IDEXX Laboratories (IDXX) Q4 2006 earnings summary

Executive summary

• Revenue grew 16% in 2006; organic revenue growth accelerated to 14% from 10% in 2005, while diluted EPS rose 23% on both reported and adjusted bases.

• Growth reflected favorable animal-health market dynamics and continued investment in products, technology, and customer value.

Financial highlights

• Total revenue was $739.1M, up from $638.1M in 2005; income from operations was $127.9M, versus $115.3M.

• Net income was $93.7M, versus $78.3M; diluted EPS was $2.84, versus $2.30.

• Operating cash flow was $109.8M and free cash flow was $64M in 2006.

Outlook and guidance

• Long-term financial goals remain double-digit organic revenue growth and mid-teens EPS growth, supported by new products, customer adoption, and sales execution.

• Water testing is expected to deliver steady low- to mid-single-digit growth and remain a long-term source of profit and cash flow.

• Planned launches include a blood-coagulation instrument by end-2007 and Catalyst Dx and SNAPshot Dx by early 2008.