment, net, consisted of the following:
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Schedule of Depreciation and Amortization, Capitalized Computer Software for Internal Use and Unpaid Property Equipment Reflected in Accounts Payable and Accrued Expenses | Below are the amounts of depreciation and amortization of property and equipment, capitalized computer software for internal use, unpaid property and equipment reflected in accounts payable and accrued expenses, and rental and reagent rental program instruments transferred from inventory to property and equipment:
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OTHER CURRENT AND LONG-TERM ASSETS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets, Noncurrent [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Current Assets | Other current assets consisted of the following:
(1) Contract assets, net, are net of allowances for credit losses. Refer to “Note 6. Credit Losses.” (2) Refer to “Note 3. Revenue, Up-Front Consideration Paid to Customers,” for more information regarding consideration paid to customers, previously referred to as customer acquisition costs.
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Schedule of Other Long-term Assets | Other long-term assets consisted of the following:
(1) Contract assets, net, are net of allowances for credit losses. Refer to “Note 6. Credit Losses.” (2) Refer to “Note 3. Revenue, Up-Front Consideration Paid to Customers,” for more information regarding consideration paid to customers, previously referred to as customer acquisition costs.
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GOODWILL AND INTANGIBLE ASSETS, NET (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2023, 2022, and 2021, were as follows:
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Schedule of Estimated Useful Lives for Intangible Assets | We provide for amortization primarily using the straight-line method by charges to income in amounts that allocate the intangible assets over their estimated useful lives as follows:
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Schedule of Intangible Assets Other Than Goodwill | Intangible assets other than goodwill consisted of the following:
The above table excludes fully amortized intangible assets for the periods presented. (1)Customer-related intangible assets are comprised of customer lists and customer relationships acquired from third parties. (2)Product rights comprise certain technologies, intellectual property, licenses, and trade names acquired from third parties.
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Schedule of Expected Amortization Expense | At December 31, 2023, the aggregate amortization expense associated with intangible assets is estimated to be as follows for each of the next five years and thereafter:
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ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities, Current [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Outstanding Payment Obligations | The changes in our outstanding payment obligations under the supplier financing arrangement, which are included in on the consolidated balance sheets, are as follows:
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Schedule of Accrued Liabilities | Accrued liabilities consisted of the following:
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Schedule of Other Long-term Liabilities | Other long-term liabilities consisted of the following:
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DEBT (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instruments [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 December 31, 2023:
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Schedule of Future Maturities of Long-term Debt | Future maturities of long-term debt at December 31, 2023, are as follows:
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INCOME TAXES (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings before Income Taxes | Earnings before income taxes were as follows:
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Schedule of Components of Provision (Benefit) for Income Taxes | The provision (benefit) for income taxes comprised the following:
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Schedule of Effective Income Tax Rate Reconciliation | The provision for income taxes differs from the amounts computed by applying the statutory federal income tax rate as follows:
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Schedule of Components of Net Deferred Tax Assets and Liabilities | The components of the net deferred tax assets (liabilities) included in the accompanying consolidated balance sheets are as follows:
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Schedule of Valuation Allowance | The following table summarizes the changes in valuation allowance for deferred tax assets:
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Schedule of Changes in Unrecognized Tax Benefits | The following table summarizes the changes in unrecognized tax positions:
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EARNINGS PER SHARE (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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Schedule of Number of Anti-dilutive Stock Awards and Options | The following table presents information concerning those anti-dilutive awards and options:
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SEGMENT REPORTING (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Performance | The following is a summary of segment performance:
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Schedule of Net Long-lived Assets by Principal Geographic Areas | Net long-lived assets, consisting of net property and equipment, are subject to geographic risks because they are generally difficult to move and to effectively utilize in another geographic area in a reasonable time period and because they are relatively illiquid. Net long-lived assets by principal geographic areas were as follows:
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FAIR VALUE MEASUREMENTS (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
(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 December 31, 2023, 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 current assets. Refer to footnote (5) 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)The interest rate swap is included within other long-term assets. (5)A deferred compensation plan assumed as part of a previous business combination is included within accrued 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.
