DELAWARE
|
01-0393723
|
(State or other jurisdiction of incorporation
or organization)
|
(IRS
Employer Identification No.)
|
|
|
ONE
IDEXX DRIVE, WESTBROOK, MAINE
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04092
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(Address of principal executive offices)
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(ZIP Code)
|
|
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207-556-0300
|
|
(Registrant’s telephone number, including area code)
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Large accelerated filer
|
ý
|
|
Accelerated filer
|
¨
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Non-accelerated filer
(Do not check if a smaller reporting company)
|
¨
|
|
Emerging growth company
|
¨
|
Smaller reporting company
|
¨
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|
|
|
Term/ Abbreviation
|
Definition
|
|
|
AOCI
|
Accumulated other comprehensive income or loss
|
ASU 2014-09
|
Accounting Standards Update (“ASU”) 2014-09,
Revenue from Contracts with Customers (Topic 606);
also referred to as the “New Revenue Standard”
|
ASU 2016-02
|
ASU 2016-02,
Leases (Topic 842);
also referred to as the “New Leasing Standard”
|
ASU 2016-16
|
ASU 2016-16,
Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory
|
ASU 2018-05
|
ASU 2018-05,
Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118
|
CAG
|
Companion Animal Group, a reporting segment that provides veterinarians diagnostic products and services and information management solutions that enhance the health and well-being of pets
|
Credit Facility
|
Our $850 million five-year unsecured revolving credit facility under an amended and restated credit agreement that was executed in December 2015, also referred to as line of credit
|
FASB
|
U.S. Financial Accounting Standards Board
|
LPD
|
Livestock, Poultry and Dairy, a reporting segment that provides diagnostic products and services for livestock and poultry health and to ensure the quality and safety of milk and improve dairy efficiency
|
OPTI Medical
|
OPTI Medical Systems, Inc., a wholly-owned subsidiary of IDEXX Laboratories Inc., located in Roswell, Georgia. This business manufactures and supplies blood gas analyzers and consumables worldwide for the human point-of-care medical diagnostics market. The Roswell facility also manufactures electrolytes slides (instrument consumables) to run Catalyst One
®
, Catalyst Dx
®
, and blood gas analyzers and consumables for the veterinary market; also referred to as OPTI.
|
Organic revenue growth
|
A non-GAAP financial measure and represents the percentage change in revenue, as compared to the same period for the prior year, net of the effect of changes in foreign currency exchange rates, business acquisitions and divestitures
|
R&D
|
Research and Development
|
Reported revenue growth
|
Represents the percentage change in revenue reported in accordance with U.S. GAAP, as compared to the same period in the prior year
|
SaaS
|
Software-as-a-service
|
SEC
|
U.S. Securities and Exchange Commission
|
Senior Note Agreements
|
Note purchase agreements for the private placement senior notes having an aggregate principal amount of approximately $600 million, referred to as senior notes and long-term debt
|
2017 Tax Act
|
The Tax Cuts and Jobs Act enacted on December 22, 2017, which includes significant changes to the U.S. corporate tax system
|
U.S. GAAP
|
Accounting principles generally accepted in the United States of America
|
Water
|
Water, a reporting segment that provides water microbiology testing products around the world
|
|
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|
Item No.
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|
Page
|
|
|
|
|
PART I—FINANCIAL INFORMATION
|
|
|
||
|
||
|
||
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||
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||
|
||
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PART II—OTHER INFORMATION
|
|
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|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
||||
ASSETS
|
|
|
|
|
|
||
Current Assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
174,559
|
|
|
$
|
187,675
|
|
Marketable securities
|
—
|
|
|
284,255
|
|
||
Accounts receivable, net of reserves of $4,689 in 2018 and $4,576 in 2017
|
265,012
|
|
|
234,597
|
|
||
Inventories
|
176,487
|
|
|
164,318
|
|
||
Other current assets
|
123,774
|
|
|
101,140
|
|
||
Total current assets
|
739,832
|
|
|
971,985
|
|
||
Long-Term Assets:
|
|
|
|
||||
Property and equipment, net
|
394,021
|
|
|
379,096
|
|
||
Goodwill
|
195,974
|
|
|
199,873
|
|
||
Intangible assets, net
|
39,036
|
|
|
43,846
|
|
||
Other long-term assets
|
151,822
|
|
|
118,616
|
|
||
Total long-term assets
|
780,853
|
|
|
741,431
|
|
||
TOTAL ASSETS
|
$
|
1,520,685
|
|
|
$
|
1,713,416
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
68,015
|
|
|
$
|
66,968
|
|
Accrued liabilities
|
228,380
|
|
|
253,418
|
|
||
Line of credit
|
437,000
|
|
|
655,000
|
|
||
Current portion of deferred revenue
|
40,921
|
|
|
29,181
|
|
||
Total current liabilities
|
774,316
|
|
|
1,004,567
|
|
||
Long-Term Liabilities:
|
|
|
|
||||
Deferred income tax liabilities
|
35,459
|
|
|
25,353
|
|
||
Long-term debt
|
603,130
|
|
|
606,075
|
|
||
Long-term deferred revenue, net of current portion
|
65,362
|
|
|
35,545
|
|
||
Other long-term liabilities
|
83,267
|
|
|
95,718
|
|
||
Total long-term liabilities
|
787,218
|
|
|
762,691
|
|
||
Total liabilities
|
1,561,534
|
|
|
1,767,258
|
|
||
|
|
|
|
||||
Commitments and Contingencies (Note 14)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ Deficit:
|
|
|
|
||||
Common stock, $0.10 par value: Authorized: 120,000 shares; Issued: 104,847 shares in 2018 and 104,275 shares in 2017; Outstanding: 86,642 shares in 2018 and 87,104 shares in 2017
|
10,485
|
|
|
10,428
|
|
||
Additional paid-in capital
|
1,109,157
|
|
|
1,073,931
|
|
||
Deferred stock units: Outstanding: 162 units in 2018 and 229 units in 2017
|
4,398
|
|
|
5,988
|
|
||
Retained earnings
|
989,039
|
|
|
803,545
|
|
||
Accumulated other comprehensive income (loss)
|
(42,559
|
)
|
|
(36,470
|
)
|
||
Treasury stock, at cost: 18,195 shares in 2018 and 17,171 shares in 2017
|
(2,111,647
|
)
|
|
(1,911,528
|
)
|
||
Total IDEXX Laboratories, Inc. stockholders’ deficit
|
(41,127
|
)
|
|
(54,106
|
)
|
||
Noncontrolling interest
|
278
|
|
|
264
|
|
||
Total stockholders’ deficit
|
(40,849
|
)
|
|
(53,842
|
)
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
1,520,685
|
|
|
$
|
1,713,416
|
|
|
|
|
|
||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
||||||
Product revenue
|
$
|
348,621
|
|
|
$
|
304,091
|
|
|
$
|
666,061
|
|
|
$
|
576,056
|
|
Service revenue
|
232,131
|
|
|
204,849
|
|
|
452,347
|
|
|
394,905
|
|
||||
Total revenue
|
580,752
|
|
|
508,940
|
|
|
1,118,408
|
|
|
970,961
|
|
||||
Cost of Revenue:
|
|
|
|
|
|
|
|
||||||||
Cost of product revenue
|
127,270
|
|
|
110,330
|
|
|
245,516
|
|
|
213,357
|
|
||||
Cost of service revenue
|
121,043
|
|
|
105,895
|
|
|
237,354
|
|
|
206,698
|
|
||||
Total cost of revenue
|
248,313
|
|
|
216,225
|
|
|
482,870
|
|
|
420,055
|
|
||||
Gross profit
|
332,439
|
|
|
292,715
|
|
|
635,538
|
|
|
550,906
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Sales and marketing
|
96,255
|
|
|
87,693
|
|
|
196,356
|
|
|
174,937
|
|
||||
General and administrative
|
61,080
|
|
|
55,460
|
|
|
122,011
|
|
|
108,374
|
|
||||
Research and development
|
29,510
|
|
|
26,998
|
|
|
58,533
|
|
|
52,788
|
|
||||
Income from operations
|
145,594
|
|
|
122,564
|
|
|
258,638
|
|
|
214,807
|
|
||||
Interest expense
|
(8,457
|
)
|
|
(9,155
|
)
|
|
(17,731
|
)
|
|
(17,744
|
)
|
||||
Interest income
|
172
|
|
|
1,176
|
|
|
751
|
|
|
2,259
|
|
||||
Income before provision for income taxes
|
137,309
|
|
|
114,585
|
|
|
241,658
|
|
|
199,322
|
|
||||
Provision for income taxes
|
28,629
|
|
|
29,178
|
|
|
43,502
|
|
|
44,857
|
|
||||
Net income
|
108,680
|
|
|
85,407
|
|
|
198,156
|
|
|
154,465
|
|
||||
Less: Net (loss) income attributable to noncontrolling interest
|
(11
|
)
|
|
50
|
|
|
14
|
|
|
89
|
|
||||
Net income attributable to IDEXX Laboratories, Inc. stockholders
|
$
|
108,691
|
|
|
$
|
85,357
|
|
|
$
|
198,142
|
|
|
$
|
154,376
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per Share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.25
|
|
|
$
|
0.97
|
|
|
$
|
2.27
|
|
|
$
|
1.75
|
|
Diluted
|
$
|
1.23
|
|
|
$
|
0.95
|
|
|
$
|
2.23
|
|
|
$
|
1.72
|
|
Weighted Average Shares Outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
87,004
|
|
|
88,004
|
|
|
87,166
|
|
|
88,060
|
|
||||
Diluted
|
88,596
|
|
|
89,878
|
|
|
88,786
|
|
|
89,962
|
|
||||
|
|
|
|
|
|
|
|
||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
|
|
|
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Net income
|
$
|
108,680
|
|
|
$
|
85,407
|
|
|
$
|
198,156
|
|
|
$
|
154,465
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
(21,492
|
)
|
|
7,954
|
|
|
(16,327
|
)
|
|
15,968
|
|
||||
Unrealized gain (loss) on net investment hedge
|
4,479
|
|
|
(3,767
|
)
|
|
2,263
|
|
|
(4,860
|
)
|
||||
Unrealized gain on investments, net of tax expense of $9 and $49 in 2018 and $49 and $23 in 2017
|
32
|
|
|
125
|
|
|
150
|
|
|
86
|
|
||||
Unrealized gain (loss) on derivative instruments:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss), net of tax expense (benefit) of $2,161 and $1,784 in 2018 and $(2,287) and $(3,199) in 2017
|
8,174
|
|
|
(3,848
|
)
|
|
5,786
|
|
|
(5,382
|
)
|
||||
Reclassification adjustment for losses (gains) included in net income, net of tax benefit (expense) of $379 and $629 in 2018 and $(280) and $(681) in 2017
|
454
|
|
|
(473
|
)
|
|
2,039
|
|
|
(1,147
|
)
|
||||
Unrealized gain (loss) on derivative instruments
|
8,628
|
|
|
(4,321
|
)
|
|
7,825
|
|
|
(6,529
|
)
|
||||
Other comprehensive (loss) gain, net of tax
|
(8,353
|
)
|
|
(9
|
)
|
|
(6,089
|
)
|
|
4,665
|
|
||||
Comprehensive income
|
100,327
|
|
|
85,398
|
|
|
192,067
|
|
|
159,130
|
|
||||
Less: comprehensive (loss) income attributable to noncontrolling interest
|
(11
|
)
|
|
50
|
|
|
14
|
|
|
89
|
|
||||
Comprehensive income attributable to IDEXX Laboratories, Inc.
