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- **Strategic Restructuring**: Divesting 7% of revenue to drive $0.30 EPS accretion, with $225M+ cost savings by 2026. 
- **Mixed Segment Growth**: RMS up 6.5% YoY, DSA down 3.1%, Manufacturing down 5.1% due to CDMO loss. 
- **Financial Resilience**: Q3 EPS $2.43, guiding to $10.10-$10.30 Non-GAAP, with $470M-$500M free cash flow. 
- **Biotech Recovery**: Q3 biotech proposal up high single-digits, but 2026 DSA growth hinges on capital access. 
- **New Initiatives**: Investing in NAMs (e.g., Trillium), with long-term margin upside. 
- **Share Buybacks**: $1B authorization to enhance returns.

**【CEO Summary Section】**
- **Strategic Review Update**: Board supports focus on core markets, divesting 7% of 2025 revenue (non-core assets), and $0.30 EPS accretion from divestitures by mid-2026. 
- **Cost Savings**: $225M annualized cost savings by 2026, plus $70M incremental savings from restructuring and efficiency initiatives. 
- **Segment Performance**: 
  - **DSA**: Q3 revenue down 3.1% YoY, but bookings stable at 0.82x net book-to-bill. Biotech proposal activity up high single-digits YoY. 
  - **RMS**: +6.5% YoY growth driven by NHP shipments, operating margin 25% (vs. 21% YoY). 
  - **Manufacturing**: Down 5.1% YoY due to CDMO client loss, but Microbial Solutions up high single-digits. 
- **NAMs**: Investing in in vitro solutions (e.g., Trillium endotoxin test), but long-term adoption gradual. 

**【CFO Financial Commentary】**
- **Q3 2025 Results**: 
  - Revenue: $1B (-0.5% YoY), organic -1.6%. 
  - EPS: $2.43 (-6.2% YoY), Non-GAAP EPS at top of guidance ($10.10-$10.30). 
  - Free Cash Flow: $178M (vs. $213M YoY), guiding to $470M-$500M for FY25. 
- **Financial Targets**: 
  - FY25 Revenue: -1.5% to -2.5% organic. 
  - Operating Margin: Flat to -30bps. 
  - Tax Rate: 23.5%-24.5%. 
  - New $1B stock buyback authorization. 

**【Q&A Highlights】**
- **Demand Trends**: Biotech funding improved in Q3, but cautious on 2026 DSA growth. Book-to-bill improving monthly, but needs sustained biotech capital access. 
- **Cost Savings**: $100M incremental savings in 2026, offsetting inflation. 
- **Divestitures**: 7% revenue impact, targeting mid-2026 completion. 
- **NAMs**: Early-stage adoption, but long-term opportunity with FDA-aligned in vitro solutions. 
- **Capacity**: DSA utilization below optimal, adding staff to meet demand. 
- **Pricing**: Spot pricing stable, strategic discounting to protect share.

Charles River Laboratories International, Inc. (CRL) Q3 2025 Earnings Call Transcript

- **Revenue Beat**: Q2 revenue $1.03B (+0.6% YoY), exceeding guidance due to FX and DSA outperformance. Full-year organic growth revised to -1% to -3%.
- **DSA Recovery**: Net book-to-bill 0.82x (Q1: 0.85x), with bookings up mid-single digits YoY. Backlog stable at $1.93B, cancellations elevated but demand stabilizing.
- **EPS Guidance Hike**: Non-GAAP EPS raised to $9.90-$10.30 (midpoint +$0.55), driven by DSA and FX. Tax rate 23.5%-24.5% for 2025 due to U.S. tax changes.
- **Strategic Moves**: $200M+ NAMs revenue, strategic review underway, and $350M share buyback in Q1.
- **Operational Strength**: Operating margin 22.1% (up 80bps YoY), free cash flow $169.3M, guiding to $470M for 2025.

**【CEO Summary Section】**
- **Revenue Performance**: Q2 2025 revenue of $1.03 billion, up 0.6% YoY, driven by foreign exchange (FX) and organic growth in RMS and Manufacturing segments. DSA organic revenue declined 2.4% YoY, but improved sequentially. Full-year organic revenue guidance revised to -1% to -3% from -3% to -5%.
- **DSA Demand Trends**: Net book-to-bill of 0.82x in Q2 (vs. 0.85x in Q1), with bookings up mid-single digits YoY. Backlog stable at $1.93 billion. Cancellations increased, particularly for longer-term post-IND studies, but demand environment stabilizing.
- **Strategic Initiatives**: NAMs (Non-Animal Models) revenue at $200 million annually, with investments in alternative technologies. Strategic review underway to enhance shareholder value.
- **Operational Improvements**: Operating margin 22.1% (up 80bps YoY), benefiting from cost savings ($175M+ annualized) and leverage. DSA segment margin 27.4% (up 30bps YoY).

