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Charles River Laboratories Announces First-Quarter 2020 Results
– First-Quarter Revenue of
– First-Quarter GAAP Earnings per Share of
– Revises 2020 Guidance Due to COVID-19 Impact –
Acquisitions contributed 9.5% to consolidated first-quarter revenue growth. The impact of foreign currency translation reduced reported revenue growth by 0.7%. Excluding the effect of these items, organic revenue growth was 8.2%, driven by the Discovery and Safety Assessment and Manufacturing Support segments. The impact of the COVID-19 pandemic reduced both the reported and organic revenue growth rates by 150 basis points, principally in the Research Models and Services segment.
On a GAAP basis, first-quarter net income attributable to common shareholders was
On a non-GAAP basis, net income was
“I am deeply grateful for the hard work and unwavering commitment of our employees who make our contributions to this important research possible. Their dedication allows us to continue to fulfill our mission every day,”
First-Quarter Segment Results
Research Models and Services (RMS)
Revenue for the RMS segment was
In the first quarter of 2020, the RMS segment’s GAAP operating margin decreased to 18.7% from 27.6% in the first quarter of 2019. On a non-GAAP basis, the operating margin decreased to 23.0% from 28.1% in the first quarter of 2019. The GAAP and non-GAAP operating margin decreases were primarily the result of the lower sales volume in the research models business due to the impact of the COVID-19 pandemic. The GAAP operating margin also declined due to acquisition-related amortization associated with the
Discovery and Safety Assessment (DSA)
Revenue for the DSA segment was
In the first quarter of 2020, the DSA segment’s GAAP operating margin increased to 16.5% from 13.2% in the first quarter of 2019. On a non-GAAP basis, the operating margin increased to 22.0% from 18.6% in the first quarter of 2019. The GAAP and non-GAAP operating margin increases were driven primarily by operating leverage from higher revenue in both the Safety Assessment and Discovery Services businesses.
Manufacturing Support (Manufacturing)
Revenue for the Manufacturing segment was
In the first quarter of 2020, the Manufacturing segment’s GAAP operating margin increased to 33.6% from 27.8% in the first quarter of 2019. On a non-GAAP basis, the operating margin increased to 35.6% from 31.0% in the first quarter of 2019. The GAAP and non-GAAP operating margin increases were driven primarily by enhanced operating efficiency in the Microbial Solutions business and operating leverage from higher revenue in the Biologics and Avian Vaccine businesses, as well as lower costs related to Biologics capacity expansions.
2020 Guidance
Due to the global COVID-19 pandemic and its expected impact on the Company’s operations, client demand, and its financial results, Charles River is revising its financial guidance for 2020, which was initially provided on
The Company’s revised guidance for revenue growth, earnings per share, and free cash flow is as follows:
2020 GUIDANCE |
CURRENT |
|
PRIOR |
|
Revenue growth, reported |
4.5% – 8.0% |
|
13.0% – 14.5% |
|
Less: Contribution from acquisitions (1) |
~(4.0%) |
|
(4.0%) – (4.5%) |
|
Unfavorable/(favorable) impact of foreign exchange |
0.5% – 1.0% |
|
(1.0%) – (1.5%) |
|
Revenue growth, organic (2) |
1.5% – 4.5% |
|
7.75% – 8.75% |
|
GAAP EPS estimate |
|
|
|
|
Acquisition-related amortization (3) |
|
|
|
|
Charges related to global efficiency initiatives (4) |
|
|
< |
|
Acquisition-related adjustments (5) |
|
|
|
|
Other items (6) |
|
|
|
|
Venture capital investment losses/(gains) (7) |
|
|
-- |
|
Non-GAAP EPS estimate |
|
|
|
|
Free cash flow (8) |
|
|
|
|
Footnotes to Guidance Table:
(1) The contribution from acquisitions reflects only those acquisitions that have been completed.
