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Charles River Laboratories Announces Fourth-Quarter and Full-Year 2020 Results and Provides 2021 Guidance
– Fourth-Quarter Revenue of
– Fourth-Quarter GAAP Earnings per Share of
– Full-Year GAAP Earnings per Share of
– Provides 2021 Guidance –
– Announces Definitive Agreement to Acquire Cognate BioServices, A Premier, Cell and Gene Therapy CDMO –
Acquisitions contributed 2.1% to consolidated fourth-quarter revenue growth. The impact of foreign currency translation benefited reported revenue growth by 2.0%. Excluding the effect of these items, organic revenue growth of 10.3% was driven by contributions from all three business segments.
On a GAAP basis, fourth-quarter net income attributable to common shareholders was
On a non-GAAP basis, net income from continuing operations was
Fourth-Quarter Segment Results
Research Models and Services (RMS)
Revenue for the RMS segment was
In the fourth quarter of 2020, the RMS segment’s GAAP operating margin decreased to 21.9% from 23.0% in the fourth quarter of 2019, primarily due to acquisition-related amortization costs associated with
Discovery and Safety Assessment (DSA)
Revenue for the DSA segment was
In the fourth quarter of 2020, the DSA segment’s GAAP operating margin decreased to 18.4% from 19.1% in the fourth quarter of 2019. On a non-GAAP basis, the operating margin decreased to 23.2% from 25.6% in the fourth quarter of 2019. The GAAP and non-GAAP operating margin decreases were driven primarily by increased costs due in part to higher performance-based compensation expense, as well as the study mix in the Safety Assessment business.
Manufacturing Support (Manufacturing)
Revenue for the Manufacturing segment was
In the fourth quarter of 2020, the Manufacturing segment’s GAAP operating margin increased to 35.3% from 34.4% in the fourth quarter of 2019. On a non-GAAP basis, the operating margin increased to 37.3% from 37.2% in the fourth quarter of 2019. The GAAP and non-GAAP operating margin increases were driven primarily by operating leverage from higher revenue in the Biologics and Avian Vaccine businesses.
Full-Year Results
For 2020, revenue increased by 11.5% to
On a GAAP basis, net income attributable to common shareholders was
On a non-GAAP basis, net income from continuing operations was
Research Models and Services (RMS)
For 2020, RMS revenue was
On a GAAP basis, the RMS segment operating margin decreased to 18.0% in 2020 from 24.9% in 2019. On a non-GAAP basis, the operating margin decreased to 22.0% in 2020 from 26.2% in 2019.
Discovery and Safety Assessment (DSA)
For 2020, DSA revenue was
On a GAAP basis, the DSA segment operating margin increased to 17.7% in 2020 from 16.0% in 2019. On a non-GAAP basis, the operating margin increased to 23.4% in 2020 from 22.0% in 2019.
Manufacturing Support (Manufacturing)
For 2020, Manufacturing revenue was
On a GAAP basis, the Manufacturing segment operating margin increased to 35.2% in 2020 from 31.3% in 2019. On a non-GAAP basis, the operating margin increased to 37.4% in 2020 from 33.9% in 2019.
Planned Acquisition of Cognate BioServices
In a separate press release today, Charles River announced that it has signed a definitive agreement to acquire
Cognate is a premier, cell and gene therapy CDMO offering comprehensive manufacturing solutions for cell therapies, as well as for production of plasmid DNA and other inputs in the CDMO value chain. The planned acquisition of Cognate will establish Charles River as a premier scientific partner for cell and gene therapy development, testing, and manufacturing, providing clients with an integrated solution from basic research through CGMP production.
Cognate is expected to generate annual revenue of approximately
2021 Guidance Excluding Cognate BioServices
The Company is providing the following revenue, earnings per share, and free cash flow guidance for 2021 excluding the financial impact of the planned acquisition of Cognate. The 2021 revenue growth outlook reflects a continuation of robust client demand trends, as well as a favorable comparison to last year’s revenue impact from the COVID-19 pandemic. Earnings per share in 2021 are expected to benefit from higher revenue and modest operating margin improvement, partially offset by a higher tax rate.
