Charles River Laboratories Announces Third-Quarter 2024 Results
Charles River Laboratories (NYSE: CRL) reported Q3 2024 revenue of $1.01 billion, down 1.6% from $1.03 billion in Q3 2023, with a 2.7% organic decline. The company's GAAP operating margin decreased to 11.6% from 14.8%, while non-GAAP operating margin fell to 19.9% from 20.5%. GAAP earnings per share dropped 21.3% to $1.33, and non-GAAP EPS decreased 4.8% to $2.59. The decline was primarily driven by lower revenue and higher restructuring costs, despite improvements in all three business segments' operating margins.
Charles River Laboratories (NYSE: CRL) ha riportato un fatturato del Q3 2024 di 1,01 miliardi di dollari, in calo dell'1,6% rispetto a 1,03 miliardi di dollari nel Q3 2023, con una diminuzione organica del 2,7%. Il margine operativo GAAP è diminuito all'11,6% dal 14,8%, mentre il margine operativo non GAAP è sceso al 19,9% dal 20,5%. Gli utili per azione GAAP sono calati del 21,3% a 1,33 dollari, e l'EPS non GAAP è diminuito del 4,8% a 2,59 dollari. La diminuzione è stata principalmente causata da un fatturato inferiore e da maggiori costi di ristrutturazione, nonostante i miglioramenti nei margini operativi di tutti e tre i segmenti di business.
Charles River Laboratories (NYSE: CRL) reportó ingresos de $1.01 mil millones en el Q3 2024, una disminución del 1.6% en comparación con $1.03 mil millones en el Q3 2023, con una caída orgánica del 2.7%. El margen operativo GAAP disminuyó al 11.6% desde el 14.8%, mientras que el margen operativo no GAAP cayó al 19.9% desde el 20.5%. Las ganancias por acción GAAP cayeron un 21.3% a $1.33, y el EPS no GAAP disminuyó un 4.8% a $2.59. La caída fue impulsada principalmente por menores ingresos y mayores costos de reestructuración, a pesar de las mejoras en los márgenes operativos de los tres segmentos de negocio.
찰스 리버 실험실 (NYSE: CRL)은 2024년 3분기 매출이 10억 1천만 달러로, 2023년 3분기 10억 3천만 달러에 비해 1.6% 감소했으며, 유기적으로는 2.7% 줄었습니다. GAAP 운영 마진은 14.8%에서 11.6%로 감소했습니다, 비 GAAP 운영 마진은 20.5%에서 19.9%로 떨어졌습니다. GAAP 주당순이익은 21.3% 감소한 1.33달러, 비 GAAP EPS는 4.8% 감소한 2.59달러였습니다. 이 감소는 주로 매출 하락과 높은 구조 조정 비용에 의해 발생했으며, 모든 세 가지 사업 부문의 운영 마진이 개선된 점을 고려하면, 더욱 눈에 띕니다.
Charles River Laboratories (NYSE: CRL) a annoncé un chiffre d'affaires de 1,01 milliard de dollars pour le T3 2024, en baisse de 1,6% par rapport à 1,03 milliard de dollars au T3 2023, avec une baisse organique de 2,7%. La marge opérationnelle GAAP a chuté à 11,6% contre 14,8%, tandis que la marge opérationnelle non-GAAP est tombée à 19,9% contre 20,5%. Le bénéfice par action GAAP a diminué de 21,3% à 1,33 dollar, et le BPA non-GAAP a baissé de 4,8% à 2,59 dollars. Ce déclin a été principalement causé par une baisse des revenus et des coûts de restructuration plus élevés, malgré des améliorations dans les marges opérationnelles des trois segments d'activité.
Charles River Laboratories (NYSE: CRL) hat im Q3 2024 einen Umsatz von 1,01 Milliarden Dollar gemeldet, was einem Rückgang von 1,6% im Vergleich zu 1,03 Milliarden Dollar im Q3 2023 entspricht, mit einem organischen Rückgang von 2,7%. Die GAAP-Betriebsgewinne sind auf 11,6% von 14,8% gesunken, während der nicht GAAP-Betriebsgewinn auf 19,9% von 20,5% gefallen ist. Der GAAP-Gewinn pro Aktie sank um 21,3% auf 1,33 Dollar, und das nicht GAAP EPS verringerte sich um 4,8% auf 2,59 Dollar. Der Rückgang wurde hauptsächlich durch niedrigere Einnahmen und höhereRestrukturierungskosten verursacht, trotz der Verbesserungen in den Betriebsgewinnen aller drei Geschäftsfelder.
