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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.


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Charles River Again Delivers Strong Earnings Growth; Eighth Consecutive Quarter of Consistently Strong Financial Performance

WILMINGTON, Mass., Jul 30, 2002 (BW HealthWire) -- Charles River Laboratories International, Inc. (NYSE: CRL) achieved strong growth in sales and earnings for the second quarter of 2002. The Company's second quarter sales increased 17% over the prior year, driven by strong growth in customer demand for the Company's growing portfolio of products and services that support drug discovery and development. Sales for the second quarter were $136.5 million, a $19.7 million increase over second quarter 2001 sales of $116.8 million. Charles River's operating income for the second quarter was $30.4 million, up 24% over the prior year. The Company's operating income margin for the quarter was 22%, compared to 21% in the prior year quarter. Net income for the quarter, before an extraordinary loss of $1.1 million related to early retirement of debt, was up 64% to $17.4 million, or $0.36 per fully diluted share. The Company's EPS in the second quarter exceeded by $0.03 the high end of its guidance range, and also exceeded by $0.04 the First Call consensus EPS estimate of $0.32.

For the first six months of 2002, Charles River's sales increased over the prior year's first half by 25%, to $270.3 million, with operating income up 34%, to $58.8 million. Excluding the benefit of revenues from strategic acquisitions, the Company's sales growth for the first six months was 17%.

Commenting on these results, James C. Foster, Chairman and CEO, said: "This was another strong quarter for Charles River. It's now eight consecutive quarters of strong growth and profitability for us, since going public. Our solid and consistent financial performance reflects our strong position in the drug discovery and development market, and the leading position we hold in a number of attractive segments of that market. We experienced growth in both our products and services segments, and these businesses continue to nicely complement each other. Our outlook, both near and long-term, remains positive. We see our pharmaceutical, medical device, biotechnology and other biomedical research customers requiring increasingly more of our products and services in order to achieve their research goals. We're particularly pleased with the continued strong outsourcing trend within the research community. We're well positioned to be a key partner in the discovery and development of the many new drugs, devices, diagnostics and other medical products that will occur over the next decade, and beyond. The opportunities for growth and expansion within our market segments continue to be many. Most recently, we've added another growth platform to our services business, in Ireland, which we think will help us drive our services expansion in Europe."

Mr. Foster went on to say: "On a different but equally important front, we're delighted to add Dr. George Milne to our Board of Directors, as of August 1. Dr. Milne has a wealth of experience in the pharmaceutical research field, most recently as a senior executive within Pfizer's R&D operations, and his extraordinary capabilities will further strengthen our already independent Board. We also saw this past quarter the end of our LBO phase, as our financial sponsor, Credit Suisse First Boston, sold all of their LBO-related stock in the Company, and we retired the balance of the term debt we incurred in connection with the transaction. We are committed as a Company to strong corporate governance, conservative accounting, and management integrity and accountability."

Mr. Foster is scheduled to appear on Bloomberg's "Morning Call" television program tomorrow morning, July 31, shortly after 7:00 a.m., to discuss the Company and its second quarter financial results.

The following forward looking guidance is subject to the qualifications set forth below, and is based on current exchange rates. For the third quarter 2002, Charles River projects sales in the range of $138 to $141 million, which amounts to 12% to 14% sales growth over the third quarter of 2001. Fully diluted EPS for the third quarter of 2002 is projected to be in the range of $0.36 to $0.37. For the full year, management estimates fully diluted EPS (before any extraordinary items) in the range of $1.37 to $1.40.

Effective January 1, 2002, the Company adopted Statement of Financial Accounting Standard No. 142, "Goodwill and Other Intangible Assets," the effect of which was to cease amortization of goodwill and certain indefinite-lived intangible assets, which amounted to $0.02 per fully-diluted share in the second quarter.

Charles River Laboratories, based in Wilmington, Massachusetts, is a leading provider of critical research tools and integrated support services that enable innovative and efficient drug discovery and development. The Company is the global leader in providing the animal research models required in research and development for new drugs, devices and therapies. The Company also offers a broad and growing portfolio of biomedical products and services that enable customers to reduce cost, increase speed, and enhance productivity and effectiveness in drug discovery and development. Charles River's customer base spans over 50 countries, and includes all of the major pharmaceutical and biotechnology companies, as well as many leading hospitals and academic institutions. The Company operates 78 facilities in 16 countries worldwide. For more information, visit the Company's web site as

This document contains "forward looking statements." Such statements involve a number of risks and uncertainties that could cause actual results to differ materially from those stated or implied by the forward looking statements, including acquisition integration risks, R&D risks, special interest groups, foreign exchange, contaminations, industry trends, new displacement technologies, outsourcing trends, USDA and FDA regulation, changes in law, continued availability of products and supplies, personnel and control, and others that are described in the Risk Factors contained in Company's Annual Report on Form 10K for 2001, and as may be updated from time to time in the Company's periodic SEC filings. The Company disclaims any intent or obligation to update forward looking statements, and otherwise claims the "safe harbor" protections for forward looking statements afforded under The Private Securities Litigation Reform Act of 1995.

