Charles River Laboratories International, Inc. (NYSE: CRL) today
reported first-quarter 2006 financial results and announced that it
has entered into a definitive agreement with Kendle International
Inc. (Nasdaq: KNDL) to sell its Phase II - IV Clinical Services
business, as it realigns its portfolio to focus on its core drug
discovery and development strengths. In conjunction with the
planned portfolio realignment, the Company recorded a goodwill
impairment charge of $129.2 million, or $1.81 per share, for the
Phase II - IV Clinical business in the first quarter of 2006. As a
result, the Company reported a net loss per share of $1.40 for the
first quarter of 2006, on sales of $283.8 million. On a non-GAAP
basis, earnings per share were $0.50, which excludes the impairment
charge and amortization and compensation charges related to the
Inveresk acquisition. Further actions announced by the Company
today included strategic initiatives targeted at streamlining the
business infrastructure and improving operating efficiency, an
increase of its stock repurchase authorization to $300 million and
revised annual guidance for 2006. James C. Foster, Chairman,
President and Chief Executive Officer said, "In keeping with our
goal to capitalize on our core competencies and to focus on
internal process improvement, we are realigning our business
through the sale of the Phase II - IV portion of our Clinical
Services business. In addition, we will be closing our
Interventional and Surgical Services (ISS) facility in
Massachusetts. These actions will allow us to focus our financial
and operating resources on our core Research Models and Services,
Preclinical Services and Clinical Phase I businesses, which we
believe offer significant long-term growth opportunities. We
believe that the market for outsourced preclinical services,
particularly toxicology, continues to be strong, and we see
emerging opportunities in In Vitro products, preconditioning
services for research models, and early-stage clinical trials. We
have concluded these businesses offer us the most promising
opportunities for growth, and support our long-term goals of sales
growth of 11% to 12%, earnings per share growth of 14% to 15%, an
operating margin of 25%, strong cash flow generation, and steadily
improving returns on invested capital." Mr. Foster said that sales
growth from continuing operations for 2006 would be revised to a
range of 6% to 8%, due primarily to continuing softness in
Transgenic Services, flat Vaccine sales and Preclinical Services
capacity constraints. The year-over-year growth rate is based on
pro forma sales of approximately $990 million in 2005, which
excludes sales from the Phase II - IV Clinical and ISS businesses.
As a result of lower sales, partially offset by expected benefits
from the strategic initiatives, and including the goodwill
impairment charge, the Company now expects the 2006 GAAP net loss
per share from continuing operations, which excludes the results of
its Phase II-IV Clinical and ISS businesses, will be in a range of
$0.09 to $0.15. Non-GAAP earnings per share, which exclude the
charge for goodwill impairment, the cost of the strategic
initiatives, and amortization and stock compensation charges
related to the Inveresk acquisition, are expected to be in a range
of $2.12 to $2.18. Divestiture of Phase II - IV Clinical Business
As a result of an evaluation of its strategic goals, the Company
determined that the Phase II - IV Clinical Services business, at
its current scale, while profitable, does not take advantage of the
Company's core competencies, and believes that monetizing the Phase
II - IV clinical assets and redeploying the resulting cash would be
more beneficial to the long-term business, to customers and to
shareholders. On May 9, 2006, the Company entered into a definitive
agreement to sell the Phase II - IV Clinical business to Kendle
International Inc. for $215 million in cash. Kendle is a global
clinical research organization that generated over $200 million in
net service revenues in 2005. By combining the Company's Phase
II-IV business with its own, Kendle will significantly enhance its
ability to conduct large-scale multinational clinical studies. The
transaction, which the Company expects to close in the third
quarter of 2006, is subject to regulatory approvals and other
customary conditions. Credit Suisse acted as financial advisor to
the Company. As a result of the pending sale of the Phase II - IV
business, the Company assessed the goodwill assigned to its
Clinical segment, and based on management's estimates of fair