**【CFO Financial Commentary】**
- **EPS Guidance**: Non-GAAP EPS raised to $9.90-$10.30 (midpoint +$0.55), driven by DSA outperformance and FX. Q2 EPS $3.12 (up 11.4% YoY), with tax rate 22.7% (vs. 21.1% YoY). Full-year tax rate expected 23.5%-24.5% due to U.S. tax legislation.
- **Segment Performance**: RMS revenue +2.3% YoY, Manufacturing +2.9% YoY. Microbial Solutions growth robust, CDMO headwind from commercial client loss ($20M+ in first half). Free cash flow $169.3M (up 8% YoY), guiding to $470M for 2025.
- **Balance Sheet**: Debt $2.3B (65% fixed-rate), free cash flow to repay debt and invest in strategic priorities.

**【Q&A Highlights】**
- **Demand Environment**: Pharma demand stabilizing, biotech mixed (smaller companies cash-constrained, midsized performing better). Net book-to-bill expected to remain below 1x but improving trend.
- **CDMO Challenges**: $20M+ headwind from commercial client loss, but Microbial Solutions growth offsetting. Margins temporarily elevated in Q2 due to one-time payments.
- **NHP Supply Resolution**: U.S. government cleared Cambodian NHP shipments, ending DOJ investigation. Enhances flexibility for NHP utilization and planning.
- **2026 Outlook**: CEO cautious on predicting DSA growth, but notes pharma spending stability and NAMs investments as long-term drivers.

Charles River Laboratories International, Inc. (CRL) Q2 2025 Earnings Call Transcript

- **FDA NAMs Strategy**: Leading hybrid approach with NAMs; $50M annual impact from reduced NHP studies, no immediate business risk.
- **Q1 Financial Highlights**: Revenue $984M (-2.7% YoY), DSA bookings surge 20% YoY to $616M, operating margin 19.1% (+60bps YoY).
- **Free Cash Flow & Buybacks**: $112M Q1 FCF, $350M shares repurchased YTD toward $1B program.
- **CDMO Outlook**: Gene therapy pipeline robust, but commercial cell therapy revenue declining.
- **Strategic Review**: Board evaluating portfolio, M&A, and value creation opportunities.


**【CEO Opening Remarks】**
- Addressed FDA's NAMs (New Approach Methods) initiative to reduce animal testing in preclinical safety assessment.
- Highlighted Charles River's leadership in hybrid study designs combining NAMs with animal data, emphasizing long-term validation needs (5+ years).
- Noted $50M annual revenue impact from reduced chronic NHP studies for monoclonal antibodies, with no immediate business impact.

**【CEO Financial Update】**
- Q1 2025 Revenue: $984.2M (-2.7% YoY), organic -1.8% driven by DSA segment.
- DSA Revenue: $592.6M (-1.4% organic), outperformed due to favorable study mix and pricing improvements.
- Book-to-Bill Ratio: 1.04x (first above 1x in 2 years), bookings +20% YoY to $616M.
- Operating Margin: 19.1% (+60bps YoY), driven by cost savings and restructuring.
- Updated FY25 Guidance: Organic Revenue -2.5% to -4.5%, EPS $9.30-$9.80 (+$0.20 midpoint).

**【CFO Financial Details】**
- Free Cash Flow: $112.4M (vs. $50.7M YoY), fueled by lower bonuses and capex moderation.
- Share Repurchases: $350M YTD, targeting $1B program.
- Tax Rate: 22.7% (vs. 23.3% YoY), benefiting from R&D credits.
- CapEx: $230M FY25, down from $270M prior guidance.

