CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

Previous wording

In recent years, we have been updating and consolidating platforms and automating processes in many parts of our business with a variety of systems, including in connection with the integration of acquired businesses. Continued expansion and ongoing implementation of operational systems may occur at a future date based on value to the business. In general, the process of planning and preparing for these types of integrated, wide-scale implementations is extremely complex and we are required to address a number of challenges, including information security assessment and remediation, regulatory requirements, data conversion, associated regulatory compliance, network and system cutover, user training, data residency, high availability, disaster recovery, latency, backups, archiving, cloud offerings, and integration with existing processes or systems. As we build out IT infrastructure to support regulatory requirements for applications and data systems, we are doing so utilizing contemporary validation practices. As with all work conducted in our regulatory sites, these too are subject to government inspections. Incongruities in any of these areas could cause operational problems during implementation including inconsistent practices, delayed report and/or data shipments, missed sales, animal management/welfare issues, data loss issues that require re-doing certain studies, personally identifiable information and data privacy issues, billing errors and accounting errors.

Current wording

In recent years, we have been updating and consolidating platforms and automating processes in many parts of our business with a variety of systems, including in connection with the integration of acquired businesses. Continued expansion and ongoing implementation of operational systems may occur at a future date based on value to the business. In general, the process of planning and preparing for these types of integrated, wide-scale implementations is extremely complex and we are required to address a number of challenges, including information security assessment and remediation, regulatory requirements, data conversion, associated regulatory compliance, network and system cutover, user training, data residency, high availability, disaster recovery, latency, backups, archiving, cloud offerings, and integration with existing processes or systems. As we build out IT infrastructure to support regulatory requirements for applications and data systems, we are doing so utilizing contemporary validation practices. As with all work conducted in our regulated sites, these too are subject to government inspections. Incongruities in any of these areas could cause operational problems during implementation including inconsistent practices, delayed report and/or data shipments, missed sales, animal management/welfare issues, data loss issues that require re-doing certain studies, personally identifiable information and data privacy issues, billing errors and accounting errors.

Previous wording

As of the date of this filing, to our knowledge, we have not experienced an information security breach or material cybersecurity incident since an event in 2019. While we have implemented additional security safeguards since that event and continue to enhance existing safeguards, such efforts may not be successful, in which case we could suffer significant harm.

Current wording

As of the date of this filing, to our knowledge, we have not experienced a material information security breach or material cybersecurity incident since an event in 2019. While we have implemented additional security safeguards since that event and continue to enhance existing safeguards, such efforts may not be successful, in which case we could suffer significant harm.

Previous wording

Further, we are at risk of being targeted, and we have in the past been victim to, business email compromise fraud, which results in payments being made to illegitimate bank accounts. Although these instances have not resulted in our incurring material losses, if similar instances occur in the future, we may incur such losses.

Current wording

We are at risk of being targeted, and we have in the past been victim to, business email compromise fraud, which results in payments being made to illegitimate bank accounts. Although these instances have not resulted in our incurring material losses, if similar instances occur in the future, we may incur such losses.

Previous wording

•difficulties in achieving business and financial success (due to unplanned events such as ongoing geopolitical conflicts, such as between the Russian Federation and Ukraine, and between Israel and Hamas, as well as the US-China relationship which could potentially influence sourcing patterns and tariff costs);

Current wording

•difficulties in achieving business and financial success (due to unplanned events such as ongoing geopolitical conflicts or economic factors such as fluctuations in interest and foreign exchange rates, as well as tax regulations);

Previous wording

Acquisitions or alliances realizing these risks could increase the likelihood of our results of operations being adversely affected. Some of the same risks exist when we decide to close or sell a business, site, product line or service offering. We continually evaluate the performance and strategic fit of our business and the sites in which they operate to determine whether a site closure or divestiture is appropriate. Such actions could involve additional risks, other than those listed above, including: difficulties in the separation of operations, services, products, and personnel, the need to agree to retain or assume certain current or future liabilities in order to complete the divestitures or site closures, as well as write-offs, including those related to goodwill and other intangible assets and which could have an adverse effect on our results of operations and financial condition. In addition, we may encounter in closing or difficulty in finding buyers or alternative exit strategies at acceptable prices and terms, and in a timely manner. We may not be successful in managing these or any other significant risks that we encounter in divesting a business, site or product line or service offering and, as a result, we may not achieve some or all of the expected benefits of the divestitures.

Current wording

Acquisitions or alliances realizing these risks could increase the likelihood of our results of operations being adversely affected. Some of the same risks exist when we decide to close or sell a business, site, product line or service offering. We continually evaluate the performance and strategic fit of our business and the sites in which they operate to determine whether a site closure or divestiture is appropriate. Such actions could involve additional risks, other than those listed above, including: difficulties in the separation of operations, services, products, and personnel, the need to agree to retain or assume certain current or future liabilities in order to complete the divestitures or site closures, as well as write-offs, including those related to goodwill and other intangible assets and which could have an adverse effect on our results of operations and financial condition. In addition, we may encounter difficulty in finding buyers or alternative exit strategies at acceptable prices and terms, and in a timely manner. We may not be successful in managing these or any other significant risks that we encounter in divesting a business, site or product line or service offering and, as a result, we may not achieve some or all of the expected benefits of the divestitures.

Previous wording

Our strategy is to deliver a comprehensive and integrated portfolio of drug discovery and non-clinical development products, services and solutions to support our clients’ discovery and early-stage drug research, process development, scale up and manufacturing efforts, and enable them to bring new and improved therapies to market faster and more cost effectively. Separately, through our various Manufacturing segment businesses, we aim to be the premier provider of products and services that ensure our clients produce and release their products safely. If we are unable to successfully execute on this strategy, this could negatively impact our future results of operations and market capitalization.

Current wording

Our strategy is to deliver a comprehensive and integrated portfolio of drug discovery and non-clinical development products, services and solutions to support our clients’ discovery, preclinical, early clinical and early stage scale up and early stage manufacturing efforts, and enable them to bring new and improved therapies to market faster and more cost effectively. As a focus, CRL aims to be the premier provider of products and services that ensure our clients develop, produce and release their products safely. Separately, through our various Manufacturing segment businesses, we aim to be the premier provider of products and services that ensure our clients produce and release their products safely. If we are unable to successfully execute on this strategy, this could negatively impact our future results of operations and market capitalization. Similarly, if we are unable to successfully execute on the Board of Directors’ comprehensive strategic review and evaluation of Charles River’s business and growth prospects, this could negatively impact our future results of operations and market capitalization.

