Investor Relations

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.

CR-000172

News Release

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Charles River Laboratories Announces Strong Fourth-Quarter and Full-Year 2002 Results and Provides Positive Outlook for 2003
WILMINGTON, Mass., Feb 3, 2003 (BUSINESS WIRE) -- Charles River Laboratories International, Inc. (NYSE:CRL) today reported fourth-quarter 2002 income before extraordinary item of $17.5 million, a 58.3% increase over the $11.1 million reported in the fourth quarter of 2001. Earnings per share before extraordinary item rose 50.0% to $0.36 per diluted share from $0.24 per diluted share reported last year. Net income for the fourth quarter was $17.5 million, or $0.36 per diluted share, compared to $8.9 million, or $0.19 per diluted share, in the fourth quarter of 2001. Last year's fourth quarter included an extraordinary loss, net of tax benefit, of $2.1 million for early retirement of debt. Net sales in the fourth quarter were $142.9 million compared to $126.1 million reported in 2001, an increase of 13.4%.

Operating income in the fourth quarter of 2002 rose 38.2% to $31.0 million from $22.4 million in the same period in 2001. The Company's operating margin rose to 21.7% compared to 17.8% achieved in the fourth quarter of last year, reflecting higher sales in both the Research Models and Biomedical Products and Services segments and operating efficiencies resulting from the increased volume.

For 2002, net sales increased 19.1% to $554.6 million from $465.6 million in 2001. Significantly higher sales yielded a gross margin of 37.7% compared to 35.9% last year. Higher sales, operating efficiencies, and the January 1, 2002, implementation of SFAS 142, "Goodwill and Other Intangible Assets," resulted in operating income of $122.3 million, a 35.4% increase over the $90.3 million reported in 2001 and a 22.0% operating margin compared to 19.4% in 2001. Income before extraordinary items was $68.4 million, a 68.2% increase over the $40.7 million reported in 2001 and diluted earnings per share before extraordinary item were $1.42, a gain of 54.3% from the $0.92 per diluted share in 2001.

James C. Foster, Chairman, President and Chief Executive Officer said, "For the fourth quarter and full year 2002, Charles River has again delivered substantial growth in sales, margins, and earnings per share. Our solid and consistent financial performance reflects the leading share position we hold in a number of attractive markets and the strength of the growing drug discovery and development market."

Mr. Foster continued, "We view 2002 as a very positive year, one which has further strengthened the Company and positioned us for continued growth on many fronts. The April 2002 opening of our new Transgenic Services building in Wilmington, Massachusetts, reinforced our position as the world's largest provider of these services, and the building is 50% utilized. Our acquisitions of BioLabs in June and Springborn Laboratories in October added both geographic and customer depth to our drug discovery and development services offerings, and both acquisitions have performed well and in line with our expectations. The proteomics joint venture begun in October added a novel service to our growing portfolio of businesses. The platform is now in place and we expect to begin generating sales in the second quarter of 2003."

Fourth-quarter 2002 net sales for the Research Models segment of the business were $53.6 million compared to $49.4 million last year. The 8.5% gain reflected increased customer demand for animal research models and higher sales of specialty models for pre-clinical drug discovery and development work. Higher sales yielded a gross margin of 39.9% compared to 36.6% in the fourth quarter of last year. The sales increase also generated operating efficiencies which resulted in a 32.0% increase in operating income, to $13.8 million in the fourth quarter with an operating margin of 25.8%, compared to last year's $10.5 million and 21.2%.

Net sales for the Biomedical Products and Services segment rose 16.5% in the fourth quarter, to $89.4 million from $76.7 million in the same period last year. The Company's discovery services business, which includes transgenic, laboratory testing, and contract staffing services, had significant sales growth in the quarter, led by transgenic services. Sales for the development services business, which includes the entire range of pre-clinical drug testing services, also increased due principally to the acquisitions of BioLabs and Springborn Laboratories. Both in vitro products and vaccine support services also reported robust sales growth.

The fourth-quarter 2002 gross margin for the Biomedical Products and Services segment was 35.6% compared to 33.3% achieved in last year's fourth quarter. Operating income for this segment rose 49.4% to $18.4 million from $12.3 million last year and the operating margin increased to 20.5% from 16.0%.

Net interest expense for the fourth quarter was $1.6 million compared to $3.9 million in the fourth quarter of 2001.

Effective January 1, 2002, the Company adopted SFAS 142, the effect of which amounted to $0.02 per diluted share on the Company's fourth-quarter 2002 results and $0.09 per diluted share for the full year.

