Charles River Laboratories International, Inc. (NYSE: CRL) today
reported its results for the fourth-quarter and full-year 2011. For
the quarter, net sales from continuing operations were $291.0
million, an increase of 3.3% from $281.7 million in the fourth
quarter of 2010. On a segment basis, sales increased in the
Research Models and Services (RMS) segment, but declined in the
Preclinical Services (PCS) segment.
The addition of a 53rd week at the end of 2011, which is
periodically required to true up to a December 31st fiscal year
end, contributed approximately 4.5% to reported fourth-quarter
sales. At a 0.2% benefit, the impact of foreign currency
translation on reported fourth-quarter sales was negligible.
On a GAAP basis, net income from continuing operations for the
fourth quarter of 2011 was $27.1 million, or $0.55 per diluted
share, compared to a net loss of $342.4 million, or $5.94 per
diluted share, for the fourth quarter of 2010. In the fourth
quarter of 2010, GAAP results included non-cash goodwill and asset
impairments of $395.0 million, or $6.28 per share.
On a non-GAAP basis, net income from continuing operations was
$33.6 million for the fourth quarter of 2011, a decline of 2.8%
from $34.5 million for the same period in 2010. A higher tax rate
and lower other income were the primary drivers of the change.
Fourth-quarter diluted earnings per share on a non-GAAP basis were
$0.69, an increase of 15.0% compared to $0.60 per share in the
fourth quarter of 2010. Non-GAAP earnings per share benefited
primarily from the net accretion of stock repurchases.
James C. Foster, Chairman, President and Chief Executive
Officer, said, “Our clients are increasingly viewing our broad
portfolio of essential products and services and our scientific
expertise as tools they can use to further their goal to bring more
drugs to market sooner, and at a lower cost. We believe that our
fourth-quarter results demonstrate a modestly improving environment
on a number of levels: stable large biopharma demand, increasing
demand for non-regulated services, better funding for mid-tier
biopharma companies, and consistent growth in the academic and
government sector. The fourth-quarter results and our expectation
for relative stability in our end markets confirm our outlook for
2012. Therefore, we are reaffirming our sales and earnings per
share guidance for the year.”
The Company reports results from continuing operations, which
excludes results of the Phase I clinical business that was divested
in 2011. The Phase I business is reported as a discontinued
operation.
Fourth-Quarter Segment
Results
Research Models and Services (RMS)
Net sales for the RMS segment were $182.4 million in the fourth
quarter of 2011, an increase of 8.3% from $168.4 million in the
fourth quarter of 2010. Excluding the 0.4% benefit from of foreign
exchange, RMS sales increased by 7.9%, primarily driven by higher
sales of Other Products and Research Model Services. Other Products
includes the In Vitro and Avian businesses. The 53rd week
contributed approximately 4.5% to fourth-quarter sales.
In the fourth quarter of 2011, the RMS segment’s GAAP operating
margin was 27.6% compared to 26.4% for the fourth quarter of 2010.
On a non-GAAP basis, the operating margin decreased to 28.8% from
30.5% in the fourth quarter of 2010. The non-GAAP operating margin
decline was primarily attributable to the performance of the large
models business and an associated inventory write-down.
Preclinical Services (PCS)
Fourth-quarter 2011 net sales from continuing operations for the
PCS segment were $108.5 million, a decrease of 4.2% from $113.3
million in the fourth quarter of 2010. The PCS sales decline was
due primarily to a continuing proportion of shorter term, less
complex studies in the sales mix, as well as fewer GLP safety
assessment studies. Foreign currency translation reduced the sales
growth rate by 0.3%. The 53rd week contributed approximately 4.0%
to fourth-quarter sales.