Previous wording

Any decline or lower than expected growth in our served markets could diminish demand for our products and services, which would adversely affect our results of operations and financial condition. In 2024, we experienced such a lower-than-expected demand growth in a number of businesses, including the businesses that comprise our DSA reporting segment. To address this issue generally, we typically pursue a number of strategies designed to improve our internal growth, including strengthening our presence in selected geographic markets through organic growth and strategic acquisitions and expanding our service offerings. In addition, we have implemented a number of restructuring actions, including to optimize our global operational footprint and reduce staffing levels, and other initiatives to drive operating efficiencies to help offset the lower-than-expected demand growth and protect the operating margin. We may not be able to successfully implement these strategies, and these strategies may not result in the expected growth or improved profitability of our business.

Current wording

Any decline or lower than expected growth in our served markets could diminish demand for our products and services, which would adversely affect our results of operations and financial condition. In recent years, we experienced such a lower-than-expected demand growth in a number of businesses, including the businesses that comprise our DSA reporting segment. To address this issue generally, we typically pursue a number of strategies designed to improve our internal growth, including strengthening our presence in selected geographic markets through organic growth and strategic acquisitions and expanding our service offerings. In addition, we have implemented a number of restructuring actions, including to optimize our global operational footprint and reduce staffing levels, and other initiatives to drive operating efficiencies to help offset the lower-than-expected demand growth and protect the operating margin. We may not be able to successfully implement these strategies, and these strategies may not result in the expected growth or improved profitability of our business.

Previous wording

As discussed in the section above entitled “Our Strategy,” we are taking decisive action to manage the Company through the current demand environment, including appropriately right-sizing our infrastructure, optimizing operations, and driving efficiency with a goal to protect operating margin. We are committed to initiatives to generate more revenue, contain costs, and protect shareholder value through enhanced commercial initiatives, restructuring and efficiency actions to drive cost savings, as well as a balanced approach to capital deployment; these initiatives include reducing staffing levels to align with the pace of demand and site closures. While we drive these initiatives to result in significant profit opportunities and savings throughout our organization, our estimated profits and savings are based on assumptions that may prove to be inaccurate, and as a result, there can be no assurance that we will realize these profits and cost savings or that, if realized, these profits and cost savings will be sustained. Failure to achieve or delays in achieving projected levels of efficiencies and cost savings from such measures, or unanticipated inefficiencies resulting from manufacturing and administrative reorganization actions in progress or contemplated, could adversely affect our business, financial condition, results of operations and cash flows and harm our reputation.

Current wording

As discussed in the section above entitled “Our Strategy,” we are taking decisive action to manage the Company through the current demand environment, including appropriately right-sizing our infrastructure, driving efficiency, and optimizing operations, including through process improvement, procurement synergies, and implementation of a global business services model, with a goal to protect operating margin. We are committed to initiatives to generate more revenue, contain costs, and protect shareholder value through enhanced commercial initiatives, restructuring and efficiency actions to drive cost savings, as well as a balanced approach to capital deployment; these initiatives include reducing staffing levels to align with the pace of demand and site closures. Similarly, we are working to execute the Board of Directors’ comprehensive strategic review and evaluation of Charles River’s business and growth prospects. While we drive these initiatives to result in significant profit opportunities and savings throughout our organization, our estimated profits and savings are based on assumptions that may prove to be inaccurate, and as a result, there can be no assurance that we will realize these profits and cost savings or that, if realized, these profits and cost savings will be sustained. Failure to achieve or delays in achieving projected levels of efficiencies and cost savings from such measures, or unanticipated inefficiencies resulting from manufacturing and administrative reorganization actions in progress or contemplated, could adversely affect our business, financial condition, results of operations and cash flows and harm our reputation.

Previous wording

We depend on our customers continued demand and solvency at our facilities for the continued operation of our business. While we maintain disaster recovery plans, they might not adequately protect us. Despite any precautions we take for natural disasters or other catastrophic events, these events, including terrorist attack, a pandemic, epidemic or outbreak of a disease, geopolitical conflict, information system disruption, hurricanes, tornadoes, fire, wildfire, floods and ice and snow storms, could result in damage to and closure of our or our customers’ facilities or the infrastructure on which such facilities rely. Such disruptions could include significant delays in the shipments of our products, reduce our capacity to provide services, adversely impact unique manufacturing capabilities, result in our customers’ inability to pay for our products or services and, ultimately, result in the loss of revenue and clients. Although we carry business interruption insurance and typically have provisions in our contracts that protect us in certain events, our coverage might not be adequate to compensate us for all losses that may occur. Any natural disaster or catastrophic event affecting us or our customers could have a significant negative impact on our operations and financial performance.

Current wording

We depend on our customers continued demand and solvency at our facilities for the continued operation of our business. While we maintain disaster recovery plans, they might not adequately protect us. Despite any precautions we take for natural disasters or other catastrophic events, these events, including terrorist attack, a pandemic, epidemic or outbreak of a disease, geopolitical conflict, information system disruption, hurricanes, tornadoes, fire, wildfire, floods and ice and snow storms, could result in damage to and closure of our or our customers’ facilities, our suppliers’ facilities, or the infrastructure on which such facilities rely. Such disruptions could include significant delays in the shipments of our products, reduce our capacity to provide services, adversely impact unique manufacturing capabilities, result in our customers’ inability to pay for our products or services and, ultimately, result in the loss of revenue and clients. Although we carry business interruption insurance and typically have provisions in our contracts that protect us in certain events, our coverage might not be adequate to compensate us for all losses that may occur. Any natural disaster or catastrophic event affecting us, our customers, or our suppliers, could have a significant negative impact on our operations and financial performance.

Previous wording

The products and services that we provide our clients are essential to the drug discovery, development and manufacturing processes, and a significant amount are mandated by law. Notwithstanding, certain special interest groups categorically object to the use of animals for valid research purposes. Historically, our core research model activities with rats, mice and other rodents have not been the subject of significant animal rights media attention. However, research activities involving animal models have been the subject of adverse attention, including shareholder proposals and attempts to disrupt carriers from transporting large research models and actions aimed at preventing expansion of operations . This has included periodic demonstrations near facilities operated by us and at our annual meetings, as well as shareholder proposals we received for some of our past Annual Meetings of Shareholders. In addition, these groups have on occasion petitioned to have certain species of research models (specifically NHPs) declared endangered by governmental and non-governmental organizations and have advocated for the governing bodies to the Convention on International Trade in Endangered Species of Wild Fauna and Flora to restrict the exportation of certain NHP species from specific countries. Furthermore, the habitat of certain animals used for research purposes may be located in or near certain environmentally protected areas or conservation areas. Activities conducted by us or any of our agents within these areas may be legally challenged and result in similar negative attention and action from environmental protection activists, including advocacy for the expansion of environmental restrictions applicable to such areas. Any negative attention, threats, acts of vandalism or legal action directed against our animal research or procurement activities (including species or research models), or our third-party service providers, such as our airline carriers or suppliers, or that restrict our or their ability to access protected or conservation areas, could impair our ability to operate our business efficiently.