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Schedule of Contingent Consideration Liability | We record changes in the estimated fair value of contingent consideration in the consolidated statements of income. Changes in contingent consideration liabilities are measured at fair value on a recurring basis using unobservable inputs (Level 3) and during the years ended December 31, 2023, and 2022, are as follows:
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HEDGING INSTRUMENTS (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Details of Net Investment Hedges and Income Statement Impact of Hedging Instruments | The following table presents the effect of cash flow hedge accounting on our consolidated statements of income and comprehensive income, and provides information regarding the location and amounts of pretax gains or losses of derivatives:
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Schedule of Hedging Instruments | The fair values of hedging instruments, their respective classification on the consolidated balance sheets, and amounts subject to offset under master netting arrangements consisted of the following derivative instruments, unless otherwise noted:
(1)Amounts represent reported carrying amounts of our foreign currency denominated debt. Refer to “Note 18. Fair Value Measurements” for information regarding the fair value of our long-term debt.
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REPURCHASES OF COMMON STOCK (Tables) |
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Dec. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 surrenders:
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ACCUMULATED OTHER COMPREHENSIVE INCOME (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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:
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Summary of Reclassifications Out of Other Comprehensive Income | The following table presents components and amounts reclassified out of AOCI to net income:
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IDEXX RETIREMENT AND INCENTIVE SAVINGS PLAN (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Benefits Expected to be Paid | Future benefits expected to be paid as of December 31, 2023, are as follows:
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
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Accounting Policies [Abstract] | |||
Restricted cash | $ 0 | $ 0 | |
Capitalized costs | 0 | 0 | $ 0 |
Advertising costs | 4,200,000 | 5,000,000 | 3,300,000 |
Foreign currency losses | (1,100,000) | (3,400,000) | $ (2,100,000) |
Equity investment, cost | $ 30,300,000 | $ 30,300,000 |
REVENUE (Revenue Recognition) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2023 | |
Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
General payment terms | 30 days |
Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
General payment terms | 60 days |
REVENUE (Free or Discounted Instruments and Systems) (Details) - Free or discounted instruments and systems - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
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Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Commitment contract assets | $ 223.1 | $ 190.8 |
Commitment contract assets reclassified to accounts receivable | $ 43.2 |
REVENUE (Up-Front Consideration Paid to Customers) (Details) - Customer commitment arrangements, multi-year arrangements - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
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Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Capitalized consideration paid to customers | $ 168.9 | $ 158.0 |
Capitalized consideration paid to customers recognized as a reduction of revenue | $ 50.9 |
REVENUE (Rebate Arrangements) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
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Rebate and up-front considerations arrangements | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred revenue | $ 32.9 | $ 36.1 |
Deferred revenue recognized | 12.6 | |
Customer commitment arrangements, multi-year arrangements | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Estimation of future revenues | $ 3,800.0 |
