Idexx Laboratories (NASDAQ:IDXX) informs distributor Henry Schein (NASDAQ:HSIC) that it intends to sell its vet diagnostic products directly in the U.S. effective January 1, 2015. This will eliminate ~$150M in top line sales for Schein and $0.04 - 0.06 in EPS. The company does not forecast a negative impact on 2014 results, however, because it will pick up other brands to sell in the meantime.
2014 Guidance: $8M in incremental expenses in 2H due to sales force ramp up plus $10M - 12M in non-recurring expenses which will reduce EPS $0.23 - 0.25. Revenue will be impacted $30M - 35M and operating profit $23M - 27M. Total revenue: $1,510M - 1,520; EPS: $3.54 - 3.63; FCF: 95 100% of net income; CAPEX: ~$80M.
Companion Animal Group diagnostics to transition to all-direct distribution in the U.S. effective January 1, 2015. Veterinary Diagnostics sales force to increase 40%. Incremental annual revenue will be $50M - 55M and incremental annual operating profit will be $5M - 8M.