8-K
IDEXX LABORATORIES INC /DE (IDXX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): February 2, 2022
IDEXX LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 000-19271 | 01-0393723 |
|---|---|---|
| (State or other jurisdiction<br><br><br>of incorporation) | (Commission<br><br><br>File Number) | (IRS Employer<br><br><br>Identification No.) |
| One IDEXX Drive, Westbrook, Maine | 04092 | |
| --- | --- | |
| (Address of principal executive offices) | (ZIP Code) |
- 556.0300
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br><br>Symbol(s) | Name of each exchange<br><br><br>on which registered |
|---|---|---|
| Common Stock, $0.10 par value per share | IDXX | NASDAQ Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On February 2, 2022, IDEXX Laboratories, Inc. (the “Company”) announced its financial results for the quarter and year ended December 31, 2021. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
In accordance with general instructions to Form 8-K, the information in this Form 8-K and the Exhibit 99.1 attached hereto is being furnished under Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d)Exhibits
The following exhibit relating to Item 2.02 shall be deemed to be furnished, and not filed.
| Exhibit No. | Description of Exhibit |
|---|---|
| 99.1 | Press Release entitled “IDEXX Laboratories Announces Fourth Quarter and Full Year 2021 Results,” issued by the Company on February 2, 2022. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| IDEXX LABORATORIES, INC. | ||
|---|---|---|
| Date: February 2, 2022 | By: | /s/ Brian P. McKeon |
| Brian P. McKeon | ||
| Executive Vice President,<br><br><br>Chief Financial Officer and Treasurer |
Exhibit 99.1
IDEXX Laboratories Announces Fourth Quarter and Full Year 2021 Results
WESTBROOK, Maine, Feb. 2, 2022 /PRNewswire/ --
- Achieves 11% fourth quarter revenue growth as reported and 10.5% organic, driven by 13% CAG Diagnostics recurring revenue growth (reported and organic)
- Strong growth supported by record instrument placements, resulting in 14% year-over-year expansion of IDEXX's global premium instrument installed base
- Delivers full year EPS of $8.60, an increase of 28% on a reported basis and 29% on a comparable basis, supported by operating margin expansion of 330 basis points as reported and 220 basis points on a comparable basis
- Provides initial outlook for 2022 revenue of $3,500 million - $3,565 million, reflecting reported growth of 9% - 11% and organic growth of 10% - 12%
- Estimates 2022 EPS of $9.27 - $9.59, an increase of 8% - 11% as reported and 12% - 16% on a comparable basis, including an estimated $0.15 per share or ~2% EPS growth impact from higher projected international tax rates
IDEXX Laboratories, Inc. (NASDAQ: IDXX), a global leader in veterinary diagnostics, veterinary practice software and water microbiology testing, today announced fourth quarter and full year results, as well as an update on U.S. companion animal diagnostic trends.
Fourth Quarter and Full Year Results
The Company reports revenues of $801 million for the fourth quarter of 2021, an increase of 11% compared to the prior year period on a reported basis and 10.5% on an organic basis. Fourth quarter results reflect 13% reported and organic revenue gains in CAG Diagnostics recurring revenues, with high gains across U.S. and International regions. On a two-year average annual growth basis, CAG Diagnostics recurring revenue increased 18% as reported and 17% organically. Continued strong CAG growth momentum was also supported by record instrument placements, resulting in CAG Diagnostics capital instrument revenue growth of 18% reported and 21% organic, and continued expansion of the Company's cloud-based software capability, which drove veterinary software, services and diagnostic imaging systems revenue growth of 30% as reported and 13% organically.
Earnings per diluted share ("EPS") were $1.89 for the fourth quarter, a decrease of 6% as reported and an increase of 12% on a comparable basis. Prior year reported EPS results included a one-time positive impact of $0.25 per share related to the enactment of tax reform in Switzerland.
Revenue for the full year of $3,215 million increased 19% as reported and 16% on an organic basis, driven by 20% reported and 18% organic growth in CAG Diagnostics recurring revenue.
For the full year 2021, EPS of $8.60 increased 28% on a reported basis and 29% on a comparable basis. EPS results benefited from strong CAG Diagnostics recurring revenue growth, solid gross margin gains and operating expense leverage, resulting in 330 basis points of operating margin improvement on a reported basis, and 220 basis points on a comparable basis. EPS results also reflect $0.38 of tax benefits from share-based compensation.
The Company expects full year 2022 revenue growth of 9% - 11% on a reported basis and 10% - 12% revenue growth on an organic basis, supported by 10.5% - 12% reported growth, and 12% - 14% organic growth in CAG Diagnostics recurring revenues. The Company also expects EPS of $9.27 - $9.59, reflecting a targeted 50 - 100 basis points of comparable operating margin improvement, building on strong 2021 performance.
