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Charles River Laboratories Announces Third-Quarter 2015 Results from Continuing Operations
– Third-Quarter Revenue of
– Third-Quarter GAAP Earnings per Share of
– Updates 2015 Guidance –
On a GAAP basis, net income from continuing operations for the third
quarter of 2015 was
On a non-GAAP basis, net income from continuing operations was
“Based on our third-quarter results and our expectations for the fourth
quarter, we are increasing our 2015 full-year revenue and non-GAAP
earnings per share guidance. We now expect revenue growth in a range
from 9.5% to 10% in constant currency, and non-GAAP earnings per share
in a range from
Third-Quarter Segment Results
Research Models and Services (RMS)
Revenue for the RMS segment was
In the third quarter of 2015, the RMS segment’s GAAP operating margin was 26.6% compared to 22.6% in the third quarter of 2014. On a non-GAAP basis, the operating margin increased to 27.5% from 25.4% in the third quarter of 2014. The RMS operating margin improvement was primarily attributable to benefits from the Company’s global efficiency initiatives.
Discovery and Safety Assessment (DSA)
Revenue from continuing operations for the DSA segment was
In the third quarter of 2015, the DSA segment’s GAAP operating margin was 21.0% compared to 13.7% in the third quarter of 2014. On a non-GAAP basis, the operating margin increased to 24.2% from 18.3% in the third quarter of 2014. The non-GAAP operating margin improvement was driven by higher capacity utilization and pricing for safety assessment services, as well as a foreign exchange benefit due to a weaker Canadian dollar, which contributed approximately 270 basis points to the improvement.
Manufacturing Support (Manufacturing)
Revenue for the Manufacturing segment was
In the third quarter of 2015, the Manufacturing segment’s GAAP operating
margin was 25.3% compared to 30.7% in the third quarter of 2014. The
GAAP decline was primarily related to the inclusion of amortization
expense for intangible assets and associated costs related to the Celsis
acquisition, which was completed on
Stock Repurchase Update
During the third quarter of 2015, the Company repurchased approximately
242,000 shares for a total of
Updates 2015 Guidance
The Company is updating its forward-looking guidance based on continuing operations for 2015.
Revenue growth is now expected to be 9.5% to 10.0% on a constant-currency basis, compared to the prior range of 8.0% to 9.5%. Based on current rates, the Company continues to expect that foreign currency translation will reduce revenue growth by approximately 5.0%, which would result in reported revenue growth of 4.5% to 5.0% (the prior range was 3.0% to 4.5%).
Foreign currency translation is expected to reduce earnings per share by
Guidance for non-GAAP earnings per share in 2015 was increased due primarily to the strong third-quarter performance. The Company also reduced its GAAP earnings per share guidance primarily to reflect the inclusion of amortization expense for intangible assets and associated charges related to the Celsis acquisition.
The Company’s updated earnings per share guidance is as follows:
2015 GUIDANCE (from continuing operations) | REVISED | PRIOR | ||||||
GAAP EPS estimate | $3.19 - $3.24 | $3.25 - $3.35 | ||||||
Amortization of intangible assets and inventory purchase accounting adjustment (1) | $0.45 | $0.32 | ||||||
Operating losses (2) | $0.06 | $0.06 | ||||||
Charges related to global efficiency initiatives and other items (3) |
$0.09 | $0.06 | ||||||
Acquisition-related adjustments (4) | $0.10-$0.12 | $0.10-$0.12 | ||||||
Bargain purchase gain associated with Avian Vaccine acquisition | ($0.21) | ($0.21) | ||||||
Non-GAAP EPS estimate | $3.69 - $3.74 | $3.60 - $3.70 |
(1) Amortization of intangibles assets includes the estimated impact of
the Celsis acquisition based on the preliminary purchase price
allocation. These charges also include an inventory purchasing
accounting adjustment related to the Celsis acquisition of
(2) These costs relate primarily to the Charles River Massachusetts
(
(3) These charges relate primarily to the Company’s planned efficiency initiatives in 2015, including site consolidation costs, asset impairments, and severance. Other projects in support of the global productivity and efficiency initiatives are expected, but these charges reflect only the decisions that have already been finalized. These charges also include executive transition costs.