Current wording

The products and services that we provide our clients are essential to the drug discovery, development and manufacturing processes, and a significant amount are mandated by law. Notwithstanding, certain special interest groups categorically object to the use of animals for valid research purposes. Historically, our core research model activities with rats, mice and other rodents have not been the subject of significant animal rights media attention. However, research activities involving animal models have been the subject of adverse attention, including shareholder proposals and attempts to disrupt carriers from transporting large research models and actions aimed at preventing expansion of operations. This has included periodic demonstrations near facilities operated by us and at our annual meetings, as well as shareholder proposals we received for some of our past Annual Meetings of Shareholders. In addition, these groups have on occasion petitioned to have certain species of research models (specifically NHPs) declared endangered by governmental and non-governmental organizations and have advocated for the governing bodies to the Convention on International Trade in Endangered Species of Wild Fauna and Flora to restrict the exportation of certain NHP species from specific countries. Furthermore, the habitat of certain animals used for research purposes may be located in or near certain environmentally protected areas or conservation areas. Activities conducted by us or any of our agents within these areas may be legally challenged and result in similar negative attention and action from environmental protection activists, including advocacy for the expansion of environmental restrictions applicable to such areas. Any negative attention, threats, acts of vandalism or legal action directed against our animal research or procurement activities (including species of research models), or our third-party service providers, such as our airline carriers or suppliers, or that restrict our or their ability to access protected or conservation areas, could impair our ability to operate our business efficiently.

Previous wording

As with other industry participants, certain of our activities rely on a sufficient supply of large research models, which has seen increasing demand as compared to supply in recent years due to a variety of factors. First, the surge of research relating to COVID-19 increased short-term demand. Second, China previously supplied a significant portion of certain critical large research models, which have been subject to geographic export restrictions applicable to many animal species since the beginning of the COVID-19 pandemic. And third, in concert with legal matters affecting the Cambodian supply of non-human primates, the non-human primate supply chain globally has recently experienced constriction. More broadly, in November 2022 the U.S. Department of Justice (DOJ) announced that a Cambodia supplier of non-human primates and two Cambodian officials had been criminally charged in connection with illegally importing non-human primates into the United States. While the Company was not named or referenced in the November 2022 proceedings, the Company shortly thereafter announced that Cambodia was the primary country of origin for non-human primates imports to Charles River, and that it had begun to operate under the expectation that for some time period supply of Cambodia-sourced non-human primates (which according to CDC statistics, at that time accounted for approximately 60% of supply to the United States) would be difficult to obtain in the United States. Subsequent to the Company’s announcement, USFWS denied clearance to certain shipments of non-human primates the Company had received from Cambodia. And as noted in Item 3. “Legal Proceedings” in this Annual Report on Form 10-K, in February 2023 the Company received a grand jury subpoena requesting certain documents related to an investigation by the DOJ and the USFWS into the Company’s conduct regarding several shipments of non-human primates from Cambodia, which is occurring in parallel to a civil investigation being undertaken by the DOJ and USFWS. Additionally, in May 2023, the Company received an inquiry from the Enforcement Division of the SEC requesting it to voluntarily provide information, subsequently augmented with a document subpoena and additional inquiries, primarily related to the sourcing of non-human primates and related disclosures. In connection with the civil investigation, the Company has voluntarily suspended planned future shipments of Cambodia non-human primates into the United States until such time that the Company and USFWS can agree upon and implement additional procedures to reasonably ensure that non-human primates imported to the United States from Cambodia are purpose-bred. Accordingly, the Company believes that for some undetermined period of time it will not be able to import Cambodia-sourced non-human primates into the United States, and overall supply of non-human primates from Cambodia on a world-wide basis is more limited than it was previously.

Current wording

As with other industry participants, certain of our activities rely on a sufficient supply of large research models, which has seen increasing demand as compared to supply in recent years due to a variety of factors. First, the surge of research relating to COVID-19 increased short-term demand. Second, China previously supplied a significant portion of certain critical large research models, which have been subject to geographic export restrictions applicable to many animal species since the beginning of the COVID-19 pandemic. And third, in concert with legal matters affecting the Cambodian supply of non-human primates, the non-human primate supply chain globally has recently experienced constriction. More broadly, legal matters and investigations may have ancillary impacts that impair supply chain access. For example, in November 2022 the U.S. Department of Justice (DOJ) announced that a Cambodia supplier of non-human primates and two Cambodian officials had been criminally charged in connection with illegally importing non-human primates into the United States, which led to an effective cessation of imports from Cambodia to the United States for a period of time. Specific to the Company, in 2023, in connection with a now closed investigation by the DOJ and USFWS into the Company’s conduct regarding several shipments of non-human primates from Cambodia, the Company announced it was voluntarily suspending planned future shipments of Cambodia non-human primates into the United States until such time that the Company and USFWS could agree upon and implement additional procedures to reasonably ensure that non-human primates imported to the United States from Cambodia are purpose-bred. In November 2025, the Company received USFWS CITES clearance to import Cambodian NHPs into the United States, and has resumed such activity.

Previous wording

While we continue to take steps to find alternative supply channels (and other global sources) and lock in supply (both for non-human primates and with respect to other limited supply products) with preferred sources through multi-year and/or minimum commitment contracts as well as through acquisitions of suppliers, there are limited sources and such mitigating efforts may not prove successful at ensuring a steady and timely supply or may require (and in the past have required) us to pay significantly higher prices for such products during periods of global shortage or restrictions on the importation or the transportation of models products. Limited global supply or regional restrictions on importation, exportation, and/or transportation for certain products may require us to source products from non-preferred vendors, which may not be successful. In addition, reductions in global air transportation routes may result in sourcing alternative transportation at an increased cost. We also may be unable to obtain supply due to governmental restrictions or limitations, including (as noted above) non-human primates, such as prohibitions on the importation, exportation and/or transportation of non-human primates from certain geographies entirely. For instance, on February 4, 2025, the standing committee of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) decided to postpone review of proposed restrictions on the exportation of NHPs from Cambodia until a future CITES meeting, which is expected to occur in late 2025. Finally, from time to time, special interest groups may attempt to list certain large research models, including certain categories of NHPs, as “endangered” under the Endangered Species Act in the United States or similar statutes in other countries. In the event that certain NHPs are classified as endangered, our business could be negatively impacted. An inability to obtain a sufficient and timely supply of critical products could adversely affect our business, financial results and results of operations.

