Core Insights - Charles River Laboratories (CRL) reported total revenue of $1.03 billion for the quarter ending June 2024, a decrease of 3.2% year-over-year [4] - The company's international revenue performance is crucial for understanding its financial resilience and growth prospects [1][2] International Revenue Analysis - Asia Pacific contributed $50.39 million, accounting for 4.9% of total revenue, with a surprise decline of -10.07% compared to expectations of $56.03 million [5] - Europe generated $271.38 million, making up 26.5% of total revenue, with a surprise of -4.12% against the projected $283.04 million [6] - Canada reported $125.24 million in revenue, representing 12.2% of total revenue, exceeding expectations by +19.89% [7] - Other International markets, including Brazil and Israel, contributed $7.68 million, accounting for 0.8% of total revenue, with a significant surprise of +220.08% [8] Future Projections - Analysts project total revenue of $1.04 billion for the current fiscal quarter, reflecting a 1.6% increase year-over-year, with expected contributions from Asia Pacific (5%), Europe (27.2%), Canada (11.1%), and Other International (0.3%) [9] - For the full year, total revenue is anticipated to be $4.11 billion, a decrease of 0.5% compared to last year, with specific contributions from Asia Pacific (5.2%), Europe (27.7%), Canada (11%), and Other International (0.7%) [10] Conclusion - The reliance on international markets presents both opportunities and challenges for Charles River, making the tracking of international revenue trends essential for future projections [11]

Core Viewpoint - The biopharma market is experiencing a slower recovery than expected, particularly affecting small and mid-sized biotechnology customers, leading to a downgrade in full-year guidance for Charles River Laboratories (CRL) [2][4][17] Company Performance - CRL's Q2 results showed a 5% year-over-year decline in organic revenue, primarily due to weak end-market demands from small and mid-sized biopharma companies [4][10] - The company has lowered its full-year guidance for both organic revenue and bottom-line growth, with projected revenue growth now between -4.5% to -2.5% compared to a prior estimate of 1.0% to 4.0% [3][10] - The GAAP EPS estimate has been revised down to $5.65 - $5.95 from $7.60 - $8.10 [3] Cost Management Initiatives - CRL's adjusted operating margin expanded by 90 basis points in Q2 despite a 3.2% decline in organic revenue, indicating effective cost-cutting measures [6][10] - The company anticipates generating over $150 million in annualized cost savings from ongoing cost-cutting initiatives, expected to be fully realized by FY25 [8][9] Market Outlook - The biopharma market is expected to remain soft in FY24 due to high interest rates and a tight capital funding environment, with no anticipated recovery before the Federal Reserve cuts interest rates [5][10] - Revenue for CRL is projected to decline by 3% in FY24, with specific segments like Discovery and Safety Assessment expected to see a 6% decline [12][13] Future Projections - For FY25, CRL is expected to recover with an 8% normalized revenue growth, assuming a favorable shift in the interest rate environment [12][13] - The company is projected to expand its margin by 230 basis points in FY25 due to the realization of cost savings [9][13] Valuation - The fair value of CRL's stock is estimated at $220 per share based on discounted cash flow analysis, with a calculated WACC of 9.8% [15][17]

Core Viewpoint - Charles River Laboratories reported a mixed performance in Q2 2024, with adjusted EPS exceeding estimates while revenues declined year over year, leading to a lowered financial outlook for the year [1][11]. Financial Performance - Adjusted EPS for Q2 2024 was $2.80, a 4.1% increase year over year, surpassing the Zacks Consensus Estimate by 17.2% [1] - GAAP EPS declined 7.9% year over year to $1.74 [1] - Total revenues were $1.03 billion, matching the Zacks Consensus Estimate but down 2.8% from the previous year [2] Segment Performance - Research Models and Services (RMS) revenues were $206.4 million, down 1.7% year over year, primarily due to lower revenues from non-human primates in China [4] - Discovery and Safety Assessment (DSA) revenues fell to $627.4 million, a 5.4% decline year over year, attributed to lower revenues in both Discovery Services and Safety Assessment [5] - Manufacturing Solutions revenues increased to $192.3 million, up 3.1% year over year, driven by growth in the CDMO business [6] Margins and Expenses - Gross profit was $353.7 million, down 11.3% year over year, with a gross margin of 34.5%, contracting 317 basis points [7] - Selling, general & administrative expenses decreased 15% year over year to $169.8 million [7] - Adjusted operating income was $183.9 million, reflecting a 7.7% decline from the prior year, with an adjusted operating margin of 17.9% [7] Liquidity and Cash Position - Cash and cash equivalents at the end of Q2 were $179.2 million, down from $327 million at the end of Q1 [8] - Cumulative net cash from operating activities was $323.4 million, an increase from $257.5 million at the end of Q2 2023 [8] 2024 Guidance - The company has lowered its revenue guidance for 2024, now expecting a decrease of 4.5-2.5% compared to earlier growth expectations of 1-4% [9] - Adjusted EPS for 2024 is now projected to be in the range of $9.90-$10.20, down from the previous range of $10.90-$11.40 [10] Market Outlook - Management indicated that demand trends in DSA are expected to decline for global biopharmaceutical clients in the second half of 2024 [12] - The company is focusing on innovation and enhancing its portfolio to adapt to changing industry needs [12]

Financial Data and Key Metrics Changes - Revenue for Q2 2024 was reported at $1.03 billion, reflecting a 3.2% decline on both reported and organic bases compared to the previous year [5][26] - Operating margin increased to 21.3%, up 90 basis points year-over-year, primarily due to lower performance-based bonus compensation accruals [6][30] - Earnings per share rose to $2.80, a 4.1% increase year-over-year, exceeding prior guidance by approximately $0.40 [6][24] Business Segment Data and Key Metrics Changes - DSA segment revenue decreased by 5% on an organic basis to $627.4 million, driven by lower revenue in Discovery Services and Safety Assessment [14][26] - RMS revenue was $206.4 million, a decline of 3.9% on an organic basis, primarily due to lower NHP revenue [17][19] - Manufacturing Solutions segment revenue increased by 3.7% on an organic basis to $192.3 million, with expectations for mid- to high single-digit growth for the year [20][21] Market Data and Key Metrics Changes - Demand from small and midsized biotech clients has stabilized, while demand from global biopharmaceutical clients is expected to deteriorate further [10][11] - The DSA backlog decreased to $2.16 billion from $2.35 billion sequentially, indicating a decline in demand [15] - The overall market environment for RMS is expected to remain stable, with flat to low single-digit growth anticipated [17][29] Company Strategy and Development Direction - The company plans to streamline its cost structure and optimize its global footprint to mitigate the impact of declining demand [7][13] - A stock repurchase program has been reinstated with a new authorization totaling $1 billion, aimed at managing capital allocation [14][28] - The company is focused on enhancing its commercial efforts and leveraging technology to improve sales insights and client engagement [12][28] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns over the rapid deterioration in demand from large pharmaceutical clients, attributing it to cost-cutting measures and pipeline reprioritization [9][38] - The outlook for the second half of the year has been revised downward, with expectations of a low to mid-single-digit organic revenue decline [10][26] - Management remains cautiously optimistic about the recovery in biotech demand, although it is not expected to support revenue improvements in the near term [11][49] Other Important Information - The company expects to generate over $150 million in annualized cost savings from restructuring initiatives, with $100 million expected to be realized in 2024 [13][27] - Free cash flow for Q2 was strong at $154.1 million, driven by lower capital expenditures and effective working capital management [31][32] Q&A Session Summary Question: What is the rationale for the increased deceleration of demand from global biopharma? - Management noted a rapid and unexpected deterioration in demand, influenced by cost-cutting and restructuring efforts within large pharmaceutical companies [35][36] Question: Is there a market share issue in DSA, or is it primarily macro pressures? - Management believes they are not losing market share and attributes the challenges to broader market shifts rather than internal issues [39][40] Question: Can you quantify the impact of bonus accruals on earnings? - Approximately $20 million in bonus accruals contributed to earnings upside in Q2, with expectations for additional favorability in the second half [42][43] Question: How do you view the pricing dynamics in the current market? - Management indicated that pricing pressures are expected to increase in the second half of the year, with a slight decline anticipated in DSA pricing [62][65] Question: What are the key areas of concern heading into 2025? - Management highlighted ongoing pressures from large pharma pullbacks and potential cooling in biotech funding as significant concerns for the upcoming year [60][61]