value, which includes the projected sales price, determined that an
impairment existed. As a result, a charge of $129.2 million, or
$1.81 per share, was recorded in the first quarter of 2006 for the
impairment of goodwill. The Company has determined that the Phase I
Clinical Services business is an essential, strategic component of
its service offerings, as it enables us to support customers'
preclinical efforts through early-stage clinical trials. The
Company will retain the Phase I facility in Edinburgh, Scotland,
and is continuing to assess options for a Phase I presence in North
America. Beginning in the second quarter of 2006, the Company
anticipates that the Phase I financial results will be included in
the Preclinical Services business segment. First-Quarter 2006
Results Net sales for the first quarter of 2006 increased to $283.8
million compared to $273.7 million reported in the first quarter of
2005, a gain of 3.7%, or 6.7% excluding the negative effect of
foreign exchange. Strong sales of toxicology services, research
models in North American and Europe, and In Vitro products drove
the first-quarter sales increase. On a GAAP basis, which includes
the impairment charge, the Company reported a net loss of $100.1
million, or $1.40 per diluted share, in the first quarter of 2006,
compared to net income of $27.6 million, or $0.40 per diluted
share, in the first quarter of 2005. In addition to the impairment
charge, first-quarter 2006 results included $3.6 million of stock
option expense recognized in accordance with Statement of Financial
Accounting Standard No. 123R (SFAS 123R), "Share-Based Payments,"
which the Company adopted on January 1, 2006. In accordance with
SFAS 123R, stock compensation expense was recorded in the business
segment results and in unallocated corporate overheard. Had SFAS
123R been adopted in 2005, first-quarter 2005 results would have
included $6.0 million of stock option expense. On a non-GAAP basis,
net income was $36.4 million, or $0.50 per diluted share, in the
first quarter of 2006, compared to $38.6 million, or $0.55 per
diluted share, in the first quarter of 2005. Non-GAAP results in
the first quarter of both years exclude amortization and
stock-based compensation charges related to the acquisition of
Inveresk. These charges amounted to $10.9 million, or $0.10 per
share, in the first quarter of 2006 and $16.3 million, or $0.15 per
share, in the first quarter of 2005. In addition, first-quarter
2006 non-GAAP results exclude the goodwill impairment charge of
$129.2 million, or $1.81 per share. Business Segments Results
Research Models and Services (RMS) First-quarter 2006 net sales for
the RMS segment of the business were $129.0 million, compared to
$127.9 million in the first quarter of 2005, an increase of
approximately 1.0%. When excluding the negative effect of foreign
exchange, the growth rate was 4.7%. As was the case in the second
half of 2005, growth was driven by North America Research Model
sales and In Vitro products and services. European Research Models
sales also showed improvement in the first quarter of 2006 compared
to the same period last year, benefiting from higher pharmaceutical
and biotechnology customers' spending. First-quarter sales growth
was partially offset by the effect of foreign exchange on sales,
mainly in Japan, a continuing decline in the U.S. Transgenic
Services businesses, and lower sales of vaccine products due to
avian influenza. In addition, sales of large animals were below the
first quarter of last year due to timing of shipments. Primarily as
a result of lower sales and $1.4 million of stock compensation
expense, the gross margin declined to 43.3% from 44.2% reported in
the first quarter of 2005. The first-quarter operating income was
$40.5 million and the operating margin was 31.4%, down from $42.3
million and 33.1% in the same period last year. Preclinical
Services Net sales for the Preclinical Services segment were $122.5
million in the first quarter of 2006, an increase of 7.4% from the
$114.1 million reported in the first quarter of 2005. Excluding the
negative effect of foreign exchange, the first-quarter growth rate
was 9.1%. The sales increase was due to continuing strong demand
for outsourced toxicology services, partially offset by negative
foreign exchange, capacity constraints, lower sales of discovery
services (which include metabolism, pharmacokinetics and
pharmacology) and ISS, and study delays in our Pennsylvania
facility. These issues negatively affected the gross and operating
margins, as did $1.9 million of stock compensation expense and
increased operating costs in the Company's Montreal operation.
