Presented by Jonathan Ayers Chairman and CEO May 8, 2013
Annual Meeting of Stockholders 2013
Agenda Introduction of Directors and Officers Jonathan W. W Ayers, Ayers Chairman and CEO
Business Meeting Jeffrey A. Fiarman, General Counsell and Secretary J ff A Fi G lC dS t
Corporate Presentation Jonathan Ayers, Chairman and CEO
Questions & Answers Jonathan Ayers, Chairman and CEO
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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Safe Harbor Disclaimer This presentation contains statements about the Company’s business prospects and estimates of the Company’s financial results for future periods that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. g expectations of These statements are based on management's future events as of the date of this presentation, and the Company assumes no obligation to update any forward-looking statements as a result of new information or future events or developments. Actual results could differ materially from management’s expectations. Factors that could cause or contribute to such differences are described in the Company’s Company s Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, in the section captioned “Risk Factors.”
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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IDEXX Purpose To be a great company that creates exceptional long-term value for our customers customers, employees and shareholders by enhancing the health and well-being of pets, people and livestock.
Guiding Principles • Achieve and sustain market leadership
• Exceed ceed tthe ee expectations pectat o s o of ou our custo customers es • Empower and reward our employees • Innovate with intelligence • Cultivate entrepreneurial spirit • Contribute to our communities
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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IDEXX Laboratories, Inc. 2012 Revenue: $1 293 million 2012 Revenue: $1,293 million Livestock and Poultry Diagnostics
Companion Animal Group:
7% Water and Other
10%
83%
Serving pet healthcare providers with advanced medical diagnostic and di l di ti d information technology
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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Companion Animal Group 2012 Revenue: $1 072 million 2012 Revenue: $1,072 million ($ millions)
Practice Practice Management, Client Communications & Digital Imaging 1 8% S t Systems
Diagnostic Information Information
($85.6 )
medical insight client value
92%1 ($986.6)
1The
revenue percent contribution to the Companion Animal Group’s total revenues of $1,072 million. © 2013 IDEXX Laboratories, Inc. All rights reserved.
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Pet Health Network® Pro1 and Petly® Cloud‐based client communication tools that drive practice growth Cloud‐based client communication tools that drive practice growth
1Pet
Health Network Pro is part of the Practice Management, Client Communications and Digital Imaging product line of the Companion Animal Group
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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Companion Animal Group Diagnostics Medical insight provided across three modalities Medical insight provided across three modalities ($ millions)
Diagnostic Information Information medical insight client value
92%1 ($986.6)
1The
revenue percent contribution to the Companion Animal Group’s total revenues of $1,072 million. © 2013 IDEXX Laboratories, Inc. All rights reserved.
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Companion Animal Group Diagnostics Medical insight provided across three modalities Medical insight provided across three modalities ($ millions)
38%1
Reference Laboratory Diagnostic and Consulting Services
($407.3) ($407 3)
Point‐of‐Care Rapid Assays p y (SNAP® Tests)
15%1 ($162.2)
39%1 ($417 1) ($417.1)
Point‐of‐care Instruments (IDEXX VetLab®) and Associated Consumables
1The
revenue percent contribution to the Companion Animal Group’s total revenues of $1,072 million. © 2013 IDEXX Laboratories, Inc. All rights reserved.
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The IDEXX Diagnostic Advantage Diagnostic information provided with three world‐class modalities Di ti i f ti id d ith th ld l d liti that are accessed in one place, with intuitive, insightful visualization
Adding value to the most recent blood work by providing cloud-based access to all the patient’s historical results for comparison and trending in an intuitive, interactive format © 2013 IDEXX Laboratories, Inc. All rights reserved.
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The power of trending versus a single data point The power of trending versus a single data point
Graphed result in the context of the historical trend
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© 2013 IDEXX Laboratories, Inc. All rights reserved.