Core Insights - Charles River Laboratories shares fell over 12% after the company announced an expected decline in sales for the full fiscal year, shifting from previous growth expectations [2][4] - The company reported second-quarter revenue of $1.03 billion, meeting analyst expectations, while profits were slightly above estimates at $94.08 million, both showing a decline from the previous year [2][3] - The board approved a new $1 billion stock buyback plan, replacing a previous $1.3 billion plan that had approximately $129 million remaining [4] Sales and Earnings Outlook - CEO James Foster indicated that demand is expected to soften in the second half of 2024, leading to a revision in the company's full-year revenue guidance to a decline of 2.5% to 4.5%, compared to earlier expectations of 1% to 4% growth [3] - Earnings per share (EPS) projections were also lowered from $7.60 to $8.10 to a new range of $5.65 to $5.95 [3] Stock Performance - Following the announcement, Charles River shares dropped to $200.98, marking a 12.2% decline on the day and approximately a 15% loss since the beginning of the year [4]

Core Insights - Charles River Laboratories (CRL) reported revenue of $1.03 billion for the quarter ended June 2024, a decrease of 3.2% year-over-year, while EPS increased to $2.80 from $2.69 in the previous year [1] - The revenue matched the Zacks Consensus Estimate, resulting in a slight surprise of +0.09%, while the EPS exceeded expectations by +17.15% [1] Revenue Breakdown - Research Models and Services generated $206.39 million, surpassing the average estimate of $200.58 million, but reflecting a year-over-year decline of -1.7% [3] - Discovery and Safety Assessment revenues were $627.42 million, below the average estimate of $637.52 million, marking a -5.4% change year-over-year [4] - Manufacturing Support revenues matched estimates at $192.31 million, showing a year-over-year increase of +3.1% [5] - Services revenues totaled $842.90 million, slightly below the average estimate of $845.77 million, with a year-over-year decline of -3.7% [6] - Products revenues were $183.22 million, exceeding the estimate of $182.16 million, but reflecting a -1% change from the previous year [7] Operating Income Analysis - Non-GAAP operating income for Research Models and Services was $47.70 million, below the average estimate of $48.60 million [8] - Non-GAAP operating income for Discovery and Safety Assessment was $170.14 million, exceeding the estimate of $156.36 million [8] - Non-GAAP operating income for Manufacturing Support was $51.20 million, slightly above the average estimate of $50.39 million [8] - Unallocated Corporate Overhead showed a loss of -$53.90 million, better than the estimate of -$62.33 million [9] - Operating income for Research Models and Services was $29.95 million, below the estimate of $43.59 million [9] - Operating income for Discovery and Safety Assessment was $138.38 million, exceeding the estimate of $131.44 million [9] - Manufacturing Support operating income was $37.23 million, below the estimate of $42.15 million [10] Stock Performance - Charles River's shares have returned +13.4% over the past month, contrasting with the Zacks S&P 500 composite's -5.9% change [10] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [10]

Charles River Laboratories (CRL) came out with quarterly earnings of $2.80 per share, beating the Zacks Consensus Estimate of $2.39 per share. This compares to earnings of $2.69 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 17.15%. A quarter ago, it was expected that this medical research equipment and services provider would post earnings of $2.05 per share when it actually produced earnings of $2.27, delivering a surprise ...