Montreal's cost structure has increased as a result of rapid
expansion and the associated hiring, and its results were further
affected by the unfavorable impact of foreign exchange. To improve
operating efficiency in Montreal, the Company has implemented
headcount reductions in administrative and support areas. As a
result of these actions and the impending closure of ISS
Massachusetts, the Company expects margins to improve beginning in
the second quarter of 2006. The segment's gross margin was 30.3%
compared to 33.5% in the first quarter of 2005. Operating income
was $12.1 million in the first quarter of 2006, compared to $12.5
million in the first quarter of last year. The operating margin was
9.9% compared to 11.0% in the first quarter of 2005. When excluding
amortization related to the Inveresk acquisition, first-quarter
non-GAAP operating income was $20.2 million and the non-GAAP
operating margin was 16.5%, compared to non-GAAP operating income
of $22.8 million and an operating margin of 20.0% in the first
quarter of 2005. The decline in gross and operating margins was due
primarily to SFAS 123R costs of $1.9 million, ISS, study delays,
and the cost structure in Montreal. Clinical Services For the first
quarter of 2006, net sales for the Clinical Services segment were
$32.3 million compared to $31.7 million in the first quarter of
2005, an increase of 1.9%. Excluding the negative effect of foreign
exchange, the sales growth rate was 6.3%. The Phase I clinic had
very strong sales in the quarter, as the effect of the European
Clinical Trials Directive waned and targeted sales efforts brought
new clients from Europe and Japan to the clinic. Higher sales and
continued efforts to optimize the cost structure resulted in a
gross margin of 31.6% compared to 31.0% in the first quarter of
2005. Including the goodwill impairment charge of $129.2 million,
the segment's operating loss was $127.4 million in the first
quarter of 2006, compared to operating income of $0.8 million in
the first quarter of last year. When excluding the impairment
charge and amortization related to the Inveresk acquisition,
first-quarter non-GAAP operating income was $4.2 million and the
non-GAAP operating margin was 13.1%, compared to non-GAAP operating
income of $3.8 million and an operating margin of 12.1% in the
first quarter of 2005. The GAAP and non-GAAP margin increases were
due primarily to improved operating efficiency, partially offset by
allocation of $0.2 million of stock compensation expense. Backlog
The backlog for Preclinical and Clinical Services at April 1, 2006,
was $481 million compared to $427 million at the end of the first
quarter of 2005 and $448 million at the end of the fourth quarter
of 2005. Net bookings increased 35.9% to $190 million and the net
book-to-bill ratio rose to 1.23 from 0.96 in the first quarter of
2005. Once the Phase II - IV Clinical Services business has been
divested, the Company will no longer report quarterly backlog. The
Company does not report backlog for the RMS business segment
because turnaround time from placement to completion of orders,
both for products and services, is rapid, and the characteristics
of the Preclinical Services business are similar. Strategic
Initiatives The Company is implementing a number of actions
designed to improve operating efficiency and profitability during
the remainder of 2006. The total cost of these initiatives is
expected to be $7.2 million, or $0.07 per diluted share. The
benefit associated with these actions is expected to be $16.0
million, or $0.16 per diluted share, in 2006, with additional
savings in later years. The Company expects to record the charges
in the second quarter of 2006. Commenting on these actions, Mr.
Foster said, "We continue to identify and implement actions to
improve our operating profitability, while maintaining our high
standards of customer service and responsiveness. We do not see the
two goals as mutually exclusive and in fact, our 4th Generation Six
Sigma(TM) initiative has helped us to identify opportunities to
enhance operations at a lower cost." RMS initiatives are focused
primarily on the closure of two remote sites in the Vaccine
businesses. These are smaller, satellite facilities which are
inefficient to operate. In addition, the Company will continue its
efforts to right-size the Transgenic Services business to address
the existing market opportunity through headcount reductions and a
management consolidation. The cost of these actions is expected to
be approximately $2.0 million, or $0.02 per diluted share.
Preclinical Services initiatives include the closure of ISS
Massachusetts, as well as a small operating unit in Ireland which
provides similar services. The ISS facility will wind down
operations and is expected to close in late 2006. The
second-quarter charge related to these anticipated closures is
expected to be $3.2 million, or $0.03 per diluted share. In
addition, the Company expects to record a charge of $2.0 million,
or $0.02 per diluted shares, for headcount reductions in Montreal
and Massachusetts. To further support the Company's goal of
operating efficiency, cost savings initiatives have been
implemented at the corporate level. There will be no charges
associated with these actions, which include selective headcount
freezes and adjustment of equity and incentive compensation. Mr.