"IDEXX had a strong finish to an exceptional 2021, as busy veterinary customers responded positively to our highly differentiated diagnostic testing and information management platforms," said Jay Mazelsky, IDEXX's CEO. "We're pleased to see veterinarians look to IDEXX solutions to support their passion to improve patient care and to run their practices more efficiently at a time when they have never been busier. This has resulted in continued high CAG Diagnostics recurring revenue growth across our major regions and record levels of premium instrument placements, with solid gains across our major in-clinic platforms. As a Purpose-driven company focused on improving the health and well-being of pets, people and livestock, our outstanding results reflect the high levels of execution across the IDEXX organization through the challenges of the COVID-19 pandemic. We are well-positioned to build on this momentum moving forward and to address the still significant untapped potential for companion animal healthcare globally."
Companion Animal Diagnostics Trends Update
Positive global trends in companion animal healthcare, including growth in demand for clinical services, continue to support strong growth for companion animal diagnostic products and services across regions. U.S. same-store clinical visit growth at veterinary practices was 2% in the fourth quarter, compared to strong prior year growth levels. On a two-year basis, U.S. same-store clinical visits increased 5.5% with solid gains across wellness and non-wellness categories. Average same-store revenue growth at U.S. veterinary practices was 8% in the fourth quarter, supported by 10% gains in clinical diagnostic revenues. We are monitoring the increase in Omicron cases globally, including impacts on factors like veterinary practice staffing levels, which may impact clinic level growth. Additional U.S. companion animal practice weekly key metrics are available in the Q4 2021 Earnings Snapshot accessible on the IDEXX website, www.idexx.com/investors.
Fourth Quarter Performance Highlights
Companion Animal Group
The Companion Animal Group generated 14% reported and 13% organic revenue growth for the fourth quarter. CAG Diagnostics organic recurring revenue growth of 13% reflects strength across IDEXX's major modalities globally, supported by continued growth in clinical service demand and expanded utilization of diagnostic products and services.
- IDEXX VetLab® consumables generated 14% reported and 15% organic revenue growth, supported by expansion of our global premium instrument installed base, high customer retention levels, increased testing utilization, and moderate net price gains.
- Reference laboratory diagnostic and consulting services generated 12% reported and organic revenue growth, reflecting mid-to-high-teen growth in the U.S. and high single-digit gains Internationally compared to strong prior year growth levels. Overall reference lab gains continue to reflect high same-store volume growth with gains across testing categories, and moderate net price gains.
- Rapid assay products generated 10% reported and organic revenue growth, with continued worldwide growth in canine, feline, and specialty testing benefiting from strong overall demand trends, high customer retention levels, and moderate net price gains.
Veterinary software, services and diagnostic imaging systems revenue growth increased 30% on a reported basis and 13% organically, supported by double-digit growth in subscription-based service revenues and strong growth in new veterinary software system placements. Reported growth includes benefits from the acquisition of ezyVet**®**, which closed in June 2021.
Water
Water achieved revenue growth of 12% on a reported basis and 13% on an organic basis, compared to 1% growth on a reported basis and modest organic growth in the prior year period. Revenue growth reflects continued strengthening of demand for compliance and non-compliance testing compared to prior year revenue levels, which were constrained by pandemic conditions.
Livestock, Poultry and Dairy ("LPD")
LPD revenue declined 20% on a reported basis and 19% on an organic basis, as compared to 16% growth on a reported basis and 13% organically in the prior year period, which benefited from the ramping of African Swine Fever (ASF) testing programs in China in 2020. Revenue decline reflects comparisons to these high prior year levels and additional impacts in China related to changes in local ASF disease management approaches, lower pork prices and changes in government requirements related to livestock infectious disease testing programs. For the full year 2021, LPD revenue decreased 9% organically compared to 11% gains in 2020. These trends are anticipated to pressure LPD revenues in future quarters, particularly in the first half of 2022, and are factored into the overall 2022 revenue outlook.
Gross Profit and Operating Profit
Gross profits increased 12%, and gross margins of 57% increased 20 basis points compared to prior year results on a reported basis and 10 basis points on a constant currency basis. Gross margin results reflect the benefit from high recurring CAG Diagnostics revenue growth, moderate net price improvement, and higher software service margins, including positive impacts from an expanded software-as-a-service (SaaS) subscription base. These benefits were offset by business mix impacts from high CAG Diagnostics capital instrument revenue growth and lower LPD and human OPTI COVID-19 PCR testing revenues.
Operating margin was 24.9% in the quarter, 80 basis points lower than the prior year period results on a reported basis and 70 basis points on a comparable basis. Operating expenses increased 15% on a reported and comparable basis. Operating expense growth in the fourth quarter reflects the advancement of commercial, innovation and project investments, the continued integration of ezyVet, and continued recovery in cost areas such as travel & entertainment and employee healthcare benefits.