- Operating margin improved across all three business segments
- Foreign currency translation benefited revenue by 0.4%
- Acquisition contributed 0.9% to consolidated revenue
- Revenue decreased 1.6% to $1.01 billion
- Organic revenue declined 2.7%
- GAAP operating margin decreased from 14.8% to 11.6%
- GAAP net income fell 21.4% to $68.7 million
- Non-GAAP net income decreased 4.8% to $133.7 million
- GAAP EPS declined 21.3% to $1.33
- Non-GAAP EPS decreased 4.8% to $2.59
Insights
The Q3 results reveal concerning trends with
The weakness in the Discovery and Safety Assessment segment overshadowing growth in other divisions suggests broader industry challenges. While non-GAAP margins improved across segments, higher corporate costs negated these gains. The divergence between GAAP and non-GAAP results (
– Third-Quarter Revenue of
– Third-Quarter GAAP Earnings per Share of
– Updates 2024 Guidance –
The impact of foreign currency translation benefited reported revenue by
In the third quarter of 2024, the GAAP operating margin decreased to
On a GAAP basis, third-quarter net income attributable to common shareholders was
James C. Foster, Chair, President and Chief Executive Officer, said, “Forward-looking demand indicators were relatively stable in the third quarter, contributing to third-quarter financial performance which exceeded our prior outlook. We are continuing to navigate through a challenging period as global biopharmaceutical clients reduce spending in conjunction with major restructuring and pipeline reprioritization activities, but overall demand trends do not appear to have deteriorated further. In addition, biotech funding has improved in 2024, and demand appears to be demonstrating early signs of stabilization. These factors resulted in a slight, sequential improvement in net book-to-bill and the cancellation rate in the Safety Assessment business.”
“We remain laser focused during this period on our strategy, which includes aggressively managing our cost structure, enhancing our clients’ experiences to gain additional share, and protecting shareholder value. We will continue to distinguish ourselves through our exceptional science and preclinical focus, in order to extend our leading position as our clients’ preferred, global, non-clinical drug development partner. We expect to emerge from this period as a stronger, leaner, and more profitable company, and an even more responsive partner for our clients,” Mr. Foster concluded.
Third-Quarter Segment Results
Research Models and Services (RMS)
Revenue for the RMS segment was
In the third quarter of 2024, the RMS segment’s GAAP operating margin decreased to
Discovery and Safety Assessment (DSA)
Revenue for the DSA segment was
In the third quarter of 2024, the DSA segment’s GAAP operating margin decreased to
Manufacturing Solutions (Manufacturing)
Revenue for the Manufacturing segment was
In the third quarter of 2024, the Manufacturing segment’s GAAP operating margin increased to
Stock Repurchase Update
On August 2, 2024, the Company’s Board of Directors approved a new stock repurchase authorization of
Updates 2024 Guidance
The Company is updating its financial guidance for 2024, which was previously revised on August 7, 2024. Revenue and non-GAAP earnings per share guidance have been narrowed and slightly raised from the midpoint of the previous ranges to principally reflect the third-quarter financial performance, which exceeded the Company's prior outlook. In addition, GAAP earnings per share guidance has been reduced due primarily to increased charges related to the Company's additional restructuring actions.
The Company’s 2024 guidance for revenue growth and earnings per share is as follows:
2024 GUIDANCE |
CURRENT |
PRIOR |
Revenue growth/(decrease), reported |
(3.0)%-(2.0)% |
(4.5)% – (2.5)% |
Impact of divestitures/(acquisitions), net |
~(0.5)% |
~(0.5)% |
(Favorable)/unfavorable impact of foreign exchange |
~(0.5)% |
-- |
Revenue growth/(decrease), organic (1) |
(4.0)% – (3.0)% |
(5.0)% – (3.0)% |
GAAP EPS estimate |
|
|
Acquisition-related amortization (2) |
|
|
Acquisition and integration-related adjustments (3) |
|
|
Costs associated with restructuring actions (4) |
|
|
Certain venture capital and other strategic investment losses/(gains), net (5) |
( |
( |
Incremental dividends related to Noveprim (6) |
|
|
Other items (7) |
|
|
Non-GAAP EPS estimate |
|
|
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; as well as fair value adjustments associated with contingent consideration arrangements. |
(4) These adjustments primarily include site consolidation (including site transition costs), 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 have and may continue to receive preferential dividends for fiscal year 2024. |
(7) These items primarily relate to (i) certain third-party legal costs related to investigations by the |
Webcast
Charles River has scheduled a live webcast on Wednesday, November 6th, at 9:30 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.
