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Charles River Laboratories Announces First-Quarter 2019 Results
– First-Quarter Revenue of
– First-Quarter GAAP Earnings per Share of
– Reaffirms 2019 Guidance Including Citoxlab –
Acquisitions, principally
On a GAAP basis, first-quarter net income from continuing operations
attributable to common shareholders was
On a non-GAAP basis, net income from continuing operations was
The GAAP and non-GAAP earnings per share increases were driven primarily by higher revenue, including the contribution from the MPI acquisition.
“Coupled with our first-quarter performance, we believe the continued execution of our business strategy and strong industry fundamentals firmly support our growth prospects for 2019 and beyond, which are enhanced by last week’s acquisition of Citoxlab. Citoxlab’s complementary service offering and geographic footprint are an excellent strategic fit, reinforcing our position as the partner of choice for early-stage drug research. Including the impact of the Citoxlab acquisition, we are reaffirming our 2019 financial guidance,” Mr. Foster concluded.
First-Quarter Segment Results
Research Models and Services (RMS)
Revenue for the RMS segment was
In the first quarter of 2019, the RMS segment’s GAAP operating margin
decreased to 27.6% from 28.8% in the first quarter of 2018. On a
non-GAAP basis, the operating margin decreased to 28.1% from 29.8% in
the first quarter of 2018. The GAAP and non-GAAP operating margin
decreases were driven primarily by the large IS government contract and
lower sales volume for research models outside of
Discovery and Safety Assessment (DSA)
Revenue for the DSA segment was
In the first quarter of 2019, the DSA segment’s GAAP operating margin
decreased to 13.2% from 15.7% in the first quarter of 2018. The GAAP
operating margin decline was driven primarily by amortization of
intangible assets related to the acquisition of
Manufacturing Support (Manufacturing)
Revenue for the Manufacturing segment was
In the first quarter of 2019, the Manufacturing segment’s GAAP operating margin decreased to 27.8% from 28.5% in the first quarter of 2018. On a non-GAAP basis, the operating margin decreased to 31.0% from 31.9% in the first quarter of 2018. The GAAP and non-GAAP operating margin declines were driven primarily by costs associated with capacity expansions, principally in the Biologics Testing Solutions business.
2019 Guidance
On
The Company is reaffirming its revenue growth and non-GAAP earnings per
share guidance for 2019 including the acquisition of Citoxlab. In
addition, the Company is providing initial GAAP earnings per share
guidance including the acquisition of Citoxlab of
The Company’s revenue and earnings per share guidance including the impact of Citoxlab is as follows:
2019 GUIDANCE INCLUDING CITOXLAB | CURRENT | PRIOR | ||||
Revenue growth, reported | 16% - 18% | 16% - 18% | ||||
Less: Contribution from acquisitions (1) | 8% - 9% | 8% - 9% | ||||
Add: Negative impact of foreign exchange | ~0.5% | ~0.5% | ||||
Revenue growth, organic (2) | 8.0% - 9.5% | 8.0% - 9.5% | ||||
GAAP EPS estimate | $4.75-$4.90 | — | ||||
Amortization of intangible assets (3) | $1.42-$1.52 | — | ||||
Charges related to global efficiency initiatives (4) | ~$0.07 | — | ||||
Acquisition-related adjustments (5) | $0.25-$0.30 | — | ||||
Venture capital investment (gains)/losses (6) | (~$0.16) | — | ||||
Non-GAAP EPS estimate | $6.40 - $6.55 | $6.40 - $6.55 | ||||
Free cash flow (7) | $310 - $320 million | — | ||||
Footnotes to Guidance Table:
(1) The contribution from acquisitions reflects only those acquisitions which have been completed.
(2) Organic revenue growth is defined as reported revenue growth adjusted for acquisitions and foreign currency translation.
(3) Amortization of intangible assets includes an estimate of
(4) These charges, which primarily include severance and other costs, relate primarily to the Company’s planned efficiency initiatives. Other projects in support of 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 primarily include transaction, advisory, and certain third-party integration costs, as well as certain costs associated with acquisition-related efficiency initiatives. These costs will be partially offset by an anticipated discrete tax benefit.
(6) Venture capital investment performance only includes recognized gains or losses. The Company does not forecast future venture capital investment gains or losses.
(7) The reconciliation of 2019 free cash flow guidance is as follows:
Cash flow from operating activities of
Webcast
Charles River has scheduled a live webcast on
Charles River will present at the
A live webcast of the presentation will be available through a link that will be posted on ir.criver.com. A webcast replay will be accessible through the same website shortly after the presentation and will remain available for approximately two weeks.