On a non-GAAP basis, the operating margin increased to 13.0%
from 12.0% in the fourth quarter of 2010. The non-GAAP operating
margin improvement was due principally to the benefits of
cost-savings actions implemented in 2010 and 2011, as well as a
non-income based tax adjustment. The fourth-quarter 2011 GAAP
operating margin increased to 3.8% from (345.9%) in the same period
in 2010, which reflected the fourth-quarter 2010 goodwill and other
impairments.
Stock Repurchase Update
During the fourth quarter of 2011, the Company repurchased
approximately 0.8 million shares for $25.0 million. As of December
31, 2011, Charles River had $116.3 million remaining on its $750
million stock repurchase authorization.
Full-Year Results
For 2011, net sales from continuing operations increased by 0.8%
to $1.14 billion from $1.13 billion in 2010. Foreign currency
translation benefited net sales growth by 2.2%. The 53rd week
contributed approximately 1.0% to reported 2011 sales.
On a GAAP basis, net income from continuing operations for 2011
was $115.5 million, or $2.24 per diluted share, compared to a net
loss of $334.1 million, or $5.25 per diluted share, in 2010. In
addition to the goodwill and asset impairments, the 2010 GAAP
results also include a $30.0 million fee related to the termination
of a proposed acquisition.
On a non-GAAP basis, net income from continuing operations for
2011 was $131.3 million, or $2.56 per diluted share, compared to
$125.6 million, or $1.99 per diluted share, in 2010.
Research Models and Services (RMS)
For 2011, RMS net sales were $705.4 million, an increase of 5.8%
from $667.0 million in 2010. Foreign currency translation benefited
net sales growth by 2.7%. On a GAAP basis, the RMS segment
operating margin was 29.2% in 2011, compared to 27.7% in 2010. On a
non-GAAP basis, the operating margin was 30.4% in 2011, compared to
29.5% in 2010.
Preclinical Services (PCS)
For 2011, PCS net sales were $437.2 million, a decrease of 6.3%
from $466.4 million in 2010. Foreign currency translation benefited
net sales growth by 1.5%. On a non-GAAP basis, the operating margin
was 12.6% in 2011, compared to 11.9% in 2010. The GAAP operating
margin for the PCS segment was 5.7% in 2011, compared to (81.4%) in
2010 as a result of the goodwill and other impairments.
Items Excluded from Non-GAAP
Results
Items excluded from non-GAAP results in the fourth quarter of
2011 and 2010 were as follows:
($ in millions) 4Q11
4Q10 Amortization of intangible assets
$5.3 $6.2 Severance related to
cost-savings actions 4.1
10.9 Impairment and other items, net (1) (0.4)
383.5 Adjustment of SPC contingent
consideration and related items 0.5
5.8 Operating losses for PCS China, Massachusetts and
Arkansas (1.8) 2.7 Costs
associated with evaluation of acquisitions 0.1
0.2 Fees and tax costs associated with
corporate subsidiary restructuring and repatriation
0.1 -- Convertible debt accounting
3.8 3.3
(1) In the fourth quarter of 2010, these items were related
primarily to goodwill and asset impairments associated with the
Company’s PCS business segment.
Items excluded from non-GAAP results in 2011 and 2010 were as
follows:
($ in millions) FY2011
FY2010 Amortization of intangible assets
$21.8 $24.4 Severance
related to cost-savings actions 5.5
16.5 Impairment and other items, net (1)
0.5 384.9 Adjustment of SPC
contingent consideration and related items
(0.7) 2.9 Operating losses for PCS China,
Massachusetts and Arkansas 6.5
13.4 Costs associated with evaluation of acquisitions
0.2 8.3 Acquisition agreement
termination fee -- 30.0
Gain on settlement of life insurance policy
(7.7) -- Write-off of deferred financing costs
related to amended credit agreement 1.5
4.5 Fees and tax costs associated with corporate
subsidiary restructuring and repatriation 1.6
15.7 Convertible debt accounting
14.0 12.9 Tax benefit related to
disposition of Phase I clinical business
(11.1) --
(1) In 2011, these items were related primarily to (i) asset
impairments associated with certain RMS and PCS operations; (ii)
gains related to dispositions of RMS facilities in Michigan and
Europe; (iii) costs associated with exiting a defined benefit plan
in RMS Japan; and (iv) costs associated with exiting a corporate
leased facility. In 2010, these items were related primarily to
goodwill and asset impairments associated with the Company’s PCS
business segment.