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Second-Quarter 2024 Financial Highlights](index=1&type=section&id=Second-Quarter%202024%20Financial%20Highlights) Charles River Laboratories reported revenue of **$1.03 billion** in Q2 2024, a **3.2%** year-over-year decrease, with GAAP diluted EPS at **$1.74** and non-GAAP diluted EPS at **$2.80**, alongside a new **$1 billion** stock repurchase authorization and revised full-year 2024 guidance Key Financial Data for Q2 2024 | Metric | Q2 2024 | Q2 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue ($) | $1.03 Billion | $1.06 Billion | -3.2% | | GAAP Operating Margin (%) | 14.8% | 15.6% | -0.8 pp | | Non-GAAP Operating Margin (%) | 21.3% | 20.4% | +0.9 pp | | GAAP Net Income ($) | $90.0 Million | $97.0 Million | -7.2% | | Non-GAAP Net Income ($) | $144.9 Million | $138.3 Million | +4.8% | | GAAP Diluted EPS ($) | $1.74 | $1.89 | -7.9% | | Non-GAAP Diluted EPS ($) | $2.80 | $2.69 | +4.1% | - The company's Board of Directors approved a new **$1 billion** stock repurchase authorization[1](index=1&type=chunk) - The company revised its full-year 2024 financial guidance[1](index=1&type=chunk) [CEO's Strategic Outlook and Response](index=2&type=section&id=CEO's%20Strategic%20Outlook%20and%20Response) CEO James C. Foster noted that despite in-line H1 financial performance, forward-looking data indicates no improvement in H2 DSA business demand, particularly from global biopharmaceutical clients, prompting the company to actively manage costs, innovate business transformation, invest prudently, and strengthen commercial efforts - DSA business demand is not expected to improve in H2 2024, but rather decline, primarily impacted by global biopharmaceutical clients[5](index=5&type=chunk) - The company will implement the following strategic measures to address weak demand: * Actively manage cost structure * Initiate new innovative approaches for business transformation * Invest prudently * Strengthen commercial efforts to win new business[5](index=5&type=chunk) - The company believes clients will continue to seek treatments for rare diseases and other unmet medical needs, prompting further measures to help clients achieve their goals with a stronger, leaner posture[5](index=5&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) [Research Models and Services (RMS)](index=2&type=section&id=Research%20Models%20and%20Services%20(RMS)) The RMS segment reported Q2 revenue of **$206.4 million**, a **1.7%** year-over-year decrease, with organic revenue down **3.9%**, primarily due to reduced non-human primate (NHP) revenue from China and lower research model services and cell solutions, partially offset by growth in small research model sales RMS Segment Performance for Q2 2024 | Metric | Q2 2024 | Q2 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue ($) | $206.4 Million | $209.9 Million | -1.7% | | Organic Revenue Growth (%) | -3.9% | - | - | | GAAP Operating Margin (%) | 14.5% | 23.3% | -8.8 pp | | Non-GAAP Operating Margin (%) | 23.1% | 26.4% | -3.3 pp | - Revenue decline primarily due to reduced non-human primate (NHP) revenue from China, and lower revenue from research model services and cell solutions businesses[6](index=6&type=chunk) - The revenue decline was partially offset by increased sales of small research models, particularly in Europe and China[6](index=6&type=chunk) - The decrease in GAAP operating margin also reflects higher costs associated with the company's restructuring plan, including site consolidation costs for the California CRADL business[7](index=7&type=chunk) [Discovery and Safety Assessment (DSA)](index=2&type=section&id=Discovery%20and%20Safety%20Assessment%20(DSA)) The DSA segment's Q2 revenue was **$627.4 million**, a **5.4%** year-over-year decrease, with organic revenue down **5.0%**, driven by reduced revenue from discovery services and safety assessment businesses, leading to declines in both GAAP and non-GAAP operating margins DSA Segment Performance for Q2 2024 | Metric | Q2 2024 | Q2 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue ($) | $627.4 Million | $663.5 Million | -5.4% | | Organic Revenue Growth (%) | -5.0% | - | - | | GAAP Operating Margin (%) | 22.1% | 24.3% | -2.2 pp | | Non-GAAP Operating Margin (%) | 27.1% | 27.6% | -0.5 pp | - Revenue decline primarily driven by reduced revenue from discovery services and safety assessment businesses[9](index=9&type=chunk) - Operating margin decline primarily impacted by lower sales volume, partially offset by reduced performance-based compensation accruals[9](index=9&type=chunk) - The decrease in GAAP operating margin also reflects higher costs associated with the company's restructuring plan and higher adjustments related to the Noveprim acquisition[9](index=9&type=chunk) [Manufacturing Solutions](index=3&type=section&id=Manufacturing%20Solutions) The Manufacturing Solutions segment reported Q2 revenue of **$192.3 million**, a **3.1%** year-over-year increase, with organic revenue up **3.7%**, reflecting growth across all businesses and significant improvements in both GAAP and non-GAAP operating margins due to enhanced profitability and reduced legal costs Manufacturing Solutions Segment Performance for Q2 2024 | Metric | Q2 2024 | Q2 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue ($) | $192.3 Million | $186.5 Million | +3.1% | | Organic