(2) Organic revenue growth is defined as reported revenue growth adjusted for acquisitions and foreign currency translation.
(3) Acquisition-related amortization 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.
(6) These items primarily relate to charges of
(7) Venture capital investment performance only includes recognized gains or losses. The Company does not forecast the future performance of its venture capital investments.
(8) The reconciliation of the current 2020 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 virtually 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.
Estimates of COVID-19 Impact
The Company has provided in this press release its estimates for the impact from COVID-19, including on the Company's revenue. These estimates were determined using methodologies and assumptions that vary depending on the specific reporting segment and situation. For the Research Models and Services segment, estimates are primarily based on comparisons to daily historical research model sales volumes prior to COVID-19 and the subsequent reduction in research model order activity associated with our clients’ COVID-19-related site closures and/or their reduced on-site activity, as well as our discussions with clients, particularly of our research model services businesses, with regard to revenue expectations and operational impacts from COVID-19. For the Discovery and Safety Assessment segment, estimates are based on multiple factors including, but not limited to, discussions with clients with regard to the cause of delays to discovery projects and safety assessment studies, location-specific actions to ensure employee safety in our facilities, the impact of remote versus in-person activities and services, and supply chain delays and other resource constraints. For the Manufacturing Support segment, estimates are based on discussions with clients with regard to their revenue expectations and operations. Further, we assume for the purposes of formulating these estimates that (1) restrictions on economic activity, including stay-in-place orders and other similar government actions, are largely relaxed in the third quarter and these restrictions are not re-imposed for the remainder of the fiscal year and (2) the global economy gradually improves through the remainder of 2020. Because these estimates and assumptions involve risks and uncertainties, actual events and results may differ materially from these estimates and assumptions, and Charles River assumes no obligation and expressly disclaims any duty to update them.
Non-GAAP Reconciliations
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.
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; third-party costs associated with the remediation of unauthorized access into our information systems detected in
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 impact of the COVID-19 pandemic; the projected future financial performance of Charles River and our specific businesses; 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
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.
SCHEDULE 1 | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||
(in thousands, except for per share data) | ||||||||
Three Months Ended | ||||||||
Service revenue |
$ |
546,592 |
|
$ |
450,942 |
|
||