2012 Guidance
The Company reaffirms its forward-looking guidance based on
continuing operations for 2012, which was originally provided on
December 14, 2011.
2012 GUIDANCE (from continuing operations)
Net sales growth, reported 0% -
2% Impact of foreign exchange Approx. 1% Net
sales growth, constant currency 1% - 3% GAAP
EPS estimate $2.10 - $2.20 Amortization of
intangible assets $0.25 Operating losses (1)
$0.05 Convertible debt accounting
$0.20 Non-GAAP EPS estimate
$2.60 - $2.70
(1) These costs relate primarily to the Company’s PCS facility
in Massachusetts.
Webcast
Charles River Laboratories has scheduled a live webcast on
Tuesday, February 14, 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 of non-GAAP financial measures to
comparable GAAP financial measures on the website.
Use of Non-GAAP Financial
Measures
This press release contains non-GAAP financial measures, such as
non-GAAP earnings per diluted share, which exclude the amortization
of intangible assets and other charges related to our acquisitions,
expenses associated with evaluating acquisitions, charges and
operating losses attributable to our businesses we plan to close or
divest, severance costs associated with our cost-savings actions,
taxes associated with the disposition of our Phase I clinical
business, adjustments related to contingent consideration related
to our acquisitions, a gain recognized upon the settlement of a
life insurance policy of a former officer, fees and taxes
associated with corporate subsidiary restructuring and
repatriation, write-offs of deferred financing costs related to our
amended credit facility, and the additional interest recorded as a
result of the adoption in 2009 of an accounting standard related to
our convertible debt accounting which increased interest and
depreciation expense. We exclude these items from the non-GAAP
financial measures because they are outside our normal operations.
There are limitations in using non-GAAP financial measures, as they
are not prepared in accordance with generally accepted accounting
principles, and may be different than non-GAAP financial measures
used by other companies. In particular, we believe that the
inclusion of supplementary 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 these often-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. We believe that the financial impact of our acquisitions
(and in certain cases, the evaluation of such acquisitions, whether
or not ultimately consummated) is often large relative to our
overall financial performance, which can adversely affect the
comparability of our results on a period-to-period basis. In
addition, certain activities, such as business acquisitions, happen
infrequently and the underlying costs associated with such
activities do not recur on a regular basis. 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 this press release,
and can also be found on the Company’s website at
ir.criver.com.
Caution Concerning Forward-Looking
Statements
This press 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 our projected 2012 financial
performance including sales, earnings per share, and the expected
impact of foreign exchange rates; the future demand for drug
discovery and development products and services; including our
expectations for revenue trends for 2012; the development and
performance of our services and products, including the impact this
can have on our clients’ drug development models; market and
industry conditions including the outsourcing of these services and
present spending trends by our customers; the impact of specific
actions intended to more accurately align our infrastructure to the
current operating environment, and to improve overall operating
efficiencies and profitability; and Charles River’s future
performance as delineated in our forward-looking guidance, and
particularly our expectations with respect to sales and foreign
exchange impact. 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 integrate businesses we acquire; the ability to
execute our cost-savings actions on an effective and timely basis
(including divestitures and site closures); the timing and
magnitude of our share repurchases; negative trends in research and
development spending, negative trends in the level of outsourced
services, or other cost reduction actions by our customers; 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 February 23, 2011,
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
Accelerating Drug Development. Exactly. Charles River provides
essential products and services to help pharmaceutical and
biotechnology companies, government agencies and leading academic
institutions around the globe accelerate their research and drug
development efforts. Our dedicated employees are focused on
providing clients with exactly what they need to improve and
expedite the discovery, early-stage development and safe
manufacture of new therapies for the patients who need them. To
learn more about our unique portfolio and breadth of services,
visit www.criver.com.