(4) 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.
Webcast
Charles River has scheduled a live webcast on
Non-GAAP Reconciliations/Discontinued Operations
The Company reports non-GAAP results in this press release, which exclude certain 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, inventory purchase accounting adjustments, and other
charges related to our acquisitions; expenses associated with evaluating
and integrating acquisitions, 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; the gain related to the bargain purchase of
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,” “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 our projected future financial performance including revenue
(on both a reported and constant-currency basis), operating margins,
earnings per share, the expected impact of foreign exchange rates, and
the expected benefit of our limited partnership investments; the future
demand for drug discovery and development products and services,
including our expectations for future revenue trends; our plans to
reopen the Charles River Massachusetts (
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. | ||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) | ||||||||||||||||||||||
(in thousands, except for per share data) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 26, |
September 27, |
September 26, |
September 27, |
|||||||||||||||||||
Total revenue | $ | 349,465 | $ | 327,567 | $ | 1,009,452 | $ | 968,114 | ||||||||||||||
Cost of revenue | $ | 211,390 | $ | 209,299 | $ | 618,934 | $ | 615,399 | ||||||||||||||
Gross margin | $ | 138,075 | $ | 118,268 | $ | 390,518 | $ | 352,715 | ||||||||||||||
Selling, general and administrative | $ | 76,225 | $ | 64,476 | $ | 218,953 | $ | 196,999 | ||||||||||||||
Amortization of intangible assets | $ | 6,410 | $ | 7,620 | $ | 17,385 | $ | 18,813 | ||||||||||||||
Operating income | $ | 55,440 | $ | 46,172 | $ | 154,180 | $ | 136,903 | ||||||||||||||
Interest income (expense), net | $ | (3,674 | ) | $ | (2,621 | ) | $ | (10,493 | ) | $ | (8,368 | ) | ||||||||||
Other income (expense), net | $ | 1,390 | $ | 331 | $ | 1,749 | $ | 8,874 | ||||||||||||||
Income from continuing operations before income taxes | $ | 53,156 | $ | 43,882 | $ | 145,436 | $ | 137,409 | ||||||||||||||
Provision for income taxes | $ | 15,255 | $ | 11,582 | $ | 26,662 | $ | 36,021 | ||||||||||||||
Income from continuing operations, net of income taxes | $ | 37,901 | $ | 32,300 | $ | 118,774 | $ | 101,388 | ||||||||||||||
Income (loss) from discontinued operations, net of income taxes | $ | (34 | ) | $ | 52 | $ | (48 | ) | $ | (862 | ) | |||||||||||
Net income | $ | 37,867 | $ | 32,352 | $ | 118,726 | $ | 100,526 | ||||||||||||||
Less: Net income attributable to noncontrolling interests | $ | (488 | ) | $ | (316 | ) | $ | (1,297 | ) | $ | (994 | ) | ||||||||||
Net income attributable to common shareholders | $ | 37,379 | $ | 32,036 | $ | 117,429 | $ | 99,532 | ||||||||||||||
Earnings (loss) per common share | ||||||||||||||||||||||
Basic: | ||||||||||||||||||||||
Continuing operations | $ | 0.81 | $ | 0.70 | $ | 2.52 | $ | 2.15 | ||||||||||||||
Discontinued operations | $ | - | $ | - | $ | - | $ | (0.02 | ) | |||||||||||||
Net | $ | 0.81 | $ | 0.70 | $ | 2.52 | $ | 2.13 | ||||||||||||||
Diluted: | ||||||||||||||||||||||
Continuing operations | $ | 0.79 | $ | 0.68 | $ | 2.47 | $ | 2.11 | ||||||||||||||
