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Charles River Announces Second-Quarter 2008 Results

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  • Second-Quarter Sales Increase 14.5% to $352 Million
  • Second-Quarter GAAP EPS Increase 29% to $0.71 and Non-GAAP EPS Increase 23% to $0.79
  • Raising 2008 Sales and Non-GAAP EPS Guidance, GAAP EPS Guidance Lowered
  • Agreement Signed to Acquire NewLab BioQuality AG
  • Increases Stock Repurchase Authorization by $200 Million

WILMINGTON, Mass.--(BUSINESS WIRE)--Aug. 5, 2008--Charles River Laboratories International, Inc. (NYSE: CRL) today reported its results for the second quarter and first six months of 2008. For the quarter, net sales increased 14.5% to $352.1 million from $307.4 million in the second quarter of 2007. Both the Research Models and Services (RMS) and Preclinical Services (PCS) business segments reported significantly higher sales, with the RMS segment showing particular strength due to continued demand from pharmaceutical and biotechnology companies. Foreign exchange contributed 4.1% to the net sales growth.

On a GAAP basis, net income for the second quarter of 2008 was $50.2 million, or $0.71 per diluted share, compared to $38.0 million, or $0.55 per diluted share, for the second quarter of 2007.

On a non-GAAP basis, net income was $55.4 million for the second quarter of 2008, compared to $43.8 million for the same period in 2007, an increase of 26.4%. Second-quarter diluted earnings per share on a non-GAAP basis were $0.79, an increase of 23.4% compared to $0.64 per share in the second quarter of 2007. Non-GAAP earnings per share in the second quarter of 2008 excluded $7.6 million of amortization of intangible assets related to acquisitions, a charge of $2.8 million primarily related to the Company's disposition of its legacy preclinical facility in Worcester, Massachusetts, and a gain of $3.3 million as a result of the Company's curtailment of its U.S. defined benefit pension plan. For the second quarter of 2007, non-GAAP results excluded $8.2 million of amortization of intangible assets and stock-based compensation related to acquisitions and a charge of $0.9 million related to the exit of the Worcester facility.

James C. Foster, Chairman, President and Chief Executive Officer, said, "A continuation of strong market demand for our broad portfolio of essential products and services enabled us to sustain our momentum in the second quarter. We believe that this demand will continue, as pharmaceutical and biotechnology customers maintain their focus on the discovery of new therapies and rely on Charles River's scientific expertise to enhance the efficiency of their research. We are optimistic that we will effectively capitalize on these opportunities, as we increasingly provide the support which is crucial to our clients' drug discovery and development efforts. Therefore, we are confident that we will achieve our increased sales and non-GAAP earnings guidance for 2008."

Research Models and Services (RMS)

Sales for the RMS segment were $172.8 million in the second quarter of 2008, an increase of 20.2% from $143.8 million in the second quarter of 2007. Sales growth was broad based, with strong global demand from pharmaceutical and biotechnology companies for research models and services, as well as In Vitro Detection products.

In the second quarter of 2008, the RMS segment's GAAP operating margin decreased to 30.2% compared to 31.5% in the second quarter of 2007. The decrease was due primarily to an increase in operating expenses in Japan, which are not expected to continue at that level, as well as a greater proportion of services in the sales mix. On a non-GAAP basis, which excluded charges of $0.6 million for acquisition-related amortization and $0.6 million for an asset impairment related to our Vaccine business in Mexico, the operating margin was 30.9% compared to 31.7% for the same period in the prior year. Non-GAAP results in the second quarter of 2007 excluded $0.4 million of amortization related to acquisitions.

Preclinical Services (PCS)

Second-quarter 2008 net sales for the PCS segment were $179.3 million, an increase of 9.6% from $163.6 million in the second quarter of 2007. Continuing strong demand for general and specialty toxicology services drove significantly higher sales at the Company's U.S. flagship facilities in Massachusetts and Nevada, and Clinical Services Northwest benefited from demand for its Phase I services. The sales gains were partially offset by less favorable preclinical study mix and some study delays, as well as capacity constraints at other preclinical facilities.

