EX-99.1 2 d127889dex991.htm EX-99.1
Exhibit 99.1

IDEXX Laboratories Announces Fourth Quarter and Full Year 2020 Results

WESTBROOK, Maine, Feb. 2, 2021 /PRNewswire/ --

  • Achieves fourth quarter reported revenue growth of 19% and organic growth of 17%, driven by CAG Diagnostics recurring revenue reported growth of 23% and organic growth of 21%
  • High revenue growth supported by sustained strong global trends in pet healthcare
  • Delivers full year EPS of $6.71, an increase of 37% on a reported basis and 31% on a comparable constant currency basis
  • Strong full year EPS results supported by operating margin expansion of 270 basis points on a reported basis and 340 basis points on a comparable constant currency basis
  • Provides initial outlook for 2021 revenue of $3,065 million - $3,120 million, reflecting reported growth of 13% - 15.5% and organic growth of 11.5% - 13.5%
  • Estimates 2021 EPS of $7.39 - $7.71, an increase of 10% - 14% as reported and 15% - 20% on a comparable constant currency basis

IDEXX Laboratories, Inc. (NASDAQ: IDXX), today announced fourth quarter and full year results, as well as market condition updates.

Fourth Quarter and Full Year Results

The Company reports revenues of $721 million for the fourth quarter of 2020, an increase of 19% compared to the prior year period on a reported basis and 17% on an organic basis. Fourth quarter results were driven by continued high gains in Companion Animal Group ("CAG") Diagnostics recurring revenue globally, as well as sustained strong growth in the Company's Livestock, Poultry and Dairy ("LPD") business. Fourth quarter growth also benefited by 1.5% from revenues associated with OPTI Medical Systems COVID-19 human PCR testing. Overall revenue gains were moderated by COVID-19 pandemic-related impacts that constrained new CAG instrument placement levels and non-compliance related testing in the Company's Water business.

Earnings per diluted share ("EPS") were $2.01 for the fourth quarter, an increase of 93% as reported, including a one-time positive impact of $0.25 per share related to the enactment of tax reform in Switzerland and $0.13 per share in share-based compensation tax benefits.

Revenue for the full year of $2,707 million increased 12% on a reported and organic basis, driven by 16% reported and 15% organic growth in CAG Diagnostics recurring revenue.

For the full year 2020, EPS of $6.71 increased 37% on a reported basis and 31% on a comparable constant currency basis. EPS results benefited from strong CAG Diagnostics recurring revenue growth and operating expense leverage, resulting in 270 basis points of operating margin improvement on a reported basis, and 340 basis points on a comparable constant currency basis. Further information and a reconciliation of non-GAAP financial measures, such as comparable constant currency growth measures, are provided in the Company's footnotes.

The Company expects full year 2021 revenue growth of 13% - 15.5% on a reported basis and 11.5% - 13.5% revenue growth on an organic basis. The Company also expects EPS of $7.39 - $7.71, reflecting a targeted 50 - 100 basis points of comparable constant currency operating margin improvement, building on strong 2020 performance.

"IDEXX had an exceptional finish to 2020, supported by continued robust global market trends in companion animal healthcare and outstanding execution by the IDEXX organization globally. Performance was strong across our major geographic markets, enabling us to deliver 12% organic growth overall and 31% EPS growth on a comparable constant currency basis for the full year, above our long-term goals. The IDEXX team stayed focused on serving our customers in an exceptional way through the COVID-19 pandemic. The team's high level of engagement and focus on execution enabled us to be well-positioned to benefit from a strong market recovery in pet healthcare. We are planning to drive continued strong growth in our companion animal business, as reflected in our initial financial 2021 outlook, leveraging our expanded global commercial capability and unique innovations, which support higher standards of healthcare for pets," said Jay Mazelsky, the Company's President and Chief Executive Officer.

Companion Animal Diagnostics Trends Update

Companion animal healthcare markets benefited from continued positive trends in the fourth quarter globally. U.S. veterinary practices experienced sustained strong clinical demand benefiting from high growth in both non-wellness and wellness clinical visits. In the U.S., same-store clinical visit growth reached 8% in the fourth quarter, including 7% growth in non-wellness visits and sustained 10% growth in wellness visits. Clinical visits continued to benefit from an increase in new clinical patient visits. Revenue growth at U.S. veterinary practices was 12% in the fourth quarter, driven by growth in service and diagnostics revenues, reflecting increased frequency and utilization of diagnostics. Additional U.S. companion animal practice weekly key metrics are available in the Q4 2020 Earnings Snapshot accessible on the IDEXX website, www.idexx.com/investors.

Global companion animal market trends have supported continued high demand for CAG diagnostic products and services. Global CAG Diagnostics recurring revenues sustained their growth at high levels through the fourth quarter with strength across regions.

Fourth Quarter Performance Highlights

Companion Animal Group

The Companion Animal Group generated 19% reported and 17% organic revenue growth for the fourth quarter. CAG Diagnostics recurring revenue growth remained very strong at 23% reported and 21% organic. Growth was high across IDEXX's major modalities globally reflecting continued strong growth in clinical visits and expanded utilization of diagnostic products and services. Overall CAG revenue growth was constrained by a 10% organic decline in IDEXX VetLab instrument revenues, impacted by COVID-19 related restrictions on access to veterinary practices.

  • IDEXX VetLab® consumables generated 27% reported and 25% organic revenue growth, supported by benefits from diagnostics utilization growth, expansion of our premium instrument installed base, and moderate net price gains.
  • Reference laboratory diagnostic and consulting services generated 21% reported and 19% organic revenue growth, led by continued high organic growth in the U.S. and mid-to-high-teen growth in international markets. Reference lab gains were supported by high same-store volume growth, with strong gains across testing categories.
  • Rapid assay products generated revenue growth of 20% on a reported and organic basis, supported by continued gains in SNAP® 4Dx® Plus Tests, feline and specialty rapid assay test volumes, benefiting from strong overall market conditions including high demand for both wellness and non-wellness testing.

Veterinary software, services and diagnostic imaging systems revenue growth increased 1% on a reported and organic basis, supported by double-digit growth in subscription-based service revenues and strong growth in new veterinary software system placements. Overall growth was moderated by declines in diagnostic imaging systems placements compared to strong prior year placement levels.

Water

Water achieved revenue growth of 1% on a reported basis and modest revenue growth on an organic basis, reflecting continued improvements in compliance testing volumes which were offset by COVID-19 pandemic-related pressures on non-compliance testing volumes.

Livestock, Poultry and Dairy ("LPD")

LPD revenue increased 16% on a reported basis and 13% on an organic basis. LPD results were supported by continued strength in core swine testing volumes and African Swine Fever diagnostic testing programs in Asia. These gains were moderated by lower herd health screening levels, compared to strong prior year results.

Gross Profit and Operating Profit

Gross profits increased 24%, and gross margins of 56.8% increased 210 basis points compared to prior year results on a reported basis and 270 basis points on a constant currency basis. Gross margin results reflected reference laboratory productivity gains on high revenue growth, favorable mix from strong consumable revenue and lower instrument revenue, as well as benefits from moderate price gains.

Operating margin was 25.7% in the quarter, 660 basis points higher than the prior year period results on a reported basis and 460 basis points on a comparable constant currency basis, excluding the prior year negative impact of the CEO transition charges. Operating expenses increased 4% on a reported basis, and 10% on a comparable constant currency basis, excluding the CEO transition charges. Operating expense growth in the fourth quarter reflects higher employee incentive and healthcare costs, R&D investments, and global commercial capability enhancements.

2021 Growth and Financial Performance Outlook

The following table provides the company's initial estimates for annual key financial metrics in 2021:

Amounts in millions except per share data and percentages

Growth and Financial Performance Outlook


2021








Revenue


$3,065

-

$3,120


Reported growth


13%

-

15.5%


Organic growth


11.5%

-

13.5%


CAG Diagnostics Recurring Revenue Growth






Reported growth


13.5%

-

16%


Organic growth


12%

-

14.5%


Operating Margin


27.3%

-

27.8%


Operating margin expansion


170

-

220 bps


Comparable constant currency margin expansion


50

-

100 bps


EPS


$7.39

-

$7.71


Reported growth


10%

-

14%


Comparable constant currency growth


15%

-

20%


Other Key Metrics






Net interest expense


$30

-

$31


Share-based compensation tax benefit


$7.5

-

$9.5


Share-based compensation tax rate benefit


~ 1 %


Effective tax rate


20%

-

21%


Share-based compensation EPS impact


$0.09

-

$0.11


Change in average shares outstanding


0%

-

(0.5)%


Operating Cash Flow


100% - 110% of net income


Free Cash Flow


80% - 90% of net income


Capital Expenditures


$120  - $140


The following table outlines estimates of foreign currency exchange rate impacts, net of foreign currency hedging transactions, and foreign currency exchange rate assumptions reflected in the above financial performance outlook for 2021.

Estimated Foreign Currency Exchange Rates and Impacts


2021








Revenue growth rate impact


1.5%

-

2.0%


CAG Diagnostics recurring revenue growth rate impact


~ 1.5%


Operating margin growth impact


~ 10 bps


EPS impact


~ $0.14


EPS growth impact


~ 2.0%








Foreign Currency Exchange Rate Assumptions






In U.S. dollars






euro


$1.19


British pound


$1.34


Canadian dollar


$0.77


Australian dollar


$0.76


Relative to the U.S. dollar






Japanese yen


¥105.00


Chinese renminbi


¥6.57


Brazilian real


R$5.36









Conference Call and Webcast Information

IDEXX Laboratories, Inc. will host a conference call today at 8:30 a.m. (Eastern) to discuss its fourth quarter and full year 2020 results and management's outlook. To participate in the conference call, dial 1-888-771-4371 or 1-847-585-4405 and reference access code 50070596. Individuals can access a live webcast of the conference call through a link on the IDEXX website, www.idexx.com/investors. An archived edition of the webcast will be available after 1:00 p.m. (Eastern) on that day via the same link and will remain available for one year.

About IDEXX Laboratories, Inc.

IDEXX Laboratories, Inc. is a member of the S&P 500® Index and is a leader in pet healthcare innovation, offering diagnostic and software products and services that deliver solutions and insights to practicing veterinarians around the world. IDEXX products enhance the ability of veterinarians to provide advanced medical care, improve staff efficiency and build more economically successful practices. IDEXX is also a worldwide leader in providing diagnostic tests and information for livestock and poultry and tests for the quality and safety of water and milk and point-of-care and laboratory diagnostics for human medicine. Headquartered in Maine, IDEXX employs more than 9,000 people and offers products to customers in over 175 countries. For more information about IDEXX, visit: www.idexx.com.

Note Regarding Forward-Looking Statements

This earnings release contains statements about the Company's business prospects and estimates of the Company's financial results for future periods that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are included above under "Fourth Quarter and Full Year Results", "2021 Growth and Financial Performance Outlook", and elsewhere and can be identified by the use of words such as "expects", "may", "anticipates", "intends", "would", "will", "plans", "believes", "estimates", "projected", "should", and similar words and expressions. Our forward-looking statements include statements relating to revenue growth and EPS outlooks; operating and free cash flow forecast; projected impact of foreign currency exchange rates; projected operating margins and expenses and capital expenditures; projected tax, tax rate and EPS benefits from share-based compensation arrangements; and projected effective tax rates, reduction of average shares outstanding and net interest expense. These statements are intended to provide management's expectation of future events as of the date of this earnings release; are based on management's estimates, projections, beliefs and assumptions as of the date of this earnings release; and are not guarantees of future performance. These forward-looking statements involve known and unknown risks and uncertainties that may cause the Company's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, among other things, the matters described under the headings "Business," "Risk Factors," "Legal Proceedings," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Quantitative and Qualitative Disclosures About Market Risk" in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 and in the corresponding sections of the Company's Quarterly Report on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020, as well as those described from time to time in the Company's other filings with the U.S. Securities and Exchange Commission available at www.sec.gov. The Company specifically disclaims any obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

Statement Regarding Non-GAAP Financial Measures

The following defines terms and conventions and provides reconciliations regarding certain measures used in this earnings release and/or the accompanying earnings conference call that are not required by, or presented in accordance with, generally accepted accounting principles in the United States of America ("GAAP"), otherwise referred to as non-GAAP financial measures. To supplement the Company's consolidated results presented in accordance with GAAP, the Company has disclosed non-GAAP financial measures that exclude or adjust certain items. Management believes these non-GAAP financial measures provide useful supplemental information for its and investors' evaluation of the Company's business performance and liquidity and are useful for period-over-period comparisons of the performance of the Company's business and its liquidity and to the performance and liquidity of our peers. While management believes that these non-GAAP financial measures are useful in evaluating the Company's business, this information should be considered as supplemental in nature and should not be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similarly titled measures reported by other companies.

Constant currency - Constant currency references are non-GAAP financial measures which exclude the impact of changes in foreign currency exchange rates and are consistent with how management evaluates our performance and comparisons with prior and future periods. We estimated the net impacts of currency on our revenue, gross profit, operating profit, and EPS results by restating results to the average exchange rates or exchange rate assumptions for the comparative period, which includes adjusting for the estimated impacts of foreign currency hedging transactions and certain impacts on our effective tax rates. These estimated currency changes impacted fourth quarter 2020 results as follows: increased gross profit growth by 0.6%, decreased gross margin growth by 60 basis points, increased operating expense growth by 0.5%, decreased operating profit margin growth by 20 basis points, and increased EPS growth by 1%. Estimated currency changes impacted full year 2020 results as follows: decreased operating profit margin growth by 20 basis points, and decreased EPS growth by 1%. Constant currency revenue growth represents the percentage change in revenue during the applicable period, as compared to the prior year period, excluding the impact of changes in foreign currency exchange rates. See the supplementary analysis of results below for revenue percentage change from currency for the three months and year ended December 31, 2020 and refer to the Growth and Financial Performance Outlook section of this press release for estimated foreign currency exchange rate impacts on 2021 projections and estimates.

Growth and organic revenue growth - All references to growth and organic growth refer to growth compared to the equivalent prior year period unless specifically noted. Organic revenue growth is a non-GAAP financial measure that excludes the impact of changes in foreign currency exchange rates and revenue from business acquisitions. Management believes that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers. See the supplementary analysis of results below for a reconciliation of reported revenue growth to organic revenue growth for the three and twelve months ended December 31, 2020. See the constant currency note above for the impacts of estimated currency changes to fourth quarter and full year 2020, as well estimated full year 2021 organic revenue growth for the Company and CAG Diagnostics recurring revenue. The percentage change in revenue resulting from acquisitions represents incremental revenues attributable to business acquisitions that have occurred since the beginning of the prior year period. Revenue from acquisitions is expected to have an immaterial impact on projected full year 2021 revenue growth and CAG Diagnostics recurring revenue growth.

Comparable constant currency operating expense growth, operating profit growth, and operating margin gain (or growth) - Comparable constant currency operating expense growth, operating profit growth, and operating profit margin gain (or growth) are non-GAAP financial measures and exclude the impact of changes in foreign currency exchange rates and non-recurring or unusual items (if any). Management believes that reporting comparable constant currency operating expense growth, operating profit growth, and operating margin gain (or growth) provides useful information to investors because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding key metrics used by management. Comparable constant currency operating expense growth, operating profit growth, and operating margin gain (or growth) should be considered in addition to, and not as replacements of or superior measures to, operating expense growth, operating profit growth, and operating margin gain reported in accordance with GAAP.

The reconciliation of these non-GAAP financial measures is as follows:



Three Months Ended

Year-over-Year


Twelve Months Ended

Year-over-Year



December 31,


December 31,

Change


December 31,


December 31,

Change

Dollar amounts in thousands


2020


2019



2020


2019


Operating Expenses (as reported)


$

224,407



$

215,518


4

%


$

876,516



$

812,703


8

%

Adjustments











CEO transition charges




(13,400)






(13,400)



Expired royalty litigation matter







(27,500)





Change from currency


(1,111)






2,827





Comparable constant currency operating expense growth


$

223,296



$

202,118


10

%


$

851,843



$

799,303


7

%












Income from operations (as reported)


$

185,095



$

115,631


60

%


$

694,524



$

552,846


26

%

Operating margin


25.7

%


19.1

%

660

bps


25.7

%


23.0

%

270

bps

Adjustments











CEO transition charges




13,400






13,400



Expired royalty litigation matter







27,500





Change from currency


(865)






7,097





Comparable constant currency income from operations growth


$

184,230



$

129,031


43

%


$

729,121



$

566,246


29

%

Comparable constant currency operating margin expansion


25.9

%


21.3

%

460

bps


27.0

%


23.5

%

340

bps

Amounts presented may not recalculate due to rounding.

These impacts and those described in the constant currency note above reconcile reported operating expense growth, operating profit growth, and operating margin gain (including projected 2021 operating margin expansion) to comparable constant currency operating expense growth, operating profit growth, and operating margin gain for the Company.

Comparable constant currency EPS growth - Comparable constant currency EPS growth is a non-GAAP financial measure that excludes the impact of changes in foreign currency exchange rates, the tax benefits of share-based compensation activity under ASU 2016-09 and non-recurring or unusual items (if any). Management believes comparable constant currency EPS growth is a more useful way to measure the Company's business performance than EPS growth because it enables better period-over-period comparisons of the fundamental financial results by excluding items that vary independent of performance and provides greater transparency to investors regarding a key metric used by management.

The reconciliation of this non-GAAP financial measure is as follows:



Three Months Ended

Year-over-Year


Twelve Months Ended

Year-over-Year



December 31,


December 31,

Growth


December 31,


December 31,

Growth



2020


2019



2020


2019


Earnings per share (diluted)


$

2.01



$

1.04


93

%


$

6.71



$

4.89


37

%

Adjustments











Share-based compensation activity


(0.13)



(0.05)




(0.45)



(0.22)



CEO transition charges




0.14






0.14



Expired royalty litigation matter







0.24





Swiss tax reform impact


(0.25)






(0.25)





Change from currency


(0.01)






0.06





Comparable constant currency EPS growth


1.62



1.13


43

%


6.31



4.81


31

%

Amounts presented may not recalculate due to rounding.

