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Charles River Reports Strong Growth in Fourth Quarter and Year
For 2001, the Company's sales increased 52% to $465.6 million, an increase of $159 million over sales of $306.6 million in 2000. Net income before an extraordinary loss of $5.2 million related to the early retirement of debt, was $40.7 million, or $0.92 per fully diluted share.
The Company experienced strong sales and earnings growth in the fourth quarter from both its biomedical products and services and research models segments. While strategic acquisitions earlier in the year contributed significantly to results, the Company also experienced solid organic growth across most product lines and services offerings, and throughout North America, Europe and Japan.
Commenting on these results, James C. Foster, Chairman and CEO, said "We're extremely pleased with our results for the fourth quarter, and the year. Despite a challenging overall economy, our businesses remained strong and steady. We experienced excellent growth and profitability across all of our businesses, with revenue growth well above our long-term strategic goal. Demand for our products and services remained robust throughout the quarter and year, fueled by increased R&D spending by big pharma and biotech, and by increased outsourcing of pre-clinical research to companies like ours that have demonstrated exceptional quality, service and reliability. While our research models segment contributed strongly to earnings and cash flow, our acquisitions early in the year of Primedica and PAI added more than $100 million to our revenues in 2001, and enabled Charles River to emerge as a world leader in pre-clinical drug discovery and development services. The vitality of our markets, the increasing trend toward pre-clinical outsourcing, and Charles River's technology and market leadership in the drug discovery and development industry position us for steady, continued growth internationally through 2002."
The Company also announced that the tender offer by its operating subsidiary for its 13.5% senior subordinated notes is expected to be completed next week. The parent will utilize a portion of the cash proceeds from its recent $175 million 3.5% convertible debenture offering to retire the subsidiary's high yield bonds.
The following forward looking guidance is subject to the qualifications set forth below, and is based on current exchange rates. For 2002, Charles River estimates sales growth in the range of 14% to 15%. Fully diluted EPS for 2002 is estimated to be in the range of $1.18 to $1.21, slightly higher than previous guidance as a result of the accretive impact of the Company's recently completed $175 million convertible debenture offering. In the first quarter of 2002, Charles River expects sales in the range of $125 to $130 million, and fully diluted EPS in the range of $0.25 to $0.27, excluding an extraordinary loss related to the retirement of high yield debt pursuant to the tender offer.
Charles River Laboratories International, Inc. is a holding company for Charles River Laboratories, Inc. Both companies are publicly registered, and each files separate financial statements and reports with the Securities Exchange Commission. The income statement and balance sheet information provided below reflect the financial results for Charles River Laboratories International, Inc., which differ from those of Charles River Laboratories, Inc. as to certain balance sheet items.
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 15 countries worldwide. For more information, visit the Company's web site at http://www.criver.com.
Caution Concerning Forward-Looking Statements: This document includes certain "forward looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. 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, including acquisition integration risks, special interest groups, contaminations, industry trends, new displacement technologies, outsourcing trends, USDA and FDA regulation, changes in law, special interest groups, continued availability of products and supplies, personnel and control, and others that are described in more detail in the Risk Factors contained in the Company's most recent Registration Statement, filed on Form S-3, as of July 19, 2001, as well as its other periodic SEC filings. The Company disclaims any intent or obligation to update forward looking statements, and otherwise claims the safe harbor protections for forward looking statements afforded under The Private Securities Litigation Reform Act of 1995.
As previously announced, investors can access a live webcast of the fourth quarter earnings conference call through a link that will be posted on the investor page of the Charles River Laboratories website, www.criver.com. The conference call begins on Thursday, February 7, at 8:30 a.m. Eastern Standard Time and will be available thereafter for replay.