|
$
|
100,338
|
|
|
$
|
85,348
|
|
|
$
|
192,053
|
|
|
$
|
159,041
|
|
|
|
|
|
|
|
|
|
||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
|
|
|
|
|
|
For the Six Months Ended
June 30, |
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
|
|
||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||
Net income
|
$
|
198,156
|
|
|
$
|
154,465
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
41,696
|
|
|
40,893
|
|
||
Benefit of deferred income taxes
|
8,638
|
|
|
2,691
|
|
||
Share-based compensation expense
|
12,352
|
|
|
11,742
|
|
||
Other
|
1,613
|
|
|
1,031
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(32,872
|
)
|
|
(32,400
|
)
|
||
Inventories
|
(16,825
|
)
|
|
(18,850
|
)
|
||
Other assets and liabilities
|
(55,781
|
)
|
|
(21,426
|
)
|
||
Accounts payable
|
3
|
|
|
1,422
|
|
||
Deferred revenue
|
(3,252
|
)
|
|
1,898
|
|
||
Net cash provided by operating activities
|
153,728
|
|
|
141,466
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
||||
Purchases of property and equipment
|
(51,377
|
)
|
|
(38,566
|
)
|
||
Purchase of marketable securities
|
(87
|
)
|
|
(175,522
|
)
|
||
Proceeds from the sale and maturities of marketable securities
|
284,125
|
|
|
155,903
|
|
||
Acquisitions of a business, net of cash acquired
|
—
|
|
|
(14,529
|
)
|
||
Net cash provided (used) by investing activities
|
232,661
|
|
|
(72,714
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
||||
(Repayments) borrowings on revolving credit facilities, net
|
(218,000
|
)
|
|
93,000
|
|
||
Payment of acquisition-related contingent consideration
|
(1,000
|
)
|
|
—
|
|
||
Repurchases of common stock
|
(189,884
|
)
|
|
(170,798
|
)
|
||
Proceeds from exercises of stock options and employee stock purchase plans
|
21,905
|
|
|
23,170
|
|
||
Shares withheld for statutory tax withholding on restricted stock
|
(8,720
|
)
|
|
(7,459
|
)
|
||
Net cash used by financing activities
|
(395,699
|
)
|
|
(62,087
|
)
|
||
Net effect of changes in exchange rates on cash
|
(3,806
|
)
|
|
4,409
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(13,116
|
)
|
|
11,074
|
|
||
Cash and cash equivalents at beginning of period
|
187,675
|
|
|
154,901
|
|
||
Cash and cash equivalents at end of period
|
$
|
174,559
|
|
|
$
|
165,975
|
|
|
|
|
|
|
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
|
|
Condensed Consolidated Balance Sheet
|
||||||||||
|
|
|
|
|
|
||||||
|
Previous U.S. GAAP
December 31, 2017
(Reported)
|
|
New U.S. GAAP
January 1, 2018
|
|
Attributed to the
New Revenue Standard
|
||||||
|
|
|
|
|
|
|
|||||
ASSETS
|
|
|
|
|
|
|
|||||
Cash, cash equivalents and marketable securities
|
$
|
471,930
|
|
|
$
|
471,930
|
|
|
$
|
—
|
|
Accounts receivable
|
234,597
|
|
|
237,281
|
|
|
2,684
|
|
|||
Inventories
|
164,318
|
|
|
163,184
|
|
|
(1,134
|
)
|
|||
Property and equipment, net
|
379,096
|
|
|
379,096
|
|
|
—
|
|
|||
Goodwill and intangible assets, net
|
243,719
|
|
|
243,719
|
|
|
—
|
|
|||
Other assets
|
219,756
|
|
|
246,481
|
|
|
26,725
|
|
|||
TOTAL ASSETS
|
$
|
1,713,416
|
|
|
$
|
1,741,691
|
|
|
$
|
28,275
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
66,968
|
|
|
$
|
66,968
|
|
|
$
|
—
|
|
Accrued liabilities
|
253,418
|
|
|
254,381
|
|
|
963
|
|
|||
Deferred income tax liabilities
|
25,353
|
|
|
25,087
|
|
|
(266
|
)
|
|||
Line of credit and long-term debt
|
1,261,075
|
|
|
1,261,075
|
|
|
—
|
|
|||
Deferred revenue
|
64,726
|
|
|
110,158
|
|
|
45,432
|
|
|||
Other long-term liabilities
|
95,718
|
|
|
82,840
|
|
|
(12,878
|
)
|
|||
Total liabilities
|
1,767,258
|
|
|
1,800,509
|
|
|
33,251
|
|
|||
|
|
|
|
|
|
||||||
Stockholders’ Deficit:
|
|
|
|
|
|
||||||
Retained earnings
|
803,545
|
|
|
798,569
|
|
|
(4,976
|
)
|
|||
All other stockholders' deficit and noncontrolling interest
|
(857,387
|
)
|
|
(857,387
|
)
|
|
—
|
|
|||
Total stockholders’ deficit
|
(53,842
|
)
|
|
(58,818
|
)
|
|
(4,976
|
)
|
|||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
1,713,416
|
|
|
$
|
1,741,691
|
|
|
$
|
28,275
|
|
|
Condensed Consolidated Balance Sheet
|
||||||||||
|
As of June 30, 2018
|
||||||||||
|
|
|
|
|
|
||||||
|
Previous U.S. GAAP
|
|
New U.S. GAAP
(As Reported)
|
|
Attributed to the
New Revenue Standard
|
||||||
|
|
|
|
|
|
|
|||||
ASSETS
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
174,559
|
|
|
$
|
174,559
|
|
|
$
|
—
|
|
Accounts receivable
|
262,420
|
|
|
265,012
|
|
|
2,592
|
|
|||
Inventories
|
178,187
|
|
|
176,487
|
|
|
(1,700
|
)
|
|||
Property and equipment, net
|
394,021
|
|
|
394,021
|
|
|
—
|
|
|||
Goodwill and intangible assets, net
|
235,010
|
|
|
235,010
|
|
|
—
|
|
|||
Other assets
|
238,682
|
|
|
275,596
|
|
|
36,914
|
|
|||
TOTAL ASSETS
|
$
|
1,482,879
|
|
|
$
|
1,520,685
|
|
|
$
|
37,806
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
|
|
|
|
|
||||||
Accounts payable
|
$
|
68,015
|
|
|
$
|
68,015
|
|
|
$
|
—
|
|
Accrued liabilities
|
228,095
|
|
|
228,380
|
|
|
285
|
|
|||
Deferred income tax liabilities
|
35,470
|
|
|
35,459
|
|
|
(11
|
)
|
|||
Line of credit and long-term debt
|
1,040,130
|
|
|
1,040,130
|
|
|
—
|
|
|||
Deferred revenue
|
64,061
|
|
|
106,283
|
|
|
42,222
|
|
|||
Other long-term liabilities
|
92,290
|
|
|
83,267
|
|
|
(9,023
|
)
|
|||
Total liabilities
|
1,528,061
|
|
|
1,561,534
|
|
|
33,473
|
|
|||
|
|
|
|
|
|
||||||
Stockholders’ Deficit:
|
|
|
|
|
|
||||||
Retained earnings
|
984,736
|
|
|
989,039
|
|
|
4,303
|
|
|||
Accumulated other comprehensive income (loss)
|
(42,589
|
)
|
|
(42,559
|
)
|
|
30
|
|
|||
All other stockholders' deficit and noncontrolling interest
|
(987,329
|
)
|
|
(987,329
|
)
|
|
—
|
|
|||
Total stockholders’ deficit
|
(45,182
|
)
|
|
(40,849
|
)
|
|
4,333
|
|
|||
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT
|
$
|
1,482,879
|
|
|
$
|
1,520,685
|
|
|
$
|
37,806
|
|
|
Condensed Consolidated Statement of Operations
|
||||||||||||||||||||||
|
For the Three Months Ended June 30, 2018
|
|
For the Six Months Ended June 30, 2018
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
Previous U.S. GAAP
|
|
New U.S. GAAP
(As Reported)
|
|
Attributed to the
New Revenue Standard
|
|
Previous U.S. GAAP
|
|
New U.S. GAAP
(As Reported) |
|
Attributed to the
New Revenue Standard |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total revenue
|
$
|
565,879
|
|
|
$
|
580,752
|
|
|
$
|
14,873
|
|
|
$
|
1,091,248
|
|
|
$
|
1,118,408
|
|
|
$
|
27,160
|
|
Total cost of revenue
|
239,491
|
|
|
248,313
|
|
|
8,822
|
|
|
467,456
|
|
|
482,870
|
|
|
15,414
|
|
||||||
Gross profit
|
326,388
|
|
|
332,439
|
|
|
6,051
|
|
|
623,792
|
|
|
635,538
|
|
|
11,746
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total operating expense
|
187,321
|
|
|
186,845
|
|
|
(476
|
)
|
|
377,947
|
|
|
376,900
|
|
|
(1,047
|
)
|
||||||
Income from operations
|
139,067
|
|
|
145,594
|
|
|
6,527
|
|
|
245,845
|
|
|
258,638
|
|
|
12,793
|
|
||||||
Interest expense
|
(8,457
|
)
|
|
(8,457
|
)
|
|
—
|
|
|
(17,731
|
)
|
|
(17,731
|
)
|
|
—
|
|
||||||
Interest income
|
437
|
|
|
172
|
|
|
(265
|
)
|
|
1,299
|
|
|
751
|
|
|
(548
|
)
|
||||||
Income before provision for income taxes
|
131,047
|
|
|
137,309
|
|
|
6,262
|
|
|
229,413
|
|
|
241,658
|
|
|
12,245
|
|
||||||
Provision for income taxes
|
27,107
|
|
|
28,629
|
|
|
1,522
|
|
|
40,536
|
|
|
43,502
|
|
|
2,966
|
|
||||||
Net income
|
$
|
103,940
|
|
|
$
|
108,680
|
|
|
$
|
4,740
|
|
|
$
|
188,877
|
|
|
$
|
198,156
|
|
|
$
|
9,279
|
|
|
Condensed Consolidated Statement of Cash Flows
|
||||||||||
|
For the Six Months Ended June 30, 2018
|
||||||||||
|
|
|
|
|
|
||||||
|
Previous U.S. GAAP
|
|
New U.S. GAAP
(As Reported)
|
|
Attributed to the
New Revenue Standard
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
|
|||||
Net income
|
$
|
188,877
|
|
|
$
|
198,156
|
|
|
$
|
9,279
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Benefit of deferred income taxes
|
6,218
|
|
|
8,638
|
|
|
2,420
|
|
|||
All other adjustments to reconcile net income to net cash provided by operating activities
|
55,661
|
|
|
55,661
|
|
|
—
|
|
|||
Changes in assets and liabilities, net
|
(97,028
|
)
|
|
(108,727
|
)
|
|
(11,699
|
)
|
|||
Net cash provided by operating activities
|
$
|
153,728
|
|
|
$
|
153,728
|
|
|
$
|
—
|
|
1.