2002 Results

For 2002, net sales for the Research Models segment of the business were $223.8 million compared to $197.5 million last year. The 13.3% gain reflected increased customer demand for animal research models and higher sales of specialty models for pre-clinical drug discovery and development work. Higher sales yielded a gross margin of 44.2% compared to 40.5% last year. The sales increase also generated operating efficiencies which resulted in a 39.4% increase in operating income to $70.9 million with an operating margin of 31.7%, compared to last year's $50.9 million and 25.8%.

Net sales for the Biomedical Products and Services segment rose 23.4% for the year, to $330.9 million from $268.1 million last year. The Company's discovery services business had significant sales growth, led by transgenic services and contract staffing. Sales for the development services business also increased due principally to the acquisitions of BioLabs and Springborn Laboratories and growth of in vitro products and vaccine support services.

The 2002 gross margin for the Biomedical Products and Services segment was 33.3% compared to 32.5% achieved last year. Segment operating income rose 41.3% to $65.9 million from $46.6 million last year and the operating margin increased to 19.9% from 17.4%.

2003 Outlook

The following forward-looking guidance may be affected by an uncertain economic and political environment in 2003. Guidance is based on current exchange rates and is exclusive of any acquisitions which may occur in 2003.

The Company anticipates that for 2003, net sales will increase by 15% to 17%, due to continued growth in both the Research Models and Biomedical Products and Services segments. The Research Model segment is expected to grow between 12% and 14 % and the Biomedical Products and Services segment is expected to grow between 17% and 19%.

Diluted earnings per share are expected to be in a range of $1.67 to $1.70, reflecting higher sales and operating efficiencies.

For the first quarter of 2003, the Company expects net sales to increase between 13% and 16% due to higher sales in both the Research Models and Biomedical Products and Services business segments. Based on higher net sales and operating efficiencies, consolidated earnings per diluted share are expected to be in a range of $0.39 to $0.41.

Julia D. Palm to Retire

Charles River Laboratories also announces that Julia D. Palm, Senior Vice President, Biomedical Products and Services, will retire from the Company at the end of 2003. To facilitate the management transition, the Company has already realigned the majority of Ms. Palm's responsibilities under two senior executives. Mr. Foster said, "We appreciate Julie's many contributions to Charles River and are very pleased that our executives will be able to work together throughout this year to ensure a seamless transition of responsibilities."

Webcast

Charles River Laboratories has scheduled a live webcast on Tuesday, February 4, at 8:30 a.m. EST to discuss matters relating to this press release. To participate, please go to www.criver.com, Investor Relations, and select the webcast link. The webcast will be available until 5:00 p.m. EST on February 11, 2003.

Charles River Laboratories, based in Wilmington, Massachusetts, is a leading provider of critical research tools and integrated support services that enable innovative and efficient drug discovery and development. The Company is the global leader in providing the animal research models required in research and development for new drugs, devices and therapies. The Company also offers a broad and growing portfolio of biomedical products and services that enable customers to reduce cost, increase speed, and enhance productivity and effectiveness in drug discovery and development. Charles River's customer base spans over 50 countries, and includes all of the major pharmaceutical and biotechnology companies, as well as many leading hospitals and academic institutions. The Company operates 76 facilities in 16 countries worldwide.

Caution Concerning Forward-Looking Statements. This document 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," "estimate," "plan," and "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based on management's current expectations, and 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, and the company expressly does not undertake any duty to update forward-looking statements, which speak only as of the date of this document. Those risks and uncertainties include, but are not limited to: acquisition integration risks; special interest groups; contaminations; industry trends; new displacement technologies; outsourcing trends; USDA and FDA regulation; changes in law; continued availability of products and supplies; loss of key personnel; interest rate and foreign currency exchange rate fluctuations; changes in generally accepted accounting principles; and any changes in business, political, or economic conditions due to the threat of future terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas. A further description of these risks, uncertainties, and other matters can be found in the Risk Factors detailed in the Company's registration statement on Form S-3 as filed on April 9, 2002, with the Securities and Exchange Commission.

            CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
       CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
           (dollars in thousands except for per share data)
                           Three Months Ended     Twelve Months Ended
                           Dec. 28,   Dec. 29,    Dec. 28,   Dec. 29,
                             2002       2001        2002       2001
Net sales                  $142,944   $126,094    $554,629   $465,630
Cost of products sold and
 services provided           89,795     82,486     345,646    298,379
Gross margin                 53,149     43,608     208,983    167,251
Selling, general and
 administrative              20,974     18,554      83,303     68,315
Amortization of goodwill
 and intangibles              1,220      2,649       3,414      8,653
Operating income             30,955     22,405     122,266     90,283
Interest income (expense)    (1,570)    (3,909)     (9,085)   (21,304)
Other income (expense)          193        (16)      1,222        500
Income before taxes,
 minority interests,
 earnings from
equity investments and
 extraordinary item          29,578     18,480     114,403     69,479
Provision for income
 taxes                       11,387      7,204      43,572     27,095
Income before minority
 interests, earnings from
equity investments and
 extraordinary item          18,191     11,276      70,831     42,384
Minority interests             (686)      (347)     (2,784)    (2,206)
Earnings from equity
 investments                      -        127         316        472
Net income before
 extraordinary item          17,505     11,056      68,363     40,650
Extraordinary loss, net
 of tax benefit                   -     (2,139)    (18,231)    (5,243)
Net income                  $17,505     $8,917     $50,132    $35,407
Earnings per common share
 before extraordinary item
   Basic                      $0.39      $0.25       $1.53      $0.99
   Diluted                    $0.36      $0.24       $1.42      $0.92
Earnings per common share
 after extraordinary item
   Basic                      $0.39      $0.20       $1.12      $0.86
   Diluted                    $0.36      $0.19       $1.06      $0.80
Weighted average number
 of common shares outstanding
 before and after
 extraordinary item
   Basic                 45,077,506 44,133,268  44,681,601 40,998,558
   Diluted               51,518,643 46,398,266  50,856,723 44,215,383
            CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
          CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                        (dollars in thousands)
                                                   Dec. 28,   Dec. 29,
                                                     2002       2001
Assets
Current assets
   Cash and cash equivalents                       $127,509   $58,271
   Trade receivables                                 94,245    98,478
   Inventories                                       43,892    39,056
   Other current assets                              12,446    14,349
      Total current assets                          278,092   210,154
Property, plant and equipment, net                  187,875   155,919
Goodwill, net                                        96,532    52,087
Other intangibles, net                               34,204    38,287
Deferred tax asset                                   80,884    87,781
Other assets                                         23,757    27,134
      Total assets                                 $701,344  $571,362
Liabilities and Shareholders' Equity
Current liabilities
   Accounts payable                                 $13,084   $13,868
   Accrued compensation                              31,825    25,736
   Other current liabilities                         68,460    58,928
      Total current liabilities                     113,369    98,532
Long-term debt                                      192,420   155,506
Other long-term liabilities                          19,612    14,826
      Total liabilities                             325,401   268,864
Minority interests                                   18,583    12,988
Total shareholders' equity                          357,360   289,510
Total liabilities and shareholders' equity         $701,344  $571,362
              CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
             SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)
                          (dollars in thousands)
                               Three Months Ended  Twelve Months Ended
                                Dec. 28,  Dec. 29,  Dec. 28,  Dec. 29,
                                  2002      2001      2002     2001
Research Models
     Net sales                   $53,552  $49,360  $223,766  $197,494
     Gross margin                 21,343   18,085    98,877    80,060
     Gross margin as a
      % of sales                   39.9%    36.6%     44.2%     40.5%
     Operating income             13,796   10,450    70,917    50,878
     Operating income as a % of
      sales                        25.8%    21.2%     31.7%     25.8%
     Depreciation amortization     2,385    2,768     9,398     9,978
     Capital expenditures          4,916    3,718    14,409    10,419
Biomedical Products and Services
     Net sales                   $89,392  $76,734  $330,863  $268,136
     Gross margin                 31,806   25,523   110,106    87,191
     Gross margin as a % of sales  35.6%    33.3%     33.3%     32.5%
     Operating income             18,367   12,293    65,898    46,643
     Operating income as a % of
      sales                        20.5%    16.0%     19.9%     17.4%
     Depreciation amortization     4,220    5,166    14,588    17,197
     Capital expenditures         11,013   12,158    23,134    25,987
Unallocated Corporate Overhead   $(1,208)   $(338) $(14,549)  $(7,238)
Total
     Net sales                  $142,944 $126,094  $554,629  $465,630
     Gross margin                 53,149   43,608   208,983   167,251
     Gross margin as a
      % of sales                   37.2%    34.6%     37.7%     35.9%
     Operating income             30,955   22,405   122,266    90,283
     Operating income as a
      % of sales                   21.7%    17.8%     22.0%     19.4%
     Depreciation amortization     6,605    7,934    23,986    27,175
     Capital expenditures         15,929   15,876    37,543    36,406
CONTACT:
Investor Contact:
Charles River Laboratories
Susan E. Hardy, 978/658-6000 Ext. 1616

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