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in
thousands, except for per share data)
Three Months
Ended
Twelve Months
Ended
December 31,2011
December 25,2010
December 31,2011
December 25,2010
Total net sales $ 290,962 $ 281,652 $ 1,142,647 $ 1,133,416
Cost of products sold and services provided
190,394 188,347
740,405 748,656
Gross margin 100,568 93,305 402,242 384,760 Selling, general
and administrative 53,579 57,275 206,140 232,489 Goodwill
impairment - 305,000 - 305,000 Asset impairment - 90,030 - 91,378
Termination fee - - - 30,000 Amortization of intangibles
5,342 6,159
21,796 24,405
Operating income 41,647 (365,159 ) 174,306 (298,512 ) Interest
income (expense) (9,674 ) (9,197 ) (41,233 ) (34,093 ) Other income
(expense)
681 1,373
(411 )
(1,477 ) Income from continuing
operations before income taxes 32,654 (372,983 ) 132,662 (334,082 )
Provision (benefit) for income taxes
5,576
(30,554 )
17,140 23 Income
from continuing operations, net of tax 27,078 (342,429 ) 115,522
(334,105 ) Discontinued operations, net of tax
150 (5,549 )
(5,545 )
(8,012 ) Net income 27,228 (347,978 )
109,977 (342,117 ) Noncontrolling interests
(113 ) 4,414
(411 ) 5,448
Net income attributable to common shareowners
$
27,115 $ (343,564
) $ 109,566
$ (336,669 ) Earnings
per common share Basic: Continuing operations $ 0.55 $ (5.94 ) $
2.26 $ (5.25 ) Discontinued operations $ - $ (0.10 ) $ (0.11 ) $
(0.13 ) Net $ 0.56 $ (6.04 ) $ 2.16 $ (5.38 ) Diluted: Continuing
operations $ 0.55 $ (5.94 ) $ 2.24 $ (5.25 ) Discontinued
operations $ - $ (0.10 ) $ (0.11 ) $ (0.13 ) Net $ 0.55 $ (6.04 ) $
2.14 $ (5.38 ) Weighted average number of common shares
outstanding Basic 48,670,624 56,886,053 50,823,063 62,561,294
Diluted 48,907,278 56,886,053 51,318,242 62,561,294
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (dollars in
thousands)
December 31,2011
December 25,2010
Assets Current assets Cash and cash equivalents $ 68,905 $
179,160 Trade receivables, net 184,810 192,972 Inventories 92,969
100,297 Other current assets 79,052 76,603 Current assets of
discontinued businesses
107
3,862 Total current assets 425,843 552,894 Property,
plant and equipment, net 738,030 752,657 Goodwill, net 197,561
198,438 Other intangibles, net 93,437 121,236 Deferred tax asset
44,804 45,003 Other assets 57,659 62,323 Long-term assets of
discontinued businesses
986
822 Total assets
$ 1,558,320
$ 1,733,373 Liabilities and
Equity Current liabilities Current portion of long-term debt
& capital leases $ 14,758 $ 30,582 Accounts payable 34,332
30,627 Accrued compensation 41,602 48,918 Deferred revenue 56,530
66,905 Accrued liabilities 54,377 59,369 Other current liabilities
14,033 20,095 Current liabilities of discontinued businesses
1,165 3,284 Total current
liabilities 216,797 259,780 Long-term debt & capital leases
703,187 670,270 Other long-term liabilities 108,451 114,596
Long-term liabilities of discontinued businesses
2,522 - Total liabilities
1,030,957 1,044,646
Non-controlling interests 1,780 1,304 Total equity
527,363 688,727 Total liabilities
and equity
$ 1,558,320 $
1,733,373 CHARLES RIVER LABORATORIES
INTERNATIONAL, INC. SELECTED BUSINESS SEGMENT INFORMATION
(UNAUDITED) (dollars in thousands)
