CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
For the period ended Jun 27, 2026. Filed Aug 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 27, 2026 · Filed Aug 5, 2026
CRL$337.52+7.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-28; filed 2026-05-07.
0001100682-26-000038
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-27; filed 2026-08-05.
0001100682-26-000118
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 89 previous paragraphs and 23 current paragraphs.
13 unchanged; 8 reworded; 2 added; 68 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 14 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
On April 17, 2026, we completed the acquisition of an additional 79% equity interest in PathoQuest SAS (PathoQuest), for $67.6 million. The acquisition was funded through a combination of available cash and proceeds from the Credit Facility. This business is reported as part of our Manufacturing reportable segment. For more details, please see Note 2 – Acquisitions and Divestitures in Part I, Item 1.
Current report
On May 22, 2026, we sold certain European Discovery Services businesses (European Discovery Divestiture) to IQVIA Inc. (IQVIA) for a preliminary purchase price of $125.2 million in cash, net of costs to sell and subject to certain customary closing adjustments. We may also earn up to $10.0 million of contingent payments, which are tied to future performance. The contingent payments have been valued at $2.8 million using a discounted probability weighted model. The results of the European Discovery Services businesses were reported in our DSA reportable segment. During the three and six months ended June 27, 2026, we recorded a gain on the divestiture of $0.3 million within Other (expense) income, net on the unaudited condensed consolidated statements of income (loss).
Removed paragraphs (68)
Previous report
On April 17, 2026, we completed the acquisition of an additional 79% equity interest in PathoQuest SAS (PathoQuest), a France-based biotechnology company that provides viral and microbial safety testing services using next-generation sequencing and bioinformatics to support biopharmaceutical product development and manufacturing, resulting in a 100% controlling interest. The preliminary purchase price for PathoQuest was €51.6 million (or approximately $60.0 million based on current exchange rates), subject to customary closing adjustments. This business will be reported as part of our Manufacturing reportable segment.
Previous report
On February 25, 2026, we signed an agreement to sell certain European Discovery Services businesses (European Discovery Divestiture) to IQVIA Inc. (IQVIA) for $145.0 million in cash, subject to certain customary closing conditions, and future contingent payments up to $10.0 million based on future performance. The proposed transaction is expected to close in the second quarter of fiscal year 2026.
Previous report
Results of Operations
Previous report
Consolidated Results of Operations and Liquidity
Previous report
Revenue for three months ended March 28, 2026 increased $11.7 million, or 1.2%, to $995.8 million compared to $984.2 million in the corresponding period in 2025, primarily due to an increase in Manufacturing revenue, driven by our Microbial Solutions business, and to a lesser extent DSA revenue; partially offset by a decrease in RMS revenue, due to decreased large and small model product revenue.
Previous report
For the three months ended March 28, 2026, our operating income and operating income as a percentage of revenue were $119.9 million and 12.0% respectively, compared to $74.7 million and 7.6% respectively, in the corresponding period of 2025. The increases in operating income and operating income as a percentage of revenue for the three months ended March 28, 2026 were primarily driven by the gain on sale of certain assets at our Wilmington, Massachusetts site, the absence of accelerated amortization expense, certain third-party legal costs incurred in fiscal year 2025, and the increase in revenue described above; partially offset by higher acquisition, integration and divestiture costs, when compared to the corresponding period in 2025.
Previous report
Net loss attributable to Charles River Laboratories International, Inc., common shareholders was $14.8 million in the three months ended March 28, 2026, compared to Net income attributable to Charles River Laboratories International Inc, common shareholders of $25.5 million in the corresponding period of 2025. The decrease of $40.3 million for the three months ended March 28, 2026 was due principally to the loss on assets held for sale related to the CDMO and Cell Solutions Divestiture of $118.0 million, partially offset by the increase in operating income described above, compared to the corresponding period in 2025.
Previous report
During the three months ended March 28, 2026, our cash flows from operations were $41.1 million compared with $171.7 million for the same period in 2025. The decrease was primarily related to higher payments of variable compensation, specifically annual incentive based bonuses paid during the first quarter.
