UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

UNITED STATES	(Mark One)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
☒		(Mark One)
☒		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019

		For the fiscal year ended December 31, 2017
or
☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________.

COMMISSION FILE NUMBER: 0-19271

IDEXX LABORATORIES, INC.

(Exact name of registrant as specified in its charter)

		For the transition period from _______________ to _______________.
Delaware			01-0393723
COMMISSION FILE NUMBER: 0-19271
IDEXX LABORATORIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE (State or other jurisdiction of incorporation   or organization) ONE							(IRS Employer Identification No.)
One IDEXX DRIVE, WESTBROOK, MAINE Drive	Westbrook	Maine	04092
(Address of principal executive offices)	01-0393723 (I.R.S. Employer Identification No.) 04092		(ZIP Code)
Registrant’s telephone number, including area code:  207-556-0300

207-556-0300

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.10 par value per share	IDXX	NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐No☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☒  No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” andfiler,” “smaller reporting company”company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐ (Do not check if a smaller reporting company)	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Based on the closing sale price on June 30, 2017 2019 of the registrant’s Common Stock, the last business day of the registrant’s most recently completed second fiscal quarter, as reported by the NASDAQ Global Select Market, the aggregate market value of the voting stock held by non-affiliates of the registrant was $ 14,011,555,111.$23,368,790,688. For these purposes, the registrant considers its directors and executive officers to be its only affiliates.

The number of shares outstanding of the registrant’s Common Stock was 87,122,79485,329,642 on February 6, 2018.

10, 2020.

DOCUMENTS INCORPORATED BY REFERENCE

Part III—Specifically identified portions of the Company’s definitive Proxy Statement to be filed in connection with the Company’s 20182020 annual meeting of stockholders (the “2018“2020 Annual Meeting”), to be held on May 9, 2018,6, 2020, are incorporated herein by reference.

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GLOSSARY OF TERMS AND SELECTED ABBREVIATIONS

GLOSSARY OF TERMS AND SELECTED ABBREVIATIONS
Term/Abbreviation		Definition
AOCI
Term/Abbreviation		Definition
2015 Amended Agreement		Amended and Restated Multi-Currency Note Purchase and Private Shelf Agreement executed in June 2015
2021 Notes		$50 million of 3.32% Series A Senior Notes due July 21, 2021
2022 Notes		$75 million of 3.25% Series A Senior Notes due February 12, 2022
2023 Notes		$75 million of 3.94% Series A Senior Notes due December 11, 2023
2024 Notes		$75 million of 3.76% Series B Senior Notes due July 21, 2024
2025 Series B Notes		$75 million of 4.04% Series B Senior Notes due December 11, 2025
2025 Series C Notes		€88.9 million of 1.785% Series C Senior Notes due June 18, 2025
2026 Notes		$75 million of unsecured 3.72% Senior notes due September 4, 2026
2027 Notes		$75 million of 3.72% Series B Senior Notes due February 12, 2027
Adjusted operating income		A non-GAAP financial measure that represents total Company operating income adjusted for the 2015 software impairment charge. Adjusted operating income should be considered in addition to, and not as a replacement for or as a superior measure to, operating income reported in accordance with U.S. GAAP. Management believes that reporting adjusted operating income provides useful information to investors by facilitating easier comparisons of our operating income performance with prior and future periods and to the performance of our peers.
AOAC RI		Association of Analytical Communities Research Institute
AOCI		Accumulated other comprehensive income or loss
APHIS ASC		Animal and Plant Health Inspector Service Accounting Standards Codification
ASU 2014-09		Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), also referred to as the “New Revenue Standard”
ASU 2016-02		ASU 2016-02, Leases (Topic 842) ; also referred to as the "New Leasing Standard"
ASU 2016-09 2016-16		ASU 2016-09, Compensation-Stock Compensation2016-16, Income Taxes (Topic 718)740): Improvements to Employee Share-Based Payment Accounting Intra-Entity Transfers of Assets Other Than Inventory,
ASU 2017-01 CAG		ASU 2017-01, Business Combinations (Topic 805): Clarify the Definition of a Business
ASU 2017-09		ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting
BSE		Bovine spongiform encephalopathy
CAG		Companion Animal Group, a reporting segment that provides veterinarians diagnostic products and services and information management solutions that enhance the health and well-being of pets
cGMP CDOR		Canadian Dollar Offered Rate, a rate at which banks commit to lending to companies
cGMP		The FDA’s current Good Manufacturing Practice regulations
Credit Facility		Our $850 million five-year unsecured revolving credit facility under an amended and restated credit agreement that was executed in December 2015, also referred to as line of credit
EMA		Extended maintenance agreements
EPA		U.S. Environmental Protection Agency
EPS		Earnings per share, if not specifically stated, EPS refers to earnings per share on a diluted basis
EU		European Union
FASB		U.S. Financial Accounting Standards Board
FDA		U.S. Food and Drug Administration
FDC Act FeLV		Food, Drug and Cosmetics Act
FeLV		Feline leukemia virus
FIV		Feline immunodeficiency virus, similar to the virus that leads to AIDS in humans
FTC Instrument rebate programs		U.S. Federal Trade Commission Our customer instrument rebate programs, previously referred to as IDEXX Instrument Marketing Programs, which require an instrument purchase and provide customers the opportunity to earn future rebates based on the volume of products and services they purchase over the term of the program
IVLS		IDEXX VetLab Station, connects and integrates the diagnostic information from all the IDEXX VetLab analyzers and thus provides reference laboratory information management system capability
Kits and consumables		Rapid assay kits and IDEXX VetLab consumables
LPD LIBOR		London Interbank Offered Rate, current benchmark interest rate used between banks and used to set interest rates on loans
LPD		Livestock, Poultry and Dairy, a reporting segment that provides diagnostic products and services for livestock and poultry health and to ensureensures the quality and safety of milk and food and improve bovine reproductiveproducer efficiency
MEA OCI		Multiple element arrangements, contracts with customers that include multiple deliverables
MetLife Agreement		Multi-Currency Note Purchase and Private Shelf Agreement, entered into in December 2014
Moss		Moss Inc., a supplier of certain components used in our SNAP products and certain livestock and poultry testing kits
NASDAQ Index		The Total Return Index for the NASDAQ Stock Market (U.S. Companies) prepared by the Center for Research in Security Prices
NCIMS		National Conference of Interstate Milk Shipments
OCI		Other comprehensive income or loss
OPTI Medical		OPTI Medical Systems, Inc., a wholly-owned subsidiary of IDEXX Laboratories Inc., located in Roswell, Georgia. This business manufactures and supplies blood gas analyzers and consumables worldwide for the human point-of-care medical diagnostics market. The Roswell facility also manufactures electrolytes slides (instrument consumables) to run Catalyst One® andOne®, Catalyst Dx®Dx®, chemistry analyzers, and blood gas analyzers and consumables for the veterinary market. Alsomarket, and is also referred to as OPTI