Current wording

While we continue to take steps to find alternative supply channels (and other global sources) and lock in supply (both for non-human primates and with respect to other limited supply products) with preferred sources through multi-year and/or minimum commitment contracts as well as through acquisitions of suppliers, there are limited sources and such mitigating efforts may not prove successful at ensuring a steady and timely supply or may require (and in the past have required) us to pay significantly higher prices for such products during periods of global shortage or restrictions on the importation or the transportation of models products. Limited global supply or regional restrictions on importation, exportation, and/or transportation for certain products may require us to source products from non-preferred vendors, which may not be successful. In addition, reductions in global air transportation routes may result in sourcing alternative transportation at an increased cost. We also may be unable to obtain supply due to governmental restrictions or limitations, including (as noted above) non-human primates, such as prohibitions on the importation, exportation and/or transportation of non-human primates from certain geographies entirely. Finally, from time to time, special interest groups may attempt to list certain large research models, including certain categories of NHPs, as “endangered” under the Endangered Species Act in the United States or similar statutes in other countries. In the event that certain NHPs are classified as endangered, our business could be negatively impacted. An inability to obtain a sufficient and timely supply of critical products could adversely affect our business, financial results and results of operations.

Previous wording

Our CDMO services establish us as a premier scientific partner for cell and gene therapy development, testing, and manufacturing; enable us to provide clients with an integrated solution from basic research and discovery through cGMP production; enable us to drive efficiency and accelerate clients’ speed-to-market by integrating manufacturing and the required testing; and enable our clients to seamlessly conduct analytical testing, process development, and manufacturing for advanced modalities with the same scientific partner. Furthermore, our CDMO operations require various raw materials supplied primarily by third parties. We or our customers specify the raw materials and other items required to manufacture the applicable product and, in some cases, the customers specify the suppliers from whom we must purchase these raw materials. In certain instances, the raw materials and other items may only be supplied by a limited number of suppliers or in limited quantities. If third-party suppliers do not supply raw materials or other items on a timely basis, it may cause a manufacturing run to be delayed or canceled which could materially adversely affect our results of operations and financial condition.

Current wording

Our CDMO services establish us as a premier scientific partner for cell and gene therapy development, testing, and manufacturing; enable us to provide clients with an integrated solution from analytical and process development through cGMP production; enable us to drive efficiency and accelerate clients’ speed-to-market by integrating manufacturing and the required testing; and enable our clients to seamlessly conduct analytical testing, process development, and manufacturing for advanced modalities with the same scientific partner. Furthermore, our CDMO operations require various raw materials supplied primarily by third parties. We or our customers specify the raw materials and other items required to manufacture the applicable product and, in some cases, the customers specify the suppliers from whom we must purchase these raw materials. In certain instances, the raw materials and other items may only be supplied by a limited number of suppliers or in limited quantities. If third-party suppliers do not supply raw materials or other items on a timely basis, it may cause a manufacturing run to be delayed or canceled which could materially adversely affect our results of operations and financial condition.

Previous wording

Our clients include researchers at pharmaceutical and biotechnology companies. Our ability to continue to grow and win new business is dependent in large part upon the ability and willingness of the pharmaceutical and biotechnology industries to continue to spend on molecules in the non-clinical phases of R&D (and in particular discovery and safety assessment) and to outsource the products and services we provide. Furthermore, our clients (particularly larger biopharmaceutical companies) continue to search for ways to maximize the return on their investments with a focus on lowering R&D costs per drug candidate. Fluctuations in the expenditure amounts in each phase of the R&D budgets of these researchers and their organizations could have a significant effect on the demand for our products and services. R&D budgets fluctuate due to changes in available resources, mergers of pharmaceutical and biotechnology companies, spending priorities (including available resources of our biotechnology clients, particularly those that are cash-negative, who may be highly focused on rationing their liquid assets in a challenging funding environment), general economic conditions, institutional budgetary policies and the impact of government regulations, including potential drug pricing legislation. Available funding for biotechnology clients in particular may be affected by the capital markets, investment objectives of venture capital investors and priorities of biopharmaceutical industry sponsors.

Current wording

Our clients include researchers at pharmaceutical and biotechnology companies. Our ability to continue to grow and win new business is dependent in large part upon the ability and willingness of the pharmaceutical and biotechnology industries to continue to invest in discovery in the non-clinical phases of R&D (and in particular discovery and safety assessment) and to outsource the products and services we provide. Furthermore, our clients (particularly larger biopharmaceutical companies) continue to search for ways to maximize the return on their investments with a focus on lowering R&D costs per drug candidate. Fluctuations in the expenditure amounts in each phase of the R&D budgets of these researchers and their organizations could have a significant effect on the demand for our products and services. R&D budgets fluctuate due to changes in available resources, mergers of pharmaceutical and biotechnology companies, spending priorities (including available resources of our biotechnology clients, particularly those that are cash-negative, who may be highly focused on rationing their liquid assets in a challenging funding environment), general economic conditions, institutional budgetary policies and the impact of government regulations, including potential drug pricing legislation. Available funding for biotechnology clients in particular may be affected by the capital markets, investment objectives of venture capital investors and priorities of biopharmaceutical industry sponsors.

Previous wording

A portion of revenue, predominantly in our RMS segment, is derived from clients at academic institutions and research laboratories whose funding is partially dependent on both the level and timing of funding from government sources such as the U.S. National Institutes of Health (NIH) and similar domestic and international agencies, which can be difficult to forecast. We also sell directly to the NIH and these other agencies. Government funding of R&D is subject to the political process, which is inherently fluid and unpredictable. For example, the NIH announced on February 7, 2025, a policy significantly reducing research grants by limiting payments for indirect overhead. While, as of the date of this filing, the order has been temporarily stayed, there can be no assurance that it will not take effect or that other adverse actions will not be taken. Our revenue may be adversely affected if our clients delay purchases as a result of uncertainties surrounding the approval of government budget proposals, included reduced allocations to government agencies that fund R&D activities. Government proposals to reduce or eliminate budgetary deficits have sometimes included reduced allocations to the NIH and other government agencies that fund R&D activities, or NIH funding may not be directed towards projects and studies that require the use of our products and services, both of which could adversely affect our business and our financial results.