**【Q&A Key Themes】**
- **FDA NAMs Adoption**: Slow, evolutionary process; hybrid models will dominate, with monoclonal antibodies leading pilot programs.
- **Biotech Funding**: Small/mid biotech revenue grew Q1, but CRADL utilization constrained by funding challenges.
- **Tariffs Impact**: Minimal direct impact, costs passed through to clients.
- **Strategic Review**: Board committee evaluating portfolio, M&A opportunities, and value creation initiatives.
- **CDMO Recovery**: Gene therapy pipeline strong, but commercial cell therapy revenue declining due to client attrition.


Charles River Laboratories International (CRL)-7 May 25-2025 Q1 Earnings call transcript

- **2025 Revenue Outlook**: Organic decline of 3.5%-5.5% (4.5%-7% reported), driven by DSA pricing headwinds and pharma budget cuts.\n- **Margin Management**: $225M annualized cost savings by 2026 to offset revenue decline, but 2025 margin modestly lower.\n- **Biotech Bright Spot**: 2025 demand stable to slightly improved, RMS segment growth from pricing and CRADL expansion.\n- **Stock Buybacks**: $350M repurchases planned to capitalize on undervaluation and offset dilution.\n- **Key Risks**: CDMO client losses, NHP supply chain diversification, and elevated tax rate in 2025.\n

**【CEO Summary Section】**
- Q4 2024 revenue of $1 billion (-1.8% organic), full year $4.05 billion (-2.8% organic), driven by lower DSA revenue.\n- 2025 organic revenue decline of 3.5%-5.5%, including 1% FX headwind, leading to reported decline of 4.5%-7%.\n- Operating margin expected to modestly decline in 2025 due to revenue headwinds, but cost savings ($225M annualized by 2026) will partially offset.\n- DSA demand stable Q4, but study volume expected to remain lower than 2024 due to pharma budget resets.\n- Biotech demand stable to slightly improved in 2025, with RMS segment growth driven by pricing and CRADL expansion.\n- CDMO revenue decline of ~1% in 2025 due to loss of 2 commercial clients, but Microbial Solutions growth to offset.\n- NHP supply diversification efforts continue, with Mauritius NHPs becoming available post-2026.\n- $350M stock buybacks planned for 2025 to offset dilution and capitalize on undervaluation.\n
**【CFO Financial Commentary】**
- Q4 2024 non-GAAP EPS of $2.66 (+8.1% YoY), full year $10.32 (-3.3% YoY).\n- 2025 non-GAAP EPS guidance of $9.10-$9.60, reflecting lower revenue and margin pressure.\n- Free cash flow of $501.6M in 2024, expected to decline to $350M-$390M in 2025 due to lower earnings and working capital build.\n- Capital expenditures ~$230M (6% of revenue), focused on maintenance and strategic projects.\n- Tax rate expected to rise to 22.5%-23.5% in 2025 due to global minimum tax and stock-based compensation.\n
**【Q&A Highlights】**
- **Book-to-bill stability**: Q4 net book-to-bill ratio stable vs. Q3, but DSA study volume expected to remain lower in 2025.\n- **RMS resilience**: Academic demand stable, pricing increases offsetting unit volume declines.\n- **CDMO challenges**: Loss of 2 clients will reduce revenue, but restructuring and microbial growth will support margins.\n- **NHP supply risk**: CITES deferred Cambodia trade decision, but diversification efforts (e.g., Noveprim, Mauritius) continue.\n- ** Pharma recovery**: No signs of near-term pharma spending rebound, but biotech funding environment improving.\n

Charles River Laboratories International, Inc. (CRL) Q4 2024 Earnings Call Transcript

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Charles River Laboratories International (CRL)-7 Aug 24-2024 Q2 Earnings call transcript

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Charles River Laboratories International (CRL)-14 Feb 24-2023 Q4 Earnings call transcript

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Charles River Laboratories International (CRL)-3 Aug 22-2022 Q2 Earnings call transcript

Charles River Laboratories International (CRL)-4 May 22-2022 Q1 Earnings call transcript

Charles River Laboratories International (CRL)-17 Feb 22-2021 Q4 Earnings call transcript

Charles River Laboratories International (CRL)-3 Nov 21-2021 Q3 Earnings call transcript

Charles River Laboratories International (CRL)-5 Aug 21-2021 Q2 Earnings call transcript

Charles River Laboratories International (CRL)-4 May 21-2021 Q1 Earnings call transcript

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Charles River Laboratories International (CRL)-29 Oct 20-2020 Q3 Earnings call transcript

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Charles River Laboratories International (CRL)-10 May 18-2018 Q1 Earnings call transcript

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