Previous report
Three Months Ended March 28, 2026 Compared to Three Months Ended March 29, 2025
Previous report
Revenue and Operating Income
Previous report
The following tables present consolidated revenue by type and by reportable segment:
Previous report
The following table presents operating income by reportable segment:
Previous report
The following presents and discusses our consolidated financial results by each of our reportable segments:
Previous report
RMS
Previous report
RMS revenue decreased $4.7 million primarily driven by decreases in large research model product revenue, and small model product revenue in North America, and to a lesser extent Cell Supply product revenue and GEMS service revenue; partially offset by increased revenue for small research models in China and the effect of changes in foreign currency exchange rates.
Previous report
RMS operating income increased $6.2 million compared to the corresponding period in 2025. RMS operating income as a percentage of revenue for the three months ended March 28, 2026 was 23.9%, an increase of 340 bps from 20.5% for the corresponding period in 2025. Operating income and operating income as a percentage of revenue increased primarily due to lower site consolidation charges and the gain on sale of certain assets at our Wilmington, Massachusetts site recognized within Selling, general and administrative expenses; partially offset by an increase in asset impairments recognized within Cost of revenue, and the lower revenue described above, compared to the corresponding period in 2025.
Previous report
DSA
Previous report
DSA revenue increased $4.3 million primarily due to effect of changes in foreign currency exchange rates, partially offset by lower volume principally driven by previous site consolidation activities.
Previous report
DSA operating income increased $9.9 million compared to the corresponding period in 2025. DSA operating income as a percentage of revenue for the three months ended March 28, 2026 was 17.4%, an increase of 150 bps from 15.9% for the corresponding period in 2025. Operating income and operating income as a percentage of revenue increased primarily due to the absence of certain third-party legal costs in fiscal year 2025 associated with the investigations by the U.S. government into the non-human primate supply chain, lower restructuring activities, including asset impairments recognized within Cost of revenue, as compared to the corresponding period in 2025.
Previous report
Manufacturing
Previous report
Manufacturing revenue increased $12.1 million primarily due to increased revenue in our Microbial Solutions business driven by higher endotoxin product revenue and the effect of changes in foreign currency exchange rates; partially offset by decreased demand for CDMO services.
Previous report
Manufacturing operating income increased $55.5 million compared to the corresponding period in 2025. Manufacturing operating income as a percentage of revenue for the three months ended March 28, 2026 was 24.6%, an increase of 2,940 bps from (4.8)% for the corresponding period in 2025. Operating income and operating income as a percentage of revenue increased primarily due to lower amortization expense within the CDMO business principally due to the absence of accelerated amortization expense as a result of a decrease in the remaining useful life of certain client relationships due to a loss of key customers in fiscal year 2025, and due to the increased revenue described above, compared to the corresponding period in 2025.
Previous report
Unallocated Corporate
Previous report
Unallocated corporate costs consist of selling, general and administrative expenses that are not directly related or allocated to the reportable segments. The increase in unallocated corporate costs of $26.3 million, or 48.5%, compared to the corresponding period in 2025 is primarily due to higher acquisition, integration and divestiture costs primarily associated with our previously discussed activities, increased stock-based compensation expense related to our recently announced transition of executives, higher professional services fees related to enterprise-wide efficiency initiatives; partially offset by the gain on sale of certain assets at our Wilmington, Massachusetts site. Costs as a percentage of revenue for the three months ended March 28, 2026 were 8.1%, an increase of 260 bps from 5.5% for the corresponding period in 2025.
Previous report
Other Income (Expense)
Previous report
Interest income for the three months ended March 28, 2026 was $1.0 million, a decrease of $0.4 million, or 26.4%, driven primarily from lower interest earning asset balances.
Previous report
Interest expense for the three months ended March 28, 2026 was $26.7 million, a decrease of $1.1 million, or 4.1%, compared to $27.9 million in the corresponding period in 2025 due primarily to lower average interest rates on our debt balances within our revolving credit facility.