Current wording

A portion of revenue, predominantly in our RMS segment, is derived from clients at academic institutions and basic research laboratories whose funding is partially dependent on both the level and timing of funding from government sources such as the U.S. National Institutes of Health (NIH) and similar domestic and international agencies, which can be difficult to forecast. We also sell directly to the NIH and these other agencies. Government funding of R&D is subject to the political process, which is inherently fluid and unpredictable. For example, the NIH announced on February 7, 2025, a policy significantly reducing research grants by limiting payments for indirect overhead. This policy was subject to an injunction at the district court and appellate court levels. However, in August 2025, the United States Supreme Court ruled that the lower courts did not have jurisdiction to reinstate the grant funding, allowing nearly $800 million in federal grants to be terminated. Our revenue may be adversely affected if our clients delay purchases as a result of uncertainties surrounding the approval of government budget proposals, included reduced allocations to government agencies that fund R&D activities. Government proposals to reduce or eliminate budgetary deficits have sometimes included reduced allocations to the NIH and other government agencies that fund R&D activities, or NIH funding may not be directed towards projects and studies that require the use of our products and services, both of which could adversely affect our business and our financial results.

Previous wording

Governmental agencies throughout the world strictly regulate the drug development process. Our business involves helping our customers navigate these regulatory processes. Accordingly, many regulations, and often new regulations, are expected to result in higher regulatory standards and often additional revenues for companies that service these industries. However, some changes in regulations, such as a relaxation in regulatory requirements or the introduction of streamlined or expedited drug approval procedures, or an increase in regulatory requirements that we have difficulty satisfying or that make our services less competitive, could eliminate or substantially reduce the demand for our services.

Current wording

Governmental agencies throughout the world strictly regulate the drug development process. Our business involves helping our customers navigate these regulatory processes. Accordingly, many regulations, and often new regulations, are expected to result in higher regulatory standards and often additional revenues for companies that service these industries. Some changes in regulations, including the relaxation of certain requirements or the use of streamlined or expedited approval procedures, may reduce the scope of preclinical testing needed. Other changes that increase regulatory obligations or affect the competitiveness of our services may lessen the demand for certain offerings.

Previous wording

For example, in December 2022, the FDA Modernization Act 2.0 was passed, which clarifies methods manufacturers and sponsors can use to investigate the safety and efficacy of a drug. Eliminating the use of animals in research may have material adverse effects on our business, results of operations, or financial condition. While there have been significant advancements in the development of alternative methods, the complete elimination of animals in research will be a gradual process that may take many years to achieve. While we are committed to working with the industry to support development and to provide the best translational models to supplement or replace traditional models as part of our 3Rs initiative, the use of animals in research is highly regulated and proposed changes to current regulations will need to be carefully evaluated to ensure that they do not compromise the safety and efficacy of new drugs and medical treatments.

Current wording

For example, in December 2022, the FDA Modernization Act 2.0 was passed, which clarified the methods manufacturers and sponsors may use to investigate the safety and efficacy of a drug. In April 2025, the FDA announced its intention to expand the use of scientifically supported cell-based approaches and other new approach methodologies (NAMs), such as organ-on-chip systems, computational modeling, and advancedin vitro assays, in preclinical safety studies; in October 2025, the FDA announced its intention to streamline the approval process for biosimilar drug development and indicated further announcements related to reducing animal testing requirements may be forthcoming; and in November 2025, the U.K. government announced a roadmap to phasing out animal testing in favor of alternative methods. Eliminating the use of animals in research may have material adverse effects on our business, results of operations, or financial condition. While there have been significant advancements in the development of alternative methods, the complete elimination of animals in research will be a gradual process that may take many years to achieve. While we are committed to working with the industry to support development and to provide the best translational models to supplement or replace traditional models as part of our Replacement, Reduction, and Refinement (3Rs) initiative, the use of animals in research is highly regulated and proposed changes to current regulations will need to be carefully evaluated to ensure that they do not compromise the safety and efficacy of new drugs and medical treatments.

Previous wording

Implementation of healthcare reform legislation, such as certain provisions of the Inflation Reduction Act, may have certain benefits, but also may contain costs that could limit the profits that can be made from the development of new drugs. This could adversely affect R&D expenditures by pharmaceutical and biotechnology companies, which could in turn decrease the business opportunities available to us both in the U.S. and abroad. In addition, new laws or regulations may create a risk of liability, increase our costs or limit our service offerings. Furthermore, if health insurers were to change their practices with respect to reimbursements for pharmaceutical products, our clients may spend less or reduce their growth in spending on R&D.

Current wording

Implementation of healthcare reform legislation, including certain provisions of the Inflation Reduction Act, may offer some benefits, but may also introduce costs or changes that affect the potential financial returns associated with developing new drugs. This could adversely affect R&D expenditures by pharmaceutical and biotechnology companies, which could in turn decrease the business opportunities available to us both in the U.S. and abroad. In addition, new laws or regulations may create a risk of liability, increase our costs or limit our service offerings. Furthermore, if health insurers were to change their practices with respect to reimbursements for pharmaceutical products, our clients may spend less or reduce their growth in spending on R&D.

Previous wording

While it is not possible to predict whether and when any such changes will occur, changes at the local, state or federal level, or in laws and regulations in effect in foreign jurisdictions in which we operate or have business relationships, may significantly impact our domestic and foreign businesses and/or those of our clients. Furthermore, modifications to international trade policy, public company reporting requirements, environmental regulation and antitrust enforcement may have a materially adverse impact on us, our suppliers or our clients.

Current wording

While it is not possible to predict whether and when any such changes will occur, updates at the local, state or federal level, or to laws and regulations in foreign jurisdictions where we operate or maintain business relationships, may materially affect our domestic and/or international operations. Furthermore, modifications to international trade policy, public company reporting requirements, environmental regulation and antitrust enforcement may have a materially adverse impact on us, our suppliers or our clients.

Previous wording

The CDMO services we offer can be highly complex, due in part to strict regulatory requirements and the inherent technical complexity of the services provided. A failure of the quality control or related systems and processes in our facilities could cause problems in connection with facility operations for a variety of reasons, including with respect to equipment malfunction, microbial or other contamination, compliance with specific manufacturing instructions, compliance with protocols and standard operating procedures, issues with raw materials, and issues with product testing. Such issues could affect the production of a single manufacturing run, multiple runs, or entire manufacturing campaigns, potentially requiring the destruction of products and cessation of manufacturing operations. In addition, any failure to meet required quality and regulatory standards may result in our failure to timely deliver products to our customers which, in turn, could damage our reputation for quality and service. Similarly, if the FDA or other regulators develop concerns over regulatory compliance in connection with our manufacturing activities of clinical trial products, including with respect to the safety of a product, such authorities can delay or suspend a client’s clinical trial by placing it on a full or partial "clinical hold" pending receipt of additional data to satisfy such concerns. A clinical hold on a client’s trial may require us to spend significant resources to address the underlying causes of the client’s clinical hold. In addition, if we are not able to successfully address such underlying causes or our response is not deemed adequate to lift the client’s clinical hold, the clinical program may have to be terminated. The same or similar regulatory issues can occur in connection with the manufacture of commercial products in the event of compliance concerns, whereby FDA or other regulators may prevent the distribution of products manufactured at our facilities and require corrective actions to address such concerns, which can be substantial and time consuming. In the event of material compliance issues, FDA or other regulators may also refuse to approve our clients’ applications to market products manufactured at our facilities, which may also adversely affect our business. In January 2025, a CDMO client disclosed that, as a result of observations made during pre-license inspections at a Company facility, (1) one biologics license application for a specific therapeutic treatment had received a complete response letter from the FDA, and (2) the FDA had placed clinical holds on that client’s Investigational New Drug applications. In addition, subsequently the FDA conducted an inspection at the same Company facility resulting in the Company receiving a Form FDA 483 Notice of Inspectional Observations which the Company is in process of responding to, and which will include commitments to mitigate identified observations. These types of events, in…

Excerpt shortened here; the source contains the full paragraph.

