Charles River(CRL)2025-02-19 12:19Revenue Performance - Fourth-quarter revenue was $1.00 billion, a decrease of 1.1% from $1.01 billion in Q4 2023[2] - Full-year revenue decreased by 1.9% to $4.05 billion from $4.13 billion in 2023[16] - The Manufacturing segment's revenue increased by 1.6% to $194.9 million in Q4 2024, with organic revenue growth of 2.1%[14] - The DSA segment's revenue decreased by 3.6% to $603.3 million in Q4 2024, with organic revenue decline of 3.5%[12] - The RMS segment's revenue for 2024 was $829.4 million, an increase of 4.7% from $792.3 million in 2023[19] - Total revenue for the three months ended December 28, 2024, was $1,002,549,000, a decrease of 1.4% compared to $1,013,476,000 for the same period in 2023[34] - Service revenue for the twelve months ended December 28, 2024, was $3,304,138,000, down from $3,440,019,000 in 2023, reflecting a decline of 4.0%[34] - Reported revenue growth for the three months ended December 28, 2024, was a decline of 1.1%, with the RMS segment growing by 4.3% and the DSA segment declining by 3.6%[46] - For the twelve months ended December 28, 2024, reported revenue growth was a decline of 1.9%, with the RMS segment growing by 4.7% and the DSA segment declining by 6.3%[46] - Non-GAAP revenue growth, organic, for the three months ended December 28, 2024, was a decline of 1.8%, with the RMS segment at a decline of 0.4% and the DSA segment at a decline of 3.5%[46] Earnings and Losses - GAAP loss per share for Q4 2024 was $(4.22), a decrease from earnings of $3.62 per share in Q4 2023[6] - Non-GAAP earnings per share for Q4 2024 were $2.66, an increase of 8.1% from $2.46 in Q4 2023[7] - The company reported a net loss of $213,747,000 for the three months ended December 28, 2024, compared to a net income of $188,952,000 for the same period in 2023[34] - Basic earnings per share for the three months ended December 28, 2024, was $(4.22), compared to $3.65 for the same period in 2023[34] - For the three months ended December 28, 2024, Charles River Laboratories reported a net loss of $215.7 million compared to a net income of $187.1 million for the same period in 2023[43] - Non-GAAP net income for the three months ended December 28, 2024, was $136.6 million, up from $127.2 million in the prior year, reflecting a 1.1% increase[43] Financial Guidance and Projections - The company plans to repurchase approximately $350 million in common stock in 2025[1] - 2025 revenue guidance indicates a decrease of 7.0% to 4.5%[23] - Non-GAAP EPS estimate for 2025 is projected to be between $9.10 and $9.60[23] Operational Challenges and Future Outlook - The company expects to face challenges related to NHP supply constraints and ongoing investigations by the U.S. government, which may impact future financial performance[29] - Future revenue trends are anticipated to be influenced by client demand for drug discovery and development products and services[29] - The company continues to assess the potential value of reporting non-GAAP results consistent with applicable rules and regulations[46] Asset and Liability Changes - Total assets decreased from $8,195,001 thousand as of December 30, 2023, to $7,528,345 thousand as of December 28, 2024, representing a decline of approximately 8.1%[36] - Total liabilities decreased from $4,536,003 thousand as of December 30, 2023, to $4,020,267 thousand as of December 28, 2024, a reduction of approximately 11.4%[36] Cash Flow and Expenditures - Cash provided by operating activities increased to $734,577 thousand for the twelve months ended December 28, 2024, compared to $683,898 thousand in the previous year, reflecting a growth of 7.4%[37] - Capital expenditures for the twelve months ended December 28, 2024, were $232,967 thousand, down from $318,528 thousand in 2023, indicating a decrease of 26.9%[37] - Cash, cash equivalents, and restricted cash at the end of the period decreased to $205,570 thousand from $284,480 thousand, a decline of 27.7%[37] Impairments and Charges - The company incurred a goodwill impairment charge of $215,000,000 during the three months ended December 28, 2024[34] - The company reported a goodwill impairment of $215,000 thousand for the twelve months ended December 28, 2024, which was not present in the previous year[37] - The company incurred a $27 million inventory charge related to non-human primate inventory issues[40] - The company reported a severance cost of $12.7 million during the quarter[39] Operating Income and Expenses - Operating income for the twelve months ended December 28, 2024, was $227,347,000, a significant decrease from $617,261,000 in 2023[34] - Operating income (loss) was $(167.7) million, with a significant goodwill impairment charge of $215.0 million recognized[39][40] - Non-GAAP operating income as a percentage of revenue was 19.9%, compared to 20.3% in the previous period[39] - Non-GAAP operating income as a percentage of revenue for the twelve months ended December 28, 2024, was 25.7%, compared to 27.5% in the previous year[38] - Depreciation and amortization expenses were $102.1 million, indicating continued investment in long-term assets[39] Legal and Environmental Issues - Third-party legal costs related to environmental litigation and government investigations impacted financial results[40] - The company experienced a reduction in long-range financial outlook for the Biologics Solutions reporting unit due to loss of key customers[40]