Previous report
Other expense, net for the three months ended March 28, 2026 was $124.1 million compared to $12.2 million for the corresponding period in 2025 due principally to the loss on assets held for sale of $118.0 million in connection with the CDMO and Cell Solutions Divestiture and venture capital and strategic equity investment losses and impairments of $1.1 million as compared to $10.4 million in 2025.
Previous report
Income Taxes
Previous report
Income tax benefit for the three months ended March 28, 2026 was $15.1 million, compared to income tax expense of $10.1 million for the corresponding period in 2025. Our effective tax rate was 50.6% for the three months ended March 28, 2026 compared to 28.1% for the corresponding period in 2025. The difference in our effective tax rate in the three months ended March 28, 2026 compared to the corresponding period in 2025 was primarily attributable to the tax effects of the $118.0 million loss on assets held for sale in connection with the CDMO and Cell Solutions Divestiture, as well accrued interest relating to acquired uncertain tax positions during the three months ended March 28, 2026.
Previous report
Liquidity and Capital Resources
Previous report
Liquidity and Cash Flows
Previous report
In general we require cash to fund our working capital needs, capital expansion, acquisitions, debt payments, lease payments, venture capital and strategic equity investments, restructuring initiatives, and pension obligations. Our principal sources of liquidity have been our cash flows from operations supplemented by long-term borrowings. Based on our current business plan, we believe that our existing funds, when combined with cash generated from operations and our access to financing resources, are sufficient to fund our operations for the foreseeable future.
Previous report
The following table presents our cash, cash equivalents and short-term investments:
Previous report
The following table presents our net cash provided by operating activities:
Previous report
Net cash provided by operating activities represents the cash receipts and disbursements related to all of our activities other than investing and financing activities. Operating cash flow is derived by adjusting our net income for (1) non-cash operating items such as depreciation and amortization, stock-based compensation, goodwill impairment, debt financing costs, deferred income taxes, write downs of inventories, provisions of credit losses, long-lived asset impairment changes, gains and/or losses on venture capital and strategic equity investments, gains and/or losses on divestitures, changes in fair value of contingent consideration, as well as (2) changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associated with transactions and when they are recognized in our results of operations.
Previous report
During the three months ended March 28, 2026, our cash flows from operations were $41.1 million compared with $171.7 million for the same period in 2025. The decrease was primarily related to higher payments of variable compensation, specifically annual incentive based bonuses paid during the first quarter.
Previous report
The following table presents our net cash used in investing activities:
Previous report
Investing activities primarily consist of cash used to fund capital expenditures to support the growth of our business, purchases and sales of investments related to our venture capital and strategic equity investment portfolios, and asset and business acquisitions, periodically offset by cash from divestitures.
Previous report
For the three months ended March 28, 2026, cash used in investing activities was primarily driven by the acquisition of the Cambodian NHP Supplier coupled with capital expenditures partially offset by proceeds from the sale of certain assets at our Wilmington, Massachusetts site.
Showing the first 40 of 68 passages. Open the source sections for the rest.
Reworded paragraphs (8)
Previous wording
Our RMS reportable segment includes the products and services offered within Research Models, Research Model Services, and Cell Solutions. Research Models includes the commercial production and sale of small research models, as well as the supply of large research models. Research Model Services includes: Insourcing Solutions (IS), which provides colony management of our clients’ research operations (including recruitment, training, staffing, and management services) within our clients’ facilities as well as our own vivarium space, utilizing our Charles River Accelerator and Development Lab (CRADL™) offerings, Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered models; and Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models; and Cell Solutions which provides controlled, consistent, customized primary cells and blood components derived from normal and mobilized peripheral blood and bone marrow as well as cells from disease state donors.
