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Segment Reporting
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Segment Reporting

Note 14.     Segment Reporting 

  

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. Our CODM is our Chief Executive Officer. Our reportable segments include diagnostic and information technology-based products and services for the veterinary market, which we refer to as the Companion Animal Group (“CAG”), water quality products (“Water”) and diagnostic products and services for livestock and poultry health and to ensure the quality and safety of milk and food, which we refer to as Livestock, Poultry and Dairy (“LPD”). Our Other operating segment combines and presents products for the human point-of-care medical diagnostics market with our pharmaceutical product line and our out-licensing arrangements because they do not meet the quantitative or qualitative thresholds for reportable segments.



Certain costs are not allocated to our operating segments and are instead reported under the caption “Unallocated Amounts”. These costs include costs that do not align with one of our existing operating segments or are cost prohibitive to allocate, which primarily consist of our R&D function, regional or country expenses, certain foreign currency revaluation gains and losses on monetary balances in currencies other than our subsidiaries’ functional currency and unusual items. Corporate support function costs (such as information technology, facilities, human resources, finance and legal), health benefits and incentive compensation are charged to our business segments at pre-determined budgeted amounts or rates. Differences from these pre-determined budgeted amounts or rates are captured within Unallocated Amounts.



Effective January 1, 2016, we modified our management reporting to the CODM to provide a more comprehensive view of the performance of our operating segments by including the capitalization of variances between standard and actual manufacturing costs, which adjusts the timing of cost recognition from when the variance is created to the period in which the related inventory is sold. Prior to January 1, 2016, the capitalization and subsequent recognition of these variances were not allocated to our operating segments and were instead reported under the caption “Unallocated Amounts.”



The segment gross profit and income (loss) from operations within this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2015, has been retrospectively revised to reflect the changes to our segment performance metrics described above. 



The following is a summary of segment performance for the three and nine months ended September  30, 2016 and 2015 (in thousands):





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three Months Ended September 30,

 



 

 

CAG

 

Water

 

LPD

 

Other

 

Unallocated Amounts

 

Consolidated Total

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

 385,288 

 

$

 27,862 

 

$

 29,799 

 

$

 5,359 

 

$

 -

 

$

 448,308 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

 77,493 

 

$

 12,442 

 

$

 3,026 

 

$

 1,008 

 

$

 (5,510)

 

$

 88,459 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (6,935)

 

Income before provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 81,524 

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 25,072 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 56,452 

 

Less: Net loss attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (3)

 

Net income attributable to IDEXX  Laboratories, Inc. stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 56,455 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

 344,081 

 

$

 25,957 

 

$

 30,448 

 

$

 5,901 

 

$

 -

 

$

 406,387 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

 61,483 

 

$

 12,642 

 

$

 6,061 

 

$

 569 

 

$

 (8,860)

 

$

 71,895 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (7,066)

 

Income before provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 64,829 

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 20,600 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 44,229 

 

Less: Net income attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 6 

 

Net income attributable to IDEXX  Laboratories, Inc. stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 44,223 

 

 





 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

For the Nine Months Ended September 30,

 



 

 

CAG

 

Water

 

LPD

 

Other

 

Unallocated Amounts

 

Consolidated Total

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

 1,143,150 

 

$

 79,243 

 

$

 93,511 

 

$

 16,523 

 

$

 -

 

$

 1,332,427 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

 229,858 

 

$

 34,864 

 

$

 12,665 

 

$

 (749)

 

$

 (10,224)

 

$

 266,414 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (21,695)

 

Income before provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 244,719 

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 75,036 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 169,683 

 

Less: Net income attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 7 

 

Net income attributable to IDEXX  Laboratories, Inc. stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 169,676 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

 1,020,232 

 

$

 72,706 

 

$

 93,777 

 

$

 15,492 

 

$

 -

 

$

 1,202,207 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

 183,086 

 

$

 33,954 

 

$

 19,596 

 

$

 (686)

 

$

 (2,949)

 

$

 233,001 

 

Interest expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (19,645)

 

Income before provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 213,356 

 

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 65,611 

 

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 147,745 

 

Less: Net income attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 16 

 

Net income attributable to IDEXX  Laboratories, Inc. stockholders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

 147,729 

 



The following is a summary of revenue by product and service category for the three and nine months ended September  30, 2016 and 2015  (in thousands): 



 

 

 

 

 

 

 

 

 

 

 

 



 

For the Three Months Ended

 

For the Nine Months Ended



 

September 30,

 

September 30,



 

 

 2016 

 

 

 2015 

 

 

 2016 

 

 

 2015 

CAG segment revenue:

 

 

 

 

 

 

 

 

 

 

 

 

CAG Diagnostics recurring revenue:

 

$

 324,233 

 

$

 290,502 

 

$

 968,041 

 

$

 869,413 

IDEXX VetLab® consumables

 

 

 113,963 

 

 

 98,957 

 

 

 336,483 

 

 

 298,093 

IDEXX VetLab service and accessories

 

 

 14,878 

 

 

 13,675 

 

 

 43,461 

 

 

 41,223 

Rapid assay products

 

 

 48,720 

 

 

 47,534 

 

 

 147,583 

 

 

 143,353 

Reference laboratory diagnostic and consulting services

 

 

 146,672 

 

 

 130,336 

 

 

 440,514 

 

 

 386,744 

CAG Diagnostics capital - instruments

 

 

 31,625 

 

 

 25,989 

 

 

 87,119 

 

 

 70,166 

Veterinary software, services and diagnostic imaging systems (1)

 

 

 29,430 

 

 

 27,590 

 

 

 87,990 

 

 

 80,653 

CAG segment revenue

 

 

 385,288 

 

 

 344,081 

 

 

 1,143,150 

 

 

 1,020,232 



 

 

 

 

 

 

 

 

 

 

 

 

Water segment revenue

 

 

 27,862 

 

 

 25,957 

 

 

 79,243 

 

 

 72,706 

LPD segment revenue

 

 

 29,799 

 

 

 30,448 

 

 

 93,511 

 

 

 93,777 

Other segment revenue

 

 

 5,359 

 

 

 5,901 

 

 

 16,523 

 

 

 15,492 

Total revenue

 

$

 448,308 

 

$

 406,387 

 

$

 1,332,427 

 

$

 1,202,207 

(1) During the second quarter of 2016, we renamed our customer information management and diagnostic imaging systems product and service category in the CAG segment to veterinary software, services and diagnostic imaging systems. Financial results were not adjusted as a result of this name change.