The segment's profits were affected, as expected, by the additional costs associated with the transition to the new preclinical facility in Nevada and the negative impact of foreign exchange in Canada resulted in lower operating margins for the PCS segment compared to the second quarter of 2007. The second-quarter 2008 GAAP operating margin declined to 16.1% from 16.8% in the same period in the prior year. On a non-GAAP basis, which excluded $7.0 million of acquisition-related amortization and a charge of $2.2 million associated with the Company's disposition of its Worcester, Massachusetts facility, the operating margin declined to 21.2% from 22.0% in the second quarter of 2007. As expected, the second-quarter GAAP and non-GAAP operating margins improved sequentially from the first quarter of 2008 by 230 and 290 basis points respectively. The improvement was attributable primarily to improved margins in Nevada as that facility ramps up and Clinical Services Northwest, which benefited from higher sales.

Six-Month Results

For the first six months of 2008, net sales increased by 15.2% to $689.8 million, from $598.6 million in the same period in 2007. Foreign exchange contributed approximately 4.1% to the sales growth rate.

On a GAAP basis, net income was $95.3 million, or $1.35 per diluted share, for the first half of 2008, compared to $74.7 million, or $1.10 per diluted share, for the same period in 2007.

On a non-GAAP basis, net income for the first six months of 2008 was $106.2 million, or $1.51 per diluted share, compared to $87.0 million, or $1.28 per diluted share, for the same period in 2007. For the first six months of 2008, non-GAAP net income excluded $15.2 million of acquisition-related amortization, a charge of $3.5 million primarily related to the Company's disposition of its Worcester, Massachusetts facility, and a gain of $3.3 million as a result of the Company's pension curtailment. Non-GAAP net income for the first half of 2007 excluded acquisition-related charges of $16.1 million and charges of $1.7 million related to the exit of the Worcester facility.

Research Models and Services (RMS)

For the first six months of 2008, RMS net sales were $341.4 million, an increase of 19.0% from first-half 2007 net sales of $286.9 million. The RMS segment's GAAP operating margin was 31.6% in the first half of 2008, compared to 32.2% for the year-ago period. On a non-GAAP basis, the operating margin was 32.1% compared to 32.4% in the first six months of 2007.

Preclinical Services (PCS)

For the first six months of 2008, PCS net sales were $348.4 million, an increase of 11.7% over first-half 2007 net sales of $311.8 million. On a GAAP basis, the PCS segment operating margin was 15.0% in the first half of 2008, compared to 16.3% in the year-ago period. On a non-GAAP basis, the operating margin was 19.8% in the first half of 2008 compared to 21.7% for the same period in 2007.

2008 Guidance

The Company is increasing its sales and non-GAAP earnings per share guidance and reducing GAAP earnings per share guidance for 2008. The reduction of GAAP earnings guidance is due primarily to a $0.04 charge for revaluation of a deferred tax asset for our convertible debt, due to a change in Massachusetts tax law. The charge will be excluded from non-GAAP results. The revised forward-looking guidance, which includes the anticipated acquisition of NewLab BioQuality AG by the end of the third quarter of 2008, is based on current foreign exchange rates.

2008 GUIDANCE                                 REVISED        PRIOR
------------------------------------------ ------------- -------------
Net sales growth                               12% - 14%     10% - 13%
GAAP EPS estimate                          $2.59 - $2.65 $2.59 - $2.69
Amortization of intangible assets                  $0.30         $0.30
Revaluation of deferred tax asset,
 impairment and other charges              $0.07 - $0.08 $0.01 - $0.02
Gain on curtailment of U.S. defined
 benefit pension plan                            ($0.03)       ($0.04)
                                           ------------- -------------
Non-GAAP EPS estimate                      $2.94 - $3.00 $2.87 - $2.97
------------------------------------------ ------------- -------------

Company to Acquire NewLab BioQuality AG

Charles River has entered into an agreement to acquire privately-held NewLab BioQuality AG (NewLab) for approximately $53 million in cash. NewLab, a Dusseldorf, Germany-based contract service organization, provides safety and quality control services to biopharmaceutical clients. NewLab is expected to achieve revenues in a range of $20-$23 million in 2008. The transaction is expected to close by the end of the third quarter of 2008, subject to customary regulatory approvals, and is expected to be neutral to earnings per share in 2008 and slightly accretive in 2009.