Revenue Growth (%) | +3.7% | - | - | | GAAP Operating Margin (%) | 19.4% | 13.1% | +6.3 pp | | Non-GAAP Operating Margin (%) | 26.6% | 22.9% | +3.7 pp | - Organic revenue growth reflects revenue growth across all businesses in the segment[10](index=10&type=chunk) - Operating margin growth primarily benefited from improved profitability across all businesses[10](index=10&type=chunk) - GAAP operating margin growth also benefited from reduced third-party legal costs related to the microbial solutions business and lower acquisition-related adjustments[10](index=10&type=chunk) [Corporate Actions & Outlook](index=3&type=section&id=Corporate%20Actions%20%26%20Outlook) [New Stock Repurchase Authorization](index=3&type=section&id=New%20Stock%20Repurchase%20Authorization) The company's Board of Directors approved a new **$1 billion** stock repurchase authorization, replacing the prior **$1.3 billion** authorization which had **$129.1 million** remaining - The company's Board of Directors approved a new **$1 billion** stock repurchase authorization[11](index=11&type=chunk) - This new authorization replaces the prior **$1.3 billion** stock repurchase authorization which had **$129.1 million** remaining[11](index=11&type=chunk) [Revised 2024 Financial Guidance](index=3&type=section&id=Revised%202024%20Financial%20Guidance) The company revised its 2024 financial guidance, reflecting the continued lack of recovery in demand from small and mid-sized biotech clients and increasing weakness from global biopharmaceutical clients, no longer expecting overall demand trends to improve in the second half, significantly impacting the DSA segment outlook - The primary reasons for the revised guidance are the continued lack of recovery in demand from small and mid-sized biotech clients and increasing weakness from global biopharmaceutical clients[12](index=12&type=chunk) - The company no longer expects overall demand trends to improve in the second half, which will significantly impact the DSA segment's outlook[12](index=12&type=chunk) - The company is implementing a restructuring plan, expected to save over **$150 million** annually, with approximately **$100 million** realized in 2024[12](index=12&type=chunk) Revised 2024 Financial Guidance Comparison | Metric | Current Guidance | Prior Guidance | | :--- | :--- | :--- | | Reported Revenue Growth/(Decline) (%) | (4.5)% – (2.5)% | 1.0% – 4.0% | | Organic Revenue Growth/(Decline) (%) | (5.0)% – (3.0)% | 0.0% – 3.0% | | GAAP EPS Estimate ($) | $5.65 – $5.95 | $7.60 – $8.10 | | Non-GAAP EPS Estimate ($) | $9.90 – $10.20 | $10.90 – $11.40 | [Financial Statements](index=9&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The unaudited condensed consolidated statements of income show total revenue of **$1.026 billion** for Q2 2024, down from **$1.059 billion** in the prior year, with GAAP net income attributable to common shareholders of **$89.988 million** and diluted EPS of **$1.74** Condensed Consolidated Statements of Income Summary (Q2 2024) | Metric | Q2 2024 (USD thousands) | Q2 2023 (USD thousands) | | :--- | :--- | :--- | | Service Revenue | 842,900 | 874,891 | | Product Revenue | 183,217 | 185,046 | | **Total Revenue** | **1,026,117** | **1,059,937** | | Operating Income | 151,652 | 164,945 | | Net Income | 94,261 | 99,443 | | Net Income Attributable to Common Shareholders | 89,988 | 97,020 | | Diluted EPS ($) | $1.74 | $1.89 | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 29, 2024, total assets were **$7.948 billion**, a decrease from **$8.195 billion** at December 30, 2023, with total liabilities at **$4.175 billion** and total equity at **$3.727 billion** Condensed Consolidated Balance Sheets Summary (as of June 29, 2024) | Metric | June 29, 2024 (USD thousands) | Dec 30, 2023 (USD thousands) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 179,213 | 276,771 | | Accounts Receivable and Contract Assets, Net | 762,221 | 780,375 | | Inventories | 349,111 | 380,259 | | **Total Current Assets** | **1,499,273** | **1,608,662** | | Property, Plant and Equipment, Net | 1,613,895 | 1,639,741 | | Goodwill | 3,079,693 | 3,095,045 | | Intangible Assets, Net | 800,129 | 864,051 | | **Total Assets** | **7,948,283** | **8,195,001** | | **Total Current Liabilities** | **947,519** | **1,055,082** | | Long-Term Debt, Net and Finance Leases | 2,409,380 | 2,647,147 | | **Total Liabilities** | **4,175,189** | **4,536,003** | | Equity Attributable to Charles River Laboratories International, Inc. | 3,722,729 | 3,596,882 | | **Total Equity** | **3,727,018** | **3,602,276** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 29, 2024, net cash provided by operating activities was **$323.4 million**, net