Core Insights - Charles River Laboratories International, Inc. (CRL) reported first-quarter 2025 adjusted earnings per share (EPS) of $2.34, a 3.1% increase year over year, exceeding the Zacks Consensus Estimate by 13.6% [1] - Total revenues for the first quarter reached $984.2 million, surpassing the Zacks Consensus Estimate by 5.2%, but reflecting a 2.4% decline from the previous year [2] - The company raised its 2025 guidance, indicating improved net bookings in the Discovery and Safety Assessment (DSA) segment [12] Financial Performance - The gross profit for the quarter was $317.7 million, down 7.9% from the prior year, with a gross margin of 32.3%, contracting 181 basis points year over year [7] - Selling, general & administrative expenses decreased by 4.6% year over year to $177.8 million, while adjusted operating profit fell 11.7% to $139.9 million [7] - The company exited the first quarter with cash and cash equivalents of $229.4 million, an increase from $194.6 million at the end of the previous quarter [8] Segment Performance - Research Models and Services (RMS) revenues totaled $213.1 million, down 3.5% year over year, primarily due to timing of shipments in China and lower revenues in the Cell Solutions business [4] - Discovery and Safety Assessment (DSA) revenues amounted to $592.6 million, a decline of 2.1% year over year, attributed to lower revenues for discovery services [5] - Manufacturing Solutions revenues were $178.5 million, down 3.6% year over year, mainly due to declines in CDMO and Biologics Testing businesses [6] Shareholder Returns - During the first quarter, the company repurchased 2.1 million shares for a total of $350 million, with a remaining authorization of $549.3 million under its $1 billion stock repurchase program [9] 2025 Guidance - For 2025, CRL expects total revenues to decline in the range of 5.5%-3.5%, an improvement from the earlier estimate of 4.5%-7% [10] - Adjusted EPS for 2025 is projected to be in the range of $9.30-$9.80, up from the previous range of $9.10-$9.60 [11]

Financial Data and Key Metrics Changes - The company reported revenue of $984.2 million in Q1 2025, a 2.7% decrease compared to the previous year, with an organic revenue decline of 1.8% [21][38] - The operating margin improved to 19.1%, an increase of 60 basis points year over year, primarily due to cost savings from restructuring initiatives [22][38] - Earnings per share were $2.34, reflecting a 3.1% increase from the same quarter last year [22][38] Business Segment Data and Key Metrics Changes - DSA revenue was $592.6 million, a decrease of 1.4% on an organic basis, driven mainly by lower revenue for discovery services [24] - RMS revenue was $213.1 million, a decrease of 2.5% on an organic basis, primarily due to timing of NHP shipments in China and lower revenue for the cell solutions business [28] - Manufacturing segment revenue was $178.5 million, a 2.2% decrease on an organic basis, driven by lower commercial revenue in the CDMO business [30] Market Data and Key Metrics Changes - The DSA backlog was $1.99 billion at the end of Q1, up slightly from $1.97 billion at year-end [24] - The net book-to-bill ratio improved to 1.04 times, the first time above one since the second half of 2022, driven by higher gross bookings from global biopharmaceutical clients [25][26] Company Strategy and Development Direction - The company is focused on expanding its non-animal platforms and investing in alternative methods to reduce animal testing, aligning with FDA initiatives [13][19] - The company plans to continue its strategic investments in areas central to the NAMS ecosystem, including organoid and organ-on-a-chip platforms [15] - A comprehensive strategic review is underway to evaluate initiatives for unlocking additional value, in collaboration with new board members and Elliott Investment Management [34][47] Management's Comments on Operating Environment and Future Outlook - Management noted continued signs of stabilization in the market despite uncertainties, with a cautious approach to the second half of the year [20] - The company modestly raised its 2025 revenue guidance by 100 basis points, expecting a 2.5% to 4.5% organic revenue decline [23][40] - Management emphasized the importance of scientific validation in the transition to NAMS and the need for a hybrid approach in drug development [11][19] Other Important Information - The company generated approximately $200 million in annual DSA revenue from NAMS, with expectations for meaningful growth over time [16] - The company has repurchased $350 million in shares during Q1 2025 as part of its capital allocation strategy [38] Q&A Session Summary Question: Thoughts on FDA guidance and mixed messaging - Management acknowledged the complexity of changes at the FDA and emphasized the ongoing development of NAMS, expressing optimism about leading clients in sync with regulatory agencies [52][54] Question: Use of biosimulation technologies - Management indicated that while biosimulation technologies are used in early drug discovery, their application in regulated toxicology is more complex and will require significant validation [59][60] Question: Areas of investment and M&A in NAMS - Management expressed interest in acquiring technologies that enhance drug development without compromising patient safety, highlighting past acquisitions and ongoing evaluations of potential opportunities [66][70] Question: Impact of FDA changes on long-term growth - Management stated that a refresh of long-term growth rates is necessary, considering the new FDA information, but refrained from providing specific numbers at this time [84] Question: Pricing environment comparison to past crises - Management noted that the current pricing environment is stable compared to the Great Recession, with better capacity management and less severe price pressure [86][87]

