Ladies and gentlemen, thank you for standing by, and welcome to the Charles River Laboratories Third Quarter 2024 earnings conference call. This call is being recorded. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during this period, you will need to press star one on your telephone. If you want to remove yourself from the queue, press star two. Lastly, should you require operator assistance, please press star zero. I would now like to turn the conference over to our host, Todd Spencer, Vice President of Investor Relations. Please go ahead. Good morning, and welcome to Charles River Laboratories Third Quarter 2024 earnings conference call and webcast. This morning, I am joined by Jim Foster, Chair, President, and Chief Executive Officer, and Flavia Pease, Executive Vice President and Chief Financial Officer. They will comment on our results for the third quarter of 2024. Following the presentation, they will respond to questions. There is a slide presentation associated with today's remarks, which will be posted on the Investor Relations section of our website at ir.criver.com. A webcast replay of this call will be available beginning at approximately two hours after the call today and can also be accessed on the Investor Relations section of our website. The replay will be available through the next quarter's conference call. I'd like to remind you of our safe harbor. All remarks that we make about future expectations, plans, and prospects for the company constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated. During this call, we will primarily discuss non-GAAP financial measures, which we believe help investors gain a meaningful understanding of our core operating results and guidance. The non-GAAP financial measures are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. In accordance with Regulation G, you can find the comparable GAAP measures and reconciliations on the Investor Relations section of our website. I will now turn the call over to Jim Foster. Good morning. Our third quarter financial performance exceeded the outlook that we provided in August. The biopharmaceutical demand environment remains challenging but consistent with the trends that we discussed in detail on last quarter's call, leading to an organic revenue decline of 2.7% in the third quarter. Revenue from small and mid-sized biotech clients was stable compared to the second quarter. However, forward-looking demand indicators for biotechs continue to trend more favorably versus last year, leading to our belief that the demand environment for this client base will continue to recover just at a more gradual pace than anticipated at the beginning of the year. We had already seen more favorable biotech funding translate into higher DSA bookings earlier this year and subsequently incremental revenue for this client base. But there are still puts and takes in terms of the funding environment and interest rate sentiment that keep our outlook appropriately measured. After slightly increasing in the first half of the year, revenue from global biopharmaceutical clients declined in the third quarter both sequentially and year- over- year. This was expected due to tighter budgets and accelerated pipeline reprioritization activities this year in conjunction with the major restructuring actions that many of our large clients have implemented within the past six to 12 months and for some clients more recently. We believe these recent restructuring actions further validated our commentary last quarter. However, the forward-looking demand trends for global biopharmaceutical clients did not show signs of further deterioration in the third quarter and actually improved from second quarter levels. Coupled with the numerous discussions that we have had with clients, this leads us to believe that we have correctly called the near-term demand outlook for this client base. Overall, these trends translated into slight sequential improvement in the forward-looking demand indicators for the Safety Assessment business in the third quarter, including improvements in Net book-to-bill and the cancellation rate. This is important because it supports our belief that we appropriately reset our financial guidance for the year in August. The Net book-to-bill remains below one times, so it would still be too early to assume when a recovery will occur, but we are pleased that the demand environment does not appear to have deteriorated further. At this time, it's too early to provide any specific commentary on 2025 guidance, but we expect the current trends will persist into 2025 and continue to pressure the year-over-year growth rates. This is particularly true in the DSA segment as we anticipate continued headwinds based on the current pricing environment and until we anniversary the step down of Global Biopharma demand that has occurred during the second half of this year. As I discussed in August, we are taking decisive action to manage the company through the current demand environment, including appropriately right-sizing our infrastructure. We are committed to initiatives to generate more revenue, contain costs, and protect shareholder value. As I outlined last quarter, and to ensure our further success, we are focused on taking strategic actions in three areas: restructuring initiatives to maintain costs and generate efficiency by reducing staffing levels to align with the pace of demand, as well as evaluating our global footprint to optimize, consolidate, and simplify operations. We have made meaningful progress on our footprint optimization efforts since we last spoke. The second area is focusing on commercial enhancements to promote a client-centric focus and gain additional market share. Our goal is to enhance the client experience and reinforce our role as a flexible and responsive partner to our clients, including through leveraging technology such as our Apollo platform and RMS e-commerce initiatives. And finally, we are continuing to evaluate additional strategies to take additional costs out and to drive efficiency. We are working on initiatives to further transform how we operate, ranging from continuing to better leverage technology to adopting a global business service model to streamline processes, as well as generating greater procurement savings. The restructuring initiatives that we have implemented to aggressively manage our cost structure are already generating significant savings, and as planned, we continue to further reduce staffing levels in the third quarter. The initiatives that we have implemented since late 2023 have reduced our total headcount by over 6%. It is imperative in this environment to keep our staff well utilized in order to protect the operating margin, which is our goal. We have also undertaken a comprehensive review of our global footprint. To provide some context, we built many of our businesses through acquisitions, accumulating over 150 sites at peak. We have periodically consolidated or divested smaller sites over the past several years to manage our global infrastructure, including the consolidation of seven small sites within the past year. Our global footprint optimization efforts are focused on consolidating capacity that is no longer needed and, in many cases, transitioning the services and clients to other larger sites. We have also taken a client-centric approach towards these actions with a goal of serving our clients more efficiently and seamlessly in order to capture synergies and savings that extend beyond the facility costs. Through these optimization initiatives, we have already begun to implement a process to close or consolidate approximately 15 smaller sites, principally focused on the DSA and RMS segments. By the time the program is completed in 2026, we expect it will generate an incremental $40 million in annualized net savings through the elimination of overhead and facility costs, as well as by reducing headcount. We view these as durable savings because we do not believe reinvestment in similar infrastructure will be required when demand improves. These footprint optimization efforts will enhance the efficiency and economies of scale in our global infrastructure, leading to a more disciplined operating