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Charles River Laboratories Announces Second-Quarter 2017 Results from Continuing Operations
– Second-Quarter Revenue of
– Second-Quarter GAAP EPS of
– Updates 2017 Guidance –
The acquisitions of
On a GAAP basis, second-quarter net income from continuing operations
attributable to common shareholders was
On a non-GAAP basis, net income from continuing operations was
Both the GAAP and non-GAAP earnings per share increases were driven by
higher revenue and operating margin improvement. GAAP earnings per share
also benefited from lower acquisition- and integration-related costs in
the second quarter of 2017. An excess tax benefit associated with stock
compensation also contributed
“We intend to continue to focus on enhancing the three primary factors which differentiate Charles River in early-stage drug research: First, our unique portfolio of essential products and services, which increases our relevance to our clients’ drug research, development, and manufacturing efforts; second, our scientific expertise and depth, which we believe is unique and unparalleled in the early-stage CRO universe; and third, our intense focus on efficiency and responsiveness, which enables us to provide exceptional, flexible service to clients without adding significant cost. By leveraging the investments we have made, and new ones we intend to make, we will continue to differentiate Charles River as the CRO partner of choice, which is the foundation for our future growth.”
Second-Quarter Segment Results
Research Models and Services (RMS)
Revenue for the RMS segment was
In the second quarter of 2017, the RMS segment’s GAAP operating margin
decreased to 27.1% from 28.3% in the second quarter of 2016. On a
non-GAAP basis, the operating margin decreased to 27.4% from 28.9% in
the second quarter of 2016. The GAAP and non-GAAP operating margin
declines were primarily driven by the research models business in
Discovery and Safety Assessment (DSA)
Revenue from continuing operations for the DSA segment was
In the second quarter of 2017, the DSA segment’s GAAP operating margin
increased to 20.5% from 14.6% in the second quarter of 2016. The GAAP
operating margin increase was due in part to lower acquisition-related
costs associated with the acquisition and integration of
(1) The acquisition of
Manufacturing Support (Manufacturing)
Revenue for the Manufacturing segment was
In the second quarter of 2017, the Manufacturing segment’s GAAP operating margin increased to 31.2% from 30.8% in the second quarter of 2016, due primarily to lower amortization of intangible assets related to acquisitions. On a non-GAAP basis, the operating margin decreased to 34.2% from 35.4% in the second quarter of 2016, due primarily to the Biologics Testing Solutions and Avian Vaccine businesses.
Stock Repurchase Update
During the second quarter of 2017, the Company repurchased 244,292
shares for a total of
Updates 2017 Guidance
The Company is increasing its reported revenue growth guidance for 2017
to primarily reflect favorable movements in foreign exchange rates, and
maintaining its GAAP and non-GAAP earnings per share guidance, that were
previously provided on
2017 GUIDANCE (from continuing operations) |
REVISED |
PRIOR |
||||||
Revenue growth, reported | 8.5% - 10.0% | 7.5% - 9.0% | ||||||
Less: Contribution from acquisitions (1) | (~5.0% - 6.0%) | (~5.0% - 6.0%) | ||||||
Add: Effect of CDMO divestiture | ~1.0% | ~1.0% | ||||||
Add: Negative effect of 53rd week in 2016 | ~1.5% | ~1.5% | ||||||
Add: Negative effect of foreign exchange | ~1.0% | ~2.0% - 2.5% | ||||||
Revenue growth, organic (2) | 7.0% - 8.5% | 7.0% - 8.5% | ||||||
GAAP EPS estimate | $4.18-$4.33 | $4.18-$4.33 | ||||||
Amortization of intangible assets (3) | ~$0.58 | ~$0.58 | ||||||
Charges related to global efficiency initiatives (4) | ~$0.02 | ~$0.02 | ||||||
Acquisition/divestiture-related adjustments (5) | ~$0.07 | ~$0.07 | ||||||
Net impact of CDMO divestiture (6) | ~$0.15 | ~$0.15 | ||||||
Non-GAAP EPS estimate | $5.00- $5.15 | $5.00 - $5.15 | ||||||
Footnotes to Guidance Table
(1) The contribution from acquisitions reflects only those acquisitions
which have already been completed.
(2) Organic revenue growth is
defined as reported revenue growth adjusted for acquisitions, the
divestiture of the CDMO business, the 53rd week, and foreign
currency translation.
(3) This adjustment does not include the
impact of amortization of intangible assets related to the Brains
On-Line acquisition because the preliminary purchase price allocation
has not been completed.
