I I F ■ F Matteo Colombo Investment update Following my last publication on Charles River Laboratories International, Inc. (NYSE:CRL) in May, the business is -3% to the downside and after its Q2 FY'24 numbers, I've revised my rating on the company to a hold for reasons outlined in this note. Critically, my view in May was formed on a potential turnaround in the economic situation of the business, along with operating growth that required very little incremental capital to produce. On reflection, this may ha ...

NEW YORK, Aug. 13, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Charles River Laboratories International, Inc. (NYSE: CRL) on behalf of long-term stockholders following a class action complaint that was filed against Charles River on May 19, 2023 with a Class Period from May 5, 2020 to February 21, 2023. Our investigation concerns whether the board of directors of Charles River have breached their fiducia ...

Have you looked into how Charles River Laboratories (CRL) performed internationally during the quarter ending June 2024? Considering the widespread global presence of this medical research equipment and services provider, examining the trends in international revenues is essential for assessing its financial resilience and prospects for growth. The global economy today is deeply interlinked, making a company's engagement with international markets a critical factor in determining its financial success and g ...

Solskin I highlighted Charles River Laboratories's (NYSE:CRL) near-term challenges due to the weak biopharma market, initiating with a 'Hold' rating in my previous coverage published in February 2024. The company released its Q2 result on August 7th, lowering its full-year guidance due to weak demands from small and mid-sized biotechnology customers. I think the current stock price has already factored in the softness of biopharma market, making it an opportune time to invest in this highquality company. Th ...

Charles River Laboratories International, Inc. (CRL) reported second-quarter 2024 adjusted earnings per share (EPS) of $2.80, which increased 4.1% year over year. The figure surpassed the Zacks Consensus Estimate by 17.2%. On a GAAP basis, earnings declined 7.9% year over year to $1.74 per share. Revenues Revenues totaled $1.03 billion, in line with the Zacks Consensus Estimate. However, the top line declined 2.8% from the year-ago quarter's level (down 3.2% organically, excluding the impact of acquisition, ...

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 ...

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 bi ...