- Records second quarter revenue growth of 10% reported and
10% organic, driven by CAG Diagnostics recurring revenue growth of
11% reported and 12% organic
- Achieves record second quarter global premium instrument
placements, supporting 11% annual installed base growth
- Delivers EPS of $2.67, representing 71% growth as reported
and 77% on a comparable basis, including 54% of EPS growth rate
benefit from lapping of discrete R&D investments in the second
quarter of 2022
- Updates 2023 revenue guidance to $3,660 million - $3,715
million, reflecting 8.5% - 10% growth as reported and organically,
driven by projected CAG Diagnostics recurring revenue growth of 10%
- 11% as reported and organically
- Increases 2023 EPS outlook to $9.64 - $9.90, a
year-over-year increase of 20% - 23% as reported and 24% - 27% on a
comparable basis, including ~12% combined EPS growth benefit from a
customer contract resolution payment in Q1 2023 and lapping of
discrete 2022 R&D investments
IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in pet
healthcare innovation, today announced second quarter results.
Second Quarter Results
The Company reports revenues of $944 million for the second
quarter of 2023, an increase of 10% reported and 10% organic,
driven by Companion Animal Group ("CAG") growth of 11% reported and
organic and Water revenue growth of 10% reported and 9% organic.
CAG Diagnostics recurring revenue growth of 11% reported and 12%
organic was supported by double-digit organic revenue growth in
U.S. and international regions, reflecting solid demand for
veterinary services and benefits from IDEXX execution drivers.
IDEXX innovation and commercial engagement drove record second
quarter global premium instrument placements, supporting 11% annual
growth in IDEXX's global premium instrument installed base.
Veterinary software, services and diagnostic imaging systems
revenue grew 12% as reported and 13% organically, reflecting
continued high growth in recurring revenues and strong quarterly
placements of cloud-based software solutions.
Second quarter earnings per diluted share (“EPS”) were $2.67, an
increase of 71% as reported and 77% on a comparable basis,
including 54% growth benefit from lapping prior year discrete
R&D investments in the second quarter of 2022. EPS results
included $0.04 per share in tax benefits from share-based
compensation, and $0.07 per share negative impact from currency
changes.
"Strong execution by IDEXX commercial and operational teams
drove excellent growth results and financial performance in the
second quarter," said Jay Mazelsky, President and Chief Executive
Officer. "Our customers' increasing embrace of IDEXX innovations,
including cloud-based software services, helps them address the
growing global demand for pet healthcare by improving efficiency
while maintaining quality of care and supporting veterinary teams.
We are proud of our progress in advancing our business strategy,
aligned with our purpose to create long-term value for our
customers, employees, and shareholders by enhancing the health and
well-being of pets, people, and livestock."
Second Quarter Performance Highlights
Companion Animal Group
The Companion Animal Group generated revenue growth of 11%
reported and organic for the quarter. Strong growth performance was
supported by CAG Diagnostics recurring revenue growth of 11% on a
reported basis and 12% organically. U.S. CAG Diagnostics organic
recurring revenue growth of 12% remained solidly above sector
growth levels in the second quarter, reflected in an estimated
1,370 basis point growth premium to U.S. same store clinical visit
growth.
Additional U.S. companion animal practice key metrics are
available in the Q2 2023 Earnings Snapshot accessible on the IDEXX
website, www.idexx.com/investors.
Strong global growth was achieved across IDEXX's testing
modalities.
- IDEXX VetLab® consumables generated 14% reported and 15%
organic revenue growth, with strong gains across U.S. and
international regions supported by benefits from higher net price
realization and an expanded global premium instrument installed
base.
- Reference laboratory diagnostic and consulting services
generated 9% reported and organic revenue growth, driven by strong
gains in the U.S. and moderate overall growth in international
regions. International growth was constrained by pressure on
same-store clinical visit levels, reflecting ongoing macro-economic
impacts.
- Rapid assay products revenues grew 11% as reported and
12% organically, driven by strong growth in the U.S., reflecting
solid volume gains and benefits from higher net price
realization.