(4) These charges relate primarily to the
Company’s planned efficiency initiatives in 2017, including site
consolidation costs, asset impairments, and severance. Other projects in
support of the global productivity and efficiency initiatives are
expected, but these charges reflect only the decisions that have already
been finalized.
(5) These adjustments are related to the evaluation
and integration of acquisitions and the divestiture of the CDMO
business, and primarily include transaction, advisory, and certain
third-party integration costs, as well as certain costs associated with
acquisition-related efficiency initiatives.
(6) These adjustments
include the preliminary net gain and tax impact related to the
divestiture of the CDMO business.
Webcast
Charles River has scheduled a live webcast on
Non-GAAP Reconciliations/Discontinued Operations
The Company reports non-GAAP results in this press release, which exclude often one-time charges and other items that are outside of normal operations. A reconciliation of GAAP to non-GAAP results is provided in the schedules at the end of this press release. In addition, the Company reports results from continuing operations, which exclude results of the Phase I clinical business that was divested in 2011. The Phase I business is reported as a discontinued operation.
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 and integrating acquisitions and divestitures, as well as fair value adjustments associated with contingent consideration; charges, gains, and losses attributable to businesses or properties we plan to close, consolidate, or divest; severance and other costs associated with our efficiency initiatives; gain on and tax effect of the divestiture of the CDMO business; and costs related to a U.S. government billing adjustment and related expenses. This press release also refers to our revenue in both a GAAP and non-GAAP basis: “constant currency,” which we define as reported revenue growth adjusted for the impact of foreign currency translation, and “organic revenue growth,” which we define as reported revenue growth adjusted for foreign currency translation, acquisitions, the divestiture, and the 53rd week. 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 divestitures (and in certain cases, the evaluation of such acquisitions and divestitures, 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 and their underlying associated costs, such as business acquisitions, generally occur periodically but on an unpredictable basis. We calculate non-GAAP integration costs to include third-party integration costs incurred post-acquisition. Presenting revenue on a constant-currency basis allows investors to measure our revenue growth exclusive of foreign currency exchange fluctuations more clearly. 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 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,” “intend,” “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 future financial performance including revenue
(on both a reported, constant-currency, and organic growth basis),
operating margins, earnings per share, the expected impact of foreign
exchange rates, and the expected benefit of our life science venture
capital investments; the future demand for drug discovery and
development products and services, including our expectations for future
revenue trends; our expectations with respect to the impact of
acquisitions on the Company, our service offerings, client perception,
strategic relationships, revenue, revenue growth rates, and earnings;
the development and performance of our services and products; market and
industry conditions including the outsourcing of services and spending
trends by our clients; the potential outcome of and impact to our
business and financial operations due to litigation and legal
proceedings; and Charles River’s future performance as delineated in our
forward-looking guidance, and particularly our expectations with respect
to revenue, the impact of foreign exchange, and enhanced efficiency
initiatives. 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 efficiency initiatives 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 clients; the
ability to convert backlog to revenue; special interest groups;
contaminations; industry trends; new displacement technologies; USDA and
About Charles River
