– First-Quarter Revenue of $1.01 Billion
–
– First-Quarter GAAP Earnings per Share of
$1.30 and Non-GAAP Earnings per Share of $2.27 –
– Updates 2024 Guidance –
Charles River Laboratories International, Inc. (NYSE: CRL) today
reported its results for the first quarter of 2024. For the
quarter, revenue was $1.01 billion, a decrease of 1.7% from $1.03
billion in the first quarter of 2023.
The impact of foreign currency translation benefited reported
revenue by 0.3%, and acquisitions contributed 1.5% to consolidated
first-quarter revenue. A small divestiture of a Safety Assessment
site reduced reported revenue by 0.2%. Excluding the effect of
these items, organic revenue decreased 3.3%. On a segment basis,
both the Manufacturing and Research Models and Services (RMS)
business segments reported organic revenue growth, which was offset
by lower revenue in the Discovery and Safety Assessment (DSA)
segment.
In the first quarter of 2024, the GAAP operating margin
decreased to 12.5% from 16.3% in the first quarter of 2023, and on
a non-GAAP basis, the operating margin decreased to 18.5% from
21.2%. The GAAP and non-GAAP decreases were primarily driven by a
lower operating margin in the DSA segment, as well as higher
unallocated corporate costs. On a GAAP basis, costs associated with
the Company’s restructuring initiatives also contributed to the
decline.
On a GAAP basis, first-quarter net income attributable to common
shareholders was $67.3 million, a decrease of 34.7% from $103.1
million for the same period in 2023. First-quarter diluted earnings
per share on a GAAP basis were $1.30, a decrease of 35.3% from
$2.01 for the first quarter of 2023. On a non-GAAP basis, net
income was $117.6 million for the first quarter of 2024, a decrease
of 17.7% from $143.0 million for the same period in 2023.
First-quarter diluted earnings per share on a non-GAAP basis were
$2.27, a decrease of 18.3% from $2.78 per share for the first
quarter of 2024. The GAAP and non-GAAP net income and earnings per
share decreases were driven primarily by lower revenue and
operating income, as well as a higher tax rate.
James C. Foster, Chair, President and Chief Executive Officer,
said, “Our first-quarter performance was a solid first step towards
achieving our financial outlook for the year, particularly in our
Manufacturing segment. Our DSA segment saw improved proposal
activity and cancellations in the first quarter, and while
encouraging, our outlook for the year remains appropriately
measured. It will take time for this proposal activity and stronger
biotech funding to translate into new DSA bookings and revenue
generation; however, these trends are consistent with our
expectations that demand will improve later this year.”
“The long-term industry fundamentals for the biopharmaceutical
industry remain firmly intact, and we intend to capitalize on new
business opportunities. We are implementing initiatives to maintain
our leadership in the non-clinical drug development sector,
including enhanced commercial efforts, actions to drive efficiency,
and investing in innovative technologies. We are the logical
outsourcing partner for our clients and are positioning ourselves
to win the new business that will emerge as these clients
reinvigorate their investments in their early-stage R&D
programs,” Mr. Foster concluded.
First-Quarter Segment
Results
Research Models and Services (RMS)
Revenue for the RMS segment was $220.9 million in the first
quarter of 2024, an increase of 10.6% from $199.8 million in the
first quarter of 2023. The Noveprim acquisition contributed 7.6% to
first-quarter RMS reported revenue, and the impact of foreign
currency translation reduced revenue by 0.3% in the quarter.
Organic revenue increased by 3.3%, due primarily to higher revenue
for non-human primates (NHPs) in China, as well as higher sales of
small research models in all geographic regions and higher revenue
for research models services, including in the Insourcing Solutions
business.
In the first quarter of 2024, the RMS segment’s GAAP operating
margin decreased to 19.5% from 20.2% in the first quarter of 2023,
driven primarily by higher amortization expense related to the
Noveprim acquisition, and higher site consolidation costs related
to restructuring initiatives. On a non-GAAP basis, the operating
margin increased to 27.6% from 23.4%. The non-GAAP operating margin
increase was driven primarily by product mix, specifically higher
revenue for NHPs including in China and from Noveprim.