|
Identification of a contract or agreement with a customer
|
2.
|
Identification of our performance obligations in the contract or agreement
|
3.
|
Determination of the transaction price
|
4.
|
Allocation of the transaction price to the performance obligations
|
5.
|
Recognition of revenue when, or as, we satisfy a performance obligation
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
CAG segment revenue:
|
|
|
|
|
|
|
|
|
|
||||||
CAG Diagnostics recurring revenue:
|
$
|
437,666
|
|
|
$
|
380,319
|
|
|
$
|
843,714
|
|
|
$
|
726,999
|
|
IDEXX VetLab consumables
|
158,620
|
|
|
132,094
|
|
|
308,133
|
|
|
255,647
|
|
||||
Rapid assay products
|
63,362
|
|
|
60,266
|
|
|
115,379
|
|
|
108,161
|
|
||||
Reference laboratory diagnostic and consulting services
|
197,268
|
|
|
171,298
|
|
|
384,205
|
|
|
330,367
|
|
||||
CAG Diagnostics service and accessories
|
18,416
|
|
|
16,661
|
|
|
35,997
|
|
|
32,824
|
|
||||
CAG Diagnostics capital - instruments
|
34,544
|
|
|
27,716
|
|
|
65,439
|
|
|
53,899
|
|
||||
Veterinary software, services and diagnostic imaging systems
|
35,277
|
|
|
31,913
|
|
|
69,167
|
|
|
62,277
|
|
||||
CAG segment revenue
|
507,487
|
|
|
439,948
|
|
|
978,320
|
|
|
843,175
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Water segment revenue
|
32,658
|
|
|
29,424
|
|
|
61,801
|
|
|
54,501
|
|
||||
LPD segment revenue
|
34,998
|
|
|
33,553
|
|
|
67,238
|
|
|
62,870
|
|
||||
Other segment revenue
|
5,609
|
|
|
6,015
|
|
|
11,049
|
|
|
10,415
|
|
||||
Total revenue
|
$
|
580,752
|
|
|
$
|
508,940
|
|
|
$
|
1,118,408
|
|
|
$
|
970,961
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
United States
|
$
|
356,736
|
|
|
$
|
315,695
|
|
|
$
|
684,197
|
|
|
$
|
604,308
|
|
Europe, the Middle East and Africa
|
122,270
|
|
|
102,482
|
|
|
242,844
|
|
|
198,910
|
|
||||
Asia Pacific Region
|
62,505
|
|
|
56,085
|
|
|
118,544
|
|
|
105,037
|
|
||||
Canada
|
26,407
|
|
|
23,078
|
|
|
48,951
|
|
|
41,826
|
|
||||
Latin America
|
12,834
|
|
|
11,600
|
|
|
23,872
|
|
|
20,880
|
|
||||
Total
|
$
|
580,752
|
|
|
$
|
508,940
|
|
|
$
|
1,118,408
|
|
|
$
|
970,961
|
|
|
For the Six Months Ended
June 30, |
||||||
|
2018
|
|
2017
|
||||
|
|
|
|
|
|
||
Share price at grant
|
$
|
179.56
|
|
|
$
|
142.66
|
|
Expected stock price volatility
|
24
|
%
|
|
26
|
%
|
||
Expected term, in years
|
5.8
|
|
|
5.8
|
|
||
Risk-free interest rate
|
2.7
|
%
|
|
2.0
|
%
|
||
Weighted average fair value of options granted
|
$
|
52.99
|
|
|
$
|
40.79
|
|
As of December 31, 2017
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Corporate bonds
|
|
$
|
140,969
|
|
|
$
|
96
|
|
|
$
|
(179
|
)
|
|
$
|
140,886
|
|
Certificates of deposit
|
|
58,510
|
|
|
—
|
|
|
—
|
|
|
58,510
|
|
||||
Commercial paper
|
|
29,171
|
|
|
—
|
|
|
—
|
|
|
29,171
|
|
||||
Asset backed securities
|
|
22,206
|
|
|
4
|
|
|
(43
|
)
|
|
22,167
|
|
||||
U.S. government bonds
|
|
15,619
|
|
|
11
|
|
|
(19
|
)
|
|
15,611
|
|
||||
Agency bonds
|
|
10,990
|
|
|
9
|
|
|
(52
|
)
|
|
10,947
|
|
||||
Treasury bills
|
|
6,964
|
|
|
—
|
|
|
(1
|
)
|
|
6,963
|
|
||||
Total marketable securities
|
|
$
|
284,429
|
|
|
$
|
120
|
|
|
$
|
(294
|
)
|
|
$
|
284,255
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
|
||
Raw materials
|
$
|
34,336
|
|
|
$
|
32,994
|
|
Work-in-process
|
16,982
|
|
|
17,786
|
|
||
Finished goods
|
125,169
|
|
|
113,538
|
|
||
Inventories (Note 2)
|
$
|
176,487
|
|
|
$
|
164,318
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
|
||
Prepaid expenses
|
$
|
27,250
|
|
|
$
|
28,967
|
|
Taxes receivable
|
41,315
|
|
|
35,475
|
|
||
Customer acquisition costs (Notes 2 and 3)
|
32,303
|
|
|
23,520
|
|
||
Contract assets (Notes 2 and 3)
|
6,558
|
|
|
—
|
|
||
Deferred sales commissions (Notes 2 and 3)
|
4,440
|
|
|
—
|
|
||
Other assets (Notes 2 and 3)
|
11,908
|
|
|
13,178
|
|
||
Other current assets
|
$
|
123,774
|
|
|
$
|
101,140
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
|
||
Investment in long-term product supply arrangements
|
$
|
11,344
|
|
|
$
|
9,949
|
|
Customer acquisition costs (Notes 2 and 3)
|
86,147
|
|
|
64,670
|
|
||
Contract assets (Notes 2 and 3)
|
14,903
|
|
|
—
|
|
||
Deferred sales commissions (Notes 2 and 3)
|
8,349
|
|
|
—
|
|
||
Deferred income taxes (Note 2)
|
8,723
|
|
|
7,698
|
|
||
Other assets (Notes 2 and 3)
|
22,356
|
|
|
36,299
|
|
||
Other long-term assets
|
$
|
151,822
|
|
|
$
|
118,616
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
|
|
|
|
|
|
||
Accrued expenses
|
$
|
61,302
|
|
|
$
|
64,430
|
|
Accrued employee compensation and related expenses
|
79,394
|
|
|
102,944
|
|
||
Accrued taxes
|
25,109
|
|
|
29,389
|
|
||
Accrued customer incentives and refund obligations (Notes 2 and 3)
|
62,575
|
|
|
56,655
|
|
||
Total accrued liabilities
|
$
|
228,380
|
|
|
$
|
253,418
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Accrued taxes
|
$
|
67,886
|
|
|
$
|
66,506
|
|
Accrued customer incentives (Note 2)
|
—
|
|
|
12,956
|
|
||
Other accrued long-term expenses
|
15,381
|
|
|
16,256
|
|
||
Total other long-term liabilities
|
$
|
83,267
|
|
|
$
|
95,718
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||
Shares repurchased in the open market
|
517
|
|
|
696
|
|
|
982
|
|
|
1,086
|
|
||||
Shares acquired through employee surrender for statutory tax withholding
|
1
|
|
|
1
|
|
|
49
|
|
|
53
|
|
||||
Total shares repurchased
|
518
|
|
|
697
|
|
|
1,031
|
|
|
1,139
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Cost of shares repurchased in the open market
|
$
|
105,774
|
|
|
$
|
114,163
|
|
|
$
|
191,962
|
|
|
$
|
164,907
|
|
Cost of shares for employee surrenders
|
165
|
|
|
156
|
|
|
8,720
|
|
|
7,459
|
|
||||
Total cost of shares
|
$
|
105,939
|
|
|
$
|
114,319
|
|
|
$
|
200,682
|
|
|
$
|
172,366
|
|
|
|
|
|
|
|
|
|
||||||||
Average cost per share - open market repurchases
|
$
|
204.69
|
|
|
$
|
163.96
|
|
|
$
|
195.47
|
|
|
$
|
151.81
|
|
Average cost per share - employee surrenders
|
$
|
215.36
|
|
|
$
|
168.25
|
|
|
$
|
179.41
|
|
|
$
|
141.56
|
|
Average cost per share - total
|
$
|
204.71
|
|
|
$
|
163.97
|
|
|
$
|
194.71
|
|
|
$
|
151.34
|
|
For the Six Months Ended June 30, 2018
|
|
Unrealized (Loss) Gain on Investments,
Net of Tax
|
|
Unrealized (Loss) Gain
on Derivative Instruments, Net of Tax
|
|
Unrealized (Loss) Gain on Net
Investment Hedge, Net of Tax
|
|
Cumulative Translation
Adjustment
|
|
Total
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Balance as of December 31, 2017
|
|
$
|
(22
|
)
|
|
$
|
(5,219
|
)
|
|
$
|
(4,311
|
)
|
|
$
|
(26,918
|
)
|
|
$
|
(36,470
|
)
|
Other comprehensive income (loss) before reclassifications
|
|
150
|
|
|
5,786
|
|
|
2,263
|
|
|
(16,327
|
)
|
|
(8,128
|
)
|
|||||
Gains reclassified from accumulated other comprehensive income
|
|
—
|
|
|
2,039
|
|
|
—
|
|
|
—
|
|
|
2,039
|
|
|||||
Balance as of June 30, 2018
|
|
$
|
128
|
|
|
$
|
2,606
|
|
|
$
|
(2,048
|
)
|
|
$
|
(43,245
|
)
|
|
$
|
(42,559
|
)
|
Details about AOCI Components
|
|
Affected Line Item in the Statement of Operations
|
|
Amounts Reclassified from AOCI For the Three Months Ended June 30,
|
||||||
|
|
|
|
2018
|
|
2017
|
||||
(Losses) gains on derivative instruments classified as cash flow hedges included in net income:
|
|
|
|
|
|
|
||||
Foreign currency exchange contracts
|
|
Cost of revenue
|
|
$
|
(833
|
)
|
|
$
|
753
|
|
|
|
Tax (benefits) expense
|
|
(379
|
)
|
|
280
|
|
||
|
|
(Losses) gains, net of tax
|
|
$
|
(454
|
)
|
|
$
|
473
|
|
Details about AOCI Components
|
|
Affected Line Item in the Statement of Operations
|
|
Amounts Reclassified from AOCI For the Six Months Ended June 30,
|
||||||
|
|
|
|
2018
|
|
2017
|
||||
(Losses) gains on derivative instruments classified as cash flow hedges included in net income:
|
|
|
|
|
|
|
||||
Foreign currency exchange contracts
|
|
Cost of revenue
|
|
$
|
(2,668
|
)
|
|
$
|
1,828
|
|
|
|
Tax (benefits) expense
|
|
(629
|
)
|
|
681
|
|
||
|
|
(Losses) gains, net of tax
|
|
$
|
(2,039
|
)
|
|
$
|
1,147