Product revenue |
|
160,467 |
|
|
153,627 |
|
||
Total revenue |
|
707,059 |
|
|
604,569 |
|
||
Costs and expenses: | ||||||||
Cost of services provided (excluding amortization of intangible assets) |
|
372,824 |
|
|
316,800 |
|
||
Cost of products sold (excluding amortization of intangible assets) |
|
82,174 |
|
|
75,992 |
|
||
Selling, general and administrative |
|
129,901 |
|
|
122,574 |
|
||
Amortization of intangible assets |
|
27,879 |
|
|
19,411 |
|
||
Operating income |
|
94,281 |
|
|
69,792 |
|
||
Other income (expense): | ||||||||
Interest income |
|
316 |
|
|
179 |
|
||
Interest expense |
|
(15,067 |
) |
|
(9,987 |
) |
||
Other (expense) income, net |
|
(24,071 |
) |
|
6,306 |
|
||
Income from operations, before income taxes |
|
55,459 |
|
|
66,290 |
|
||
Provision for income taxes |
|
4,622 |
|
|
10,602 |
|
||
Net income |
|
50,837 |
|
|
55,688 |
|
||
Less: Net income attributable to noncontrolling interests |
|
68 |
|
|
555 |
|
||
Net income attributable to common shareholders |
$ |
50,769 |
|
$ |
55,133 |
|
||
Earnings per common share | ||||||||
Net income attributable to common shareholders: | ||||||||
Basic |
$ |
1.03 |
|
$ |
1.14 |
|
||
Diluted |
$ |
1.02 |
|
$ |
1.11 |
|
||
Weighted-average number of common shares outstanding; | ||||||||
Basic |
|
49,189 |
|
|
48,458 |
|
||
Diluted |
|
49,966 |
|
|
49,462 |
|
||
SCHEDULE 2 | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
(in thousands, except per share amounts) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents |
$ |
372,433 |
|
$ |
238,014 |
|
||
Trade receivables, net |
|
542,390 |
|
|
514,033 |
|
||
Inventories |
|
162,938 |
|
|
160,660 |
|
||
Prepaid assets |
|
68,826 |
|
|
52,588 |
|
||
Other current assets |
|
61,694 |
|
|
56,030 |
|
||
Total current assets |
|
1,208,281 |
|
|
1,021,325 |
|
||
Property, plant and equipment, net |
|
1,033,409 |
|
|
1,044,128 |
|
||
Operating lease right-of-use assets, net |
|
155,568 |
|
|
140,085 |
|
||
|
1,731,837 |
|
|
1,540,565 |
|
|||
Client relationships, net |
|
752,516 |
|
|
613,573 |
|
||
Other intangible assets, net |
|
80,347 |
|
|
75,840 |
|
||
Deferred tax assets |
|
42,753 |
|
|
44,659 |
|
||
Other assets |
|
197,079 |
|
|
212,615 |
|
||
Total assets |
$ |
5,201,790 |
|
$ |
4,692,790 |
|
||
Liabilities, Redeemable Noncontrolling Interests and Equity | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt and finance leases |
$ |
47,667 |
|
$ |
38,545 |
|
||
Accounts payable |
|
102,697 |
|
|
111,498 |
|
||
Accrued compensation |
|
113,620 |
|
|
158,617 |
|
||
Deferred revenue |
|
178,829 |
|
|
171,805 |
|
||
Accrued liabilities |
|
139,163 |
|
|
139,118 |
|
||
Other current liabilities |
|
108,920 |
|
|
90,598 |
|
||
Total current liabilities |
|
690,896 |
|
|
710,181 |
|
||
Long-term debt, net and finance leases |
|
2,326,770 |
|
|
1,849,666 |
|
||
Operating lease right-of-use liabilities |
|
133,440 |
|
|
116,252 |
|
||
Deferred tax liabilities |
|
197,094 |
|
|
167,283 |
|
||
Other long-term liabilities |
|
173,924 |
|
|
182,933 |
|
||
Total liabilities |
|
3,522,124 |
|
|
3,026,315 |
|
||
Redeemable noncontrolling interests |
|
24,039 |
|
|
28,647 |
|
||
Equity: | ||||||||
Preferred stock, |
|
- |
|
|
- |
|
||
Common stock, |
|
496 |
|
|
489 |
|
||
Additional paid-in capital |
|
1,562,982 |
|
|
1,531,785 |
|
||
Retained earnings |