Foster continued, "With a realigned portfolio of high-end,
essential products and services and a leaner cost structure, we
expect to enhance our ability to support our customers in their
pursuit of drug discovery and development to improve human and
animal health. We are making significant investments across the
spectrum of our business, from production capacity and
preconditioning services and the PTS in our RMS segment, through
our entire Preclinical Services business. We believe that these
investments, all of which leverage our core competencies of
veterinary medicine and regulatory preclinical services, support
our goal to build a larger, more profitable business. 2006 Revised
Guidance The following forward-looking guidance is based on
continuing operations, which exclude the Phase II - IV Clinical and
ISS businesses. Beginning in the second quarter of 2006, the
Company expects to report the Phase II - IV and ISS businesses as
discontinued operations, which will result in $0.15 dilution to the
Company's original 2006 earnings guidance. This guidance also
assumes implementation on January 1, 2006, of SFAS 123R, and
therefore includes an estimated $0.12 of stock option expense.
Guidance is based on current foreign exchange rates. The Company is
revising its estimates for 2006 sales growth and earnings per share
from continuing operations. Net sales growth for 2006 from
continuing operations is expected to be in a range of 6% to 8%,
based on lower-than-expected first-quarter results. Due primarily
to the $1.81 per share goodwill impairment charge and the
first-quarter shortfall of $0.07 per share, the Company estimates
that on a GAAP basis, it will report a net loss for 2006 in a range
of $0.09 to $0.15. Non-GAAP earnings per share, which exclude the
goodwill impairment charge, $0.39 per share of amortization and
compensation charges related to the acquisition of Inveresk, and
the $0.07 per share second-quarter charge associated with the
strategic initiatives, are expected to be in a range of $2.12 to
$2.18. The Company is committed to improving its operating
efficiency, and the anticipated benefit of the strategic
initiatives announced today is expected to significantly improve
operating results in the balance of the year. The $0.16 per share
benefit from the strategic initiatives is included in the revised
earnings per share estimates. -0- *T REVISED (from continuing 2006
EPS GUIDANCE PRIOR operations)
------------------------------------- --------------
----------------- Sales 7% - 9% 6% - 8% GAAP EPS estimates $1.95 -
$2.01 ($0.09) - ($0.15) Q2 Strategic initiatives charge --- $0.07
Goodwill impairment charge --- $1.81 Inveresk-related charges $0.39
$0.39 -------------- ----------------- Non-GAAP estimates $2.34 -
$2.40 $2.12 - $2.18 -------------- ----------------- Dilution from
divestiture of Phase II - IV Clinical Services ($0.15)
First-quarter shortfall ($0.07)
------------------------------------- --------------
----------------- *T Stock Repurchase Program Charles River's Board
of Directors approved an increase to the Company's stock repurchase
authorization, which now provides for the purchase of up to $300.0
million of its common stock. The Company has repurchased stock
under this authorization pursuant to a Rule 10b5-1 plan initiated
in August 2005. Stock purchases may be made from time to time on
the open market, through block trades or otherwise in compliance
with Rule 10b-18 of the federal securities laws. Depending on
market conditions and other factors, these repurchases may be
commenced or suspended at any time or from time to time without
prior notice. Funds for the repurchases are expected to come from
cash on hand, cash generated by operations, or cash derived from
the sale of non-core assets. In the first quarter of 2006, the
Company repurchased 246,900 shares at a total cost of $11.4
million. Since inception of the plan in the third quarter of 2005
through the end of the first quarter of 2006, the Company has
purchased 642,900 shares at a total cost of $28.9 million. There
are currently no specific plans for the shares that have been or
may be purchased under the program. As of April 1, 2006, Charles
River had approximately 72.1 million shares of common stock
outstanding. Webcast Charles River Laboratories has scheduled a
live webcast on Wednesday, May 10, at 8:30 a.m. ET to discuss
matters relating to this press release. To participate, please go
to ir.criver.com and select the webcast link. You can also find the
associated slide presentation and reconciliations to comparable
GAAP measures on the website. The webcast will be available until
5:00 p.m. ET on May 24, 2006. Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures which
exclude, among other items, amortization of intangible assets and
other charges related to the Inveresk acquisition. We exclude these
items from the non-GAAP financial measures because they are outside
our normal operations. We believe that the inclusion of non-GAAP