Current wording

The CDMO services we offer can be highly complex, due in part to strict regulatory requirements and the inherent technical complexity of the services provided. A failure of the quality control or related systems and processes in our facilities could cause problems in connection with facility operations for a variety of reasons, including with respect to equipment malfunction, microbial or other contamination, compliance with specific manufacturing instructions, compliance with protocols and standard operating procedures, issues with raw materials, and issues with product testing. Such issues could affect the production of a single manufacturing run, multiple runs, or entire manufacturing campaigns, potentially requiring the destruction of products and cessation of manufacturing operations. In addition, any failure to meet required quality and regulatory standards may result in our failure to timely deliver products to our customers which, in turn, could damage our reputation for quality and service. Similarly, if the FDA or other regulators develop concerns over regulatory compliance in connection with our manufacturing activities of clinical trial products, including with respect to the safety of a product, such authorities can delay or suspend a client’s clinical trial by placing it on a full or partial "clinical hold" pending receipt of additional data to satisfy such concerns. A clinical hold on a client’s trial may require us to spend significant resources to address the underlying causes of the client’s clinical hold. In addition, if we are not able to successfully address such underlying causes or our response is not deemed adequate to lift the client’s clinical hold, the clinical program may have to be terminated. The same or similar regulatory issues can occur in connection with the manufacture of commercial products in the event of compliance concerns, whereby FDA or other regulators may prevent the distribution of products manufactured at our facilities and require corrective actions to address such concerns, which can be substantial and time consuming. In the event of material compliance issues, FDA or other regulators may also refuse to approve our clients’ applications to market products manufactured at our facilities, which may also adversely affect our business. In January 2025, a CDMO client disclosed that, as a result of observations made during pre-license inspections at a Company facility, (1) one biologics license application for a specific therapeutic treatment had received a complete response letter from the FDA, and (2) the FDA had placed clinical holds on that client’s Investigational New Drug applications. In addition, subsequently the FDA conducted an inspection at the same Company facility resulting in the Company receiving a Form FDA 483 Notice of Inspectional Observations. In October 2025, a successful pre-license inspection was performed and we are closely partnered with this client through the remaining steps of th…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Over the past decade, pharmaceutical and biotechnology companies have generally increased their outsourcing of non-clinical and clinical research support activities, such as discovery and safety assessment. While many industry analysts expect the outsourcing trend to continue to increase for the next several years (although with different growth rates for different phases of drug discovery and development), decreases in such outsourcing may result in a diminished growth rate in the sales of any one or more of our service lines and may adversely affect our financial condition and results of operations. For additional discussion of the factors that we believe have recently influenced outsourcing demand from our clients, please see the section entitled “Our Strategy” above.

Current wording

Over the past decade, pharmaceutical and biotechnology companies have generally increased their outsourcing of non-clinical and clinical research support activities, such as drug discovery, safety assessment and clinical trial support. While many industry analysts expect the outsourcing trend to continue to increase for the next several years (although with different growth rates for different phases of drug discovery and development), decreases in such outsourcing may result in a diminished growth rate in the sales of any one or more of our service lines and may adversely affect our financial condition and results of operations. For additional discussion of the factors that we believe have recently influenced outsourcing demand from our clients, please see the section entitled “Our Strategy” above.

Previous wording

The scientific community continues to develop cell-based and new alternative model methodologies (NAMs), which do not involve working with animal models and are designed to increase the translation from findings in early-stage discovery and pre-clinical studies to human studies, and vice-versa. As these methods continue to advance, they may supplement, and in some cases possibly replace or supplant methodologies that are currently in use, such as the use of traditional living animals in biomedical research. In addition, technological improvements, such as imaging and other translational biomarker technologies, could impact demand for animal research models. Further, manufacturers, including Charles River, have recently introduced recombinant versions of LAL, which has been historically derived from live animals. It is our strategy to explore new technologies to refine and potentially reduce the use of animal models and animal derived products as newin vitroandin silico methods become available and synthetically-manufactured products become validated with sufficient data to ensure public safety. For information regarding our efforts to support development and to provide the best translational models to supplement or replace traditional models, see “Our Strategy” included elsewhere in this Form 10-K. However, we may not be able to develop new products, inputs or processes effectively or in a timely manner to replace any lost sales. Lastly, other companies or entities may develop research models, inputs or processes with characteristics different from those that we produce, and that may be viewed as more desirable by some of our clients.

Current wording

The scientific community continues to develop NAMs, which do not involve working with animal models and are designed to increase the translation from findings in early-stage discovery and pre-clinical studies to human studies, and vice-versa. As these methods continue to advance, they may supplement, and in some cases possibly replace or supplant methodologies that are currently in use, such as the use of traditional living animals in biomedical research. For example, in April 2025, the FDA announced its intention to reduce animal testing in preclinical safety studies with NAMs, such as organ-on-a-chip systems, computational modeling, and advanced in vitro assays; in October 2025, the FDA announced its intention to streamline the approval process for biosimilar drug development and indicated further announcements related to reducing animal testing requirements may be forthcoming; and in November 2025, the U.K. government announced a roadmap to phasing out animal testing in favor of alternative methods. In addition, technological improvements, such as imaging and other translational biomarker technologies, could impact demand for animal research models. Further, manufacturers, including Charles River, have recently introduced recombinant versions of LAL, which has been historically derived from live animals. It is our strategy to explore new technologies to refine and potentially reduce the use of animal models and animal derived products as new in vitro and in silico methods become available and synthetically-manufactured products become validated with sufficient data to ensure public safety. For information regarding our efforts to support development and to provide the best translational models to supplement or replace traditional models, see “Our Strategy” included elsewhere in this Form 10-K. However, we may not be able to develop new products, inputs or processes effectively or in a timely manner to replace any lost sales. Lastly, other companies or entities may develop research models, inputs or processes with characteristics different from those that we produce, and that may be viewed as more desirable by some of our clients.