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
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
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 | Nine Months Ended | ||||||||||||||
September 28, 2024 |
September 30, 2023 |
September 28, 2024 |
September 30, 2023 |
||||||||||||
Service revenue | $ |
832,463 |
|
$ |
869,759 |
|
$ |
2,492,225 |
|
$ |
2,602,016 |
|
|||
Product revenue |
|
177,300 |
|
|
156,864 |
|
|
555,215 |
|
|
513,917 |
|
|||
Total revenue |
|
1,009,763 |
|
|
1,026,623 |
|
|
3,047,440 |
|
|
3,115,933 |
|
|||
Costs and expenses: | |||||||||||||||
Cost of services provided (excluding amortization of intangible assets) |
|
568,699 |
|
|
587,560 |
|
|
1,724,246 |
|
|
1,731,136 |
|
|||
Cost of products sold (excluding amortization of intangible assets) |
|
92,043 |
|
|
77,223 |
|
|
275,617 |
|
|
246,326 |
|
|||
Selling, general and administrative |
|
199,213 |
|
|
176,109 |
|
|
555,295 |
|
|
550,713 |
|
|||
Amortization of intangible assets |
|
32,403 |
|
|
34,229 |
|
|
97,248 |
|
|
103,419 |
|
|||
Operating income |
|
117,405 |
|
|
151,502 |
|
|
395,034 |
|
|
484,339 |
|
|||
Other income (expense): | |||||||||||||||
Interest income |
|
1,528 |
|
|
1,373 |
|
|
6,740 |
|
|
3,605 |
|
|||
Interest expense |
|
(30,284 |
) |
|
(33,742 |
) |
|
(98,054 |
) |
|
(103,166 |
) |
|||
Other income (expense), net |
|
2,592 |
|
|
(6,260 |
) |
|
6,185 |
|
|
(12,200 |
) |
|||
Income before income taxes |
|
91,241 |
|
|
112,873 |
|
|
309,905 |
|
|
372,578 |
|
|||
Provision for income taxes |
|
20,946 |
|
|
24,852 |
|
|
70,867 |
|
|
81,160 |
|
|||
Net income |
|
70,295 |
|
|
88,021 |
|
|
239,038 |
|
|
291,418 |
|
|||
Less: Net income attributable to noncontrolling interests |
|
638 |
|
|
632 |
|
|
2,340 |
|
|
3,878 |
|
|||
Net income available to Charles River Laboratories International, Inc. | $ |
69,657 |
|
$ |
87,389 |
|
$ |
236,698 |
|
$ |
287,540 |
|
|||
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. | $ |
69,657 |
|
$ |
87,389 |
|
$ |
236,698 |
|
$ |
287,540 |
|
|||
Less: Adjustment of redeemable noncontrolling interest |
|
379 |
|
|
— |
|
|
1,081 |
|
|
— |
|
|||
Less: Incremental dividends attributable to noncontrolling interest holders |
|
599 |
|
|
— |
|
|
9,621 |
|
|
— |
|
|||
Net income available to Charles River Laboratories International, Inc. common shareholders | $ |
68,679 |
|
$ |
87,389 |
|
$ |
225,996 |
|
$ |
287,540 |
|
|||
Earnings per common share | |||||||||||||||
Basic | $ |
1.34 |
|
$ |
1.70 |
|
$ |
4.39 |
|
$ |
5.62 |
|
|||
Diluted | $ |
1.33 |
|
$ |
1.69 |
|
$ |
4.37 |
|
$ |
5.58 |
|
|||
Weighted-average number of common shares outstanding: | |||||||||||||||
Basic |
|
51,394 |
|
|
51,283 |
|
|
51,461 |
|
|
51,199 |
|
|||
Diluted |
|
51,583 |
|
|
51,607 |
|
|
51,713 |
|
|
51,493 |
|
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | |||||||
|
|||||||
SCHEDULE 2 | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
(in thousands, except per share amounts) | |||||||
September 28, 2024 |
December 30, 2023 |
||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ |
210,171 |
|
$ |
276,771 |
|
|