Charles River Biopharmaceutical Services, which provides services to support the development and manufacture of biologics, is a world leader in cell bank manufacture from research through full-scale production, and a premier provider of testing to determine the potency of biologics, of drug product release testing, and of clinical-scale vaccine manufacture. Complementing these services, NewLab enhances Charles River's capabilities in process validation services, which mimic new manufacturing processes to verify that potentially hazardous contaminants have been removed; in consulting services, which help manufacturers meet regional Good Manufacturing Practice (GMP) guidance on new drugs; and assists in designing International Conference on Harmonisation (ICH)-compliant stability testing programs. Together, Charles River and NewLab expect to provide the most comprehensive service package in the biopharmaceutical industry at a time when biologic drugs are becoming an increasing proportion of therapeutics in development.

Board Increases Stock Repurchase Authorization

Charles River's Board of Directors has increased the existing authorization for the repurchase of Charles River common stock by $200.0 million. In addition to the remaining balance of $30.7 million as of August 1, 2008, the amount currently available under the authorization is $230.7 million. The stock purchases will 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 or cash generated by operations.

During the second quarter of 2008, the Company repurchased approximately 535,000 shares of common stock at a total cost of $32.8 million. There are currently no specific plans for the shares that have been or may be purchased under the program.

As of August 1, 2008, Charles River had approximately 67.8 million shares of common stock outstanding.

Webcast

Charles River Laboratories has scheduled a live webcast on Wednesday, August 6, 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 from continuing operations, which exclude amortization of intangible assets and other charges related to our acquisitions, charges related to the disposition of our Worcester facility, an impairment of our Vaccine business in Mexico, the impact of the revaluation of a deferred tax asset as a result of changes to a Massachusetts tax law, and gains attributable to the curtailment of our U.S. pension plan. 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 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 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. 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 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 our projected 2008 sales and earnings; 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; the timing of the opening of new and expanded facilities; our future stock purchase activities; future cost reduction activities by our customers; and Charles River's future performance as delineated in our forward-looking guidance, and particularly our expectations with respect to sales growth. In addition, these statements include the intended acquisition of NewLab and the expected impact on our revenues and earnings. 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 consummate the acquisition of NewLab; a decrease in research and development spending, a decrease 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 20, 2008, 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 more than 8,800 employees worldwide are focused on providing clients with exactly what they need to improve and expedite the discovery, development through first-in-human evaluation, 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        Six Months Ended
                     ------------------------ ------------------------
                      June 28,    June 30,     June 28,    June 30,
                         2008        2007         2008        2007

Total net sales      $   352,134 $   307,435  $   689,819 $   598,634
Cost of products sold
 and services
 provided                214,147     186,479      421,455     362,105
                     ------------------------ ------------------------
Gross margin             137,987     120,956      268,364     236,529
Selling, general and
 administrative           61,064      56,092      120,370     109,109
Amortization of
 intangibles               7,600       8,139       15,171      15,994
                     ------------------------ ------------------------
Operating income          69,323      56,725      132,823     111,426
Interest income
 (expense)                (1,207)     (2,595)      (1,873)     (4,654)
Other income
 (expense)                  (267)     (1,069)      (1,104)       (920)
                     ------------------------ ------------------------
Income before income
 taxes and minority
 interests                67,849      53,061      129,846     105,852
Provision for income
 taxes                    17,920      15,101       34,846      30,411
                     ------------------------ ------------------------
Income before
 minority interests       49,929      37,960       95,000      75,441
Minority interests           258        (119)         341        (373)
                     ------------------------ ------------------------
Income from
 continuing
 operations               50,187      37,841       95,341      75,068
Loss from
 discontinued
 businesses, net of
 tax                           -         115            -        (349)
                     ------------------------ ------------------------
Net income (loss)    $    50,187 $    37,956  $    95,341 $    74,719
                     ======================== ========================

Earnings (loss) per
 common share
    Basic:
    Continuing
     operations      $      0.75 $      0.57  $      1.41 $      1.13
    Discontinued
     operations      $         - $         -  $         - $     (0.01)
    Net income       $      0.75 $      0.57  $      1.41 $      1.12
    Diluted:
    Continuing
     operations      $      0.71 $      0.55  $      1.35 $      1.10
    Discontinued
     operations      $         - $         -  $         - $     (0.01)
    Net income       $      0.71 $      0.55  $      1.35 $      1.10

Weighted average
 number of common
 shares outstanding
    Basic             67,328,432  66,830,155   67,416,639  66,587,863
    Diluted           70,363,643  68,517,657   70,464,092  67,971,898
    CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
  CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                (dollars in thousands)