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. | ||||||||||||||||||||||||
SCHEDULE 1 | ||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||||||||||
(in thousands, except for per share data) | ||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
July 1, 2017 | June 25, 2016 | July 1, 2017 | June 25, 2016 | |||||||||||||||||||||
Total revenue | $ | 469,129 | $ | 434,055 | $ | 914,892 | $ | 788,923 | ||||||||||||||||
Cost of revenue (excluding amortization of intangible assets) | 283,467 | 264,308 | 557,531 | 478,408 | ||||||||||||||||||||
Selling, general and administrative | 94,533 | 100,473 | 186,023 | 183,417 | ||||||||||||||||||||
Amortization of intangible assets | 9,819 | 11,213 | 20,556 | 17,565 | ||||||||||||||||||||
Operating income | 81,310 | 58,061 | 150,782 | 109,533 | ||||||||||||||||||||
Interest income | 161 | 222 | 363 | 485 | ||||||||||||||||||||
Interest expense | (7,403 | ) | (8,909 | ) | (14,386 | ) | (13,120 | ) | ||||||||||||||||
Other income (expense), net | 2,848 | 5,016 | 18,204 | 9,042 | ||||||||||||||||||||
Income from continuing operations, before income taxes | 76,916 | 54,390 | 154,963 | 105,940 | ||||||||||||||||||||
Provision for income taxes | 22,243 | 18,845 | 53,327 | 32,820 | ||||||||||||||||||||
Income from continuing operations, net of income taxes | 54,673 | 35,545 | 101,636 | 73,120 | ||||||||||||||||||||
Income (Loss) from discontinued operations, net of income taxes | (71 | ) | 12 | (75 | ) | (14 | ) | |||||||||||||||||
Net income | 54,602 | 35,557 | 101,561 | 73,106 | ||||||||||||||||||||
Less: Net income attributable to noncontrolling interests | 650 | 350 | 831 | 756 | ||||||||||||||||||||
Net income attributable to common shareholders | $ | 53,952 | $ | 35,207 | $ | 100,730 | $ | 72,350 | ||||||||||||||||
Earnings (loss) per common share | ||||||||||||||||||||||||
Basic: | ||||||||||||||||||||||||
Continuing operations attributable to common shareholders | $ | 1.14 | $ | 0.75 | $ | 2.12 | $ | 1.54 | ||||||||||||||||
Discontinued operations | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Net income attributable to common shareholders | $ | 1.13 | $ | 0.75 | $ | 2.12 | $ | 1.54 | ||||||||||||||||
Diluted: | ||||||||||||||||||||||||
Continuing operations attributable to common shareholders | $ | 1.12 | $ | 0.73 | $ | 2.08 | $ | 1.51 | ||||||||||||||||
Discontinued operations | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Net income attributable to common shareholders | $ | 1.12 | $ | 0.73 | $ | 2.08 | $ | 1.51 | ||||||||||||||||
Weighted average number of common shares outstanding | ||||||||||||||||||||||||
Basic | 47,591 | 47,061 | 47,569 | 46,852 | ||||||||||||||||||||
Diluted | 48,342 | 47,919 | 48,404 | 47,791 | ||||||||||||||||||||
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | ||||||||||
SCHEDULE 2 | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||||
(in thousands) | ||||||||||
July 1, 2017 | December 31, 2016 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 116,466 | $ | 117,626 | ||||||
Trade receivables, net | 398,547 | 364,050 | ||||||||
Inventories | 104,690 | 95,833 | ||||||||
Prepaid assets | 50,671 | 34,315 | ||||||||
Other current assets | 67,693 | 45,008 | ||||||||
Total current assets | 738,067 | 656,832 | ||||||||
Property, plant and equipment, net | 758,724 | 755,827 | ||||||||
Goodwill | 776,453 | 787,517 | ||||||||
Client relationships, net | 299,348 | 320,157 | ||||||||
Other intangible assets, net | 69,446 | 74,291 | ||||||||
Deferred tax asset | 30,494 | 28,746 | ||||||||
Other assets | 101,132 | 88,430 | ||||||||
Total assets | $ | 2,773,664 | $ | 2,711,800 | ||||||
Liabilities, Redeemable Noncontrolling Interest and Equity | ||||||||||
Current liabilities: | ||||||||||
Current portion of long-term debt and capital leases | $ | 27,225 | $ | 27,313 | ||||||
Accounts payable | 64,652 | 68,485 | ||||||||
Accrued compensation | 84,732 | 93,471 | ||||||||
Deferred revenue | 119,336 | 127,731 | ||||||||
Accrued liabilities | 99,128 | 84,470 | ||||||||
Other current liabilities | 27,362 | 26,500 | ||||||||
Current liabilities of discontinued operations | 1,636 | 1,623 | ||||||||
Total current liabilities | 424,071 | 429,593 | ||||||||
Long-term debt, net and capital leases | 1,116,278 | 1,207,696 | ||||||||
Deferred tax liabilities | 82,956 | 55,717 | ||||||||
Other long-term liabilities | 163,799 | 159,239 | ||||||||