Discovery and Safety Assessment (DSA)
Revenue for the DSA segment was $605.5 million in the first
quarter of 2024, a decrease of 8.6% from $662.4 million in the
first quarter of 2023. Organic revenue decreased by 8.7%, driven by
lower revenue in both the Discovery Services and Safety Assessment
businesses, which included a challenging, prior-year growth
comparison in the Safety Assessment business.
In the first quarter of 2024, the DSA segment’s GAAP operating
margin decreased to 19.0% from 25.9% in the first quarter of 2023.
On a non-GAAP basis, the operating margin decreased to 23.5% from
29.0% in the first quarter of 2023. The GAAP and non-GAAP operating
margin decreases were driven primarily by lower sales volume and
moderating price increases in both the Discovery Services and
Safety Assessment businesses. On a GAAP basis, costs associated
with restructuring initiatives also contributed to the decline.
Manufacturing Solutions (Manufacturing)
Revenue for the Manufacturing segment was $185.2 million in the
first quarter of 2024, an increase of 10.7% from $167.3 million in
the first quarter of 2023. Organic revenue growth of 10.4%
reflected higher revenue across each of the segment’s businesses,
led by the CDMO business.
In the first quarter of 2024, the Manufacturing segment’s GAAP
operating margin increased to 18.2% from 1.3% in the first quarter
of 2023, and on a non-GAAP basis, the operating margin increased to
25.3%, from 13.7% in the first quarter of 2023. The GAAP and
non-GAAP operating margin increases were driven primarily by
improved profitability for each of segment’s businesses, as well as
a favorable comparison to a lease impairment last year in the CDMO
business.
Updates 2024 Guidance
The Company is updating its financial guidance for 2024, which
was initially provided on February 14, 2024. Despite modest
adjustments to the quarterly gating in 2024, the Company’s outlook
for the year remains essentially unchanged and it is reaffirming
revenue growth and non-GAAP earnings per share guidance, with the
continued expectation that demand trends will improve modestly
during the second half of the year.
The Company’s 2024 guidance for revenue growth and earnings per
share is as follows:
2024 GUIDANCE
CURRENT
PRIOR
Revenue growth, reported
1.0% – 4.0%
1.0% – 4.0%
Impact of divestitures/(acquisitions),
net
~(0.5)%
~(0.5)%
(Favorable)/unfavorable impact of foreign
exchange
~(0.5)%
~(0.5)%
Revenue growth, organic (1)
0.0% – 3.0%
0.0% – 3.0%
GAAP EPS estimate
$7.60 – $8.10
$7.90 – $8.40
Acquisition-related amortization (2)
~$2.50
~$2.40
Acquisition and integration-related
adjustments (3)
~$0.10
~$0.10
Costs associated with restructuring
actions (4)
~$0.35
~$0.25
Certain venture capital and other
strategic investment losses/(gains), net (5)
($0.08)
--
Incremental dividends related to Noveprim
(6)
~$0.25
--
Other items (7)
~$0.20
~$0.25
Non-GAAP EPS estimate
$10.90 – $11.40
$10.90 – $11.40
Footnotes to
Guidance Table:
(1) Organic revenue growth is defined as
reported revenue growth adjusted for completed acquisitions and
divestitures, as well as foreign currency translation.
(2) These adjustments include amortization
related to intangible assets, as well as the purchase accounting
step-up on inventory and certain long-term biological assets.
(3) These adjustments are related to the
evaluation and integration of acquisitions and divestitures, and
primarily include transaction, advisory, certain third-party
integration, and related costs.
(4) These adjustments primarily include
site consolidation, severance, impairment, and other costs related
to the Company’s restructuring actions.
(5) Certain venture capital and other
strategic investment performance only includes recognized gains or
losses on certain investments. The Company does not forecast the
future performance of these investments.
(6) This item primarily relates to
incremental dividends attributable to Noveprim noncontrolling
interest holders who receive preferential dividends for fiscal year
2024.