REVENUE (Instrument Rental Arrangements) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
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Revenue from Contract with Customer [Abstract] | |||
Lease revenue | $ 20.7 | $ 20.3 | $ 20.8 |
REVENUE (Reagent Rental Arrangements) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
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Reagent rental arrangements | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Estimation of future revenues | $ 56.4 | |
Sales-type reagent rental arrangements | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Lease receivable asset | 23.1 | $ 18.4 |
Lease receivable, reclassified to receivable | 4.3 | |
Operating-type reagent rental arrangements | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Instruments transferred to property and equipment | $ 14.6 | $ 17.4 |
REVENUE (Deferred Extended Warranties and Post-Contract Support Revenue) (Details) - Extended warranties and post contract support - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
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Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred revenue | $ 26.0 | $ 26.4 |
Deferred revenue recognized | 19.8 | |
Estimation of future revenues | $ 9.7 |
REVENUE (Costs to Obtain a Contract) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Deferred commission costs | $ 19.7 | $ 19.2 |
Commissions expense recognized | $ 6.5 | |
Minimum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Amortization period | 3 years | |
Maximum | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Amortization period | 7 years |
SHARE-BASED COMPENSATION (Schedule of Weighted Averages of the Assumptions Used In Estimating the Fair Value of Stock Option Awards) (Details) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
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Share-Based Payment Arrangement [Abstract] | |||
Expected stock price volatility | 32.00% | 30.00% | 30.00% |
Expected term, in years | 6 years 8 months 12 days | 6 years 4 months 24 days | 6 years 2 months 12 days |
Risk-free interest rate | 3.70% | 2.10% | 0.70% |
Weighted average fair value of options granted (in USD per shares) | $ 201.48 | $ 166.30 | $ 169.15 |
SHARE-BASED COMPENSATION (Schedule Of Restricted Stock Unit Activity) (Details) shares in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2023
$ / shares
shares
| |
Restricted stock units (RSU's) | |
Number of Units | |
Nonvested, at beginning of year (in shares) | 148 |
Granted (in shares) | 63 |
Vested (in shares) | (62) |
Forfeited (in shares) | (8) |
Nonvested, at end of year (in shares) | 141 |
Weighted Average Grant-Date Fair Value | |
Weighted average grant date fair value, at beginning of year (in USD per share) | $ / shares | $ 391.55 |
Weighted average grant date fair value, end of year (in USD per share) | $ / shares | $ 459.11 |
Restricted stock units expected to vest reduced for estimated forfeitures | |
Number of Units | |
Nonvested, at end of year (in shares) | 134 |
Weighted Average Grant-Date Fair Value | |
Weighted average grant date fair value, end of year (in USD per share) | $ / shares | $ 457.51 |
CREDIT LOSSES (Details) - USD ($) $ in Millions |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Accounts receivable allowance for credit losses | $ 9.5 | $ 8.3 |
Percent of accounts receivable not past due (percent) | 83.00% | 86.00% |
Percent of accounts receivable past due (percent) | 17.00% | 14.00% |
Accounts receivable, noncurrent, threshold period past due | 60 days | 60 days |
Reserve for contract assets and sales-type leases | $ 6.4 | $ 5.5 |
Greater than 60 Days Past Due | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Percent of accounts receivable past due (percent) | 1.70% | 2.00% |
INVENTORIES (Narrative) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Inventory [Line Items] | |||
Unpaid inventory | $ 58,900 | $ 59,400 | $ 64,400 |
Reagent rental arrangements | |||
Inventory [Line Items] | |||
Amount of rental and operating-type reagent rental program instruments transferred from inventory to property and equipment | $ 14,608 | $ 17,407 | $ 11,628 |