Long-term liabilities of discontinued operations | 4,849 | 5,771 | ||||||||
Total liabilities | 1,791,953 | 1,858,016 | ||||||||
Redeemable noncontrolling interest | 15,317 | 14,659 | ||||||||
Total equity attributable to common shareholders | 963,496 | 836,768 | ||||||||
Noncontrolling interests | 2,898 | 2,357 | ||||||||
Total liabilities, redeemable noncontrolling interest and equity | $ | 2,773,664 | $ | 2,711,800 | ||||||
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. |
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SCHEDULE 3 |
||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP | ||||||||||||||||||
SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)(1) | ||||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
July 1, 2017 | June 25, 2016 | July 1, 2017 | June 25, 2016 | |||||||||||||||
Research Models and Services | ||||||||||||||||||
Revenue | $ 124,002 | $ 125,058 | $ 251,163 | $ 248,397 | ||||||||||||||
Operating income | 33,579 | 35,445 | 71,290 | 71,831 | ||||||||||||||
Operating income as a % of revenue | 27.1% | 28.3% | 28.4% | 28.9% | ||||||||||||||
Add back: | ||||||||||||||||||
Amortization related to acquisitions | 369 | 596 | 805 | 1,184 | ||||||||||||||
Government billing adjustment and related expenses | 57 | 69 | 150 | 129 | ||||||||||||||
Site consolidation costs, impairments and other items | - | 69 | - | 138 | ||||||||||||||
Total non-GAAP adjustments to operating income | $ 426 | $ 734 | $ 955 | $ 1,451 | ||||||||||||||
Operating income, excluding non-GAAP adjustments | $ 34,005 | $ 36,179 | $ 72,245 | $ 73,282 | ||||||||||||||
Non-GAAP operating income as a % of revenue | 27.4% | 28.9% | 28.8% | 29.5% | ||||||||||||||
Depreciation and amortization | $ 4,945 | $ 5,118 | $ 10,037 | $ 10,368 | ||||||||||||||
Capital expenditures | $ 4,404 | $ 2,381 | $ 7,007 | $ 3,434 | ||||||||||||||
Discovery and Safety Assessment | ||||||||||||||||||
Revenue | $ 252,092 | $ 221,059 | $ 479,850 | $ 379,042 | ||||||||||||||
Operating income | 51,690 | 32,381 | 90,350 | 63,211 | ||||||||||||||
Operating income as a % of revenue | 20.5% | 14.6% | 18.8% | 16.7% | ||||||||||||||
Add back: | ||||||||||||||||||
Amortization related to acquisitions | 6,905 | 7,390 | 14,505 | 10,485 | ||||||||||||||
Severance | 76 | 4,099 | 272 | 4,120 | ||||||||||||||
Acquisition related adjustments (2) | 824 | 2,838 | 1,527 | 3,640 | ||||||||||||||
Site consolidation costs, impairments and other items | 150 | 121 | 559 | 2,154 | ||||||||||||||
Total non-GAAP adjustments to operating income | $ 7,955 | $ 14,448 | $ 16,863 | $ 20,399 | ||||||||||||||
Operating income, excluding non-GAAP adjustments | $ 59,645 | $ 46,829 | $ 107,213 | $ 83,610 | ||||||||||||||
Non-GAAP operating income as a % of revenue | 23.7% | 21.2% | 22.3% | 22.1% | ||||||||||||||
Depreciation and amortization | $ 18,965 | $ 18,600 | $ 38,334 | $ 30,557 | ||||||||||||||
Capital expenditures | $ 7,102 | $ 4,644 | $ 15,425 | $ 9,351 | ||||||||||||||
Manufacturing Support | ||||||||||||||||||
Revenue | $ 93,035 | $ 87,938 | $ 183,879 | $ 161,484 | ||||||||||||||
Operating income | 29,041 | 27,121 | 55,642 | 46,736 | ||||||||||||||
Operating income as a % of revenue | 31.2% | 30.8% | 30.3% | 28.9% | ||||||||||||||
Add back: | ||||||||||||||||||
Amortization related to acquisitions | 2,544 | 3,475 | 5,246 | 6,479 | ||||||||||||||
Severance (3) | 247 | - | 1,068 | - | ||||||||||||||
Acquisition related adjustments (2) | - | 490 | 26 | 677 | ||||||||||||||
Site consolidation costs, impairments and other items | - | 72 | - | 301 | ||||||||||||||
Total non-GAAP adjustments to operating income | $ 2,791 | $ 4,037 | $ 6,340 | $ 7,457 | ||||||||||||||
Operating income, excluding non-GAAP adjustments | $ 31,832 | $ 31,158 | $ 61,982 | $ 54,193 | ||||||||||||||
Non-GAAP operating income as a % of revenue | 34.2% | 35.4% | 33.7% | 33.6% | ||||||||||||||
Depreciation and amortization | $ 5,787 | $ 6,525 | $ 11,749 | $ 12,501 | ||||||||||||||
Capital expenditures | $ 1,939 | $ 4,256 | $ 4,231 | $ 6,385 | ||||||||||||||
Unallocated Corporate Overhead | $ (33,000) | $ (36,886) | $ (66,500) | $ (72,245) | ||||||||||||||
Add back: | ||||||||||||||||||
Acquisition related adjustments (2) | 1,192 | 7,260 | 1,213 | 11,023 | ||||||||||||||
Total non-GAAP adjustments to operating expense | $ 1,192 | $ 7,260 | $ 1,213 | $ 11,023 | ||||||||||||||
