Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

August 7, 2024

Date of Report (Date of earliest event reported)

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Charter)


Delaware	001-15943	06-1397316
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

251 Ballardvale Street

Wilmington, Massachusetts 01887

(Address of Principal Executive Offices) (Zip Code)

781-222-6000

(Registrant’s Telephone Number, including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	CRL	New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02. Results of Operations and Financial Condition

The following information shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

On August 7, 2024, Charles River Laboratories International, Inc. issued a press release providing financial results for the second quarter ended June 29, 2024.

The press release, attached as an exhibit to this report, includes "safe harbor" language pursuant to the Private Securities Litigation Reform Act of 1995, as amended, indicating that certain statements contained in the press release are "forward-looking" rather than historic. The press release also states that these and other risks relating to Charles River are set forth in the documents filed by Charles River with the Securities and Exchange Commission.

ITEM 9.01. Financial Statements and Exhibits

(d) Exhibits.


Exhibit No.						Description
99.1						Press release dated August 7, 2024
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


			CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

Date:	August 7, 2024	By:	/s/ Matthew L. Daniel
			Matthew L. Daniel, Corporate Senior Vice President,
			General Counsel, Corporate Secretary & Chief Compliance Officer

Exhibit 99.1

NEWS RELEASE

CHARLES RIVER LABORATORIES ANNOUNCES
SECOND-QUARTER 2024 RESULTS

– Second-Quarter Revenue of $1.03 Billion –

– Second-Quarter GAAP Earnings per Share of $1.74
and Non-GAAP Earnings per Share of $2.80 –

– Board Approves New Stock Repurchase Authorization of $1.0 Billion –

– Revises 2024 Guidance –

WILMINGTON, MA, August 7, 2024 – Charles River Laboratories International, Inc. (NYSE: CRL) today reported its results for the second quarter of 2024. For the quarter, revenue was $1.03 billion, a decrease of 3.2% from $1.06 billion in the second quarter of 2023.

The impact of foreign currency translation reduced reported revenue by 0.3%, a divestiture reduced reported revenue by 0.2%, and an acquisition contributed 0.5% to consolidated second-quarter revenue. Excluding the effect of these items, revenue also declined 3.2% on an organic basis. On a segment basis, organic revenue growth in the Manufacturing Solutions (Manufacturing) segment was more than offset by lower revenue in the Discovery and Safety Assessment (DSA) and Research Models and Services (RMS) segments.

In the second quarter of 2024, the GAAP operating margin decreased to 14.8% from 15.6% in the second quarter of 2023. This GAAP decrease was primarily driven by lower operating margins in the RMS and DSA segments, due in part to costs associated with the Company’s restructuring initiatives. On a non-GAAP basis, the second-quarter operating margin increased to 21.3% from 20.4%, driven primarily by lower performance-based compensation accruals, as well as operating margin improvement in the Manufacturing segment.

On a GAAP basis, second-quarter net income attributable to common shareholders was $90.0 million, a decrease of 7.2% from $97.0 million for the same period in 2023. Second-quarter diluted earnings per share on a GAAP basis were $1.74, a decrease of 7.9% from $1.89 for the second quarter of 2023. The GAAP net income and earnings per share decreases were driven primarily by lower revenue and operating income, which included higher costs associated with the Company’s restructuring initiatives. On a non-GAAP basis, net income was $144.9 million for the second quarter of 2024, an increase of 4.8% from $138.3 million for the same period in 2023. Second-quarter diluted earnings per share on a non-GAAP basis were $2.80, an increase of 4.1% from $2.69 per share for the second quarter of 2024. The increases in non-GAAP net

income and earnings per share were driven primarily by lower performance-based compensation accruals, as well as higher revenue and operating income in the Manufacturing segment.

James C. Foster, Chair, President and Chief Executive Officer, said, “Our financial performance through the first half of this year has been largely in line with our initial outlook; however, forward-looking DSA trends suggest that demand will not improve during the second half of the year as we had previously anticipated, and in fact, will decline for global biopharmaceutical clients. This has caused us to take a much more negative view of our growth prospects for the second half of the year. We believe that our clients are currently more focused on reassessing their budgets and reprioritizing their pipelines, but continue to view strategic outsourcing as a compelling solution to improve their cost efficiency and speed to market, presenting a longer-term opportunity for us.”