2022 Growth and Financial Performance Outlook
The following table provides the company's initial estimates for annual key financial metrics in 2022:
Amounts in millions except per share data and percentages
| Growth and Financial Performance Outlook | 2022 | |
|---|---|---|
| Revenue | 3,500 | $3,565 |
| Reported growth | 9% | 11% |
| Organic growth | 10% | 12% |
| CAG Diagnostics Recurring Revenue Growth | ||
| Reported growth | 10.5% | 12% |
| Organic growth | 12% | 14% |
| Operating Margin | 29.7% | 30.2% |
| Reported operating margin expansion | 70 | 120 bps |
| Comparable operating margin expansion | 50 | 100 bps |
| EPS | 9.27 | $9.59 |
| Reported growth | 8% | 11% |
| Comparable growth | 12% | 16% |
| Other Key Metrics | ||
| Net interest expense | ~ 28.5 | |
| Share-based compensation tax benefit | ~ 10 | |
| Share-based compensation tax rate benefit | ~ 1 % | |
| Effective tax rate | 21.5% | 22% |
| Share-based compensation EPS impact | ~ 0.12 | |
| Reduction in average shares outstanding | 1% | 1.5% |
| Operating Cash Flow | 95% - 100% of net income | |
| Free Cash Flow | 75% - 80% of net income | |
| Capital Expenditures | ~ 180MM |
All values are in US Dollars.
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 2022.
| EstimatedForeign Currency Exchange Rates and Impacts | 2022 |
|---|---|
| Revenue growth rate impact | ~ (1.5)% |
| CAG Diagnostics recurring revenue growth rate impact | ~ (1.5)% |
| Operating margin growth impact | ~ 20 bps |
| EPS impact | ~ $(0.08) |
| EPS growth impact | ~ (1.0)% |
| Foreign Currency Exchange Rate Assumptions | |
| In U.S. dollars | |
| euro | $1.12 |
| British pound | $1.34 |
| Canadian dollar | $0.78 |
| Australian dollar | $0.71 |
| Relative to the U.S. dollar | |
| Japanese yen | ¥117.00 |
| Chinese renminbi | ¥5.74 |
| Brazilian real | R$6.47 |
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 2021 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 50273826. 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 and effective 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 over 10,000 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 thePrivate Securities Litigation Reform Act of 1995. Forward-looking statements are included above under "Fourth Quarter and Full Year Results", "Livestock, Poultry and Dairy ("LPD")", "2022 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 the impact of certain trends in China; 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 EPSbenefits from share-based compensation arrangements; and projected international tax rate, effective tax rate, 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, 2020 and in the corresponding sections of the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021, and September 30, 2021, 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 andprovides 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 believesthat 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 2021 results as follows: decreased gross profit growth by 0.6%, increased gross margin growth by 10 basis points, decreased operating expense growth by 0.2%, decreased operating profit margin growth by 10 basis points, and decreased EPS growth by 1%. Estimated currency changes impacted full year 2021 results as follows: increased operating profit margin growth by 20 basis points, and increased EPS growth by 2%. 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, 2021 and refer to the 2022 Growth and Financial Performance Outlook section of this press release for estimated foreign currency exchange rate impacts on 2022 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, 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. Two-year average organic growth rates are provided to facilitate easier comparisons between periods impacted by the COVID-19 pandemic with prior and future periods, calculated as the average of the growth rates over the two referenced periods. 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 and twelve months ended December 31, 2021. See the constant currency note above for the impacts of estimated currency changes to fourth quarter and full year 2021, as well estimated full year 2022 organic revenue growth for the Company and CAG Diagnostics recurring revenue. 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 expected to have an immaterial impact on projected full year 2022 revenue growth and CAG Diagnostics recurring revenue growth. For a reconciliation of fourth quarter 2020 LPD and Water organic revenue growth to revenue growth reported in accordance with GAAP, see the supplementary analysis of results in the Company's earnings release dated February 2, 2021.