Trade receivables and contract assets, net of allowances for credit losses of |
|
754,207 |
|
|
780,375 |
|
|
Inventories |
|
336,200 |
|
|
380,259 |
|
|
Prepaid assets |
|
92,631 |
|
|
87,879 |
|
|
Other current assets |
|
101,514 |
|
|
83,378 |
|
|
Total current assets |
|
1,494,723 |
|
|
1,608,662 |
|
|
Property, plant and equipment, net |
|
1,639,978 |
|
|
1,639,741 |
|
|
Venture capital and strategic equity investments |
|
235,987 |
|
|
243,811 |
|
|
Operating lease right-of-use assets, net |
|
385,133 |
|
|
394,029 |
|
|
Goodwill |
|
3,124,592 |
|
|
3,095,045 |
|
|
Intangible assets, net |
|
778,461 |
|
|
864,051 |
|
|
Deferred tax assets |
|
37,963 |
|
|
40,279 |
|
|
Other assets |
|
307,005 |
|
|
309,383 |
|
|
Total assets | $ |
8,003,842 |
|
$ |
8,195,001 |
|
|
Liabilities, Redeemable Noncontrolling Interests and Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ |
135,963 |
|
$ |
168,937 |
|
|
Accrued compensation |
|
211,077 |
|
|
213,290 |
|
|
Deferred revenue |
|
251,968 |
|
|
241,820 |
|
|
Accrued liabilities |
|
208,124 |
|
|
227,825 |
|
|
Other current liabilities |
|
205,089 |
|
|
203,210 |
|
|
Total current liabilities |
|
1,012,221 |
|
|
1,055,082 |
|
|
Long-term debt, net and finance leases |
|
2,326,653 |
|
|
2,647,147 |
|
|
Operating lease right-of-use liabilities |
|
432,836 |
|
|
419,234 |
|
|
Deferred tax liabilities |
|
167,746 |
|
|
191,349 |
|
|
Other long-term liabilities |
|
236,669 |
|
|
223,191 |
|
|
Total liabilities |
|
4,176,125 |
|
|
4,536,003 |
|
|
Redeemable noncontrolling interest |
|
40,590 |
|
|
56,722 |
|
|
Equity: | |||||||
Preferred stock, |
|
— |
|
|
— |
|
|
Common stock, |
|
517 |
|
|
513 |
|
|
Additional paid-in capital |
|
1,971,413 |
|
|
1,905,578 |
|
|
Retained earnings |
|
2,122,835 |
|
|
1,887,218 |
|
|
Treasury stock, at cost, 584 and zero shares, as of September 28, 2024 and December 30, 2023, respectively |
|
(119,621 |
) |
|
— |
|
|
Accumulated other comprehensive loss |
|
(192,871 |
) |
|
(196,427 |
) |
|
Total Charles River Laboratories International, Inc. equity |
|
3,782,273 |
|
|
3,596,882 |
|
|
Nonredeemable noncontrolling interests |
|
4,854 |
|
|
5,394 |
|
|
Total equity |
|
3,787,127 |
|
|
3,602,276 |
|
|
Total liabilities, equity and noncontrolling interests | $ |
8,003,842 |
|
$ |
8,195,001 |
|
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | |||||||
|
|||||||
SCHEDULE 3 | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||
(in thousands) | |||||||
Nine Months Ended | |||||||
September 28, 2024 |
September 30, 2023 |
||||||
Cash flows relating to operating activities | |||||||
Net income | $ |
239,038 |
|
$ |
291,418 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization |
|
259,637 |
|
|
233,610 |
|
|
Stock-based compensation |
|
52,656 |
|
|
52,527 |
|
|
Deferred income taxes |
|
(25,988 |
) |
|
(28,251 |
) |
|
Long-lived asset impairment charges |
|
17,339 |
|
|
26,202 |
|
|
(Gain) loss on venture capital & strategic equity investments, net |
|
(8,788 |
) |
|
9,246 |
|
|
Provision for credit losses |
|
8,223 |
|
|
11,030 |
|
|
Loss on divestitures, net |
|
659 |
|
|
995 |