(7) These items primarily relate to (i)
certain third-party legal costs related to investigations by the
U.S. government into the NHP supply chain related to our Safety
Assessment business; and (ii) charges associated with U.S. and
international tax legislation that necessitated changes to the
Company’s international financing structure.
Webcast
Charles River has scheduled a live webcast on Thursday, May 9th,
at 8:30 a.m. ET to discuss matters relating to this press release.
To participate, please go to ir.criver.com and select the webcast
link. You can also find the associated slide presentation and
reconciliations of GAAP financial measures to non-GAAP financial
measures on the website.
Bank of America Healthcare Conference
Presentation
Charles River will present at the Bank of America 2024
Healthcare Conference in Las Vegas, Nevada, on Wednesday, May 15th,
at 10:00 a.m. PT (1:00pm ET). Management will provide an overview
of Charles River’s strategic focus and business developments.
A live webcast of the presentation will be available through a
link that will be posted on ir.criver.com. A webcast replay will be
accessible through the same website shortly after the presentation
and will remain available for approximately two weeks.
Non-GAAP Reconciliations
The Company reports non-GAAP results in this press release,
which exclude often-one-time charges and other items that are
outside of normal operations. A reconciliation of GAAP to non-GAAP
results is provided in the schedules at the end of this press
release.
Use of Non-GAAP Financial
Measures
This press release contains non-GAAP financial measures, such as
non-GAAP earnings per diluted share, non-GAAP operating income,
non-GAAP operating margin, and non-GAAP net income. Non-GAAP
financial measures exclude, but are not limited to, the
amortization of intangible assets and the purchase accounting
step-up adjustment on inventory and certain long term biological
assets, and other charges and adjustments related to our
acquisitions and divestitures, including incremental dividends
attributable to Noveprim noncontrolling interest holders and the
gain on our sale of our Avian Vaccine business; expenses associated
with evaluating and integrating acquisitions and divestitures,
including advisory fees and certain other transaction-related
costs, as well as fair value adjustments associated with contingent
consideration; charges, gains, and losses attributable to
businesses or properties we plan to close, consolidate, or divest;
severance and other costs associated with our restructuring
initiatives; the write-off of deferred financing costs and fees
related to debt financing; investment gains or losses associated
with our venture capital and other strategic equity investments;
certain legal costs in our Microbial Solutions business related to
environmental litigation and in our Safety Assessment business
related to U.S. government investigations into the NHP supply
chain; tax effect of all of the aforementioned matters; and
adjustments related to the recognition of deferred tax assets
expected to be utilized as a result of changes to the our
international financing structure and the revaluation of deferred
tax liabilities as a result of foreign tax legislation. This press
release also refers to our revenue on both a GAAP and non-GAAP
basis: “organic revenue growth,” which we define as reported
revenue growth adjusted for foreign currency translation,
acquisitions, and divestitures. We exclude these items from the
non-GAAP financial measures because they are outside our normal
operations. There are limitations in using non-GAAP financial
measures, as they are not presented in accordance with generally
accepted accounting principles, and may be different than non-GAAP
financial measures used by other companies. In particular, we
believe that the inclusion of supplementary non-GAAP financial
measures in this press release helps investors to gain a meaningful
understanding of our core operating results and future prospects
without the effect of these often-one-time charges, and is
consistent with how management measures and forecasts the Company's
performance, especially when comparing such results to prior
periods or forecasts. We believe that the financial impact of our
acquisitions and divestitures (and in certain cases, the evaluation
of such acquisitions and divestitures, whether or not ultimately
consummated) is often large relative to our overall financial
performance, which can adversely affect the comparability of our
results on a period-to-period basis. In addition, certain
activities and their underlying associated costs, such as business
acquisitions, generally occur periodically but on an unpredictable
basis. We calculate non-GAAP integration costs to include
third-party integration costs incurred post-acquisition. Presenting
revenue on an organic basis allows investors to measure our revenue
growth exclusive of acquisitions, divestitures, and foreign
currency exchange fluctuations more clearly. Non-GAAP results also
allow investors to compare the Company’s operations against the
financial results of other companies in the industry who similarly
provide non-GAAP results. The non-GAAP financial measures included
in this press release are not meant to be considered superior to or
a substitute for results of operations presented in accordance with
GAAP. The Company intends to continue to assess the potential value
of reporting non-GAAP results consistent with applicable rules and
regulations. Reconciliations of the non-GAAP financial measures
used in this press release to the most directly comparable GAAP
financial measures are set forth in this press release, and can
also be found on the Company’s website at ir.criver.com.