model. In total, the restructuring initiatives that we have implemented since late 2023, including headcount reductions and global footprint optimization efforts, are expected to generate approximately $200 million in cumulative annualized cost savings, eliminating more than 5% of our cost structure. Approximately half of the annualized cost savings will be realized this year, and at least $150 million in total will be realized in 2025. Before I provide more detail on our third quarter results, I want to provide a brief update on capital allocation. We were pleased to report that we generated record free cash flow of over $200 million in the third quarter. Strong cash generation is a long-term hallmark of the company. This, coupled with moderating capital intensity of our businesses and lower debt, has enabled us to reevaluate and rebalance our capital priorities to include modest stock repurchases this year, totaling approximately $100 million in the third quarter. These collective efforts, from restructuring to capital allocation, are aimed at emerging as a leaner, more efficient organization when demand returns, a stronger partner to our clients, and better positioned to capture new business opportunities, as well as to protect and ultimately enhance shareholder value. I'll now provide highlights of our third quarter performance and updated guidance. We reported revenue of $1.01 billion in the third quarter of 2024, a 1.6% decline on a reported basis over last year. Organic revenue declined by 2.7%, driven by the anticipated decline in DSA, partially offset by low double-digit growth in the manufacturing segment and slightly higher RMS revenues. By client segment, revenue declined for both the small and mid-sized biotech and the global biopharmaceutical client segments in the third quarter, as expected. But as I mentioned earlier, revenue from biotech clients was stable sequentially. The operating margin was 19.9%, a decrease of 60 basis points year over year. The operating margin improved in each of our three business segments due in part to the benefit of cost savings. However, higher unallocated corporate costs resulted in a consolidated operating margin decline in the third quarter. Flavia will provide more details on unallocated corporate costs shortly. Earnings per share were $2.59 in the third quarter, a decrease of 4.8% from the third quarter of last year, reflecting the lower revenue and operating margin. Despite the decline, third quarter earnings per share exceeded the outlook we provided in August due primarily to the better-than-expected top-line performance, particularly in the DSA segment. We are narrowing and slightly raising our full-year guidance for revenue and non-GAAP earnings per share from the midpoint of the previous ranges to reflect the third quarter performance. We are narrowing our revenue outlook to a 3%-4% decrease on an organic basis, and non-GAAP earnings per share has been slightly raised to a range of $10.10-$10.30. While we're never pleased with declining revenue, our financial outlook already demonstrates that we are beginning to see the benefits of the disciplined management of our cost structure. I'd now like to provide you with additional details on our third quarter segment performance, beginning with the DSA segment's results. DSA revenue in the third quarter was $615.1 million, a decrease of 7.4% on an organic basis, driven by lower sales volume in both the discovery services and safety assessment businesses. DSA revenue modestly exceeded our prior outlook of a 10% second-half decline because global biopharma demand trends held up better than we expected. We now believe the DSA segment revenue will decline at a high single-digit rate organically in the second half of the year, consistent with our full-year outlook. In the safety assessment business, the revenue decrease was primarily driven by lower study volume. Pricing was essentially flat year over year and is expected to turn slightly lower in the fourth quarter, which is consistent with our previous expectations. From our perspective, the safety assessment pricing environment, or spot market, for new proposals has not materially changed for most of the year. We were pleased that gross bookings and cancellations improved from second quarter levels, resulting in an improvement in the net book- to- bill ratio to the most favorable level since the first quarter of 2023. As I mentioned earlier, these forward-looking indicators for global biopharmaceutical clients rebounded in the third quarter, which reassured us that the demand environment was not further deteriorating. In addition, biotech trends remained stable in the third quarter, and overall, the forward-looking demand KPIs for this client base remain more favorable in 2024 than last year. Headwinds still exist, ranging from the net book-to-bill ratio remaining below one times to pricing and the overhang from our clients' major restructuring efforts. Therefore, we will continue to take a cautious view with respect to the near-term outlook for our safety assessment business until the sustained demand trends are more supportive of a return to revenue growth. The DSA backlog decreased just slightly on a sequential basis to $2.12 billion at the end of the third quarter from $2.16 billion at the end of the second quarter. As part of our ongoing efforts to promote a client-centric approach and refine our operating model, we are working to further integrate our global discovery and safety assessment operating structure to one DSA over the next year. For the last two years, our global DSA operations have been managed by one senior leader, Shannon Parisotto. During this time, Shannon has comprehensively evaluated the strengths and opportunities that exist within the businesses and focused on enhancing its future vision. In concert with senior management, has developed a plan that we believe will unlock greater synergies and ultimately make us a stronger and even more responsive partner for our clients. Many of the changes will be settled both internally and from a client perspective. They will focus on a combined salesforce and leadership approach, integrated scientific programming, and a more seamless client experience as their programs transition from the discovery to the early development phase. The insights we have already gained from migrating towards this model have influenced our global footprint optimization plans, including consolidation of several smaller sites and transitioning services to other DSA locations. The DSA operating margin was 27.4% in the third quarter, a 20 basis points increase from the third quarter of 2023, and a 30 basis points increase sequentially. The year-over-year and sequential improvements were primarily driven by the increasing benefits from the cost savings actions that we have implemented. RMS revenue was $197.8 million, an increase of 0.6% on an organic basis over the third quarter of 2023. RMS revenue is primarily driven by the benefit of higher pricing and small model sales volume in China, largely offset by lower revenue for research model services and Cell S olutions. As has been the case all year, small model revenue in North America and Europe has been driven by higher pricing. Unit volume for small animals has declined this year in conjunction with large pharma restructuring activities that have led to spending cuts and a reduction in research staff, and the funding environment has resulted in a slowdown in new biotech company creation. These trends have largely been reflected in our original outlook for the year. To offset the volume declines, we also continue to realize price increases because small models are essential low-cost tools for drug research. Our China business continues to perform well this year, despite the macroeconomic pressures in the country, primarily driven by share gains associated with our geographic expansions. Research model services, including our CRADL operations, experienced a modest revenue decline in the third quarter, largely reflecting the overall biopharma demand environment. While CRADL's business model continues to resonate with clients, it experienced low occupancy as clients selectively narrowed room utilization