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; the write-off of deferred financing costs and fees related to debt financing; and investment gains or losses associated with our venture capital investments. 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, and divestitures. We exclude these items from the non-GAAP financial measures because they are outside our normal operations. Commencing in the first quarter of 2019, we exclude the performance of our venture capital investments due to the determination that such investment gains or losses are not core to our overall 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 an organic basis allows investors to measure our revenue growth exclusive of acquisitions, divestitures, and 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,” “would,” “may,”
“estimate,” “plan,” “outlook,” and “project,” and other similar
expressions that predict or indicate future events or trends or that are
not statements of historical matters. These statements also include
statements regarding the projected future financial performance of
Charles River and our specific businesses, 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,
including the acquisition of Citoxlab, 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; the impact of U.S. tax reform
enacted in the fourth quarter of 2017; 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; risks
and uncertainties associated with the unauthorized access into its
information systems reported on
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 | ||||||||||
March 30, 2019 | March 31, 2018 | |||||||||
Service revenue | $ | 450,942 | $ | 345,454 | ||||||
Product revenue | 153,627 | 148,516 | ||||||||
Total revenue | 604,569 | 493,970 | ||||||||
Costs and expenses: | ||||||||||
Cost of services provided (excluding amortization of intangible assets) | 316,800 | 243,808 | ||||||||
Cost of products sold (excluding amortization of intangible assets) | 75,992 | 68,693 | ||||||||
Selling, general and administrative | 122,574 | 103,372 | ||||||||
Amortization of intangible assets | 19,411 | 10,268 | ||||||||
Operating income | 69,792 | 67,829 | ||||||||
Other income (expense): | ||||||||||
Interest income | 179 | 282 | ||||||||
Interest expense | (9,987 | ) | (11,191 | ) | ||||||
Other income, net | 6,306 | 6,120 | ||||||||
Income from continuing operations, before income taxes | 66,290 | 63,040 | ||||||||
Provision for income taxes | 10,602 | 9,772 | ||||||||
Income from continuing operations, net of income taxes | 55,688 | 53,268 | ||||||||
Loss from discontinued operations, net of income taxes | — | (23 | ) | |||||||
Net income | 55,688 | 53,245 | ||||||||
Less: Net income attributable to noncontrolling interests | 555 | 614 | ||||||||
Net income attributable to common shareholders | $ | 55,133 | $ | 52,631 | ||||||
Earnings per common share | ||||||||||
Basic: | ||||||||||
Continuing operations attributable to common shareholders | $ | 1.14 | $ | 1.10 | ||||||
Discontinued operations | $ | — | $ | — | ||||||
Net income attributable to common shareholders | $ | 1.14 | $ | 1.10 | ||||||
Diluted: | ||||||||||
Continuing operations attributable to common shareholders | $ | 1.11 | $ | 1.08 | ||||||
Discontinued operations | $ | — | $ | — | ||||||
Net income attributable to common shareholders | $ | 1.11 | $ | 1.08 | ||||||
Weighted-average number of common shares outstanding; | ||||||||||
Basic | 48,458 | 47,785 | ||||||||
Diluted | 49,462 | 48,828 | ||||||||
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | ||||||||||
SCHEDULE 2 | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||||
(in thousands) | ||||||||||
March 30, 2019 | December 29, 2018 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 126,316 | $ | 195,442 | ||||||
Trade receivables, net | 495,501 | 472,248 | ||||||||
Inventories | 129,765 | 127,892 | ||||||||
Prepaid assets | 58,549 | 53,447 | ||||||||
Other current assets | 56,051 | 48,807 | ||||||||
Total current assets | 866,182 | 897,836 | ||||||||
Property, plant and equipment, net | 907,367 | 932,877 | ||||||||