2021 GUIDANCE EXCLUDING COGNATE |
|
Revenue growth, reported |
12% – 14% |
Less: Contribution from acquisitions (1) |
(0.5%) – (1.0%) |
Unfavorable/(favorable) impact of foreign exchange |
(2.0%) – (2.5%) |
Revenue growth, organic (2) |
9% – 11% |
GAAP EPS estimate (3) |
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Acquisition-related amortization |
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Acquisition-related adjustments (4) |
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Other items (5) |
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Non-GAAP EPS estimate |
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Free cash flow (6) |
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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) GAAP EPS guidance does not include an estimate for future gains or losses from venture capital and other strategic investments. Potential gains or losses are expected in 2021, but the Company does not forecast the future performance of these investments. Any future gains or losses would be excluded from non-GAAP results.
(4) 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.
(5) These items primarily relate to charges of approximately
(6) Reconciliation of the current 2021 free cash flow guidance is as follows: Cash flow from operating activities of
2021 Financial Impact of Cognate Acquisition
Based on the anticipated completion of the acquisition by the end of the first quarter of 2021, Cognate is expected to add approximately
The transaction is expected to be neutral to non-GAAP earnings per share in 2021, and therefore, is not expected to have a meaningful impact on the Company’s non-GAAP earnings per share guidance. Items excluded from non-GAAP earnings per share are expected to include all acquisition-related costs, which primarily include amortization of intangible assets, advisory fees, certain costs associated with efficiency initiatives, and certain third-party integration costs.
Webcast
Charles River has scheduled a live webcast on
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; executive transition costs; 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.
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SCHEDULE 1 |
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
|||||||||||||||
(in thousands, except for per share data) |
|||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
Service revenue |
$ |
618,229 |
|
$ |
549,380 |
|
$ |
2,296,156 |
|
$ |
2,029,371 |
|
|||
Product revenue |
|
172,761 |
|
|
141,758 |
|
|
627,777 |
|
|
591,855 |
|
|||
Total revenue |
|
790,990 |
|
|
691,138 |
|
|
2,923,933 |
|
|
2,621,226 |
|
|||
Costs and expenses: | |||||||||||||||
Cost of services provided (excluding amortization of intangible assets) |
|
408,242 |
|
|
357,636 |
|
|
1,533,230 |
|
|
1,371,699 |
|
|||
Cost of products sold (excluding amortization of intangible assets) |
|
82,780 |
|
|
71,188 |
|
|
317,162 |
|
|
291,216 |
|
|||
Selling, general and administrative |
|
143,033 |
|
|
129,598 |
|
|
528,935 |
|
|
517,622 |
|
|||
Amortization of intangible assets |
|
28,008 |
|
|
23,927 |
|
|
111,877 |
|
|
89,538 |
|
|||
Operating income |
|
128,927 |
|
|
108,789 |
|
|
432,729 |
|
|
351,151 |
|
|||
Other income (expense): | |||||||||||||||
Interest income |