to cut costs, and GEMS has been modestly affected by a similar slowdown in client demand. As part of our footprint optimization efforts, we are in the process of consolidating several CRADL sites and have also consolidated our Cell Solutions operation at its largest site in California. Existing demand trends are expected to result in essentially flat RMS organic revenue in 2024. In the third quarter, the RMS operating margin increased by 210 basis points to 21%. The improvement was primarily due to higher pricing, a favorable revenue mix related to Noveprim, and the benefit of cost savings actions. Revenue for the manufacturing solutions segment was $196.9 million, an increase of 11.8% on an organic basis compared to the third quarter of last year. Each of the segments' businesses contributed to the robust revenue growth, and given its continued strong performance, we are raising the segment's full-year revenue outlook to high single-digit organic growth from our prior outlook of mid to high single-digit growth. The CDMO business led the way with a robust quarter, particularly for cell therapy, as client interest and booked activity were strong in the third quarter. CDMO business remains on track to have another solid year. Our biologics testing business also continued to perform well, driven by demand for our core testing activities, including cell banking, viral clearance, and viral safety testing. We are also pleased that the synergies between our CDMO and biologics testing businesses continue to strengthen, as it is critical to provide analytical testing capabilities to expedite the production processes for our clients' cell and gene therapies. More than half of our CDMO clients now utilize our biologics testing capabilities, which is a testament to the synergies between these businesses. The microbial solutions business also had a strong quarter, driven primarily by demand for our Endosafe testing consumables, as well as improving instrument placements. We believe the third quarter performance demonstrated that demand for microbial products has rebounded from the pressures last year, which resulted from clients' destocking activity and tighter budgets in the drug manufacturing sector. Our belief was supported by the placement of seven of our large automated systems from our Endosafe Nexus platform during the third quarter, and a similar number of placements are expected in the fourth quarter. In addition to the fact that these high-throughput systems are expected to drive meaningful incremental cartridge use, we view installation of these systems as further evidence that both existing and new clients are utilizing our comprehensive, rapid manufacturing quality control testing solutions to enhance their product release testing speed and efficiency. Manufacturing segment's third quarter operating margin was 28.7%, representing an increase of 420 basis points year- over- year. The improvement was largely a result of leverage from higher sales volume across each of the segment's businesses. To conclude, we are continuing to navigate through this challenging period by remaining laser-focused on our strategy, by aggressively managing our cost structure, by enhancing our clients' experience to gain additional share, and by protecting shareholder value. We have always distinguished ourselves through our exquisite science and preclinical focus, extending our leading position as our client's preferred global non-clinical drug development partner. We have navigated challenges before, and we expect to emerge from this period as a stronger, leaner, and more profitable company, and an even more responsive partner for our clients. I'd like to thank our employees for their exceptional work and commitment, and our clients and shareholders for their continued support. Now, Flavia will provide additional details on our third quarter financial performance and 2024 guidance. Thank you, Jim, and good morning. Before I begin, may I remind you that I'll be speaking primarily to Non-GAAP results, which exclude amortization and other acquisition-related adjustments, costs related primarily to restructuring actions, gains or losses from certain venture capital and other strategic investments, and certain other items. Many of my comments will also refer to organic revenue growth, which excludes the impact of acquisitions, divestitures, and foreign currency translation. Third quarter 2024 organic revenue decreased at a rate of 2.7%, which was better than our outlook of a mid-single-digit decline. We delivered Non-GAAP earnings per share of $2.59, which decreased 4.8%, but was favorable to our prior outlook of a low double-digit decline. The outperformance was largely driven by better-than-expected DSA results. As Jim discussed, we have narrowed and slightly raised our revenue guidance for the full year to reflect the stronger third quarter performance and now expect a revenue decline of 2%-3% on a reported basis and 3%-4% on an organic basis. Non-GAAP earnings per share guidance is now in a range of $10.10-$10.30. By segment, the revenue outlooks for each segment are either narrowed or unchanged. RMS revenue will be essentially flat on an organic basis. DSA revenue is expected to be at the more favorable end of our prior outlook of a high single-digit organic revenue decline, and manufacturing is expected to report high single-digit organic revenue growth. From an operating margin perspective, the outlook is also unchanged. We expect that this year's consolidated operating margin will be slightly below last year's level, as cost savings and lower performance-based bonus accruals will nearly offset the revenue shortfall at the margin level in 2024. There are three key updates this quarter that I'll highlight now: the additional savings from our restructuring initiatives, the reinitiation of stock repurchases, and our strong free cash flow generation. As mentioned in August, we have begun to implement additional restructuring initiatives to deliver further cost savings to help preserve the bottom line. This will result in the consolidation of approximately 15 smaller sites, primarily in the DSA and RMS segments, most of which have already started. We're also planning a sale and lease-back arrangement for our Wilmington RMS and corporate campus, which will reduce fixed costs and improve efficiencies while enabling us to continue to operate from the site. We expect these footprint optimization efforts will be completed in 2026 and generate net savings of approximately $40 million. Inclusive of the actions we have taken since late 2023, we have successfully identified annualized savings of approximately $200 million, of which approximately $100 million will be realized this year, and an incremental $50 million in each of the next two years to achieve the full run rate in 2026. As part of our footprint optimization efforts, we expect to incur roughly $100 million of restructuring charges associated with site consolidation and transition costs, lease impairments, severance, and related items. A portion of the cash charges will be offset by the expected cash proceeds from the sale of real estate. These restructuring items will be excluded from our non-GAAP results. The majority of these charges will be recorded in 2025. By taking these actions now, we are positioning the company for future profitable growth, utilizing a more scalable footprint. As you know, our board recently approved a new stock repurchase authorization of $1 billion. We commenced stock repurchases under the new authorization in August and repurchased a total of 500,000 shares for approximately $100 million, which achieved our goal to offset annual share count dilution from equity awards for the year. Moving forward, we'll continue to regularly reevaluate the best uses of our capital, inclusive of stock repurchases, debt repayment, and strategic M&A to accelerate growth and maximize shareholder value. As Jim mentioned, we also achieved record quarterly free cash flow, with $213.1 million generated in the third quarter, compared to $139.5 million last year. The improvement was driven by disciplined working capital management and lower capital expenditures. CapEx was $38.7 million in the third