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		OPTI.
Organic revenue growth		A non-GAAP financial measure andthat represents the percentage change in revenue, as compared to the same period for the prior year, net of the effect of changes in foreign currency exchange rates, certain business acquisitions and divestitures. Organic revenue growth should be considered in addition to, and not as a replacement for or as a superior measure to, revenues reported in accordance with U.S. GAAP, and may not be comparable to similarly titled measures reported by other companies. Management believes that reporting organic revenue growth provides useful information to investors by facilitating easier comparisons of our revenue performance with prior and future periods and to the performance of our peers.
Ortho		Ortho Clinical Diagnostics, Inc., a supplier of dry slide consumables used in our Catalyst One and Catalyst Dx Chemistry Analyzer, Catalyst One Chemistry AnalyzerAnalyzers and the VetTest Chemistry Analyzer
PACS Up-Front customer loyalty programs		Our up-front loyalty programs provides customers with incentives in the form of cash payments or IDEXX Points upon entering into multi-year agreements to purchase annual minimum amounts of future products or services
PACS		Picture archiving and communication software, our software solution for accessing, storing, and sharing diagnostic images
R&D		Research and Development

Reagent rentals		Refers to instrumentsInstruments being placed at customer sites at little or no cost in exchange for a long-term customer commitment to purchase instrument consumables. consumables
Reported revenue growth		The percentage change in revenue reported in accordance with U.S. GAAP, as compared to the same period in the prior year
S&P		Standard & Poor’s
S&P 500 Health Care Index		The index for the S&P 500 Health Care (U.S. companies) measures the performance of companies that are classified as members in the Global Industry Classification Standard of health care services sub-industry
S&P 500 Index		The S&P 500 Index is a U.S. stock market index based on the market capitalization of 500 large companies having common stock listed on the New York Stock Exchange or NASDAQ, including IDEXX
SaaS		Software-as-a-service
SDMA		Symmetrical dimethyl arginine, a biomarker that detects kidney disease
SEC		U.S. Securities and Exchange Commission
Senior Note Agreement Agreements		PrivateNote purchase agreements for the private placement of senior notes having an aggregate principal amount of approximately $600$700 million, referred to as senior notes  or long-term debt
T4		Thyroxine, a hormone produced by the thyroid gland, tested to indicate thyroid health
2017 Tax Act		The Tax Cuts and Jobs Act enacted on December 22, 2017, which hasincludes significant changes to the U.S. corporate tax system
TPE		Third-party evidence, relevant in determining revenue recognition for multiple element arrangement
U.S. GAAP		Accounting principles generally accepted in the United States of America
USDA		United States Department of Agriculture
VSOE Volume commitment programs		Vendor-specific objective evidence, relevant in determining revenue recognition for multiple element arrangements Programs that provide customers with a free or discounted instrument or system upon entering into multi-year agreements to purchase annual minimum amounts of products and services, such as our IDEXX 360 program.
Water		Water, a reporting segment that provides water microbiology testing products around the world

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IDEXX LABORATORIES, INC.