Discontinued operations | $ | - | $ | - | $ | - | $ | (0.02 | ) | |||||||||||||
Net | $ | 0.79 | $ | 0.68 | $ | 2.47 | $ | 2.09 | ||||||||||||||
Weighted average number of common shares outstanding | ||||||||||||||||||||||
Basic | 46,290 | 46,016 | 46,572 | 46,683 | ||||||||||||||||||
Diluted | 47,245 | 46,878 | 47,584 | 47,566 |
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||||
(in thousands) | ||||||||||
September 26, 2015 | December 27, 2014 | |||||||||
Assets | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 74,032 | $ | 160,023 | ||||||
Trade receivables, net | 288,836 | 257,991 | ||||||||
Inventories | 98,097 | 89,043 | ||||||||
Prepaid assets | 33,593 | 26,900 | ||||||||
Other current assets | 84,103 | 72,941 | ||||||||
Total current assets | 578,661 | 606,898 | ||||||||
Property, plant and equipment, net | 671,673 | 676,797 | ||||||||
Goodwill | 418,245 | 321,077 | ||||||||
Other intangible assets, net | 277,686 | 178,875 | ||||||||
Deferred tax asset | 21,026 | 23,193 | ||||||||
Other assets | 65,552 | 72,951 | ||||||||
Total assets | $ | 2,032,843 | $ | 1,879,791 | ||||||
Liabilities, Redeemable Noncontrolling Interest and Equity | ||||||||||
Current liabilities: | ||||||||||
Current portion of long-term debt and capital leases | $ | 16,599 | $ | 31,904 | ||||||
Accounts payable | 31,629 | 33,815 | ||||||||
Accrued compensation | 71,518 | 71,569 | ||||||||
Deferred revenue | 76,019 | 78,124 | ||||||||
Accrued liabilities | 94,692 | 67,380 | ||||||||
Other current liabilities | 21,347 | 11,079 | ||||||||
Current liabilities of discontinued operations | 2,300 | 2,299 | ||||||||
Total current liabilities | 314,104 | 296,170 | ||||||||
Long-term debt, net and capital leases | 835,800 | 740,557 | ||||||||
Other long-term liabilities | 139,756 | 130,361 | ||||||||
Long-term liabilities of discontinued operations | 7,139 | 8,357 | ||||||||
Total liabilities | 1,296,799 | 1,175,445 | ||||||||
Redeemable noncontrolling interest | 27,447 | 28,419 | ||||||||
Total equity attributable to common shareholders | 704,359 | 672,203 | ||||||||
Noncontrolling interests | 4,238 | 3,724 | ||||||||
Total liabilities, equity and redeemable noncontrolling interest | $ | 2,032,843 | $ | 1,879,791 |
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | ||||||||||||||||||||
SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED) | ||||||||||||||||||||
(in thousands, except percentages) | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 26, |
September 27, |
September 26, |
September 27, |
|||||||||||||||||
Research Models and Services | ||||||||||||||||||||
Revenue | $ | 118,451 | $ | 124,021 | $ | 358,506 | $ | 389,636 | ||||||||||||
Gross margin | 47,841 | 45,295 | 143,352 | 149,392 | ||||||||||||||||
Gross margin as a % of revenue | 40.4 | % | 36.5 | % | 40.0 | % | 38.3 | % | ||||||||||||
Operating income | 31,494 | 28,056 | 93,800 | 97,734 | ||||||||||||||||
Operating income as a % of revenue | 26.6 | % | 22.6 | % | 26.2 | % | 25.1 | % | ||||||||||||
Depreciation and amortization | 5,319 | 7,277 | 16,712 | 20,277 | ||||||||||||||||
Capital expenditures | 3,022 | 4,110 | 12,111 | 11,528 | ||||||||||||||||
Discovery and Safety Assessment | ||||||||||||||||||||
Revenue | $ | 158,272 | $ | 140,862 | $ | 451,659 | $ | 388,614 | ||||||||||||
Gross margin | 53,721 | 39,968 | 146,660 | 105,084 | ||||||||||||||||