quarter, compared to $65.9 million last year, which reflected the ongoing moderation of our capacity requirements. For the year, free cash flow will be over $450 million, an increase from our prior outlook of $380-$400 million, and CapEx is expected to be between $220 and $240 million. I will now provide details on the non-operating items that affected our third quarter performance. Unallocated corporate costs total $76.8 million, or 6.6% of revenue in the third quarter, compared to 4.7% of revenue last year. The increase was primarily due to higher health and fringe-related costs and the absence of benefits from virtual power purchase agreements, or VPPAs, that were recognized in the prior year. For the full year, we expect unallocated corporate costs to be slightly above the mid-5% range as a% of revenue. The Non-GAAP tax rate in the third quarter was 21.3%, representing a decrease of 30 basis points year over year. The decrease was primarily due to a favorable geographic earnings mix. For the full year, we now expect our tax rate will be in the range of 21.5%-22%. The total adjusted net interest expense in the third quarter was $28.8 million, which represented both a sequential and year-over-year decline. These reductions are primarily the result of shifting debt to lower interest rate geographies and continued debt repayment. For the full year, we expect total net interest expense will be at the lower end of our prior outlook of $118-$122 million. We are pleased with the effectiveness of our capital management activities. We have been able to lower our net interest expense by repaying over $300 million in debt this year, which has brought our gross leverage ratio to 2.25 times and our net leverage ratio to 2.2 times at the end of the third quarter. We were able to continue to repay debt in the third quarter while absorbing $100 million to reinitiate stock repurchases in August. As a reminder, we also entered into a $500 million interest rate swap two years ago that has proven to be economically advantageous, as we have been locked in a lower fixed interest rate. Currently, over 85% of our $2.3 billion debt at the end of the third quarter was at a fixed rate, including the swap that expires in November. A summary of our 2024 financial guidance can be found on slide 41. With one quarter remaining in the year, our fourth quarter outlook is effectively embedded in our full-year guidance. For the fourth quarter, we expect revenue to decline by low to mid-single-digit rates on both a reported and organic basis. There can be quarterly variability in RMS results due to the timing of NHP shipments, and the manufacturing segment's growth rate is expected to moderate from the strong low double-digit performance in the third quarter due primarily to the timing of CDMO projects. Non-GAAP earnings per share are expected to be in a range of approximately $2.45-$2.65. Looking ahead to 2025, we continue to expect the current trends will persist, largely due to our global biopharmaceutical clients' ongoing restructuring programs and the continued gradual recovery in biotech growth. As a reminder, we plan to provide our 2025 outlook when we report our year-end results in February, which is our standard practice. In conclusion, we're pleased with our third quarter performance in this challenging environment. As we look to the future, we're focused on being well-positioned to drive growth when the market rebounds. Our unwavering commitment to continuing to deliver high-quality scientific solutions to our clients, as we transform into a leaner, more agile organization, is a testament to our company's strength and resilience. Thank you. That concludes our comments. We will now take your questions. Thank you. Ladies and gentlemen, the floor is now open for questions. If you would like to signal for a question, please press star one on your telephone keypad. You can remove yourself from the queue at any time by pressing star two. Once again, that is star one to ask a question and star two to remove yourself. In the interest of time, we ask that you limit yourself to one question and one follow-up question. We will pause for just a moment to assemble the question queue. We'll go first to Max Smock with William Blair. Please go ahead. Good morning. Thanks for taking our questions. I wanted to follow up on a comment you had around the puts and takes in terms of the funding environment, the interest rate sentiment that keeps your outlook for small biotech measured. Could you just walk through kind of what those puts and takes are? And then, in light of last night's election, I'd be curious if there's been any change to your view on the outlook for the funding environment moving forward. Hey, Max. Good morning. I think I'll let Jim answer on the election part, but in terms of the puts and takes, I think from a macroeconomic perspective and just funding environment, it started in the beginning of the year with a more robust funding with the IPO market opening. We continue to see that getting support throughout the year, although slightly lower clip than the first half of the year. Obviously, interest rates have started to come down, which is a good signal to the biotech environment. And as we said, from a demand perspective, we continue to see the demand indicators trend more favorably for our biotech client base than last year. So while they didn't rebound to the extent that we had anticipated earlier in the year, which was part of the reason we adjusted our guidance in the second earnings call, they are stable and favorable to last year. So we're cautiously optimistic that things will continue to improve, but albeit at a much slower clip. Excuse me. A little bit of a ponderable at the election. I think that if it had gone the other way, IRA might have been beefed up, but additional drugs might have been added to it. In the short term, that'd be more expansive. Having said that, it's popular and attractive for any candidate to just talk about drug prices being too high. But I would expect we'd have less of a focus on it with the new administration. We'll have to wait and see what the dialogue is. Got it. Thank you for that. And then, Flavia, maybe just a cleanup one from me. How much of a benefit did you all recognize from lower incentive comp in the quarter? Similar to last quarter, it's fair to assume most of that impact was in DSA and at the corporate level. Just to confirm, you're talking about? performance-based comp. Oh, performance-based comp. Thanks. So that was not a meaningful impact in the third quarter. The big adjustment when we adjusted our guidance was really in the second quarter. So this was not a key factor in this quarter's results. I'm sorry. Are you still expecting it to be a factor, though, in the second half? I think last quarter when we talked, you did $20 million in 2Q. I think rough math, we had kind of gotten to $30 million in total for the back half of the year. So is it fair to assume there will still be some impact in 4Q, or now is that kind of tailwind? Is that out of margins here in the back half of the year? Yeah. It's still going to have an impact in the second half, but the majority of the catch-up was in the second quarter. Got it. Thank you. We'll go now to Matt Sykes with Goldman Sachs. Please go ahead. Hey, good morning. Thanks for taking my questions. Maybe just first on the large pharma segment. You noted the still challenging environment. However, you also cited demand trends didn't get worse. Just based on your discussions with these customers, do you think we're at the tail end of these cost savings and reprioritizations? And if so, how do you see the slope of demand recovery from this customer segment as we move into 2025? Tough to say. Probably at the tail end with some of that. It certainly felt like they were doing an en masse kind of at the same time, even though there's lots of preparation for that. There's no question there's been an enormous amount of reprioritization and reduction of costs. Some of it's definitely going on because we engage with so many of these clients at the end of the year to see what their spend will be next year, what the budget looks like, whether they'll be more money in R&D or less. I