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
|
|
|
|
|
||
Shares outstanding for basic earnings per share
|
87,004
|
|
|
88,004
|
|
|
87,166
|
|
|
88,060
|
|
|
|
|
|
|
|
|
|
||||
Shares outstanding for diluted earnings per share:
|
|
|
|
|
|
|
|
||||
Shares outstanding for basic earnings per share
|
87,004
|
|
|
88,004
|
|
|
87,166
|
|
|
88,060
|
|
Dilutive effect of share-based payment awards
|
1,592
|
|
|
1,874
|
|
|
1,620
|
|
|
1,902
|
|
|
88,596
|
|
|
89,878
|
|
|
88,786
|
|
|
89,962
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||
|
|
|
|
|
|
|
|
|
|||
Weighted average number of shares underlying anti-dilutive options
|
326
|
|
|
368
|
|
|
245
|
|
|
275
|
|
|
|
For the Three Months Ended June 30,
|
||||||||||||||||||||||
|
|
CAG
|
|
Water
|
|
LPD
|
|
Other
|
|
Unallocated Amounts
|
|
Consolidated Total
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
507,487
|
|
|
$
|
32,658
|
|
|
$
|
34,998
|
|
|
$
|
5,609
|
|
|
$
|
—
|
|
|
$
|
580,752
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from operations
|
|
$
|
129,796
|
|
|
$
|
15,122
|
|
|
$
|
6,471
|
|
|
$
|
1,130
|
|
|
$
|
(6,925
|
)
|
|
$
|
145,594
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
(8,285
|
)
|
|||||||||||
Income before provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
137,309
|
|
|||||||||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
28,629
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
108,680
|
|
|||||||||||
Less: Net loss attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
(11
|
)
|
|||||||||||
Net income attributable to IDEXX Laboratories, Inc. stockholders
|
|
|
|
|
|
|
|
|
|
|
|
$
|
108,691
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
|
$
|
439,948
|
|
|
$
|
29,424
|
|
|
$
|
33,553
|
|
|
$
|
6,015
|
|
|
$
|
—
|
|
|
$
|
508,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from operations
|
|
$
|
108,731
|
|
|
$
|
13,653
|
|
|
$
|
5,176
|
|
|
$
|
768
|
|
|
$
|
(5,764
|
)
|
|
$
|
122,564
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
(7,979
|
)
|
|||||||||||
Income before provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
114,585
|
|
|||||||||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
29,178
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
85,407
|
|
|||||||||||
Less: Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
50
|
|
|||||||||||
Net income attributable to IDEXX Laboratories, Inc. stockholders
|
|
|
|
|
|
|
|
|
|
|
|
$
|
85,357
|
|
|
|
For the Six Months Ended June 30,
|
||||||||||||||||||||||
|
|
CAG
|
|
Water
|
|
LPD
|
|
Other
|
|
Unallocated Amounts
|
|
Consolidated Total
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
978,320
|
|
|
$
|
61,801
|
|
|
$
|
67,238
|
|
|
$
|
11,049
|
|
|
$
|
—
|
|
|
$
|
1,118,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from operations
|
|
$
|
230,194
|
|
|
$
|
27,584
|
|
|
$
|
9,432
|
|
|
$
|
1,628
|
|
|
$
|
(10,200
|
)
|
|
$
|
258,638
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
(16,980
|
)
|
|||||||||||
Income before provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
241,658
|
|
|||||||||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
43,502
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
198,156
|
|
|||||||||||
Less: Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|||||||||||
Net income attributable to IDEXX Laboratories, Inc. stockholders
|
|
|
|
|
|
|
|
|
|
|
|
$
|
198,142
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue
|
|
$
|
843,175
|
|
|
$
|
54,501
|
|
|
$
|
62,870
|
|
|
$
|
10,415
|
|
|
$
|
—
|
|
|
$
|
970,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) from operations
|
|
$
|
188,586
|
|
|
$
|
23,916
|
|
|
$
|
8,978
|
|
|
$
|
1,161
|
|
|
$
|
(7,834
|
)
|
|
$
|
214,807
|
|
Interest expense, net
|
|
|
|
|
|
|
|
|
|
|
|
(15,485
|
)
|
|||||||||||
Income before provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
199,322
|
|
|||||||||||
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
44,857
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
154,465
|
|
|||||||||||
Less: Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
89
|
|
|||||||||||
Net income attributable to IDEXX Laboratories, Inc. stockholders
|
|
|
|
|
|
|
|
|
|
|
|
$
|
154,376
|
|
Level 1
|
|
Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.
|
Level 2
|
|
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
Level 3
|
|
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
As of June 30, 2018
|
|
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
|
|
Significant
Other
Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
|
Balance at
June 30, 2018 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
(1)
|
|
$
|
12,677
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,677
|
|
Equity mutual funds
(2)
|
|
$
|
2,026
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,026
|
|
Cross currency swaps
(3)
|
|
—
|
|
|
$
|
314
|
|
|
—
|
|
|
$
|
314
|
|
||
Foreign currency exchange contracts
(3)
|
|
$
|
—
|
|
|
$
|
4,459
|
|
|
$
|
—
|
|
|
$
|
4,459
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
(3)
|
|
$
|
—
|
|
|
$
|
1,360
|
|
|
$
|
—
|
|
|
$
|
1,360
|
|
Deferred compensation
(4)
|
|
$
|
2,026
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,026
|
|
As of December 31, 2017
|
|
Quoted Prices
in Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Balance at
December 31, 2017 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds
(1)
|
|
$
|
32,962
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
32,962
|
|
Certificates of deposit
(1)
|
|
$
|
—
|
|
|
$
|
1,250
|
|
|
$
|
—
|
|
|
$
|
1,250
|
|
|
|
|
|
|
|
|
|
|
||||||||
Marketable Securities
|
|
|
|
|
|
|
|
|
||||||||
Corporate bonds
|
|
$
|
—
|
|
|
$
|
140,886
|
|
|
$
|
—
|
|
|
$
|
140,886
|
|
Certificates of deposit
|
|
—
|
|
|
58,510
|
|
|
—
|
|
|
58,510
|
|
||||
Commercial paper
|
|
—
|
|
|
29,171
|
|
|
—
|
|
|
29,171
|
|
||||
Asset backed securities
|
|
—
|
|
|
22,167
|
|
|
—
|
|
|
22,167
|
|
||||
U.S. government bonds
|
|
—
|
|
|
15,611
|
|
|
—
|
|
|
15,611
|
|
||||
Agency bonds
|
|
—
|
|
|
10,947
|
|
|
—
|
|
|
10,947
|
|
||||
Treasury bills
|
|
—
|
|
|
6,963
|
|
|
—
|
|
|
6,963
|
|
||||
Total marketable securities
|
|
$
|
—
|
|
|
$
|
284,255
|
|
|
$
|
—
|
|
|
$
|
284,255
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity mutual funds
(2)
|
|
$
|
2,162
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,162
|
|
Foreign currency exchange contracts
(3)
|
|
$
|
—
|
|
|
$
|
477
|
|
|
$
|
—
|
|
|
$
|
477
|
|
Liabilities
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency exchange contracts
(3)
|
|
$
|
—
|
|
|
$
|
6,468
|
|
|
$
|
—
|
|
|
$
|
6,468
|
|
Deferred compensation
(4)
|
|
$
|
2,162
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,162
|
|
(1)
|
Money market funds and certificates of deposit with an original maturity of less than ninety days are included within cash and cash equivalents. The remaining balance of cash and cash equivalents as of
June 30, 2018
and
December 31, 2017
, consisted of demand deposits. Certificates of deposit with an original maturity of over ninety days are included within marketable securities.
|
(2)
|
Equity mutual funds relate to a deferred compensation plan that was assumed as part of a previous business combination. This amount is included within other long-term assets. See footnote (4) below for a discussion of the related deferred compensation liability.
|
(3)
|
Cross currency swaps and foreign currency exchange contracts are included within other current assets; other long-term assets; accrued liabilities; or other long-term liabilities depending on the gain (loss) position and anticipated settlement date.
|
(4)
|
A deferred compensation plan assumed as part of a previous business combination is included within accrued liabilities and other long-term liabilities. The fair value of our deferred compensation plan is indexed to the performance of the underlying equity mutual funds discussed in footnote (2) above.