Gross margin as a % of revenue | 33.9 | % | 28.4 | % | 32.5 | % | 27.0 | % | ||||||||||||
Operating income | 33,191 | 19,329 | 84,856 | 48,840 | ||||||||||||||||
Operating income as a % of revenue | 21.0 | % | 13.7 | % | 18.8 | % | 12.6 | % | ||||||||||||
Depreciation and amortization | 11,509 | 13,340 | 35,060 | 33,867 | ||||||||||||||||
Capital expenditures | 4,277 | 3,436 | 13,756 | 11,330 | ||||||||||||||||
Manufacturing Support | ||||||||||||||||||||
Revenue | $ | 72,742 | $ | 62,684 | $ | 199,287 | $ | 189,864 | ||||||||||||
Gross margin | 36,513 | 33,005 | 100,506 | 98,239 | ||||||||||||||||
Gross margin as a % of revenue | 50.2 | % | 52.7 | % | 50.4 | % | 51.7 | % | ||||||||||||
Operating income | 18,424 | 19,220 | 55,653 | 58,091 | ||||||||||||||||
Operating income as a % of revenue | 25.3 | % | 30.7 | % | 27.9 | % | 30.6 | % | ||||||||||||
Depreciation and amortization | 5,139 | 3,513 | 12,034 | 10,625 | ||||||||||||||||
Capital expenditures | 2,139 | 1,463 | 5,475 | 5,444 | ||||||||||||||||
Unallocated Corporate Overhead | $ | (27,669 | ) | $ | (20,433 | ) | $ | (80,129 | ) | $ | (67,762 | ) | ||||||||
Total | ||||||||||||||||||||
Revenue | $ | 349,465 | $ | 327,567 | $ | 1,009,452 | $ | 968,114 | ||||||||||||
Gross margin | 138,075 | 118,268 | 390,518 | 352,715 | ||||||||||||||||
Gross margin as a % of revenue | 39.5 | % | 36.1 | % | 38.7 | % | 36.4 | % | ||||||||||||
Operating income | 55,440 | 46,172 | 154,180 | $ | 136,903 | |||||||||||||||
Operating income as a % of revenue | 15.9 | % | 14.1 | % | 15.3 | % | 14.1 | % | ||||||||||||
Depreciation and amortization | 23,814 | 26,084 | 69,330 | 70,435 | ||||||||||||||||
Capital expenditures | 10,452 | 9,402 | 35,008 | 29,907 |
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | |||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP | |||||||||||||||||||||||||
SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED) (1) | |||||||||||||||||||||||||
(in thousands, except percentages) | |||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 26, 2015 |
September 27, 2014 |
September 26, 2015 |
September 27, 2014 |
||||||||||||||||||||||
Research Models and Services | |||||||||||||||||||||||||
Revenue | $ | 118,451 | $ | 124,021 | $ | 358,506 | $ | 389,636 | |||||||||||||||||
Operating income | 31,494 | 28,056 | 93,800 | 97,734 | |||||||||||||||||||||
Operating income as a % of revenue | 26.6 | % | 22.6 | % | 26.2 | % | 25.1 | % | |||||||||||||||||
Add back: | |||||||||||||||||||||||||
Amortization of intangible assets related to acquisitions | 757 | 470 | 2,291 | 2,015 | |||||||||||||||||||||
Severance | 167 | 379 | 1,166 | 3,974 | |||||||||||||||||||||
Government billing adjustment and related expenses | 45 | 214 | 336 | 294 | |||||||||||||||||||||
Site consolidation costs, impairments and other items | 57 | 2,402 | 1,415 | 5,134 | |||||||||||||||||||||
Operating income, excluding specified charges (Non-GAAP) | $ | 32,520 | $ | 31,521 | $ | 99,008 | $ | 109,151 | |||||||||||||||||
Non-GAAP operating income as a % of revenue | 27.5 | % | 25.4 | % | 27.6 | % | 28.0 | % | |||||||||||||||||
Discovery and Safety Assessment | |||||||||||||||||||||||||
Revenue | $ | 158,272 | $ | 140,862 | $ | 451,659 | $ | 388,614 | |||||||||||||||||
Operating income | 33,191 | 19,329 | 84,856 | 48,840 | |||||||||||||||||||||
Operating income as a % of revenue | 21.0 | % | 13.7 | % | 18.8 | % | 12.6 | % | |||||||||||||||||
