CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

We are a leading, full service, non-clinical global drug development partner. For over 75 years, we have been in the business of providing the research models required in the research and development of new drugs, devices, and therapies. Over this time, we have built upon our original core competency of laboratory animal medicine and science (research model technologies) to develop a diverse portfolio of discovery and safety assessment services, both Good Laboratory Practice (GLP) and non-GLP, that supports our clients from target identification through non-clinical development. We also provide a suite of products and services to support our clients’ manufacturing activities. Utilizing our broad portfolio of products and services enables our clients to create a more efficient and flexible drug development model, which reduces their costs, enhances their productivity and effectiveness, and increases speed to market.

Our client base includes major global pharmaceutical companies; many biotechnology companies; agricultural and industrial chemical, life science, veterinary medicine, medical device, diagnostic and consumer product companies; contract research and contract manufacturing organizations; and other commercial entities, as well as leading hospitals, academic institutions, and government agencies around the world.

Segment Reporting

Our three reportable segments are Discovery and Safety Assessment (DSA), Manufacturing Solutions (Manufacturing), and Research Models and Services (RMS).

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.

Our Manufacturing reportable segment includes Microbial Solutions, which providesin vitro lot-release testing products, microbial detection products, and species identification services and Biologics Testing (Biologics), which performs specialized testing of biologics. In May 2026, we sold the contract development and manufacturing products and services (CDMO) business, reported in the Manufacturing segment.

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.

Fiscal Quarters

Our fiscal year is typically based on 52 weeks, with each quarter composed of 13 weeks ending on the last Saturday on, or closest to, March 31, June 30, September 30, and December 31. A 53rd week in the fourth quarter of the fiscal year is occasionally necessary to align with a December 31 calendar year-end.

Global Market Environment

We are continuing to see an improved spending environment from our client base, principally within our DSA segment, as the demand conditions have improved from levels experienced in the recent quarters, due primarily to increased biotech funding and global biopharmaceutical companies refocusing their investments on their early-stage research and development pipelines. Consistent with the improving demand environment, DSA backlog increased slightly to $2.0 billion as of September 26, 2026 from $1.9 billion as of December 27, 2025.

Strategic Vision and Restructuring Programs

We continuously assess opportunities to drive greater efficiencies through process improvements, cost-savings initiatives, and restructuring actions. During the third quarter of fiscal 2026, we announced our Create the Future program, which formalizes and expands the Company’s ongoing transformation and efficiency initiatives under a unified operating framework. Create the Future builds upon actions already underway, including process improvements, procurement synergies, global business service expansion, workforce optimization, and real estate footprint rationalization, while introducing additional initiatives focused on AI-enabled automation, simplification and digitization, and enterprise optimization.

Through the ongoing actions, the Company expects to achieve approximately $300 million of cumulative annualized cost savings by the end of 2026, with more than $175 million realized through fiscal 2025. In addition, the Create the Future program is expected to generate incremental cost savings in excess of $300 million between 2027 and 2030. Workforce-related actions have primarily resulted in severance and transition costs, while facility optimization activities have resulted in asset impairment charges, accelerated depreciation, and other site-related costs. Restructuring charges were $19.2 million and $73.8 million during the three and nine months ended September 26, 2026, respectively, compared with $99.8 million and $107.0 million in fiscal 2025 and 2024, respectively. For further details of these costs, see Note 15 – Restructuring and Asset Impairments in Part I, Item 1.

Recent Acquisitions

We make strategic acquisitions designed to expand our portfolio of products and services to support the drug discovery and development continuum. We maintain an acquisition strategy that focuses on augmenting internal growth of existing businesses with complementary acquisitions. Our recent transactions are described below.

On April 17, 2026, we completed the acquisition of an additional 79% equity interest in PathoQuest SAS (PathoQuest), for $67.4 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.

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. During the three and nine months ended September 26, 2026, the Company paid $100.0 million and $170.0 million of deferred consideration, respectively, with the remaining balance of $5 million to be paid as of September 26, 2026. 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.

Recent Divestitures

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.

On May 22, 2026, we sold certain European Discovery Services businesses (European Discovery Divestiture) to IQVIA Inc. (IQVIA) for a purchase price of $126.4 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 nine months ended September 26, 2026, we recorded a pre-tax gain on the divestiture of $1.1 million and $1.4 million, respectively, within Other expense, net on the unaudited condensed consolidated statements of income.

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. These businesses and the related assets and liabilities met the criteria for held-for-sale as of March 28, 2026, resulting in a pre-tax loss of $118.0 million recognized for the three months ended March 28, 2026, which represents the excess of its carrying value over the fair value less cost to sell. Upon closing of the sale, a $63.7 million pre-tax loss on divestiture was recognized for the three months ended June 27, 2026. No pre-tax loss was recognized on the divestiture for the three months ended September 26, 2026. We recognized the pre-tax loss on divestiture of $181.7 million for the nine months ended September 26, 2026 within Other expense, net on the unaudited condensed consolidated statements of income.

In March 2026, we completed the sale of certain assets located at our Wilmington, Massachusetts site. The assets consisted of office, laboratory and mixed-use buildings within our RMS segment and unallocated corporate, and was sold to an unrelated third party for cash consideration of $60.1 million, net of costs to sell. In conjunction with the sale, we entered into a long-term operating lease for certain buildings to support RMS and unallocated corporate operations. Upon meeting the criteria for sale leaseback, we derecognized the book value of $21.6 million and recognized a pre-tax gain of approximately $38.5 million. The gain was recognized within our RMS reportable segment and unallocated corporate for $23.2 million and $15.3 million, respectively, and is included in Selling, general and administrative expenses for the nine months ended September 26, 2026 within the unaudited condensed consolidated statements of income.