|
331,098 |
|
|
280,329 |
|
||
|
(23,675 |
) |
|
- |
|
|||
Accumulated other comprehensive loss |
|
(218,917 |
) |
|
(178,019 |
) |
||
Total equity attributable to common shareholders |
|
1,651,984 |
|
|
1,634,584 |
|
||
Noncontrolling interest |
|
3,643 |
|
|
3,244 |
|
||
Total equity |
|
1,655,627 |
|
|
1,637,828 |
|
||
Total liabilities, redeemable noncontrolling interests and equity |
$ |
5,201,790 |
|
$ |
4,692,790 |
|
||
SCHEDULE 3 | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||
(in thousands) | ||||||||
Three Months Ended | ||||||||
Cash flows relating to operating activities | ||||||||
Net income |
$ |
50,837 |
|
$ |
55,688 |
|
||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization |
|
57,260 |
|
|
45,358 |
|
||
Stock-based compensation |
|
10,960 |
|
|
12,899 |
|
||
Deferred income taxes |
|
(2,973 |
) |
|
7,781 |
|
||
Loss (gain) on venture capital investments |
|
12,035 |
|
|
(10,575 |
) |
||
Other, net |
|
10,495 |
|
|
(380 |
) |
||
Changes in assets and liabilities: | ||||||||
Trade receivables, net |
|
(32,136 |
) |
|
(23,127 |
) |
||
Inventories |
|
4,076 |
|
|
(2,520 |
) |
||
Accounts payable |
|
(10,003 |
) |
|
10,245 |
|
||
Accrued compensation |
|
(45,245 |
) |
|
(55,114 |
) |
||
Deferred revenue |
|
6,065 |
|
|
(14,405 |
) |
||
Customer contract deposits |
|
4,454 |
|
|
(5,866 |
) |
||
Other assets and liabilities, net |
|
2,765 |
|
|
(5,125 |
) |
||
Net cash provided by operating activities |
|
68,590 |
|
|
14,859 |
|
||
Cash flows relating to investing activities | ||||||||
Acquisition of businesses and assets, net of cash acquired |
|
(382,250 |
) |
|
(989 |
) |
||
Capital expenditures |
|
(25,721 |
) |
|
(16,731 |
) |
||
Purchases of investments and contributions to venture capital investments |
|
(7,121 |
) |
|
(2,419 |
) |
||
Proceeds from sale of investments |
|
2,504 |
|
|
15 |
|
||
Other, net |
|
(1,097 |
) |
|
(689 |
) |
||
Net cash used in investing activities |
|
(413,685 |
) |
|
(20,813 |
) |
||
Cash flows relating to financing activities | ||||||||
Proceeds from long-term debt and revolving credit facility |
|
1,409,793 |
|
|
290,111 |
|
||
Proceeds from exercises of stock options |
|
22,608 |
|
|
21,832 |
|
||
Payments on long-term debt, revolving credit facility, and finance lease obligations |
|
(925,109 |
) |
|
(360,658 |
) |
||
Purchase of treasury stock |
|
(23,675 |
) |
|
(17,760 |
) |
||
Other, net |
|
(4,405 |
) |
|
(2,608 |
) |
||
Net cash provided by (used in) financing activities |
|
479,212 |
|
|
(69,083 |
) |
||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
290 |
|
|
6,025 |
|
||
Net change in cash, cash equivalents, and restricted cash |
|
134,407 |
|
|
(69,012 |
) |
||
Cash, cash equivalents, and restricted cash, beginning of period |
|
240,046 |
|
|
197,318 |
|
||
Cash, cash equivalents, and restricted cash, end of period |
$ |
374,453 |
|
$ |
128,306 |
|
||
Supplemental cash flow information: | ||||||||
Cash and cash equivalents |
$ |
372,433 |
|
$ |
126,316 |
|
||
Restricted cash included in Other current assets |
|
444 |
|
|
491 |
|
||
Restricted cash included in Other assets |
|
1,576 |
|
|
1,499 |
|
||
Cash, cash equivalents, and restricted cash, end of period |
$ |
374,453 |
|
$ |
128,306 |
|
||
SCHEDULE 4 | ||||||||
RECONCILIATION OF GAAP TO NON-GAAP | ||||||||
SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)(1) | ||||||||
(in thousands, except percentages) | ||||||||
Three Months Ended | ||||||||
Research Models and Services | ||||||||
Revenue |
$ |
145,996 |
|
$ |
137,172 |
|
||
Operating income |
|
27,373 |
|
|
37,832 |
|
||
Operating income as a % of revenue |
|
18.7 |
% |
|
27.6 |
% |
||
Add back: | ||||||||
Amortization related to acquisitions |
|
5,652 |
|
|
352 |
|
||
Severance |
|
(9 |
) |
|
160 |
|
||
Acquisition related adjustments (2) |
|
285 |
|
|
- |
|
||
Site consolidation costs, impairments and other items |
|
229 |
|
|
181 |
|
||
Total non-GAAP adjustments to operating income |
$ |
6,157 |
|
$ |
693 |
|
||
Operating income, excluding non-GAAP adjustments |
$ |
33,530 |
|
$ |
38,525 |
|
||
Non-GAAP operating income as a % of revenue |
|
23.0 |
% |
|
28.1 |
% |
||
Depreciation and amortization |
$ |
8,752 |
|
$ |
4,322 |
|
||
Capital expenditures |
$ |
5,412 |
|
$ |
4,112 |
|
||
Discovery and Safety Assessment | ||||||||
Revenue |
$ |
438,683 |
|
$ |
354,197 |
|
||
Operating income |
|
72,283 |
|
|
46,705 |
|
||
Operating income as a % of revenue |
|
16.5 |
% |
|
13.2 |
% |
||
Add back: | ||||||||
Amortization related to acquisitions |
|
23,007 |
|
|
16,735 |
|
||
Severance |
|
83 |
|
|
13 |
|
||
Acquisition related adjustments (2) |
|
1,289 |
|
|
2,254 |
|
||
Total non-GAAP adjustments to operating income |
$ |
24,379 |
|
$ |
19,002 |
|
||
Operating income, excluding non-GAAP adjustments |
$ |
96,662 |
|
$ |
65,707 |
|
||
Non-GAAP operating income as a % of revenue |
|
22.0 |
% |
|
18.6 |
% |
||
Depreciation and amortization |
$ |
41,330 |
|
$ |
33,784 |
|
||
Capital expenditures |
$ |
14,729 |
|
$ |
8,848 |
|
||
Manufacturing Support | ||||||||
Revenue |
$ |
122,380 |
|
$ |
113,200 |
|
||
Operating income |
|
41,112 |
|
|
31,499 |
|
||
Operating income as a % of revenue |
|
33.6 |
% |
|
27.8 |
% |
||
Add back: | ||||||||
Amortization related to acquisitions |
|
2,247 |
|
|
2,324 |
|
||
Severance |
|
256 |
|
|
227 |
|
||
Acquisition related adjustments (2) |
|
2 |
|
|
50 |
|
||
Site consolidation costs, impairments and other items |
|
- |
|
|
1,008 |
|
||
Total non-GAAP adjustments to operating income |
$ |
2,505 |
|
$ |
3,609 |
|
||
Operating income, excluding non-GAAP adjustments |
$ |
43,617 |
|
$ |
35,108 |
|
||
Non-GAAP operating income as a % of revenue |
|
35.6 |
% |
|
31.0 |
% |
||
Depreciation and amortization |
$ |
6,366 |
|
$ |
5,805 |
|
||
Capital expenditures |
$ |
5,161 |
|
$ |
3,606 |
|
||
Unallocated Corporate Overhead |
$ |
(46,487 |
) |
$ |
(46,244 |
) |
||
Add back: | ||||||||
Acquisition related adjustments (2) |
|
6,983 |
|
|
5,422 |
|
||
Other items (3) |
$ |
(287 |
) |
$ |
- |
|
||
Total non-GAAP adjustments to operating expense |
$ |
6,696 |
|
$ |
5,422 |
|
||
Unallocated corporate overhead, excluding non-GAAP adjustments |
$ |
(39,791 |
) |
$ |
(40,822 |
) |
||
Total | ||||||||
Revenue |
$ |
707,059 |
|
$ |
604,569 |
|
||
Operating income |
|
94,281 |
|
|
69,792 |
|
||
Operating income as a % of revenue |
|
13.3 |
% |
|
11.5 |
% |
||
Add back: | ||||||||
Amortization related to acquisitions |
|
30,906 |
|
|
19,411 |
|
||
Severance and executive transition costs |
|
330 |
|
|
400 |
|
||
Acquisition related adjustments (2) |
|
8,559 |
|
|
7,726 |
|
||
Site consolidation costs, impairments and other items (3) |