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
December December December December
29, 2001 30, 2000 29, 2001 30, 2000
Total Net Sales $126,094 $81,058 $465,630 $306,585
Cost of products
sold and services
provided 82,486 50,520 298,379 186,654
Gross margin 43,608 30,538 167,251 119,931
Selling, general and
administrative 18,554 15,838 68,315 51,204
Amortization of goodwill
and intangibles 2,649 932 8,653 3,666
Operating income 22,405 13,768 90,283 65,061
Interest income (expense) (3,909) (6,425) (21,304) (39,047)
Other income (expense) (16) 247 500 71
Income before taxes,
minority interests,
earnings from equity
investments and
extraordinary item 18,480 7,590 69,479 26,085
Provision for income
taxes 7,204 3,040 27,095 7,837
Income before minority
interests, earnings
from equity investments
and extraordinary item 11,276 4,550 42,384 18,248
Minority interests (347) (266) (2,206) (1,396)
Earnings from equity
investments 127 144 472 1,025
Net income before
extraordinary item 11,056 4,428 40,650 17,877
Extraordinary loss, net
of tax benefit (2,139) -- (5,243) (29,101)
Net income (loss) $ 8,917 $4,428 $35,407 $ (11,224)
Earnings per common share
before extraordinary item
Basic $ 0.25 $ 0.12 $ 0.99 $ 0.64
Diluted $ 0.24 $ 0.11 $ 0.92 $ 0.56
Earnings (loss) per common
share after extraordinary
item
Basic $ 0.20 $ 0.12 $ 0.86 $(0.40)
Diluted $ 0.19 $ 0.11 $ 0.80 $(0.35)
Weighted average number of
common shares outstanding
Basic 44,133,268 35,920,369 40,998,558 27,737,677
Diluted 46,398,266 40,194,560 44,215,383 31,734,354
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
December 29, December 30,
2001 2000
Assets
Current assets
Cash and cash equivalents $ 58,271 $ 33,129
Trade receivables 98,478 45,949
Inventories 39,056 33,890
Other current assets 14,349 6,769
Total current assets 210,154 119,737
Property, plant and equipment, net 155,919 117,001
Goodwill and other intangibles 90,374 41,893
Deferred tax asset 84,387 105,027
Other assets 27,134 26,950
Total assets $567,968 $410,608
Liabilities and Shareholders' Equity
Current liabilities
Current portion of long-term debt $ 759 $ 231
Accounts payable 13,868 10,767
Accrued compensation 25,736 16,997
Other current liabilities 58,169 36,325
Total current liabilities 98,532 64,320
Long-term debt 155,506 201,957
Other long-term liabilities 14,826 14,074
Total liabilities 268,864 280,351
Minority interests 12,988 13,330
Total shareholders' equity 286,116 116,927
Total liabilities and shareholders' equity $567,968 $410,608
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)
(dollars in thousands)
Three Months Ended Twelve Months Ended
December December December December
29, 2001 30, 2000 29, 2001 30, 2000
Research Models
Net sales $49,360 $45,412 $197,494 $ 177,950
Gross margin 18,085 16,614 80,060 70,641
Gross margin as
a % of sales 36.6% 36.6% 40.5% 39.7%
Operating income 10,450 6,742 50,878 40,862
Operating income
as a % of sales 21.2% 14.8% 25.8% 23.0%
Depreciation and
amortization 2,768 2,718 9,978 9,840
Capital expenditures 3,718 2,878 10,419 7,502
Biomedical Products
and Services
Net sales $76,734 $35,646 $268,136 $ 128,635
Gross margin 25,523 13,924 87,191 49,290
Gross margin as
a % of sales 33.3% 39.1% 32.5% 38.3%
Operating income 12,293 7,603 46,643 26,308
Operating income
as a % of sales 16.0% 21.3% 17.4% 20.5%
Depreciation and
amortization 5,166 1,774 17,197 6,926
Capital expenditures 12,158 4,158 25,987 8,063
Unallocated Corporate
Overhead ($ 338) ($ 577) ($ 7,238) ($ 2,109)
Total
Net sales $ 126,094 $81,058 $465,630 $ 306,585
Gross margin 43,608 30,538 167,251 119,931
Gross margin as
a % of sales 34.6% 37.7% 35.9% 39.1%
Operating income 22,405 13,768 90,283 65,061
Operating income
as a % of sales 17.8% 17.0% 19.4% 21.2%
Depreciation and
amortization 7,934 4,492 27,175 16,766
Capital expenditures 15,876 7,036 36,406 15,565
CONTACT: Charles River Laboratories, Christopher DiFrancesco, 978-658-6000 ext. 1329 ir@criver.com