|
63 |
|
|
684 |
|
|
834 |
|
|
1,522 |
|
|||
Interest expense |
|
(33,147 |
) |
|
(24,362 |
) |
|
(86,433 |
) |
|
(60,882 |
) |
|||
Other income, net |
|
76,584 |
|
|
20,454 |
|
|
99,984 |
|
|
12,293 |
|
|||
Income from operations, before income taxes |
|
172,427 |
|
|
105,565 |
|
|
447,114 |
|
|
304,084 |
|
|||
Provision for income taxes |
|
28,237 |
|
|
25,053 |
|
|
81,808 |
|
|
50,023 |
|
|||
Net income |
|
144,190 |
|
|
80,512 |
|
|
365,306 |
|
|
254,061 |
|
|||
Less: Net income attributable to noncontrolling interests |
|
999 |
|
|
164 |
|
|
1,002 |
|
|
2,042 |
|
|||
Net income attributable to common shareholders |
$ |
143,191 |
|
$ |
80,348 |
|
$ |
364,304 |
|
$ |
252,019 |
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Earnings per common share | |||||||||||||||
Net income attributable to common shareholders: | |||||||||||||||
Basic |
$ |
2.88 |
|
$ |
1.64 |
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$ |
7.35 |
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$ |
5.17 |
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Diluted |
$ |
2.81 |
|
$ |
1.61 |
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$ |
7.20 |
|
$ |
5.07 |
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Weighted-average number of common shares outstanding: | |||||||||||||||
Basic |
|
49,754 |
|
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48,875 |
|
|
49,550 |
|
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48,730 |
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Diluted |
|
51,028 |
|
|
49,867 |
|
|
50,611 |
|
|
49,693 |
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SCHEDULE 2 | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
(in thousands, except per share amounts) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents |
$ |
228,424 |
|
$ |
238,014 |
|
|
Trade receivables, net of allowances for doubtful accounts of |
|
617,740 |
|
|
514,033 |
|
|
Inventories |
|
185,695 |
|
|
160,660 |
|
|
Prepaid assets |
|
96,712 |
|
|
52,588 |
|
|
Other current assets |
|
72,560 |
|
|
56,030 |
|
|
Total current assets |
|
1,201,131 |
|
|
1,021,325 |
|
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Property, plant and equipment, net |
|
1,124,358 |
|
|
1,044,128 |
|
|
Operating lease right-of-use assets, net |
|
178,220 |
|
|
140,085 |
|
|
|
1,809,168 |
|
|
1,540,565 |
|
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Client relationships, net |
|
721,505 |
|
|
613,573 |
|
|
Other intangible assets, net |
|
66,094 |
|
|
75,840 |
|
|
Deferred tax assets |
|
37,729 |
|
|
44,659 |
|
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Other assets |
|
352,626 |
|
|
212,615 |
|
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Total assets |
$ |
5,490,831 |
|
$ |
4,692,790 |
|
|
Liabilities, Redeemable Noncontrolling Interests and Equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt and finance leases |
$ |
50,214 |
|
$ |
38,545 |
|
|
Accounts payable |
|
122,475 |
|
|
111,498 |
|
|
Accrued compensation |
|
206,823 |
|
|
158,617 |
|
|
Deferred revenue |
|
207,942 |
|
|
171,805 |
|
|
Accrued liabilities |
|
149,820 |
|
|
139,118 |
|
|
Other current liabilities |
|
102,477 |
|
|
90,598 |
|
|
Total current liabilities |
|
839,751 |
|
|
710,181 |
|
|
Long-term debt, net and finance leases |
|
1,929,571 |
