IDEXX Laboratories on July 23 reported that revenues for the second quarter of 2013 increased 5 percent to $352.6 million, from $335.6 million in the second quarter of 2012. Organic revenue growth was 5.5 percent versus the prior year period. Earnings per diluted share for the quarter ending June 30, 2013 increased 9 percent to $0.99, compared to $0.91 for the same period in the prior year.

"I am pleased with the Companion Animal Group acceleration in sequential quarter organic revenue growth from 3.6 percent in the first quarter to 6.8 percent in the second quarter, reflecting strong growth in instrument consumables and reference lab services," said Jonathan Ayers, the company's chairman and chief executive officer.

Companion Animal Group revenues for the second quarter of 2013 were $295.8 million compared to $278.3 million for the second quarter of 2012. Organic revenue growth of 6.8 percent versus the prior year period was due largely to an increase in sales volumes and net sales prices in reference laboratories. Higher sales volumes were driven by the acquisition of new customers and increased testing volumes from existing customers. Changes in foreign currency exchange rates reduced revenue growth by 0.9 percent, which was partly offset by revenue from acquisitions.

Water revenues for the second quarter of 2013 were $22.4 million compared to $22.0 million for the second quarter of 2012. Organic revenue growth of 2.3 percent resulted from higher average unit sales prices. Changes in foreign currency exchange rates reduced revenue growth by 0.5 percent.

Livestock, Poultry and Dairy revenues for the second quarter of 2013 were $28.3 million compared to $28.6 million for the second quarter of 2012. The 0.9 percent decline in organic revenue versus the prior year period resulted from lower sales volumes of certain bovine tests resulting from changes in Bovine Spongiform Encephalopathy testing requirements in the European Union and lower testing levels from certain government programs. This unfavorable factor was partly offset by higher sales volumes of Dairy SNAP tests used for the detection of antibiotic residues in milk and as well as certain poultry tests. Changes in foreign currency exchange rates did not have a significant impact on reported revenue.

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Additional operating results

Gross profit for the second quarter of 2013 increased $13.0 million, or 7.0 percent, to $197.7 million from $184.7 million for the second quarter of 2012. As a percentage of total revenue, gross profit increased slightly to 56.1 percent from 55.0 percent in the previous year period. The increase in the gross profit percentage was due primarily to efficiencies realized throughout our reference laboratory operations and as well as price increases in our reference laboratories and, to a lesser extent, for consumables used with our VetLab instruments. These favorable factors were partly offset by the unfavorable impact of currency as hedging losses more than offset the net favorable impact of changes in foreign currency exchange rates.

Selling, general and administrative expense for the second quarter of 2013 was $96.8 million, or 27.4 percent of revenue, compared to $88.8 million, or 26.5 percent of revenue, for the second quarter of 2012. The increase in SG&A expense was due primarily to increased personnel-related costs. Research and development  expense for the second quarter of 2013 was $22.2 million, or 6.3 percent of revenue, compared to $20.1 million, or 6 percent of revenue for the second quarter of 2012. The increase in research and development expense resulted primarily from higher consulting and external development costs and increased personnel-related costs.

Income from operations for the second quarter of 2013 increased 3.9 percent to $78.8 million, or 22.3 percent of revenue, compared to $75.8 million, or 22.6 percent of revenue, for same period of the prior year.