c161d416b9512884c08b74d592c5dd8a2558ca0df153a1eb828d15aae310e06c

DSA backlog (USD billions)

bf06210844c667a6af05e5a10402b81c38dd4818587fe93ac5be8d785f5a9a19

Adjustments for Non-Cash Items [USD]

Stock-Based Compensation [USD]

Changes in Working Capital [USD]

Capital Expenditures (CapEx) [USD]

Proceeds from Debt [USD]

Repayments of Debt [USD]

Share Repurchases [USD]

Dividend Payments [USD]

Net Change in Cash [USD]

f401fdac9f243199e43cfd47d4282fa49f97e7408a7d6ef5f03ba6312e889726

9d921e3454703869b50d3dc059d69afc77747f0591155a40310778dbd7dd43d9

- Research Models

- Research Model Services

Manufacturing

- Endotoxin and Microbial Detection

- Other Manufacturing Support

Service Revenue

Product Revenue

Total Revenue

9e78c1034683dcd5450120c907d35bf04d1a4f6d615a70a2e4559c4641e6a587

9b5a2eace87a643d382e02100b6d67b583687b27c3c3cff6e10925df4f6e5003

Service Revenue (USD, thousands)

Product Revenue (USD, thousands)

Total Revenue (USD, thousands)

Cost of Services Provided (excluding amortization of intangible assets) (USD, thousands)

Cost of Products Sold (excluding amortization of intangible assets) (USD, thousands)

Selling, General and Administrative Expenses (USD, thousands)

Amortization of Intangible Assets (USD, thousands)

Operating Income (USD, thousands)

Interest Income (USD, thousands)

Interest Expense (USD, thousands)

Other Income (Expense), Net (USD, thousands)

Income Before Income Taxes (USD, thousands)

Provision for Income Taxes (USD, thousands)

Net Income (USD, thousands)

Net Income Attributable to Noncontrolling Interests (USD, thousands)

Net Income Attributable to Charles River Laboratories International Inc. (USD, thousands)

Net Income Available to Charles River Laboratories International, Inc. Common Shareholders (USD, thousands)

Basic Earnings per Common Share (USD)

Diluted Earnings per Common Share (USD)

Weighted-average number of common shares outstanding - Basic (thousands)

Weighted-average number of common shares outstanding - Diluted (thousands)

2684aa95a07a9442f12be9e41d60a843ffa9682c3eb99435899788a5f93194e4

The cash increase in Q1 2024 was primarily driven by **strong operating activity**, which generated **$129,888 thousand** in cash, buoyed by positive adjustments like depreciation, amortization, and changes in working capital.  **[0001100682-24-000018_crl-20240330.htm:34]** **[0001100682-24-000018_crl-20240330.htm:8]**  Additionally, **financing activities** contributed **$18,346 thousand**, mainly from proceeds on long-term debt and a revolving credit facility, which helped offset cash used in investing activities such as significant **capital expenditures** and **investments**.  **[0001100682-24-000018_crl-20240330.htm:8]** **[0001100682-24-000014_crl1q24earningsrelease.htm:11]**  Although exchange rate changes negatively impacted cash by **$(8,387) thousand**, the overall robust operating and financing cash flows led to the net surge observed in the quarter.  **[0001100682-24-000018_crl-20240330.htm:34]** **[0001100682-24-000018_crl-20240330.htm:8]** **[0001100682-24-000014_crl1q24earningsrelease.htm:11]** 

What factors led to the cash surge in Q1 2024?

The sharp decline in cash during Q2 2024 was due to significant net cash outflows from investing activities and the impact of a foreign currency translation loss. **Investing activities** used **$147,658 thousand**, largely due to **capital expenditures of $118,630 thousand** and investments in venture capital and strategic equity, while a **foreign currency translation adjustment loss of $84,518 thousand** further strained the cash balance. These outflows, despite being partially offset by strong operating cash flow, led to the notable decrease in cash and cash equivalents.  **[0001100682-24-000027_crl-20240629.htm:43]** **[0001100682-24-000027_crl-20240629.htm:8]** **[0001100682-24-000027_crl-20240629.htm:7]** 

Why did cash fall sharply in Q2 2024?

The jump in Total Assets in Q4 2023 was primarily driven by a **substantial increase in goodwill**—largely due to acquisitions including the additional equity stake in Noveprim—which boosted goodwill significantly. This was further complemented by **higher inventories** (rising from **$255,809 thousand** to **$380,259 thousand**), increased **investments in property, plant, and equipment**, and a notable growth in **other assets** including strategic and long-term investments. Changes in **venture capital and strategic equity investments** also contributed to this overall asset growth ( **[0001100682-24-000007_crl-20231230.htm:120]** **[CRL_3373229_8]** **[0001100682-24-000007_crl-20231230.htm:120]** **[0001100682-24-000007_crl-20231230.htm:148]** **[0001100682-24-000007_crl-20231230.htm:106]** ).

What drove the jump in Total Assets in Q4 2023?