The reconciliation of the two-year average annual organic growth of CAG Diagnostics recurring revenue is as follows:
| ReportedRevenueGrowth^1^ | PercentageChange from Currency | PercentageChange fromAcquisitions | OrganicRevenueGrowth^1^ | |
|---|---|---|---|---|
| CAG Diagnostics recurring revenue growth rates for the quarter ended Dec. 31, 2021 | 12.7% | (0.6%) | 0.3% | 12.9% |
| CAG Diagnostics recurring<br>revenue growth rates for the quarter ended Dec. 31, 2020 | 22.9% | 1.9% | 0.1% | 20.9% |
| 2-year average annual growth rates | 17.8% | 0.7% | 0.2% | 16.9% |
| ^1^ See Statement Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding. |
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 | Twelve Months Ended | Year-over-Year | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | Change | December 31, | December 31, | Change | |||||||||||
| Dollar amounts in thousands | 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Gross Profit (as reported) | $ | 456,421 | $ | 409,502 | 11 | % | $ | 1,889,432 | $ | 1,571,040 | 20 | % | ||||
| Gross margin | 57.0 | % | 56.8 | % | 20 | bps | 58.8 | % | 58.0 | % | 80 | bps | ||||
| Less: comparability adjustments | ||||||||||||||||
| Change from currency | (2,494) | — | 27,952 | — | ||||||||||||
| Comparable gross profit growth | $ | 458,915 | $ | 409,502 | 12 | % | $ | 1,861,480 | $ | 1,571,040 | 18 | % | ||||
| Comparable gross margin and gross margingain (or growth) | 56.9 | % | 56.8 | % | 10 | bps | 58.7 | % | 58.0 | % | 70 | bps | ||||
| Operating expenses (as reported) | $ | 257,230 | $ | 224,407 | 15 | % | $ | 957,404 | $ | 876,516 | 9 | % | ||||
| Less: comparability adjustments | ||||||||||||||||
| Ongoing litigation matter | — | — | — | 27,500 | ||||||||||||
| Change from currency | (364) | — | 10,152 | — | ||||||||||||
| Comparable operating expense growth | 257,594 | 224,407 | 15 | % | 947,252 | 849,016 | 12 | % | ||||||||
| Income from operations (as reported) | $ | 199,191 | $ | 185,095 | 8 | % | $ | 932,028 | $ | 694,524 | 34 | % | ||||
| Operating margin | 24.9 | % | 25.7 | % | (80) | bps | 29.0 | % | 25.7 | % | 330 | bps | ||||
| Less: comparability adjustments | ||||||||||||||||
| Ongoing litigation matter | — | — | — | (27,500) | ||||||||||||
| Change from currency | (2,129) | — | 17,801 | — | ||||||||||||
| Comparable operating profit growth | $ | 201,320 | $ | 185,095 | 9 | % | $ | 914,227 | $ | 722,024 | 27 | % | ||||
| Comparable operating margin and operatingmargin gain (or growth) | 25.0 | % | 25.7 | % | $ (70) | bps | 28.8 | % | 26.7 | % | 220 | bps | ||||
| Amounts presented may not recalculate due to rounding. | ||||||||||||||||
| Twelve 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 | 2021 | 2020 | 2020 | 2019 | ||||||||||||
| Income from operations (as reported) | $ | 932,028 | $ | 694,524 | 34 | % | $ | 694,524 | $ | 552,846 | 26 | % | ||||
| Operating margin | 29.0 | % | 25.7 | % | 330 | bps | 25.7 | % | 23.0 | % | 270 | bps | ||||
| Less: comparability adjustments | ||||||||||||||||
| Ongoing litigation matter | — | (27,500) | (27,500) | |||||||||||||
| CEO transition | (13,400) | |||||||||||||||
| Change from currency | 17,801 | — | (7,907) | — | ||||||||||||
| Comparable operating profit growth | $ | 914,227 | $ | 722,024 | 27 | % | $ | 729,121 | $ | 566,246 | 29 | % | ||||
| Comparable operating margin and operatingmargin gain (or growth) | 28.8 | % | 26.7 | % | 220 | bps | 27.0 | % | 23.5 | % | 340 | bps | ||||
| Cumulative comparable operating margin gain | 560 | bps | ||||||||||||||
| Amounts presented may not recalculate due to rounding. |
Projected 2022 comparable operating margin expansion outlined in the 2022 Growth and Financial Performance Outlook section of this earnings release reflects the projected full year 2022 reported operating margin adjusted for estimated positive year-over-year foreign currency exchange rate change impact of approximately 20 basis points.
These impacts and those described in the constant currency note above reconcile reported gross profit growth, gross margin gain, operating expense growth, operating profit growth and operating margin gain (including projected 2022 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 | Twelve Months Ended | Year-over-Year | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | Growth | December 31, | December 31, | Growth | |||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Earnings per share (diluted) | $ | 1.89 | $ | 2.01 | (6) | % | $ | 8.60 | $ | 6.71 | 28 | % |
| Less: comparability adjustments | ||||||||||||
| Share-based compensation activity | 0.08 | 0.13 | 0.38 | 0.45 | ||||||||
| Ongoing litigation matter | — | — | — | (0.24) | ||||||||
| Swiss tax reform impact | — | 0.25 | — | 0.25 | ||||||||
| Change from currency | (0.02) | — | 0.16 | — | ||||||||
| Comparable EPS growth | 1.83 | 1.63 | 12 | % | 8.06 | 6.25 | 29 | % | ||||
| Amounts presented may not recalculate due to rounding. |
Projected 2022 comparable EPS growth outlined in the 2022 Growth and Financial Performance Outlook section of this earnings release reflects the following adjustments: (i) full year 2021 reported EPS adjusted for positive share-based compensation activity of $0.38 for full year 2021; and (ii) projected full year 2022 reported EPS adjusted for estimated positive share-based compensation activity of $0.12 and estimated negative year-over-year foreign currency exchange rate change impact of $0.08.
These impacts and those described in the constant currency note above reconcile reported EPS growth (including projected 2022 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 years ended December 31, 2021 and 2020. To estimate projected 2022 free cash flow, we have deducted projected purchases of property and equipment (also referred to as capital expenditures) of approximately $180 million.