“Therefore, it is imperative for us to navigate through this period of softer demand by aggressively managing our cost structure, initiating new and innovative ways to transform our business, being disciplined with our investments, and enhancing our commercial efforts to win new business. We firmly believe that our clients will continue to seek life-saving treatments for rare diseases and other unmet medical needs, which drives us to take further steps to position Charles River for the future. These steps will enable us to emerge as a stronger, leaner partner to help our clients achieve their goals by utilizing our scientific expertise and flexible solutions,” Mr. Foster concluded.

Second-Quarter Segment Results

Research Models and Services (RMS)

Revenue for the RMS segment was $206.4 million in the second quarter of 2024, a decrease of 1.7% from $209.9 million in the second quarter of 2023. The Noveprim acquisition in November 2023 contributed 2.7% to second-quarter RMS reported revenue, and the impact of foreign currency translation reduced revenue by 0.5%. Organic revenue decreased by 3.9%, due primarily to lower revenue for non-human primates (NHPs) in China. In addition, lower revenue for research model services and the Cell Solutions business also contributed to the decline. The decline was partially offset by higher sales of small research models, particularly in Europe and China.

In the second quarter of 2024, the RMS segment’s GAAP operating margin decreased to 14.5% from 23.3% in the second quarter of 2023. On a non-GAAP basis, the operating margin decreased to 23.1% from 26.4%. The GAAP and non-GAAP operating margin declines were driven primarily by lower NHP revenue. On a GAAP basis, the lower operating margin also reflects higher costs associated with the Company’s restructuring initiatives, including site consolidation costs related to the Company’s CRADL operations in California.

Discovery and Safety Assessment (DSA)

Revenue for the DSA segment was $627.4 million in the second quarter of 2024, a decrease of 5.4% from $663.5 million in the second quarter of 2023. A divestiture of a small Safety Assessment site reduced reported revenue by 0.3% and the impact of foreign currency translation

reduced DSA revenue by 0.1%. Organic revenue decreased by 5.0%, driven by lower revenue in the Discovery Services and Safety Assessment businesses.

In the second quarter of 2024, the DSA segment’s GAAP operating margin decreased to 22.1% from 24.3% in the second quarter of 2023. On a non-GAAP basis, the operating margin decreased to 27.1% from 27.6% in the second quarter of 2023. The GAAP and non-GAAP operating margin decreases were driven primarily by the impact of lower sales volume, partially offset by lower performance-based compensation accruals. On a GAAP basis, the lower operating margin also reflects higher costs associated with the Company’s restructuring initiatives, as well as higher acquisition-related adjustments associated with Noveprim.

Manufacturing Solutions (Manufacturing)

Revenue for the Manufacturing segment was $192.3 million in the second quarter of 2024, an increase of 3.1% from $186.5 million in the second quarter of 2023. The impact of foreign currency translation reduced Manufacturing revenue by 0.6%. Organic revenue growth of 3.7% reflected higher revenue across all of the segment’s businesses.

In the second quarter of 2024, the Manufacturing segment’s GAAP operating margin increased to 19.4% from 13.1% in the second quarter of 2023, and on a non-GAAP basis, the operating margin increased to 26.6%, from 22.9% in the second quarter of 2023. The GAAP and non-GAAP operating margin increases were driven primarily by improved profitability for each of segment’s businesses. On a GAAP basis, lower third-party legal costs related to the Microbial Solutions business and lower acquisition-related adjustments also contributed to the increase.

New Stock Repurchase Authorization

The Company’s Board of Directors has approved a new stock repurchase authorization of $1.0 billion. This new authorization replaces a prior stock repurchase authorization of $1.3 billion that had $129.1 million remaining on the plan when it was terminated.

Revises 2024 Guidance

The Company is revising its financial guidance for 2024, which was previously updated on May 9, 2024. The reduced guidance primarily reflects the lack of a recovery in demand from our small and mid-sized biotechnology clients in the second half of the year, as well as softer demand trends from global biopharmaceutical clients whose deterioration has become increasingly evident in the past couple of months. As a result, the Company no longer expects that overall demand trends will improve during the second half of the year. In particular, these trends will have a meaningful impact on the outlook for the DSA segment. The Company is implementing restructuring initiatives that are expected to result in annualized cost savings of over $150 million (inclusive of actions implemented last year through the third quarter of 2024), of which approximately $100 million will be realized in 2024.

The Company’s 2024 guidance for revenue growth and earnings per share is as follows:


2024 GUIDANCE	CURRENT	PRIOR
Revenue growth/(decrease), reported	(4.5)% – (2.5)%	1.0% – 4.0%
Impact of divestitures/(acquisitions), net	~(0.5)%	~(0.5)%
(Favorable)/unfavorable impact of foreign exchange	--	~(0.5)%
Revenue growth/(decrease), organic (1)	(5.0)% – (3.0)%	0.0% – 3.0%
GAAP EPS estimate	$5.65 – $5.95	$7.60 – $8.10
Acquisition-related amortization (2)	~$2.75	~$2.50
Acquisition and integration-related adjustments (3)	~$0.20	~$0.10
Costs associated with restructuring actions (4)	~$1.00	~$0.35
Certain venture capital and other strategic investment losses/(gains), net (5)	($0.14)	($0.08)
Incremental dividends related to Noveprim (6)	~$0.25	~$0.25
Other items (7)	~$0.20	~$0.20
Non-GAAP EPS estimate	$9.90 – $10.20	$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; as well as fair value adjustments associated with contingent consideration arrangements.

(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 may 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 Wednesday, August 7th, at 9:00 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 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; the impact of our restructuring initiatives, including annualized savings; the impact of our stock repurchase authorization; 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.

# # #

Investor Contact: Media Contact:

Todd Spencer Amy Cianciaruso

Corporate Vice President, Corporate Vice President,

Investor Relations Chief Communications Officer

781.222.6455 781.222.6168

todd.spencer@crl.com amy.cianciaruso@crl.com


CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

SCHEDULE 1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in thousands, except for per share data)

	Three Months Ended				Six Months Ended
	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023

Service revenue	$	842,900	$	874,891	$	1,659,762	$	1,732,257
Product revenue	183,217		185,046		377,915		357,053
Total revenue	1,026,117		1,059,937		2,037,677		2,089,310
Costs and expenses:
Cost of services provided (excluding amortization of intangible assets)	577,383		578,099		1,155,547		1,143,576
Cost of products sold (excluding amortization of intangible assets)	95,021		82,861		183,574		169,103
Selling, general and administrative	169,791		199,758		356,082		374,604
Amortization of intangible assets	32,270		34,274		64,845		69,190
Operating income	151,652		164,945		277,629		332,837
Other income (expense):
Interest income	3,010		1,426		5,212		2,232
Interest expense	(32,769)		(35,044)		(67,770)		(69,424)
Other income (expense), net	(2,240)		(2,663)		3,593		(5,940)
Income before income taxes	119,653		128,664		218,664		259,705
Provision for income taxes	25,392		29,221		49,921		56,308
Net income	94,261		99,443		168,743		203,397
Less: Net income attributable to noncontrolling interests	180		2,423		1,702		3,246
Net income available to Charles River Laboratories International, Inc.	$	94,081	$	97,020	$	167,041	$	200,151

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.	$	94,081	$	97,020	$	167,041	$	200,151
Less: Adjustment of redeemable noncontrolling interest	301		—		702		—
Less: Incremental dividends attributable to noncontrolling interest holders	3,792		—		9,022		—
Net income available to Charles River Laboratories International, Inc. common shareholders	$	89,988	$	97,020	$	157,317	$	200,151


Earnings per common share
Net income attributable to common shareholders:
Basic	$	1.75	$	1.89	$	3.06	$	3.91
Diluted	$	1.74	$	1.89	$	3.04	$	3.90

Weighted-average number of common shares outstanding:
Basic	51,551		51,216		51,494		51,157
Diluted	51,846		51,467		51,810		51,382


CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

SCHEDULE 2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in thousands, except per share amounts)


	June 29, 2024		December 30, 2023
Assets
Current assets:
Cash and cash equivalents	$	179,213	$	276,771
Trade receivables and contract assets, net of allowances for credit losses of $24,951 and $25,722, respectively	762,221		780,375
Inventories	349,111		380,259
Prepaid assets	97,892		87,879
Other current assets	110,836		83,378
Total current assets	1,499,273		1,608,662
Property, plant and equipment, net	1,613,895		1,639,741
Venture capital and strategic equity investments	231,859		243,811
Operating lease right-of-use assets, net	386,147		394,029
Goodwill	3,079,693		3,095,045
Intangible assets, net	800,129		864,051
Deferred tax assets	36,109		40,279
Other assets	301,178		309,383
Total assets	$	7,948,283	$	8,195,001

Liabilities, Redeemable Noncontrolling Interests and Equity
Current liabilities:
Accounts payable	$	133,101	$	168,937
Accrued compensation	176,667		213,290
Deferred revenue	247,177		241,820
Accrued liabilities	192,156		227,825
Other current liabilities	198,418		203,210
Total current liabilities	947,519		1,055,082
Long-term debt, net and finance leases	2,409,380		2,647,147
Operating lease right-of-use liabilities	428,587		419,234
Deferred tax liabilities	165,183		191,349
Other long-term liabilities	224,520		223,191
Total liabilities	4,175,189		4,536,003
Redeemable noncontrolling interest	46,076		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; 51,696 shares issued and 51,613 shares outstanding as of June 29, 2024, and 51,338 shares issued and outstanding as of December 30, 2023	517		513
Additional paid-in capital	1,956,629		1,905,578
Retained earnings	2,053,557		1,887,218
Treasury stock, at cost, 83 and zero shares, as of June 29, 2024 and December 30, 2023, respectively	(18,265)		—
Accumulated other comprehensive loss	(269,709)		(196,427)
Total Charles River Laboratories International, Inc. equity	3,722,729		3,596,882
Nonredeemable noncontrolling interests	4,289		5,394
Total equity	3,727,018		3,602,276
Total liabilities, equity and noncontrolling interests	$	7,948,283	$	8,195,001


CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

SCHEDULE 3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(in thousands)

		Six Months Ended
		June 29, 2024		July 1, 2023
	Cash flows relating to operating activities
	Net income	$	168,743	$	203,397
	Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization	171,439		154,740
	Stock-based compensation	33,325		29,730

	Deferred income taxes	(13,073)		(16,555)
	Long-lived asset impairment charges	14,250		10,453
	(Gain) loss on venture capital & strategic equity investments, net	(6,305)		5,176
	Provision for credit losses	4,719		9,849
	Loss on divestitures, net	659		563

	Other, net	9,090		3,229
	Changes in assets and liabilities:
	Trade receivables and contract assets, net	1,072		(48,249)
	Inventories	9,750		(32,671)
	Accounts payable	(6,436)		(24,985)
	Accrued compensation	(33,153)		(7,648)
	Deferred revenue	8,151		(6,796)
	Customer contract deposits	7,849		(17,519)
	Other assets and liabilities, net	(46,657)		(5,209)
	Net cash provided by operating activities	323,423		257,505
	Cash flows relating to investing activities
	Acquisition of businesses and assets, net of cash acquired	(5,479)		(50,166)
	Capital expenditures	(118,630)		(174,258)
	Purchases of investments and contributions to venture capital investments	(35,538)		(22,689)
	Proceeds from sale of investments	12,359		2,943

	Other, net	(370)		(1,057)
	Net cash used in investing activities	(147,658)		(245,227)
	Cash flows relating to financing activities
	Proceeds from long-term debt and revolving credit facility	741,200		281,796
	Proceeds from exercises of stock options	22,331		15,719
	Payments on long-term debt, revolving credit facility, and finance lease obligations	(987,344)		(317,049)
	Purchase of treasury stock	(18,265)		(23,978)

	Payments of contingent consideration	—		(2,711)
	Purchases of additional equity interests, net	(12,000)		—
	Other, net	(13,434)		—
	Net cash provided by financing activities	(267,512)		(46,223)
	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(11,729)		1,508
	Net change in cash, cash equivalents, and restricted cash	(103,476)		(32,437)
	Cash, cash equivalents, and restricted cash, beginning of period	284,480		241,214
	Cash, cash equivalents, and restricted cash, end of period	$	181,004	$	208,777


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						Six Months Ended
		June 29, 2024			July 1, 2023			June 29, 2024			July 1, 2023
Research Models and Services
	Revenue	$	206,389		$	209,948		$	427,296		$	409,714
	Operating income	29,948			48,918			73,097			89,327
	Operating income as a % of revenue	14.5		%	23.3		%	17.1		%	21.8		%
	Add back:
	Amortization related to acquisitions	7,357			5,491			17,645			10,985
	Acquisition related adjustments (2)	174			997			337			1,827
	Severance	494			—			1,034			—
	Site consolidation and impairment charges	9,728			—			16,574			—

	Total non-GAAP adjustments to operating income	$	17,753		$	6,488		$	35,590		$	12,812
	Operating income, excluding non-GAAP adjustments	$	47,701		$	55,406		$	108,687		$	102,139
	Non-GAAP operating income as a % of revenue	23.1		%	26.4		%	25.4		%	24.9		%

	Depreciation and amortization	$	16,538		$	13,949		$	34,661		$	27,438
	Capital expenditures	$	9,313		$	7,493		$	29,357		$	26,577

Discovery and Safety Assessment
	Revenue	$	627,419		$	663,457		$	1,232,871		$	1,325,810
	Operating income	138,376			161,538			253,215			332,969
	Operating income as a % of revenue	22.1		%	24.3		%	20.5		%	25.1		%
	Add back:
	Amortization related to acquisitions	20,298			17,744			38,894			35,231
	Acquisition related adjustments (2)	5,591			2,359			5,783			2,603
	Severance	2,429			—			7,913			—
	Site consolidation and impairment charges	1,337			—			2,344			—
	Third-party legal costs (3)	2,110			1,492			4,301			4,297
	Total non-GAAP adjustments to operating income	$	31,765		$	21,595		$	59,235		$	42,131
	Operating income, excluding non-GAAP adjustments	$	170,141		$	183,133		$	312,450		$	375,100
	Non-GAAP operating income as a % of revenue	27.1		%	27.6		%	25.3		%	28.3		%

	Depreciation and amortization	$	47,729		$	43,124		$	93,518		$	85,574
	Capital expenditures	$	19,444		$	48,326		$	68,403		$	113,510

Manufacturing Solutions
	Revenue	$	192,309		$	186,532		$	377,510		$	353,786
	Operating income	37,230			24,403			70,911			26,509
	Operating income as a % of revenue	19.4		%	13.1		%	18.8		%	7.5		%
	Add back:
	Amortization related to acquisitions	10,768			11,125			21,561			23,146
	Acquisition related adjustments (2)	544			2,182			1,243			3,011
	Severance	1,671			2,517			3,194			3,433
	Site consolidation and impairment charges	990			182			1,090			2,754
	Third-party legal costs (3)	—			2,368			—			6,858
	Total non-GAAP adjustments to operating income	$	13,973		$	18,374		$	27,088		$	39,202
	Operating income, excluding non-GAAP adjustments	$	51,203		$	42,777		$	97,999		$	65,711
	Non-GAAP operating income as a % of revenue	26.6		%	22.9		%	26.0		%	18.6		%

	Depreciation and amortization	$	20,073		$	19,523		$	39,878		$	39,607
	Capital expenditures	$	10,583		$	10,862		$	19,445		$	32,600

Unallocated Corporate Overhead		$	(53,902)		$	(69,914)		$	(119,594)		$	(115,968)
	Add back:
	Acquisition related adjustments (2)	2,108			4,799			3,637			7,002
	Severance	1,304			—			2,794			—

	Total non-GAAP adjustments to operating expense	$	3,412		$	4,799		$	6,431		$	7,002
	Unallocated corporate overhead, excluding non-GAAP adjustments	$	(50,490)		$	(65,115)		$	(113,163)		$	(108,966)