financial measures in this press release helps investors to gain a
meaningful understanding of our core operating results and future
prospects without the effect of one-time charges, and is consistent
with how management measures and forecasts the Company's
performance, especially when comparing such results to prior
periods or forecasts. Non-GAAP results also allow investors to
compare the Company's operations against the financial results of
other companies in the industry who similarly provide non-GAAP
results. The non-GAAP financial measures included in this press
release are not meant to be considered superior to or a substitute
for results of operations prepared in accordance with GAAP. The
Company intends to continue to assess the potential value of
reporting non-GAAP results consistent with applicable rules and
regulations. Reconciliations of the non-GAAP financial measures
used in this press release to the most directly comparable GAAP
financial measures are set forth in the text of, and the
accompanying exhibits to, this press release, and can also be found
on the Company's website at ir.criver.com. Caution Concerning
Forward-Looking Statements. This news release includes
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as
"anticipate," "believe," "expect," "will," "may," "estimate,"
"plan," "outlook," and "project" and other similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. These statements also include
statements regarding the future demand for drug discovery and
development products and services, including the outsourcing of
these services; the impact of specific actions intended to improve
overall operating efficiencies and profitability, particularly with
respect to the Interventional and Surgical Services, Transgenic
Services, and Montreal businesses; the intended divestiture of the
Company's Phase II - IV Clinical Services business; expectations
regarding future stock option, restricted stock and other equity
grants to the Company's employees and directors; expectations
regarding stock repurchases; the timing of the opening of new and
expanded facilities; and Charles River's future performance as
delineated in our forward-looking guidance, and particularly our
expectations with respect to sales growth, efficiency improvements
and operating synergies. Forward-looking statements are based on
Charles River's current expectations and beliefs, and involve a
number of risks and uncertainties that are difficult to predict and
that could cause actual results to differ materially from those
stated or implied by the forward-looking statements. Those risks
and uncertainties include, but are not limited to: the ability to
successfully divest the Phase II - IV Clinical Services business
without diverting attention or resources from the Company's core
businesses; a decrease in research and development spending or a
decrease in the level of outsourced services; the ability to
convert backlog to sales; special interest groups; contaminations;
industry trends; new displacement technologies; USDA and FDA
regulations; changes in law; continued availability of products and
supplies; loss of key personnel; interest rate and foreign currency
exchange rate fluctuations; changes in tax regulation and laws;
changes in generally accepted accounting principles; and any
changes in business, political, or economic conditions due to the
threat of future terrorist activity in the U.S. and other parts of
the world, and related U.S. military action overseas. A further
description of these risks, uncertainties, and other matters can be
found in the Risk Factors detailed in Charles River's Annual Report
on Form 10-K as filed on March 14, 2006, as well as other filings
we make with the Securities and Exchange Commission. Because
forward-looking statements involve risks and uncertainties, actual
results and events may differ materially from results and events
currently expected by Charles River, and Charles River assumes no
obligation and expressly disclaims any duty to update information
contained in this news release except as required by law. About
Charles River Laboratories Charles River Laboratories, based in
Wilmington, Massachusetts, is a global provider of solutions that
advance the drug discovery and development process. Our
leading-edge products and services are designed to enable our
clients to bring drugs to market faster and more efficiently.
Backed by our rigorous, best-in-class procedures and our proven
data collection, analysis and reporting capabilities, our products
and services are organized into three categories spanning every
step of the drug development pipeline: Research Models and
Services, Preclinical Services, and Clinical Services. Charles
River's customer base includes all of the major pharmaceutical
companies and many biotechnology companies, government agencies and
leading hospitals and academic institutions. Charles River's 8,600
employees serve clients in more than 50 countries. For more
information on Charles River, visit our website at www.criver.com.