Caution Concerning Forward-Looking
Statements
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements may be identified by the use of
words such as “anticipate,” “believe,” “expect,” “intend,” “will,”
“would,” “may,” “estimate,” “plan,” “outlook,” and “project,” and
other similar expressions that predict or indicate future events or
trends or that are not statements of historical matters. These
statements also include statements regarding Charles River’s
expectations regarding the availability of Cambodia-sourced NHPs;
the impact of the investigations by the U.S. government into the
Cambodia NHP supply chain, including but not limited to Charles
River’s ability to cooperate fully with the U.S. government;
Charles River’s ability to effectively manage any Cambodia NHP
supply impact; the projected future financial performance of
Charles River and our specific businesses, including our
expectations with respect to the impact of NHP supply constraints
and our ability to gain market share; earnings per share; operating
margin; client demand, particularly the future demand for drug
discovery and development products and services, including our
expectations for future revenue trends; our expectations with
respect to pricing of our products and services; our expectations
with respect to future tax rates and the impact of such tax rates
on our business; our expectations with respect to the impact of
acquisitions and divestitures completed in 2021, 2022, and 2023,
including the Noveprim acquisition, on the Company, our service
offerings, client perception, strategic relationships, revenue,
revenue growth rates, revenue growth drivers, and earnings; the
development and performance of our services and products, including
our investments in our portfolio; market and industry conditions
including the outsourcing of services and identification of
spending trends by our clients and funding available to them;
ability to gain market share and capitalize on business
opportunities; and Charles River’s future performance as delineated
in our forward-looking guidance, and particularly our expectations
with respect to revenue, the impact of foreign exchange, interest
rates, enhanced efficiency initiatives. Forward-looking statements
are based on Charles River’s current expectations and beliefs, and
involve a number of risks and uncertainties that are difficult to
predict and that could cause actual results to differ materially
from those stated or implied by the forward-looking statements.
Those risks and uncertainties include, but are not limited to: NHP
supply constraints and the investigations by the U.S. Department of
Justice, including the impact on our projected future financial
performance, the timing of the resumption of Cambodia NHP imports
into the U.S., our ability to manage supply impact, and potential
study delays in our Safety Assessment business attributable to NHP
supply constraints; changes and uncertainties in the global economy
and financial markets; the ability to successfully integrate
businesses we acquire, including Noveprim; the timing and magnitude
of our share repurchases; negative trends in research and
development spending, negative trends in the level of outsourced
services, or other cost reduction actions by our clients; the
ability to convert backlog to revenue; special interest groups;
contaminations; industry trends; new displacement technologies;
USDA and FDA regulations; changes in law; continued availability of
products and supplies; loss of key personnel; interest rate and
foreign currency exchange rate fluctuations; changes in tax
regulation and laws; changes in generally accepted accounting
principles; disruptions in the global economy caused by
geopolitical conflicts; and any changes in business, political, or
economic conditions due to the threat of future terrorist activity
in the U.S. and other parts of the world, and related U.S. military
action overseas. A further description of these risks,
uncertainties, and other matters can be found in the Risk Factors
detailed in Charles River's Annual Report on Form 10-K as filed on
February 14, 2024, as well as other filings we make with the
Securities and Exchange Commission. Because forward-looking
statements involve risks and uncertainties, actual results and
events may differ materially from results and events currently
expected by Charles River, and Charles River assumes no obligation
and expressly disclaims any duty to update information contained in
this press release except as required by law.