Right-of-use asset-operating leases | 130,704 | — | ||||||||
Goodwill | 1,245,848 | 1,247,133 | ||||||||
Client relationships, net | 525,108 | 537,945 | ||||||||
Other intangible assets, net | 69,651 | 72,943 | ||||||||
Deferred tax assets | 23,772 | 23,386 | ||||||||
Other assets | 158,005 | 143,759 | ||||||||
Total assets | $ | 3,926,637 | $ | 3,855,879 | ||||||
Liabilities, Redeemable Noncontrolling Interest and Equity | ||||||||||
Current liabilities: | ||||||||||
Current portion of long-term debt and finance leases | $ | 30,655 | $ | 31,416 | ||||||
Accounts payable | 78,523 | 66,250 | ||||||||
Accrued compensation | 82,174 | 137,212 | ||||||||
Deferred revenue | 137,886 | 145,139 | ||||||||
Accrued liabilities | 109,049 | 106,925 | ||||||||
Other current liabilities | 91,472 | 71,280 | ||||||||
Total current liabilities | 529,759 | 558,222 | ||||||||
Long-term debt, net and finance leases | 1,540,833 | 1,636,598 | ||||||||
Right-of-use liability-operating leases | 109,054 | — | ||||||||
Deferred tax liabilities | 151,881 | 143,635 | ||||||||
Other long-term liabilities | 173,562 | 179,121 | ||||||||
Total liabilities | 2,505,089 | 2,517,576 | ||||||||
Redeemable noncontrolling interest | 20,519 | 18,525 | ||||||||
Equity: | ||||||||||
Preferred stock, $0.01 par value; 20,000 shares authorized; no shares issued and outstanding | — | — | ||||||||
Common stock, $0.01 par value; 120,000 shares authorized; 48,884 shares issued and 48,747 shares outstanding as of March 30, 2019, and 48,210 shares issued and 48,209 shares outstanding as of December 29, 2018 | 489 | 482 | ||||||||
Additional paid-in capital | 1,481,011 | 1,447,512 | ||||||||
Retained earnings | 97,229 | 42,096 | ||||||||
Treasury stock, at cost, 137 and 1 shares, as of March 30, 2019 and December 29, 2018, respectively | (17,815 | ) | (55 | ) | ||||||
Accumulated other comprehensive loss | (162,800 | ) | (172,703 | ) | ||||||
Total equity attributable to common shareholders | 1,398,114 | 1,317,332 | ||||||||
Noncontrolling interest | 2,915 | 2,446 | ||||||||
Total equity | 1,401,029 | 1,319,778 | ||||||||
Total liabilities, redeemable noncontrolling interest and equity |
$ | 3,926,637 | $ | 3,855,879 | ||||||
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | ||||||||||
SCHEDULE 3 |
||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||||
(in thousands) | ||||||||||
Three Months Ended | ||||||||||
March 30, 2019 | March 31, 2018 | |||||||||
Cash flows relating to operating activities | ||||||||||
Net income | $ | 55,688 | $ | 53,245 | ||||||
Less: Loss from discontinued operations, net of income taxes | — | (23 | ) | |||||||
Income from continuing operations, net of income taxes | 55,688 | 53,268 | ||||||||
Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 45,358 | 33,210 | ||||||||
Stock-based compensation | 12,899 | 10,541 | ||||||||
Deferred income taxes | 7,781 | (782 | ) | |||||||
Gain on venture capital investments | (10,575 | ) | (6,451 | ) | ||||||
Other, net | (380 | ) | 3,932 | |||||||
Changes in assets and liabilities: | ||||||||||
Trade receivables, net | (23,127 | ) | (3,780 | ) | ||||||
Inventories | (2,520 | ) | (3,501 | ) | ||||||
Accounts payable | 10,245 | (1,076 | ) | |||||||
Accrued compensation | (55,114 | ) | (30,991 | ) | ||||||
Deferred revenue | (14,405 | ) | (18,292 | ) | ||||||
Customer contract deposits | (5,866 | ) | 23,566 | |||||||
Other assets and liabilities, net | (5,125 | ) | 407 | |||||||
Net cash provided by operating activities | 14,859 | 60,051 | ||||||||
Cash flows relating to investing activities | ||||||||||
Acquisition of businesses and assets, net of cash acquired | (989 | ) | (20,216 | ) | ||||||
Capital expenditures | (16,731 | ) | (27,726 | ) | ||||||
Purchases of investments and contributions to venture capital investments | (2,419 | ) | (5,268 | ) | ||||||
Proceeds from sale of investments | 15 | 28,596 | ||||||||
Other, net | (689 | ) | (50 | ) | ||||||
Net cash used in investing activities | (20,813 | ) | (24,664 | ) | ||||||
Cash flows relating to financing activities | ||||||||||