These impacts and those described in the constant currency note above reconcile reported EPS growth (including projected 2021 reported EPS growth) to comparable constant currency EPS growth for the Company.

Free cash flow - Free cash flow is a non-GAAP financial measure and means, with respect to a measurement period, the cash generated from operations during that period, reduced by the Company's investments in property and equipment. Management believes free cash flow is a useful measure because it indicates the cash the operations of the business are generating after appropriate reinvestment for recurring investments in property and equipment that are required to operate the business. See the supplementary analysis of results below for our calculation of free cash flow for the years ended December 31, 2020 and 2019. To estimate projected 2021 free cash flow, we have deducted projected purchases of property and equipment (also referred to as capital expenditures) of approximately $120 - $140 million.

Debt to Adjusted EBITDA (Leverage Ratios) - Adjusted EBITDA, gross debt, and net debt are non-GAAP financial measures. Adjusted EBITDA is a non-GAAP financial measure of earnings before interest, taxes, depreciation, amortization, non-recurring transaction

expenses incurred in connection with acquisitions, share-based compensation expense, and certain other non-cash losses and charges. Management believes that reporting Adjusted EBITDA, gross debt and net debt in the Debt to Adjusted EBITDA ratios provides

supplemental analysis to help investors further evaluate the Company's business performance and available borrowing capacity under

the Company's credit facility. For further information on how Adjusted EBITDA and the Debt to Adjusted EBITDA Ratios are calculated, see the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2020.

After-Tax Return on Invested Capital, Excluding Cash and Investments ("ROIC"): After-Tax Return on Invested Capital, Excluding Cash and Investments, is a non-GAAP financial measure. After-tax return on invested capital, excluding cash and investments, represents our after-tax income from operations, divided by our average invested capital, excluding cash and investments, using beginning and ending balance sheet values. Management believes that reporting ROIC provides useful information to investors for evaluating the efficiency and effectiveness of our use of capital. See the supplementary table below for reconciliation of this non-GAAP financial measure.

Notes and Definitions

CEO transition charges - Effective November 1, 2019, Jonathan W. Ayers, our former Chairman of the Board, President and Chief Executive Officer, stepped down as Chairman of our Board, ceased to be an employee of the Company and transitioned to the role of external Senior Advisor to the Company. Mr. Ayers continues to serve as a member of our Board. Pursuant to a mutual separation agreement between the Company and Mr. Ayers, we recognized a charge to operating income of approximately $13.4 million in the fourth quarter of 2019, representing the cost of severance payments and an acceleration of the cost of his equity awards, which was offset by a reduction to our provision for income taxes of approximately $1.2 million, resulting in a total charge to net income of approximately $12.2 million, net of tax impacts.

Swiss tax reform impact - A one-time positive income tax impact related to the enactment of tax reform in Switzerland reflected in the fourth quarter of 2020, when the Company recorded an approximately $22 million deferred tax asset related to transitional benefits.

Expired royalty litigation matter - The Company established an accrual of $27.5 million in the third quarter of 2020 related to an ongoing matter involving an alleged breach of contract for underpayment of royalty payments made from 2004 through 2017 under an expired patent license agreement. The accrual amount represents the amount of a possible loss that we have determined to be probable and estimable, and the actual cost of resolving this matter may be higher or lower than the amount accrued.


IDEXX Laboratories, Inc. and Subsidiaries





Condensed Consolidated Statement of Operations





Amounts in thousands except per share data (Unaudited)









Three Months Ended


Twelve Months Ended





December 31,


December 31,


December 31,


December 31,





2020


2019


2020


2019

Revenue:


Revenue


$720,938



$605,446



$2,706,655



$2,406,908


Expenses and Income:


Cost of revenue


311,436



274,297



1,135,615



1,041,359




Gross profit


409,502



331,149



1,571,040



1,365,549




Sales and marketing


115,909



105,694



434,435



418,193




General and administrative


69,721



74,664



300,832



261,317




Research and development


38,777



35,160



141,249



133,193




Income from operations


185,095



115,631



694,524



552,846




Interest expense, net


(7,659)



(7,125)



(32,539)



(30,628)




Income before provision for income taxes


177,436



108,506



661,985



522,218




Provision for income taxes


2,478



17,962



79,854



94,426


Net Income:


Net income


174,958



90,544



582,131



427,792




Less: Noncontrolling interest in subsidiary's
earnings


168



48



355



72




Net income attributable to stockholders


$174,790



$90,496



$581,776



$427,720




Earnings per share: Basic


$2.04



$1.05



$6.82



$4.97




Earnings per share: Diluted


$2.01



$1.04



$6.71



$4.89




Shares outstanding: Basic


85,490



85,848



85,342



86,115




Shares outstanding: Diluted


86,904



87,212



86,722



87,542








IDEXX Laboratories, Inc. and Subsidiaries






Selected Operating Information (Unaudited)










Three Months Ended


Twelve Months Ended





December 31,


December 31,


December 31,


December 31,





2020


2019


2020


2019

Operating Ratios


Gross profit


56.8

%


54.7

%


58.0

%


56.7

%

(as a percentage of revenue):


Sales, marketing, general and administrative
expense


25.7

%


29.8

%


27.2

%


28.2

%



Research and development expense


5.4

%


5.8

%


5.2

%


5.5

%



Income from operations1


25.7

%


19.1

%


25.7

%


23.0

%












1Amounts presented may not recalculate due to rounding.







IDEXX Laboratories, Inc. and Subsidiaries

Segment Information

Amounts in thousands (Unaudited)












Three Months Ended


Three Months Ended





December 31,


Percent of


December 31,


Percent of





2020


Revenue


2019


Revenue

Revenue:


CAG


$629,652





$529,786






Water


33,088





32,870






LPD


42,476





36,655






Other


15,722





6,135






Total


$720,938





$605,446















Gross Profit:


CAG


$351,079



55.8

%


$283,525



53.5

%



Water


22,889



69.2

%


23,549



71.6

%



LPD


25,283



59.5

%


21,607



58.9

%



Other


10,251



65.2

%


2,468



40.2

%



Total


$409,502



56.8

%


$331,149



54.7

%












Income from Operations:


CAG


$148,825



23.6

%


$92,005



17.4

%



Water


15,484



46.8

%


14,456



44.0

%



LPD


11,591



27.3

%


7,028



19.2

%



Other


9,195



58.5

%


2,142



34.9

%



Total


$185,095



25.7

%


$115,631



19.1

%






Twelve Months Ended


Twelve Months Ended





December 31,


Percent of


December 31,


Percent of





2020


Revenue


2019


Revenue

Revenue:


CAG


$2,385,765





$2,119,183






Water


128,625





132,850






LPD


145,845





132,635






Other


46,420





22,240






Total


$2,706,655





$2,406,908















Gross Profit:


CAG


$1,363,186



57.1

%


$1,181,007



55.7

%



Water


90,380



70.3

%


95,946



72.2

%



LPD


89,202



61.2

%


78,504



59.2

%



Other


28,272



60.9

%


10,092



45.4

%



Total


$1,571,040



58.0

%


$1,365,549



56.7

%












Income from Operations:


CAG


$574,887



24.1

%


$462,605



21.8

%



Water


58,867



45.8

%


61,923



46.6

%



LPD


40,008



27.4

%


24,735



18.6

%



Other


20,762



44.7

%


3,583



16.1

%



Total


$694,524



25.7

%


$552,846



23.0

%

IDEXX Laboratories, Inc. and Subsidiaries

Revenues and Revenue Growth Analysis by Product and Service Categories and by Domestic and International Markets

Amounts in thousands (Unaudited)



Three Months Ended



















Reported


Percentage


Percentage


Organic



December 31,


December 31,


Dollar


Revenue


Change from


Change from


Revenue

Net Revenue


2020


2019


Change


Growth1


Currency


Acquisitions


Growth1

CAG


$629,652



$529,786



$99,866



18.9

%


1.8

%




17.0

%

United States


405,362



347,563



57,799



16.6

%




0.1

%


16.6

%

International


224,290



182,223



42,067



23.1

%


5.3

%




17.8

%

Water


$33,088



$32,870



$218



0.7

%


0.2

%




0.4

%

United States


14,573



14,516



57



0.4

%






0.4

%

International


18,515



18,354



161



0.9

%


0.4

%




0.5

%

LPD


$42,476



$36,655



$5,821



15.9

%


3.2

%




12.7

%

United States


3,730



4,009



(279)



(7.0)

%






(7.0)

%

International


38,746



32,646



6,100



18.7

%


3.7

%




15.0

%

Other


$15,722



$6,135



$9,587



156.2

%






156.2

%

Total Company


$720,938



$605,446



$115,492



19.1

%


1.8

%




17.2

%

United States


433,607



368,169



65,438



17.8

%




0.1

%


17.7

%

International


287,331



237,277



50,054



21.1

%


4.6

%




16.5

%




Three Months Ended



















Reported


Percentage


Percentage


Organic



December 31,


December 31,


Dollar


Revenue


Change from


Change from


Revenue

Net CAG Revenue


2020


2019


Change


Growth1


Currency


Acquisitions


Growth1

CAG Diagnostics recurring revenue:


$548,244



$446,133



$102,111



22.9

%


1.9

%


0.1

%


20.9

%

IDEXX VetLab consumables


220,997



173,714



47,283



27.2

%


2.4

%




24.8

%

Rapid assay products


60,337



50,183



10,154



20.2

%


0.6

%




19.6

%

Reference laboratory diagnostic
and consulting services


242,968



201,028



41,940



20.9

%


1.8

%


0.1

%


18.9

%

CAG Diagnostics services and
accessories


23,942



21,208



2,734



12.9

%


1.7

%




11.2

%

CAG Diagnostics capital –
instruments


36,910



39,802



(2,892)



(7.3)

%


2.5

%




(9.7)

%

Veterinary software, services and
diagnostic imaging systems


44,498



43,851



647



1.5

%


0.3

%




1.2

%

Net CAG revenue


$629,652



$529,786



$99,866



18.9

%


1.8

%




17.0

%
















1See Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding.

IDEXX Laboratories, Inc. and Subsidiaries

Revenues and Revenue Growth Analysis by Product and Service Categories and by Domestic and International Markets

Amounts in thousands (Unaudited)



Twelve Months Ended



















Reported


Percentage


Percentage


Organic



December 31,


December 31,


Dollar


Revenue


Change from


Change from


Revenue

Net Revenue


2020


2019


Change


Growth1


Currency


Acquisitions


Growth1

CAG


$2,385,765



$2,119,183



$266,582



12.6

%


0.2

%


0.5

%


11.9

%

United States


1,593,855



1,410,278



183,577



13.0

%




0.8

%


12.2

%

International


791,910



708,905



83,005



11.7

%


0.5

%




11.2

%

Water


$128,625



$132,850



($4,225)



(3.2)

%


(1.6)

%




(1.6)

%

United States


62,083



62,673



(590)



(0.9)

%






(0.9)

%

International


66,542



70,177



(3,635)



(5.2)

%


(3.0)

%




(2.2)

%

LPD


$145,845



$132,635



$13,210



10.0

%


(1.1)

%




11.0

%

United States


14,533



14,230



303



2.1

%






2.1

%

International


131,312



118,405



12,907



10.9

%


(1.2)

%




12.1

%

Other


$46,420



$22,240



$24,180



108.7

%






108.7

%

Total Company


$2,706,655



$2,406,908



$299,747



12.5

%




0.5

%


12.0

%

United States


1,691,224



1,495,516



195,708



13.1

%




0.8

%


12.3

%

International


1,015,431



911,392



104,039



11.4

%


(0.1)

%




11.5

%




Twelve Months Ended



















Reported


Percentage


Percentage


Organic



December 31,


December 31,


Dollar


Revenue


Change from


Change from


Revenue

Net CAG Revenue


2020


2019


Change


Growth1


Currency


Acquisitions


Growth1

CAG Diagnostics recurring revenue:


$2,113,839



$1,828,329



$285,510



15.6

%


0.1

%


0.6

%


14.8

%

IDEXX VetLab consumables


824,376



693,360



131,016



18.9

%


0.1

%




18.8

%

Rapid assay products


253,018



232,149



20,869



9.0

%


(0.2)

%




9.2

%

Reference laboratory diagnostic
and consulting services


946,268



822,497



123,771



15.0

%


0.3

%


1.4

%


13.4

%

CAG Diagnostics services and
accessories


90,177



80,323



9,854



12.3

%






12.3

%

CAG Diagnostics capital –
instruments


108,950



132,685



(23,735)



(17.9)

%


0.4

%




(18.2)

%

Veterinary software, services and
diagnostic imaging systems


162,976



158,169



4,807



3.0

%






3.0

%

Net CAG revenue


$2,385,765



$2,119,183



$266,582



12.6

%


0.2

%


0.5

%


11.9

%
















1See Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding.

IDEXX Laboratories, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet

Amounts in thousands (Unaudited)





December 31,


December 31,





2020


2019

Assets:


Current Assets:







Cash and cash equivalents


$383,928



$90,326




Accounts receivable, net


331,429



269,312




Inventories


209,873



195,019




Other current assets


137,508



124,982




Total current assets


1,062,738



679,639




Property and equipment, net


555,167



533,845




Other long-term assets, net


676,656



618,991




Total assets


$2,294,561



$1,832,475


Liabilities and Stockholders'







Equity:


Current Liabilities:







Accounts payable


$74,558



$72,172




Accrued liabilities


415,648



322,938




Line of credit




288,765




Current portion of long-term debt


49,988






Deferred revenue


42,567



41,462




Total current liabilities


582,761



725,337




Long-term debt, net of current portion


858,492



698,910




Other long-term liabilities, net


220,513



230,403




Total long-term liabilities


1,079,005



929,313




Total stockholders' equity


632,088



177,473




Noncontrolling interest


707



352




Total stockholders' equity


632,795



177,825




Total liabilities and stockholders' equity


$2,294,561



$1,832,475


IDEXX Laboratories, Inc. and Subsidiaries

Select Balance Sheet Information (Unaudited)





December 31,
2020


September 30,
2020


June 30,
2020


March 31,
2020


December 31,
2019

Selected Balance Sheet Information:


Days sales
outstanding1


42.2



41.5



44.4



41.5



40.5




Inventory turns2


2.1



1.9



1.6



1.9



2.2















1Days sales outstanding represents the average of the accounts receivable balances at the beginning and end of each quarter divided by revenue for that
quarter, the result of which is then multiplied by 91.25 days.

2Inventory turns represent inventory-related cost of product revenue for the twelve months preceding each quarter-end divided by the average inventory
balances at the beginning and end of each quarter.

IDEXX Laboratories, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows

Amounts in thousands (Unaudited)





Twelve Months Ended





December 31,


December 31,





2020


2019

Operating:


Cash Flows from Operating Activities:







Net income


$582,131



$427,792




Non-cash charges


97,693



136,335




Changes in assets and liabilities


(31,761)



(104,969)




Net cash provided by operating activities


648,063



459,158


Investing:


Cash Flows from Investing Activities:







Purchases of property and equipment


(106,958)



(154,969)




Acquisitions of intangible assets


(668)



(255)




Acquisitions of businesses and equity investment, net of cash acquired


(1,750)



(50,304)




Net cash (used) provided by investing activities


(109,376)



(205,528)


Financing:


Cash Flows from Financing Activities:







Repayments on revolving credit facilities, net


(289,625)



(110,275)




Issuance of senior notes


200,000



100,000




Debt issuance costs


(5,025)



(154)




Payment of acquisition-related contingent considerations


(1,676)



(2,375)




Repurchases of common stock


(182,815)



(301,658)




Proceeds from exercises of stock options and employee stock purchase plans


51,328



36,106




Shares withheld for statutory tax withholding on restricted stock


(20,603)



(8,053)




Net cash used by financing activities


(248,416)



(286,409)




Net effect of changes in exchange rates on cash


3,331



(689)




Net change in cash and cash equivalents


293,602



(33,468)




Cash and cash equivalents, beginning of period


90,326



123,794




Cash and cash equivalents, end of period


$383,928



$90,326


IDEXX Laboratories, Inc. and Subsidiaries

Free Cash Flow

Amounts in thousands except per share data (Unaudited)





Twelve Months Ended





December 31,


December 31,





2020


2019

Free Cash Flow:


Net cash provided by operating activities


$648,063



$459,158




Investing cash flows attributable to purchases of property and equipment


(106,958)



(154,969)




Free cash flow1


$541,105



$304,189









1See Statements Regarding Non-GAAP Financial Measures, above.

IDEXX Laboratories, Inc. and Subsidiaries




After-Tax Return on Invested Capital, Excluding Cash and Investments ("ROIC")




Amounts in thousands (Unaudited)




Numerator (amounts in thousands)

For the Year Ended
December 31, 2020



Income from operations (as reported)

$694,524




After-tax income from operations1

$610,745




Denominator (dollar amounts in thousands)

As of
December 31, 2020


As of
December 31, 2019

Total shareholders' equity

$632,088



$177,473


Noncontrolling interest

707



352


Line of credit



288,765


Long-term debt, current portion

49,988




Long-term debt, net of current portion

858,492



698,910


Deferred income tax assets

(31,549)



(8,100)


Deferred income tax liabilities

11,707



33,024


Total invested capital

$1,521,433



$1,190,424


Less cash and cash equivalents

383,928



90,326


Total invested capital, excluding cash and investments

$1,137,505



$1,100,098


Average invested capital, excluding cash and investments2

$1,118,802




After-tax return on invested capital, excluding cash and investments

55

%







1After-tax income from operations represents income from operations reduced by our reported effective tax rate.

2Average invested capital, excluding cash and investments, represents the average of the amount of total invested capital, excluding cash and investments.

IDEXX Laboratories, Inc. and Subsidiaries





Common Stock Repurchases





Amounts in thousands except per share data (Unaudited)







Three Months Ended


Twelve Months Ended



December 31,


December 31,


December 31,


December 31,



2020


2019


2020


2019

Shares repurchased in the open market




532



721

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