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IDEXX Laboratories Inc. Reports Operating Results (10-Q)

July 20, 2012 | About:
10qk

10qk

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IDEXX Laboratories Inc. (IDXX) filed Quarterly Report for the period ended 2012-06-30.

Idexx Laboratories, Inc. has a market cap of $5.08 billion; its shares were traded at around $90.03 with a P/E ratio of 32.4 and P/S ratio of 4.2. Idexx Laboratories, Inc. had an annual average earning growth of 16.7% over the past 10 years. GuruFocus rated Idexx Laboratories, Inc. the business predictability rank of 5-star.

Highlight of Business Operations:

Currency Impact. For both the three and six months ended June 30, 2012, approximately 25% of our revenue was derived from products manufactured in the U.S. and sold internationally in local currencies compared to 26% for both the three and six months ended June 30, 2011. Strengthening of the rate of exchange for the U.S. dollar relative to other currencies has a negative impact on our revenues derived in currencies other than the U.S. dollar and on profits of products manufactured in the U.S. and sold internationally, and a weakening of the U.S. dollar has the opposite effect. Similarly, to the extent that the U.S. dollar is stronger in current or future periods relative to the exchange rates in effect in the corresponding prior periods, our growth rate will be negatively affected. The impact of foreign currency denominated operating expenses and foreign currency denominated supply contracts partly offset this exposure.

Instruments revenue was $23.3 million and $21.1 million for the three months ended June 30, 2012 and 2011, respectively. Consumables revenue was $68.9 million and $66.2 million for the three months ended June 30, 2012 and 2011, respectively. Instrument service and accessories revenue was $11.6 million and $11.0 million for the three months ended June 30, 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 of our ProCyte Dx® and Catalyst Dx® instruments. Consumables revenue growth was due primarily to higher sales volumes 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 reduced instruments and consumables revenue growth by 2%.

Water. Gross profit for Water increased due to higher sales and an increase in the gross profit percentage to 67% from 60%. The increase in the gross profit percentage was due primarily to the timing of certain manufacturing costs during the three months ended June 30, 2011. Lower freight and distribution costs and the favorable impact of currency also contributed to the increase in the gross profit percentage. The net effect of currency was positive because the net unfavorable impact of changes in foreign currency exchange rates was more than offset by hedging gains during the three months ended June 30, 2012 compared to hedging losses during the same period of the prior year.

Instruments revenue was $43.8 million and $40.1 million for the six months ended June 30, 2012 and 2011, respectively. Consumables revenue was $138.7 million and $130.2 million for the six months ended June 30, 2012 and 2011, respectively. Instrument service and accessories revenue was $22.7 million and $21.6 million for the six months ended June 30, 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 of our ProCyte Dx® and Catalyst Dx® instruments. Consumables revenue growth was due primarily to higher sales volumes 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 reduced instruments and consumables revenue growth by 1%.

Water. Gross profit for Water increased due to higher sales and an increase in the gross profit percentage to 67% from 60%. The increase in the gross profit percentage was due primarily to the timing of certain manufacturing costs during the six months ended June 30, 2011. Lower freight and distribution costs and the favorable impact of currency also contributed to the increase in the gross profit percentage. The net effect of currency was positive because the net unfavorable impact of changes in foreign currency exchange rates was more than offset by hedging gains during the six months ended June 30, 2012 compared to hedging losses during the same period of the prior year.

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