|
|
1,849,666 |
|
|
Operating lease right-of-use liabilities |
|
155,595 |
|
|
116,252 |
|
|
Deferred tax liabilities |
|
217,031 |
|
|
167,283 |
|
|
Other long-term liabilities |
|
205,215 |
|
|
182,933 |
|
|
Total liabilities |
|
3,347,163 |
|
|
3,026,315 |
|
|
Redeemable noncontrolling interests |
|
25,499 |
|
|
28,647 |
|
|
Equity: | |||||||
Preferred stock, |
|
- |
|
|
- |
|
|
Common stock, issued and outstanding as of outstanding as of |
|
498 |
|
|
489 |
|
|
Additional paid-in capital |
|
1,627,564 |
|
|
1,531,785 |
|
|
Retained earnings |
|
625,414 |
|
|
280,329 |
|
|
|
- |
|
|
- |
|
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Accumulated other comprehensive loss |
|
(138,874 |
) |
|
(178,019 |
) |
|
Total equity attributable to common shareholders |
|
2,114,602 |
|
|
1,634,584 |
|
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Noncontrolling interest |
|
3,567 |
|
|
3,244 |
|
|
Total equity |
|
2,118,169 |
|
|
1,637,828 |
|
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Total liabilities, redeemable noncontrolling interests and equity |
$ |
5,490,831 |
|
$ |
4,692,790 |
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SCHEDULE 3 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) |
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(in thousands) |
|||||||
Twelve Months Ended | |||||||
Cash flows relating to operating activities | |||||||
Net income |
$ |
365,306 |
|
$ |
254,061 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization |
|
234,924 |
|
|
198,095 |
|
|
Stock-based compensation |
|
56,341 |
|
|
57,271 |
|
|
Deferred income taxes |
|
(133 |
) |
|
(21,895 |
) |
|
Gain on venture capital and strategic equity investments, net |
|
(100,861 |
) |
|
(20,706 |
) |
|
Other, net |
|
17,273 |
|
|
7,931 |
|
|
Changes in assets and liabilities: | |||||||
Trade receivables, net |
|
(85,627 |
) |
|
(8,323 |
) |
|
Inventories |
|
(18,379 |
) |
|
(21,399 |
) |
|
Accounts payable |
|
748 |
|
|
29,775 |
|
|
Accrued compensation |
|
40,481 |
|
|
3,394 |
|
|
Deferred revenue |
|
28,647 |
|
|
(3,620 |
) |
|
Customer contract deposits |
|
8,955 |
|
|
(10,898 |
) |
|
Other assets and liabilities, net |
|
(1,100 |
) |
|
17,250 |
|
|
Net cash provided by operating activities |
|
546,575 |
|
|
480,936 |
|
|
Cash flows relating to investing activities | |||||||
Acquisition of businesses and assets, net of cash acquired |
|
(418,628 |
) |
|
(515,701 |
) |
|
Capital expenditures |
|
(166,560 |
) |
|
(140,514 |
) |
|
Purchases of investments and contributions to venture capital investments |
|
(26,692 |
) |
|
(22,341 |
) |
|
Proceeds from sale of investments |
|
11,401 |
|
|
942 |
|
|
Other, net |
|
(1,065 |
) |
|
(3,888 |
) |
|
Net cash used in investing activities |
|
(601,544 |
) |
|
(681,502 |
) |
|
Cash flows relating to financing activities | |||||||
Proceeds from long-term debt and revolving credit facility |
|
2,230,988 |
|
|
3,358,461 |
|
|
Proceeds from exercises of stock options |
|
46,586 |
|
|
34,546 |
|
|
Payments on long-term debt, revolving credit facility, and finance lease obligations |
|
(2,200,400 |
) |
|
(3,124,588 |
) |
|
Payments on debt financing costs |
|
- |
|
|
(6,593 |
) |
|
Purchase of treasury stock |
|
(23,979 |
) |
|
(18,087 |
) |
|
Other, net |
|
(5,947 |
) |
|
(11,802 |
) |
|