About Charles River
Charles River provides essential products and services to help
pharmaceutical and biotechnology companies, government agencies and
leading academic institutions around the globe accelerate their
research and drug development efforts. Our dedicated employees are
focused on providing clients with exactly what they need to improve
and expedite the discovery, early-stage development and safe
manufacture of new therapies for the patients who need them. To
learn more about our unique portfolio and breadth of services,
visit www.criver.com.
CHARLES RIVER LABORATORIES
INTERNATIONAL, INC.
SCHEDULE 1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except for per share data) Three
Months Ended March 30, 2024 April 1, 2023
Service revenue
$
816,862
$
857,366
Product revenue
194,698
172,007
Total revenue
1,011,560
1,029,373
Costs and expenses: Cost of services provided (excluding
amortization of intangible assets)
578,164
565,477
Cost of products sold (excluding amortization of intangible assets)
88,553
86,242
Selling, general and administrative
186,291
174,846
Amortization of intangible assets
32,575
34,916
Operating income
125,977
167,892
Other income (expense): Interest income
2,202
806
Interest expense
(35,001
)
(34,380
)
Other income (expense), net
5,833
(3,277
)
Income before income taxes
99,011
131,041
Provision for income taxes
24,529
27,087
Net income
74,482
103,954
Less: Net income attributable to noncontrolling interests
1,522
823
Net income available to Charles River Laboratories International,
Inc.
$
72,960
$
103,131
Calculation of net income per share attributable to common
shareholders of Charles River Laboratories International, Inc. Net
income available to Charles River Laboratories International, Inc.
$
72,960
$
103,131
Less: Adjustment of redeemable noncontrolling interest
401
—
Less: Incremental dividends attributable to noncontrolling interest
holders
5,230
—
Net income available to Charles River Laboratories International,
Inc. common shareholders
$
67,329
$
103,131
Earnings per common share Net income attributable to
common shareholders: Basic
$
1.31
$
2.02
Diluted
$
1.30
$
2.01
Weighted-average number of common shares outstanding: Basic
51,437
51,097
Diluted
51,842
51,428
CHARLES RIVER LABORATORIES
INTERNATIONAL, INC.
SCHEDULE 2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in
thousands, except per share amounts) March 30,
2024 December 30, 2023 Assets Current assets:
Cash and cash equivalents
$
327,039
$
276,771
Trade receivables and contract assets, net of allowances for credit
losses of $25,407 and $25,722, respectively
786,980
780,375
Inventories
361,281
380,259
Prepaid assets
93,834
87,879
Other current assets
99,054
83,378
Total current assets
1,668,188
1,608,662
Property, plant and equipment, net
1,618,708
1,639,741
Venture capital and strategic equity investments
243,543
243,811
Operating lease right-of-use assets, net
384,394
394,029
Goodwill
3,070,241
3,095,045
Intangible assets, net
827,638
864,051
Deferred tax assets
36,924
40,279
Other assets
303,147
309,383
Total assets
$
8,152,783
$
8,195,001
Liabilities, Redeemable Noncontrolling Interests and
Equity Current liabilities: Accounts payable
$
129,682
$
168,937
Accrued compensation
189,606
213,290
Deferred revenue
256,383
241,820
Accrued liabilities
190,892
227,825
Other current liabilities
188,247
203,210
Total current liabilities
954,810
1,055,082
Long-term debt, net and finance leases
2,660,459
2,647,147
Operating lease right-of-use liabilities
418,054
419,234
Deferred tax liabilities
180,094
191,349
Other long-term liabilities
235,441
223,191
Total liabilities
4,448,858
4,536,003
Redeemable noncontrolling interest
57,775
56,722
Equity: Preferred stock, $0.01 par value; 20,000 shares authorized;
no shares issued and outstanding
—
—
Common stock, $0.01 par value; 120,000 shares authorized; 51,552
shares issued and 51,510 shares outstanding as of March 30, 2024,
and 51,338 shares issued and outstanding as of December 30, 2023
515
513
Additional paid-in capital
1,939,413
1,905,578
Retained earnings
1,959,777
1,887,218
Treasury stock, at cost, 42 and zero shares, as of March 30, 2024
and December 30, 2023, respectively
(9,351
)
—
Accumulated other comprehensive loss
(249,919
)
(196,427
)
Total Charles River Laboratories International, Inc. equity
3,640,435
3,596,882
Nonredeemable noncontrolling interests
5,715
5,394
Total equity
3,646,150
3,602,276
Total liabilities, equity and noncontrolling interests
$
8,152,783
$
8,195,001
CHARLES RIVER LABORATORIES
INTERNATIONAL, INC.