cash used in investing activities was **$147.7 million**, and net cash used in financing activities was **$267.5 million**, with cash and cash equivalents at period-end totaling **$181.0 million** Condensed Consolidated Statements of Cash Flows Summary (Six Months Ended June 29, 2024) | Metric | Six Months Ended June 29, 2024 (USD thousands) | Six Months Ended July 1, 2023 (USD thousands) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | 323,423 | 257,505 | | Net Cash Used in Investing Activities | (147,658) | (245,227) | | Net Cash Used in Financing Activities | (267,512) | (46,223) | | Effect of Exchange Rate Changes | (11,729) | 1,508 | | Net Change in Cash and Cash Equivalents | (103,476) | (32,437) | | Cash and Cash Equivalents at End of Period | 181,004 | 208,777 | [Non-GAAP Reconciliations & Disclosures](index=6&type=section&id=Non-GAAP%20Reconciliations%20%26%20Disclosures) [Non-GAAP Financial Measures Explanation](index=6&type=section&id=Non-GAAP%20Financial%20Measures%20Explanation) Non-GAAP financial measures are reported to exclude one-time and non-operating items, providing investors with a clearer understanding of core operating results and future prospects, with organic revenue growth defined as reported revenue growth adjusted for foreign currency translation, acquisitions, and divestitures - Non-GAAP financial measures aim to exclude one-time expenses and non-operating items, providing a deeper understanding of core operating results and future prospects[18](index=18&type=chunk) - Items excluded from non-GAAP metrics include intangible asset amortization, acquisition and divestiture-related expenses and adjustments, restructuring costs, investment gains/losses, and certain legal costs[18](index=18&type=chunk) - Organic revenue growth is defined as reported revenue growth adjusted for foreign currency translation, acquisition, and divestiture impacts[18](index=18&type=chunk) [Reconciliation of GAAP to Non-GAAP Segment Information](index=12&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Segment%20Information) The company provides a detailed reconciliation of GAAP to non-GAAP operating income for each business segment, with non-GAAP adjustments primarily including acquisition-related amortization, acquisition-related adjustments, severance, site consolidation, impairment charges, and third-party legal costs, to offer a clearer view of segment operational performance Reconciliation of GAAP to Non-GAAP Operating Income Summary (Q2 2024) | Segment | GAAP Operating Income (USD thousands) | Total Non-GAAP Adjustments (USD thousands) | Non-GAAP Operating Income (USD thousands) | GAAP Operating Margin (%) | Non-GAAP Operating Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | RMS | 29,948 | 17,753 | 47,701 | 14.5% | 23.1% | | DSA | 138,376 | 31,765 | 170,141 | 22.1% | 27.1% | | Manufacturing Solutions | 37,230 | 13,973 | 51,203 | 19.4% | 26.6% | | **Total** | **151,652** | **66,903** | **218,555** | **14.8%** | **21.3%** | - Non-GAAP adjustments primarily include acquisition-related amortization, acquisition-related adjustments, severance, site consolidation and impairment charges, and third-party legal costs[34](index=34&type=chunk) [Reconciliation of GAAP to Non-GAAP Earnings](index=14&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Earnings) The company provides a detailed reconciliation of GAAP to non-GAAP earnings per share, with non-GAAP adjustments including redeemable non-controlling interest adjustments, incremental dividends to non-controlling interest holders, non-GAAP operating income adjustments, investment gains/losses, divestiture gains/losses, and tax impacts, to present a more accurate view of core profitability Reconciliation of GAAP to Non-GAAP EPS Summary (Q2 2024) | Metric | Q2 2024 (USD thousands) | Q2 2023 (USD thousands) | | :--- | :--- | :--- | | GAAP Net Income Attributable to Common Shareholders | 89,988 | 97,020 | | Total Non-GAAP Adjustments | 65,576 | 51,256 | | Investment Gains/(Losses) | (902) | 1,873 | | Divestiture Gains/(Losses) | 0 | 1,003 | | Tax Impact | (13,816) | (13,463) | | Non-GAAP Net Income Attributable to Common Shareholders | 144,939 | 138,285 | | GAAP Diluted EPS ($) | $1.74 | $1.89 | | Non-GAAP Diluted EPS ($) | $2.80 | $2.69 | - Non-GAAP adjustments include redeemable non-controlling interest adjustments, incremental dividends to non-controlling interest holders, non-GAAP operating income adjustments, investment gains/losses, divestiture gains/losses, and tax impacts[36](index=36&type=chunk) [Reconciliation of GAAP to Non-GAAP Revenue Growth, Organic](index=15&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Revenue%20Growth%2C%20Organic) The