Add back: | |||||||||||||||||||||||||
Amortization of intangible assets related to acquisitions | 3,412 | 5,789 | 10,632 | 12,652 | |||||||||||||||||||||
Severance | 239 | 69 | 714 | 1,118 | |||||||||||||||||||||
Operating losses (2) | 1,319 | 606 | 2,863 | 1,981 | |||||||||||||||||||||
Acquisition related adjustments (3) | 135 | (7 | ) | 160 | 196 | ||||||||||||||||||||
Operating income, excluding specified charges (Non-GAAP) | $ | 38,296 | $ | 25,786 | $ | 99,225 | $ | 64,787 | |||||||||||||||||
Non-GAAP operating income as a % of revenue | 24.2 | % | 18.3 | % | 22.0 | % | 16.7 | % | |||||||||||||||||
Manufacturing Support | |||||||||||||||||||||||||
Revenue | $ | 72,742 | $ | 62,684 | $ | 199,287 | $ | 189,864 | |||||||||||||||||
Operating income | 18,424 | 19,220 | 55,653 | 58,091 | |||||||||||||||||||||
Operating income as a % of revenue | 25.3 | % | 30.7 | % | 27.9 | % | 30.6 | % | |||||||||||||||||
Add back: | |||||||||||||||||||||||||
Amortization of intangible assets and inventory step-up related to acquisitions | 4,429 | 1,361 | 6,650 | 4,146 | |||||||||||||||||||||
Severance | 961 | 126 | 1,256 | 150 | |||||||||||||||||||||
Acquisition related adjustments (3) | 483 | - | 1,011 | - | |||||||||||||||||||||
Operating income, excluding specified charges (Non-GAAP) | $ | 24,297 | $ | 20,707 | $ | 64,570 | $ | 62,387 | |||||||||||||||||
Non-GAAP operating income as a % of revenue | 33.4 | % | 33.0 | % | 32.4 | % | 32.9 | % | |||||||||||||||||
Unallocated Corporate Overhead | $ | (27,669 | ) | $ | (20,433 | ) | $ | (80,129 | ) | $ | (67,762 | ) | |||||||||||||
Add back: | |||||||||||||||||||||||||
Severance and executive transition costs | 1,054 | - | 2,031 | 121 | |||||||||||||||||||||
Acquisition related adjustments (3) | 3,055 | 580 | 6,649 | 5,256 | |||||||||||||||||||||
Unallocated corporate overhead, excluding specified charges (Non-GAAP) | $ | (23,560 | ) | $ | (19,853 | ) | $ | (71,449 | ) | $ | (62,385 | ) | |||||||||||||
Total | |||||||||||||||||||||||||
Revenue | $ | 349,465 | $ | 327,567 | $ | 1,009,452 | $ | 968,114 | |||||||||||||||||
Operating income | 55,440 | 46,172 | 154,180 | 136,903 | |||||||||||||||||||||
Operating income as a % of revenue | 15.9 | % | 14.1 | % | 15.3 | % | 14.1 | % | |||||||||||||||||
Add back: | |||||||||||||||||||||||||
Amortization of intangible assets and inventory step-up related to acquisitions | 8,598 | 7,620 | 19,573 | 18,813 | |||||||||||||||||||||
Severance and executive transition costs | 2,421 | 574 | 5,167 | 5,363 | |||||||||||||||||||||
Site consolidation costs, impairments and other items | 57 | 2,402 | 1,415 | 5,134 | |||||||||||||||||||||
Operating losses (2) | 1,319 | 606 | 2,863 | 1,981 | |||||||||||||||||||||
Acquisition related adjustments (3) | 3,673 | 573 | 7,820 | 5,452 | |||||||||||||||||||||
Government billing adjustment and related expenses | 45 | 214 | 336 | 294 | |||||||||||||||||||||
Operating income, excluding specified charges (Non-GAAP) | $ | 71,553 | $ | 58,161 | $ | 191,354 | $ | 173,940 | |||||||||||||||||
Non-GAAP operating income as a % of non-GAAP revenue | 20.5 | % | 17.8 | % | 19.0 | % | 18.0 | % | |||||||||||||||||
- | - | - | - | ||||||||||||||||||||||
|
(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 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 GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance.