|
|
|
|
|
Three Months Ended June 30,
|
||||||
|
|
|
|
2018
|
|
2017
|
||||
|
|
|
|
Costs of revenue
|
|
Costs of revenue
|
||||
|
|
|
|
|
|
|
||||
Financial statement line items in which effects of cash flow hedges are recorded
|
|
|
|
$
|
248,313
|
|
|
$
|
216,225
|
|
Foreign exchange contracts
|
|
|
|
|
|
|
||||
Amount of (loss) gain reclassified from accumulated other comprehensive income into income
|
|
|
|
(833
|
)
|
|
753
|
|
|
|
|
|
Six Months Ended June 30,
|
||||||
|
|
|
|
2018
|
|
2017
|
||||
|
|
|
|
Costs of revenue
|
|
Costs of revenue
|
||||
|
|
|
|
|
|
|
||||
Financial statement line items in which effects of cash flow hedges are recorded
|
|
|
|
$
|
482,870
|
|
|
$
|
420,055
|
|
Foreign exchange contracts
|
|
|
|
|
|
|
||||
Amount of (loss) gain reclassified from accumulated other comprehensive income into income
|
|
|
|
(2,668
|
)
|
|
1,828
|
|
|
|
|
|
Hedging Assets
|
||||||
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments
|
|
Balance Sheet Classification
|
|
|
|
|
||||
Foreign currency exchange contracts
|
|
Other current assets
|
|
$
|
2,704
|
|
|
$
|
477
|
|
Cross currency swaps
|
|
Other current assets
|
|
314
|
|
|
—
|
|
||
Foreign currency exchange contracts
|
|
Other long-term assets
|
|
1,755
|
|
|
—
|
|
||
Total derivative instruments presented as cash flow hedges on the balance sheet
|
|
|
|
4,773
|
|
|
477
|
|
||
Gross amounts subject to master netting arrangements not offset on the balance sheet
|
|
|
|
703
|
|
|
477
|
|
||
Net amount
|
|
|
|
$
|
4,070
|
|
|
$
|
—
|
|
|
|
|
|
Hedging Liabilities
|
||||||
|
|
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
|
|
|
||||
Derivatives designated as hedging instruments
|
|
Balance Sheet Classification
|
|
|
|
|
||||
Foreign currency exchange contracts
|
|
Accrued liabilities
|
|
$
|
1,304
|
|
|
$
|
6,468
|
|
Foreign currency exchange contracts
|
|
Other long-term liabilities
|
|
56
|
|
|
—
|
|
||
Total derivative instruments presented as cash flow hedges on the balance sheet
|
|
|
|
1,360
|
|
|
6,468
|
|
||
Foreign currency borrowings designated as net investment hedge on the balance sheet
|
|
Long-term debt
|
|
103,590
|
|
|
106,567
|
|
||
Total hedging instruments presented on the balance sheet
|
|
|
|
104,950
|
|
|
113,035
|
|
||
Gross amounts subject to master netting arrangements not offset on the balance sheet
|
|
|
|
703
|
|
|
477
|
|
||
Net amount
|
|
|
|
$
|
104,247
|
|
|
$
|
112,558
|
|
•
|
Point-of-care veterinary diagnostic products, comprising instruments, consumables, and rapid assay test kits;
|
•
|
Veterinary reference laboratory diagnostic and consulting services;
|
•
|
Veterinary management and diagnostic imaging systems and services;
|
•
|
Biomedical research, reference laboratory diagnostic services, and instruments;
|
•
|
Diagnostic, health-monitoring products for livestock, poultry, and antibiotic residue testing in dairy;
|
•
|
Products that test water for certain microbiological contaminants;
|
•
|
Point-of-care electrolytes and blood gas analyzers used in the human point-of-care medical diagnostics market.
|
(1)
|
Reported revenue growth and organic revenue growth may not recalculate due to rounding.
|
|
|
For the Three Months Ended June 30,
|
|
Change
|
|||||||||||||||||
Total Company - Results of Operations
(dollars in thousands)
|
|
2018
|
|
Percent of Revenue
|
|
2017
|
|
Percent of Revenue
|
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
580,752
|
|
|
|
|
$
|
508,940
|
|
|
|
|
$
|
71,812
|
|
|
14.1
|
%
|
||
Cost of revenue
|
|
248,313
|
|
|
|
|
216,225
|
|
|
|
|
32,088
|
|
|
14.8
|
%
|
|||||
Gross profit
|
|
332,439
|
|
|
57.2
|
%
|
|
292,715
|
|
|
57.5
|
%
|
|
39,724
|
|
|
13.6
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
|
96,255
|
|
|
16.6
|
%
|
|
87,693
|
|
|
17.2
|
%
|
|
8,562
|
|
|
9.8
|
%
|
|||
General and administrative
|
|
61,080
|
|
|
10.5
|
%
|
|
55,460
|
|
|
10.9
|
%
|
|
5,620
|
|
|
10.1
|
%
|
|||
Research and development
|
|
29,510
|
|
|
5.1
|
%
|
|
26,998
|
|
|
5.3
|
%
|
|
2,512
|
|
|
9.3
|
%
|
|||
Total operating expenses
|
|
186,845
|
|
|
32.2
|
%
|
|
170,151
|
|
|
33.4
|
%
|
|
16,694
|
|
|
9.8
|
%
|
|||
Income from operations
|
|
$
|
145,594
|
|
|
25.1
|
%
|
|
$
|
122,564
|
|
|
24.1
|
%
|
|
$
|
23,030
|
|
|
18.8
|
%
|
Companion Animal Group
|
(1)
|
Reported revenue growth and organic revenue growth may not recalculate due to rounding
|
|
|
For the Three Months Ended June 30,
|
|
Change
|
|||||||||||||||||
Results of Operations
(dollars in thousands)
|
|
2018
|
|
Percent of Revenue
|
|
2017
|
|
Percent of Revenue
|
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues
|
|
$
|
507,487
|
|
|
|
|
$
|
439,948
|
|
|
|
|
$
|
67,539
|
|
|
15.4
|
%
|
||
Cost of revenue
|
|
221,577
|
|
|
|
|
189,862
|
|
|
|
|
31,715
|
|
|
16.7
|
%
|
|||||
Gross profit
|
|
285,910
|
|
|
56.3
|
%
|
|
250,086
|
|
|
56.8
|
%
|
|
35,824
|
|
|
14.3
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
|
84,668
|
|
|
16.7
|
%
|
|
76,374
|
|
|
17.4
|
%
|
|
8,294
|
|
|
10.9
|
%
|
|||
General and administrative
|
|
49,993
|
|
|
9.9
|
%
|
|
45,396
|
|
|
10.3
|
%
|
|
4,597
|
|
|
10.1
|
%
|
|||
Research and development
|
|
21,453
|
|
|
4.2
|
%
|
|
19,585
|
|
|
4.5
|
%
|
|
1,868
|
|
|
9.5
|
%
|
|||
Total operating expenses
|
|
156,114
|
|
|
30.8
|
%
|
|
141,355
|
|
|
32.1
|
%
|
|
14,759
|
|
|
10.4
|
%
|
|||
Income from operations
|
|
$
|
129,796
|
|
|
25.6
|
%
|
|
$
|
108,731
|
|
|
24.7
|
%
|
|
$
|
21,065
|
|
|
19.4
|
%
|
Water
|
|
|
For the Three Months Ended June 30,
|
|
Change
|
|||||||||||||||||
Results of Operations
(dollars in thousands)
|
|
2018
|
|
Percent of Revenue
|
|
2017
|
|
Percent of Revenue
|
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues
|
|
$
|
32,658
|
|
|
|
|
$
|
29,424
|
|
|
|
|
$
|
3,234
|
|
|
11.0
|
%
|
||
Cost of revenue
|
|
9,579
|
|
|
|
|
8,772
|
|
|
|
|
807
|
|
|
9.2
|
%
|
|||||
Gross profit
|
|
23,079
|
|
|
70.7
|
%
|
|
20,652
|
|
|
70.2
|
%
|
|
2,427
|
|
|
11.8
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
|
4,103
|
|
|
12.6
|
%
|
|
3,505
|
|
|
11.9
|
%
|
|
598
|
|
|
17.1
|
%
|
|||
General and administrative
|
|
3,210
|
|
|
9.8
|
%
|
|
2,854
|
|
|
9.7
|
%
|
|
356
|
|
|
12.5
|
%
|
|||
Research and development
|
|
644
|
|
|
2.0
|
%
|
|
640
|
|
|
2.2
|
%
|
|
4
|
|
|
0.6
|
%
|
|||
Total operating expenses
|
|
7,957
|
|
|
24.4
|
%
|
|
6,999
|
|
|
23.8
|
%
|
|
958
|
|
|
13.7
|
%
|
|||
Income from operations
|
|
$
|
15,122
|
|
|
46.3
|
%
|
|
$
|
13,653
|
|
|
46.4
|
%
|
|
$
|
1,469
|
|
|
10.8
|
%
|
Livestock, Poultry and Dairy
|
|
|
For the Three Months Ended June 30,
|
|
Change
|
|||||||||||||||||
Results of Operations
(dollars in thousands)
|
|
2018
|
|
Percent of Revenue
|
|
2017
|
|
Percent of Revenue
|
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
34,998
|
|
|
|
|
$
|
33,553
|
|
|
|
|
$
|
1,445
|
|
|
4.3
|
%
|
||
Cost of revenue
|
|
14,311
|
|
|
|
|
13,871
|
|
|
|
|
440
|
|
|
3.2
|
%
|
|||||
Gross profit
|
|
20,687
|
|
|
59.1
|
%
|
|
19,682
|
|
|
58.7
|
%
|
|
1,005
|
|
|
5.1
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
|
6,505
|
|
|
18.6
|
%
|
|
6,941
|
|
|
20.7
|
%
|
|
(436
|
)
|
|
(6.3
|
%)
|
|||
General and administrative
|
|
4,805
|
|
|
13.7
|
%
|
|
4,753
|
|
|
14.2
|
%
|
|
52
|
|
|
1.1
|
%
|
|||
Research and development
|
|
2,906
|
|
|
8.3
|
%
|
|
2,812
|
|
|
8.4
|
%
|
|
94
|
|
|
3.3
|
%
|
|||
Total operating expenses
|
|
14,216
|
|
|
40.6
|
%
|
|
14,506
|
|
|
43.2
|
%
|
|
(290
|
)
|
|
(2.0
|
%)
|
|||
Income from operations
|
|
$
|
6,471
|
|
|
18.5
|
%
|
|
$
|
5,176
|
|
|
15.4
|
%
|
|
$
|
1,295
|
|
|
25.0
|
%
|
|
|
For the Three Months Ended June 30,
|
|
Change
|
|||||||||||||||||
Results of Operations
(dollars in thousands)
|
|
2018
|
|
Percent of Revenue
|
|
2017
|
|
Percent of Revenue
|
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
5,609
|
|
|
|
|
$
|
6,015
|
|
|
|
|
$
|
(406
|
)
|
|
(6.7
|
%)
|
||
Cost of revenue
|
|
2,996
|
|
|
|
|
3,512
|
|
|
|
|
(516
|
)
|
|
(14.7
|
%)
|
|||||
Gross profit
|
|
2,613
|
|
|
46.6
|
%
|
|
2,503
|
|
|
41.6
|
%
|
|
110
|
|
|
4.4
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
|
439
|
|
|
7.8
|
%
|
|
601
|
|
|
10.0
|
%
|
|
(162
|
)
|
|
(27.0
|
%)
|
|||
General and administrative
|
|
773
|
|
|
13.8
|
%
|
|
826
|
|
|
13.7
|
%
|
|
(53
|
)
|
|
(6.4
|
%)
|
|||
Research and development
|
|
271
|
|
|
4.8
|
%
|
|
308
|
|
|
5.1
|
%
|
|
(37
|
)
|
|
(12.0
|
%)
|
|||
Total operating expenses
|
|
1,483
|
|
|
26.4
|
%
|
|
1,735
|
|
|
28.8
|
%
|
|
(252
|
)
|
|
(14.5
|
%)
|
|||
Income from operations
|
|
$
|
1,130
|
|
|
20.1
|
%
|
|
$
|
768
|
|
|
12.8
|
%
|
|
$
|
362
|
|
|
47.1
|
%
|
|
|
For the Three Months Ended June 30,
|
|
Change
|
|||||||||||||||
Results of Operations
(dollars in thousands)
|
|
2018
|
|
|
|
2017
|
|
|
|
Amount
|
|
Percentage
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
N/A
|
|
Cost of revenue
|
|
(150
|
)
|
|
|
|
208
|
|
|
|
|
(358
|
)
|
|
(172.1
|
%)
|
|||
Gross profit
|
|
150
|
|
|
|
|
(208
|
)
|
|
|
|
358
|
|
|
(172.1
|
%)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
|
540
|
|
|
|
|
272
|
|
|
|
|
268
|
|
|
98.5
|
%
|
|||
General and administrative
|
|
2,299
|
|
|
|
|
1,631
|
|
|
|
|
668
|
|
|
41.0
|
%
|
|||
Research and development
|
|
4,236
|
|
|
|
|
3,653
|
|
|
|
|
583
|
|
|
16.0
|
%
|
|||
Total operating expenses
|
|
7,075
|
|
|
|
|
5,556
|
|
|
|
|
1,519
|
|
|
27.3
|
%
|
|||
Loss from operations
|
|
$
|
(6,925
|
)
|
|
|
|
$
|
(5,764
|
)
|
|
|
|
$
|
(1,161
|
)
|
|
20.1
|
%
|
(1)
|
Reported revenue growth and organic revenue growth may not recalculate due to rounding.