Total
	Revenue	$	1,026,117		$	1,059,937		$	2,037,677		$	2,089,310
	Operating income	151,652			164,945			277,629			332,837
	Operating income as a % of revenue	14.8		%	15.6		%	13.6		%	15.9		%
	Add back:
	Amortization related to acquisitions	38,423			34,360			78,100			69,362
	Acquisition related adjustments (2)	8,417			10,337			11,000			14,443
	Severance	5,898			2,517			14,935			3,433
	Site consolidation and impairment charges	12,055			182			20,008			2,754
	Third-party legal costs (3)	2,110			3,860			4,301			11,155
	Total non-GAAP adjustments to operating income	$	66,903		$	51,256		$	128,344		$	101,147
	Operating income, excluding non-GAAP adjustments	$	218,555		$	216,201		$	405,973		$	433,984
	Non-GAAP operating income as a % of revenue	21.3		%	20.4		%	19.9		%	20.8		%

	Depreciation and amortization	$	86,082		$	77,671		$	171,439		$	154,740
	Capital expenditures	$	39,486		$	67,383		$	118,630		$	174,258

(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				Six Months Ended
		June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023

Net income available to Charles River Laboratories International, Inc. common shareholders		$	89,988	$	97,020	$	157,317	$	200,151
Add back:
Adjustment of redeemable noncontrolling interest (2)		301		—		702		—
Incremental dividends attributable to noncontrolling interest holders (3)		3,792		—		9,022		—
Non-GAAP adjustments to operating income (4)		65,576		51,256		127,017		101,147

Venture capital and strategic equity investment (gains) losses, net		(902)		1,873		(6,664)		5,155
(Gain) loss on divestitures (5)		—		1,003		658		562
Other (6)		—		596		—		495
Tax effect of non-GAAP adjustments:
Non-cash tax provision related to international financing structure (7)		871		1,296		1,212		2,420

Tax effect of the remaining non-GAAP adjustments		(14,687)		(14,759)		(26,715)		(28,658)
Net income attributable to Charles River Laboratories International, Inc. common shareholders, excluding non-GAAP adjustments		$	144,939	$	138,285	$	262,549	$	281,272

Weighted average shares outstanding - Basic		51,551		51,216		51,494		51,157
Effect of dilutive securities:
Stock options, restricted stock units and performance share units		295		251		316		225
Weighted average shares outstanding - Diluted		51,846		51,467		51,810		51,382

Earnings per share attributable to common shareholders:
Basic		$	1.75	$	1.89	$	3.06	$	3.91
Diluted		$	1.74	$	1.89	$	3.04	$	3.90

Basic, excluding non-GAAP adjustments		$	2.81	$	2.70	$	5.10	$	5.50
Diluted, excluding non-GAAP adjustments		$	2.80	$	2.69	$	5.07	$	5.47

(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)	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 June 29, 2024		Total CRL		RMS Segment		DSA Segment		MS Segment

Revenue growth, reported		(3.2)	%	(1.7)	%	(5.4)	%	3.1	%
(Increase) decrease due to foreign exchange		0.3	%	0.5	%	0.1	%	0.6	%
Contribution from acquisitions (2)		(0.5)	%	(2.7)	%	—	%	—	%
Impact of divestitures (3)		0.2	%	—	%	0.3	%	—	%

Non-GAAP revenue growth, organic (4)		(3.2)	%	(3.9)	%	(5.0)	%	3.7	%

Six Months Ended June 29, 2024		Total CRL		RMS Segment		DSA Segment		MS Segment

Revenue growth, reported		(2.5)	%	4.3	%	(7.0)	%	6.7	%
(Increase) decrease due to foreign exchange		—	%	0.4	%	(0.3)	%	0.2	%
Contribution from acquisitions (2)		(1.0)	%	(5.1)	%	—	%	—	%
Impact of divestitures (3)		0.3	%	—	%	0.4	%	—	%

Non-GAAP revenue growth, organic (4)		(3.2)	%	(0.4)	%	(6.9)	%	6.9	%

(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.

Cover Page	Aug. 07, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 07, 2024
Entity Registrant Name	CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-15943
Entity Tax Identification Number	06-1397316
Entity Address, Address Line One	251 Ballardvale Street
Entity Address, City or Town	Wilmington
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01887
City Area Code	781
Local Phone Number	222-6000
Title of 12(b) Security	Common stock, $0.01 par value
Trading Symbol	CRL
Security Exchange Name	NYSE
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity Central Index Key	0001100682
Amendment Flag	false