|
|
Other, net |
|
20,372 |
|
|
6,947 |
|
|
Changes in assets and liabilities: | |||||||
Trade receivables and contract assets, net |
|
18,300 |
|
|
(59,081 |
) |
|
Inventories |
|
13,789 |
|
|
(44,126 |
) |
|
Accounts payable |
|
(7,095 |
) |
|
(26,531 |
) |
|
Accrued compensation |
|
(1,981 |
) |
|
28,438 |
|
|
Deferred revenue |
|
13,583 |
|
|
(9,997 |
) |
|
Customer contract deposits |
|
14,707 |
|
|
(21,534 |
) |
|
Other assets and liabilities, net |
|
(39,236 |
) |
|
(7,938 |
) |
|
Net cash provided by operating activities |
|
575,215 |
|
|
462,955 |
|
|
Cash flows relating to investing activities | |||||||
Acquisition of businesses and assets, net of cash acquired |
|
(5,479 |
) |
|
(50,166 |
) |
|
Capital expenditures |
|
(157,351 |
) |
|
(240,205 |
) |
|
Purchases of investments and contributions to venture capital investments |
|
(45,264 |
) |
|
(36,322 |
) |
|
Proceeds from sale of investments |
|
39,470 |
|
|
3,953 |
|
|
Other, net |
|
(358 |
) |
|
(2,044 |
) |
|
Net cash used in investing activities |
|
(168,982 |
) |
|
(324,784 |
) |
|
Cash flows relating to financing activities | |||||||
Proceeds from long-term debt and revolving credit facility |
|
976,783 |
|
|
333,034 |
|
|
Proceeds from exercises of stock options |
|
23,110 |
|
|
19,658 |
|
|
Payments on long-term debt, revolving credit facility, and finance lease obligations |
|
(1,316,990 |
) |
|
(530,909 |
) |
|
Purchase of treasury stock |
|
(119,051 |
) |
|
(24,016 |
) |
|
Payments of contingent consideration |
|
— |
|
|
(2,711 |
) |
|
Purchases of additional equity interests, net |
|
(12,000 |
) |
|
— |
|
|
Other, net |
|
(26,900 |
) |
|
(4,145 |
) |
|
Net cash used in financing activities |
|
(475,048 |
) |
|
(209,089 |
) |
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
(4,025 |
) |
|
(4,680 |
) |
|
Net change in cash, cash equivalents, and restricted cash |
|
(72,840 |
) |
|
(75,598 |
) |
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
284,480 |
|
|
241,214 |
|
|
Cash, cash equivalents, and restricted cash, end of period | $ |
211,640 |
|
$ |
165,616 |
|
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 | Nine Months Ended | |||||||||||||||
September 28, 2024 |
September 30, 2023 |
September 28, 2024 |
September 30, 2023 |
|||||||||||||
Research Models and Services | ||||||||||||||||
Revenue | $ |
197,824 |
|
$ |
186,848 |
|
$ |
625,120 |
|
$ |
596,562 |
|
||||
Operating income |
|
27,544 |
|
|
28,326 |
|
|
100,641 |
|
|
117,653 |
|
||||
Operating income as a % of revenue |
|
13.9 |
% |
|
15.2 |
% |
|
16.1 |
% |
|
19.7 |
% |
||||
Add back: | ||||||||||||||||
Amortization related to acquisitions |
|
9,086 |
|
|
5,398 |
|
|
26,731 |
|
|
16,383 |
|
||||
Acquisition and integration-related adjustments (2) |
|
— |
|
|
604 |
|
|
337 |
|
|
2,431 |
|
||||
Severance |
|
2,651 |
|
|
965 |
|
|
3,685 |
|
|
965 |
|
||||
Site consolidation and impairment charges |
|
2,318 |
|
|
— |
|
|
18,892 |
|
|
— |
|
||||
Total non-GAAP adjustments to operating income | $ |
14,055 |
|
$ |
6,967 |
|
$ |
49,645 |
|
$ |
19,779 |
|
||||
Operating income, excluding non-GAAP adjustments | $ |
41,599 |
|
$ |
35,293 |
|
$ |
150,286 |
|
$ |
137,432 |
|
||||
Non-GAAP operating income as a % of revenue |
|
21.0 |
% |
|
18.9 |
% |
|
24.0 |
% |
|
23.0 |
% |
||||
Depreciation and amortization | $ |
18,389 |
|
$ |
13,872 |
|
$ |
53,050 |
|
$ |
41,310 |
|
||||
Capital expenditures | $ |
7,186 |
|
$ |
9,192 |
|
$ |
36,543 |
|
$ |
35,769 |
|
||||
Discovery and Safety Assessment | ||||||||||||||||
Revenue | $ |
615,060 |
|
$ |
664,028 |
|
$ |
1,847,931 |
|
$ |
1,989,838 |
|
||||
Operating income |
|
126,436 |
|
|
146,819 |
|
|
379,651 |
|
|
479,788 |
|
||||
Operating income as a % of revenue |
|
20.6 |
% |
|
22.1 |
% |
|
20.5 |
% |
|
24.1 |
% |
||||
Add back: | ||||||||||||||||
Amortization related to acquisitions |
|
19,818 |
|
|
17,749 |
|
|
58,712 |
|
|
52,980 |
|
||||
Acquisition and integration-related adjustments (2) |
|
1,714 |
|
|
630 |
|
|
7,497 |
|
|
3,233 |
|
||||
Severance |
|
12,550 |
|
|
2,001 |
|
|
20,463 |
|
|
2,001 |
|
||||
Site consolidation and impairment charges |
|
1,324 |
|
|
11,219 |
|
|
3,668 |
|
|
11,219 |
|
||||
Third-party legal costs (3) |
|
6,713 |
|
|
2,099 |
|
|
11,014 |
|
|
6,396 |
|
||||
Total non-GAAP adjustments to operating income | $ |
42,119 |
|
$ |
33,698 |
|
$ |
101,354 |
|
$ |
75,829 |
|
||||
Operating income, excluding non-GAAP adjustments | $ |
168,555 |
|
$ |
180,517 |
|
$ |
481,005 |
|
$ |
555,617 |
|
||||
Non-GAAP operating income as a % of revenue |
|
27.4 |
% |
|
27.2 |
% |
|
26.0 |
% |
|
27.9 |
% |
||||
Depreciation and amortization | $ |
47,751 |
|
$ |
44,088 |
|
$ |
141,269 |
|
$ |
129,662 |
|
||||
Capital expenditures | $ |
22,773 |
|
$ |
41,967 |
|
$ |
91,176 |
|
$ |
155,477 |
|
||||
Manufacturing Solutions | ||||||||||||||||
Revenue | $ |
196,879 |
|
$ |
175,747 |
|
$ |
574,389 |
|
$ |
529,533 |
|
||||
Operating income |
|
40,188 |
|
|
26,275 |
|
|
111,099 |
|
|
52,784 |
|
||||
Operating income as a % of revenue |
|
20.4 |
% |
|
15.0 |
% |
|
19.3 |
% |
|
10.0 |
% |
||||
Add back: | ||||||||||||||||
Amortization related to acquisitions |
|
10,802 |
|
|
11,164 |
|
|
32,363 |
|
|
34,310 |
|
||||
Acquisition and integration-related adjustments (2) |
|
143 |
|
|
3,279 |
|
|
1,386 |
|
|
6,290 |
|
||||
Severance |
|
4,892 |
|
|
612 |
|
|
8,086 |
|
|
4,045 |
|
||||
Site consolidation and impairment charges |
|
502 |
|
|
364 |
|
|
1,592 |
|
|
3,118 |
|
||||
Third-party legal costs (3) |
|
— |
|
|
1,336 |
|
|
— |
|
|
8,194 |
|
||||
Total non-GAAP adjustments to operating income | $ |
16,339 |
|
$ |
16,755 |
|
$ |
43,427 |
|
$ |
55,957 |
|
||||
Operating income, excluding non-GAAP adjustments | $ |
56,527 |
|
$ |
43,030 |
|
$ |
154,526 |
|
$ |
108,741 |
|
||||
Non-GAAP operating income as a % of revenue |
|
28.7 |
% |
|
24.5 |
% |
|
26.9 |
% |
|
20.5 |
% |
||||
Depreciation and amortization | $ |
20,298 |
|
$ |
20,070 |
|
$ |
60,176 |
|
$ |
59,677 |
|
||||
Capital expenditures | $ |
8,735 |
|
$ |
14,349 |
|
$ |
28,180 |
|
$ |
46,949 |
|
||||
Unallocated Corporate Overhead | $ |
(76,763 |
) |
$ |
(49,918 |
) |
$ |
(196,357 |
) |
$ |
(165,886 |
) |
||||
Add back: | ||||||||||||||||
Acquisition and integration-related adjustments (2) |
|
4,082 |
|
|
1,958 |
|
|
7,719 |
|
|
8,960 |
|
||||
Severance |
|
6,443 |
|
|
— |
|
|
9,237 |
|
|
— |
|
||||
Total non-GAAP adjustments to operating expense | $ |
10,525 |
|
$ |
1,958 |
|
$ |
16,956 |
|
$ |
8,960 |
|
||||
Unallocated corporate overhead, excluding non-GAAP adjustments | $ |
(66,238 |
) |
$ |
(47,960 |
) |
$ |
(179,401 |
) |
$ |
(156,926 |
) |
||||
Total | ||||||||||||||||
Revenue | $ |
1,009,763 |
|
$ |
1,026,623 |
|
$ |
3,047,440 |
|
$ |
3,115,933 |
|
||||
Operating income |
|
117,405 |
|
|
151,502 |
|
|
395,034 |
|
|
484,339 |
|
||||
Operating income as a % of revenue |
|
11.6 |
% |
|
14.8 |
% |
|
13.0 |
% |
|
15.5 |
% |
||||
Add back: | ||||||||||||||||
Amortization related to acquisitions |
|
39,706 |
|
|
34,311 |
|
|
117,806 |
|
|
103,673 |
|
||||
Acquisition and integration-related adjustments (2) |
|
5,939 |
|
|
6,471 |
|
|
16,939 |
|
|
20,914 |
|
||||
Severance |
|
26,536 |
|
|
3,578 |
|
|
41,471 |
|
|
7,011 |
|
||||
Site consolidation and impairment charges |
|
4,144 |
|
|
11,583 |
|
|
24,152 |
|
|
14,337 |
|
||||
Third-party legal costs (3) |
|
6,713 |
|
|
3,435 |
|
|
11,014 |
|
|
14,590 |
|
||||
Total non-GAAP adjustments to operating income | $ |
83,038 |
|
$ |
59,378 |
|
$ |
211,382 |
|
$ |
160,525 |
|
||||
Operating income, excluding non-GAAP adjustments | $ |
200,443 |
|
$ |
210,880 |
|
$ |
606,416 |
|
$ |
644,864 |
|
||||
Non-GAAP operating income as a % of revenue |
|
19.9 |
% |
|
20.5 |
% |
|
19.9 |
% |
|
20.7 |
% |
||||
Depreciation and amortization | $ |
88,198 |
|
$ |
78,870 |
|
$ |
259,637 |
|
$ |
233,610 |
|
||||
Capital expenditures | $ |
38,721 |
|
$ |
65,947 |
|
$ |
157,351 |
|
$ |
240,205 |
|
(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 |
|||||||||
(2) |
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; as well as 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 |
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 | Nine Months Ended | ||||||||||||||
September 28, 2024 |
September 30, 2023 |
September 28, 2024 |
September 30, 2023 |
||||||||||||
Net income available to Charles River Laboratories International, Inc. common shareholders | $ |
68,679 |
|
$ |
87,389 |
|
$ |
225,996 |
|
$ |
287,540 |
|
|||
Add back: | |||||||||||||||
Adjustment of redeemable noncontrolling interest (2) |
|
379 |
|
|
— |
|
|
1,081 |
|
|
— |
|
|||
Incremental dividends attributable to noncontrolling interest holders (3) |
|
599 |
|
|
— |
|
|
9,621 |
|
|
— |
|
|||
Non-GAAP adjustments to operating income (4) |
|
82,315 |
|
|
59,378 |
|
|
209,332 |
|
|
160,525 |
|
|||
Venture capital and strategic equity investment (gains) losses, net |
|
(2,507 |
) |
|
7,249 |
|
|
(9,171 |
) |
|
12,404 |
|
|||
(Gain) loss on divestitures (5) |
|
— |
|
|
433 |
|
|
658 |
|
|
995 |
|
|||
Other (6) |
|
— |
|
|
— |
|
|
— |
|
|
495 |
|
|||
Tax effect of non-GAAP adjustments: | |||||||||||||||
Non-cash tax provision related to international financing structure (7) |
|
292 |
|
|
1,283 |
|
|
1,504 |
|
|
3,703 |
|
|||
Enacted tax law changes |
|
3,596 |
|
|
— |
|
|
3,596 |
|
|
— |
|
|||