Normalized free cash flow - Normalized 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 excluding major project investments. Management believes that normalized free cash flow is a useful measure because it enables better period-over-period comparisons of the cash the operations of the business are generating after appropriate reinvestment for recurring and non-recurring investments in property and equipment that are required to operate the business, excluding major project investments. Normalized 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. To estimate projected 2022 normalized free cash flow, we have deducted projected purchases of property and equipment (also referred to as capital expenditures) of approximately $130 million, which excludes $50 million related to a new warehouse and manufacturing site expansion aligned to support our accelerated growth.
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, 2021.
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.
Ongoing 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.
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.
| 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, | ||
| 2021 | 2020 | 2021 | 2020 | ||
| Revenue: | Revenue | $801,090 | $720,938 | $3,215,360 | $2,706,655 |
| Expenses and Income: | Cost of revenue | 344,669 | 311,436 | 1,325,928 | 1,135,615 |
| Gross profit | 456,421 | 409,502 | 1,889,432 | 1,571,040 | |
| Sales and marketing | 128,458 | 115,909 | 486,735 | 434,435 | |
| General and administrative | 83,466 | 69,721 | 309,660 | 300,832 | |
| Research and development | 45,306 | 38,777 | 161,009 | 141,249 | |
| Income from operations | 199,191 | 185,095 | 932,028 | 694,524 | |
| Interest expense, net | (7,308) | (7,659) | (29,374) | (32,539) | |
| Income before provision for income taxes | 191,883 | 177,436 | 902,654 | 661,985 | |
| Provision for income taxes | 29,112 | 2,478 | 157,810 | 79,854 | |
| Net Income: | Net income | 162,771 | 174,958 | 744,844 | 582,131 |
| Less: Noncontrolling interest in subsidiary's earnings | — | 168 | (1) | 355 | |
| Net income attributable to stockholders | $162,771 | $174,790 | $744,845 | $581,776 | |
| Earnings per share: Basic | $1.92 | $2.04 | $8.74 | $6.82 | |
| Earnings per share: Diluted | $1.89 | $2.01 | $8.60 | $6.71 | |
| Shares outstanding: Basic | 84,828 | 85,490 | 85,200 | 85,342 | |
| Shares outstanding: Diluted | 86,142 | 86,904 | 86,572 | 86,722 | |
| IDEXX Laboratories, Inc. and Subsidiaries | |||||
| --- | --- | --- | --- | --- | --- |
| Selected Operating Information (Unaudited) | |||||
| Three Months Ended | Twelve Months Ended | ||||
| December 31, | December 31, | December 31, | December 31, | ||
| 2021 | 2020 | 2021 | 2020 | ||
| Operating Ratios | Gross profit | 57.0% | 56.8% | 58.8% | 58.0% |
| (as a percentage of revenue): | Sales, marketing, general and administrative<br><br>expense | 26.5% | 25.7% | 24.8% | 27.2% |
| Research and development expense | 5.7% | 5.4% | 5.0% | 5.2% | |
| Income from operations^1^ | 24.9% | 25.7% | 29.0% | 25.7% | |
| ^1^Amounts presented may not recalculate due to rounding. | |||||
| IDEXX Laboratories, Inc. and Subsidiaries | |||||
| --- | --- | --- | --- | ||
| Segment Information | |||||
| Amounts in thousands (Unaudited) | |||||
| Three Months Ended | Three Months Ended | ||||
| December 31, | December 31, | ||||
| 2021 | 2020 | ||||
| Revenue: | CAG | 719,103 | 629,652 | ||
| Water | 37,131 | 33,088 | |||
| LPD | 33,967 | 42,476 | |||
| Other | 10,889 | 15,722 | |||
| Total | 801,090 | 720,938 | |||
| Gross Profit: | CAG | 406,273 | 351,079 | ||
| Water | 25,038 | 22,889 | |||
| LPD | 18,309 | 25,283 | |||
| Other | 6,801 | 10,251 | |||
| Total | 456,421 | 409,502 | |||
| Income from Operations: | CAG | 174,130 | 148,825 | ||
| Water | 15,845 | 15,484 | |||
| LPD | 4,360 | 11,591 | |||
| Other | 4,856 | 9,195 | |||
| Total | 199,191 | 185,095 | |||
| Twelve Months Ended | Twelve Months Ended | ||||
| December 31, | December 31, | ||||
| 2021 | 2020 | ||||
| Revenue: | CAG | 2,889,960 | 2,385,765 | ||
| Water | 146,505 | 128,625 | |||
| LPD | 135,887 | 145,845 | |||
| Other | 43,008 | 46,420 | |||
| Total | 3,215,360 | 2,706,655 | |||
| Gross Profit: | CAG | 1,683,804 | 1,363,186 | ||
| Water | 100,944 | 90,380 | |||
| LPD | 81,564 | 89,202 | |||
| Other | 23,120 | 28,272 | |||
| Total | 1,889,432 | 1,571,040 | |||
| Income from Operations: | CAG | 824,022 | 574,887 | ||
| Water | 65,444 | 58,867 | |||
| LPD | 28,636 | 40,008 | |||
| Other | 13,926 | 20,762 | |||
| Total | 932,028 | 694,524 |
All values are in US Dollars.