As previously announced, investors can access a live webcast of the second quarter earnings conference call through a link that will be posted on the investor page of the Charles River Laboratories website, The conference call begins on Wednesday, July 31, 2002, at 8:30 a.m. Eastern Standard Time and will be available thereafter for one week for replay.

           (dollars in thousands except for per share data)
                             Three Months Ended     Six Months Ended
                            June 29,   June 30,   June 29,   June 30,
                              2002       2001       2002       2001
Total Net Sales             $136,501   $116,820   $270,321   $215,851
Cost of products sold
 and services provided        84,101     73,050    167,962    135,419
Gross margin                  52,400     43,770    102,359     80,432
Selling, general and
 administrative               21,387     17,285     42,306     32,745
Amortization of goodwill
 and intangibles                 631      1,993      1,261      3,821
Operating income              30,382     24,492     58,792     43,866
Interest income (expense)     (2,261)    (5,594)    (5,653)   (12,299)
Other income (expense)         1,160       (122)     1,077        433
Income before taxes,
 minority interests,
 earnings from equity
 investments and
 extraordinary item           29,281     18,776     54,216     32,000
Provision for income taxes    11,419      7,659     21,144     13,214
Income before minority
 interests, earnings from
 equity investments and
 extraordinary item           17,862     11,117     33,072     18,786
Minority interests              (619)      (652)    (1,381)    (1,216)
Earnings from
 equity investments              177        136        259        219
Net income before
 extraordinary item           17,420     10,601     31,950     17,789
Extraordinary loss,
 net of tax benefit           (1,092)    (1,583)   (17,854)    (1,820)
Net income                   $16,328     $9,018    $14,096    $15,969
Earnings per common share
 before extraordinary item
     Basic                     $0.39      $0.26      $0.72      $0.46
     Diluted                   $0.36      $0.24      $0.67      $0.42
Earnings per common share
 after extraordinary item
     Basic                     $0.37      $0.22      $0.32      $0.42
     Diluted                   $0.34      $0.21      $0.31      $0.38
                        (dollars in thousands)
                                             June 29,     December 29,
                                               2002           2001
Current assets
   Cash and cash equivalents                 $ 84,712      $ 58,271
   Trade receivables                           99,829        98,478
   Inventories                                 39,454        39,056
   Other current assets                        15,713        14,349
      Total current assets                    239,708       210,154
Property, plant and equipment, net            169,088       155,919
Goodwill, net                                  87,416        52,087
Other intangibles, net                         19,691        38,287
Deferred tax asset                             86,033        87,781
Other assets                                   27,944        27,134
      Total assets                           $629,880      $571,362
Liabilities and Shareholders' Equity
Current liabilities
   Accounts payable                          $ 12,240      $ 13,868
   Accrued compensation                        21,874        25,736
   Other current liabilities                   68,262        58,928
      Total current liabilities               102,376        98,532
Long-term debt                                188,705       155,506
Other long-term liabilities                    15,877        14,826
      Total liabilities                       306,958       268,864
Minority interests                             13,386        12,988
Total shareholders' equity                    309,536       289,510
Total liabilities and
 shareholders' equity                        $629,880      $571,362
                        (dollars in thousands)
                            Three Month Ended      Six Months Ended
                           June 29,   June 30,   June 29,     June 30,
                             2002       2001       2002         2001
Research Models
  Net sales                 $56,544    $48,013   $113,443     $97,487
  Gross margin               26,096     20,917     52,159      41,465
  Gross margin as
   a % of sales               46.2%      43.6%      46.0%       42.5%
  Operating income           18,993     13,681     38,525      26,952
  Operating income as
   a % of sales               33.6%      28.5%      34.0%       27.6%
  Depreciation amortization   2,326      2,331      4,541       4,736
  Capital expenditures        5,083      2,479      6,539       4,392
Biomedical Products
 and Services
  Net sales                 $79,957    $68,807   $156,878    $118,364
  Gross margin               26,304     22,853     50,200      38,967
  Gross margin as
   a % of sales               32.9%      33.2%      32.0%       32.9%
  Operating income           16,317     12,476     30,438      20,956
  Operating income as
   a % of sales               20.4%      18.1%      19.4%       17.7%
  Depreciation amortization   3,290      4,259      6,509       7,293
  Capital expenditures        4,688      4,994      7,767       7,334
Unallocated Corporate
 Overhead                   ($4,928)   ($1,665)  ($10,171)    ($4,042)
  Net sales                $136,501   $116,820   $270,321    $215,851
  Gross margin               52,400     43,770    102,359      80,432
  Gross margin as
   a % of sales               38.4%      37.5%      37.9%       37.3%
  Operating income           30,382     24,492     58,792      43,866
  Operating income as
   a % of sales               22.3%      21.0%      21.7%       20.3%
  Depreciation amortization   5,616      6,590     11,050      12,029
  Capital expenditures        9,771      7,473     14,306      11,726
Charles River Laboratories International, Inc.
Dennis R. Shaughnessy, Senior Vice President
978/658-6000 ext. 1329

Copyright (C) 2002 Business Wire. All rights reserved.

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