Net cash provided by financing activities |
|
47,248 |
|
|
231,937 |
|
|
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
794 |
|
|
11,357 |
|
|
Net change in cash, cash equivalents, and restricted cash |
|
(6,927 |
) |
|
42,728 |
|
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
240,046 |
|
|
197,318 |
|
|
Cash, cash equivalents, and restricted cash, end of period |
$ |
233,119 |
|
$ |
240,046 |
|
|
Supplemental cash flow information: |
$ |
228,424 |
|
$ |
238,014 |
|
|
Cash and cash equivalents |
|
3,074 |
|
|
431 |
|
|
Restricted cash included in Other current assets |
|
1,621 |
|
|
1,601 |
|
|
Restricted cash included in Other assets |
$ |
233,119 |
|
$ |
240,046 |
|
|
Cash, cash equivalents, and restricted cash, end of period | |||||||
Cash paid for income taxes |
$ |
60,059 |
|
$ |
54,060 |
|
|
Cash paid for interest |
$ |
72,461 |
|
$ |
67,813 |
|
|
Non-cash investing and financing activities: | |||||||
Additions to property, plant and equipment, net |
$ |
25,614 |
|
$ |
21,447 |
|
|
Assets acquired under finance leases |
$ |
1,571 |
|
$ |
4,819 |
|
SCHEDULE 4 | ||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP | ||||||||||||||||
SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)(1) | ||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||||
Research Models and Services | ||||||||||||||||
Revenue |
$ |
156,697 |
|
$ |
131,317 |
|
$ |
571,152 |
|
$ |
537,089 |
|
||||
Operating income |
|
34,381 |
|
|
30,183 |
|
|
102,706 |
|
|
133,912 |
|
||||
Operating income as a % of revenue |
|
21.9 |
% |
|
23.0 |
% |
|
18.0 |
% |
|
24.9 |
% |
||||
Add back: | ||||||||||||||||
Amortization related to acquisitions |
|
3,975 |
|
|
339 |
|
|
19,556 |
|
|
1,381 |
|
||||
Severance |
|
118 |
|
|
1,000 |
|
|
645 |
|
|
2,106 |
|
||||
Acquisition related adjustments (2)(3) |
|
876 |
|
|
- |
|
|
2,375 |
|
|
2,201 |
|
||||
Site consolidation costs, impairments and other items |
|
- |
|
|
786 |
|
|
200 |
|
|
1,043 |
|
||||
Total non-GAAP adjustments to operating income |
$ |
4,969 |
|
$ |
2,125 |
|
$ |
22,776 |
|
$ |
6,731 |
|
||||
Operating income, excluding non-GAAP adjustments |
$ |
39,350 |
|
$ |
32,308 |
|
$ |
125,482 |
|
$ |
140,643 |
|
||||
Non-GAAP operating income as a % of revenue |
|
25.1 |
% |
|
24.6 |
% |
|
22.0 |
% |
|
26.2 |
% |
||||
Depreciation and amortization |
$ |
9,747 |
|
$ |
4,999 |
|
$ |
37,080 |
|
$ |
19,197 |
|
||||
Capital expenditures |
$ |
13,902 |
|
$ |
12,010 |
|
$ |
29,487 |
|
$ |
26,989 |
|
||||
Discovery and Safety Assessment | ||||||||||||||||
Revenue |
$ |
495,004 |
|
$ |
439,202 |
|
$ |
1,837,428 |
|
$ |
1,618,995 |
|
||||
Operating income |
|
91,087 |
|
|
83,689 |
|
|
325,959 |
|
|
258,903 |
|
||||
Operating income as a % of revenue |
|
18.4 |
% |
|
19.1 |
% |
|
17.7 |
% |
|
16.0 |
% |
||||
Add back: | ||||||||||||||||
Amortization related to acquisitions |
|
21,978 |
|
|
22,357 |
|
|
90,304 |
|
|
80,424 |
|
||||
Severance |
|
130 |
|
|
4,778 |
|
|
4,117 |
|
|
7,311 |
|
||||
Acquisition related adjustments (3) |
|
828 |
|
|
1,614 |
|
|
3,673 |
|
|
10,130 |
|
||||
Site consolidation costs, impairments and other items |
|
726 |
|
|
- |
|
|
6,598 |
|
|
(207 |
) |
||||
Total non-GAAP adjustments to operating income |
$ |
23,662 |
|
$ |
28,749 |
|
$ |
104,692 |
|
$ |
97,658 |
|
||||
Operating income, excluding non-GAAP adjustments |