Financial Data and Key Metrics Changes - The company reported revenue of $984.2 million in Q1 2025, a 2.7% decrease compared to the previous year, with an organic revenue decline of 1.8% [20][21] - The operating margin improved to 19.1%, an increase of 60 basis points year over year, primarily due to cost savings from restructuring initiatives [21][38] - Earnings per share were $2.34, reflecting a 3.1% increase from the same quarter last year [21] Business Segment Performance - DSA revenue was $592.6 million, a decrease of 1.4% on an organic basis, driven mainly by lower revenue for discovery services [23] - RMS revenue was $213.1 million, a decrease of 2.5% on an organic basis, primarily due to timing of NHP shipments in China and lower revenue for the cell solutions business [28] - Manufacturing segment revenue was $178.5 million, a 2.2% decrease on an organic basis, driven by lower commercial revenue in the CDMO business [30] Market Data and Key Metrics Changes - The DSA backlog was $1.99 billion at the end of Q1, up slightly from $1.97 billion at year-end [24] - The net book to bill ratio improved to 1.04 times for the first time in over two years, driven by higher gross bookings from global biopharmaceutical clients [25] - Revenue from small and mid-sized biotech clients grew for the second consecutive quarter, while revenue from global biopharmaceutical clients declined [20][21] Company Strategy and Industry Competition - The company is focused on integrating non-animal methods (NAMS) into its business, aligning with FDA initiatives to reduce animal testing [6][12] - The company plans to continue investing in alternative methods and technologies, including partnerships and acquisitions, to enhance its capabilities in drug development [12][66] - The strategic planning committee will undertake a comprehensive review to evaluate initiatives for unlocking additional value [35] Management's Comments on Operating Environment and Future Outlook - Management noted continued signs of stabilization in the market despite uncertainties, including government funding cuts and a slower start for biotech funding [19] - The company has modestly raised its 2025 revenue guidance due to better-than-expected DSA performance, now expecting a 2.5% to 4.5% organic revenue decline [22][40] - Management emphasized the importance of patient safety and the gradual adoption of NAMS, indicating that the transition will be evolutionary rather than revolutionary [18][60] Other Important Information - The company generated approximately $200 million in annual DSA revenue from NAMS, with expectations for meaningful growth over time [15] - The company has made strategic investments in various alternative methods, including organoid and organ-on-a-chip platforms [14] - The company repurchased $350 million in shares during Q1 2025 as part of its capital allocation strategy [38] Q&A Session Summary Question: Thoughts on FDA guidance and mixed messaging - Management acknowledged the complexity of changes at the FDA and emphasized the ongoing development of NAMS, indicating that the focus on monoclonal antibodies is a logical starting point [50][54] Question: Use of biosimulation technologies - Management noted that while biosimulation technologies are used in early drug discovery, their application in regulated toxicology is more complex and will require significant validation [56][58] Question: Company's position in NAMS and potential M&A - Management expressed interest in acquiring technologies that enhance drug development without compromising patient safety, highlighting past acquisitions and ongoing evaluations of potential opportunities [63][66] Question: Impact of FDA changes on long-term growth - Management indicated that a comprehensive review of long-term growth rates will be conducted, considering the new FDA information and client feedback [78] Question: Pricing environment comparison to past downturns - Management noted that the pricing environment has improved slightly, driven by a favorable mix, and is not experiencing the same level of pressure as during the Great Recession [81][83]

Charles River Laboratories (CRL) came out with quarterly earnings of $2.34 per share, beating the Zacks Consensus Estimate of $2.06 per share. This compares to earnings of $2.27 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 13.59%. A quarter ago, it was expected that this medical research equipment and services provider would post earnings of $2.50 per share when it actually produced earnings of $2.66, delivering a surprise ...

Financial Performance - Q1 2025 - Revenue decreased by 2.7% year-over-year to $984.2 million, with an organic revenue decline of 1.8%[24, 45] - GAAP EPS decreased by 61.5% year-over-year to $0.50, while non-GAAP EPS increased by 3.1% to $2.34[26, 45] - The company completed the repurchase of $350 million in common stock during 1Q25[47] - Free cash flow increased to $112.4 million compared to $50.7 million in 1Q24[48] Segment Performance - Q1 2025 - Discovery and Safety Assessment (DSA) revenue decreased by 2.1% to $592.6 million, with an organic decline of 1.4%[28] - Research Models and Services (RMS) revenue decreased by 3.5% to $213.1 million, with an organic decline of 2.5%[35] - Manufacturing Solutions revenue decreased by 3.6% to $178.5 million, with an organic decline of 2.2%[38] Updated 2025 Guidance - The company revised its 2025 revenue growth guidance to a decline of 5.5%-3.5% reported and a decline of 4.5%-2.5% organic[27, 51] - GAAP EPS estimate is $4.35-$4.85, and non-GAAP EPS estimate is $9.30-$9.80[27] - The company expects approximately flat organic revenue growth for RMS and approximately flat revenue for Manufacturing, while DSA organic revenue is expected to decline in the mid-single-digit range[52] NAMs (New Approach Methodologies) - CRL generated approximately $200 million in annual DSA revenue from NAMs, with the majority in discovery[13] - Chronic NHP studies longer than 3 months for mAbs represented approximately $50 million of the company's annual revenue[18] - Large Molecule accounted for ~25% of CRL safety assessment revenue mix in 2024, with mAbs accounting for ~10% and other biologics accounting for ~15%[20]