Veterinary software, services and diagnostic imaging systems
revenues grew 12% as reported and 13% organically, supported by
double-digit organic gains in recurring software and digital
imaging revenues. Strong demand for cloud-based products continues
to support momentum in software solution placements and customer
gains.
Water
Water revenues grew 10% on a reported basis and 9% on an organic
basis for the quarter, reflecting solid gains across regions,
including benefits from net price improvement.
Livestock, Poultry and Dairy (“LPD”)
LPD revenues were flat on a reported basis and grew 1%
organically for the quarter, as solid gains in the U.S. were offset
by lower herd health screening levels.
Gross Profit and Operating Profit
Gross profits increased 11% as reported and 13% on a comparable
basis. Gross margin of 60.7% increased 100 basis points as reported
and 160 basis points on a comparable basis. Benefits from net price
gains, lab productivity and operational initiatives, improvement in
software service gross margins and business mix offset inflationary
effects.
Operating margin was 31.4% in the quarter, 1,060 basis points
higher than the prior year as reported and 1,130 basis points
higher on a comparable basis including a 930 basis point benefit
from lapping prior year discrete R&D investments. Operating
margin expansion reflects gross margin gains benefiting from strong
CAG Diagnostics recurring revenue growth and operating expense
declines of 17% as reported and on a comparable basis. Reported
operating expense declines include a 26% growth impact from lapping
prior year discrete R&D investments. Adjusting for this impact,
operating expense growth was modestly below revenue growth,
supporting operating margin gains.
2023 Growth and Financial Performance Outlook
The Company is updating its full year revenue growth outlook
range to 8.5% - 10% as reported and organically. This reflects no
changes to the outlook for organic revenue growth at the high end
of the range and an increase of 1% at the low end. The overall
reported revenue range was increased by $15 million for updated
foreign exchange impact estimates.
The Company refined its full year reported operating margin
outlook to 29.3% - 29.7%, incorporating strong first half
performance. Operating margin guidance includes a consistent ~60
basis points in year-over-year unfavorable net margin impact from
updated foreign currency exchange rate changes, including effects
from comparisons to prior year foreign exchange hedge gains.
The Company's higher EPS outlook range of $9.64 - $9.90
increased $0.31 at the low end and $0.15 at the high end,
incorporating positive refinements to the full year operational
outlook and benefits of $0.06 combined from updated projections for
interest expense, foreign exchange impacts, and share-based
compensation benefits. This includes an outlook for $0.21 of
negative full year impact from foreign exchange changes, primarily
related to lapping 2022 hedge gains, an improvement of $0.02 per
share compared to prior guidance.
The following table provides the Company's updated outlook for
annual key financial metrics in 2023:
Amounts in millions except per share data and percentages
Growth and Financial Performance
Outlook
2023
Revenue
$3,660
-
$3,715
Reported growth
8.5%
-
10%
Organic growth
8.5%
-
10%
CAG Diagnostics Recurring Revenue
Growth
Reported growth
10%
-
11%
Organic growth
10%
-
11%
Operating Margin
29.3%
-
29.7%
Operating margin expansion
270 bps
-
300 bps
Negative impact of foreign exchange
~ 60 bps
Comparable margin expansion
330 bps
-
360 bps
Positive impact of discrete in-license of
technology and customer contract resolution
~ 280 bps
EPS
$9.64
-
$9.90
Reported growth
20%
-
23%
Comparable growth
24%
-
27%
Positive impact of discrete in-license of
technology and customer contract resolution
12%
Other Key Metrics
Net interest expense
~ $40
Share-based compensation tax benefit
~ $9
Share-based compensation tax rate
benefit
~ 1%
Effective tax rate
21.5%
-
22%
Share-based compensation EPS impact
~ $0.11
Reduction in average shares
outstanding
0.5 %
-
1%
Operating Cash Flow
100% - 110% of net income
Free Cash Flow
80% - 90% of net
income
Capital Expenditures
~ $180
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 2023.