Annual Report on Form 10-K

Table of Contents

Item No.		Page No.
Item No.		Page No.
	PART I
Item 1	Business PART I	6
Item 1A1	Risk FactorsBusiness	226
Item 1A	Risk Factors	20
Item 1B	Unresolved Staff Comments	3331
Item 2	Properties	3432
Item 3	Legal Proceedings	3433
Item 4	Mine Safety Disclosures	3433
	PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3534
Item 6	Selected Financial Data	3836
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3937
Item 7A	Quantitative and Qualitative DisclosureDisclosures about Market Risk	8265
Item 8	Financial Statements and Supplementary Data	8366
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	8366
Item 9A	Controls and Procedures	8467
Item 9B	Other Information	8568
	PART III
Item 10	Directors, Executive Officers and Corporate Governance	8569
Item 11	Executive Compensation	8569
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	8669
Item 13	Certain Relationships and Related Transactions, and Director Independence	8669
Item 14	Principal Accountant Fees and Services	8669
	PART IV
	PART IV
Item 15	Exhibits, Financial Statement Schedules	8670
Item 16	Form 10-K Summary	8670
Financial Statements and Supplementary Data – Index to Consolidated Financial Statements		F-1
Exhibit Index
Signatures

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The terms “IDEXX,” “Company,” “registrant,” “we,” “us,” and “our” included in this Annual Report on Form 10-K mean IDEXX Laboratories, Inc. and all subsidiaries that are consolidated under U.S. GAAP.

We have included certain terms and abbreviations used throughout this Annual Report on Form 10-K in the "Glossary of Terms and Selected Abbreviations.” 

Our name, logo and the following terms used in this Annual Report on Form 10-K are either registered trademarks or trademarks of IDEXX Laboratories, Inc. in the United States and/or other countries: 4Dx^®, Animana^® Veterinary Software, Catalyst Dx^®, Catalyst One^®, Coag Dx^™,  Colilert^®,  Colisure^®,  Cornerstone^®,  DVMAX^®,  Enterolert^®,  Feline Triple^®,  Filta-Max^®,  Filta-Maxxpress^®,  IDEXX I-Vision CR^®,  IDEXX I-Vision DR^®,  IDEXX I-Vision Mobile^™,  IDEXX ImageBank^™, IDEXX Neo^®, IDEXX-PACS^™, IDEXX PetlySDMA^® Plans, IDEXX SDMA®, IDEXX VetLab^®,  IDEXX VPM^™,  LaserCyte^®, LaserCyte^® Dx, OPTI^®, OPTI LION™,  PetChek^®,  PetDetect^®,  Pet Health Network^®, Petly^® Plans, Practice Profile^™,  ProCyte Dx^®,  Pseudalert^®,  Quanti-Tray^®, rVetLink^®, SediVue Dx^®, SimPlate®, IDEXX SmartService^™, Smart Flow^™, SNAP^®,  SNAPduo^®,  SNAP Pro^®, SNAP^®cPL^™, SNAP^®fPL^™,  SNAPshot Dx^®, IDEXX VetAutoread^™,  VetConnect^®,IDEXXVetLab^®UA^™, VetLINK^®,  VetLyte^®,  VetStat^®,  VetTest®and VetVaultVetTest^®.

VetAutoread is a trademark of QBC Diagnostics.

໿

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This Annual Report on Form 10-K for the year ended December 31, 2017,2019, contains statements which, to the extent they are not statements of historical fact, constitute “forward-looking statements.” Such forward-looking statements about our business and expectations within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), include statements relating to future revenue growth rates, future tax benefits; business trends, earnings and other measures of financial performance;  the effect of economic downturns on our business performance; projected impact of foreign currency exchange rates; demand for our products; realizability of assets; future cash flow and uses of cash; future repurchases of common stock; future levels of indebtedness and capital spending; interest expense; warranty expense; share-based compensation expense; the adoption and projected impact of new accounting standards; future commercial efforts; future product launches; projected cost and completion of capital investments; and competition. Forward-looking statements can be identified by the use of words such as “expects,” “may,” “anticipates,” “intends,” “would,” “will,” “plans,” “believes,” “estimates,” “should,” “project,” and similar words and expressions. These forward-looking statements are intended to provide our current expectations or forecasts of future events, are based on current estimates, projections, beliefs, and assumptions, and are not guarantees of future performance. Actual events or results may differ materially from those described in the forward-looking statements. These forward-looking statements involve a number of risks and uncertainties, as more fullyincluding, among other things, the matters described under the heading “Part I, Item 1A. Risk Factors”headings "Business," "Risk Factors," "Legal Proceedings," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Quantitative and Qualitative Disclosures About Market Risk" in this Annual Report on Form 10-K. Any forward-looking statements represent our estimates only as of the day this Annual Report on Form 10-K was first filed with the Securities and Exchange Commission (“SEC”) and should not be relied upon as representing our estimates as of any subsequent date. From time to time, oral or written forward-looking statements may also be included in other materials released to the public and they are subject to the risks and uncertainties described or cross-referenced in this section. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even if our estimates or expectations change.