Three Months
Ended
Twelve Months
Ended
December 31,2011
December 25,2010
December 31,2011
December 25,2010
Research Models and Services Net sales $ 182,414 $ 168,382 $
705,419 $ 666,986 Gross margin 74,667 68,383 297,327 278,391 Gross
margin as a % of net sales 40.9 % 40.6 % 42.1 % 41.7 % Operating
income 50,352 44,405 206,319 184,464 Operating income as a % of net
sales 27.6 % 26.4 % 29.2 % 27.7 % Depreciation and amortization
9,326 9,703 37,240 37,657 Capital expenditures 20,055 11,867 34,257
27,694
Preclinical Services Net sales $ 108,548 $
113,270 $ 437,228 $ 466,430 Gross margin 25,901 24,922 104,915
106,369 Gross margin as a % of net sales 23.9 % 22.0 % 24.0 % 22.8
% Operating income 4,081 (391,842 ) 24,925 (379,726 ) Operating
income as a % of net sales 3.8 % -345.9 % 5.7 % -81.4 %
Depreciation and amortization 11,656 13,956 47,990 55,992 Capital
expenditures 7,416 4,141 14,886 15,166
Unallocated
Corporate Overhead $ (12,786 ) $ (17,722 ) $ (56,938 ) $
(103,250 )
Total Net sales $ 290,962 $ 281,652
$ 1,142,647 $ 1,133,416 Gross margin 100,568 93,305 402,242 384,760
Gross margin as a % of net sales 34.6 % 33.1 % 35.2 % 33.9 %
Operating income 41,647 (365,159 ) 174,306 (298,512 ) Operating
income as a % of net sales 14.3 % -129.6 % 15.3 % -26.3 %
Depreciation and amortization 20,982 23,659 85,230 93,649 Capital
expenditures 27,471 16,008 49,143 42,860
CHARLES RIVER
LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GAAP TO
NON-GAAP SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)
(1) (dollars in thousands)
Three Months
Ended
Twelve Months
Ended
December 31,2011
December 25,2010
December 31,2011
December 25,2010
Research Models and Services Net sales $ 182,414 $ 168,382 $
705,419 $ 666,986 Operating income 50,352 44,405 206,319 184,464
Operating income as a % of net sales 27.6 % 26.4 % 29.2 % 27.7 %
Add back: Amortization related to acquisitions 1,755 1,824 6,747
7,349 Severance related to cost-savings actions 752 4,238 1,196
4,429 Impairment and other items
(2)
(257 ) 846
312 846
Operating income, excluding specified charges (Non-GAAP) $ 52,602 $
51,313 $ 214,574 $ 197,088 Non-GAAP operating income as a % of net
sales 28.8 % 30.5 % 30.4 % 29.5 %
Preclinical
Services Net sales $ 108,548 $ 113,270 $ 437,228 $ 466,430
Operating income 4,081 (391,842 ) 24,925 (379,726 ) Operating
income as a % of net sales 3.8 % -345.9 % 5.7 % -81.4 % Add back:
Amortization related to acquisitions 3,586 4,335 15,048 17,056
Severance related to cost-savings actions 3,393 4,277 4,372 9,145
Adjustment of SPC contingent consideration and related items
(3) 4,879 7,200 4,879 7,200 Impairment and other items
(2) 425 386,999 425 388,347 Operating losses for PCS China,
PCS Massachusetts and PCS Arkansas
(2,297
) 2,662
5,580 13,387
Operating income, excluding specified charges (Non-GAAP) $ 14,067 $
13,631 $ 55,229 $ 55,409 Non-GAAP operating income as a % of net
sales 13.0 % 12.0 % 12.6 % 11.9 %
Unallocated Corporate
Overhead $ (12,786 ) $ (17,722 ) $ (56,938 ) $ (103,250 ) Add
back:
Severance related to cost-savings
actions
- 2,418 (106 ) 2,930 Impairment and other items
(2) (532 ) -
(264 ) - Adjustment of SPC contingent consideration and related