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IDEXX Point-of-Care Instruments and Rapid Assays The value of Real‐Time Care™ The value of Real Time Care
2:00 pm Check in
2:05 pm Exam
2:12 pm Test
2:21 pm Results and Treatment Plan
2:27 pm Check out
Insightful information during the patient visit results in . . . • “Wow” pet-owner experience • Greater compliance to follow-on recommendations • Higher practice income per visit • Higher staff productivity
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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IDEXX VetLab® In-house Analyzers and Consumables Uniquely designed to enable Real‐Time Uniquely designed to enable Real Time Care Care™
• Comprehensive suite of instruments that work together • Razor-blade business model – 78% recurring i revenue
• Flagship g p chemistry y analyzer y – Catalyst y Dx® • Superior speed, menu, integration • Just announced: 10,000th analyzer installation
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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Hematology Instruments: LaserCyte® Dx and ProCyte Dx® Fast and complete hematology results using reference lab technologies Fast and complete hematology results using reference lab technologies
ProCyte Dx • Premier hematology point-of-care solution on the market today
Next-generation LaserCyte Dx • Laser flow cytometry • Single-dose reagents
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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IDEXX VetLab® Station (IVLS) The information hub for the IDEXX VetLab The information hub for the IDEXX VetLab® suite
Real‐time Real time connection with IDEXX and Vetconnect PLUS
Integration of all Integration of all IDEXX In‐house instruments
Back‐and‐forth communication with IDEXX and third party practice management software practice management software
With over 19,000 installed globally, IVLS is a key foundation to the IDEXX information technology eco-system eco system
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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Reference Laboratory and Consulting Services Global network of 60 labs serving 37 countries Global network of 60 labs serving 37 countries
IDEXX Reference Laboratories generally provide same day or early the next day results for a comprehensive menu of testing capabilities © 2013 IDEXX Laboratories, Inc. All rights reserved.
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The IDEXX-Direct® Model in Europe
• Newest lab in Leipzig, p g, Germany • Works with Ludwigsburg core lab l b tto serve practices ti in i Germany, Norway, Sweden, Finland, Denmark, Belgium and Italy
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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The North American Diagnostics Market Opportunity Little overlap between our customers for in‐house equipment Little overlap between our customers for in‐house equipment and outside lab modalities
IDEXX Outside Lab ONLY C stomers Customers
IDEXX Full Diagnostic Advantage Customers
IDEXX VetLab® ONLY customers
Prospects not using IDEXX as primary for either in house or outside in-house lab needs
36% overlap (Most customers also use IDEXX SNAP® kits in some fashion)
* IDEXX VetLab refers to customers who use VetTest® or Catalyst Dx® for their in-house chemistry diagnostics IDEXX Outside Lab refers to customers who use IDEXX Reference Labs as their primary outside lab. © 2013 IDEXX Laboratories, Inc. All rights reserved.
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North American Companion Animal Diagnostics 2013 Sales and Marketing Transformation 2013 Sales and Marketing Transformation Sales Professional Coverage Specialist Role (old) In-House Equipment Specialists
2x
Outside Lab Specialists
1x
Veterinary Diagnostic Consultant Role (New)
3x +
– Simplicity: Single point of contact for diagnostics
– Expansion: 13% by Q4
– Smaller Territories: 60% increase in customer calls per sales professional
– Tenure & Retention: Deeper customer relationships
– Greater Coverage
I Increased d productivity d ti it and d capacity it tto supportt accelerated l t d revenue growth th in the North American Companion Animal Business © 2013 IDEXX Laboratories, Inc. All rights reserved.
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Livestock and Poultry Diagnostics, Water and Other Livestock and Poultry Diagnostics 2012 Revenue: $87 million
Water and Other 2012 Revenue: $134 million
7% 10%
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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IDEXX Global Presence 2012 Revenue by region 2012 Revenue by region Canada 5%
Europe, the Middle East and Africa d Af i
23%
59%
A i P ifi R i Asia Pacific Region
United States
11% 2%
Latin America Latin America © 2013 IDEXX Laboratories, Inc. All rights reserved.
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Annual Revenues ($ millions)
$1,024
$1,032
2008
2009
$1,103
$1,219
$1,293 $1,293
2011
2012
$1,380 – $1 380 $1,390
$923 $923
2007
2010
2013
1
1 Represents Company 2013 revenue guidance of $1.38 Represents Company 2013 revenue guidance of $1 38 ‐
$1 39 billion as provided in the Company’ss press release dated April 23, 2013. $1.39 billion as provided in the Company press release dated April 23 2013 This slide shall not be deemed to be a reiteration or affirmation of that guidance or a guaranty that the Company’s expectations have not changed since the date of that press release.
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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Fully-diluted EPS
$3.17
$3.40 ‐ 3 46 3.46
$2.78 $2.37 $1.87
$ $2.01
$1.46
2007
2008
2009
2010
2011
2012
1
2013
1 Represents Company 2013 fully‐diluted EPS guidance of $3.40 ‐
$3.46 as provided in the Company’s press release dated April 23, 2013 . This slide shall not be deemed to be a reiteration or affirmation of that guidance or a guaranty that the Company’s expectations Thi lid h ll t b d dt b it ti ffi ti f th t id t th t th C ’ t ti h have not t changed since the date of that press release.
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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IDEXX Margin and Free Cash Flow Progression ($ millions)
2010
2011
2012
Revenue
$ 1,103
$ 1,219
$ 1,293
Operating Margin
18.5%
19.4%
20.3%
$ 158
$ 184
$ 186
112%
114%
104%
Free Cash Flow1 (% of net income)
1 Free cash flow is a non‐U.S. GAAP measure. We calculate free cash flow as cash generated from operations, excluding tax benefits
attributable to share‐based compensation arrangements, reduced by our investments in fixed assets. 2012 free cash flow excludes our royalty prepayment in the first quarter of 2012. We feel free cash flow is a useful measure because it indicates the cash the ro alt prepa ment in the first q arter of 2012 We feel free ash flo is a sef l meas re be a se it indi ates the ash the operations operations of the business are generating after appropriate reinvestment for recurring investments in fixed assets that are required to operate the business. We believe this is a common financial measure useful to further evaluate the results of operations. Please refer to the appendix for a calculation of free cash flow for the years ended December 31 2010, 2011 and 2012. © 2013 IDEXX Laboratories, Inc. All rights reserved.
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Financial Results ($ millions except for EPS)
Q1 2012
Q1 2013
Full Year 2011 2012
Revenue Growth
$
323
$
332 3%
$ 1 1,219 219
$ 1 1,293 293 6%
EPS: Diluted Growth
$
0.72
$ 0.81 12%
$ 2.78
$
3.17 14%
1First quarter 2013 EPS includes the retroactive extension of the federal research and development (“R&D”) tax credit, which added $0.05 to EPS, and a $4.1
million charge resulting from a third‐party service provider’s bankruptcy, which reduced EPS by $0.05. 2012 EPS includes a $3.5 million milestone payment earned related to the 2008 sale of product rights previously included in our pharmaceutical product line, which added $0.04 to EPS. 2011 EPS included a similar milestone payment, a gain from the sale of certain raw material inventory in connection with the restructuring of our pharmaceutical business and a benefit from the federal research and development tax credit, all of which contributed $0.08 to EPS. b fi f h f d l h dd l di ll f hi h ib d $0 08 EPS
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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IDEXX Balance Sheet March 31 2013 March 31, 2013 ($ millions)
Cash
228
Debt
262
Net debt Equity q y
34 631
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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Westbrook Expansion Reaching for the Gold in LEED certification Reaching for the Gold in LEED certification
February April
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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Sustainability at IDEXX Sustaining our communities the environment and employee well‐being Sustaining our communities, the environment and employee well‐being
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Multi-year Emissions Audit of World Campus, Westbrook, Maine
tCO2e e* per FFTE
8 7 6 5 4 3 2 1 0 2009
2010
2011
2012
2009 2010 2011 2012 *tCO2e = Tons of CO2 and CO2 equivalents per full-time employee equivalent (FTE) Audit data provided by Sustainserv, Inc.
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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IDEXX Purpose To be a great company that creates exceptional long-term value for our customers, employees and shareholders by enhancing th health the h lth and d well-being ll b i off pets, t people l and d livestock. li t k
Guiding Principles • Achieve and sustain market leadership • Exceed ceed tthe ee expectations pectat o s o of ou our custo customers es • Empower and reward our employees • Innovate with intelligence • Cultivate entrepreneurial spirit • Contribute to our communities
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© 2013 IDEXX Laboratories, Inc. All rights reserved.
Appendix
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© 2013 IDEXX Laboratories, Inc. All rights reserved.
Free Cash Flow1 ($ millions) Twelve Months Ended
Net cash provided by operating activities Royalty prepayment to obtain exclusive patent rights Financing cash flows attributable to tax benefits from share-based compensation arrangements Purchases of property and equipment Free cash flow % of net income
December 31,
December 31,
December 31,
2010
2011
2012
$179
$221
$230
0
0
6
18
16
15
(39)
(53)
(65)
$158
$184
$186
112%
114%
104%
1 Free cash flow is a non‐U.S. GAAP measure. We calculate free cash flow as cash generated from operations, excluding tax benefits
attributable to share‐based compensation arrangements, reduced by our investments in fixed assets. 2012 free cash flow excludes our royalty prepayment in the first quarter of 2012. We feel free cash flow is a useful measure because it indicates the cash the royalty prepayment in the first quarter of 2012 We feel free cash flow is a useful measure because it indicates the cash the operations operations of the business are generating after appropriate reinvestment for recurring investments in fixed assets that are required to operate the business. We believe this is a common financial measure useful to further evaluate the results of operations.
© 2013 IDEXX Laboratories, Inc. All rights reserved.
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