Previous wording

Our donor collection centers are registered with the FDA and the FDA periodically conducts inspections of those facilities and operations. At the conclusion of each inspection, the FDA provides us with a list of objectionable conditions and practices observed during the inspection that could result in additional enforcement actions. Failure to comply with the regulations enforced by the FDA could result in sanctions and/or remedies and have a material adverse effect on us.

Current wording

Our donor collection center is registered with the FDA and the FDA periodically conducts inspections of those facilities and operations. At the conclusion of each inspection, the FDA provides us with a list of objectionable conditions and practices observed during the inspection that could result in additional enforcement actions. Failure to comply with the regulations enforced by the FDA could result in sanctions and/or remedies and have a material adverse effect on us.

Previous wording

The EU GDPR also imposes specific restrictions on the transfer of personal data to countries outside of the EU and EEA, including the use of appropriate safeguards to enable such transfers, such as Standard Contractual Clauses (SCCs) and the EU-US Data Privacy Framework (DPF). Although these mechanisms are currently valid for purposes of transferring personal data, they could be subject to legal challenges and there is no assurance that we could satisfy or rely on these measures to lawfully transfer personal data. If we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results. While we have implemented controls and procedures to comply with the requirements of the EU GDPR, such procedures and controls may not be effective in ensuring compliance or preventing unauthorized transfers of personal data.

Current wording

US Data Privacy Framework (DPF). Although these mechanisms are currently valid for purposes of transferring personal data, they could be subject to legal challenges and there is no assurance that we could satisfy or rely on these measures to lawfully transfer personal data. If we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results. While we have implemented controls and procedures to comply with the requirements of the EU GDPR, such procedures and controls may not be effective in ensuring compliance or preventing unauthorized transfers of personal data.

Previous wording

Moreover, we are subject to the privacy and data protection laws of China, including the Personal Information Protection Law (PIPL) and Data Security Law (DSL), which promulgated requirements relating to the collection, processing, transfer and security of personal information in or from China. Violations of the PIPL or DSL could result in fines and penalties, suspension of data transfers, cancellation of business authorizations, personal liability for responsible company officers, as well as criminal and civil liability. In the event that the PIPL requires us to store data in China, or limits our ability to transfer data across borders, we may experience increased costs and business inefficiencies. Fines, corrective actions, or other penalties asserted due to alleged noncompliance may impose additional financial or operational costs, limit our ability to attract and retain local talent, or limit our ability to do business in China.

Current wording

Similarly, we are subject to the privacy and data protection laws of China, including the Personal Information Protection Law (PIPL) and Data Security Law (DSL), which promulgated requirements relating to the collection, processing, transfer and security of personal information in or from China. Violations of the PIPL or DSL could result in fines and penalties, suspension of data transfers, cancellation of business authorizations, personal liability for responsible company officers, as well as criminal and civil liability. In the event that the PIPL requires us to store data in China, or limits our ability to transfer data across borders, we may experience increased costs and business inefficiencies. Fines, corrective actions, or other penalties asserted due to alleged noncompliance may impose additional financial or operational costs, limit our ability to attract and retain local talent, or limit our ability to do business in China.

Previous wording

As a global company, we are subject to taxation in numerous countries, states, and other jurisdictions. Changes to governmental laws and regulations, or their interpretations, including the adoption of global minimum taxation requirements and potential changes to existing tax law by the current U.S. Presidential administration and Congress, could impact our profits, effective tax rate and cash flows.

Current wording

As a global company, we are subject to taxation in numerous countries, states, and other jurisdictions. Changes to governmental laws and regulations, or their interpretations, including the adoption of global minimum taxation requirements and potential changes to existing tax law by the current U.S. Presidential administration and Congress, could impact our profits, effective tax rate and cash flows. For example, in July 2025, the U.S. enacted the One Big Beautiful Bill Act ("OBBBA"), which includes several changes to U.S. federal income tax law, including accelerated tax depreciation, expensing of research and development, and the U.S. international inclusions.

Previous wording

Many of our services, products and processes rely on intellectual property. In some cases, that intellectual property is owned by another party and licensed to us, sometimes exclusively. To protect our intellectual property rights, we primarily rely upon trade secret, patent, and copyright law, as well as contractual provisions relating to intellectual property ownership and control and confidentiality. Laws relating to intellectual property rights and contracts vary from country to country and are subject to change at any time. In addition, the agreements upon which we rely to protect our intellectual property might be breached, or might not be fully enforceable. Our intellectual property rights might not prevent our competitors from independently developing intellectual property that is similar to or duplicative of ours. Also, enforcement of our intellectual property rights may also require substantial investments of time, money, and oversight, and may not result in success. If we are unable to secure and maintain our intellectual property rights, or if we are unable to prevent misappropriation or infringement, our business could be adversely affected.

Current wording

Many of our services, products and processes rely on intellectual property. In some cases, that intellectual property is owned by another party and licensed to us, sometimes exclusively. To protect our intellectual property rights, we primarily rely upon trade secret, patent, trademark, and copyright law, as well as contractual provisions relating to intellectual property ownership and control and confidentiality. Laws relating to intellectual property rights and contracts vary from country to country and are subject to change at any time. In addition, the agreements upon which we rely to protect our intellectual property might be breached, or might not be fully enforceable. Our intellectual property rights might not prevent our competitors from independently developing intellectual property that is similar to or duplicative of ours. Also, enforcement of our intellectual property rights may also require substantial investments of time, money, and oversight, and may not result in success. If we are unable to secure and maintain our intellectual property rights, or if we are unable to prevent misappropriation or infringement, our business could be adversely affected.

Previous wording

We are involved in legal proceedings related to various matters, including securities litigation, and may become involved in other legal proceedings that arise from time to time in the future. For example, as discussed further in Part I, Item 3, Legal Proceedings, a putative securities class action and two derivative securities lawsuits have been filed against the Company, and certain officers and directors, alleging that disclosures about the Company’s practices with respect to the importation of non-human primates were materially false or misleading. We also are or have been subject to government investigations and civil investigative demands seeking information with respect to alleged violations of law, including as discussed in Part I, Item 3, Legal Proceedings, investigations by the DOJ, USFWS, and SEC.

Current wording

We are involved in legal proceedings related to various matters, including securities litigation, and may become involved in other legal proceedings that arise from time to time in the future. For example, as discussed further in Part I, Item 3, Legal Proceedings, a putative securities class action and two derivative securities lawsuits have been filed against the Company, and certain officers and directors, alleging that disclosures about the Company’s practices with respect to the importation of non-human primates were materially false or misleading. We also have been subject to government investigations and civil investigative demands seeking information with respect to alleged violations of law, including as discussed in Part I, Item 3, Legal Proceedings, pertaining to an investigation by the SEC.