Unallocated corporate overhead, excluding non-GAAP adjustments | $ (31,808) | $ (29,626) | $ (65,287) | $ (61,222) | ||||||||||||||
Total | ||||||||||||||||||
Revenue | $ 469,129 | $ 434,055 | $ 914,892 | $ 788,923 | ||||||||||||||
Operating income | $ 81,310 | 58,061 | 150,782 | 109,533 | ||||||||||||||
Operating income as a % of revenue | 17.3% | 13.4% | 16.5% | 13.9% | ||||||||||||||
Add back: | ||||||||||||||||||
Amortization related to acquisitions | 9,818 | 11,461 | 20,556 | 18,148 | ||||||||||||||
Severance | 323 | 4,099 | 1,340 | 4,120 | ||||||||||||||
Acquisition related adjustments (2) | 2,016 | 10,588 | 2,766 | 15,340 | ||||||||||||||
Government billing adjustment and related expenses | 57 | 69 | 150 | 129 | ||||||||||||||
Site consolidation costs, impairments and other items | 150 | 262 | 559 | 2,593 | ||||||||||||||
Total non-GAAP adjustments to operating income | $ 12,364 | $ 26,479 | $ 25,371 | $ 40,330 | ||||||||||||||
Operating income, excluding non-GAAP adjustments | $ 93,674 | $ 84,540 | $ 176,153 | $ 149,863 | ||||||||||||||
Non-GAAP operating income as a % of revenue | 20.0% | 19.5% | 19.3% | 19.0% | ||||||||||||||
Depreciation and amortization | $ 31,799 | $ 32,353 | $ 64,210 | $ 57,008 | ||||||||||||||
Capital expenditures | $ 15,997 | $ 11,791 | $ 31,917 | $ 20,041 |
(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 often-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 U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance.
(2) These adjustments are related to the evaluation and integration of acquisitions, which primarily include transaction, third-party integration, and certain compensation costs, and fair value adjustments associated with contingent consideration.
(3) This adjustment relates to transition costs associated with the divestiture of the CDMO business.
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | |||||||||||||||||||||||||
SCHEDULE 4 | |||||||||||||||||||||||||
RECONCILIATION OF GAAP EARNINGS TO NON-GAAP EARNINGS (UNAUDITED)(1) | |||||||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
July 1, 2017 | June 25, 2016 | July 1, 2017 | June 25, 2016 | ||||||||||||||||||||||
Net income attributable to common shareholders | $ | 53,952 | $ | 35,207 | $ | 100,730 | $ | 72,350 | |||||||||||||||||
Less: Income (loss) from discontinued operations, net of income taxes | (71 | ) | 12 | (75 | ) | (14 | ) | ||||||||||||||||||
Net income from continuing operations attributable to common shareholders | 54,023 | 35,195 | 100,805 | 72,364 | |||||||||||||||||||||
Add back: | |||||||||||||||||||||||||
Non-GAAP adjustments to operating income (Refer to Schedule 3) | 12,364 | 26,479 | 25,371 | 40,330 | |||||||||||||||||||||
Gain on divestiture of CDMO business | - | - | (10,577 | ) | - | ||||||||||||||||||||
Write-off of deferred financing costs and fees related to debt financing | - | 1,449 | - | 1,449 | |||||||||||||||||||||
Tax effect of non-GAAP adjustments: | |||||||||||||||||||||||||
Tax effect from divestiture of CDMO business | - | - | 18,005 | - | |||||||||||||||||||||
Tax effect of the remaining non-GAAP adjustments | (4,035 | ) | (5,767 | ) | (8,699 | ) | (10,249 | ) | |||||||||||||||||
Net income from continuing operations attributable to common shareholders, excluding non-GAAP adjustments | $ | 62,352 | $ | 57,356 | $ | 124,905 | $ | 103,894 | |||||||||||||||||
Weighted average shares outstanding - Basic | 47,591 | 47,061 | 47,569 | 46,852 | |||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||||
Stock options, restricted stock units, performance share units and restricted stock | 751 | 858 | 835 | 939 | |||||||||||||||||||||
Weighted average shares outstanding - Diluted | 48,342 | 47,919 | 48,404 | 47,791 | |||||||||||||||||||||
Earnings per share from continuing operations attributable to common shareholders | |||||||||||||||||||||||||
Basic | $ | 1.14 | $ | 0.75 | $ | 2.12 | $ | 1.54 | |||||||||||||||||
Diluted | $ | 1.12 | $ | 0.73 | $ | 2.08 | $ | 1.51 | |||||||||||||||||
Basic, excluding non-GAAP adjustments | $ | 1.31 | $ | 1.22 | $ | 2.63 | $ | 2.22 | |||||||||||||||||
Diluted, excluding non-GAAP adjustments | $ | 1.29 | $ | 1.20 | $ | 2.58 | $ | 2.17 |
(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 often-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 U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance.