INVENTORIES (Schedule of Components of Inventories) (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory, Net [Abstract] | ||
Raw materials | $ 106,392 | $ 92,796 |
Work-in-process | 28,989 | 28,041 |
Finished goods | 244,901 | 246,986 |
Inventories | $ 380,282 | $ 367,823 |
LEASES (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Lessee, Lease, Description [Line Items] | ||
Rent expense, excluding variable and short-term expenses | $ 29.1 | $ 26.8 |
Total rent expense including variable rent and short-term expenses | $ 31.7 | $ 28.7 |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, termination period | 1 year |
LEASES (Maturities of Operating Lease Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
2024 | $ 24,231 | |
2025 | 23,478 | |
2026 | 21,030 | |
2027 | 16,138 | |
2028 | 11,981 | |
Thereafter | 43,698 | |
Total lease payments | 140,556 | |
Less imputed interest | (21,083) | |
Total lease liabilities (current and long-term) | $ 119,473 | |
Weighted average remaining lease term - operating leases | 8 years 10 months 24 days | 9 years 8 months 12 days |
Weighted average discount rate - operating leases | 4.00% | 3.50% |
LEASES (Supplemental Cash Flow Information) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 27,525 | $ 24,973 |
Right-of-use assets obtained in exchange for operating lease obligations, net of early lease terminations | $ 19,443 | $ 36,817 |
PROPERTY AND EQUIPMENT, NET (Summary Of Depreciation And Amortization, Capitalized Computer Software For Internal Use And Unpaid Property Equipment Reflected In Account Payable And Accrued Expenses) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 100,994 | $ 96,746 | $ 92,376 |
Unpaid property and equipment, reflected in accounts payable and accrued liabilities at end of year | 12,061 | 18,334 | 19,326 |
Reagent rental arrangements | |||
Property, Plant and Equipment [Line Items] | |||
Amount of rental and operating-type reagent rental program instruments transferred from inventory to property and equipment | 14,608 | 17,407 | 11,628 |
Capitalization of internal-use software development costs during the period | |||
Property, Plant and Equipment [Line Items] | |||
Capitalization of internal-use software development costs during the period | $ 37,120 | $ 20,329 | $ 14,753 |
PROPERTY AND EQUIPMENT, NET (Narrative) (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Property, Plant and Equipment [Abstract] | |||
Write-down of fixed assets | $ 0 | $ 0 | $ 5,100,000 |
OTHER CURRENT AND LONG-TERM ASSETS (Schedule of Other Current Assets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Assets, Noncurrent [Abstract] | ||
Contract assets, net | $ 55,111 | $ 41,854 |
Consideration paid to customers | 54,081 | 50,776 |
Prepaid expenses | 48,370 | 41,742 |
Taxes receivable | 16,972 | 48,430 |
Other | 29,061 | 37,687 |
Other current assets | $ 203,595 | $ 220,489 |
OTHER CURRENT AND LONG-TERM ASSETS (Schedule Of Other Long-term Assets) (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Other Assets, Noncurrent [Abstract] | ||
Contract assets, net | $ 167,963 | $ 148,971 |
Consideration paid to customers | 114,850 | 107,205 |
Deferred income taxes | 107,364 | 55,215 |
Equity investments | 30,250 | 30,250 |
Investment in long-term product supply arrangements | 25,943 | 25,250 |
Other | 50,164 | 50,838 |
Other long-term assets | $ 496,534 | $ 417,729 |
GOODWILL AND INTANGIBLE ASSETS, NET (Narrative) (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill impairments | $ 0 | $ 0 | $ 0 |
Intangible assets impairments | 0 | 0 | 0 |
Aggregate amortization expense | $ 13,800,000 | $ 15,000,000 | $ 12,100,000 |
GOODWILL AND INTANGIBLE ASSETS, NET (Schedule of Estimated Useful Lives For Intangible Assets) (Details) |
Dec. 31, 2023 |
---|---|
Customer-related intangible assets | Minimum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated useful life | 3 years |
Customer-related intangible assets | Maximum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated useful life | 17 years |
Product rights | Minimum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated useful life | 5 years |