| 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 | 2021 | 2020 | Change | Growth^1^ | Currency | Acquisitions | Growth^1^ |
| CAG | $719,103 | $629,652 | $89,451 | 14.2% | (0.7%) | 1.5% | 13.4% |
| United States | 466,322 | 405,362 | 60,960 | 15.0% | — | 2.0% | 13.0% |
| International | 252,781 | 224,290 | 28,491 | 12.7% | (2.0%) | 0.6% | 14.0% |
| Water | $37,131 | $33,088 | $4,043 | 12.2% | (0.5%) | — | 12.7% |
| United States | 17,123 | 14,573 | 2,550 | 17.5% | — | — | 17.5% |
| International | 20,008 | 18,515 | 1,493 | 8.1% | (0.8%) | — | 8.9% |
| LPD | $33,967 | $42,476 | ($8,509) | (20.0%) | (1.2%) | — | (18.9%) |
| United States | 4,185 | 3,730 | 455 | 12.2% | — | — | 12.2% |
| International | 29,782 | 38,746 | (8,964) | (23.1%) | (1.2%) | — | (21.9%) |
| Other | $10,889 | $15,722 | ($4,833) | (30.7%) | (0.7%) | — | (30.1%) |
| Total Company | $801,090 | $720,938 | $80,152 | 11.1% | (0.7%) | 1.3% | 10.5% |
| United States | 493,464 | 433,607 | 59,857 | 13.8% | — | 1.9% | 11.9% |
| International | 307,626 | 287,331 | 20,295 | 7.1% | (1.8%) | 0.5% | 8.4% |
| Three Months Ended | |||||||
| Reported | Percentage | Percentage | Organic | ||||
| December 31, | December 31, | Dollar | Revenue | Change from | Change from | Revenue | |
| Net CAG Revenue | 2021 | 2020 | Change | Growth^1^ | Currency | Acquisitions | Growth^1^ |
| CAG Diagnostics recurring revenue: | $617,624 | $548,244 | $69,380 | 12.7% | (0.6%) | 0.3% | 12.9% |
| IDEXX VetLab consumables | 251,623 | 220,997 | 30,626 | 13.9% | (0.7%) | — | 14.6% |
| Rapid assay products | 66,380 | 60,337 | 6,043 | 10.0% | (0.4%) | — | 10.4% |
| Reference laboratory diagnosticand consulting services | 271,899 | 242,968 | 28,931 | 11.9% | (0.5%) | 0.8% | 11.6% |
| CAG Diagnostics services andaccessories | 27,722 | 23,942 | 3,780 | 15.8% | (1.1%) | — | 16.9% |
| CAG Diagnostics capital –<br><br>instruments | 43,495 | 36,910 | 6,585 | 17.8% | (2.8%) | — | 20.6% |
| Veterinary software, services and<br><br>diagnostic imaging systems | 57,984 | 44,498 | 13,486 | 30.3% | 0.1% | 17.4% | 12.8% |
| Net CAG revenue | $719,103 | $629,652 | $89,451 | 14.2% | (0.7%) | 1.5% | 13.4% |
| ^1^See Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding. | |||||||
| IDEXX Laboratories, Inc. and Subsidiaries | |||||||
| --- | --- | --- | --- | --- | --- | --- | --- |
| Revenues and Revenue Growth Analysisby 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 | 2021 | 2020 | Change | Growth^1^ | Currency | Acquisitions | Growth^1^ |
| CAG | $2,889,960 | $2,385,765 | $504,195 | 21.1% | 1.5% | 0.9% | 18.7% |
| United States | 1,881,887 | 1,593,855 | 288,032 | 18.1% | — | 1.2% | 16.9% |
| International | 1,008,073 | 791,910 | 216,163 | 27.3% | 4.8% | 0.4% | 22.1% |
| Water | $146,505 | $128,625 | $17,880 | 13.9% | 2.2% | — | 11.7% |
| United States | 70,654 | 62,083 | 8,571 | 13.8% | — | — | 13.8% |
| International | 75,851 | 66,542 | 9,309 | 14.0% | 4.2% | — | 9.8% |
| LPD | $135,887 | $145,845 | ($9,958) | (6.8%) | 2.3% | — | (9.2%) |
| United States | 15,626 | 14,533 | 1,093 | 7.5% | — | — | 7.5% |
| International | 120,261 | 131,312 | (11,051) | (8.4%) | 2.5% | — | (11.0%) |
| Other | $43,008 | $46,420 | ($3,412) | (7.4%) | 0.9% | — | (8.2%) |
| Total Company | $3,215,360 | $2,706,655 | $508,705 | 18.8% | 1.6% | 0.8% | 16.4% |
| United States | 1,995,683 | 1,691,224 | 304,459 | 18.0% | — | 1.1% | 16.9% |
| International | 1,219,677 | 1,015,431 | 204,246 | 20.1% | 4.3% | 0.3% | 15.5% |
| Twelve Months Ended | |||||||
| Reported | Percentage | Percentage | Organic | ||||
| December 31, | December 31, | Dollar | Revenue | Change from | Change from | Revenue | |
| Net CAG Revenue | 2021 | 2020 | Change | Growth^1^ | Currency | Acquisitions | Growth^1^ |
| CAG Diagnostics recurring revenue: | $2,534,562 | $2,113,839 | $420,723 | 19.9% | 1.6% | 0.2% | 18.1% |
| IDEXX VetLab consumables | 1,006,781 | 824,376 | 182,405 | 22.1% | 2.1% | — | 20.0% |
| Rapid assay products | 296,852 | 253,018 | 43,834 | 17.3% | 0.7% | — | 16.6% |
| Reference laboratory diagnosticand consulting services | 1,123,656 | 946,268 | 177,388 | 18.7% | 1.4% | 0.5% | 16.8% |
| CAG Diagnostics services andaccessories | 107,273 | 90,177 | 17,096 | 19.0% | 1.8% | — | 17.1% |
| CAG Diagnostics capital –<br><br>instruments | 149,140 | 108,950 | 40,190 | 36.9% | 1.2% | — | 35.7% |
| Veterinary software, services and<br><br>diagnostic imaging systems | 206,258 | 162,976 | 43,282 | 26.6% | 0.7% | 10.5% | 15.4% |
| Net CAG revenue | $2,889,960 | $2,385,765 | $504,195 | 21.1% | 1.5% | 0.9% | 18.7% |
| ^1^See Statements Regarding Non-GAAP Financial Measures, above. Amounts presented may not recalculate due to rounding. | |||||||
| IDEXX Laboratories, Inc. and Subsidiaries | |||||||
| --- | --- | --- | --- | ||||
| Condensed Consolidated BalanceSheet | |||||||
| Amounts in thousands (Unaudited) | |||||||
| December 31, | December 31, | ||||||
| 2021 | 2020 | ||||||
| Assets: | Current Assets: | ||||||
| Cash and cash equivalents | $144,454 | $383,928 | |||||
| Accounts receivable, net | 368,348 | 331,429 | |||||
| Inventories | 269,030 | 209,873 | |||||
| Other current assets | 173,823 | 137,508 | |||||
| Total current assets | 955,655 | 1,062,738 | |||||
| Property and equipment, net | 587,667 | 555,167 | |||||
| Other long-term assets, net | 893,881 | 676,656 | |||||
| Total assets | $2,437,203 | $2,294,561 | |||||
| Liabilities and Stockholders' | |||||||
| Equity: | Current Liabilities: | ||||||
| Accounts payable | $116,140 | $74,558 | |||||
| Accrued liabilities | 458,909 | 415,648 | |||||
| Line of credit | 73,500 | — | |||||
| Current portion of long-term debt | 74,996 | 49,988 | |||||
| Deferred revenue | 40,034 | 42,567 | |||||
| Total current liabilities | 763,579 | 582,761 | |||||
| Long-term debt, net of current portion | 775,205 | 858,492 | |||||
| Other long-term liabilities, net | 208,427 | 220,513 | |||||
| Total long-term liabilities | 983,632 | 1,079,005 | |||||
| Total stockholders' equity | 689,992 | 632,088 | |||||
| Noncontrolling interest | — | 707 | |||||
| Total stockholders' equity | 689,992 | 632,795 | |||||
| Total liabilities and stockholders' equity | $2,437,203 | $2,294,561 | |||||
| IDEXX Laboratories, Inc. and Subsidiaries | |||||||
| --- | --- | --- | --- | --- | --- | --- | |
| Select Balance Sheet Information (Unaudited) | |||||||
| December 31,2021 | September 30,2021 | June 30,2021 | March 31,2021 | December 31,2020 | |||
| Selected Balance Sheet Information: | Days sales<br><br>outstanding^1^ | 42.4 | 42.7 | 42.2 | 41.8 | 42.2 | |
| Inventory turns^2^ | 2.0 | 1.9 | 2.1 | 2.0 | 2.1 | ||
| ^1^Days sales outstanding represents the average of the accounts receivable balances at the beginning and end of each quarter divided by revenue for that quarter, the result of which is then multiplied by 91.25 days. | |||||||
| ^2^Inventory turns represent inventory-related cost of product revenue for the twelve months preceding each quarter-end divided by the average inventory balances at the beginning and end of each quarter. | |||||||
| IDEXX Laboratories, Inc. and Subsidiaries | |||||||
| --- | --- | --- | --- | ||||
| Condensed Consolidated Statement of Cash Flows | |||||||
| Amounts in thousands (Unaudited) | |||||||
| Twelve Months Ended | |||||||
| December 31, | December 31, | ||||||
| 2021 | 2020 | ||||||
| Operating: | Cash Flows from Operating Activities: | ||||||
| Net income | $744,844 | $582,131 | |||||
| Non-cash charges | 148,225 | 97,693 | |||||
| Changes in assets and liabilities | (137,523) | (31,761) | |||||
| Net cash provided by operating activities | 755,546 | 648,063 | |||||
| Investing: | Cash Flows from Investing Activities: | ||||||
| Purchases of property and equipment | (119,549) | (106,958) | |||||
| Acquisitions of intangible assets and equity investments | — | (918) | |||||
| Acquisitions of businesses, net of cash acquired | (173,418) | (1,500) | |||||
| Net cash (used) provided by investing activities | (292,967) | (109,376) | |||||