items
(3) (4,394 ) (1,405 ) (5,600 ) (4,335 ) Costs related
to PCS China 485 - 891 - Costs associated with the evaluation of
acquisitions 65 182 215 6,769 Acquisition agreement termination fee
- - - 30,000 Gain on settlement of life insurance policy - - (7,710
) - Costs associated with corporate legal entity restructuring
& repatriation 145 - 930 393 Convertible debt accounting
(4) 53 53
213
213 Unallocated
corporate overhead, excluding specified charges (Non-GAAP) $
(16,964 ) $ (16,474 ) $ (68,369 ) $ (67,280 )
Total
Net sales $ 290,962 $ 281,652 $ 1,142,647 $ 1,133,416 Operating
income 41,647 (365,159 ) 174,306 (298,512 ) Operating income as a %
of net sales 14.3 % -129.6 % 15.3 % -26.3 % Add back: Amortization
related to acquisitions 5,341 6,159 21,795 24,405 Severance related
to cost-savings actions 4,145 10,933 5,462 16,504 Adjustment of SPC
contingent consideration and related items
(3) 485 5,795
(721 ) 2,865 Impairment and other items
(2) (364 ) 387,845
473 389,193 Operating losses for PCS China, PCS Massachusetts and
PCS Arkansas (1,812 ) 2,662 6,471 13,387 Costs associated with the
evaluation of acquisitions 65 182 215 6,769 Acquisition agreement
termination fee - - - 30,000 Gain on settlement of life insurance
policy - - (7,710 ) - Costs associated with corporate legal entity
restructuring & repatriation 145 - 930 393 Convertible debt
accounting
(4) 53
53 213
213 Operating income, excluding specified
charges (Non-GAAP) $ 49,705 $ 48,470 $ 201,434 $ 185,217 Non-GAAP
operating income as a % of net sales 17.1 % 17.2 % 17.6 % 16.3 %
(1) Charles River management believes that
supplementary non-GAAP financial measures provide useful
information to allow investors to gain a meaningful understanding
of our core operating results and future prospects, without the
effect of one-time charges and other items which are outside our
normal operations, consistent with the manner in which management
measures and forecasts the Company’s performance. The supplementary
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. The Company intends to continue to assess the
potential value of reporting non-GAAP results consistent with
applicable rules, regulations and guidance.
(2) The
twelve months ended December 31, 2011 include: (i) asset
impairments associated with certain RMS and PCS operations; (ii)
gains on the disposition of RMS facilities in Michigan and Europe;
(iii) costs associated with exiting a defined benefit plan in RMS
Japan; and (iv) costs associated with vacating a corporate leased
facility. The three and twelve month periods ended December 25,
2010 include items primarily related to goodwill and asset
impairments associated with the Company’s PCS business segment.
(3) The three and twelve month periods ended December
31, 2011 include an impairment of in-process research and
development and a deferred revenue reversal related to Systems
Pathology Company, LLC (SPC). The three and twelve month periods
ended December 25, 2010 include an impairment of in-process
research and development related to SPC.
(4) Includes
the impact of convertible debt accounting adopted at the beginning
of 2009, which increased depreciation expense.