Product rights | Maximum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated useful life | 15 years |
Noncompete agreements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated useful life | 3 years |
Noncompete agreements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Intangible assets, estimated useful life | 5 years |
GOODWILL AND INTANGIBLE ASSETS, NET (Schedule of Intangible Assets Other Than Goodwill) (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Cost | $ 133,546 | $ 138,719 |
Accumulated Amortization | 49,046 | 41,047 |
Net | 84,500 | 97,672 |
Customer-related intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 102,217 | 104,111 |
Accumulated Amortization | 37,782 | 30,952 |
Net | 64,435 | 73,159 |
Product rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 27,317 | 30,176 |
Accumulated Amortization | 8,606 | 8,039 |
Net | 18,711 | 22,137 |
Noncompete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 4,012 | 4,432 |
Accumulated Amortization | 2,658 | 2,056 |
Net | $ 1,354 | $ 2,376 |
GOODWILL AND INTANGIBLE ASSETS, NET (Schedule of Expected Amortization Expense) (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 12,834 | |
2025 | 12,097 | |
2026 | 11,835 | |
2027 | 10,522 | |
2028 | 9,204 | |
Thereafter | 28,008 | |
Net | $ 84,500 | $ 97,672 |
ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES (Schedule of Supplier Financing Program) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Supplier Finance Program, Obligation [Roll Forward] | ||
Payment obligations outstanding at the beginning of the period | $ 10,171 | $ 4,775 |
Supplier finance program, obligation, statement of financial position [extensible enumeration] | Accounts payable | Accounts payable |
Payment obligation additions during the period | $ 45,765 | $ 58,936 |
Payment obligations settled during the period | (46,878) | (53,540) |
Payment obligations outstanding at the end of the period | $ 9,057 | $ 10,171 |
ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES (Schedule of Accrued Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Accrued employee compensation and related expenses | $ 174,375 | $ 142,994 |
Accrued expenses | 113,596 | 149,446 |
Accrued taxes | 86,553 | 48,547 |
Accrued customer incentives and refund obligations | 84,386 | 72,250 |
Current lease liabilities | $ 19,802 | $ 20,425 |
Operating lease, liability, current, statement of financial position [extensible enumeration] | Accrued liabilities | Accrued liabilities |
Accrued liabilities | $ 478,712 | $ 433,662 |
ACCOUNTS PAYABLE, ACCRUED LIABILITIES AND OTHER LONG-TERM LIABILITIES (Schedule Of Other Long-term Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Accrued taxes | $ 39,642 | $ 49,142 |
Other accrued long-term expenses | 25,884 | 18,445 |
Other long-term liabilities | $ 65,526 | $ 67,587 |
DEBT (Schedule of Current Senior Notes Outstanding) (Details) - Senior Notes |
Dec. 31, 2023
USD ($)
|
Dec. 31, 2023
EUR (€)
|
Apr. 14, 2020
USD ($)
|
Apr. 02, 2020
USD ($)
|
Mar. 14, 2019
USD ($)
|
Jun. 30, 2015
EUR (€)
|
Dec. 19, 2014
USD ($)
|
Sep. 30, 2014
USD ($)
|
Jul. 31, 2014
USD ($)
|
Dec. 31, 2013
USD ($)
|
---|---|---|---|---|---|---|---|---|---|---|
2025 Series B Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal Amount | $ 75,000,000 | $ 75,000,000 | ||||||||
Coupon Rate | 4.04% | 4.04% | 4.04% | |||||||
2026 Senior Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal Amount | $ 75,000,000 | $ 75,000,000 | ||||||||
Coupon Rate | 3.72% | 3.72% | 3.72% | |||||||
2024 Series B Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal Amount | $ 75,000,000 | $ 75,000,000 | ||||||||
Coupon Rate | 3.76% | 3.76% | 3.76% | |||||||
2025 Series C Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal Amount | € | € 88,857,000 | € 88,900,000 | ||||||||
Coupon Rate | 1.785% | 1.785% | 1.785% | |||||||
2027 Series B Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal Amount | $ 75,000,000 | $ 75,000,000 | ||||||||
Coupon Rate | 3.72% | 3.72% | 3.72% | |||||||
2029 Series C Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal Amount | $ 100,000,000 | $ 100,000,000 | ||||||||
Coupon Rate | 4.19% | 4.19% | 4.19% | |||||||
MetLife 2030 Series D Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal Amount | $ 125,000,000 | $ 125,000,000 | ||||||||
Coupon Rate | 2.50% | 2.50% | 2.50% | |||||||
Prudential 2030 Series D Notes | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Principal Amount | $ 75,000,000 | $ 75,000,000 | ||||||||
Coupon Rate | 2.50% | 2.50% | 2.50% |
DEBT (Schedule of Future Maturities of Long-Term Debt) (Details) $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Debt Instruments [Abstract] | |
2024 | $ 75,000 |
2025 | 173,187 |
2026 | 75,000 |
2027 | 75,000 |
2028 | 0 |
Thereafter | 300,000 |
Total | $ 698,187 |
INCOME TAXES (Schedule of Earnings Before Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ 889,133 | $ 684,661 | $ 689,994 |
International | 172,043 | 175,311 | 212,660 |
Income before provision for income taxes | $ 1,061,176 | $ 859,972 | $ 902,654 |
INCOME TAXES (Schedule of Components of Provision (Benefit) for Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Current | |||
Federal | $ 191,274 | $ 150,099 | $ 112,811 |
State | 40,369 | 30,529 | 19,147 |
International | 32,797 | 35,138 | 29,288 |
Provision for current income taxes | 264,440 | 215,766 | 161,246 |
Deferred | |||
Federal | (36,501) | (31,663) | (7,019) |
State | (6,462) | (5,735) | (503) |
International | (5,343) | 2,515 | 4,086 |
Provision (benefit) for deferred income taxes | (48,306) | (34,883) | (3,436) |
Provision for income taxes | $ 216,134 | $ 180,883 | $ 157,810 |
INCOME TAXES (Schedule of Effective Income Tax Rate Reconciliation) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | |||
U.S. federal statutory rate | 21.00% | 21.00% | 21.00% |
State income tax, net of federal tax benefit | 2.70% | 2.30% | 2.10% |
Taxation on international earnings | (0.10%) | 0.60% | (0.80%) |
Foreign derived intangible income | (1.40%) | (1.70%) | (1.20%) |
Share-based compensation from settlements | (1.30%) | (1.50%) | (3.60%) |
Research and development credit | (1.20%) | (1.10%) | (0.70%) |
Other, net | 0.70% | 1.40% | 0.70% |
Effective tax rate | 20.40% | 21.00% | 17.50% |
INCOME TAXES (Narrative) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Income Tax Disclosure [Abstract] | |||
Effective income tax rate (percent) | 20.40% | 21.00% | 17.50% |
Income taxes paid | $ 192.5 | $ 239.8 | $ 161.7 |
Income tax ruling exemption | 21.4 | ||
Net operating loss carryforwards in certain state and international jurisdictions | 39.3 | ||
Unrecognized tax benefits that would impact effective tax rate if recognized | 21.2 | 20.9 | |
Interest expense and penalties related to unrecognized tax benefits | 2.9 | 1.3 | 1.1 |
Interest expense and penalties accrued | 3.8 | $ 4.2 | $ 3.8 |
Unrecognized tax benefits, subject to expiration | $ 8.9 |
INCOME TAXES (Schedule of Valuation Allowance For Deferred Tax Assets) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Deferred Tax Assets, Valuation Allowance [Roll Forward] | |||
Balance at beginning of year | $ 39,726 | $ 39,280 | $ 40,262 |
Charges to costs and expense | 21 | 2,200 | 1,464 |
Write-off/cash payments | (7,846) | (1,537) | (1,182) |
Foreign currency translation | 2,892 | (217) | (1,264) |
Balance at the end of the year | $ 34,793 | $ 39,726 | $ 39,280 |
INCOME TAXES (Schedule of Changes in Unrecognized Tax Benefits) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Total amounts of unrecognized tax benefits, beginning of period | $ 22,547 | $ 21,789 | $ 22,484 |
Gross increases in unrecognized tax positions as a result of tax positions taken during a prior period | 6,366 | 342 | 443 |
Gross increases in unrecognized tax positions as a result of tax positions taken in the current period | 3,987 | 3,197 | 2,414 |
Decreases in unrecognized tax positions related to settlements with taxing authorities | (7,535) | (1,544) | (537) |
Decreases in unrecognized tax positions as a result of a lapse of the applicable statutes of limitations | (3,045) | (1,237) | (3,015) |
Total amounts of unrecognized tax benefits, end of period | $ 22,320 | $ 22,547 | $ 21,789 |
EARNINGS PER SHARE (Schedule of Reconciliation of Shares Outstanding for Basic and Diluted Earnings Per Share) (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Shares outstanding for basic earnings per share: | |||
