UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003.

OR

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Transiton Period From __________To __________.

COMMISSION FILE NUMBER 0-19271

IDEXX LABORATORIES, INC.

(Exact name of registrant as specified in its charter)

DELAWARE		01-0393723
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
One IDEXX Drive, Westbrook, Maine		04092
(Address of principal executive offices)		(Zip Code)

(207) 856-0300

(Registrant’s telephone number, including area code)

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 [X] No [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of May 8, 2003, 34,157,410 shares of the registrant’s Common Stock, $.10 par value, were outstanding.

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

INDEX


PART I		FINANCIAL INFORMATION	Page

	Item 1.	Financial Statements

		Consolidated Balance Sheets as of December 31, 2002 and
		March 31, 2003	3

		Consolidated Statements of Operations for the three months
		ended March 31, 2002 and 2003	4

		Consolidated Statements of Cash Flows for the three months
		ended March 31, 2002 and 2003	5

		Notes to Consolidated Financial Statements	6

	Item 2.	Management's Discussion and Analysis of Financial Condition
		and Results of Operations	9

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	17

	Item 4.	Controls and Procedures	17

PART II		OTHER INFORMATION

	Item 6.	Exhibits and Reports on Form 8-K	18

SIGNATURES			19

CERTIFICATIONS			20

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
(Unaudited)

	December 31,			March 31,
	2002			2003
ASSETS
Current Assets:
Cash and cash equivalents	$	113,788		$	133,451
Short-term investments		33,403			41,980
Accounts receivable, less reserves of $2,415 and $2,468 in 2002 and 2003, respectively		45,689			51,582
Inventories		75,086			69,382
Deferred income taxes		14,887			15,505
Other current assets		6,267			5,801

Total current assets		289,120			317,701

Long-Term Investments		15,572			8,708

Property and Equipment, at cost:
Land		1,195			1,193
Buildings		5,144			5,132
Leasehold improvements		22,290			22,708
Machinery and equipment		45,296			44,603
Construction in progress		5,863			6,484
Office furniture and equipment		35,521			35,833

		115,309			115,953
Less Accumulated depreciation and amortization		65,854			67,190

		49,455			48,763
Long Term Assets:
Goodwill, net of accumulated amortization of $29,948 and $29,955 for 2002
and 2003, respectively		52,321			52,280
Other intangible assets, net of accumulated amortization of $4,373 and
$4,469 for 2002 and 2003, respectively		3,836			3,818
Other non-current assets, net		6,348			5,648

		62,505			61,746

TOTAL ASSETS	$	416,652		$	436,918

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	9,427		$	17,013
Accrued expenses		51,710			51,497
Notes payable		973			984
Deferred revenue		7,662			8,318

Total current liabilities		69,772			77,812
Long-term Liabilities:
Deferred tax liabilities		--			39
Deferred revenue		5,907			5,716

Total long-term liabilities		5,907			5,755
Commitments and Contingencies (Note 5)
Stockholders' Equity:
Common stock, $0.10 par value; Authorized: 60,000 shares; Issued: 42,331
shares in 2002 and 43,005 shares in 2003		4,233			4,301
Additional paid-in capital		334,348			348,769
Retained earnings		183,260			195,322
Accumulated other comprehensive income (loss)		(2,511	)		(2,529	)
Treasury stock (8,650 shares in 2002 and 9,041 shares in 2003), at cost		(178,357	)		(192,512	)

Total stockholders' equity		340,973			353,351

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	416,652		$	436,918

The accompanying notes are an integral part of these consolidated financial statements.

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)

	Three Months Ended March 31,
	2002		2003
Revenue
Product revenue	$	71,567	$	82,071
Service revenue		24,984		27,176

		96,551		109,247
Cost of Revenue:
Cost of product revenue		34,906		38,271
Cost of service revenue		18,584		19,514

		53,490		57,785

Gross profit		43,061		51,462

Expenses:
Sales and marketing		13,698		16,323
General and administrative		11,865		10,355
Research and development		7,182		7,337

Income from operations		10,316		17,447
Interest income, net		570		690

Income before provision for income taxes		10,886		18,137
Provision for income taxes		3,701		6,075

Net income	$	7,185	$	12,062

Earnings per share:
Basic	$	0.21	$	0.36

Diluted	$	0.21	$	0.34

Weighted average shares outstanding:
Basic		33,883		33,812

Diluted		35,017		35,520

The accompanying notes are an integral part of these consolidated financial statements.

IDEXX LABORATORIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)

	Three Months Ended March 31,
	2002			2003
Cash Flows from Operating Activities:
Net income	$	7,185		$	12,062
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization		4,674			4,912
Non-cash portion of CEO succession charge		1,836			--
Provision for uncollectible accounts		16			195
Provision for deferred income taxes		120			460
Changes in assets and liabilities, net of acquisitions and disposals
Accounts receivable		(994	)		(5,804	)
Inventories		1,052			5,708
Other current assets		(554	)		255
Accounts payable		9,997			7,577
Accrued expenses		1,342			3,696
Deferred revenue		(219	)		483

Net cash provided by operating activities		24,455			29,544

Cash Flows from Investing Activities:
Purchase of short and long-term investments		(7,399	)		(5,860	)
Sales and maturities of short and long-term investments		--			4,089
Purchase of property and equipment		(3,793	)		(3,089	)
Increase in other assets		(668	)		(468	)

Net cash used by investing activities		(11,860	)		(5,328	)

Cash Flows from Financing Activities:
Purchase of treasury stock		--			(9,257	)
Proceeds from the exercise of stock options		2,268			4,745

Net cash provided (used) by financing activities		2,268			(4,512	)

Net effect of exchange rates on cash		(51	)		(41	)
Net increase in cash and cash equivalents		14,812			19,663
Cash and cash equivalents at beginning of period		66,666			113,788

Cash and cash equivalents at end of period	$	81,478		$	133,451

Supplemental disclosure of Cash Flow Information:
Interest paid during the period	$	--		$	--
Income taxes paid during the period	$	4,486		$	854
Supplemental disclosure of Non-Cash Information:
Tax benefit on exercise of non-qualified stock options and disqualifying
dispositions	$	1,123		$	4,849
Value of shares exchanged in stock option exercises	$	--		$	4,897