|
(58 |
) |
|
1,189 |
|
||
Total non-GAAP adjustments to operating income |
$ |
39,737 |
|
$ |
28,726 |
|
||
Operating income, excluding non-GAAP adjustments |
$ |
134,018 |
|
$ |
98,518 |
|
||
Non-GAAP operating income as a % of revenue |
|
19.0 |
% |
|
16.3 |
% |
||
Depreciation and amortization |
$ |
57,260 |
|
$ |
45,358 |
|
||
Capital expenditures |
$ |
25,721 |
|
$ |
16,731 |
|
||
|
|
|
|
|
(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 |
|||||
(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 amount relates to third-party costs, net of insurance reimbursements, associated with the remediation of the unauthorized access into the Company's information systems which was detected in |
|||||
SCHEDULE 5 | ||||||||
RECONCILIATION OF GAAP EARNINGS TO NON-GAAP EARNINGS (UNAUDITED)(1) | ||||||||
(in thousands, except per share data) | ||||||||
Three Months Ended | ||||||||
Net income attributable to common shareholders |
$ |
50,769 |
|
$ |
55,133 |
|
||
Add back: | ||||||||
Non-GAAP adjustments to operating income (Refer to Schedule 4) |
|
39,737 |
|
|
28,726 |
|
||
Venture capital (gains) losses |
|
12,035 |
|
|
(10,575 |
) |
||
Tax effect of non-GAAP adjustments: | ||||||||
Non-cash tax benefit related to international financing structure (2) |
|
1,073 |
|
|
- |
|
||
Tax effect of the remaining non-GAAP adjustments |
|
(11,804 |
) |
|
(3,880 |
) |
||
Net income attributable to common shareholders, excluding non-GAAP adjustments |
$ |
91,810 |
|
$ |
69,404 |
|
||
Weighted average shares outstanding - Basic |
|
49,189 |
|
|
48,458 |
|
||
Effect of dilutive securities: | ||||||||
Stock options, restricted stock units and performance share units |
|
777 |
|
|
1,004 |
|
||
Weighted average shares outstanding - Diluted |
|
49,966 |
|
|
49,462 |
|
||
Earnings per share attributable to common shareholders: | ||||||||
Basic |
$ |
1.03 |
|
$ |
1.14 |
|
||
Diluted |
$ |
1.02 |
|
$ |
1.11 |
|
||
Basic, excluding non-GAAP adjustments |
$ |
1.87 |
|
$ |
1.43 |
|
||
Diluted, excluding non-GAAP adjustments |
$ |
1.84 |
|
$ |
1.40 |
|
||
(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 |
||||
(2) |
This adjustment relates to the recognition of deferred tax assets expected to be utilized as a result of changes to the Company's international financing structure. |
SCHEDULE 6 | ||||||||||||
RECONCILIATION OF GAAP REVENUE GROWTH | ||||||||||||
TO NON-GAAP REVENUE GROWTH, ORGANIC (UNAUDITED) (1) | ||||||||||||
Three Months Ended |
Total CRL | RMS Segment | DSA Segment | MS Segment | ||||||||
Revenue growth, reported |
17.0 |
% |
6.4 |
% |
23.9 |
% |
8.1 |
% |
||||
Decrease due to foreign exchange |
0.7 |
% |
0.9 |
% |
0.5 |
% |
1.5 |
% |
||||
Contribution from acquisitions (2) |
(9.5 |
)% |
(9.0 |
)% |
(12.8 |
)% |
- % | |||||
Non-GAAP revenue growth, organic (3) |
8.2 |
% |
(1.7 |
)% |
11.6 |
% |
9.6 |
% |
||||
(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 |
|||||||||
(2) |
The contribution from acquisitions reflects only completed acquisitions. |
|||||||||
(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/20200507005121/en/
Investor Contacts:
Corporate Vice President,
Investor Relations
781.222.6455
todd.spencer@crl.com
Media Contact:
Corporate Vice President,
Public Relations
781.222.6168
amy.cianciaruso@crl.com
Source: