Notice of Pendency of Class Action against Idexx Laboratories Inc. and Others.

NEW YORK--(BUSINESS WIRE)--Jan. 9, 1998--Pursuant to Section 21D(a)(3)(A)(i) of the Securities Exchange Act of 1934, notice is hereby given that a class action lawsuit was filed today in the United States District Court for the District of Maine on behalf of all persons who purchased or otherwise acquired the common stock of Idexx Laboratories Inc. ("Idexx" or the "Company") between July 19, 1996 and March 24, 1997, inclusive (the "Class Period").

The complaint charges Idexx and certain officers and directors of the Company during the relevant time period with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by, among other things, issuing to the investing public materially false and misleading statements concerning the demand for Idexx's products, its competitiveness and the trends in its business.

In particular, the complaint alleges that throughout the Class Period, defendants portrayed Idexx as a company that was experiencing strong growth in all lines of its business -- a growth rate of 30% or more -- and would continue to experience such growth in the future. Idexx's business, however, was suffering from a confluence of negative adverse undisclosed factors which, in aggregate, signalled a dramatic slowing of Idexx's growth rate and a marked decline in its business; the market for veterinary consumables was weakening and the significant growth rate in that market was dramatically slowing from historical rates; Idexx's sale and placement of veterinary instruments was declining as that market reached saturation and the Company's traditional sales methods proved increasingly ineffective; and Idexx's European operations were declining as the result of, among other things, ineffective management and competition.

The complaint alleges that defendants concealed these negative factors from the market during the Class Period by taking certain steps designed to maintain the appearance that Idexx was continuing to grow at historical rates. In particular, the complaint alleges that Idexx engaged in aggressive sales practices designed to push product onto the shelves of its distributors and enable the Company to continue to record increasing sales levels. This "stuffing" activity, which was facilitated by Idexx's offering of promotional discounts and extended payment terms to its distributors, was never disclosed to investors. Ultimately, Idexx was forced to announce that it would be "reducing shipments" to distributors in order to reduce bloated inventories and that its sales in the future would be adversely affected as it worked through this inventory. In aggregate, the inventory bloat was reported to be a staggering $15 million -- several quarters worth of sales. Thus, during the Class Period, the complaint alleges that Idexx's reported revenues and sales were a materially false and misleading portrayal of the Company's actual performance and prospects.

Prior to the disclosure of the adverse facts described above, certain officers and directors of Idexx sold significant amounts of Idexx common stock to the unsuspecting investing public. These sales generated proceeds in excess of $5.4 million. In addition to these profitable insider sales, the Company was able to use its artificially inflated stock as currency to complete a significant acquisition.

On March 24, 1997, Idexx upset the market by announcing that the Company expected lower than anticipated results for the first quarter of 1997. The Company blamed the lower expected results on a "combination of lower than anticipated sales of certain veterinary diagnostic products and a decision to decrease shipments in the first and second quarters to distributors to reduce distributor inventories." In response to this announcement, the price of Idexx common stock declined $20.00 per share, falling from $32.00 per share to $12 per share -- a decrease of 63% and a decrease of 74% from a Class Period high of $46.25 -- on extremely heavy trading volume. Because of the issuance of a series of materially false and misleading statements concerning Idexx's business and operations issued during the Class Period, the price of Idexx common stock was artificially inflated during that time.

Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Milberg Weiss Bershad Hynes & Lerach LLP ("Milberg Weiss"), Law Offices of Gene Mesh and Associates and Harvey & Frank. Milberg Weiss maintains offices in New York City, San Diego, Los Angeles and San Francisco and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in numerous important actions on behalf of defrauded investors, and is responsible for a number of outstanding recoveries which, in the aggregate, total approximately $2 billion. For more information about Milberg Weiss, please visit our website at www.milberg.com. The Law Offices of Gene Mesh and Associates and Harvey & Frank similarly have substantial experience in the prosecution of complex litigation.

If you are a member of the class described above, you may, not later than sixty days from today, move the Court to serve as lead plaintiff of the class, if you so choose. In order to serve as lead plaintiff, however, you must meet certain legal requirements.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Milberg Weiss (Steven G. Schulman or Samuel H. Rudman) at One Pennsylvania Plaza, 49th Floor, New York, New York 10119-0165.

CONTACT: Milberg Weiss Bershad Hynes & Lerach LLP

Steven G. Schulman

Samuel H. Rudman

1-800-922-0187