Previous wording

Our success depends to a significant extent on the continued services of our senior management and other members of management who have skills and industry experience aligned with our strategic objectives. James C. Foster, our Chief Executive Officer and President since 1992 and Chairman since 2000, has held various positions with us for four decades. While we entered into an amended employment agreement with Mr. Foster in 2021, most members of our senior management do not have employment agreements, except in jurisdictions outside of the United States where employment contracts are common for most employees. If Mr. Foster or other members of senior management do not continue in their present positions, particularly if they depart the Company with little to no notice, our business may be adversely impacted.

Current wording

Our success depends to a significant extent on the continued services of our senior management and other members of management who have skills and industry experience aligned with our strategic objectives. Birgit Girshick, our current COO who will serve as our CEO effective May 5, 2026, has held various positions with us for more than 35 years. For further detail on Ms. Girshick’s employment with the Company, see the Letter Agreement by and between Charles River Laboratories International, Inc. and Birgit Girshick, dated as of January 6, 2026, attached as an exhibit to this Form 10-K. Most members of our senior management do not have employment agreements, except in jurisdictions outside of the United States where employment contracts are common for most employees. If members of senior management do not continue in their present positions, particularly if they do not give reasonable advance notice should they choose to depart from the Company, our business may be adversely impacted.

Previous wording

As of December 28, 2024, we had $2.2 billion of debt and finance leases (debt). Our debt could have significant adverse effects on our business, including making it more difficult for us to obtain additional financing on favorable terms; requiring us to dedicate a substantial portion of our cash flows from operations to the repayment of debt and the interest on this debt; limiting our ability to capitalize on significant business opportunities; making us more vulnerable to rising interest rates, and reducing our flexibility to respond to changing business and economic conditions. Disruption in the financial market could also have a material adverse effect on our financial position, results of operations and liquidity. For additional information regarding our debt, please see Note 11. Debt and Other Financing Arrangements, included in the notes to our consolidated financial statements included elsewhere in this Form 10-K.

Current wording

As of December 27, 2025, we had $2.1 billion of debt and finance leases (debt). Our debt could have significant adverse effects on our business, including making it more difficult for us to obtain additional financing on favorable terms; requiring us to dedicate a substantial portion of our cash flows from operations to the repayment of debt and the interest on this debt; limiting our ability to capitalize on significant business opportunities; making us more vulnerable to rising interest rates, and reducing our flexibility to respond to changing business and economic conditions. Disruption in the financial markets could also have a material adverse effect on our financial position, results of operations and liquidity. For additional information regarding our debt, please see Note 11. Debt and Other Financing Arrangements, included in the notes to our consolidated financial statements included elsewhere in this Form 10-K.

Previous wording

If the future growth and operating results of our business are not as strong as anticipated, overall macroeconomic or industry conditions deteriorate and/or our market capitalization declines, this could impact the assumptions used in establishing the carrying value of goodwill or other intangible assets, as well as long-lived tangible assets, such as property, plant and equipment and operating lease right-of-use assets. Should disruption in the global financial markets and deterioration of economic conditions have a prolonged impact on our industry, triggering events may arise resulting in long-lived tangible asset, intangible asset, or goodwill impairments. To the extent long-lived tangible assets, intangible assets, or goodwill are impaired, their carrying value will be written down to their implied fair values and a charge will be made to our net income. Such an impairment charge could materially and adversely affect our operating results. As of December 28, 2024, the carrying amount of goodwill and other intangibles on our consolidated balance sheet was $3.6 billion, property, plant and equipment was $1.6 billion, and operating lease right-of-use assets was $412.5 million. During the fourth quarter ended December 28, 2024, a triggering event was identified for the Biologics Solutions reporting unit. This resulted from a loss of key customers, ultimately resulting in a reduction in Biologics Solutions’ long range financial outlook. In response, we conducted a quantitative impairment test for goodwill to determine if the goodwill in the Biologics Solutions reporting unit was impaired. Upon completion of a quantitative impairment test, it was determined that the fair value of the reporting unit was below its carrying value, resulting in a goodwill impairment of approximately $215.0 million. We will continue to closely monitor future performance and any potential impacts on the value of the reporting unit. For additional discussion on this topic, see section herein titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Goodwill and Intangible Assets.”

Current wording

If the future growth and operating results of our business are not as strong as anticipated, overall macroeconomic or industry conditions deteriorate and/or our market capitalization declines, this could impact the assumptions used in establishing the carrying value of goodwill or other intangible assets, as well as long-lived tangible assets, such as property, plant and equipment and operating lease right-of-use assets. Should disruption in the global financial markets and deterioration of economic conditions have a prolonged impact on our industry, triggering events may arise resulting in long-lived tangible asset, intangible asset, or goodwill impairments. To the extent long-lived tangible assets, intangible assets, or goodwill are impaired, their carrying value will be written down to their fair values and a charge will be made to our net income (loss). Such an impairment charge could materially and adversely affect our operating results. As of December 27, 2025, the carrying amount of goodwill and other intangibles on our consolidated balance sheet was $3.1 billion, property, plant and equipment was $1.7 billion, and operating lease right-of-use assets was $361.4 million.

Previous wording

Our results of operations in any quarter may vary from quarter to quarter and are influenced by the risks discussed above, as well as: changes in the general global economy; changes in the mix of our products and services; cyclical buying patterns of our clients; the financial performance of our strategic and venture capital investments; certain acquisition-related adjustments, including change in fair value of contingent payments both receivable from or payable to counterparties; and the occasional extra week (“53rd week”) that we recognize in a fiscal year (and fourth fiscal quarter thereof), including 2022, due to our fiscal year ending on the last Saturday in December. We believe that operating results for any particular quarter are not necessarily a meaningful indication of future results. Nonetheless, fluctuations in our quarterly operating results could negatively affect the market price of our common stock.

Current wording

Our results of operations in any quarter may vary from quarter to quarter and are influenced by the risks discussed above, as well as: changes in the general global economy; changes in the mix of our products and services; changes in government regulation or in practices related to the pharmaceutical or biotechnology industries, including with respect to the use of NAMs; cyclical buying patterns of our clients; the financial performance of our strategic and venture capital investments; certain acquisition-related adjustments, including change in fair value of contingent payments both receivable from or payable to counterparties; and the occasional extra week (“53rd week”) that we recognize in a fiscal year (and fourth fiscal quarter thereof), due to our fiscal year ending on the last Saturday in December. The next fiscal year with a 53rd week is scheduled to occur in 2028. We believe that operating results for any particular quarter are not necessarily a meaningful indication of future results. Nonetheless, fluctuations in our quarterly operating results could negatively affect the market price of our common stock.