Current wording
Our RMS reportable segment includes the products and services offered within Research Models, Research Model Services, and Cell Solutions. Research Models includes the commercial production and sale of small research models, as well as the supply of large research models. Research Model Services includes: Insourcing Solutions (IS), which provides colony management of our clients’ research operations (including recruitment, training, staffing, and management services) within our clients’ facilities as well as our own vivarium space, utilizing our Charles River Accelerator and Development Lab (CRADL™) offerings, Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered models; and Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models. In May 2026, we sold the Cell Solutions business, reported in the RMS segment, which provided controlled, consistent, customized primary cells and blood components derived from normal and mobilized peripheral blood and bone marrow as well as cells from disease state donors.
Previous wording
Our DSA segment is comprised of Discovery and Safety Assessment services. We provide regulated and non-regulated DSA services to support the discovery, development, and regulatory-required safety testing of potential new drugs, includingin vitro (non-animal) andin vivo (in research models) studies, laboratory support services, including bioanalytical and strategic non-clinical consulting and program management to support product development.
Current wording
Our DSA segment is comprised of Discovery and Safety Assessment services. We provide regulated and non-regulated DSA services to support the discovery, development, and regulatory-required safety testing of potential new drugs, includingin vitro (non-animal), in vivo (in research models) andin silico studies, laboratory support services, including bioanalytical and strategic non-clinical consulting and program management to support product development. In May 2026, we sold certain European Discovery Services businesses.
Previous wording
Our Manufacturing reportable segment includes Microbial Solutions, which providesin vitro lot-release testing products, microbial detection products, and species identification services and Biologics Solutions (Biologics), which performs specialized testing of biologics (Biologics Testing Solutions) as well as contract development and manufacturing products and services (CDMO).
Current wording
Our Manufacturing reportable segment includes Microbial Solutions, which providesin vitro lot-release testing products, microbial detection products, and species identification services and Biologics Solutions (Biologics), which performs specialized testing of biologics (Biologics Testing Solutions). In May 2026, we sold the contract development and manufacturing products and services (CDMO) business, reported in the Manufacturing segment.
Previous wording
We are continuing to see a cautious spending environment from our client base, principally within our DSA segment as the challenging demand environment experienced in the recent prior quarters has persisted. As we continue to navigate these challenges in the current macroeconomic environment, DSA backlog held consistent at $1.9 billion as of March 28, 2026 and December 27, 2025, respectively.
Current wording
We are continuing to see a cautious, but improving, spending environment from our client base, principally within our DSA segment as the challenging demand environment experienced in the recent prior quarters has persisted. As we continue to navigate these challenges in the current macroeconomic environment, DSA backlog increased slightly to $2.0 billion as of June 27, 2026 from $1.9 billion as of December 27, 2025.
Previous wording
In response to recent trends, we continue to implement cost savings initiatives focused on driving greater efficiencies, as well as restructuring actions that have been implemented over the past three years that were focused on workforce right-sizing and site optimization. More recently, efficiency initiatives have targeted incremental savings through process improvements, procurement synergies, and implementation of a global business services model. Collectively, these actions are expected to generate approximately $300 million in cumulative, annualized cost savings by the end of 2026, of which more than $175 million benefitted fiscal year 2025. Workforce right-sizing actions resulted in severance and transition costs while costs related to the consolidation of facilities to optimize our global footprint and drive greater operating efficiency across the company resulted in asset impairments, accelerated depreciation, and other site consolidation charges. We incurred restructuring charges of $31.6 million during the three months ended March 28, 2026, and $99.8 million and $107.0 million during the fiscal years 2025 and 2024, respectively.
Current wording
In response to recent trends, we continue to implement cost savings initiatives focused on driving greater efficiencies, as well as restructuring actions that have been implemented over the past three years that were focused on workforce right-sizing and site optimization. More recently, efficiency initiatives have targeted incremental savings through process improvements, procurement synergies, and implementation of a global business services model. Collectively, these actions are expected to generate approximately $300 million in cumulative, annualized cost savings by the end of 2026, of which more than $175 million benefitted fiscal year 2025. Workforce right-sizing actions resulted in severance and transition costs while costs related to the consolidation of facilities to optimize our global footprint and drive greater operating efficiency across the company resulted in asset impairments, accelerated depreciation, and other site consolidation charges. We incurred restructuring charges of $23.1 million and $54.6 million during the three and six months ended June 27, 2026, and $99.8 million and $107.0 million during the fiscal years 2025 and 2024, respectively.