|
|
|
For the Six Months Ended June 30,
|
|
Change
|
|||||||||||||||||
Total Company - Results of Operations
(dollars in thousands)
|
|
2018
|
|
Percent of Revenue
|
|
2017
|
|
Percent of Revenue
|
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
1,118,408
|
|
|
|
|
$
|
970,961
|
|
|
|
|
$
|
147,447
|
|
|
15.2
|
%
|
||
Cost of revenue
|
|
482,870
|
|
|
|
|
420,055
|
|
|
|
|
62,815
|
|
|
15.0
|
%
|
|||||
Gross profit
|
|
635,538
|
|
|
56.8
|
%
|
|
550,906
|
|
|
56.7
|
%
|
|
84,632
|
|
|
15.4
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
|
196,356
|
|
|
17.6
|
%
|
|
174,937
|
|
|
18.0
|
%
|
|
21,419
|
|
|
12.2
|
%
|
|||
General and administrative
|
|
122,011
|
|
|
10.9
|
%
|
|
108,374
|
|
|
11.2
|
%
|
|
13,637
|
|
|
12.6
|
%
|
|||
Research and development
|
|
58,533
|
|
|
5.2
|
%
|
|
52,788
|
|
|
5.4
|
%
|
|
5,745
|
|
|
10.9
|
%
|
|||
Total operating expenses
|
|
376,900
|
|
|
33.7
|
%
|
|
336,099
|
|
|
34.6
|
%
|
|
40,801
|
|
|
12.1
|
%
|
|||
Income from operations
|
|
$
|
258,638
|
|
|
23.1
|
%
|
|
$
|
214,807
|
|
|
22.1
|
%
|
|
$
|
43,831
|
|
|
20.4
|
%
|
Companion Animal Group
|
(1)
|
Reported revenue growth and organic revenue growth may not recalculate due to rounding
|
|
|
For the Six Months Ended June 30,
|
|
Change
|
|||||||||||||||||
Results of Operations
(dollars in thousands)
|
|
2018
|
|
Percent of Revenue
|
|
2017
|
|
Percent of Revenue
|
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues
|
|
$
|
978,320
|
|
|
|
|
$
|
843,175
|
|
|
|
|
$
|
135,145
|
|
|
16.0
|
%
|
||
Cost of revenue
|
|
430,477
|
|
|
|
|
372,019
|
|
|
|
|
58,458
|
|
|
15.7
|
%
|
|||||
Gross profit
|
|
547,843
|
|
|
56.0
|
%
|
|
471,156
|
|
|
55.9
|
%
|
|
76,687
|
|
|
16.3
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
|
173,774
|
|
|
17.8
|
%
|
|
154,156
|
|
|
18.3
|
%
|
|
19,618
|
|
|
12.7
|
%
|
|||
General and administrative
|
|
101,128
|
|
|
10.3
|
%
|
|
89,463
|
|
|
10.6
|
%
|
|
11,665
|
|
|
13.0
|
%
|
|||
Research and development
|
|
42,747
|
|
|
4.4
|
%
|
|
38,951
|
|
|
4.6
|
%
|
|
3,796
|
|
|
9.7
|
%
|
|||
Total operating expenses
|
|
317,649
|
|
|
32.5
|
%
|
|
282,570
|
|
|
33.5
|
%
|
|
35,079
|
|
|
12.4
|
%
|
|||
Income from operations
|
|
$
|
230,194
|
|
|
23.5
|
%
|
|
$
|
188,586
|
|
|
22.4
|
%
|
|
$
|
41,608
|
|
|
22.1
|
%
|
Water
|
|
|
For the Six Months Ended June 30,
|
|
Change
|
|||||||||||||||||
Results of Operations
(dollars in thousands)
|
|
2018
|
|
Percent of Revenue
|
|
2017
|
|
Percent of Revenue
|
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Revenues
|
|
$
|
61,801
|
|
|
|
|
$
|
54,501
|
|
|
|
|
$
|
7,300
|
|
|
13.4
|
%
|
||
Cost of revenue
|
|
18,360
|
|
|
|
|
16,374
|
|
|
|
|
1,986
|
|
|
12.1
|
%
|
|||||
Gross profit
|
|
43,441
|
|
|
70.3
|
%
|
|
38,127
|
|
|
70.0
|
%
|
|
5,314
|
|
|
13.9
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
|
8,168
|
|
|
13.2
|
%
|
|
7,168
|
|
|
13.2
|
%
|
|
1,000
|
|
|
14.0
|
%
|
|||
General and administrative
|
|
6,398
|
|
|
10.4
|
%
|
|
5,785
|
|
|
10.6
|
%
|
|
613
|
|
|
10.6
|
%
|
|||
Research and development
|
|
1,291
|
|
|
2.1
|
%
|
|
1,258
|
|
|
2.3
|
%
|
|
33
|
|
|
2.6
|
%
|
|||
Total operating expenses
|
|
15,857
|
|
|
25.7
|
%
|
|
14,211
|
|
|
26.1
|
%
|
|
1,646
|
|
|
11.6
|
%
|
|||
Income from operations
|
|
$
|
27,584
|
|
|
44.6
|
%
|
|
$
|
23,916
|
|
|
43.9
|
%
|
|
$
|
3,668
|
|
|
15.3
|
%
|
Livestock, Poultry and Dairy
|
|
|
For the Six Months Ended June 30,
|
|
Change
|
|||||||||||||||||
Results of Operations
(dollars in thousands)
|
|
2018
|
|
Percent of Revenue
|
|
2017
|
|
Percent of Revenue
|
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
67,238
|
|
|
|
|
$
|
62,870
|
|
|
|
|
$
|
4,368
|
|
|
6.9
|
%
|
||
Cost of revenue
|
|
28,904
|
|
|
|
|
26,343
|
|
|
|
|
2,561
|
|
|
9.7
|
%
|
|||||
Gross profit
|
|
38,334
|
|
|
57.0
|
%
|
|
36,527
|
|
|
58.1
|
%
|
|
1,807
|
|
|
4.9
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
|
13,119
|
|
|
19.5
|
%
|
|
12,476
|
|
|
19.8
|
%
|
|
643
|
|
|
5.2
|
%
|
|||
General and administrative
|
|
9,715
|
|
|
14.4
|
%
|
|
9,162
|
|
|
14.6
|
%
|
|
553
|
|
|
6.0
|
%
|
|||
Research and development
|
|
6,068
|
|
|
9.0
|
%
|
|
5,911
|
|
|
9.4
|
%
|
|
157
|
|
|
2.7
|
%
|
|||
Total operating expenses
|
|
28,902
|
|
|
43.0
|
%
|
|
27,549
|
|
|
43.8
|
%
|
|
1,353
|
|
|
4.9
|
%
|
|||
Income from operations
|
|
$
|
9,432
|
|
|
14.0
|
%
|
|
$
|
8,978
|
|
|
14.3
|
%
|
|
$
|
454
|
|
|
5.1
|
%
|
|
|
For the Six Months Ended June 30,
|
|
Change
|
|||||||||||||||||
Results of Operations
(dollars in thousands)
|
|
2018
|
|
Percent of Revenue
|
|
2017
|
|
Percent of Revenue
|
|
Amount
|
|
Percentage
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
11,049
|
|
|
|
|
$
|
10,415
|
|
|
|
|
$
|
634
|
|
|
6.1
|
%
|
||
Cost of revenue
|
|
6,362
|
|
|
|
|
5,801
|
|
|
|
|
561
|
|
|
9.7
|
%
|
|||||
Gross profit
|
|
4,687
|
|
|
42.4
|
%
|
|
4,614
|
|
|
44.3
|
%
|
|
73
|
|
|
1.6
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing
|
|
959
|
|
|
8.7
|
%
|
|
1,220
|
|
|
11.7
|
%
|
|
(261
|
)
|
|
(21.4
|
%)
|
|||
General and administrative
|
|
1,577
|
|
|
14.3
|
%
|
|
1,617
|
|
|
15.5
|
%
|
|
(40
|
)
|
|
(2.5
|
%)
|
|||
Research and development
|
|
523
|
|
|
4.7
|
%
|
|
616
|
|
|
5.9
|
%
|
|
(93
|
)
|
|
(15.1
|
%)
|
|||
Total operating expenses
|
|
3,059
|
|
|
27.7
|
%
|
|
3,453
|
|
|
33.2
|
%
|
|
(394
|
)
|
|
(11.4
|
%)
|
|||
Income from operations
|
|
$
|
1,628
|
|
|
14.7
|
%
|
|
$
|
1,161
|
|
|
11.1
|
%
|
|
$
|
467
|
|
|
40.2
|
%
|
|
|
For the Six Months Ended June 30,
|
|
Change
|
|||||||||||||||
Results of Operations
(dollars in thousands)
|
|
2018
|
|
|
|
2017
|
|
|
|
Amount
|
|
Percentage
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenues
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
N/A
|
|
Cost of revenue
|
|
(1,233
|
)
|
|
|
|
(482
|
)
|
|
|
|
(751
|
)
|
|
155.8
|
%
|
|||
Gross profit
|
|
1,233
|
|
|
|
|
482
|
|
|
|
|
751
|
|
|
155.8
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Sales and marketing
|
|
336
|
|
|
|
|
(83
|
)
|
|
|
|
419
|
|
|
(504.8
|
%)
|
|||
General and administrative
|
|
3,193
|
|
|
|
|
2,347
|
|
|
|
|
846
|
|
|
36.0
|
%
|
|||
Research and development
|
|
7,904
|
|
|
|
|
6,052
|
|
|
|
|
1,852
|
|
|
30.6
|
%
|
|||
Total operating expenses
|
|
11,433
|
|
|
|
|
8,316
|
|
|
|
|
3,117
|
|
|
37.5
|
%
|
|||
Loss from operations
|
|
$
|
(10,200
|
)
|
|
|
|
$
|
(7,834
|
)
|
|
|
|
$
|
(2,366
|
)
|
|
30.2
|
%
|
Cash, cash equivalents and marketable securities
(dollars in thousands)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||
|
|
|
|
|
|
|
||
U.S.
