IDEXX Laboratories Inc. (IDXX, Financial) filed Quarterly Report for the period ended 2012-03-31.
Idexx Labs Inc has a market cap of $4.68 billion; its shares were traded at around $84.83 with a P/E ratio of 30.9 and P/S ratio of 3.8. Idexx Labs Inc had an annual average earning growth of 17.3% over the past 10 years. GuruFocus rated Idexx Labs Inc the business predictability rank of 5-star.
Companion Animal Group. Gross profit for CAG increased due to higher sales and an increase in the gross profit percentage to 52% from 51%. The increase in the gross profit percentage was due primarily to lower overall manufacturing costs and the favorable impact of currency as the net unfavorable impact of changes in foreign currency exchange rates was more than offset by hedging gains during the three months ended March 31, 2012 compared to hedging losses during the same period of the prior year. Lower overall manufacturing costs were driven primarily by production volume efficiencies in our instruments and consumables line of business.
Water. Gross profit for Water increased due to higher sales and an increase in the gross profit percentage to 66% from 60%. The increase in the gross profit percentage was due to the timing of certain manufacturing costs during the three months ended March 31, 2011 and the favorable impact of currency as the net unfavorable impact of changes in foreign currency exchange rates was more than offset by hedging gains during the three months ended March 31, 2012 compared to hedging losses during the same period of the prior year.
Livestock and Poultry Diagnostics. Gross profit for LPD decreased due to lower sales and a decrease in the gross profit percentage to 68% from 69%. The decrease in the gross profit percentage was due primarily to higher overall manufacturing costs driven by lower production volumes. This unfavorable impact was partly offset by the favorable impact of currency as the net unfavorable impact of changes in foreign currency exchange rates was more than offset by hedging gains during the three months ended March 31, 2012 compared to hedging losses during the same period of the prior year.
Net borrowing and payment activity under the Credit Facility resulted in incremental cash provided of $13.5 million during the three months ended March 31, 2012 compared to the same period of the prior year. At March 31, 2012, we had $254.0 million outstanding under the Credit Facility. The general availability of funds under the Credit Facility was further reduced by $1.0 million for a letter of credit issued related to our worker’s compensation policy covering claims for the years ending 2009 through 2012. The obligations under the Credit Facility may be accelerated upon the occurrence of an event of default under the Credit Facility, which includes customary events of default including, without limitation, payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, the failure to pay specified indebtedness, and a change of control default. The Credit Facility contains affirmative, negative and financial covenants customary for financings of this type. The negative covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental changes, investments, transactions with affiliates and certain restrictive agreements. The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation and amortization, defined as the consolidated leverage ratio under the terms of the Credit Facility, not to exceed 3-to-1. At March 31, 2012, we were in compliance with the covenants of the Credit Facility.
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Idexx Labs Inc has a market cap of $4.68 billion; its shares were traded at around $84.83 with a P/E ratio of 30.9 and P/S ratio of 3.8. Idexx Labs Inc had an annual average earning growth of 17.3% over the past 10 years. GuruFocus rated Idexx Labs Inc the business predictability rank of 5-star.
Highlight of Business Operations:
Instruments revenue was $20.5 million and $19.1 million for the three months ended March 31, 2012 and 2011, respectively. Consumables revenue was $69.8 million and $63.9 million for the three months ended March 31, 2012 and 2011, respectively. Instrument service and accessories revenue was $11.2 million and $10.7 million for the three months ended March 31, 2012 and 2011, respectively. The remaining sources of revenue are not significant to overall instruments and consumables revenue. Instruments revenue growth was due primarily to increased sales volumes of our Catalyst Dx® and ProCyte Dx® instruments. Consumables revenue growth was due primarily to higher sales of consumables used with our Catalyst Dx® instrument, partly offset by lower sales of consumables used with our VetTest® chemistry instrument as customers continue to upgrade from our VetTest® instrument to our Catalyst Dx® instrument. Higher sales volumes of consumables used with our ProCyte Dx® instrument also contributed to the increase in consumables revenue. These favorable factors were partly offset by lower sales volumes of consumables used with our LaserCyte® instrument. Service and accessories revenue growth was primarily a result of the increase in our active installed base of instruments. The impact of changes in distributors’ inventory levels contributed 1% to instruments and consumables revenue growth.Companion Animal Group. Gross profit for CAG increased due to higher sales and an increase in the gross profit percentage to 52% from 51%. The increase in the gross profit percentage was due primarily to lower overall manufacturing costs and the favorable impact of currency as the net unfavorable impact of changes in foreign currency exchange rates was more than offset by hedging gains during the three months ended March 31, 2012 compared to hedging losses during the same period of the prior year. Lower overall manufacturing costs were driven primarily by production volume efficiencies in our instruments and consumables line of business.
Water. Gross profit for Water increased due to higher sales and an increase in the gross profit percentage to 66% from 60%. The increase in the gross profit percentage was due to the timing of certain manufacturing costs during the three months ended March 31, 2011 and the favorable impact of currency as the net unfavorable impact of changes in foreign currency exchange rates was more than offset by hedging gains during the three months ended March 31, 2012 compared to hedging losses during the same period of the prior year.
Livestock and Poultry Diagnostics. Gross profit for LPD decreased due to lower sales and a decrease in the gross profit percentage to 68% from 69%. The decrease in the gross profit percentage was due primarily to higher overall manufacturing costs driven by lower production volumes. This unfavorable impact was partly offset by the favorable impact of currency as the net unfavorable impact of changes in foreign currency exchange rates was more than offset by hedging gains during the three months ended March 31, 2012 compared to hedging losses during the same period of the prior year.
Net borrowing and payment activity under the Credit Facility resulted in incremental cash provided of $13.5 million during the three months ended March 31, 2012 compared to the same period of the prior year. At March 31, 2012, we had $254.0 million outstanding under the Credit Facility. The general availability of funds under the Credit Facility was further reduced by $1.0 million for a letter of credit issued related to our worker’s compensation policy covering claims for the years ending 2009 through 2012. The obligations under the Credit Facility may be accelerated upon the occurrence of an event of default under the Credit Facility, which includes customary events of default including, without limitation, payment defaults, defaults in the performance of affirmative and negative covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults, defaults relating to judgments, certain events related to employee pension benefit plans under the Employee Retirement Income Security Act of 1974, the failure to pay specified indebtedness, and a change of control default. The Credit Facility contains affirmative, negative and financial covenants customary for financings of this type. The negative covenants include restrictions on liens, indebtedness of subsidiaries of the Company, fundamental changes, investments, transactions with affiliates and certain restrictive agreements. The financial covenant is a consolidated leverage ratio test that requires our ratio of debt to earnings before interest, taxes, depreciation and amortization, defined as the consolidated leverage ratio under the terms of the Credit Facility, not to exceed 3-to-1. At March 31, 2012, we were in compliance with the covenants of the Credit Facility.
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