IDEXX Laboratories' CEO Discusses Q3 2011 Results - Earnings Call Transcript

In addition, any forward-looking statements represent IDEXX’s estimates only as of today and should not be relied upon as representing the company’s estimates as of any subsequent date. The company disclaims any obligation to update or revise any forward-looking statements in the future even if its estimates or expectations change.

Also during this call, we will be discussing certain financial measures not prepared in accordance with Generally Accepted Accounting Principles or GAAP. A definition of these non-GAAP financial measures is provided in our earnings release, which can be found on our website idexx.com.

Finally, we plan to end today’s call by 10 AM Eastern and in order to allow broad participation in the Q&A, we ask that each participant limit his or her questions to one with one follow-up as necessary. We do appreciate you may have additional questions, so please feel free to get back into the queue and if time permits we will be more than happy to take your additional questions.

I would now like to turn the conference over to Merilee Raines. Please go ahead.

Merilee Raines

Good morning and thanks for joining our call today. The quarter's financial performance overall was largely in line with our expectations at the time of our second quarter call in July.

Our third quarter revenues of $301 million grew organically 8% after adjusting for a 4% favorable impact from currency. The mix of revenues was somewhat different from our thinking back in July with relatively stronger performance in out VetLab instrument placements offsetting a somewhat lighter performance in our Digital Radiography and Practice Management product line.

Diluted earnings per share of $0.66 were slightly above our expectation due largely to the receipt of the final balance owed to us of just over $1 million for inventory sold when we divested certain pharmaceutical product lines at the end of 2008. this payment which contributed $0.01 to earnings was recorded as a reduction to G&A expense. Beyond this payment, lower operating expenses offset a slightly lower gross margin primarily a function of revenue mix.

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