Shares outstanding for basic earnings per share (in shares) | 83,066 | 83,623 | 85,200 |
Shares outstanding for diluted earnings per share: | |||
Shares outstanding for basic earnings per share (in shares) | 83,066 | 83,623 | 85,200 |
Dilutive effect of share-based payment awards (in shares) | 912 | 977 | 1,372 |
Shares outstanding for diluted earnings per share (in shares) | 83,978 | 84,600 | 86,572 |
EARNINGS PER SHARE (Schedule of Number of Anti-Dilutive Stock Options and Awards) (Details) - shares shares in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average number of shares underlying anti-dilutive options (in shares) | 381 | 263 | 121 |
Awards | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average number of shares underlying anti-dilutive options (in shares) | 1 | 46 | 0 |
COMMITMENTS, CONTINGENCIES AND GUARANTEES (Details) - USD ($) |
198 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2020 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Sep. 30, 2020 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Purchase obligations due in within year one | $ 196,300,000 | |||
Purchase obligations due in after year one | 55,200,000 | |||
Damages sought | $ 50,000,000 | |||
Loss contingency accrual | $ 27,500,000 | |||
Liabilities for indemnification obligations | $ 0 | $ 0 |
SEGMENT REPORTING (Narrative) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of business segments | 3 |
FAIR VALUE MEASUREMENTS (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2022 |
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
Jun. 30, 2022 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Payment of contingent consideration | $ 3,135 | $ 6,431 | $ 1,500 | ||
ezyVet | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Contingent payment | $ 7,000 | ||||
Another acquisition | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Payment of contingent consideration | $ 100 | ||||
Estimated fair value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Long-term debt, fair value disclosure | 670,000 | 725,600 | |||
Carrying value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Long-term debt, fair value disclosure | $ 698,200 | $ 769,800 |
FAIR VALUE MEASUREMENTS (Schedule of Contingent Consideration Liability) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 120 | $ 7,230 |
Payment of contingent consideration | (99) | (7,110) |
Change in estimated fair value | $ (21) | $ 0 |
Fair value recurring basis unobservable input reconciliation liability gain loss statement of income extensible list not disclosed flag | consolidated statements of income | consolidated statements of income |
Ending balance | $ 0 | $ 120 |
PREFERRED STOCK (Details) - $ / shares |
Dec. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Preferred Stock, Number of Shares, Par Value and Other Disclosure [Abstract] | ||
Shares of preferred stock authorized (in shares) | 500,000 | |
Par value per share (in USD per share) | $ 1.00 | |
Preferred stock outstanding (in shares) | 0 | 0 |
IDEXX RETIREMENT AND INCENTIVE SAVINGS PLAN (Narrative) (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2023 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|
Pension Plan | Switzerland | |||
Retirement And Incentive Savings Plan [Line Items] | |||
Defined benefit plan, benefit obligation | $ 5,600,000 | ||
Defined benefit plan, plan assets, amount | 14,400,000 | ||
Pension expense | $ 1,100,000 | ||
401(k) Plan | |||
Retirement And Incentive Savings Plan [Line Items] | |||
Contribution match, maximum percent of participants' eligible compensation (percent) | 5.00% | 5.00% | 5.00% |
Employer contributions | $ 30,300,000 | $ 28,300,000 | $ 25,800,000 |
Discretionary contributions | $ 0 | $ 0 | $ 0 |
IDEXX RETIREMENT AND INCENTIVE SAVINGS PLAN (Schedule of Future Benefits Expected to be Paid) (Details) - Pension Plan - Switzerland $ in Thousands |
Dec. 31, 2023
USD ($)
|
---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2024 | $ 829 |
2025 | 1,154 |
2026 | 1,035 |
2027 | 1,087 |
2028 | 1,090 |
2029 through 2033 | $ 6,405 |
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