$ |
114,749 |
|
$ |
112,438 |
|
$ |
430,651 |
|
$ |
356,561 |
|
||||
Non-GAAP operating income as a % of revenue |
|
23.2 |
% |
|
25.6 |
% |
|
23.4 |
% |
|
22.0 |
% |
||||
Depreciation and amortization |
$ |
43,784 |
|
$ |
39,908 |
|
$ |
168,922 |
|
$ |
151,139 |
|
||||
Capital expenditures |
$ |
59,217 |
|
$ |
41,713 |
|
$ |
105,653 |
|
$ |
86,843 |
|
||||
Manufacturing Support | ||||||||||||||||
Revenue |
$ |
139,289 |
|
$ |
120,619 |
|
$ |
515,353 |
|
$ |
465,142 |
|
||||
Operating income |
|
49,206 |
|
|
41,527 |
|
|
181,494 |
|
|
145,420 |
|
||||
Operating income as a % of revenue |
|
35.3 |
% |
|
34.4 |
% |
|
35.2 |
% |
|
31.3 |
% |
||||
Add back: | ||||||||||||||||
Amortization related to acquisitions |
|
2,144 |
|
|
2,260 |
|
|
8,758 |
|
|
9,062 |
|
||||
Severance |
|
428 |
|
|
1,102 |
|
|
2,413 |
|
|
1,651 |
|
||||
Acquisition related adjustments (3) |
|
- |
|
|
68 |
|
|
(421 |
) |
|
286 |
|
||||
Site consolidation costs, impairments and other items |
|
151 |
|
|
(103 |
) |
|
320 |
|
|
1,382 |
|
||||
Total non-GAAP adjustments to operating income |
$ |
2,723 |
|
$ |
3,327 |
|
$ |
11,070 |
|
$ |
12,381 |
|
||||
Operating income, excluding non-GAAP adjustments |
$ |
51,929 |
|
$ |
44,854 |
|
$ |
192,564 |
|
$ |
157,801 |
|
||||
Non-GAAP operating income as a % of revenue |
|
37.3 |
% |
|
37.2 |
% |
|
37.4 |
% |
|
33.9 |
% |
||||
Depreciation and amortization |
$ |
6,647 |
|
$ |
6,007 |
|
$ |
25,904 |
|
$ |
23,584 |
|
||||
Capital expenditures |
$ |
12,302 |
|
$ |
9,318 |
|
$ |
26,287 |
|
$ |
23,617 |
|
||||
Unallocated Corporate Overhead |
$ |
(45,747 |
) |
$ |
(46,610 |
) |
$ |
(177,430 |
) |
$ |
(187,084 |
) |
||||
Add back: | ||||||||||||||||
Severance and executive transition costs |
|
375 |
|
|
390 |
|
|
411 |
|
|
390 |
|
||||
Acquisition related adjustments (3) |
|
4,020 |
|
|
3,634 |
|
|
13,996 |
|
|
26,822 |
|
||||
Other items (4) |
|
- |
|
|
657 |
|
|
(661 |
) |
|
2,065 |
|
||||
Total non-GAAP adjustments to operating expense |
$ |
4,395 |
|
$ |
4,681 |
|
$ |
13,746 |
|
$ |
29,277 |
|
||||
Unallocated corporate overhead, excluding non-GAAP adjustments |
$ |
(41,352 |
) |
$ |
(41,929 |
) |
$ |
(163,684 |
) |
$ |
(157,807 |
) |
||||
Total | ||||||||||||||||
Revenue |
$ |
790,990 |
|
$ |
691,138 |
|
$ |
2,923,933 |
|
$ |
2,621,226 |
|
||||
Operating income |
|
128,927 |
|
|
108,789 |
|
|
432,729 |
|
|
351,151 |
|
||||
Operating income as a % of revenue |
|
16.3 |
% |
|
15.7 |
% |
|
14.8 |
% |
|
13.4 |
% |
||||
Add back: | ||||||||||||||||
Amortization related to acquisitions |
|
28,097 |
|
|
24,956 |
|
|
118,618 |
|
|
90,867 |
|
||||
Severance and executive transition costs |
|
1,051 |
|
|
7,270 |
|
|
7,586 |
|
|
11,458 |
|
||||
Acquisition related adjustments (2)(3) |
|
5,724 |
|
|
5,316 |
|
|
19,623 |
|
|
39,439 |
|
||||
Site consolidation costs, impairments and other items (4) |
|
877 |
|
|
1,340 |
|
|
6,457 |
|
|
4,283 |
|
||||
Total non-GAAP adjustments to operating income |
$ |
35,749 |
|
$ |
38,882 |
|
$ |
152,284 |
|
$ |
146,047 |
|
||||
Operating income, excluding non-GAAP adjustments |
$ |
164,676 |
|
$ |
147,671 |
|
$ |
585,013 |
|
$ |
497,198 |
|
||||
Non-GAAP operating income as a % of revenue |
|
20.8 |
% |
|
21.4 |
% |
|
20.0 |
% |
|
19.0 |
% |
||||
Depreciation and amortization |
$ |
60,876 |