Proceeds from long-term debt and revolving credit facility | 290,111 | 1,080,299 | ||||||||
Proceeds from exercises of stock options | 21,832 | 20,041 | ||||||||
Payments on long-term debt, revolving credit facility, and finance lease obligations | (360,658 | ) | (1,096,795 | ) | ||||||
Payments on debt financing costs | — | (4,932 | ) | |||||||
Purchase of treasury stock | (17,760 | ) | (13,549 | ) | ||||||
Other, net | (2,608 | ) | — | |||||||
Net cash used in financing activities | (69,083 | ) | (14,936 | ) | ||||||
Discontinued operations | ||||||||||
Net cash used in operating activities from discontinued operations | — | (636 | ) | |||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 6,025 | 4,254 | ||||||||
Net change in cash, cash equivalents, and restricted cash | (69,012 | ) | 24,069 | |||||||
Cash, cash equivalents, and restricted cash, beginning of period | 197,318 | 166,331 | ||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 128,306 | $ | 190,400 | ||||||
Supplemental cash flow information: | ||||||||||
Cash and cash equivalents | $ | 126,316 | $ | 187,774 | ||||||
Restricted cash included in Other current assets | 491 | 605 | ||||||||
Restricted cash included in Other assets | 1,499 | 2,021 | ||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 128,306 | $ | 190,400 | ||||||
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | ||||||||||
SCHEDULE 4 | ||||||||||
RECONCILIATION OF GAAP TO NON-GAAP | ||||||||||
SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)(1) | ||||||||||
(in thousands, except percentages) | ||||||||||
Three Months Ended | ||||||||||
March 30, 2019 | March 31, 2018 | |||||||||
Research Models and Services | ||||||||||
Revenue | $ | 137,172 | $ | 133,958 | ||||||
Operating income | 37,832 | 38,527 | ||||||||
Operating income as a % of revenue | 27.6 | % | 28.8 | % | ||||||
Add back: | ||||||||||
Amortization related to acquisitions | 352 | 409 | ||||||||
Severance | 160 | 523 | ||||||||
Site consolidation costs, impairments and other items | 181 | 515 | ||||||||
Total non-GAAP adjustments to operating income | $ | 693 | $ | 1,447 | ||||||
Operating income, excluding non-GAAP adjustments | $ | 38,525 | $ | 39,974 | ||||||
Non-GAAP operating income as a % of revenue | 28.1 | % | 29.8 | % | ||||||
Depreciation and amortization | $ | 4,322 | $ | 4,853 | ||||||
Capital expenditures | $ | 4,112 | $ | 4,625 | ||||||
Discovery and Safety Assessment | ||||||||||
Revenue | $ | 354,197 | $ | 259,992 | ||||||
Operating income | 46,705 | 40,859 | ||||||||
Operating income as a % of revenue | 13.2 | % | 15.7 | % | ||||||
Add back: | ||||||||||
Amortization related to acquisitions | 16,735 | 7,541 | ||||||||
Severance | 13 | (254 | ) | |||||||
Acquisition related adjustments (2) | 2,254 | 430 | ||||||||
Site consolidation costs, impairments and other items | — | (143 | ) | |||||||
Total non-GAAP adjustments to operating income | $ | 19,002 | $ | 7,574 | ||||||
Operating income, excluding non-GAAP adjustments | $ | 65,707 | $ | 48,433 | ||||||
Non-GAAP operating income as a % of revenue | 18.6 | % | 18.6 | % | ||||||
Depreciation and amortization | $ | 33,784 | $ | 20,787 | ||||||
Capital expenditures | $ | 8,848 | $ | 12,802 | ||||||
Manufacturing Support | ||||||||||
Revenue | $ | 113,200 | $ | 100,020 | ||||||
Operating income | 31,499 | 28,523 | ||||||||
Operating income as a % of revenue | 27.8 | % | 28.5 | % | ||||||
Add back: | ||||||||||
Amortization related to acquisitions | 2,324 | 2,318 | ||||||||
Severance | 227 | 870 | ||||||||
Acquisition related adjustments (2) | 50 | — | ||||||||
Site consolidation costs, impairments and other items | 1,008 | 159 | ||||||||
Total non-GAAP adjustments to operating income | $ | 3,609 | $ | 3,347 | ||||||
Operating income, excluding non-GAAP adjustments | $ | 35,108 | $ | 31,870 | ||||||
Non-GAAP operating income as a % of revenue | 31.0 | % | 31.9 | % | ||||||
Depreciation and amortization | $ | 5,805 | $ | 5,736 | ||||||
Capital expenditures | $ | 3,606 | $ | 6,834 | ||||||
Unallocated Corporate Overhead | $ | (46,244 | ) | $ | (40,080 | ) | ||||
Add back: | ||||||||||
