Charles River Laboratories International, Inc. (CRL) reported first-quarter 2024 adjusted earnings per share (EPS) of $2.27, which reflected an 18.3% decrease year over year. However, the metric surpassed the Zacks Consensus Estimate by 10.7%.On a GAAP basis, earnings declined 35.3% year over year to $1.30 per share. The year-over-year decline in GAAP earnings was primarily due to lower revenues and gross and operating income.RevenuesRevenues in the first quarter totaled $1.01 billion, beating the Zacks Con ...

Company Participants Operator Todd Spencer During this call, we will primarily discuss non-GAAP financial measures, which we believe help investors gain a meaningful understanding of our core operating results and guidance. The non-GAAP financial measures are not meant to be considered superior to or a substitute for results from operations prepared in accordance with GAAP. In accordance with Regulation G, you can find the comparable GAAP measures and reconciliations on the Investor Relations section of our ...

Charles River Laboratories (CRL) reported $1.01 billion in revenue for the quarter ended March 2024, representing a year-over-year decline of 1.7%. EPS of $2.27 for the same period compares to $2.78 a year ago.The reported revenue represents a surprise of +1.44% over the Zacks Consensus Estimate of $997.24 million. With the consensus EPS estimate being $2.05, the EPS surprise was +10.73%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare ...