                               June 28,     December
                                  2008       29, 2007
Assets
Current assets
   Cash and cash equivalents   $  262,438   $  225,449
   Trade receivables, net         240,009      213,908
   Inventories                     93,602       88,023
   Other current assets            80,328       79,477
   Current assets of
    discontinued businesses           563        1,007
                               ----------  -----------
      Total current assets        676,940      607,864
Property, plant and equipment,
 net                              826,835      748,793
Goodwill, net                   1,121,900    1,120,540
Other intangibles, net            135,512      148,905
Deferred tax asset                 65,342       89,255
Other assets                       60,382       85,993
Long-term assets of
 discontinued businesses            4,187        4,187
                               ----------  -----------
      Total assets             $2,891,098   $2,805,537
                               ==========  ===========

Liabilities and Shareholders'
 Equity
Current liabilities
   Current portion of long-term
    debt                       $  210,042   $   25,051
   Accounts payable                43,523       36,715
   Accrued compensation            52,517       53,359
   Deferred revenue                94,889      102,021
   Accrued liabilities             72,792       61,366
   Other current liabilities       26,293       23,268
   Current liabilities of
    discontinued businesses           719          748
                               ----------  -----------
      Total current liabilities   500,775      302,528
Long-term debt                    312,260      484,998
Other long-term liabilities       128,980      154,044
                               ----------  -----------
      Total liabilities           942,015      941,570
                               ----------  -----------
Minority interests                  3,208        3,500
Total shareholders' equity      1,945,875    1,860,467
                               ----------  -----------
Total liabilities and
 shareholders' equity          $2,891,098   $2,805,537
                               ==========  ===========
            CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
          SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)
                        (dollars in thousands)

                                 Three Months Ended  Six Months Ended
                                 ------------------ ------------------
                                 June 28, June 30,  June 28, June 30,
                                    2008     2007      2008     2007
Research Models and Services
 Net sales                       $172,848 $143,803  $341,444 $286,871
 Gross margin                      76,429   63,109   152,685  126,763
 Gross margin as a % of net sales    44.2%    43.9%     44.7%    44.2%
 Operating income                  52,199   45,268   108,012   92,289
 Operating income as a % of net
  sales                              30.2%    31.5%     31.6%    32.2%
 Depreciation and amortization      7,016    5,663    13,675   11,232
 Capital expenditures              23,510   10,688    33,656   17,772

Preclinical Services
 Net sales                       $179,286 $163,632  $348,375 $311,763
 Gross margin                      61,558   57,847   115,679  109,766
 Gross margin as a % of net sales    34.3%    35.4%     33.2%    35.2%
 Operating income                  28,849   27,426    52,117   50,870
 Operating income as a % of net
  sales                              16.1%    16.8%     15.0%    16.3%
 Depreciation and amortization     16,004   15,569    31,678   29,913
 Capital expenditures              40,667   38,724    70,225   69,564


Unallocated Corporate Overhead   $(11,725)$(15,969) $(27,306)$(31,733)


Total
 Net sales                       $352,134 $307,435  $689,819 $598,634
 Gross margin                     137,987  120,956   268,364  236,529
 Gross margin as a % of net sales    39.2%    39.3%     38.9%    39.5%
 Operating income (loss)           69,323   56,725   132,823  111,426
 Operating income as a % of net
  sales                              19.7%    18.5%     19.3%    18.6%
 Depreciation and amortization     23,020   21,232    45,353   41,145
 Capital expenditures              64,177   49,412   103,881   87,336
            CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
                  RECONCILIATION OF GAAP TO NON-GAAP
          SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)
                        (dollars in thousands)

                                 Three Months Ended  Six Months Ended
                                 ------------------ ------------------
                                 June 28, June 30,  June 28, June 30,
                                    2008     2007      2008     2007
Research Models and Services
 Net sales                       $172,848 $143,803  $341,444 $286,871
 Operating income                  52,199   45,268   108,012   92,289
 Operating income as a % of net
  sales                              30.2%    31.5%     31.6%    32.2%
 Add back:
     Amortization related to
      acquisitions                    594      371     1,128      745
     Impairment and other charges     634        -       634        -
                                 ------------------ ------------------
 Operating income, excluding
  specified charges (Non-GAAP)   $ 53,427 $ 45,639  $109,774 $ 93,034
 Non-GAAP operating income as a %
  of net sales                       30.9%    31.7%     32.1%    32.4%