suspect we're not through with it yet. We really feel that we've reached the point where it's unlikely to deteriorate further from a demand point of view. Pharma was very strong for us last year and pretty strong for us in the first half of this year, less strong in the back half of this year, with biotech sort of picking up some of the slack, albeit more slowly. So much of what we do is beneficial for our clients to reduce their costs and infrastructure. There's a lot of work that could come outside, so we could be the beneficiaries of that as well. But I think it's going to be a while before we're through it. Got it. Thanks for that, color. And then on your cost savings initiatives, what gives you confidence that the headcount reductions and the site consolidations, one, won't create friction amongst your customer base as you're doing that, and two, you're right-sized for any recovery that may happen next year, even if it's more pronounced than your expectations? So look, we're obviously working really hard at maintaining our quality staff. Everything at Charles River is about science. It's about speed. It's about responsiveness. And it's about really understanding the science and being able to contribute to what the client is doing. So we've tried to be. We've been very surgical and very thoughtful in our workforce reductions. We think that we're in a very good place now, given our guidance for the balance of the year and some of our early thoughts for next. If things were to accelerate and improve more quickly than we might anticipate, we're quite confident that we could add those people back, mostly direct labor. And as you've heard us say before, we need some meaningful period of time to train those people, but the sort of brain trust of the folks that are overseeing some of the studies and interfacing with the clients, we've left intact. So look, we had an obligation to get our headcount in sync with the demand. That's our responsibility and a necessity. And I think that we've done that, as I said, quite thoughtfully and expeditiously. Thank you. We'll hear next from David Windley with Jefferies. Please go ahead. Thanks. Excuse me. Thanks. Good morning. Thanks for taking my questions. On the first one, Jim, I wanted to dovetail off the last on demand and DSA and think about or ask you about the pricing and backlog versus what is flowing through revenue, kind of thinking about the puts and takes on demand there. Then, more broadly, as you think about margin in DSA, pricing that I mentioned, the cost actions that you're taking, how should we think about the margin sustainability at that 27% level? Again, it feels like some moving parts to and fro. I mean, the pricing and the backlog, as that work plays through, is obviously going to have some impact. Prices have been sort of flat to somewhat down, actually probably more comparable. We have said that we anticipate that it'll be down further by the end of the year. So we're going to see that play through. Pricing for next year, we're not going to go there yet, but we'll see that. I'll let Flavia answer the margin question. Look, we're going to do everything we can to protect margins. So from a headcount point of view and an infrastructure point of view, G&A point of view, we're doing everything that we think is possible. Yeah. I think to your question, Dave, and how Jim is framing, we know that price is going to be a headwind for us next year. We are, in a sense, that we are already signaling that it will turn from flattish this quarter to slightly down next quarter. So we know that that will be something that we'll have going against us in 2025. And that's the reason why we've been working so hard on the cost-saving initiatives, whether it is to adjust the workforce to the demand environment or look at how we can optimize the footprint, because we know we're going to have to overcome this to help protect margin. So I do think the DSA margin will be pressured given the pricing dynamics, our, let's say, inability at the current market environment to get price, which was the case when demand was much stronger. And so there will be pressure on the margin, I think, going forward. Without talking about specifics, I don't expect it to definitely not to increase. And if you put the pieces together with the headwinds on price, I think we'll have to see when we guide to 2025. But if you just do the math with cost going up and price not increasing, that will be pressured. Okay. And then just if I could get some detail on, you mentioned a global business service model, I think. And to my ear, maybe that's the first time you've discussed that or mentioned that. If you could elaborate on the details of that and how long it'll take you to implement. Yeah. I'll take that one. We actually had a little bit of that commentary last quarter as well, but it's good that you picked up on it. The way I would suggest you think about it is we obviously continue to look at opportunities for us to streamline and be more effective in how we operate. When the demand started softening, the first lever we pulled was on the headcount that is directly associated with the services that we provide. We then look at footprint, which is what we provided an update at this call. But then we continue to look at, let's say, new ways of us to operate and make sure that we are as effective as we can, whether it is continuing to reap the benefits of our digitization efforts to automate processes and get efficiencies that way, or look at global business services as a means and a way to, especially in some of our more standard processes, functional areas, can we do those in a more effective way? So we're looking at opportunities to perhaps change the way we operate, operate more in a standardized fashion, in a more scalable fashion. And that's what we mean by pulling that lever on global business services. Got it. Thank you. We'll hear now from Eric Coldwell with Baird. Please go ahead. Hey, thanks very much. Could you dive into the, at least what I would say might be relatively low RMS margin this quarter, given you did have upside in high-margin Noveprim sales and also favorable pricing in small animals, where I might have expected more of a drop-through on the pricing side on the small animals? Anyway, if you could also dig into the lumpiness in large animal timing as a potential factor in Q4 and what you're currently thinking you might experience on that this period? Thanks very much. Good morning, Eric. Yeah. I'll take that one, and I'll answer the latter part of your first question first. So to your point, there is a little bit of potential lumpiness on the timing of shipments of large models, both from Noveprim as well as the sales that we have in China for China. So we try to account for that, and it's a little bit of a binary event, whether it happens or not, right? And it will play into the margins in growth in the RMS sector or segment, excuse me, as well as potentially having an impact on EPS, given that that part of the business has high margins. So obviously, we guide in a range, and so the range considers both outcomes. And so we try to do the best we can, but sometimes it can shift one week, and it falls in one calendar year or one quarter or not. With regards to the RMS margin this quarter, there is a mixed bag there. As you pointed out, on one hand, the NHP shipments are favorable. But on the other hand, I think there's a couple of headwinds. Obviously, we still got growth in China, and volume growth, I mean, which is a lower margin part of the RMS models business. And then I think you also saw that the services businesses were lighter. They actually had some decline this quarter. So there are some puts and takes there. We put some pressure on the margin. Our next question will come from the line of Justin Bowers with Deutsche Bank. Please go ahead. Mr. Bowers, I believe your line may be muted. Pardon. Thank you. Good morning. The bookings and safety assessment improved pretty significantly quarter over quarter. And I believe you did call out an improvement in cancellations as well. Are you seeing that across both customer sets, biotech and globals, or was that more isolated to one customer? And then is this