| Financing: | Cash Flows from Financing Activities: | ||||||
| Repayments on revolving credit facilities, net | 73,500 | (289,625) | |||||
| Issuance of senior debt | — | 200,000 | |||||
| Payments of senior debt | (50,000) | — | |||||
| Debt issuance costs | (2,650) | (5,025) | |||||
| Purchase of minority interest | (990) | — | |||||
| Payment of acquisition-related contingent considerations | (1,500) | (1,676) | |||||
| Repurchases of common stock | (746,777) | (182,815) | |||||
| Proceeds from exercises of stock options and employee stock purchase plans | 46,565 | 51,328 | |||||
| Shares withheld for statutory tax withholding payments on restricted stock | (15,562) | (20,603) | |||||
| Net cash used by financing activities | (697,414) | (248,416) | |||||
| Net effect of changes in exchange rates on cash | (4,639) | 3,331 | |||||
| Net change in cash and cash equivalents | (239,474) | 293,602 | |||||
| Cash and cash equivalents, beginning of period | 383,928 | 90,326 | |||||
| Cash and cash equivalents, end of period | $144,454 | $383,928 | |||||
| IDEXX Laboratories, Inc. and Subsidiaries | |||||||
| --- | --- | --- | --- | ||||
| Free Cash Flow | |||||||
| Amounts in thousands except per share data (Unaudited) | |||||||
| Twelve Months Ended | |||||||
| December 31, | December 31, | ||||||
| 2021 | 2020 | ||||||
| Free Cash Flow: | Net cash provided by operating activities | $755,546 | $648,063 | ||||
| Investing cash flows attributable to purchases of property and equipment | (119,549) | (106,958) | |||||
| Free cash flow^1^ | $635,997 | $541,105 | |||||
| ^1^See Statements Regarding Non-GAAP Financial Measures, above. | |||||||
| IDEXX Laboratories, Inc. and Subsidiaries | |||||||
| --- | --- | ||||||
| After-Tax Return on Invested Capital, Excluding Cash and Investments ("ROIC") | |||||||
| Amounts in thousands (Unaudited) | |||||||
| Numerator (amounts in thousands) | For the Year Ended<br>December 31, 2021 | ||||||
| Income from operations (as reported) | 932,028 | ||||||
| After-tax income from operations^1^ | 769,083 | ||||||
| Denominator (dollar amounts in thousands) | As of<br>December 31, 2021 | ||||||
| Total shareholders' equity | 689,992 | ||||||
| Noncontrolling interest | — | ||||||
| Line of credit | 73,500 | ||||||
| Long-term debt, current portion | 74,996 | ||||||
| Long-term debt, net of current portion | 775,205 | ||||||
| Deferred income tax assets | (24,784) | ||||||
| Deferred income tax liabilities | 8,935 | ||||||
| Total invested capital | 1,597,844 | ||||||
| Less cash and cash equivalents | 144,454 | ||||||
| Total invested capital, excluding cash and investments | 1,453,390 | ||||||
| Average invested capital, excluding cash and investments^2^ | 1,295,448 | ||||||
| After-tax return on invested capital, excluding cash and investments | 59 % | ||||||
| ^1^After-tax income from operations represents income from operations reduced by our reported effective tax rate. | |||||||
| ^2^Average invested capital, excluding cash and investments, represents the average of the amount of total invested capital, excluding cash and investments. |
All values are in US Dollars.
| 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, | |
| 2021 | 2020 | 2021 | 2020 | |
| Shares repurchased in the open market | 391 | — | 1,283 | 721 |
| Shares acquired through employee surrender for statutory tax withholding | — | 27 | 29 | 58 |
| Total shares repurchased | 391 | 27 | 1,312 | 779 |
| Cost of shares repurchased in the open market | $244,608 | $— | $755,545 | $179,623 |
| Cost of shares for employee surrenders | 61 | 11,574 | 15,562 | 20,603 |
| Total cost of shares | $244,669 | $11,574 | $771,107 | $200,226 |
| Average cost per share – open market repurchases | $626.25 | $— | $588.58 | $249.20 |
| Average cost per share – employee surrenders | $600.02 | $426.73 | $548.08 | $354.98 |
| Average cost per share – total | $626.25 | $426.73 | $587.70 | $257.08 |
Contact: John Ravis, Investor Relations, 1-207-556-8155