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PART I

ITEM 1.    BUSINESS

COMPANY OVERVIEW

IDEXX was incorporated in Delaware in 1983. We develop, manufacture, and distribute products and provide services primarily for the companion animal veterinary, livestock and poultry, dairy and water testing markets. We also sell a line of portable electrolytes and blood gas analyzers for the human point-of-care medical diagnostics market. Our primary products and services are:

·

Point-of-care veterinary diagnostic products, comprising instruments, consumables, and rapid assay test kits;

·

Veterinary reference laboratory diagnostic and consulting services;

·

Practice management and diagnostic imaging systems and services used by veterinarians;

Point-of-care veterinary diagnostic products, comprised of instruments, consumables, and rapid assay test kits;

·

Biological materials testing, laboratory diagnostic instruments and services used by the biomedical research community;

Veterinary reference laboratory diagnostic and consulting services;

·

Diagnostic, health-monitoring products for livestock, poultry and dairy;

Practice management and diagnostic imaging systems and services used by veterinarians;

·

Products that test water for certain microbiological contaminants; and

Health monitoring, biological materials testing, laboratory diagnostic instruments, and services used by the biomedical research community;

·

Point-of-care electrolytes and blood gas analyzers used in the human point-of-care medical diagnosticsmarket.

Diagnostic, health-monitoring products for livestock, poultry, and dairy;

Products that test water for certain microbiological contaminants; and

Point-of-care electrolytes and blood gas analyzers used in the human point-of-care medical diagnostics market.

Our purpose guides our strategy: to be a great company that creates exceptional long-term value for our customers, employees, and shareholdersstockholders by enhancing the health and well-being of pets, people, and livestock.

DESCRIPTION OF BUSINESS BY SEGMENT

We operate primarily through three business segments: diagnostic

Companion Animal Group (“CAG”) - Diagnostic and information technology-basedmanagement-based products and services for the veterinary market, which we refer to as the Companion Animal Group (“CAG”); watermarket.

Water quality products (“Water”); - Design, development, manufacture, and diagnosticdistribution of products used in the detection of various microbiological parameters in water.

Livestock, Poultry and Dairy (“LPD”) - Diagnostic products and services for livestock and poultry health and to ensure the quality and safety of milk and food, and improve bovine reproductive efficiency, which we refer to as Livestock, Poultry and Dairy (“LPD”).  producer efficiency.  

Our Other operating segment combines and presents products for the human point-of-care medical diagnostics market (“OPTI Medical”) with our pharmaceutical product line and our out-licensing arrangements because they do not meet the quantitative or qualitative thresholds for reportable segments.

The performance of our business is particularly subject to various risks that are associated with doing business internationally. For the year ended December 31, 2017,2019, sales of products and services to customers outside the U.S. accounted for approximately 39 percent38% of our overall revenue. See “Part I, Item 1A. Risk Factors”, “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and "Part II, Item 8. Financial Statements and Supplementary Data, Note 1516. Segment Reporting" to the consolidated financial statements for the year ended December 31, 2017,2019, included in this Annual Report on Form 10-K for more information about our segments and revenue from customers outside of the U.S.

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We believe that the breadth of our full diagnostic solution, including novel products and services developed and made available only by IDEXX, as well as the seamless software integration of our offering compriseprovide a unique competitive advantage providingby giving veterinarians with the tools and services to offer advanced veterinary medical care. We believe that with the use of our products and services, veterinary practices significantly improve the quality of veterinary care provided to their patients, increase staff efficiencies, and effectively communicate the value of this medical care to the pet owner. We believe that these capabilities, enabled by the use of IDEXX products and services, improve the financial health of the veterinary practice.

CAG Diagnostics

We provide diagnostic capabilities that meet veterinarians’ diverse needs through a variety of modalities, including in-clinic diagnostic solutions and outside reference laboratory services. Regardless of modality utilized, veterinarians are provided with clinically relevant data which is integrated within our information management technologies. The result is a comprehensive view of patient diagnostic information that is easily accessible by both the veterinarian and pet owner.

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Integrated Diagnostic Information Management

VetConnect PLUS is a cloud-based technology that enables veterinarians to access and analyze patients’ data from all of IDEXX’s diagnostic modalities. These integrated diagnostic results provide the veterinarian with a visualization of patient-specific testing results, allowing the veterinarian to easily see and trend diagnostic results, enabling greater medical insight and enhanced decision making.decision-making. In addition, VetConnect PLUS provides instant mobile or browser-based access to results, which can be printed or emailed to pet owners and other veterinarians. In this way, VetConnect PLUS can aid veterinarians and practice staff in engaging the pet owner in the patient’s care, which can support greater compliance with medical recommendations or preventive care protocols. Customers have activated VetConnect PLUS in over 80100 countries.

In-Clinic Diagnostic Solutions

Our in-clinic diagnostic solutions are comprised of our IDEXX VetLab suite of in-clinic chemistry, hematology, immunoassay, urinalysis, and coagulation analyzers, as well as associated proprietary consumable products that provide real-time reference lab quality diagnostic results andresults. Our in-clinic diagnostic solutions also include a broad range of single-use, handheld IDEXX SNAPrapid assay test kits that provide quick, accurate, and convenient point-of-care diagnostic test results for a variety of companion animal diseases and health conditions.

The IDEXX VetLab suite includes several instrument systems, as well as associated proprietary consumable products, all of which are described below. Additionally, we offer extended maintenance agreements in connection with the sale of our instruments.

Blood and Urine Chemistry. We sellhave three blood and urine chemistry analyzers the Catalyst One Chemistry analyzer, the Catalyst DxChemistry analyzer, and the VetTest chemistry analyzer, that are used by veterinarians to measure levels of certain enzymes and other substances in blood or urine for monitoring health status and assisting in diagnosing physiologic conditions. We currently sell two of these chemistry analyzers, the Catalyst One Chemistry analyzer and the VetTest Chemistry analyzer. We continue to support our Catalyst DxChemistry analyzer, previously sold as part of the Catalyst platform. These three instruments use consumables manufactured for IDEXX by Ortho-Clinical Diagnostics, Inc. (“Ortho”) based on Ortho’s dry slide technology. In addition, the Catalyst analyzers also use dry slide electrolyte consumables manufactured by OPTI Medical Systems, Inc. (“OPTI Medical”), one ofIDEXX at our wholly-owned subsidiaries, and otherRoswell, Georgia facility, as well as certain slides alsothat are manufactured by IDEXX.at our Westbrook, Maine facility. Blood tests commonly run on these analyzers include glucose, alkaline phosphatase, ALT (alanine aminotransferase), albumin, calcium, creatinine, blood urea nitrogen, total protein, and many others. Tests are sold individually and in prepackaged panels.panels, called clips. All three analyzers also run a urine test called urine protein:creatinine ratio, which assists in the detection of renal disease. 

The Catalyst analyzers provide significantly improved throughput, ease of use and test menu relative to the VetTest analyzer (our original chemistry analyzer), including the ability to run electrolytes, phenobarbital, fructosamine, and total thyroxine (“T₄”)., C-reactive protein, and SDMA, as part of one run. Key ease-of-use features include the ability to run a whole blood sample using an on-board centrifuge, the ability to run pre-packaged, multi-slide clips in addition to single chemistry slides and an automated metering system. These analyzers also enable automated dilutions, which is an ease-of-use feature both for certain blood chemistries and the test for urine protein:creatinine ratio. The Catalyst Dx analyzer allows a veterinarian to run multiple patient samples simultaneously and both the Catalyst Dx and Catalyst One analyzers run different sample types including whole blood, plasma, serum, and urine. In addition,The Catalyst SDMA test allows our customers to use the Catalyst DxOne and Catalyst OneDx analyzers run ato screen for SDMA, an innovative proprietary test to measure phenobarbital levels in blood, allowing veterinarians to adjust anticonvulsant medication more quickly and efficiently. Our fructosamine test helps veterinarians to diagnose and managethat detects the onset of canine and feline diabetes mellitus, helping to assess insulin treatments, and adjust insulin dosages. We launched our totalkidney disease months or years earlier than traditional methods. The Catalyst SDMA Test is also available in a combo kit with T₄test globally for use on the Catalyst One analyzer during the first quarter of 2015 and for use on the Catalyst Dx analyzer early in the third quarter of 2015. T₄ testing is essential to assessing and managing thyroid function and is an accepted standard for baseline testing for both sick pets and preventive care in senior pets.

.

The Catalyst One analyzer launched in November 2014, is engineered to deliver the same laboratory-quality results and real-time work flow as the Catalyst Dx analyzer. The Catalyst One analyzer currently offers all the same tests as the Catalyst Dx, plusincluding an expanded menu of 30 tests, including tests for thyroid disease, kidney disease, diabetes, and therapeutic drug monitoring.

33 tests.

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In January 2018, we launched the Catalyst SDMA Test in North America, which allows our customers to use the Catalyst One and Catalyst Dx to screen for SDMA. We expect to launch our Catalyst SDMA Test outside of North America in 2018 as well.

We also have two other chemistry analyzers, the VetLyte Electrolyte analyzer and the VetStat Electrolyte and Blood Gas analyzer. The VetStat analyzer runs single-use disposable cassettes that are manufactured by OPTI Medical.

IDEXX at our Roswell, Georgia facility.

IDEXX VetLab Station. The IDEXX VetLab Station (“IVLS”) connects and integrates the diagnostic information from all the IDEXX VetLab analyzers, and thus, provides reference laboratory information management system capability. IVLS securely connects to the internet,Internet, and in this way, enables IDEXX to perform, through its SmartService Solutions wireless services, remote instrument service and software updates to IVLS and certain connected instruments. IVLS also sends all results created on connected instruments instantly to VetConnect PLUS. We sell IVLS as an integral component of the Catalyst One, Catalyst Dx, LaserCyte, LaserCyte Dx and ProCyte Dxanalyzers, SNAP Pro Mobile Device,Analyzer, SNAPshot Dx analyzer and also as a standalone hardware platform. The IVLS includes a touch screen user interface to simplify laboratory work flow, connect with a practice management system and send information to run the individual analyzers. IVLS also generates one integrated patient report incorporating all of the lab work generated by the IDEXX VetLab suite, stores, retrieves and analyzes historical patient diagnostics data, including SNAP test results, and sends and receives information from practice management systems, including the IDEXX Cornerstone system, as well as a wide variety of third-party systems. 

examinations, vaccines, and diagnostics, over the course of the year. Certain of our services are compatible with non-IDEXX practice management systems.

With our acquisition of rVetLink in June 2017, we  now also offer a comprehensive referral management solution for specialty care hospitals that streamlines the referral process between primary care and specialty care veterinarians. General practice veterinarians occasionally refer patients to board-certified specialists for advanced care in areas such as cardiology, oncology, dermatology, ophthalmology, surgery, or internal medicine. rVetLink automates the time-consuming process of sharing medical records and images, and sending notifications to facilitate generalist-specialist collaboration in the delivery of care. rVetLink’s cloud technology integrates with our other major specialty hospital management systems, including IDEXX Cornerstone Software and IDEXX DVMAX Software.

•

Software applications that extend workflow capabilities for practices and groups.  With our Smart Flow cloud offering, which we acquired in the third quarter of 2018, we are able to improve overall patient management and workflow optimization through coordination and tracking of every step of a patient during a hospital stay. Smart Flow works in conjunction with major veterinary practice management systems, including IDEXX Cornerstone, DVMAX, IDEXX Animana, IDEXX Neo, and certain third-party practice management systems.

In July 2016, we launched Legiolert, a simple culture method test for the detection of Legionella pneumophila, the most common Legionella species in water, and the primary cause of Legionnaires’ disease. The Legiolert test is designed to be used on potable or non-potable water sources with results in seven days.

Increased competition from and technological advances by our competitors could negatively affect our operating results

We face intense competition within the markets in which we sell our products and services, and we expect that future competition may become even more intense as new products, services and technologies become available and new competitors enter the market. Our competitors in the veterinary diagnostic market in the United States and abroad include companies that develop, manufacture, and sell veterinary diagnostic tests and commercial veterinary reference laboratories, certain large and well-funded animal health pharmaceutical companies, as well as corporate hospital chains that operate reference laboratories that serve both their hospitals and unaffiliated hospitals, such as the vertically integrated corporate hospital chain formed when Mars, Incorporated acquired VCA Inc. (formerly named VCA Antech, Inc.) in 2017, which resulted in the combination of two large U.S. veterinary hospital chains. While we believe that our reference laboratory service offerings are competitively differentiated due to our proprietary products and services, such as the IDEXX SDMA test, there can be no assurance that increased consolidation and reference laboratory vertical integration among our customers would not have a negative impact on our ability to compete successfully. For more information regarding the risks presented by consolidation and reference laboratory vertical integration among our customers, see “Consolidation in our customer base, including through increased corporate hospital ownership, and prevalence of buying consortiums could negatively affect our business” below.

Competition could negatively affect our sales and profitability in a number of ways. New competitors may enter our markets through the development of innovative new technology, the acquisition of rights to use existing technologies or the use of existing technologies when patents protecting such existing technologies expire. New or existing competitors may introduce new, innovative, and competitive products and services, which could be superior, or be perceived by our customers to be superior, to our products and services or lead to the obsolescence of one or more of our products or services. While an important aspect of our strategy is to continue, on a cost-effective and timely basis, to enhance our existing products and services and to develop and introduce new and innovative products and services, there can be no assurance that we will be able to successfully develop such products and services or that those products or services will be superior to our competitors’ products or service or otherwise achieve market acceptance. Some of our competitors and potential competitors may choose to differentiate themselves by offering products and services similar to ours at lower sales prices, which could have an adverse effect on our results of operations through loss of market share or a decision to lower our own sales prices to remain competitive. In addition, our ability to attract and retain customers depends on the effectiveness of our customer marketing and incentive programs and multiple competitors could bundle product and service offerings through co-marketing or other arrangements, which could enhance their ability to compete with our broad product and service offering. Certain of our competitors and potential competitors, including large diagnostic and pharmaceutical companies, also have substantially greater financial and managerial resources than us, as well as greater experience in manufacturing, marketing, research and development, and obtaining regulatory approvals than we do.

Consolidation in our customer base, including through increased corporate hospital ownership, and prevalence of buying consortiums could negatively affect our business

Veterinarians are our primary customers for our CAG products and services, and the veterinary services industry in the U.S. and abroad has been consolidating in recent years. In the United States., the number of owners of veterinary hospitals has been declining, and an increasing percentage of veterinary hospitals are owned by corporations that are in the business of acquiring veterinary hospitals and/or opening new veterinary hospitals nationally or regionally. Major corporate hospital owners in the U.S. include Mars, Incorporated (owner of Banfield Pet Hospitals, Blue Pearl Veterinary Partners, Pet Partners and VCA Inc.), and National Veterinary Associates. A similar trend exists in other regions such as Europe, and is developing in other international markets. Furthermore, an increasing percentage of individually-owned veterinary hospitals in the U.S. are participating in buying consortiums. Corporate owners of veterinary hospitals and buying consortiums often seek to improve profitability by leveraging the buying power they derive from their scale to obtain favorable pricing from suppliers, which could have a negative impact on our profitability and results of operations. While we have strong supplier relationships with several corporate hospital groups and buying consortiums, decisions by larger corporate owners and buying consortiums to shift their purchasing of products and services away from us and to a competitor would have a negative impact on our results of operations. In addition, certain corporate owners also operate reference laboratories that serve both their hospitals and unaffiliated hospitals. Any hospitals acquired by these companies generally shift all or a large portion of their testing to the reference laboratories operated by these companies, and there can be no

assurance that hospitals that otherwise become affiliated with these companies would not shift all or a portion of their testing to such reference laboratories. Furthermore, because these companies compete with us in the reference laboratory services marketplace, hospitals acquired by these companies or those that establish other affiliations with these companies may cease to be customers or potential customers of our other companion animal products and services, which would cause our sales of these products and services to decline.

Changes in testing patterns could negatively affect our operating results

The market for our companion animal, livestock and poultry diagnostic tests and our dairy and water testing products could be negatively impacted by a number of factors impacting testing practices. The introduction or broad market acceptance of vaccines or preventatives for the diseases and conditions for which we sell diagnostic tests and services could result in a decline in testing. Changes in accepted medical protocols regarding the diagnosis of certain diseases and conditions could have a similar effect. Eradication or substantial declines in the prevalence of certain diseases also could lead to a decline in diagnostic testing for such diseases. Our livestock and poultry products business in particular is subject to fluctuations resulting from changes in disease prevalence. Changes in government regulations or in the availability of government funds available for monitoring programs could negatively affect sales of our products that are driven by compliance testing, such as our livestock and poultry, dairy and water products. In addition, changes and trends in local dairy, poultry, or other food markets around the world could negatively affect the related production markets resulting in a decline in demand for our testing products. Declines in testing for any reason, including the reasons described above, along with lost opportunities associated with a reduction in veterinary visits, could have an adverse effect on our results of operations. 

Our success is heavily dependent upon proprietary technologies  

We rely on a combination of patent, trade secret, trademark, and copyright laws to protect our proprietary rights. We also license patents and technologies from third parties to enable the use of third-party technologies in the development and production of our products and offerings. If we do not have adequate protection of our proprietary rights or are unable to license third-party patents and technologies on reasonable terms, our business may be affected by competitors who utilize substantially equivalent technologies that compete with us. 

We cannot ensure that we will obtain issued patents, that any patents issued or licensed to us will remain valid, or that any patents owned or licensed by us will provide protection against competitors with similar technologies. Even if our patents cover products sold by our competitors, the time and expense of litigating to enforce our patent rights could be substantial, and could have an adverse effect on our results of operations. In addition, expiration of patent rights could result in substantial new competition in the markets for products previously covered by those patent rights. 