Acquisition related adjustments (2) | 5,422 | 2,864 | ||||||||
Total non-GAAP adjustments to operating expense | $ | 5,422 | $ | 2,864 | ||||||
Unallocated corporate overhead, excluding non-GAAP adjustments | $ | (40,822 | ) | $ | (37,216 | ) | ||||
Total | ||||||||||
Revenue | $ | 604,569 | $ | 493,970 | ||||||
Operating income | $ | 69,792 | $ | 67,829 | ||||||
Operating income as a % of revenue | 11.5 | % | 13.7 | % | ||||||
Add back: | ||||||||||
Amortization related to acquisitions | 19,411 | 10,268 | ||||||||
Severance and executive transition costs | 400 | 1,139 | ||||||||
Acquisition related adjustments (2) | 7,726 | 3,294 | ||||||||
Site consolidation costs, impairments and other items | 1,189 | 531 | ||||||||
Total non-GAAP adjustments to operating income | $ | 28,726 | $ | 15,232 | ||||||
Operating income, excluding non-GAAP adjustments | $ | 98,518 | $ | 83,061 | ||||||
Non-GAAP operating income as a % of revenue | 16.3 | % | 16.8 | % | ||||||
Depreciation and amortization | $ | 45,358 | $ | 33,210 | ||||||
Capital expenditures | $ | 16,731 | $ | 27,726 | ||||||
|
|
(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. | |
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | ||||||||||
SCHEDULE 5 | ||||||||||
RECONCILIATION OF GAAP EARNINGS TO NON-GAAP EARNINGS (UNAUDITED)(1) | ||||||||||
(in thousands, except per share data) | ||||||||||
Three Months Ended | ||||||||||
March 30, 2019 | March 31, 2018 | |||||||||
Net income attributable to common shareholders | $ | 55,133 | $ | 52,631 | ||||||
Less: Loss from discontinued operations, net of income taxes | — | (23 | ) | |||||||
Net income from continuing operations attributable to common shareholders | 55,133 | 52,654 | ||||||||
Add back: | ||||||||||
Non-GAAP adjustments to operating income (Refer to Schedule 3) | 28,726 | 15,232 | ||||||||
Write-off of deferred financing costs and fees related to debt refinancing | — | 3,261 | ||||||||
Venture capital (gains) losses | (10,575 | ) | (6,451 | ) | ||||||
Tax effect of non-GAAP adjustments | (3,880 | ) | (1,879 | ) | ||||||
Net income from continuing operations attributable to common shareholders, excluding non-GAAP adjustments | $ | 69,404 | $ | 62,817 | ||||||
Weighted average shares outstanding - Basic | 48,458 | 47,785 | ||||||||
Effect of dilutive securities: | ||||||||||
Stock options, restricted stock units, performance share units and restricted stock | 1,004 | 1,043 | ||||||||
Weighted average shares outstanding - Diluted | 49,462 | 48,828 | ||||||||
Earnings per share from continuing operations attributable to common shareholders | ||||||||||
Basic | $ | 1.14 | $ | 1.10 | ||||||
Diluted | $ | 1.11 | $ | 1.08 | ||||||
Basic, excluding non-GAAP adjustments | $ | 1.43 | $ | 1.31 | ||||||
Diluted, excluding non-GAAP adjustments | $ | 1.40 | $ | 1.29 | ||||||
(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 6 | ||||||||||||||||
RECONCILIATION OF GAAP REVENUE GROWTH | ||||||||||||||||
TO NON-GAAP REVENUE GROWTH, ORGANIC (UNAUDITED) (1) | ||||||||||||||||
For the three months ended March 30, 2019 |
Total CRL |
RMS Segment |
DSA Segment |
MS Segment |
||||||||||||
Revenue growth, reported | 22.4 | % | 2.4 | % | 36.2 | % | 13.2 | % | ||||||||
Decrease due to foreign exchange | 2.8 | % | 3.0 | % | 2.2 | % | 4.3 | % | ||||||||
Contribution from acquisitions (2) | (14.4 | )% | — | % | (27.2 | )% | (0.3 | )% | ||||||||
Non-GAAP revenue growth, organic (3) | 10.8 | % | 5.4 | % | 11.2 | % | 17.2 | % | ||||||||
(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 completed acquisitions. Manufacturing Support includes an immaterial acquisition of an Australian Microbial Solutions business. | |
(3) | Organic revenue growth is defined as reported revenue growth adjusted for acquisitions and foreign exchange. | |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190507005265/en/
Source:
Investor Contacts:
Todd Spencer
Corporate Vice President,
Investor
Relations
781.222.6455
todd.spencer@crl.com
Media Contact:
Amy Cianciaruso
Corporate Vice President,
Public
Relations
781.222.6168
amy.cianciaruso@crl.com