SCHEDULE 3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands) Three Months Ended March 30,
2024 April 1, 2023 Cash flows relating to operating
activities Net income
$
74,482
$
103,954
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation and amortization
85,357
77,069
Stock-based compensation
16,738
13,460
Deferred income taxes
(987
)
(11,584
)
Long-lived asset impairment charges
5,432
10,460
(Gain) loss on venture capital and strategic equity investments,
net
(5,880
)
3,282
Provision for credit losses
839
3,238
Other, net
1,999
1,448
Changes in assets and liabilities: Trade receivables and contract
assets, net
(17,281
)
(33,831
)
Inventories
5,600
(8,587
)
Accounts payable
(8,541
)
(41,313
)
Accrued compensation
(20,945
)
(21,469
)
Deferred revenue
19,957
(481
)
Customer contract deposits
6,140
1,509
Other assets and liabilities, net
(33,022
)
12,228
Net cash provided by operating activities
129,888
109,383
Cash flows relating to investing activities Acquisition of
businesses and assets, net of cash acquired
—
(50,166
)
Capital expenditures
(79,144
)
(106,875
)
Purchases of investments and contributions to venture capital
investments
(13,867
)
(12,570
)
Proceeds from sale of investments
7,502
1,953
Other, net
(283
)
(960
)
Net cash used in investing activities
(85,792
)
(168,618
)
Cash flows relating to financing activities Proceeds from
long-term debt and revolving credit facility
300,882
192,500
Proceeds from exercises of stock options
21,505
11,792
Payments on long-term debt, revolving credit facility, and finance
lease obligations
(292,482
)
(157,328
)
Purchase of treasury stock
(9,351
)
(19,012
)
Payments of contingent consideration
—
(2,711
)
Other, net
(2,208
)
—
Net cash provided by financing activities
18,346
25,241
Effect of exchange rate changes on cash, cash equivalents, and
restricted cash
(8,387
)
1,671
Net change in cash, cash equivalents, and restricted cash
54,055
(32,323
)
Cash, cash equivalents, and restricted cash, beginning of period
284,480
241,214
Cash, cash equivalents, and restricted cash, end of period
$
338,535
$
208,891
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
SCHEDULE 4 RECONCILIATION OF GAAP TO NON-GAAP
SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)(1) (in
thousands, except percentages) Three Months Ended
March 30, 2024 April 1, 2023 Research Models and
Services Revenue
$
220,907
$
199,766
Operating income
43,149
40,409
Operating income as a % of revenue
19.5
%
20.2
%
Add back: Amortization related to acquisitions
10,288
5,494
Acquisition related adjustments (2)
163
830
Severance
540
—
Site consolidation and impairment charges
6,846
—
Total non-GAAP adjustments to operating income
$
17,837
$
6,324
Operating income, excluding non-GAAP adjustments
$
60,986
$
46,733
Non-GAAP operating income as a % of revenue
27.6
%
23.4
%
Depreciation and amortization
$
18,123
$
13,489
Capital expenditures
$
20,044
$
19,084
Discovery and Safety Assessment Revenue
$
605,452
$
662,353
Operating income
114,839
171,431
Operating income as a % of revenue
19.0
%
25.9
%
Add back: Amortization related to acquisitions
18,596
17,487
Acquisition related adjustments (2)
192
244
Severance
5,484
—