a good level? I mean, the bookings have ranged from, say, 450-475 for the first three quarters of the year. Are we at a good sort of run rate here based on sort of the conversations and what you know now, or are we still in sort of this normal level of volatility around the bookings? We're seeing a lower rate of cancellations across pretty much our client base, which obviously we're pleased to see. Forward momentum for the pharma companies, which are still reducing their infrastructures, as we talked about earlier, is definitely an issue for them. As I said, they had a strong first half of the year and less strong third quarter. Both the demand and the bookings for the biotech client base feels a lot more stable and a lot more consistent, albeit not growing at the rate that we had perhaps anticipated, but a lot of positive signs there in terms of capture rate, in terms of access to clients, in terms of their dialogue, and you watch them, it's all about rate cuts, which we've had one and another one to come, and what happens to the IPO market. I don't have a clear what the election does to our clients, both large and small, but biotech has been the principal driver of our growth for almost a decade, sort of slowed down a little bit last year, seems to be strengthening somewhat this year. Having said that, as we think about moving into next year, a lot of the trends that we're seeing now are likely to persist for at least some time until some of those things happen, like the IPO market actually opening up. The other thing that's, I guess the last thing I would say is that the biotech funding market had a very good September and a very good October as well. So, while everybody continues to compare the results to, I don't know, 2021 and 2022, which were crazy exceptional years, there's a fair amount of money going into biotech. And as we've said, and I personally said for several quarters now, I think this is a lot about psychology and a lot about fear of the unknown and a lot about pulling back and being hyper-conservative, sort of feeds upon itself. But actual access to capital is not that bad. It's quite good for the venture firms, and they're quite good for big pharma funding a lot of biotech. So, I think the trajectory is improving nicely, albeit a little bit more slowly than we thought. Thank you. And just a quick follow-up on that. What is customer behavior now in terms of bookings? How far are they booking? Is it closer to study start? And then lastly, with some of these restructurings that we're seeing in large pharma, is that yielding opportunities in the CRADL business, or do you think a lot of those decisions around infrastructure have been made at this point? Yeah. I think in terms of when studies are starting, we see kind of both ends of the spectrum. There's things starting within a month, and there are still people booking six, nine months ahead. So we're really seeing the gamut of study starts in that sense. With regards to CRADL, we do still believe that our vivarium as a service, if you will, type of service continues to resonate with clients, kind of big and small. We did see some in the biotech client base, let's say, rationalizing or right-sizing how much space they take. Some of the pharma clients had already, in the start of our CRADL business, kind of established bespoke and spaces where they were anchor clients. So we're not seeing them take more, but they had already taken space in some facilities. And we continue to work with them as they update their footprint in additional opportunities. So I'll say for large clients, we're not seeing it be positive or negative. In the biotech clients, there's a little bit less utilization at this point, which drove the softness, if you will, on services for RMS this quarter. Thanks so much. We'll hear next from Dan Leonard with UBS. Please go ahead. Thank you. I'm just trying to make sure I understand your view here. Is it your view that the Q4 sales is the run rate for the business until we see an improved end-market demand environment? Yeah. I think if we are going to refrain from answering comments or questions that sort of infer what the outlook is for 2025, I think, as Jim has said, we are pleased that the demand trends and indicators have sort of stabilized in the third quarter. We think we called the outlook for this year correctly. We're going to continue to watch and see how they evolve in the fourth quarter before we comment on outlook for next year. What I will remind everybody is, from a comps perspective, right, we'll have to anniversary, especially the first half of this year, where pharma was still strong. So between that and pricing, that's why we have put in our prepared remarks that we expect the current demand trends will continue into 2025 and put some pressure on year-over-year growth. Once we start seeing more pronounced and lasting signals of recovery, we'll be obviously the first to tell you all that we have more confidence on the outlook. At this point, I think it's a steady state of where we are. We obviously will have considerable discussions with our clients in the fourth quarter as we put our plan to bed, and they do the same. And so we should get pretty accurate feedback on spending patterns, how much they're going to be spending in the clinic, how much they're going to be spending for IND filings, how much for post-IND, and what their total IND spend looks like. Obviously, at some point, big pharma is going to get back to investing in early discovery and early development. So, I think we have the best access to clients to understand what's going on in the marketplace. For now, we're going to have to assume that some of the situation that we're in, some of that's just going to persist. As Flavia said, we do have the sort of comparison to last year. So we'll know a lot more as we get through the fourth quarter and we get to our February call, where we sort of encapsulate the year and make our prognosis and guidance for the following year. But we don't think anything is deteriorating or will deteriorate. So we have some stability here, hopefully some predictability, and hopefully improved visibility based on what our clients tell us. And we'll certainly share that with you in February. And then just to follow up on margins, I understand your goal is to maintain margins, but is the $50 million of incremental cost savings in 2025, is that enough to offset the reversal or the restoration of incentive compensation, inflation, some things which you would know at this point that would be typical budgeting matters? Is that $50 million enough? Yeah. And I talked a little bit about this in the second quarter earnings, that in a sense, quote-unquote, "it's not enough." And that's why we continue working, and we provided additional color now that our overall savings have increased with the result of the footprint optimization efforts that we have been working on over the last two to three months. In an environment where you don't have volume growth, where price is a headwind, and your costs continue to increase, obviously protecting margin is hard. And that's why we continue to look at levers to drive efficiency and do the best we can to ensure we're adjusting our staffing, rationalizing our footprint, and driving those efficiencies to protect margin in this environment. Understood. Thank you. We'll go next to Elizabeth Anderson with Evercore ISI. Please go ahead. Hey, guys. Thanks so much for the question, and congrats on the next quarter. I may have two questions. My first question is, you've talked about some of the changes you've been making internally, how you operate, and sort of obviously your estimation of where we are in the pharma cycle. What are customers, particularly biopharma customers, asking for differently in this cycle? Are you sort of conceptually working with them in new ways given these changes? And then secondly, obviously, your focus on capital deployment has traditionally not been as weighted towards share repo. Is this, obviously, the purchases in the third quarter, is that more of a reflection of sort of the dislocation in the share price as you saw it, or is that something you're kind of thinking about changing your mix going