Estimated Foreign Currency Exchange
Rate Impacts
2023
Revenue growth rate impact
~ 20 bps
CAG Diagnostics recurring revenue growth
rate impact
~ 20 bps
Operating margin growth impact
(~ 60 bps)
EPS impact
(~ $0.21)
EPS growth impact
(~ 3%)
Go-Forward Foreign Currency Exchange
Rate Assumptions
2023
In U.S. dollars
euro
$1.10
British pound
$1.27
Canadian dollar
$0.75
Australian dollar
$0.67
Relative to the U.S. dollar
Japanese yen
¥142
Chinese renminbi
¥7.27
Brazilian real
R$4.86
Conference Call and Webcast Information
IDEXX Laboratories, Inc. will be hosting a conference call today
at 8:30 a.m. (EDT) to discuss its second quarter 2023 results and
management’s outlook. To participate in the conference call, dial
1-877-612-6725 or 1-773-305-6837 and reference passcode 351415.
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.
(EDT) on that day via the same link and will remain available for
one year.
2023 Investor Day
IDEXX Laboratories, Inc. will host its 2023 Investor Day on
Thursday, August 10, 2023 from 8:00 am to approximately 12:00 pm
(EDT). A live audio webcast and accompanying slide presentations
will be available at www.idexx.com/investors. An archived webcast
replay of the event will be available approximately one hour
following the event at www.idexx.com/investors. For additional
information contact investorrelations@idexx.com.
About IDEXX Laboratories, Inc.
IDEXX is a global leader in pet healthcare innovation. Our
diagnostic and software products and services create clarity in the
complex, constantly evolving world of veterinary medicine. We
support longer, fuller lives for pets by delivering insights and
solutions that help the veterinary community around the world make
confident decisions—to advance medical care, improve efficiency,
and build thriving practices. Our innovations also help ensure the
safety of milk and water across the world and maintain the health
and well-being of people and livestock. IDEXX Laboratories, Inc. is
a member of the S&P 500® Index. Headquartered in Maine, IDEXX
employs nearly 11,000 people and offers solutions and products to
customers in more than 175 countries and territories. 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 "2023 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 our expectations regarding financial performance;
revenue growth and EPS outlooks; operating and free cash flow
forecast; projected impact of foreign currency exchange rates and
interest 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, 2022 and in the
corresponding sections of the Company's Quarterly Reports on Form
10-Q for the quarters ended March 31, 2023 and June 30, 2023, 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 second quarter
2023 results as follows: decreased gross profit growth by 2%,
decreased gross margin growth by 60 basis points, decreased
operating expense growth by 0%, decreased operating profit growth
by 4%, decreased operating profit margin growth by 70 basis points,
and decreased EPS growth by 4%. 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 six months ended June
30, 2023 and refer to the 2023 Growth and Financial Performance
Outlook section of this earnings release for estimated foreign
currency exchange rate impacts on 2023 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
represents the percent change in revenue, as compared to the same
period for the prior year, net of the impact of changes in foreign
currency exchange rates, certain business acquisitions, and
divestitures. 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. Organic revenue growth
should be considered in addition to, and not as a replacement of or
a superior measure to, revenue growth reported in accordance with
GAAP. See the supplementary analysis of results below for a
reconciliation of reported revenue growth to organic revenue growth
for the three months and six months ended June 30, 2023. Please
refer to the constant currency note above for a summary of foreign
currency exchange rate impacts. Please refer to the 2023 Growth and
Financial Performance Outlook section of this earnings release for
estimated full year 2023 organic revenue growth for the Company and
CAG Diagnostics recurring revenue growth. The percentage change in
revenue resulting from acquisitions represents revenues during the
current year period, limited to the initial 12 months from the date
of the acquisition, that are directly attributable to business
acquisitions. Revenue from acquisitions is not expected to have an
impact on projected full year 2023 revenue growth or CAG
Diagnostics recurring revenue growth.