company provides a detailed reconciliation of GAAP reported revenue growth to non-GAAP organic revenue growth, which is calculated by adjusting for foreign currency exchange rate impacts, acquisition contributions, and divestiture impacts to reflect the actual growth of the core business Reconciliation of GAAP to Non-GAAP Organic Revenue Growth Summary (Q2 2024) | Metric | Total Company | RMS Segment | DSA Segment | Manufacturing Solutions Segment | | :--- | :--- | :--- | :--- | :--- | | Reported Revenue Growth (%) | (3.2)% | (1.7)% | (5.4)% | 3.1% | | Foreign Currency Exchange Rate Impact (%) | 0.3% | 0.5% | 0.1% | 0.6% | | Acquisition Contribution (%) | (0.5)% | (2.7)% | —% | —% | | Divestiture Impact (%) | 0.2% | —% | 0.3% | —% | | **Non-GAAP Organic Revenue Growth (%)** | **(3.2)%** | **(3.9)%** | **(5.0)%** | **3.7%** | - Organic revenue growth is calculated by adjusting for foreign currency exchange rate impacts, acquisition contributions, and divestiture impacts to reflect the actual growth of the core business[38](index=38&type=chunk) [Caution Concerning Forward-Looking Statements](index=7&type=section&id=Caution%20Concerning%20Forward-Looking%20Statements) This press release contains forward-looking statements, based on current expectations and beliefs, involving risks and uncertainties that could cause actual results to differ materially, including NHP supply constraints, global economic changes, acquisition integration, R&D spending trends, and regulatory changes - Forward-looking statements are based on the company's current expectations and beliefs, involving difficult-to-predict risks and uncertainties[21](index=21&type=chunk) - Risks and uncertainties that could cause actual results to differ materially from forward-looking statements include: * Non-human primate (NHP) supply constraints and the impact of U.S. government investigations * Changes in global economic and financial markets * Ability to successfully integrate acquired businesses, including Noveprim * Negative trends in R&D spending and outsourcing service levels * Regulatory changes, loss of key personnel, interest rate and foreign exchange fluctuations[21](index=21&type=chunk)[23](index=23&type=chunk) - The company undertakes no obligation to update the information contained in this press release, except as required by law[23](index=23&type=chunk) [Company Information](index=8&type=section&id=Company%20Information) [About Charles River](index=8&type=section&id=About%20Charles%20River) Charles River Laboratories International, Inc. provides essential products and services to global pharmaceutical and biotechnology companies, government agencies, and leading academic institutions to accelerate their research and drug development efforts - Charles River provides products and services to global pharmaceutical and biotechnology companies, government agencies, and leading academic institutions to accelerate research and drug development[24](index=24&type=chunk) - The company focuses on helping clients discover, early develop, and safely manufacture new therapies through scientific expertise and flexible solutions[24](index=24&type=chunk) [Investor & Media Contacts](index=8&type=section&id=Investor%20%26%20Media%20Contacts) Contact information is provided for investor relations and the Chief Communications Officer - Investor Contact: Todd Spencer, Corporate Vice President, Investor Relations, Phone: 781.222.6455, Email: todd.spencer@crl.com[25](index=25&type=chunk) - Media Contact: Amy Cianciaruso, Corporate Vice President, Chief Communications Officer, Phone: 781.222.6168, Email: amy.cianciaruso@crl.com[25](index=25&type=chunk)

Earnings Surprise History Q2 Estimates The Zacks Consensus Estimate for earnings per share of $2.39 indicates an 11.2% decline year over year. Estimates for Charles River's second-quarter earnings have remained unchanged at $2.39 per share in the past 30 days. Factors at Play Note that there was a timing shift with NHP shipments that accelerated into the first quarter. This might have acted as a headwind in the second quarter. In the previous reported quarter, CRL's Insourcing Solutions, or IS, generated hi ...

Charles River Laboratories International, Inc. (CRL) recently announced a contract development and manufacturing organization (CDMO) agreement with the Italy-based clinical-stage biotechnology company, AAVantgarde. The collaboration will produce GMP plasmid DNA to help advance AAVantgarde's platform for treating Stargardt's disease — a condition with significant unmet needs. Significance of the Partnership Charles River will leverage its two-decade-long expertise in manufacturing GMP plasmid DNA to support ...