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | |||||||||||||||||||||
SCHEDULE 5 | |||||||||||||||||||||
RECONCILIATION OF GAAP REVENUE GROWTH | |||||||||||||||||||||
TO NON-GAAP REVENUE GROWTH, ORGANIC (UNAUDITED) (1) | |||||||||||||||||||||
For the three months ended July 1, 2017 | Total CRL | RMS Segment | DSA Segment | MS Segment | |||||||||||||||||
Revenue growth, reported | 8.1 | % | (0.8 | %) | 14.0 | % | 5.8 | % | |||||||||||||
Decrease due to foreign exchange | 1.9 | % | 1.8 | % | 2.2 | % | 1.4 | % | |||||||||||||
Contribution from acquisitions (2) | (3.9 | %) | 0.0 | % | (6.9 | %) | (1.9 | %) | |||||||||||||
Impact of CDMO divestiture (3) | 1.0 | % | 0.0 | % | 0.0 | % | 4.8 | % | |||||||||||||
Non-GAAP revenue growth, organic (4) | 7.1 | % | 1.0 | % | 9.3 | % | 10.1 | % | |||||||||||||
For the six months ended July 1, 2017 | Total CRL | RMS Segment | DSA Segment | MS Segment | |||||||||||||||||
Revenue growth, reported | 16.0 | % | 1.1 | % | 26.6 | % | 13.9 | % | |||||||||||||
Decrease due to foreign exchange | 2.0 | % | 1.8 | % | 2.3 | % | 1.6 | % | |||||||||||||
Contribution from acquisitions (2) | (10.9 | %) | 0.0 | % | (21.4 | %) | (3.2 | %) | |||||||||||||
Impact of CDMO divestiture (3) | 0.5 | % | 0.0 | % | 0.0 | % | 2.7 | % | |||||||||||||
Non-GAAP revenue growth, organic (4) | 7.6 | % | 2.9 | % | 7.5 | % | 15.0 | % |
(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 often-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 U.S. 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 contribution from acquisitions reflects only those acquisitions which were completed during fiscal year 2016.
(3) The CDMO business, which was acquired as part of
(4) Organic revenue growth is defined as reported revenue growth adjusted for acquisitions and foreign exchange.
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | |||||||||||||
SCHEDULE 6 | |||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||||||||||||
(in thousands) | |||||||||||||
Six Months Ended | |||||||||||||
July 1, 2017 | June 25, 2016 | ||||||||||||
Cash flows relating to operating activities | $ | 134,353 | $ | 125,956 | |||||||||
Cash flows relating to investing activities | 14,026 | (604,776 | ) | ||||||||||
Cash flows relating to financing activities | (155,064 | ) | 510,249 | ||||||||||
Cash flows used in discontinued operations | (997 | ) | (782 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 6,808 | 6,299 | |||||||||||
Net change in cash and cash equivalents | (874 | ) | 36,946 | ||||||||||
Cash and cash equivalents, beginning of period (1) | 119,894 | 119,963 | |||||||||||
Cash and cash equivalents, end of period (2) | $ | 119,020 | $ | 156,909 |
(1) Includes restricted cash of
(2) Includes restricted cash balances of
View source version on businesswire.com: http://www.businesswire.com/news/home/20170809005256/en/
Source:
Charles River Laboratories International, Inc.
Investor Contact:
Susan
E. Hardy, 781-222-6190
Corporate Vice President, Investor Relations
susan.hardy@crl.com
or
Media
Contact:
Amy Cianciaruso, 781-222-6168
Corporate Vice
President, Public Relations
amy.cianciaruso@crl.com