IDEXX says all-direct distribution model to capture $50M-$55M in additional reve

theflyonthewall.com

The Company estimates that annual operating profit associated with this growing revenue stream will incrcase approximately $5 million to $8 million in 2015, before transitional impacts, with accretive benefits that will scale over time. The company will incur transition costs in implementing the all-direct product distribution approach in the US. For 2014, this will include approximately $8 million in incremental expense as the company ramps up sales and operating resources ahead of the planned January 1, 2015 introduction of the new model. The company also expects to incur approximately $10 million to $12 million in non-recurring expenses in the second half of 2014 associated with project management and other one-time costs required to implement the new model. Combined, the company estimates these transition costs will reduce reported EPS by approximately 23c-24c in 2014. The company estimates that the drawdown of this inventory will occur primarily in the first quarter of 2015 and will result in a one-time reduction in projected revenue and operating profit of $30 million to $35 million, and $23 million to $27 million, respectively. Additionally, the Company expects to incur $2 million to $3 million in remaining project management expenses in early 2015.

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