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WILMINGTON, Mass.--(BUSINESS WIRE)--Aug. 2, 2000--Charles River Laboratories International, Inc. (NYSE: CRL) reported today that second quarter 2000 sales increased by 32.6%, to $74.1 million from $55.9 million, over the second quarter of 1999, while net income was $8.0 million or $0.34 per diluted share, compared to $7.2 million, or $0.37 per diluted share in 1999.
Sales in the Company's research model segment grew 22.9% in the quarter, while sales in its biomedical products and services segment grew 52.2%. Operating income in the second quarter was $18.2 million, an increase of $5.9 million, or 48.0%, from $12.3 million in 1999. Net income of $8.0 million in the quarter included a favorable adjustment to a tax valuation allowance of $4.8 million. Giving pro forma effect to the Company's June Initial Public Offering as if it occurred at the beginning of the year, and excluding the tax valuation adjustment, the Company's pro-forma earnings per diluted share were $0.18 for the second quarter.
For the six-month period ended June 24, 2000, net sales were $143.4 million, an increase of $35.2 million, or 32.5%, from $108.2 million in 1999. These revenues include the results from the Company's acquisition of Sierra Biomedical in the fourth quarter of 1999, as well as its purchase of an additional 16% of the equity of Charles River Japan (from 50% to 66%) during the first quarter of 2000. Excluding these events, in constant currency, net sales grew 10% in the six-month period, and 7% in the second quarter. Sales in the Company's research models segment grew 18.2% for this period, while sales in the biomedical products and services segment grew 63.4%. Operating income was $33.4 million, an increase of $10.2 million, or 44.0%, from $23.2 million in 1999. Net income was $8.6 million, or $0.37 per diluted share, compared to $14.3 million, or $0.72 per diluted share in 1999. Giving effect to the initial public offering as of the beginning of the year, and excluding the tax valuation adjustment, pro-forma earnings per diluted share would have been $0.33 for the first six months of the year.
On June 28, 2000, the Company closed its IPO, selling 14 million shares at $16 per share. On July 6, 2000, the underwriters exercised an over-allotment option and the Company sold an additional 2.1 million shares, at $16 per share. The total gross proceeds to the Company from the sale of 16.1 million shares were $257.6 million, of which approximately $205.0 million will be used to retire debt. Since the IPO closed after the close of the Company's fiscal second quarter, the extraordinary expenses associated with the IPO will be included in the results for the third quarter.
According to James C. Foster, CEO: "We are very pleased with the strong performance of the business in the quarter. Our sales for the quarter were slightly above our revenue target, and our operating income and net income were well above our targets. We think these results reflect our continued sales and acquisition momentum in the pre-clinical enabling technology or "tools" space.
"Demand for our core research model business remained strong from both large pharmaceutical and biotech customers engaged in drug discovery and genomics research. We continue to generate strong cash flow and predictable earnings. Our strategy of adding higher growth biomedical products and services to our portfolio exploits the increasing demand for outsourced pre-clinical solutions. We are expanding this sector of our business by adding new capacity in California to service the explosive growth in biotech R&D activity on the West Coast. Furthermore, we have begun to expand our overseas reach with new operations in France and Japan."
Charles River remains exceptionally well positioned to provide the biomedical research community with the unique tools and exceptional service they need to find cures, to treat disease, and to improve the lives of people and animals.
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 costs, 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 53 facilities in 15 countries worldwide.
Charles River Laboratories International, Inc. is listed on the New York Stock Exchange under the symbol CRL. The Company's listing application contains additional information, available to the public on request, upon which the NYSE relied in authorized the listing.
This document may contain "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 contaminations, industry trends, new displacement technologies, outsourcing tends, FDA regulation, changes in law, acquisition integration risks, special interests groups, continued availability of products and supplies, personnel and control, and others that are described in the Risk Factors contained in Company's Registration Statement on Form S-1, as filed on June 23, 2000. The Company disclaims an intent or obligation to update forward looking statements.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (dollars in thousands except for per share data) Three Months Ended Six Months Ended June 26, June 24, June 26, June 24, 1999 2000 1999 2000 Total net sales $ 55,886 $ 74,097 $ 108,166 $ 143,399 Cost of products sold and services provided 32,162 42,520 64,322 83,912 Selling, general and administrative 11,092 12,427 19,911 24,240 Amortization of goodwill and intangibles 353 937 764 1,802 Operating income 12,279 18,213 23,169 33,445 Interest income 134 149 359 291 Interest expense (94) (13,157) (171) (25,821) Loss from foreign currency, net (100) (130) (153) (160) Other income (expense) -- 390 -- 390 Income before income taxes, minority interests and earnings from Equity investments 12,219 5,465 23,204 8,145 Provision for income taxes 5,485 (2,864) 10,011 (396) Income before minority interests and earnings from equity investments 6,734 8,329 13,193 8,541 Minority interests (9) (462) (2) (679) Earnings from equity investments 510 107 1,117 748 Net Income $ 7,235 $ 7,974 $ 14,308 $ 8,610 Earnings per common share Basic $ .37 $ .40 $ .72 $ .43 Diluted $ .37 $ .34 $ .72 $ .37 Weighted average number of common shares outstanding Basic 19,820,369 19,820,369 19,820,369 19,820,369 Diluted 19,820,369 23,571,555 19,820,369 23,571,555 CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (dollars in thousands) December 25, June 24, 1999 2000 Assets Current assets Cash and cash equivalents $ 15,010 $ 18,993 Trade receivables 36,293 50,930 Inventories 30,534 32,192 Other current assets 7,158 6,223 Total current assets 88,995 108,338 Property, plant and equipment, net 85,413 117,741 Goodwill and other intangibles 36,958 41,658 Deferred tax asset 101,560 101,783 Other assets 50,130 29,380 Total assets $ 363,056 $ 398,900 Liabilities and Shareholder's Equity Current liabilities Current portion of long-term debt $ 3,290 $ 6,442 Accounts payable 9,291 8,693 Accrued compensation 10,792 13,540 Other current liabilities 38,048 38,403 Total current liabilities 61,421 67,078 Long-term debt 381,706 392,742 Other long-term liabilities 16,569 20,074 Total liabilities 459,696 479,894 Minority interests 304 14,471 Redeemable common stock 13,198 13,198 Total shareholder's equity (110,142) (108,663) Total liabilities and shareholder's equity $ 363,056 $ 398,900 CONTACT: Charles River Laboratories International, Inc. Dennis R. Shaughnessy or Marcia Gookin Investor Relations 978-658-6000 ext. 1329 firstname.lastname@example.org