|
|
$
|
3,302
|
|
|
$
|
5,902
|
|
Foreign
|
|
171,257
|
|
|
466,028
|
|
||
Total
|
|
$
|
174,559
|
|
|
471,930
|
|
|
|
|
|
|
|
|
|
||
Total cash, cash equivalents and marketable securities held in U.S. dollars by our foreign subsidiaries
|
|
$
|
20,389
|
|
|
$
|
334,339
|
|
|
|
|
|
|
|
|
||
Percentage of total cash, cash equivalents and marketable securities held in U.S. dollars by our foreign subsidiaries
|
|
11.7
|
%
|
|
70.8
|
%
|
|
For the Three Months Ended
|
|||||||||||||
|
June 30,
2018 |
|
March 31,
2018
|
|
December 31,
2017
|
|
September 30,
2017
|
|
June 30,
2017
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||
Days sales outstanding
(1)
|
41.2
|
|
|
42.0
|
|
|
41.7
|
|
|
43.4
|
|
|
41.7
|
|
Inventory turns
(2)
|
2.2
|
|
|
2.0
|
|
|
2.2
|
|
|
1.9
|
|
|
2.0
|
|
(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 12 months preceding each quarter-end divided by the inventory balance at the end of the quarter.
|
|
|
For the Six Months Ended June 30,
|
||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
Dollar Change
|
||||||
|
|
|
|
|
|
|
|
|
||||
Net cash provided by operating activities
|
|
$
|
153,728
|
|
|
$
|
141,466
|
|
|
$
|
12,262
|
|
Net cash provided (used) by investing activities
|
|
232,661
|
|
|
(72,714
|
)
|
|
305,375
|
|
|||
Net cash used by financing activities
|
|
(395,699
|
)
|
|
(62,087
|
)
|
|
(333,612
|
)
|
|||
Net effect of changes in exchange rates on cash
|
|
(3,806
|
)
|
|
4,409
|
|
|
(8,215
|
)
|
|||
Net change in cash and cash equivalents
|
|
$
|
(13,116
|
)
|
|
$
|
11,074
|
|
|
$
|
(24,190
|
)
|
|
|
For the Six Months Ended June 30,
|
||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
Dollar Change
|
||||||
|
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
|
$
|
(32,872
|
)
|
|
$
|
(32,400
|
)
|
|
$
|
(472
|
)
|
Inventories
|
|
(16,825
|
)
|
|
(18,850
|
)
|
|
2,025
|
|
|||
Accounts payable
|
|
3
|
|
|
1,422
|
|
|
(1,419
|
)
|
|||
Deferred revenue
|
|
(3,252
|
)
|
|
1,898
|
|
|
(5,150
|
)
|
|||
Other assets and liabilities
|
|
(55,781
|
)
|
|
(21,426
|
)
|
|
(34,355
|
)
|
|||
|
|
|
|
|
|
|
||||||
Total change in cash due to changes in operating assets and liabilities
|
|
$
|
(108,727
|
)
|
|
$
|
(69,356
|
)
|
|
$
|
(39,371
|
)
|
|
Twelve months ended
|
||
Trailing 12 Months Adjusted EBITDA:
|
June 30, 2018
|
||
|
|
|
|
Net income attributable to stockholders (as reported)
|
$
|
306,910
|
|
Interest expense
|
37,212
|
|
|
Provision for income taxes
|
116,433
|
|
|
Depreciation and amortization
|
83,943
|
|
|
Share-based compensation expense
|
24,127
|
|
|
Adjusted EBITDA
|
$
|
568,625
|
|
|
|
||
|
|
||
Debt to Adjusted EBITDA Ratio:
|
June 30, 2018
|
||
|
|
|
|
Line of credit
|
$
|
437,000
|
|
Long-term debt
|
603,130
|
|
|
Total debt
|
1,040,130
|
|
|
Acquisition-related contingent consideration payable
|
2,537
|
|
|
Capitalized leases
|
330
|
|
|
U.S. GAAP change - deferred financing costs
|
460
|
|
|
Gross debt
|
1,043,457
|
|
|
Gross debt to Adjusted EBITDA ratio
|
1.84
|
|
|
|
|
|
|
Less: Cash and cash equivalents
|
(174,559
|
)
|
|
Net debt
|
$
|
868,898
|
|
Net debt to Adjusted EBITDA ratio
|
1.53
|
|
|
|
For the Three Months Ended
June 30, |
|
For the Six Months Ended
June 30, |
||||||||||||
(dollars in thousands)
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||
Revenue impact
|
|
$
|
9,791
|
|
|
$
|
(5,301
|
)
|
|
$
|
27,607
|
|
|
$
|
(8,256
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Operating profit impact, excluding hedge activity
|
|
$
|
3,456
|
|
|
$
|
(2,044
|
)
|
|
$
|
10,598
|
|
|
$
|
(4,496
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Hedge gains - prior year
|
|
(753
|
)
|
|
(80
|
)
|
|
(1,828
|
)
|
|
(889
|
)
|
||||
Hedge (losses) gains - current year
|
|
(833
|
)
|
|
753
|
|
|
(2,668
|
)
|
|
1,828
|
|
||||
Hedging activity impact
|
|
(1,586
|
)
|
|
673
|
|
|
(4,496
|
)
|
|
939
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating profit impact, including hedge activity
|
|
$
|
1,870
|
|
|
$
|
(1,371
|
)
|
|
$
|
6,102
|
|
|
$
|
(3,557
|
)
|
Diluted earnings per share impact, including hedge activity
|
|
$
|
0.02
|
|
|
$
|
(0.01
|
)
|
|
$
|
0.05
|
|
|
$
|
(0.03
|
)
|
Period
|
|
Total Number of Shares Purchased
(a)
|
|
Average Price Paid per Share
(b)
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(1)
(c)
|
|
Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
(1)
(d)
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
||
April 1 to April 30, 2018
|
|
139,550
|
|
|
$
|
193.51
|
|
|
139,550
|
|
|
4,381,238
|
|
May 1 to May 31, 2018
|
|
233,143
|
|
|
$
|
202.06
|
|
|
233,143
|
|
|
4,148,095
|
|
June 1 to June 30, 2018
|
|
144,816
|
|
|
$
|
219.77
|
|
|
144,050
|
|
|
4,004,045
|
|
Total
|
|
517,509
|
|
(2)
|
$
|
204.71
|
|
|
516,743
|
|
|
4,004,045
|
|
(1)
|
On August 13, 1999, our Board of Directors approved and announced the repurchase of our common stock in the open market or in negotiated transactions pursuant to the Company’s share repurchase program. The authorization has been increased by the Board of Directors on numerous occasions; most recently, on May 2, 2017, the maximum level of shares that may be repurchased under the program was increased from 65 million to 68 million shares. There is no specified expiration date for this share repurchase program. There were no other repurchase programs outstanding during the three months ended
June 30, 2018
, and no share repurchase programs expired during the period. Repurchases of
516,743
shares were made during the three months ended
June 30, 2018
, in transactions made pursuant to our share repurchase program.
|
(2)
|
During the three months ended
June 30, 2018
, we received
766
shares of our common stock that were surrendered by employees in payment for the minimum required withholding taxes due on the vesting of restricted stock units and settlement of deferred stock units. In the above table, these shares are included in columns (a) and (b), but excluded from columns (c) and (d). These shares do not reduce the number of shares that may yet be purchased under the share repurchase program.
|
Exhibit No.
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
XBRL Instance Document.
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
IDEXX LABORATORIES, INC.
|
|
|
|
|
|
/s/ Brian P. McKeon
|
Date: August 1, 2018
|
Brian P. McKeon
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|
|
(Principal Financial Officer)
|
1.
|
Retirement Payment
. Your retirement will be effective on March 1, 2019 (the “Retirement Date”). You agree to continue to use your best efforts in the performance of your services on behalf of IDEXX through the Retirement Date. The foregoing notwithstanding, to the extent requested by the Company from time to time during the period between the date of this Agreement and the Retirement Date (the “Transition Period”), you acknowledge and agree that you shall resign from such positions you hold as an officer or director of IDEXX and you agree that you will cooperate with IDEXX to execute in a timely manner any documentation that may be required to effect your resignation from such IDEXX positions. From the date you are no longer serving as the Corporate Vice President, General Counsel and Corporate Secretary at IDEXX Laboratories, Inc. and through the end of the Transition Period, (a) your title shall be CVP-Special Projects, and (b) you shall perform only such services and transition assistance as requested and directed by IDEXX’s Chief Executive Officer (the “CEO”). Your usual base salary will continue through the Transition Period and cease on the Retirement Date.
|
a.
|
52 weeks of your base salary (at your base salary rate in effect immediately prior to May 24, 2018) as retirement pay. This amount, equaling $400,000.00, shall be paid to you in a lump sum (subject to applicable tax withholding obligations) on the first payroll date coincident with or next following the Retirement Date, subject to the terms of Paragraph 1.d hereof.
|
b.
|
An amount equal to $21,289.32 (estimated to equal approximately 52 weeks of COBRA premium costs) which shall be paid in a lump sum (less applicable withholdings) on the first payroll date coincident with or next following the Retirement Date, subject to the terms of Paragraph 1.d hereof.
|
c.
|
An amount equal to $240,000.00 which shall be paid to you in a lump sum (less applicable withholdings) on the first payroll date coincident with or next following the Retirement Date, subject to the terms of Paragraph 1.d hereof.
|
d.
|
You acknowledge and agree that the retirement pay as set forth in this Paragraph 1 (collectively, the “Retirement Payments”) shall be in lieu of any retirement or severance payments or other consideration, if any, you may be entitled to under any other agreement or arrangement with IDEXX or under any IDEXX company policy or plan, including, but not limited to the IDEXX Laboratories, Inc. Severance Benefit Plan, as initially adopted effective January 1, 1998, including any amendments thereto (the “Severance Plan”), and that it is above and beyond anything you might otherwise be entitled to receive. You further acknowledge and agree that the Retirement Payments and the additional vesting of your equity as described in Paragraph 2 below (collectively the “Agreement Consideration”) shall be in consideration of
|
e.
|
Subject to the terms for each as described above, the payments set forth in Paragraphs 1.a., 1.b., and 1.c. shall be paid to you in a single lump sum payment totaling $661,289.32 (less applicable withholdings) through the direct deposit system, if you have direct deposit established. If you do not have direct deposit, payments will be mailed to you at the address IDEXX has for you on file.
|
2.