(2) This item includes operating losses related primarily to the
Company's
(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.
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | ||||||||||||||||||||||
RECONCILIATION OF GAAP EARNINGS TO NON-GAAP EARNINGS (UNAUDITED)(1) | ||||||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
September 26, 2015 | September 27, 2014 | September 26, 2015 | September 27, 2014 | |||||||||||||||||||
Net income attributable to common shareholders | $ | 37,379 | $ | 32,036 | $ | 117,429 | $ | 99,532 | ||||||||||||||
Less: Discontinued operations | 34 | (52 | ) | 48 | 862 | |||||||||||||||||
Net income from continuing operations attributable to common shareholders | 37,413 | 31,984 | 117,477 | 100,394 | ||||||||||||||||||
Add back: | ||||||||||||||||||||||
Amortization of intangible assets and inventory step-up related to acquisitions | 8,598 | 7,620 | 19,573 | 18,813 | ||||||||||||||||||
Severance and executive transition costs | 2,421 | 574 | 5,167 | 5,363 | ||||||||||||||||||
Site consolidation costs, impairments and other items | 57 | 2,402 | 1,415 | 5,134 | ||||||||||||||||||
Operating losses (2) | 1,319 | 606 | 2,863 | 1,981 | ||||||||||||||||||
Acquisition related adjustments (3) | 3,673 | 573 | 7,820 | 5,452 | ||||||||||||||||||
Government billing adjustment and related expenses | 45 | 214 | 336 | 294 | ||||||||||||||||||
Reversal of an indemnification asset associated with acquisition and corresponding interest (4) | - | - | 10,411 | - | ||||||||||||||||||
Write-off of deferred financing costs and fees related to debt refinancing | (12 | ) | - | 721 | - | |||||||||||||||||
Gain on bargain purchase (5) | (55 | ) | - | (9,933 | ) | - | ||||||||||||||||
Tax effect of non-GAAP adjustments: | ||||||||||||||||||||||
Reversal of uncertain tax position associated with acquisition and corresponding interest (4) | - | - | (10,411 | ) | - | |||||||||||||||||
Tax effect of the remaining non-GAAP adjustments | (4,804 | ) | (3,553 | ) | (13,422 | ) | (11,481 | ) | ||||||||||||||
Net income from continuing operations attributable to common shareholders, excluding specified charges (Non-GAAP) | $ | 48,655 | $ | 40,420 | $ | 132,017 | $ | 125,950 | ||||||||||||||
Weighted average shares outstanding - Basic | 46,290 | 46,016 | 46,572 | 46,683 | ||||||||||||||||||
Effect of dilutive securities: | ||||||||||||||||||||||
Stock options, restricted stock units, performance stock units, and contingently issued restricted stock | 955 | 862 | 1,012 | 883 | ||||||||||||||||||
Weighted average shares outstanding - Diluted | 47,245 | 46,878 | 47,584 | 47,566 | ||||||||||||||||||
Basic earnings per share from continuing operations | $ | 0.81 | $ | 0.70 | $ | 2.52 | $ | 2.15 | ||||||||||||||
Diluted earnings per share from continuing operations | $ | 0.79 | $ | 0.68 | $ | 2.47 | $ | 2.11 | ||||||||||||||
Basic earnings per share from continuing operations, excluding specified charges (Non-GAAP) | $ | 1.05 | $ | 0.88 | $ | 2.83 | $ | 2.70 | ||||||||||||||
Diluted earnings per share from continuing operations, excluding specified charges (Non-GAAP) | $ | 1.03 | $ | 0.86 | $ | 2.77 | $ | 2.65 | ||||||||||||||
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(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 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 GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance.