Comparable growth metrics -
Comparable gross profit growth, comparable gross margin gain (or
growth), comparable operating expense growth, comparable operating
profit growth and comparable operating 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). Please refer to the constant currency note above for a
summary of foreign currency exchange rate impacts. Management
believes that reporting comparable gross profit growth, comparable
gross margin gain (or growth), comparable operating expense growth,
comparable operating profit growth and comparable 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 gross profit
growth, comparable gross margin gain (or growth), comparable
operating expense growth, comparable operating profit growth and
comparable operating margin gain (or growth) should be considered
in addition to, and not as replacements of or superior measures to,
gross profit growth, gross margin gain, 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
Six Months Ended
Year-over-Year
June 30,
June 30,
Change
June 30,
June 30,
Change
Dollar amounts in thousands
2023
2022
2023
2022
Gross Profit (as reported)
$
572,850
$
514,032
11%
$
1,115,821
$
1,012,785
10%
Gross margin
60.7
%
59.7
%
100 bps
60.5
%
59.7
%
80 bps
Less: comparability adjustments
Change from currency
(8,676
)
—
(24,502
)
—
Comparable gross profit growth
$
581,526
$
514,032
13%
$
1,140,323
$
1,012,785
13%
Comparable gross margin and gross
margin gain (or growth)
61.4
%
59.7
%
160 bps
61.1
%
59.7
%
140 bps
Operating expenses (as
reported)
$
276,706
$
334,966
(17)%
$
539,278
$
585,375
(8)%
Less: comparability adjustments
Change from currency
(623
)
—
(4,805
)
—
Comparable operating expense
growth
$
277,329
$
334,966
(17)%
$
544,083
$
585,375
(7)%
Income from operations (as
reported)
$
296,144
$
179,066
65%
$
576,543
$
427,410
35%
Operating margin
31.4
%
20.8
%
1,060 bps
31.3
%
25.2
%
610 bps
Less: comparability adjustments
Change from currency
(8,054
)
—
(19,698
)
—
Comparable operating profit
growth
$
304,198
$
179,066
70%
$
596,241
$
427,410
40%
Comparable operating margin and
operating margin gain (or growth)
32.1
%
20.8
%
1,130 bps
31.9
%
25.2
%
680 bps
Amounts presented may not recalculate due
to rounding.
Projected 2023 comparable operating margin expansion outlined in
the 2023 Growth and Financial Performance Outlook section of this
earnings release reflects projected full year 2023 reported
operating margin adjusted for estimated positive year-over-year
foreign currency exchange rate change impact of approximately 60
basis points.
These impacts described above reconcile reported gross profit
growth, gross margin gain, operating expense growth, operating
profit growth and operating margin gain (including projected 2023
operating margin expansion) to comparable gross profit growth,
comparable gross margin gain, comparable operating expense growth,
comparable operating profit growth and comparable operating margin
gain for the Company.
Comparable EPS growth - Comparable
EPS growth is a non-GAAP financial measure that represents the
percentage change in earnings per share (diluted) ("EPS") for a
measurement period, as compared to the prior base period, net of
the impact of changes in foreign currency exchange rates from the
prior base period and excluding the tax benefits of share-based
compensation activity under ASU 2016-09, Compensation-Stock
Compensation (Topic 718): Improvements to Employee Share-Based
Payment Accounting, and non-recurring or unusual items (if any).
Management believes comparable 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. Comparable EPS growth
should be considered in addition to, and not as a replacement of or
a superior measure to, EPS growth reported in accordance with GAAP.
Please refer to the constant currency note above for a summary of
foreign currency exchange rate impacts.
The reconciliation of this non-GAAP financial measure is as
follows:
Three Months Ended
Year-over-Year
Six Months Ended
Year-over-Year
June 30,
June 30,
Growth
June 30,
June 30,
Growth
2023
2022
2023
2022
Earnings per share (diluted)
$
2.67
$
1.56
71%
$
5.22
$
3.82
37%
Less: comparability adjustments
Share-based compensation activity
0.04
0.03
0.10
0.09
Change from currency
(0.07)
—
(0.18)
—
Comparable EPS growth
2.70
1.53
77%
5.30
3.73
42%
Amounts presented may not recalculate due
to rounding.