Previous wording
On January 14, 2026, we completed the acquisition of certain assets of K.F. Cambodia Ltd (Cambodian NHP Supplier), a leading supplier of non-human primates (NHPs) located in Cambodia. The preliminary purchase price for the Cambodian NHP Supplier was $507.3 million, consisting of $335.0 million paid at closing and $172.3 million representing the acquisition date fair value of deferred consideration, which is payable upon the satisfaction of certain post-close conditions. This business is reported as part of our DSA reportable segment for NHPs vertically integrated into the DSA supply chain and the RMS reportable segment for those NHPs sold to third party customers.
Current wording
On January 14, 2026, we completed the acquisition of certain assets of K.F. Cambodia Ltd (Cambodian NHP Supplier), a leading supplier of non-human primates (NHPs) located in Cambodia. The preliminary purchase price for the Cambodian NHP Supplier was $507.3 million, consisting of $335.0 million paid at closing and $172.3 million representing the acquisition date fair value of deferred consideration, which is payable upon the satisfaction of certain post-close conditions. As of June 27, 2026, $105.0 million of deferred consideration remains to be paid which is recorded in Accrued liabilities on the unaudited condensed consolidated balance sheets. The acquisition was funded through a combination of available cash and proceeds from our Credit Facility. This business is reported as part of our DSA reportable segment for NHPs vertically integrated into the DSA supply chain and the RMS reportable segment for those NHPs sold to third party customers. For more details, please see Note 2 – Acquisitions and Divestitures in Part I, Item 1.
Previous wording
The Company routinely evaluates the strategic fit and fundamental performance of its global businesses, divesting operations that do not meet key business criteria. As part of this ongoing assessment, the Company determined that certain capital could be better deployed in other long-term growth opportunities.
Current wording
We routinely evaluate the strategic fit and fundamental performance of our global businesses, divesting operations that do not meet key business criteria. As part of this ongoing assessment, we determined that certain capital could be better deployed in other long-term growth opportunities.
Previous wording
On May 6, 2026, we completed the sale of our CDMO and Cell solutions businesses (CDMO and Cell Solutions Divestiture) to GI Partners (GI) for future contingent performance-based payments up to $50.0 million, subject to certain customary closing adjustments. Additionally, we may be required to fund up to $45.0 million of future EBITDA losses and capital expenditures of the divested businesses over a four year period. During the three months ended March 28, 2026, we recognized a pre-tax loss of $118.0 million, which represents the excess carrying value over the fair value less cost to sell. The loss is recognized within Other (expense) income within the unaudited condensed consolidated statements of income (loss). We will complete our analysis related to the transaction, including determining the final loss on sale, which will be recognized in the second quarter of fiscal year 2026.
Current wording
On May 6, 2026, we sold our CDMO and Cell Solutions businesses (CDMO and Cell Solutions Divestiture) to GI Partners (GI) for net cash paid to the buyer of $12.4 million, net of costs to sell and subject to certain customary closing adjustments. Additionally, we may be required to fund up to $45.0 million of future EBITDA losses and capital expenditures of the divested businesses over a four year period, which is expected to be fully used by GI. Conversely, we may also earn up to $50.0 million of contingent payments, which are tied to future performance and achievement of milestones. The contingent payments receivable have been valued at $15.7 million using a discounted probability weighted model. The results of the CDMO and Cell Solutions businesses were reported in our Manufacturing reportable segment and RMS reportable segment, respectively. During the three and six months ended June 27, 2026, we recorded a loss on the divestiture of $63.7 million and $181.7 million, respectively, within Other (expense) income, net on the unaudited condensed consolidated statements of income (loss).