Site consolidation and impairment charges
1,007
—
Third-party legal costs (3)
2,191
2,805
Total non-GAAP adjustments to operating income
$
27,470
$
20,536
Operating income, excluding non-GAAP adjustments
$
142,309
$
191,967
Non-GAAP operating income as a % of revenue
23.5
%
29.0
%
Depreciation and amortization
$
45,789
$
42,450
Capital expenditures
$
48,959
$
65,184
Manufacturing Solutions Revenue
$
185,201
$
167,254
Operating income
33,681
2,106
Operating income as a % of revenue
18.2
%
1.3
%
Add back: Amortization related to acquisitions
10,793
12,021
Acquisition related adjustments (2)
699
829
Severance
1,523
916
Site consolidation and impairment charges
100
2,572
Third-party legal costs (3)
—
4,490
Total non-GAAP adjustments to operating income
$
13,115
$
20,828
Operating income, excluding non-GAAP adjustments
$
46,796
$
22,934
Non-GAAP operating income as a % of revenue
25.3
%
13.7
%
Depreciation and amortization
$
19,805
$
20,084
Capital expenditures
$
8,862
$
21,738
Unallocated Corporate Overhead
$
(65,692
)
$
(46,054
)
Add back: Severance
1,490
—
Acquisition related adjustments (2)
1,529
2,203
Total non-GAAP adjustments to operating expense
$
3,019
$
2,203
Unallocated corporate overhead, excluding non-GAAP adjustments
$
(62,673
)
$
(43,851
)
Total Revenue
$
1,011,560
$
1,029,373
Operating income
125,977
167,892
Operating income as a % of revenue
12.5
%
16.3
%
Add back: Amortization related to acquisitions
39,677
35,002
Acquisition related adjustments (2)
2,583
4,106
Severance
9,037
916
Site consolidation and impairment charges
7,953
2,572
Third-party legal costs (3)
2,191
7,295
Total non-GAAP adjustments to operating income
$
61,441
$
49,891
Operating income, excluding non-GAAP adjustments
$
187,418
$
217,783
Non-GAAP operating income as a % of revenue
18.5
%
21.2
%
Depreciation and amortization
$
85,357
$
77,069
Capital expenditures
$
79,144
$
106,875
(1)
Charles River management believes that supplementary non-GAAP
financial measures provide useful information to allow investors to
gain a meaningful understanding of our core operating results and
future prospects, without the effect of often-one-time charges and
other items which are outside our normal operations, consistent
with the manner in which management measures and forecasts the
Company’s performance. The supplementary non-GAAP financial
measures included are not meant to be considered superior to, or a
substitute for results of operations prepared in accordance with
U.S. GAAP. The Company intends to continue to assess the potential
value of reporting non-GAAP results consistent with applicable
rules, regulations and guidance.
(2)
These adjustments are related to the evaluation and integration of
acquisitions, which primarily include transaction, third-party
integration, and certain compensation costs, and fair value
adjustments associated with contingent consideration arrangements.
(3)
Third-party legal costs are related to (a) an environmental
litigation related to the Microbial Solutions business and (b)
investigations by the U.S. government into the NHP supply chain
applicable to our Safety Assessment business.
CHARLES RIVER LABORATORIES
INTERNATIONAL, INC.