(2) This item includes operating losses related primarily to the
Company's
(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) These amounts represent the reversal of an uncertain tax position and an offsetting indemnification asset related to the acquisition of BioFocus.
(5) The amount relates to the acquisition of
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. | ||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP REVENUE GROWTH (UNAUDITED) | ||||||||||||||||||||
EXCLUDING THE IMPACT OF FOREIGN EXCHANGE | ||||||||||||||||||||
For the Three and Nine Months Ended September 26, 2015 | ||||||||||||||||||||
For the three months ended September 26, 2015 | Total CRL | RMS Segment | DSA Segment | MS Segment | ||||||||||||||||
Revenue growth, reported | 6.7 | % | (4.5 | %) | 12.4 | % | 16.0 | % | ||||||||||||
Impact of foreign exchange | (5.5 | %) | (6.5 | %) | (3.8 | %) | (7.7 | %) | ||||||||||||
Non-GAAP revenue growth, constant currency | 12.2 | % | 2.0 | % | 16.2 | % | 23.7 | % | ||||||||||||
For the nine months ended September 26, 2015 | Total CRL | RMS Segment | DSA Segment | MS Segment | ||||||||||||||||
Revenue growth, reported | 4.3 | % | (8.0 | %) | 16.2 | % | 5.0 | % | ||||||||||||
Impact of foreign exchange | (5.8 | %) | (6.9 | %) | (3.7 | %) | (8.0 | %) | ||||||||||||
Non-GAAP revenue growth, constant currency | 10.1 | % | (1.1 | %) | 19.9 | % | 13.0 | % |
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 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 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. | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||||||||||||
(in thousands) | ||||||||||||
Nine Months Ended | ||||||||||||
September 26, |
September 27, |
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Cash flows relating to operating activities: | ||||||||||||
Net income | $ | 118,726 | $ | 100,526 | ||||||||
Less: Loss from discontinued operations | (48 | ) | (862 | ) | ||||||||
Income from continuing operations | 118,774 | 101,388 | ||||||||||
Summary of non-cash adjustments | 84,978 | 87,082 | ||||||||||
Changes in assets and liabilities | (17,857 | ) | (36,187 | ) | ||||||||
Net cash provided by operating activities | 185,895 | 152,283 | ||||||||||
Cash flows relating to investing activities: | ||||||||||||
Acquisition of businesses, net of cash acquired | (211,974 | ) | (183,151 | ) | ||||||||
Capital expenditures | (35,008 | ) | (29,907 | ) | ||||||||
Other | (1,997 | ) | (4,131 | ) | ||||||||
Net cash used in investing activities | (248,979 | ) | (217,189 | ) | ||||||||
Cash flow relating to financing activities: | ||||||||||||
Net cash provided by (used in) financing activities | (11,440 | ) | 44,296 | |||||||||
Cash flows used in discontinued operations | (1,265 | ) | (570 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | (10,202 | ) | (4,000 | ) | ||||||||
Net change in cash and cash equivalents | (85,991 | ) | (25,180 | ) | ||||||||
Cash and cash equivalents, beginning of period | 160,023 | 155,927 | ||||||||||
Cash and cash equivalents, end of period | $ | 74,032 | $ | 130,747 |
View source version on businesswire.com: http://www.businesswire.com/news/home/20151104005298/en/
Source:
Charles River Laboratories International, Inc.
Investor Contact:
Susan
E. Hardy, 781-222-6190
Corporate Vice President, Investor Relations
susan.hardy@crl.com
or
Media
Contact:
Amy Cianciaruso, 781-222-6168
Corporate Vice
President, Public Relations
amy.cianciaruso@crl.com