[First-Quarter 2024 Results & Overview](index=1&type=section&id=First-Quarter%202024%20Results) [First-Quarter 2024 Results Summary](index=1&type=section&id=First-Quarter%202024%20Results%20Summary) Charles River Laboratories reported a **1.7% revenue decrease** in Q1 2024, primarily due to the DSA segment, with GAAP EPS declining **35.3%** from reduced operating income Q1 2024 Key Financial Metrics | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Revenue | $1.01 billion | $1.03 billion | -1.7% | | Organic Revenue | | | -3.3% | | GAAP Operating Margin | 12.5% | 16.3% | -380 bps | | Non-GAAP Operating Margin | 18.5% | 21.2% | -270 bps | | GAAP Diluted EPS | $1.30 | $2.01 | -35.3% | | Non-GAAP Diluted EPS | $2.27 | $2.78 | -18.3% | - Overall revenue decreased due to a **0.3% foreign currency benefit**, **1.5% acquisition contribution**, and **0.2% divestiture reduction**, with organic decline driven by lower DSA segment revenue offsetting growth in Manufacturing and RMS segments[1](index=1&type=chunk) - Decreased GAAP and non-GAAP operating margins were primarily due to lower DSA segment operating margin and higher unallocated corporate costs, with GAAP results also impacted by restructuring costs[4](index=4&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO James C. Foster highlighted strong Manufacturing segment performance and improving DSA proposal activity, anticipating demand recovery later in the year through strategic initiatives - The DSA segment experienced improved proposal activity and cancellations in Q1, with new bookings and revenue expected to materialize over time[6](index=6&type=chunk) - Stronger biotech funding is anticipated to drive improved demand later in the year[6](index=6&type=chunk) - Strategic initiatives include enhanced commercial efforts, efficiency drives, and investments in innovative technologies to maintain industry leadership[6](index=6&type=chunk) [First-Quarter Segment Results](index=2&type=section&id=First-Quarter%20Segment%20Results) [Research Models and Services (RMS)](index=2&type=section&id=Research%20Models%20and%20Services%20%28RMS%29) The RMS segment reported **$220.9 million revenue**, a **10.6% increase** with **3.3% organic growth**, driven by NHP sales and small research models, improving non-GAAP operating margin to **27.6%** RMS Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $220.9 M | $199.8 M | | Reported Revenue Growth | 10.6% | | | Organic Revenue Growth | 3.3% | | | GAAP Operating Margin | 19.5% | 20.2% | | Non-GAAP Operating Margin | 27.6% | 23.4% | - The Noveprim acquisition significantly drove reported revenue, contributing **7.6%** to the segment's growth[7](index=7&type=chunk) - Organic growth stemmed from increased NHP revenue in China, higher sales of small research models across regions, and growth in research model services[7](index=7&type=chunk) [Discovery and Safety Assessment (DSA)](index=2&type=section&id=Discovery%20and%20Safety%20Assessment%20%28DSA%29) The DSA segment's revenue decreased **8.6%** to **$605.5 million**, with an **8.7% organic decline** due to lower Discovery and Safety Assessment businesses, contracting non-GAAP operating margin to **23.5%** DSA Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $605.5 M | $662.4 M | | Reported Revenue Growth | -8.6% | | | Organic Revenue Growth | -8.7% | | | GAAP Operating Margin | 19.0% | 25.9% | | Non-GAAP Operating Margin | 23.5% | 29.0% | - The revenue decline was driven by lower performance in both Discovery Services and Safety Assessment businesses[9](index=9&type=chunk) - The operating margin decrease was primarily caused by lower sales volume and moderating price increases[10](index=10&type=chunk) [Manufacturing Solutions (Manufacturing)](index=3&type=section&id=Manufacturing%20Solutions%20%28Manufacturing%29) The Manufacturing segment achieved **$185.2 million revenue**, a **10.7% increase** with **10.4% organic growth**, driven by CDMO business and expanding non-GAAP operating margin to **25.3%** Manufacturing Segment Performance (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Revenue | $185.2 M | $167.3 M | | Reported Revenue Growth | 10.7% | | | Organic Revenue Growth | 10.4% | | | GAAP Operating Margin | 18.2% | 1.3% | | Non-GAAP Operating Margin | 25.3% | 13.7% | - Organic revenue growth was led by the CDMO business, reflecting higher revenue across all segment businesses[11](index=11&type=chunk) - The significant operating margin increase resulted from improved segment profitability and a favorable comparison to a Q1 2023 lease impairment[12](index=12&type=chunk) [2024 Financial Guidance](index=3&type=section&id=Updates%202024%20Guidance) [Updated 2024 Guidance](index=3&type=section&id=Updated%202024%20Guidance) Charles River reaffirmed its 2024 revenue and non-GAAP EPS guidance, while lowering GAAP EPS estimates to **$7.60-$8.10** due to increased restructuring costs 2024 Full-Year Guidance | Metric | Current Guidance | Prior Guidance | | :--- | :--- | :--- | | Reported Revenue Growth | 1.0% – 4.0% | 1.0% – 4.0% | | Organic Revenue Growth | 0.0% – 3.0% | 0.0% – 3.0% | | GAAP EPS Estimate | $7.60 – $8.10 | $7.90 – $8.40 | | Non-GAAP EPS Estimate | $10.90 – $11.40 | $10.90 – $11.40 | - The company's full-year outlook remains largely unchanged, anticipating modest demand improvement in the second half of the year[13](index=13&type=chunk) - Updated GAAP EPS guidance reflects increased restructuring costs, from approximately **$0.25** to **$0.35 per share**[14](index=14&type=chunk) [Financial Statements (Unaudited)](index=8&type=section&id=Financial%20Statements) [Condensed Consolidated Statements of Income](index=8&type=section&id=SCHEDULE%201%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) Q1 2024 total revenue decreased to **$1.01 billion**, with operating income falling to **$126.0 million** and net income attributable to common shareholders declining to **$67.3 million** Q1 2024 Income Statement Highlights (in thousands) | Line Item | Three Months Ended Mar 30, 2024 | Three Months Ended Apr 1, 2023 | | :--- | :--- | :--- | | Total Revenue | $1,011,560 | $1,029,373 | | Operating Income | $125,977 | $167,892 | | Net Income Attributable to Common Shareholders | $67,329 | $103,131 | | Diluted EPS | $1.30 | $2.01 | [Condensed Consolidated Balance Sheets](index=9&type=section&id=SCHEDULE%202%20CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 30, 2024, total assets were **$8.15 billion**, total liabilities **$4.45 billion**, and total equity **$3.65 billion**, with cash and cash equivalents increasing to **$327.0 million** Balance Sheet Highlights (in thousands) | Line Item | March 30, 2024 | December 30, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $327,039 | $276,771 | | Total Assets | $8,152,783 | $8,195,001 | | Long-term debt, net | $2,660,459 | $2,647,147 | | Total Liabilities | $4,448,858 | $4,536,003 | | Total Equity | $3,646,150 | $3,602,276 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=SCHEDULE%203%20CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operating activities increased to **$129.9 million** in Q1 2024, while net cash used in investing activities decreased to **$85.8 million** due to lower capital expenditures Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Mar 30, 2024 | Three Months Ended Apr 1, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $129,888 | $109,383 | | Net cash used in investing activities | ($85,792) | ($168,618) | | Net cash provided by financing activities | $18,346 | $25,241 | | Net change in cash | $54,055 | ($32,323) | [Reconciliation of GAAP to Non-GAAP Measures](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) [Reconciliation of Business Segment Information](index=11&type=section&id=SCHEDULE%204%20RECONCILIATION%20OF%20GAAP%20TO%20NON-GAAP%20SELECTED%20BUSINESS%20SEGMENT%20INFORMATION) Q1 2024 total non-GAAP adjustments to operating income reached **$61.4 million**, primarily from acquisition amortization, severance, and site consolidation charges, resulting in **$187.4 million** consolidated non-GAAP operating income Total Non-GAAP Adjustments to Operating Income (Q1 2024, in thousands) | Adjustment Type | Amount | | :--- | :--- | | Amortization related to acquisitions | $39,677 | | Acquisition related adjustments | $2,583 | | Severance | $9,037 | | Site consolidation and impairment charges | $7,953 | | Third-party legal costs | $2,191 | | **Total Non-GAAP Adjustments** | **$61,441** | [Reconciliation of GAAP to Non-GAAP Earnings](index=13&type=section&id=SCHEDULE%205%20RECONCILIATION%20OF%20GAAP%20EARNINGS%20TO%20NON-GAAP%20EARNINGS) Q1 2024 GAAP net income of **$67.3 million** was adjusted to **$117.6 million** non-GAAP net income, resulting in non-GAAP diluted EPS of **$2.27** versus GAAP diluted EPS of **$1.30** GAAP to Non-GAAP Earnings Reconciliation (Q1 2024, in thousands) | Description | Amount | | :--- | :--- | | GAAP Net Income (Common Shareholders) | $67,329 | | Non-GAAP adjustments to operating income | $61,441 | | Venture capital investment (gains) | ($5,762) | | Other adjustments & tax effects | ($4,398) | | **Non-GAAP Net Income** | **$117,610** | [Reconciliation of Organic Revenue Growth](index=14&type=section&id=SCHEDULE%206%20RECONCILIATION%20OF%20GAAP%20REVENUE%20GROWTH%20TO%20NON-GAAP%20REVENUE%20GROWTH%2C%20ORGANIC) Q1 2024 reported revenue decline of **1.7%** was reconciled to a **3.3% organic revenue decline** after adjusting for acquisitions, divestitures, and foreign exchange impacts Total CRL Revenue Growth Reconciliation (Q1 2024) | Description | % Impact | | :--- | :--- | | Revenue growth, reported | (1.7)% | | Impact of foreign exchange | (0.3)% | | Contribution from acquisitions | (1.5)% | | Impact of divestitures | 0.2% | | **Non-GAAP revenue growth, organic** | **(3.3)%** | [Other Information](index=4&type=section&id=Other%20Information) [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP financial measures to provide investors with a clearer understanding of core operating results by excluding one-time or non-operational items - Non-GAAP measures offer a meaningful understanding of core operating results by excluding the effect of often one-time charges[18](index=18&type=chunk) - Organic revenue presentation enables clearer growth measurement by excluding the effects of acquisitions, divestitures, and foreign currency fluctuations[18](index=18&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Caution%20Concerning%20Forward-Looking%20Statements) This press release includes forward-looking statements on financial performance and demand, subject to risks like NHP supply constraints, government investigations, and global economic changes - Forward-looking statements encompass financial guidance, client demand trends, and the impact of NHP supply constraints[23](index=23&type=chunk) - Significant risks include NHP supply issues, government investigations, global economic changes, and challenges in integrating acquisitions such as Noveprim[23](index=23&type=chunk)