SCHEDULE 5
RECONCILIATION OF GAAP EARNINGS TO NON-GAAP EARNINGS
(UNAUDITED)(1) (in thousands, except per share data)
Three Months Ended March 30, 2024 April 1,
2023 Net income available to Charles River Laboratories,
Inc. common shareholders
$
67,329
$
103,131
Add back: Adjustment of redeemable noncontrolling interest (2)
401
—
Incremental dividends attributable to noncontrolling interest
holders (3)
5,230
—
Non-GAAP adjustments to operating income (Refer to previous
schedule)
61,441
49,891
Venture capital and strategic equity investment (gains) losses, net
(5,762
)
3,282
(Gain) loss on divestitures (4)
658
(441
)
Other (5)
—
(101
)
Tax effect of non-GAAP adjustments: Non-cash tax provision related
to international financing structure (6)
341
1,124
Tax effect of the remaining non-GAAP adjustments
(12,028
)
(13,899
)
Net income attributable to Charles River Laboratories, Inc. common
shareholders, excluding non-GAAP adjustments
$
117,610
$
142,987
Weighted average shares outstanding - Basic
51,437
51,097
Effect of dilutive securities: Stock options, restricted stock
units and performance share units
405
331
Weighted average shares outstanding - Diluted
51,842
51,428
Earnings per share attributable to common shareholders:
Basic
$
1.31
$
2.02
Diluted
$
1.30
$
2.01
Basic, excluding non-GAAP adjustments
$
2.29
$
2.80
Diluted, excluding non-GAAP adjustments
$
2.27
$
2.78
(1)
Charles River management believes that supplementary non-GAAP
financial measures provide useful information to allow investors to
gain a meaningful understanding of our core operating results and
future prospects, without the effect of often-one-time charges and
other items which are outside our normal operations, consistent
with the manner in which management measures and forecasts the
Company’s performance. The supplementary non-GAAP financial
measures included are not meant to be considered superior to, or a
substitute for results of operations prepared in accordance with
U.S. GAAP. The Company intends to continue to assess the potential
value of reporting non-GAAP results consistent with applicable
rules, regulations and guidance.
(2)
This amount represents accretion adjustments of the Noveprim
redeemable noncontrolling interest.
(3)
This amount represents incremental undeclared dividends
attributable to Noveprim noncontrolling interest holders who
receive preferential dividends for fiscal year 2024.
(4)
The amount included in 2024 relates to a loss on the sale of a
Safety Assessment site. Adjustments included in 2023 relate to the
gain on the sale of our Avian Vaccine business, which was divested
in 2022.
(5)
Amounts included in 2023 relate to a final adjustment on the
termination of a Canadian pension plan.
(6)
This amount relates to the recognition of deferred tax assets
expected to be utilized as a result of changes to the Company's
international financing structure.
CHARLES RIVER LABORATORIES
INTERNATIONAL, INC.
SCHEDULE 6
RECONCILIATION OF GAAP REVENUE
GROWTH
TO NON-GAAP REVENUE GROWTH,
ORGANIC (UNAUDITED) (1)
Three Months Ended March 30, 2024 Total
CRL RMS Segment DSA Segment MS Segment
Revenue growth, reported
(1.7
)%
10.6
%
(8.6
)%
10.7
%
(Increase) decrease due to foreign exchange
(0.3
)%
0.3
%
(0.5
)%
(0.3
)%
Contribution from acquisitions (2)
(1.5
)%
(7.6
)%
—
%
—
%
Impact of divestitures (3)
0.2
%
—
%
0.4
%
—
%
Non-GAAP revenue growth, organic (4)
(3.3
)%
3.3
%
(8.7
)%
10.4
%
(1)
Charles River management believes that supplementary non-GAAP
financial measures provide useful information to allow investors to
gain a meaningful understanding of our core operating results and
future prospects, without the effect of often-one-time charges and
other items which are outside our normal operations, consistent
with the manner in which management measures and forecasts the
Company’s performance. The supplementary non-GAAP financial
measures included are not meant to be considered superior to, or a
substitute for results of operations prepared in accordance with
U.S. GAAP. The Company intends to continue to assess the potential
value of reporting non-GAAP results consistent with applicable
rules, regulations and guidance.
(2)
The contribution from acquisitions reflects only completed
acquisitions.
(3)
Impact of divestitures relates to the sale of a site within our
Safety Assessment business.
(4)
Organic revenue growth is defined as reported revenue growth
adjusted for acquisitions, divestitures, and foreign exchange.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240509551116/en/
Investor Contact: Todd Spencer Corporate Vice President,
Investor Relations 781.222.6455 todd.spencer@crl.com
Media Contact: Amy Cianciaruso Corporate Vice President, Chief
Communications Officer 781.222.6168 amy.cianciaruso@crl.com
Charles River Laboratories (NYSE:CRL)
過去 株価チャート
から 5 2024 まで 6 2024
Charles River Laboratories (NYSE:CRL)
過去 株価チャート
から 6 2023 まで 6 2024