|
$ |
51,833 |
|
$ |
234,924 |
|
$ |
198,095 |
|
||||
Capital expenditures |
$ |
87,854 |
|
$ |
63,839 |
|
$ |
166,560 |
|
$ |
140,514 |
|
(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 amount represents a |
|||||||
(3) |
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. | |||||||
(4) |
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 | Twelve Months Ended | ||||||||||||||
Net income attributable to common shareholders |
$ |
143,191 |
|
$ |
80,348 |
|
$ |
364,304 |
|
$ |
252,019 |
|
|||
Add back: | |||||||||||||||
Non-GAAP adjustments to operating income (Refer to previous schedule) |
|
35,749 |
|
|
38,882 |
|
|
152,284 |
|
|
146,047 |
|
|||
Write-off of deferred financing costs and fees related to debt financing |
|
- |
|
|
1,605 |
|
|
- |
|
|
1,605 |
|
|||
Venture capital and strategic equity investment (gains) losses, net |
|
(68,635 |
) |
|
(14,983 |
) |
|
(100,861 |
) |
|
(20,707 |
) |
|||
Loss due to |
|
10,283 |
|
|
- |
|
|
10,283 |
|
|
- |
|
|||
Tax effect of non-GAAP adjustments: | |||||||||||||||
Non-cash tax provision (benefit) related to international financing structure (2) |
|
1,454 |
|
|
581 |
|
|
4,444 |
|
|
(19,787 |
) |
|||
Tax effect of the remaining non-GAAP adjustments |
|
87 |
|
|
(6,368 |
) |
|
(18,953 |
) |
|
(24,811 |
) |
|||
Net income attributable to common shareholders, excluding non-GAAP adjustments |
$ |
122,129 |
|
$ |
100,065 |
|
$ |
411,501 |
|
$ |
334,366 |
|
|||
Weighted average shares outstanding - Basic |
|
49,754 |
|
|
48,875 |
|
|
49,550 |
|
|
48,730 |
|
|||
Effect of dilutive securities: | |||||||||||||||
Stock options, restricted stock units and performance share units |
|
1,274 |
|
|
992 |
|
|
1,061 |
|
|
963 |
|
|||
Weighted average shares outstanding - Diluted |
|
51,028 |
|
|
49,867 |
|
|
50,611 |
|
|
49,693 |
|
|||
Earnings per share attributable to common shareholders: | |||||||||||||||
Basic |
$ |
2.88 |
|
$ |
1.64 |
|
$ |
7.35 |
|
$ |
5.17 |
|
|||
Diluted |
$ |
2.81 |
|
$ |
1.61 |
|
$ |
7.20 |
|
$ |
5.07 |
|
|||
Basic, excluding non-GAAP adjustments |
$ |
2.45 |
|
$ |
2.05 |
|
$ |
8.30 |
|
$ |
6.86 |
|
|||
Diluted, excluding non-GAAP adjustments |
$ |
2.39 |
|
$ |
2.01 |
|
$ |
8.13 |
|
$ |
6.73 |
|
(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) | |||||||
For the three months ended |
Total CRL | RMS Segment | DSA Segment | MS Segment | |||
Revenue growth, reported |
14.4 % |
19.3 % |
12.7 % |
15.5 % |
|||
Decrease (increase) due to foreign exchange |
(2.0)% |
(2.9)% |
(1.4)% |
(3.1)% |
|||
Contribution from acquisitions (2) |
(2.1)% |
(11.2)% |
- % |
- % |
|||
Non-GAAP revenue growth, organic (3) |
10.3 % |
5.2 % |
11.3 % |
12.4 % |
|||
For the twelve months ended |
Total CRL | RMS Segment | DSA Segment | MS Segment | |||
Revenue growth, reported |
11.5 % |
6.3 % |
13.5 % |
10.8 % |
|||
Decrease (increase) due to foreign exchange |
(0.4)% |
(0.6)% |
(0.4)% |
(0.4)% |
|||
Contribution from acquisitions (2) |
(4.1)% |
(9.0)% |
(3.7)% |
- % |
|||
Non-GAAP revenue growth, organic (3) |
7.0 % |
(3.3)% |
9.4 % |
10.4 % |
(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/20210217005517/en/
Investors:
Corporate Vice President,
Investor Relations
781.222.6455
todd.spencer@crl.com
Media:
Corporate Vice President,
Public Relations
781.222.6168
amy.cianciaruso@crl.com
Source: