IDEXX Laboratories Announces Intention to Modify Distribution Relationship with MWI Veterinary Supply, Inc.
WESTBROOK, Maine, August 09, 2012—IDEXX Laboratories, Inc. (NASDAQ: IDXX), announced today it has agreed with MWI Veterinary Supply, Inc. (MWI) on the terms of a revised distribution relationship under which MWI will continue to sell IDEXX products to veterinary customers in the U.S., and in the future also will be able to sell products that compete with IDEXX’s products. Under the new arrangement, which is expected to become effective January 1, 2013, IDEXX will reduce the discount from list price at which it sells its products to MWI.
“We believe that this new relationship will be positive for our business in several ways,” said Jonathan Ayers, Chairman and Chief Executive Officer. “Importantly, we believe that upon execution of a new agreement with MWI we will have achieved a result that will lead to the satisfactory conclusion of the multi-year investigation by the U.S. Federal Trade Commission (FTC) staff. In addition, while we understand that MWI will also be carrying competitive products, we will continue to maintain the strong relationship we have had with MWI for over a decade. This will benefit both of our companies and our mutual veterinary customers.”
“We also are delighted to reaffirm our multi-decade relationships with Butler Schein Animal Health, Webster Veterinary, Midwest Veterinary Supply, and Victor Medical Company, which we will maintain on terms consistent with our historical practices. With each of these companies we have built a successful partnership based on a shared vision of providing strong service and adding value to the practices of our veterinary customers. We look forward to continuing to bring new innovations to the veterinary market with the support of our entire network of U.S. distribution partners.”
In April 2012 IDEXX announced its intention to move one of its three largest U.S. distributors of companion animal diagnostic products to non-exclusive status, which IDEXX believed would address concerns expressed to IDEXX by the FTC staff regarding IDEXX’s relationships with these three distributors. IDEXX and MWI will negotiate a definitive agreement reflecting the new terms of the relationship. IDEXX intends to seek review of the agreement by the FTC staff to ensure that the agreement satisfactorily addresses the staff’s concerns. If the agreement is satisfactory to the FTC staff, IDEXX anticipates negotiating a consent agreement with the staff, which must then be approved by the Commission. Completion of the entire FTC consent agreement process would take several months.
Conference Call and Webcast Information
IDEXX Laboratories will host a conference call today at 5:15 p.m. (eastern) to discuss its intention to enter into a revised distributor relationship with MWI. To participate in the conference call, dial 1-800-553-5275 or 1-612-332-1025 and reference confirmation code 256660. An audio replay will be available through August 16, 2012 by dialing 1-320-365-3844 and referencing replay code 256660.
The call will also be available via live or archived webcast on the IDEXX Laboratories' web site at idexx.com.
About IDEXX Laboratories
IDEXX Laboratories, Inc. is a leader in pet healthcare innovation, serving practicing veterinarians around the world with a broad range of diagnostic and information technology-based products and services. IDEXX products enhance the ability of veterinarians to provide advanced medical care, improve staff efficiency and build more economically successful practices. IDEXX is also a worldwide leader in providing diagnostic tests and information for livestock and poultry and tests for the quality and safety of water and milk. Headquartered in Maine, IDEXX Laboratories employs more than 5,000 people and offers products to customers in over 100 countries.
Note Regarding Forward-Looking Statements
This press release contains statements about the Company's plans to modify its distribution relationship with MWI, the expected impact of this revised relationship on the Company's business and the expected impact of this modification on the FTC's pending review of the Company's distribution arrangements that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the use of words such as "expects," "may," "anticipates," "intends," "would," "will," "plans," "believes," "estimates," "should," and similar words and expressions. These statements are based on management's expectations of future events as of the date of this press release, 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 include the following: the Company's ability to reach a definitive agreement with MWI; the response of the U.S. Federal Trade Commission to such agreement; the impact of a change in the status of one of the Company's distributors on the Company's results of operations; the impact of distributor purchasing decisions on sales of the Company's products that are sold through distribution; and the other factors relating to our business and prospects that are discussed in the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2012, in the section captioned "Risk Factors."
Chief Financial Officer