December 19, 2010

The Bottom Line: Idexx passes the test

Growing markets for quick, accurate ways to test for animal diseases, and for contaminants in water and milk, drive the health of a Westbrook company.

By J. Hemmerdinger jhemmerdinger@pressherald.com
Staff Writer

WESTBROOK - It's good to be a dog, even when you get dragged to the vet.

20101206_IDEXX
click image to enlarge

Vanessa Vigue, a scientific research associate, performs a test at Idexx Laboratories in Westbrook.

Gordon Chibroski/Staff Photographer

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Idexx’s SNAP tests have multiple dotted test strips for determining animal diseases.

Gordon Chibroski/Staff Photographer

IDEXX LABORATORIES

HEADQUARTERS: Westbrook

HISTORY: Idexx was founded in 1983 by David Shaw, now a partner at the Portland-based investment firm Black Point Group. The company launched with diagnostic kits and computerized monitoring systems for poultry, cattle and swine producers. Soon, Idexx entered the so-called companion animal industry, selling products that test dogs and cats. Today, the company sells products to 50,000 veterinary clinics worldwide and every year makes some 26 million SNAP tests, a product that lets vets quickly check pets for heartworm, Lyme disease and other illnesses. Idexx also sells products that test for contaminants in water and milk.

EMPLOYEES: 4,700, including 1,600 in Westbrook

CEO: Jonathan Ayers

WORTH NOTING

Since Ayers took the helm in 2002, Idexx revenue nearly tripled from $386 million to more than $1 billion, and the number of staff in Maine has doubled to 1,600.

Nearly 40 percent of the company’s revenues come from international sales, in 168 countries.

Idexx has manufacturing plants in Maine, Georgia, the United Kingdom, France and Switzerland.

FINANCIALS: Idexx reported revenue of $1.03 billion in 2009, nearly the same as in 2008. The company expects 2010 revenue to be $1.1 billion.

STOCK: IDXX. Trading around $70 per share.

Many veterinarians today have sophisticated blood-testing equipment. In minutes, pets can be screened for a host of nasty diseases, like heartworm and Lyme disease.

That's also good for Idexx Laboratories, the Westbrook-based firm that makes testing equipment found in many veterinarians' offices.

In the last eight years, Idexx, one of Maine's largest publicly traded companies, has doubled its work force in Maine and tripled its worldwide revenue. More expansion is projected.

Jonathan Ayers, the company's president and CEO, attributes Idexx's growth to strong research and development and new products he said lead the market.

"It's like Apple created the iPhone and the iPod ... The stuff we sell today didn't exist before we launched it," said Ayers recently at the company's Westbrook plant.

Take for, example, the SNAP 4Dx, a product that looks like a home pregnancy test, but detects disease in animal blood. The device is 2½ inches long and made of white plastic. There's a trough at one end to catch blood, and a testing strip that changes color to indicate a disease.

Ayers said SNAPs make testing for diseases simple for vets and pets. The company turns out some 26 million SNAP tests each year in Westbrook.

The SNAP test isn't new -- the first version tested for heartworm and was released in the 1980s. But the company keeps updating it, making it better.

The latest 4Dx, released in 2007, tests for four diseases at once, including heartworm and Lyme disease, an infection Ayers said used to require thorough lab work to detect.

"You put blood into it, and if the dots light up, you have a disease," said Ayers.

David Shaw, now partner at Portland-based investment firm Black Point Group, launched Idexx in Portland in 1983. Idexx initially had five staffers and sold diagnostic tests for farm animals. Pet tests came a few years later.

In 1991, the company went public, trading under the symbol IDXX, and relocated to leased space in Westbrook's Five Star Industrial Park. Revenue was more than $100 million in 1994.

Jeffrey Langan succeeded Shaw as CEO in 1999, but Shaw returned that year when Langan left the company. Ayers became head in 2002.

Expansion continued, and in 2006 Idexx bought the 450,000- square-foot Westbrook complex on what is now Idexx Drive.

The purchase price was $17.85 million, according to the Westbrook town assessor's office.

The facility is massive, with long, dimly lit halls lined with the lockers of lab workers. In adjacent rooms, employees in white lab coats and safety glasses test Idexx products and assemble sophisticated blood analyzers. The building has a bistro, a cafe and an outdoor courtyard with lunch tables. Idexx also has a 55,000-square-foot call center on Thomas Drive in Westbrook and 23,000 square feet of space in the Riverfront Plaza building downtown, for its IT group.

In 2009, Idexx revenue topped $1 billion. That year, the company spent $65 million on research and development.

The company now has some 5,000 staffers, including 1,700 employees in Maine. The median salary of Maine employees is $48,000 per year, according to the company.

Idexx sells products in 168 countries, and roughly 40 percent of its sales are international.

The company's stock climbed from around $55 in August to more than $70 on Friday.

Dawn Brock, a senior analyst covering health care services at New York City investment firm Kaufman Bros., said Idexx has gained a reputation for its products.

"They have leading-edge technology and innovation. It is a competitive advantage," she said.

The company also has a fairly continuous stream of revenue, Brock said. They sell testing instruments, such as blood-analyzing machines, but also individual test slides.

(Continued on page 2)

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