Tax effect of the remaining non-GAAP adjustments |
|
(19,608 |
) |
|
(15,271 |
) |
|
(46,323 |
) |
|
(43,929 |
) |
|||
Net income attributable to Charles River Laboratories International, Inc. common shareholders, excluding non-GAAP adjustments | $ |
133,745 |
|
$ |
140,461 |
|
$ |
396,294 |
|
$ |
421,733 |
|
|||
Weighted average shares outstanding - Basic |
|
51,394 |
|
|
51,283 |
|
|
51,461 |
|
|
51,199 |
|
|||
Effect of dilutive securities: | |||||||||||||||
Stock options, restricted stock units and performance share units |
|
189 |
|
|
324 |
|
|
252 |
|
|
294 |
|
|||
Weighted average shares outstanding - Diluted |
|
51,583 |
|
|
51,607 |
|
|
51,713 |
|
|
51,493 |
|
|||
Earnings per share attributable to common shareholders: | |||||||||||||||
Basic | $ |
1.34 |
|
$ |
1.70 |
|
$ |
4.39 |
|
$ |
5.62 |
|
|||
Diluted | $ |
1.33 |
|
$ |
1.69 |
|
$ |
4.37 |
|
$ |
5.58 |
|
|||
Basic, excluding non-GAAP adjustments | $ |
2.60 |
|
$ |
2.74 |
|
$ |
7.70 |
|
$ |
8.24 |
|
|||
Diluted, excluding non-GAAP adjustments | $ |
2.59 |
|
$ |
2.72 |
|
$ |
7.66 |
|
$ |
8.19 |
|
(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 |
||||||||
(2) |
This amount represents accretion adjustments of the Noveprim redeemable noncontrolling interest. | ||||||||
(3) |
This amount represents incremental declared and undeclared dividends attributable to Noveprim noncontrolling interest holders who receive preferential dividends for fiscal year 2024. | ||||||||
(4) |
This amount excludes Non-GAAP adjustments attributable to noncontrolling interest holders. | ||||||||
(5) |
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. | ||||||||
(6) |
Amounts included in 2023 relate to a final adjustment on the termination of a Canadian pension plan. | ||||||||
(7) |
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 September 28, 2024 | Total CRL | RMS Segment | DSA Segment | MS Segment | ||||||||
Revenue growth, reported | (1.6 |
)% |
5.9 |
% |
(7.4 |
)% |
12.0 |
% |
||||
(Increase) decrease due to foreign exchange | (0.4 |
)% |
(0.4 |
)% |
(0.3 |
)% |
(0.2 |
)% |
||||
Contribution from acquisitions (2) | (0.9 |
)% |
(4.9 |
)% |
— |
% |
— |
% |
||||
Impact of divestitures (3) | 0.2 |
% |
— |
% |
0.3 |
% |
— |
% |
||||
Non-GAAP revenue growth, organic (4) | (2.7 |
)% |
0.6 |
% |
(7.4 |
)% |
11.8 |
% |
||||
Nine Months Ended September 28, 2024 | Total CRL | RMS Segment | DSA Segment | MS Segment | ||||||||
Revenue growth, reported | (2.2 |
)% |
4.8 |
% |
(7.1 |
)% |
8.5 |
% |
||||
(Increase) decrease due to foreign exchange | (0.1 |
)% |
0.1 |
% |
(0.3 |
)% |
— |
% |
||||
Contribution from acquisitions (2) | (1.0 |
)% |
(5.0 |
)% |
— |
% |
— |
% |
||||
Impact of divestitures (3) | 0.2 |
% |
— |
% |
0.4 |
% |
— |
% |
||||
Non-GAAP revenue growth, organic (4) | (3.1 |
)% |
(0.1 |
)% |
(7.0 |
)% |
8.5 |
% |
(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 |
|||||||||
(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/20241106571740/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
Source: Charles River Laboratories International, Inc.
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