Wall Street analysts expect Charles River Laboratories (CRL) to post quarterly earnings of $2.05 per share in its upcoming report, which indicates a year-over-year decline of 26.3%. Revenues are expected to be $997.24 million, down 3.1% from the year-ago quarter.The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. This represents how the covering analysts, as a whole, have reassessed their initial estimates during this timeframe.Ahead of a company's earnings disclosure, i ...

Investors interested in stocks from the Medical Services sector have probably already heard of Icon PLC (ICLR) and Charles River Laboratories (CRL) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks w ...

Charles River Laboratories International, Inc. (CRL) is scheduled to report first-quarter 2024 results on May 9, before market open.Earnings Surprise HistoryIn the last reported quarter, the company’s adjusted earnings per share of $2.46 surpassed the Zacks Consensus Estimate by 2.9%. Earnings surpassed estimates in each of the trailing four quarters, the average beat being 7.07%.Let’s take a look at how things have shaped up prior to this announcement.Factors at PlayThe sustained worldwide need for researc ...

Investors looking for stocks in the Medical Services sector might want to consider either Icon PLC (ICLR) or Charles River Laboratories (CRL) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revis ...

A month has gone by since the last earnings report for Charles River Laboratories (CRL) . Shares have added about 6.2% in that time frame, outperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is Charles River due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts. Charles River Q4 Earnings Beat, Mar ...

Charles River Laboratories International, Inc. (CRL) inked an AAV9 production program deal with Navega Therapeutics. The deal will grant Navega Therapeutics access to Charles River’s contract development and manufacturing capabilities and advisory services to produce the AAV gene therapy candidate NT-Z001 for phase 1 clinical trials.The recent move will bolster Charles River’s Biologics Solutions.More on the NewsUsing the accuracy of its AI-enabled zinc finger epigenome regulatory technology, Navega Therape ...