forward, broadly speaking? Thank you. So we bought back shares for, I'm trying to think, at least 10 or 12 years consistently to offset dilution from options being granted. And that was something that I think that was the smart thing to do. Of course, it's all contextual. It depends on the share price. It depends on how much debt we have. It depends on how robust our earnings are, and it depends on whether we have a different or a better use for the cash. And so, as we've said a few times, we have a committee of the board that looks at this five times a year. What is the best use of our cash? And we felt at the time, and still feel, that sort of reintroducing that and offsetting the dilution is a smart thing to do and probably leaves us enough powder to do some M&A as well. Of course, we've been paying down our debt. So look, nothing's forever, and everything is contextual. So it doesn't necessarily indicate anything about the future, although we may feel the same way going forward next year. Your first question, I would say that our biotech clients are looking for funding. As I said earlier, very concerned from a psychological point of view about having lack of access to funding. The VCs have to put in another round or larger rounds than they used to if they can't get an IPO going. And those that were assuming that they could get a secondary haven't been able to do that. So they're definitely more cautious. Having said that, almost no biotech companies have any internal capacity to do any of the things that we do. So they are, by definition, net outsourcers, whether they're small, medium, or very large, frankly. So they're all potentially our client base, and the majority of them probably are really our client base. And so all we can do is stay close to them, be responsive to the needs. As Flavia said earlier, right now, the sort of backlog is kind of nine months-ish, and we can start some studies quite quickly. Others, if they want to book a study that goes out for a while, we can do that as well. But it's usually a couple of quarters. So it sort of feels like a pretty good sweet spot now in terms of being able to respond to their demand sometimes quickly and sometimes on a forward-going basis. So I think our clients are pleased with our responsiveness, which is everything, and the quality of our science. And we do an amazing job given the scale of our company and servicing very small values. Great. Thank you. We'll turn now to Michael Ryskin with Bank of America. Please go ahead. Great. Thanks for taking the question, guys. A lot has been asked. I'll stick with one from me. On the global biopharma side, you talked about trends overall and just sort of some stabilization following reprioritization earlier this year. I kind of want to ask, how heterogeneous is demand within global pharma? What we're hearing is there's sort of a dichotomy where you've got a handful that are spending a lot, a handful that are reprioritizing a lot, and then sort of everyone's kind of sitting around in the middle. Is that how you see it? So for the ones that so far are spending a lot, what gives you confidence that that'll continue and they're not just behind everyone else in initiating reprioritizations or cost cuttings? Does that make sense? I think they're all watching their costs, even the ones that you're probably talking about that you don't think need to. We've actually seen those companies reduce their infrastructure as well because the patent cliff is looming, and some of these folks with the GLP-1 drugs, everybody's working on a different or a better version of that. So it's going to be quite substantial. So not dissimilar from biotech, a lot of the pharma companies no longer have any internal capacity, certainly to do toxicology. And a lot of them don't have internal capacity to do some of the discovery work that we're doing. And even if they do have the capacity, doing it with Charles River is a faster, less expensive, and most often a higher science result. So what's ironic about this kind of slowdown in our demand is that all of our client base doing work with us is a methodology to reduce their cost structure and do less internally and use our capability. And that should help speed things up. So we certainly still believe that that's the case and that we will see demand coming from some of our small biotech clients and some of the larger pharma clients as well. We have very big market shares with big pharma, albeit at a time where they're all being cautious and reducing their infrastructure. As we said earlier, some of that is done. Some of that's in process. Maybe some of that is yet to happen. But we'll have a much better sense of that as we sort of interrogate them during the fourth quarter here. Thanks. That's helpful. I'll leave it there. We'll go next to Tejas Savant with Morgan Stanley. Please go ahead. Hey, guys. Good morning. Jim, I want to go back to some of the earlier line of questioning on DSA margins here. But I want you to frame your response, ideally, with a longer sort of time frame, if you will. I mean, back in the day, DSA used to be a mid- to high-teens margin business. Last year, it peaked at 27.5%. There's a few moving pieces for 2025, so I'm not going to ask you to go there because I think you already answered that. But help us think about what's an appropriate floor if demand doesn't get better. I mean, there's WIL and MPI that got added along the way. You have much larger scale than you did back in 2015, right? So help us think about what's the worst-case scenario, and then I have a follow-up. Thank you. I mean, it's just classic supply and demand here, right? So we've gone from an era of very aggressive ability to take price for the last five, six, seven years, just enormous amounts of price, a lot of share gains, and a lot of clients really depending on us to a period where we have 2024, we have a very small amount of price. And as we said earlier in our remarks, probably beginning to decline by the end of the year. As space fills, which it will, as demand comes back and improves, which it will, unless you all believe that our clients are no longer going to invest in new drugs, which, of course, is not the case, you have to assume that there's a lot of stuff that's been parked and that the clients want to get back to filing INDs. You have large portfolios that have been scaled back, and I don't think they've killed those drugs. They're just sort of waiting in abeyance. So the opportunities are there from a demand point of view. Also, from a competitive point of view, there's not a lot of capacity outside of Charles River. There's obviously some, but since we took out the kind of second tier of competition some time ago, there are much smaller companies picking up the slack. So as the demand improves, space is going to fill, and I do think we'll have an opportunity to invigorate our margins. I really can't comment on whether it's going to be better or worse than 27% or what the long-term goal is going to be. As you know, we're organized all the time to drive efficiency and improve our operating margins just in terms of our overall structure. A lot of things that we're doing right now, I think, will enhance and improve that. I think maybe just to add, we will provide you an update, obviously, on our longer-term financial targets at some point, given that we obviously are not going to be able to deliver on what we shared, at least in the time frame of 2020. It was 2023 to 2026 when we had our analyst day last year. But since then, we have said we still believe that the fundamentals of this market are intact. And whether it is the 6%-8% or 5%-7%, we still believe that that's in the cards. It's just a matter of when are we going to get there. And in the same way, I would say the mid- to high-20% range that we provided as a goalpost for DSA margin is still doable. It's a matter of, again, when are we going to get there? And maybe the lower end of that mid or the higher end of the high is going to depend upon how quickly and how much does the market come back. But to Jim's point, if you believe in drug discovery and the pharmaceutical industry as a viable business, that longer-term outlook, both in terms of top line and