Projected 2023 comparable EPS growth outlined in the 2023 Growth
and Financial Performance Outlook section of this earnings release
reflects adjustments including estimated positive share-based
compensation activity of $0.11 and estimated negative
year-over-year foreign currency exchange rate change impact of
$0.21.
These impacts and those described in the constant currency note
above reconcile reported EPS growth (including projected 2023
reported EPS growth) to comparable 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. Free cash flow should be considered in addition to, and
not as a replacement of or a superior measure to, net cash provided
by operating activities. See the supplementary analysis of results
below for our calculation of free cash flow for the three and six
months ended June 30, 2023 and 2022. To estimate projected 2023
free cash flow, we have deducted projected purchases of property
and equipment (also referred to as capital expenditures) of
approximately $180 million. Free cash flow conversion, or the net
income to free cash flow ratio, is a non-GAAP financial measure
that is defined as free cash flow, with respect to a measurement
period, divided by net income for the same period. To calculate
trailing twelve-month net income to free cash flow ratio for the
twelve months ended June 30, 2023, we have deducted purchases of
property and equipment of approximately $154 million from net cash
provided from operating activities of approximately $747 million,
divided by net income of approximately $791 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.
Adjusted EBITDA, gross debt, and net debt should be considered in
addition to, and not as replacements of or superior measures to,
net income or total debt reported in accordance with GAAP. For
further information on how Adjusted EBITDA and the Debt to Adjusted
EBITDA Ratios are calculated, see the Company's Annual Report on
Form 10-K for the year ended December 31, 2022 and Quarterly Report
on Form 10-Q for the quarter ended June 30, 2023.
IDEXX Laboratories, Inc. and
Subsidiaries
Condensed Consolidated Statement of
Operations
Amounts in thousands except per share data
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
June 30,
June 30,
2023
2022
2023
2022
Revenue:
Revenue
$943,630
$860,546
$1,843,825
$1,697,095
Expenses and Income:
Cost of revenue
370,780
346,514
728,004
684,310
Gross profit
572,850
514,032
1,115,821
1,012,785
Sales and marketing
140,532
130,257
288,336
262,549
General and administrative
89,669
81,488
159,770
159,437
Research and development
46,505
123,221
91,172
163,389
Income from operations
296,144
179,066
576,543
427,410
Interest expense, net
(10,215)
(7,983)
(22,926)
(14,836)
Income before provision for income
taxes
285,929
171,083
553,617
412,574
Provision for income taxes
61,693
39,104
115,327
86,630
Net Income:
Net income attributable to
stockholders
$224,236
$131,979
$438,290
$325,944
Earnings per share: Basic
$2.70
$1.57
$5.28
$3.87
Earnings per share: Diluted
$2.67
$1.56
$5.22
$3.82
Shares outstanding: Basic
83,086
83,922
83,039
84,164
Shares outstanding: Diluted
83,983
84,858
83,980
85,222
IDEXX Laboratories, Inc. and
Subsidiaries
Selected Operating Information
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
June 30,
June 30,
2023
2022
2023
2022
Operating Ratios
Gross profit
60.7%
59.7%
60.5%
59.7%
(as a percentage of revenue):
Sales, marketing, general and
administrative expense
24.4%
24.6%
24.3%
24.9%
Research and development expense
4.9%
14.3%
4.9%
9.6%
Income from operations1
31.4%
20.8%
31.3%
25.2%
1Amounts presented may not recalculate due
to rounding.
IDEXX Laboratories, Inc. and
Subsidiaries
Segment Information
Amounts in thousands (Unaudited)
Three Months Ended
June 30, 2023
Percent of Revenue
June 30, 2022
Percent of Revenue
Revenue:
CAG
$866,652
$784,087
Water
43,029
39,195
LPD
29,911
29,889
Other
4,038
7,375
Total
$943,630
$860,546
Gross Profit:
CAG
$525,709
60.7%
$466,254
59.5%
Water
30,319
70.5%
27,359
69.8%
LPD
16,086
53.8%
16,996
56.9%
Other
736
18.2%
3,423
46.4%
Total
$572,850
60.7%
$514,032
59.7%
Income from Operations:
CAG
$275,509
31.8%
$156,526
20.0%
Water
19,820
46.1%
17,920
45.7%
LPD
1,951
6.5%
3,230
10.8%
Other
(1,136)
(28.1)%
1,390
18.8%
Total
$296,144
31.4%
$179,066
20.8%
Six Months Ended
June 30, 2023
Percent of Revenue
June 30, 2022
Percent of Revenue
Revenue:
CAG
$1,693,931
$1,545,271
Water
81,912
75,566
LPD
59,119
60,759
Other
8,863
15,499
Total
$1,843,825
$1,697,095
Gross Profit:
CAG
$1,024,466
60.5%
$915,353
59.2%
Water
57,587
70.3%
53,096
70.3%
LPD
31,139
52.7%
36,543
60.1%
Other
2,629
29.7%
7,793
50.3%
Total
$1,115,821
60.5%
$1,012,785
59.7%
Income from Operations:
CAG
$537,259
31.7%
$379,651
24.6%
Water
36,791
44.9%
34,574
45.8%
LPD
3,259
5.5%
9,967
16.4%
Other
(766)
(8.6)%
3,218
20.8%
Total
$576,543
31.3%
$427,410
25.2%
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
June 30, 2023
June 30, 2022
Dollar Change
Reported Revenue
Growth1
Percentage Change from
Currency
Percentage Change from
Acquisitions
Organic Revenue
Growth1
Net Revenue
CAG
$866,652
$784,087
$82,565
10.5%
(0.5%)
—
11.0%
United States
594,395
532,626
61,769
11.6%
—
—
11.6%
International
272,257
251,461
20,796
8.3%
(1.5%)
—
9.7%
Water
43,029
39,195
3,834
9.8%
(1.2%)
1.7 %
9.2%
United States
21,208
19,533
1,675
8.6%
—
1.4 %
7.2%
International
21,821
19,662
2,159
11.0%
(2.4%)
2.1 %
11.3%
LPD
29,911
29,889
22
0.1%
(0.5%)
—
0.6%
United States
4,422
3,742
680
18.2%
—
—
18.2%
International
25,489
26,147
(658)
(2.5%)
(0.6%)
—
(1.9%)
Other
4,038
7,375
(3,337)
(45.2%)
—
—
(45.3%)
Total Company
$943,630
$860,546
$83,084
9.7%
(0.5%)
0.1%
10.1%
United States
621,607
559,825
61,782
11.0%
—
—
11.0%
International
322,023
300,721
21,302
7.1%
(1.4%)
0.1%
8.4%
Three Months Ended
June 30, 2023
June 30, 2022
Dollar Change
Reported Revenue
Growth1
Percentage Change from
Currency
Percentage Change from
Acquisitions
Organic Revenue
Growth1
Net CAG Revenue
CAG Diagnostics recurring revenue:
$762,476
$685,413
$77,063
11.2%
(0.5%)
—
11.7%
IDEXX VetLab consumables
303,735
266,079
37,656
14.2%
(0.7%)
—
14.9%
Rapid assay products
97,340
87,481
9,859
11.3%
(0.3%)
—
11.6%
Reference laboratory diagnostic and
consulting services
330,106
304,130
25,976
8.5%
(0.3%)
—
8.9%
CAG Diagnostics services and
accessories
31,295
27,723
3,572
12.9%
(0.7%)
—
13.6%
CAG Diagnostics capital – instruments
34,054
36,227
(2,173)
(6.0%)
(0.3%)
—
(5.7%)
Veterinary software, services and
diagnostic imaging systems
70,122
62,447
7,675
12.3%
(0.4%)
—
12.6%
Net CAG revenue
$866,652
$784,087
$82,565
10.5%
(0.5%)
—
11.0%
Three Months Ended
June 30, 2023
June 30, 2022
Dollar Change
Reported Revenue
Growth1
Percentage Change from
Currency
Percentage Change from
Acquisitions
Organic Revenue
Growth1
CAG Diagnostics recurring revenue:
$762,476
$685,413
$77,063
11.2%
(0.5%)
—
11.7%
United States
$517,388
$460,357
$57,031
12.4%
—
—
12.4%
International
$245,088
$225,056
$20,032
8.9%
(1.5%)
—
10.4%
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)
Six Months Ended
June 30, 2023
June 30, 2022
Dollar Change
Reported Revenue
Growth1
Percentage Change from
Currency
Percentage Change from
Acquisitions
Organic Revenue
Growth1
Net Revenue
CAG
$1,693,931
$1,545,271
$148,660
9.6%
(1.3%)
—
11.0%
United States
1,158,922
1,032,392
126,530
12.3%
—
—
12.3%
International
535,009
512,879
22,130
4.3%
(3.9%)
—
8.2%
Water
81,912
75,566
6,346
8.4%
(2.0%)
1.7%
8.7%
United States
41,128
37,364
3,764
10.1%
—
0.7%
9.3%
International
40,784
38,202
2,582
6.8%
(4.0%)
2.6%
8.1%
LPD
59,119
60,759
(1,640)
(2.7%)
(2.2%)
—
(0.5%)
United States
8,965
7,602
1,363
17.9%
—
—
17.9%
International
50,154
53,157
(3,003)
(5.6%)
(2.5%)
—
(3.2%)
Other
8,863
15,499
(6,636)
(42.8%)
(0.1%)
—
(42.8%)
Total Company
$1,843,825
$1,697,095
$146,730
8.6%
(1.4%)
0.1%
10.0%
United States
1,212,020
1,085,731
126,289
11.6%
—
—
11.6%
International
631,805
611,364
20,441
3.3%
(3.7%)
0.2%
6.9%
Six Months Ended
June 30, 2023
June 30, 2022
Dollar Change
Reported Revenue
Growth1
Percentage Change from
Currency
Percentage Change from
Acquisitions
Organic Revenue
Growth1
Net CAG Revenue
CAG Diagnostics recurring revenue:
$1,489,378
$1,350,223
$139,155
10.3%
(1.4%)
—
11.7%
IDEXX VetLab consumables
594,849
533,252
61,597
11.6%
(1.9%)
—
13.4%
Rapid assay products
179,372
162,000
17,372
10.7%
(0.8%)
—
11.6%
Reference laboratory diagnostic and
consulting services
653,286
599,205
54,081
9.0%
(1.1%)
—
10.1%
CAG Diagnostics services and
accessories
61,871
55,766
6,105
10.9%
(1.9%)
—
12.9%
CAG Diagnostics capital – instruments
67,198
73,224
(6,026)
(8.2%)
(1.6%)
—
(6.6%)
Veterinary software, services and
diagnostic imaging systems
137,355
121,824
15,531
12.7%
(0.6%)
—
13.3%
Net CAG revenue
$1,693,931
$1,545,271
$148,660
9.6%
(1.3%)
—
11.0%
Six Months Ended
June 30, 2023
June 30, 2022
Dollar Change
Reported Revenue
Growth1
Percentage Change from
Currency
Percentage Change from
Acquisitions
Organic Revenue
Growth1
CAG Diagnostics recurring revenue:
$1,489,378
$1,350,223
$139,155
10.3%
(1.4%)
—
11.7%
United States
$1,008,728
$892,859
$115,869
13.0%
—
—
13.0%
International
$480,650
$457,364
$23,286
5.1%
(4.0%)
—
9.1%
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)
June 30, 2023
December 31, 2022
Assets:
Current Assets:
Cash and cash equivalents
$132,838
$112,546
Accounts receivable, net
461,858
400,619
Inventories
395,141
367,823
Other current assets
189,188
220,489
Total current assets
1,179,025
1,101,477
Property and equipment, net
683,270
649,474
Other long-term assets, net
1,008,511
995,814
Total assets
$2,870,806
$2,746,765
Liabilities and Stockholders'
Equity:
Current Liabilities:
Accounts payable
$107,664
$110,221
Accrued liabilities
399,425
433,662
Line of credit
264,000
579,000
Current portion of long-term debt
74,991
74,982
Deferred revenue
37,779
37,938
Total current liabilities
883,859
1,235,803
Long-term debt, net of current portion
696,844
694,387
Other long-term liabilities, net
196,242
207,838
Total long-term liabilities
893,086
902,225
Total stockholders' equity
1,093,861
608,737
Total liabilities and stockholders'
equity
$2,870,806
$2,746,765
IDEXX Laboratories, Inc. and
Subsidiaries
Selected Balance Sheet Information
(Unaudited)
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
June 30, 2022
Selected Balance Sheet
Information:
Days sales outstanding1
43.9
42.9
43.4
43.4
43.2
Inventory turns2
1.3
1.3
1.3
1.3
1.5
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)
Six Months Ended
June 30, 2023
June 30, 2022
Operating:
Cash Flows from Operating
Activities:
Net income
$438,290
$325,944
Non-cash adjustments to net income
76,246
61,563
Changes in assets and liabilities
(130,310)
(206,951)
Net cash provided by operating
activities
384,226
180,556
Investing:
Cash Flows from Investing
Activities:
Purchases of property and equipment
(66,981)
(61,924)
Equity investment
—
(25,000)
Acquisition of intangible assets
—
(10,000)
Net cash used by investing activities
(66,981)
(96,924)
Financing:
Cash Flows from Financing
Activities:
(Repayments) borrowings under credit
facility, net
(315,000)
537,500
Payment of senior debt
—
(75,000)
Proceeds from maturity of net investment
hedges
6,256
—
Payments for the acquisition-related
contingent consideration and holdbacks
(1,780)
(2,816)
Repurchases of common stock
—
(573,060)
Proceeds from exercises of stock options
and employee stock
purchase plans
23,086
18,379
Shares withheld for statutory tax
withholding payments on
restricted stock
(9,676)
(10,390)
Net cash used by financing activities
(297,114)
(105,387)
Net effect of changes in exchange rates on
cash
161
(8,337)
Net increase (decrease) in cash and cash
equivalents
20,292
(30,092)
Cash and cash equivalents, beginning of
period
112,546
144,454
Cash and cash equivalents, end of
period
$132,838
$114,362
IDEXX Laboratories, Inc. and
Subsidiaries
Free Cash Flow
Amounts in thousands except per share data
(Unaudited)
Three Months Ended
Six Months Ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Free Cash Flow:
Net cash provided by operating
activities
$200,314
$65,850
$384,226
$180,556
Investing cash flows attributable to
purchases of property and equipment
(27,470)
(30,086)
(66,981)
(61,924)
Free cash flow1
$172,844
$35,764
$317,245
$118,632
1See Statements Regarding Non-GAAP
Financial Measures, above.
IDEXX Laboratories, Inc. and
Subsidiaries
Common Stock Repurchases
Amounts in thousands except per share data
(Unaudited)
Three Months Ended
Six Months Ended
June 30, 2023
June 30, 2022
June 30, 2023
June 30, 2022
Shares repurchased in the open market
—
809
—
1,311
Shares acquired through employee surrender
for statutory tax withholding
—
—
19
21
Total shares repurchased
—
809
19
1,332
Cost of shares repurchased in the open
market
$ —
$313,455
$ —
$576,238
Cost of shares for employee surrenders
$79
$52
$9,676
$10,390
Total cost of shares
$79
$313,507
$9,676
$586,628
Average cost per share – open market
repurchases
$ —
$ 387.78
$ —
$ 439.63
Average cost per share – employee
surrenders
$ 469.84
$ 369.63
$ 503.35
$ 504.60
Average cost per share – total
$ 469.84
$ 387.78
$ 503.35
$ 440.63
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230731815693/en/
John Ravis, Investor Relations, 1-207-556-8155
Grafico Azioni IDEXX Laboratories (NASDAQ:IDXX)
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