CHARLES RIVER
LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GAAP
EARNINGS TO NON-GAAP EARNINGS (1) (dollars in thousands,
except for per share data)
Three Months
Ended
Twelve Months
Ended
December 31,2011
December 25,2010
December 31,2011
December 25,2010
Net income attributable to common shareholders $ 27,115 $
(343,564 ) $ 109,566 $ (336,669 ) Less: Discontinued operations
(150 ) 5,549
5,545 8,012
Net income from continuing operations 26,965 (338,015 )
115,111 (328,657 ) Add back: Amortization related to acquisitions
5,341 6,159 21,795 24,405 Severance related to cost-savings actions
4,145 10,933 5,462 16,504 Impairment and other items
(2)
(364 ) 383,548 473 384,896 Adjustment of SPC contingent
consideration and related items
(3) 485 5,795 (721 ) 2,865
Operating losses for PCS China, PCS Massachusetts and PCS Arkansas
(1,812 ) 2,662 6,471 13,387 Costs associated with the evaluation of
acquisitions 65 182 215 8,319 Acquisition agreement termination fee
- - - 30,000 Gain on settlement of life insurance policy - - (7,710
) - Writeoff of deferred financing costs related to debt
extinguishment - - 1,450 4,542 Costs and taxes associated with
corporate legal entity restructuring & repatriation 145 - 1,637
15,689 Convertible debt accounting, net
(4) 3,762 3,333
13,978 12,948 Tax benefit from disposition of Phase I clinical
business - - (11,111 ) - Tax effect
(5,162
) (40,056 )
(15,710 ) (59,274
) Net income, excluding specified charges (Non-GAAP)
$ 33,569 $
34,541 $ 131,340
$ 125,624 Weighted
average shares outstanding - Basic 48,670,624 56,886,053 50,823,063
62,561,294 Effect of dilutive securities: Stock options and
contingently issued restricted stock 236,654 487,130 495,179
558,229 Weighted average shares outstanding - Diluted
48,907,278 57,373,183
51,318,242
63,119,523 Basic earnings per share $
0.56 $ (6.04 ) $ 2.16 $ (5.38 ) Diluted earnings per share $ 0.55 $
(6.04 ) $ 2.14 $ (5.38 ) Basic earnings per share, excluding
specified charges (Non-GAAP) $ 0.69 $ 0.61 $ 2.58 $ 2.01 Diluted
earnings per share, excluding specified charges (Non-GAAP) $ 0.69 $
0.60 $ 2.56 $ 1.99
(1) Charles River
management believes that supplementary non-GAAP financial measures
provide useful information to allow investors to gain a meaningful
understanding of our core operating results and future prospects,
without the effect of one-time charges and other items which are
outside our normal operations, consistent with the manner in which
management measures and forecasts the Company’s performance. The
supplementary 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. The Company intends to
continue to assess the potential value of reporting non-GAAP
results consistent with applicable rules, regulations and guidance.
(2) The twelve months ended December 31, 2011
include: (i) asset impairments associated with certain RMS and PCS
operations; (ii) gains on the disposition of RMS facilities in
Michigan and Europe; (iii) costs associated with exiting a defined
benefit plan in RMS Japan; and (iv) costs associated with vacating
a corporate leased facility. The three and twelve month periods
ended December 25, 2010 include items primarily related to goodwill
and asset impairments associated with the Company’s PCS business
segment.
(3) The three and twelve month periods ended
December 31, 2011 include an impairment of in-process research and
development and a deferred revenue reversal related to Systems
Pathology Company, LLC (SPC). The three and twelve month periods
ended December 25, 2010 include an impairment of in-process
research and development related to SPC.
(4) The
three and twelve months ended December 31, 2011 include the impact
of convertible debt accounting adopted at the beginning of 2009,
which increased interest expense by $3,709 and $13,765 and
depreciation expense by $53 and $213, respectively. The three and
twelve months ended December 25, 2010 include the impact of
convertible debt accounting adopted at the beginning of 2009, which
increased interest expense by $3,280 and $12,735 and depreciation
expense by $53 and $213, respectively.
Charles River Laboratories (NYSE:CRL)
Historical Stock Chart
From May 2024 to Jun 2024
Charles River Laboratories (NYSE:CRL)
Historical Stock Chart
From Jun 2023 to Jun 2024