-0- *T CHARLES RIVER LABORATORIES INTERNATIONAL, INC. CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in
thousands, except for per share data) Three Months Ended
----------------------- April 1, March 26, 2006 2005 Total net
sales $283,769 $273,722 Cost of products sold and services provided
180,585 169,111 ----------- ----------- Gross margin 103,184
104,611 Selling, general and administrative 47,772 44,852 Goodwill
impairment charge 129,187 Amortization of intangibles 11,189 14,363
----------- ----------- Operating income (loss) (84,964) 45,396
Interest income (expense) (2,948) (6,259) Other, net 238 (144)
----------- ----------- Income before income taxes and minority
interests (87,674) 38,993 Provision for income taxes 12,039 10,860
----------- ----------- Income before minority interests (99,713)
28,133 Minority interests (402) (485) ----------- ----------- Net
income (loss) $(100,115) $27,648 =========== =========== Earnings
(loss ) per common share Basic $(1.40) $0.42 Diluted $(1.40) $0.40
Weighted average number of common shares outstanding Basic
71,505,478 65,876,099 Diluted 71,505,478 72,526,888 CHARLES RIVER
LABORATORIES INTERNATIONAL, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (UNAUDITED) (dollars in thousands) April 1, December 31,
2006 2005 Assets Current assets Cash and cash equivalents $101,456
$114,821 Trade receivables, net 201,069 203,274 Inventories 68,167
65,270 Other current assets 41,967 35,957 ----------- ------------
Total current assets 412,659 419,322 Property, plant and equipment,
net 428,004 399,454 Goodwill, net 1,288,239 1,417,666 Other
intangibles, net 188,291 199,148 Deferred tax asset 71,720 67,911
Other assets 21,511 34,708 ----------- ------------ Total assets
$2,410,424 $2,538,209 =========== ============ Liabilities and
Shareholders' Equity Current liabilities Current portion of
long-term debt $36,403 $36,445 Accounts payable 34,133 30,447
Accrued compensation 27,237 40,358 Deferred income 100,379 116,302
Other current liabilities 69,871 87,860 ----------- ------------
Total current liabilities 268,023 311,412 Long-term debt 270,652
260,217 Other long-term liabilities 126,451 129,849 -----------
------------ Total liabilities 665,126 701,478 -----------
------------ Minority interests 8,243 9,718 Total shareholders'
equity 1,737,055 1,827,013 ----------- ------------ Total
liabilities and shareholders' equity $2,410,424 $2,538,209
=========== ============ CHARLES RIVER LABORATORIES INTERNATIONAL,
INC. SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED) (dollars in
thousands) Three Months Ended --------------------- April 1, March
26, 2006 2005 Research Models and Services Net sales $128,973
$127,912 Gross margin 55,885 56,586 Gross margin as a % of net
sales 43.3% 44.2% Operating income 40,477 42,308 Operating income
as a % of net sales 31.4% 33.1% Depreciation and amortization 5,034
4,729 Capital expenditures 3,566 5,275 Preclinical Services Net
sales $122,458 $114,072 Gross margin 37,089 38,188 Gross margin as
a % of net sales 30.3% 33.5% Operating income 12,091 12,516
Operating income as a % of net sales 9.9% 11.0% Depreciation and
amortization 14,414 16,993 Capital expenditures 35,821 7,023
Clinical Services Net sales $32,338 $31,738 Gross margin 10,210
9,837 Gross margin as a % of net sales 31.6% 31.0% Operating income
(loss) (127,440) 833 Operating income as a % of net sales -394.1%
2.6% Depreciation and amortization 3,171 3,704 Capital expenditures
253 100 Unallocated Corporate Overhead $(10,092) $(10,261) Total
Net sales $283,769 $273,722 Gross margin 103,184 104,611 Gross
margin as a % of net sales 36.4% 38.2% Operating income (loss)
(84,964) 45,396 Operating income as a % of net sales -29.9% 16.6%
Depreciation and amortization 22,619 25,426 Capital expenditures
39,640 12,398 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP SELECTED BUSINESS SEGMENT
INFORMATION (UNAUDITED) (dollars in thousands) Three Months Ended
------------------- April 1, March 26, 2006 2005 Research Models
and Services Net sales $128,973 $127,912 Operating income 40,477
42,308 Operating income as a % of net sales 31.4% 33.1% Add back: -