Preclinical Services
 Net sales                       $179,286 $163,632  $348,375 $311,763
 Operating income                  28,849   27,426    52,117   50,870
 Operating income as a % of net
  sales                              16.1%    16.8%     15.0%    16.3%
 Add back:
     Amortization related to
      acquisitions                  7,006    7,768    14,043   15,249
     Impairment and other charges   2,187      863     2,873    1,682
                                 ------------------ ------------------
 Operating income, excluding
  specified charges (Non-GAAP)   $ 38,042 $ 36,057  $ 69,033 $ 67,801
 Non-GAAP operating income as a %
  of net sales                       21.2%    22.0%     19.8%    21.7%


Unallocated Corporate Overhead   $(11,725)$(15,969) $(27,306)$(31,733)
 Add back:
     Stock-based compensation
      related to Inveresk
      acquisition                       -       18         -       88
     Pension curtailment           (3,276)       -    (3,276)       -
                                 ------------------ ------------------
 Unallocated corporate overhead,
  excluding specified charges
  (Non-GAAP)                     $(15,001)$(15,951) $(30,582)$(31,645)


Total
 Net sales                       $352,134 $307,435  $689,819 $598,634
 Operating income                  69,323   56,725   132,823  111,426
 Operating income as a % of net
  sales                              19.7%    18.5%     19.3%    18.6%
 Add back:
     Amortization related to
      acquisition                   7,600    8,139    15,171   15,994
     Stock-based compensation
      related to Inveresk
      acquisition                       -       18         -       88
     Impairment and other charges   2,821      863     3,507    1,682
     Pension curtailment           (3,276)       -    (3,276)       -
                                 ------------------ ------------------
 Operating income, excluding
  specified charges (Non-GAAP)   $ 76,468 $ 65,745  $148,225 $129,190
 Non-GAAP operating income as a %
  of net sales                       21.7%    21.4%     21.5%    21.6%


 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, 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 and
  regulations.
            CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
         RECONCILIATION OF GAAP EARNINGS TO NON-GAAP EARNINGS
          (dollars in thousands, except for per share data)

                        Three Months Ended        Six Months Ended
                     ------------------------ ------------------------
                      June 28,    June 30,     June 28,    June 30,
                         2008        2007         2008        2007

Net income (loss)    $    50,187 $    37,956  $    95,341 $    74,719
Less: Discontinued
 operations                    -        (115)           -         349
                     ------------------------ ------------------------
Net income from
 continuing
 operations               50,187      37,841       95,341      75,068
Add back:
    Amortization
     related to
     acquisitions          7,600       8,139       15,171      15,994
    Stock-based
     compensation
     related to
     Inveresk
     acquisition               -          18            -          88
    Impairment and
     other charges         2,821         863        3,507       1,682
    Pension
     curtailment          (3,276)          -       (3,276)          -
    Tax effect            (1,962)     (3,061)      (4,567)     (5,845)
                     ------------------------ ------------------------
Net income from
 continuing
 operations,
 excluding specified
 charges (Non-GAAP)  $    55,370 $    43,800  $   106,176 $    86,987
                     ======================== ========================

Weighted average
 shares outstanding -
 Basic                67,328,432  66,830,155   67,416,639  66,587,863
Effect of dilutive
 securities:
     2.25% senior
      convertible
      debentures       1,454,072     203,034    1,438,261           -
     Stock options
      and
      contingently
      issued
      restricted
      stock            1,271,120   1,350,004    1,318,566   1,250,385
     Warrants            310,019     134,464      290,626     133,650
                     ------------------------ ------------------------
Weighted average
 shares outstanding -
 Diluted              70,363,643  68,517,657   70,464,092  67,971,898
                     ======================== ========================

Basic earnings (loss)
 per share           $      0.75 $      0.57  $      1.41 $      1.12
Diluted earnings
 (loss) per share    $      0.71 $      0.55  $      1.35 $      1.10

Basic earnings per
 share, excluding
 specified charges
 (Non-GAAP)          $      0.82 $      0.66  $      1.57 $      1.31
Diluted earnings per
 share, excluding
 specified charges
 (Non-GAAP)          $      0.79 $      0.64  $      1.51 $      1.28


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, 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 and
 regulations.

CONTACT: Charles River Laboratories International, Inc.
Investor Contact:
Susan E. Hardy, 781-222-6190
Corporate Vice President, Investor Relations
or
Media Contact:
Amy Cianciaruso, 781-222-6168
Associate Director, Public Relations

SOURCE: Charles River Laboratories International, Inc.