|
Stock Options and Restricted Stock Units
. You acknowledge and agree that in further consideration of your execution and delivery of the irrevocable Releases as set forth in Paragraph 1.d. and execution and delivery, and your agreement to be bound by the terms, of the Ancillary Agreements, the Retirement Date is set as a date that will allow you to vest in the next scheduled vesting tranche with respect to (a) your outstanding restricted stock unit grant that was granted on September 1, 2014 and (b) each of the outstanding annual equity awards granted in 2015, 2016, 2017 and 2018, respectively. All vesting service for any IDEXX stock option grants and awards of restricted stock units will thereafter cease on the Retirement Date. Stock options that are vested and exercisable as of the Retirement Date may be exercised only to the extent and only for the time period specified in each respective award. Any options and restricted stock unit awards that are not vested as of the Retirement Date shall be forfeited. Similarly, restricted stock units that have vested and settled by the Retirement Date will be subject the terms of your award, as applicable.
|
3.
|
IDEXX Retirement and Incentive Savings Plan (401(k) Plan)
. Effective on the Retirement Date you will become an inactive participant in the IDEXX Retirement and Incentive Savings Plan, and will become eligible for a distribution. At that time, you may, for example, roll over your account to an IRA or to another qualified employer 401(k) plan.
|
4.
|
Health, Dental, and Vision Plans for Employees of IDEXX
. To the extent applicable, your enrollment in the IDEXX medical, dental, and vision plans will continue through the last day of the calendar month in which the Retirement Date occurs. After that date, to the extent you are eligible, you may continue your medical and dental coverage for eighteen months under the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) by paying the total cost of the premium plus an additional 2% administrative charge as provided by COBRA (details will be provided to you separately). As noted in Paragraph 1.b. hereof, IDEXX will pay you in a lump sum payment an amount equal to approximately 52 weeks of COBRA premium costs, subject to your otherwise complying with the terms of this Agreement, including Paragraph 1.d. hereof. Notwithstanding the foregoing, if IDEXX’s making this lump sum payment to you under this Agreement would violate the nondiscrimination rules applicable to health plans or self-insured plans under Section 105(h) of the Internal Revenue Code of 1986, as amended (the “Code”), or result in the imposition of penalties under the Patient Protection and Affordable Care Act of 2010 and the related regulations and guidance promulgated thereunder (the “PPACA”), the parties agree to reform this Agreement in a manner as is necessary to comply with the PPACA and the Code. Further, nothing herein provided shall be construed to extend the period of time over which COBRA continuation coverage otherwise may be provided to you and/or your dependents.
|
5.
|
Basic Life Insurance, Basic Accidental Death & Dismemberment Coverage, and Disability Coverage
. Your basic life coverage terminates effective as of the Retirement Date. This coverage may be converted to an individual policy (details will be provided to you separately). Your basic accidental death and dismemberment
|
6.
|
Paid Time Off (PTO) Pay
. Your PTO will continue to accrue in the normal course until the Retirement Date. You will receive payment for any accrued but unused PTO time remaining as of your Retirement Date as per IDEXX policy.
|
7.
|
Expense Reports and Company Credit Cards
. You must submit any outstanding expense reports no later than the Retirement Date. Your IDEXX credit cards will be canceled on the Retirement Date. IDEXX may pay any credit card balances not covered by valid expense reports received after the Retirement Date and deduct the amount of such payments from amounts that are provided in Paragraph 1 of this Agreement. Without limiting the foregoing, you agree that IDEXX may withhold from any amount payable to you under this Agreement any amounts owed by you to IDEXX.
|
8.
|
IDEXX Property
. All IDEXX property must be returned no later than the Retirement Date. IDEXX will hold you responsible for any such property not returned and you hereby acknowledge and agree that IDEXX may withhold the value of such property from any Retirement Payment or other payment owed to you by IDEXX. You agree that with respect to IDEXX documents and records, you shall not keep or retain any copies, either in hard copy or electronically stored.
|
9.
|
Non-Disparagement
. You hereby agree that you have not made and that you shall not make any disparaging statements, whether orally, in writing, or in any other medium regarding IDEXX or its principals, directors, officers, shareholders, employees and agents. You also agree that you shall not intentionally make any false or disparaging communications about IDEXX or its business, principals, directors, officers, shareholders, employees and agents, including but not limited to communicating any information (whether true or not) that may have the effect of undermining the respect and confidence in IDEXX or such individuals by IDEXX’s customers and/or employees.
|
10.
|
Choice of Law
. This Agreement shall be governed by and construed in accordance with the laws of the State of Maine. You agree and consent to submit to personal jurisdiction in the State of Maine in any state or federal court of competent subject matter jurisdiction situated in Cumberland County, Maine. You further agree that the sole and exclusive venue for any suit arising out of, or seeking to enforce, the terms of this Agreement, the Ancillary Agreements and the Releases shall be in a state or federal court of competent subject matter jurisdiction situated in Cumberland County, Maine. In addition, you waive any right to challenge in another court any judgment entered by such Cumberland County court or to assert that any action instituted by IDEXX in any such court is in the improper venue or should be transferred to a more convenient forum.
In addition, you and IDEXX also waive any right you or it may otherwise have to a trial by jury in any action to enforce the terms of this Agreement,
the Ancillary Agreements or the Releases.
|
11.
|
Confidentiality; Ancillary Agreements
. You agree not to disclose the terms and conditions of this Agreement (or the discussions leading up to or relating to this Agreement) to anyone, except to your spouse, your attorney or your tax advisor; a further disclosure by any of them shall be deemed a breach of this provision by you. By
|
12.
|
Continuing Cooperation
. You acknowledge and agree you are being requested to stay with IDEXX until the Retirement Date. By doing so, you will be eligible for the Retirement Payments, provided that you continue to perform your job duties as may be assigned in accordance with Paragraph 1 hereof, as well as assist with the transition of your duties, if requested by the CEO. Following the end of your employment, you agree to make yourself reasonably available (without the expectation of additional compensation) to answer any questions via telephone/email about the transition of your responsibilities, and to cooperate with respect to helping. IDEXX deal with any legal matters arising out of events in which you were involved or familiar with due to your former employment with IDEXX.
|
13.
|
Neutral Reference
. In response to any employment and reference inquiries by a third party regarding your employment with IDEXX, IDEXX will only provide a neutral reference; that is, IDEXX’s response to such third party will only reflect (i) the period of your employment (ii) your last position held; and (iii) that it is IDEXX policy not to discuss or disclose information regarding current or former employees’ performance to third parties and that no inference should be made from this policy.
|
14.
|
Complete Agreement
. This Agreement, including the Ancillary Agreements and the Releases, constitutes the complete understanding between you and IDEXX with respect to your retirement from employment with IDEXX and this Agreement, including the Ancillary Agreements and the Releases, supersedes all prior representations, agreements, and understandings, both written and oral, between you and IDEXX with respect to the subject matters hereof. You acknowledge that you have not relied upon any representations, promises, or agreements of any kind except those set forth herein in signing this Agreement.
|
15.
|
No Changes To Benefit Plans
. Nothing in this Agreement shall be construed to modify the terms of any IDEXX employee benefits plan. The terms of such plans shall continue to govern. IDEXX retains the right to amend or terminate its employee benefit plans at any time.
|
16.
|
Effective Date
. Except as otherwise provided herein with respect to the Releases, this Agreement shall take effect on the date of your execution of this Agreement.
|
17.
|
Miscellaneous
.
|
a.
|
No delay or omission by IDEXX in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by IDEXX on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.
|
b.
|
The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.
|
c.
|
In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.
|
d.
|
Nothing in this Agreement precludes you from providing truthful testimony when lawfully subpoenaed or otherwise required to do so by law.
|
e.
|
By signing this Agreement, you hereby represent that to the best of your knowledge you did not commit any act, or fail to commit any act, or do anything else while employed by IDEXX that was a breach of your duty of loyalty (including but not limited to taking any property that belongs to IDEXX or its customers) or that might result in liability to IDEXX.
|
f.
|
This Agreement may not be altered, amended or modified except in writing signed by both IDEXX and you.
|
g.
|
If any provision of this Agreement shall be found by a court of competent jurisdiction to be invalid or unenforceable, in whole or in part, then such provision shall be construed and/or modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law, as if such provision had been originally incorporated herein as so modified or restricted, or as if such provision had not been originally incorporated herein, as the case may be. The parties further agree to seek a lawful substitute for any provision found to be unlawful; provided, that, if the parties are unable to agree upon a lawful substitute, the parties desire and request that a court or other authority called upon to decide the enforceability of this Agreement modify this Agreement so that, once modified, this Agreement will be enforceable to the maximum extent permitted by the law in existence at the time of the requested enforcement.
|
18.
|
Reimbursement: Cessation of Payment
. If you or your heirs or assigns breach any of the terms of this Agreement or breach any other obligation owed to the Released Parties (as defined in the Release), including, without limitation, the Ancillary Agreements, IDEXX shall have, in addition to any other remedies, the right to cease any and all future payments under this Agreement provided in consideration thereof and the right to recover any and all payments previously made under this Agreement in consideration thereof, or any amount of actual damages proven by IDEXX, if greater (except for the portion of the consideration received by you in consideration for your release of age discrimination claims, which the parties hereby agree shall be equal to $1,000). Further, you shall indemnify and hold harmless the Released Parties from and against all liability, costs and expenses, including attorneys’ fees, arising out of said breach. You and IDEXX acknowledge that the remedy set forth hereunder is not to be considered a form of liquidated damages and the tender back shall not be the exclusive remedy hereunder. In the event of a breach of the terms of this Agreement or breach of any other obligation owed to the Released Parties as set forth in the Release, IDEXX shall contact you via email or written correspondence and provide you with five (5) business days’ notice to allow for your response to such breach prior to the cessation of any and all future payments under this Agreement.
|
19.
|
Counterparts
. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. Signatures delivered in .pdf format shall be deemed effective for all purposes.
|
1)
|
I have reviewed this report on Form 10-Q for the quarter ended June 30, 2018 of IDEXX Laboratories, Inc.;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: August 1, 2018
|
/s/ Jonathan W. Ayers
|
|
Jonathan W. Ayers
|
|
Chairman, President and Chief Executive Officer
|
|
(Principal Executive Officer)
|
1)
|
I have reviewed this report on Form 10-Q for the quarter ended June 30, 2018 of IDEXX Laboratories, Inc.;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report, based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5)
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: August 1, 2018
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/s/ Brian P. McKeon
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Brian P. McKeon
|
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Executive Vice President, Chief Financial Officer
and Treasurer
|
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(Principal Financial Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
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/s/ Jonathan W. Ayers
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August 1, 2018
|
Jonathan W. Ayers
Chairman, President and Chief Executive Officer
|
|
|
|
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(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
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/s/ Brian P. McKeon
|
August 1, 2018
|
Brian P. McKeon
Executive Vice President, Chief Financial Officer
and Treasurer
|
|
|
|
|