In the past, we have received notices claiming that our products infringe third-party patents and we may receive such notices in the future. Patent litigation is complex and expensive, and the outcome of patent litigation can be difficult to predict. We cannot ensure that we will win a patent litigation case or negotiate an acceptable resolution of such a case. If we lose, we may be prohibited from selling certain products and/or we may be required to pay damages and/or ongoing royalties as a result of the lawsuit. Any such result could have an adverse effect on our results of operations. 

Natural and other disasters, information technology system failures and network disruptions and cybersecurity breaches and attacks could adversely affect our business

Our business and results of operations could be negatively affected by certain factors beyond our control, such as natural disasters (such as hurricanes, earthquakes, fires, and floods); civil unrest; negative geopolitical conditions and developments; war, terrorism or other man-made disasters; and information technology system failures, network disruptions and cybersecurity breaches and attacks. Any of these events could result in, among other things, damage to or the temporary closure of one or more of our manufacturing or distribution facilities or reference laboratories (damage to one of our facilities or the manufacturing equipment we use could be costly and may require substantial lead-time to repair or replace); damage to or closure of one or more facilities of our third-party business partners or suppliers on which we rely; a temporary lack of an adequate work force in one or more markets; an interruption in power supply; a temporary or long-term disruption in our supply chain (including a disruption to our ability to obtain critical components for the manufacture of our products); a temporary disruption

in our ability to deliver (or delays in the delivery of) our products or services; and short- or long-term damage to our customers’ businesses (which would adversely impact customer demand for our products and services). For more information regarding the risks presented by disruption to our suppliers’ operations and supply chain, see “Our dependence on suppliers could limit our ability to sell certain products or negatively affect our operating results” above.

We manufacture many of our significant companion animal products, including our rapid assay devices and certain instruments, many of our water testing products and certain of our livestock, poultry, and dairy testing products, at a single facility in Westbrook, Maine. Certain of our companion animal products, as well as our human point-of-care products, are manufactured in Roswell, Georgia. We also manufacture certain of our livestock and poultry testing products in Bern, Switzerland and Montpellier, France. In addition, we maintain major distribution facilities in North America and in the Netherlands and major reference laboratories in Memphis, Tennessee; Ludwigsburg, Germany; Sacramento, California; Elmhurst, Illinois; North Grafton, Massachusetts; East Brisbane, Australia; Markham, Ontario; Wetherby, U.K.; and Tokyo, Japan. Interruption of operations at any of these facilities due to the occurrence of one or more of the events described above could have an adverse effect on our results of operations. 

We rely on several information systems throughout our company, as well as our third-party business partners’ and suppliers’ information systems, to provide access to our web-based products and services, keep financial records, analyze results of operations, process customer orders, manage inventory, process shipments to customers, store confidential or proprietary information and operate other critical functions. Although we maintain information security policies and employ system backup measures and engage in information system redundancy planning and processes, such policies, measures, planning and processes, as well as our current disaster recovery plan,plans, may be ineffective or inadequate to address all eventualities. Further, our information systems and our business partners’ and suppliers’ information systems may be vulnerable to attacks by hackers and other security breaches, including, among other things, computer viruses and malware, denial of service actions, misappropriation of data and similar events through the Internetinternet (including via devices and applications connected to the Internet)internet), and through email attachments and persons with access to these information systems, such as our employees or third parties with whom we do business. As information systems and the use of software and related applications by us, our business partners, suppliers, and customers become more cloud-based and connected to the “Internet of Things,” which is inherently susceptible to cyberattacks, there has been an increase in global cybersecurity vulnerabilities and threats, including more sophisticated and targeted cyber-related attacks that pose a risk to the security of our information systems and networks and the confidentiality, availability and integrity of data and information. We process credit card payments electronically over secure networks and also offer products and services that connect to and are part of the “Internet of Things,” such as our connected devices (e.g., IDEXX VetLab instruments). Any such attack or breach could compromise our networks and the information stored thereon could be accessed, publicly disclosed, lost, or stolen. While we have implemented network security and internal control measures, especially for the purpose of protecting our connected products and services from cyberattacks, and invested in our data and information technology infrastructure, there can be no assurance that these efforts will prevent a system disruption, attack, or security breach and, as such, the risk of system disruptions and security breaches from a cyberattack remains.

If

Strengthening of the rate of exchange for the U.S. dollar has a negative effect on our business

Our income tax filings are regularly under audit by various tax authorities, and the final determination of tax audits could be materially different thanfrom that which is reflected in historical income tax provisions and accruals. Significant judgment is required in determining our worldwide provision for income taxes. We regularly assess our exposures related to our worldwide provision for income taxes to determine the adequacy of our provision for taxes. Any reduction in these contingent liabilities or additional assessments would increase or decrease income, respectively, in the period such determination is made.

Purchases of Equity Securities by the Issuer

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