Financial Performance - First-quarter revenue for Charles River Laboratories was $984.2 million, a decrease of 2.7% from $1,011.6 million in Q1 2024[2]. - GAAP earnings per share (EPS) for Q1 2025 was $0.50, down from $1.30 in Q1 2024, while non-GAAP EPS increased to $2.34, up 3.1% from $2.27[4][5]. - The GAAP operating margin decreased to 7.6% from 12.5% in Q1 2024, while the non-GAAP operating margin increased to 19.1% from 18.5%[3]. - Total revenue for the three months ended March 29, 2025, was $984.168 million, a decrease of 2.5% compared to $1,011.560 million for the same period in 2024[30]. - Service revenue decreased to $797.923 million, down 2.3% from $816.862 million year-over-year[30]. - Net income attributable to Charles River Laboratories was $25.469 million, a significant decline of 65.1% from $72.960 million in the prior year[30]. - Earnings per share (EPS) for the quarter was $0.50, down from $1.31 in the same quarter last year[30]. - Operating income fell to $74.669 million, a decrease of 40.7% compared to $125.977 million in the previous year[30]. - Net income available to common shareholders was $25,469 thousand, down 62.1% from $67,329 thousand in the same quarter last year[38]. - Basic earnings per share attributable to common shareholders decreased to $0.50 from $1.31 year-over-year[38]. Segment Performance - The Research Models and Services (RMS) segment reported revenue of $213.1 million, a decrease of 3.5% from $220.9 million in Q1 2024[8]. - The Discovery and Safety Assessment (DSA) segment revenue was $592.6 million, down 2.1% from $605.5 million in Q1 2024[10]. - The Manufacturing segment revenue decreased to $178.5 million, a decline of 3.6% from $185.2 million in Q1 2024[13]. - Revenue for the Research Models and Services segment decreased to $213,073 thousand, down 3.8% from $220,907 thousand in the prior year[33]. - Non-GAAP operating income for the Discovery and Safety Assessment segment was $141,696 thousand, representing a 23.9% margin, compared to 23.5% in the previous year[33]. - Operating income for the Manufacturing Solutions segment was a loss of $(8,620) thousand, compared to a profit of $33,681 thousand in the prior year[33]. Guidance and Future Outlook - The company is increasing its 2025 guidance, now expecting revenue growth to be between -5.5% and -3.5%, improved from the previous guidance of -7.0% to -4.5%[16][17]. - Non-GAAP EPS guidance for 2025 is now projected to be between $9.30 and $9.80, up from the previous range of $9.10 to $9.60[17]. - The company noted a notable improvement in DSA booking activity, indicating demand stabilization despite broader market uncertainties[7]. - Non-GAAP revenue growth, organic, was reported at (1.8)%, with the Research Models and Services segment showing a decline of (2.5)%[40]. Cash Flow and Capital Expenditures - Cash and cash equivalents increased to $229.356 million from $194.606 million at the end of the previous quarter[31]. - Total assets rose to $7,582.366 million, up from $7,528.345 million at the end of December 2024[31]. - Long-term debt increased to $2,510.754 million from $2,240.205 million, indicating a rise in leverage[31]. - The company reported net cash provided by operating activities of $171.697 million, an increase from $129.888 million in the prior year[32]. - Capital expenditures for the quarter were $59.324 million, down from $79.144 million year-over-year[32]. - Capital expenditures for the Discovery and Safety Assessment segment were $34,521 thousand, down from $48,959 thousand in the previous year[33]. Other Financial Metrics - The company reported a total of $113,555 thousand in non-GAAP adjustments to operating income, compared to $61,441 thousand in the previous year[38]. - The company experienced a foreign exchange impact of 0.9% on reported revenue growth[40].

Wall Street expects a year-over-year decline in earnings on lower revenues when Charles River Laboratories (CRL) reports results for the quarter ended March 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on M ...

Charles River Laboratories International, Inc. (CRL) is scheduled to report first-quarter 2025 results on May 7, before market open.In the last reported quarter, the company’s adjusted earnings per share (EPS) of $2.66 surpassed the Zacks Consensus Estimate by 6.4%. Earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 10.22%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)CRL’s Q1 EstimatesThe Zacks Consensus Estimate for revenues is ...

With a robust academic background including an MBA in Finance from NYU-Stern, and an MD from Delhi University, my journey in the financial world has been diverse and enriching. My postgraduate training in medicine was conducted at Harvard and Cornell affiliated hospitals, thus laying a solid foundation for my current expertise.As a registered investment advisor and professional money manager, I bring nearly a decade of experience in writing about income investing and biotech/pharma investing. My role at Vas ...

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