- --------- --------- Operating income, excluding specified charges
(Non-GAAP) 40,477 42,308 Non-GAAP operating income as a % of net
sales 31.4% 33.1% Preclinical Services Net sales $122,458 $114,072
Operating income 12,091 12,516 Operating income as a % of net sales
9.9% 11.0% Add back: Amortization related to acquisition 8,095
10,317 - - --------- --------- Operating income, excluding
specified charges (Non-GAAP) 20,186 22,833 Non-GAAP operating
income as a % of net sales 16.5% 20.0% Clinical Services Net sales
$32,338 $31,738 Operating income (loss) (127,440) 833 Operating
income as a % of net sales -394.1% 2.6% Add back: Amortization
related to acquisition 2,499 3,014 Goodwill impairment 129,187 - -
- --------- --------- Operating income, excluding specified charges
(Non-GAAP) 4,246 3,847 Non-GAAP operating income as a % of net
sales 13.1% 12.1% Unallocated Corporate Overhead $(10,092)
$(10,261) Add back: Stock-based compensation related to acquisition
325 2,969 - - --------- --------- Unallocated corporate overhead,
excluding specified charges (Non-GAAP) (9,767) (7,292) Total Net
sales $283,769 $273,722 Operating income (loss) (84,964) 45,396
Operating income as a % of net sales -29.9% 16.6% Add back:
Amortization related to acquisition 10,594 13,331 Stock-based
compensation related to acquisition 325 2,969 Goodwill impairment
129,187 - --------- --------- Operating income, excluding specified
charges (Non-GAAP) 55,142 61,696 Non-GAAP operating income as a %
of net sales 19.4% 22.5% Charles River management believes that
non-GAAP financial measures helps investors to gain a meaningful
understanding of our core operating results and future prospects,
consistent with the manner in which management measures and
forecasts the Company's performance. The non-GAAP financial
measures included are not meant to be considered superior to or a
substitute for results of operations prepared in accordance with
GAAP. CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION
OF GAAP EARNINGS TO NON-GAAP EARNINGS (dollars in thousands, except
for per share data) Three Months Ended -----------------------
April 1, March 26, 2006 2005 Net income (loss) $(100,115) $27,648
Add back: Amortization related to acquisition 10,594 13,331
Goodwill impairment 129,187 Stock-based compensation related to
acquisition 325 2,969 Tax effect (3,603) (5,313) -----------
----------- Net income, excluding specified charges (Non- GAAP)
$36,388 $38,635 =========== =========== Calculation of earnings per
common share, excluding specified charges (Non-GAAP): Net income
for purposes of calculating earnings per share, excluding specified
charges (Non-GAAP) $36,388 $38,635 After-tax equivalent interest
expense on 3.5% senior convertible debentures - 1,168 -----------
----------- Income for purposes of calculating diluted earnings per
share, excluding specified charges (Non-GAAP) $36,388 $39,803
=========== =========== Weighted average shares outstanding - Basic
71,505,478 65,876,099 Effect of dilutive securities: 3.5% senior
convertible debentures - 4,759,455 Stock options and contingently
issued restricted stock 1,239,254 1,550,175 Warrants 145,505
341,159 ----------- ----------- Weighted average shares outstanding
- Diluted 72,890,237 72,526,888 =========== =========== Basic
earnings (loss) per share $(1.40) $0.42 Diluted earnings (loss) per
share $(1.40) $0.40 Basic earnings per share, excluding specified
charges (Non-GAAP) $0.51 $0.59 Diluted earnings per share,
excluding specified charges (Non-GAAP) $0.50 $0.55 Charles River
management believes that non-GAAP financial measures helps
investors to gain a meaningful understanding of our core operating
results and future prospects, consistent with the manner in which
management measures and forecasts the Company's performance. The
non-GAAP financial measures included are not meant to be considered
superior to or a substitute for results of operations prepared in
accordance with GAAP. *T
Charles River Laboratories (NYSE:CRL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Charles River Laboratories (NYSE:CRL)
Historical Stock Chart
From Sep 2023 to Sep 2024