CRL’s debt reduction by Q3 2024 was primarily driven by **significant net repayments on the Credit Facility of $346.2 million** and **substantial payments totaling $1,316,990 thousand on long-term debt, revolving credit facilities, and finance lease obligations** during the nine months ended September 28, 2024.  **[0001100682-24-000035_crl-20240928.htm:23]** **[0001100682-24-000033_crl3q24earningsrelease.htm:11]** **[0001100682-24-000035_crl-20240928.htm:45]** 

What contributed to the debt reduction by Q3 2024?

bf99347b0a34b29e827170a33e82b10f3985161269ed0eef0c4790fba188ad91

The **operating income** in **Q4 2023** was notably lower primarily due to a combination of factors. First, **revenue declined by 7.9%** from the previous year, partly because of a **3.5% organic drop** in sales in the **Discovery and Safety Assessment (DSA)** and **Research Models and Services (RMS)** segments, exacerbated by the absence of the 53rd week in 2022 which reduced reported growth.  **[CRL_3373229_2]** **[0001157523-24-000238_a53896037ex99_1.htm:1]**  Additionally, **higher unallocated corporate costs**, including increased investments in digital strategy and rising health and fringe-related expenses, put further pressure on margins. The company also faced **segment-specific challenges**, with declining operating income in the DSA segment and lower sales volume in parts of the RMS segment, coupled with increased restructuring activities, site consolidation costs, and impairment charges. This mix of lower revenue and higher costs led to significant **margin compression**—from 14.9% in Q4 2022 to 13.1% in Q4 2023—which collectively explains the lower operating income.  **[CRL_3373229_2]** **[CRL_3373229_9]** **[CRL_3373229_4]** **[0001157523-24-000238_a53896037ex99_1.htm:1]** **[0001157523-24-000238_a53896037ex99_1.htm:12]** **[CRL_3373229_5]** 

Why was Operating Income so low in Q4 2023?

The **decline in net income** in Q3 2024 was driven by a combination of **lower revenue** and **higher costs**. Specifically, total revenue dropped by **1.6%**, with the **Discovery and Safety Assessment (DSA) segment** experiencing a **7.4% organic decline** due to lower study volumes and flat pricing. Additionally, **unallocated corporate costs increased by 53.8%** and restructuring expenses further impacted profitability, resulting in a **22.5% decrease in operating income** and a reduced operating margin. These factors together led to a **20.1% decline** in net income compared to Q3 2023.  **[0001100682-24-000035_crl-20240928.htm:7]** **[0001100682-24-000035_crl-20240928.htm:6]** **[0001100682-24-000033_crl3q24earningsrelease.htm:0]** **[0001100682-24-000035_crl-20240928.htm:37]** **[CRL_3406111_3]** **[CRL_3406111_4]** 

What drove the decline in Net Income in Q3 2024?

The sharp drop in **Basic EPS** in Q1 2024 was primarily driven by multiple factors. Firstly, there was a **decline in total and organic revenue**, with total revenue falling by **1.7%** and organic revenue dropping **3.3%**, notably due to an **8.7% decrease** in the Discovery and Safety Assessment segment.  **[0001100682-24-000014_crl1q24earningsrelease.htm:0]** **[CRL_3387835_2]**  Additionally, **operating margins decreased significantly** as both GAAP and non-GAAP margins contracted, impacted by lower DSA operating margins, higher unallocated corporate costs, and restructuring-related expenses.  **[0001100682-24-000014_crl1q24earningsrelease.htm:0]** **[CRL_3387835_2]**  Furthermore, a **higher tax rate** increased by **160 basis points** due to stock-based compensation compounded the decline.  **[CRL_3387835_6]**  Together, these factors led to a substantial reduction in net income and consequently a sharp drop in Basic EPS.

Why did Basic EPS drop sharply in Q1 2024?

a932281e143457445fc3e327563db90a6ee0edbaafbc8c7487f5de562a7c7da8

U.S.

Europe

Canada

Asia Pacific

Other Non-U.S.

Other

7473635dfe55fdff17b90901ac41e11f51c26f47d7bb9120b86b7721f7b85bc0

Net income [USD, thousands]

Depreciation and amortization [USD, thousands]

Stock-based compensation [USD, thousands]

Deferred income taxes [USD, thousands]

Long-lived asset impairment charges [USD, thousands]

(Gain) loss on venture capital & strategic equity investments, net [USD, thousands]

Provision for credit losses [USD, thousands]

Loss on divestitures, net [USD, thousands]

Other, net (adjustments) [USD, thousands]

Trade receivables and contract assets, net (changes) [USD, thousands]

Inventories (changes) [USD, thousands]

Accounts payable (changes) [USD, thousands]

Accrued compensation (changes) [USD, thousands]

Deferred revenue (changes) [USD, thousands]

Customer contract deposits (changes) [USD, thousands]

Other assets and liabilities, net (changes) [USD, thousands]

Net cash provided by operating activities [USD, thousands]

Capital expenditures [USD, thousands]

Purchases of investments and contributions to venture capital investments [USD, thousands]

Proceeds from sale of investments [USD, thousands]

Other, net (investing) [USD, thousands]

Net cash used in investing activities [USD, thousands]

Proceeds from long-term debt and revolving credit facility [USD, thousands]

Payments on long-term debt, revolving credit facility, and finance lease obligations [USD, thousands]

Proceeds from exercises of stock options [USD, thousands]

Purchase of treasury stock [USD, thousands]

Purchase of remaining equity interest of other redeemable noncontrolling interest [USD, thousands]

Other, net (financing) [USD, thousands]

Net cash used in financing activities [USD, thousands]

Effect of exchange rate changes on cash, cash equivalents, and restricted cash [USD, thousands]

Net change in cash, cash equivalents, and restricted cash [USD, thousands]

Cash, cash equivalents, and restricted cash, beginning of period [USD, thousands]

Cash, cash equivalents, and restricted cash, end of period [USD, thousands]

22b5dca1d5dddd49df6da0c0e49a4e8bfb7b5f1f24571282d4cf0a4e9e302c56

Charles River Laboratories International Inc (CRL)

Financials