margin, is still intact. Got it. That's helpful. And then a quick follow-up on the manufacturing side of things. I think, Flavia, you cited project timing driving a little bit of growth moderation in the fourth quarter. Can you just give us a sense of what your customer or product concentration looks like on the CDMO side of things at the moment? And then separately, just on the BIOSECURE sort of shifts underway in terms of cell therapy manufacturing or biologics testing, do you guys have any interest in picking up some of the competitors' facilities, which now appear to be for sale? So BIOSECURE should provide some opportunities for us. We've said that multiple times for several quarters now. It's too early for it to have done that. But we'll obviously watch it closely, and we'll see whether a change in administration changes that or not. I do think that the specter of that happening is concerning a lot of people. We just met with some of our venture capital partners last week, and they're quite concerned about it and quite reluctant to do any sort of work in China. Chemistry has in large part gone to China, but that probably will shift to India. The $64,000 question is, for the safety assessment work that's gone to China, where will that go? Because you're not going to get it done in India, so I think a lot of it, assuming that it shifts, a lot of that will come back to the U.S. and to Europe, and we should have an opportunity there. The CDMO business has had a very strong year for us just in terms of the quality of our clients, having a couple of commercial clients, having multiple regulatory audits and multiple different auditing organizations, both domestic and foreign, an enhancement in the quality and experience of our staff and in our facilities, so that business feels like it's poised to continue to do well, continue to distinguish ourselves, and a very important modality to treat some really rough diseases, so we're really focused on continuing to grow that franchise. I do think that some of the work we have now is helping us garner new clients, probably our best marketing approach, and should continue to be strong through the back half of this year. Got it. Appreciate the color, Jim. We'll hear next from Casey Woodring with JPMorgan. Please go ahead. I was like, "Is this really it?" Great. Thanks for taking my questions. Maybe just a quick follow-up to the manufacturing question asked earlier here. Just can you elaborate on the synergies you're seeing between CDMO and the biologics testing business? I think you mentioned that more than half of the CDMO clients are now utilizing biologics testing. So I'm just curious if you can maybe quantify the benefit there or elaborate on the attach rate moving forward that you're expecting. Thanks. Yeah. I mean, that was the principal instigating factor of us going into the CDMO space was that we're doing all this testing of the drug before it goes into the clinic, which is required by law, and also testing the drugs once they're commercially approved, and we had a fair number of clients requesting us to move into the CDMO space only because they didn't want to take the time to validate another provider. So we would do the testing, but who would manufacture the drug before we did the testing? And by the way, if we were doing safety assessment for them just along the trajectory, we could help speed up the process. So they're very closely linked. I think 50% of our more than 50% of our biotech sorry, our biologics clients, CDMO, is using us for the biologics. They're very closely aligned, particularly the analytical testing aspect of that. And that gives us a competitive advantage, by the way. I won't name the competition, but some of our principal competition in that space has no internal capability to do biologics testing. In fact, we do some biologics testing for our competition. And so that really holds us in good stead. I would imagine that would continue to be a key distinguishing feature of our service offering as we go forward. Got it. Maybe just one quick follow-up here. So last quarter, you mentioned that the drop in large pharma demand was surprising in part because you deal with heads of R&D that don't have as much discretion around budgets. So curious just on the client discussions that you flagged today. You called out that you're getting some confidence from those. Just is there any change in how you're communicating with clients during this time and the level of visibility that you have in large pharma now? Thanks. I mean, the only change is we're still dealing with the same people, and I think we're dealing with the right people. As we said earlier, sometimes the decisions are not made by them, are made at a higher level or made quickly or in secret just so it doesn't leak. I do think, as we said earlier, that the ability to have a conversation with clients as they are finalizing or as they have finalized their operating plans for fiscal 2025 should be, and we believe will be helpful for us to kind of zero base where we are with our clients, both large and small, kind of build up our plan for next year. I mean, that's sort of always been the case for us. And the decision about what molecules they'll work on with some of the bigger folks, bigger clients, will they work on them internally or not? If the smaller companies are going to the work's going to go outside, how many molecules will they work on? What percentage of the work with Charles River get? Are facts that we will be able to drill down on? And we'll put a kind of appropriate discount factor to what they tell us because it's not always exactly what they say. But kind of finishing the year and going into the next year with a fresh budget, I do think allows the opportunity for us to plan a lot better and have a good sense of what the client base is up to. So we are working hard on that right now as we're working on our own operating plan. We'll take our next question from Luke Sergott with Barclays. Please go ahead. Awesome. Great. Thanks. I just kind of want to look at it at a high level. On 2Q, you cut the guidance pretty hard. And, Jim, your transcript was reminiscent of the global financial crisis on the outlook. And then we get to where we are today with a pretty significant beat. It seems like things are relatively stable, getting a little better in biotech, a little worse on large pharma. But you look at the macro and all the restructurings, and it's hitting the rest of the space. I guess kind of what changed versus your original expectations? What got materially better here? Or is it more of just that initial outlook on your initial cut there was like, "All right, we're just going to assume that things get way worse than they are"? I'm not sure anything materially changed. It's kind of on the margin here. We do the best we can in terms of having a prognosis on what the next quarter and the rest of the year will be. As I said earlier, we try to do that on a zero-based basis, and we build it up client by client. We have constant communications with our clients. There's a lot of ebbs and flows, though. So we wouldn't want you to get out ahead of this conversation about what just happened. We're obviously pleased with the quarter. We have some positive signs here as cancellation rates aren't as high as this sort of consistent demand, at least on the biotech side, sequential consistent demand on the biotech side. Pharma definitely was a bit of a surprise to us, and I think a bit of a surprise to some of our clients, but I think that'll ameliorate and settle down. We don't think it's going to turn around overnight. So we will look. We're going to continue to put numbers out there that we're confident that we can make without lowballing it or highballing it. And I do think that we understand the client base well enough to do that. We don't have a trend yet. We have some positive indications, which is fantastic. I think we need a few quarters for that to be a trend, and as we said earlier, if and when that, I guess when the IPO market opens up and there's another rate cut, I do think that the biotech clients will have more confidence in their ability to spend for the portfolios that they have and even some of the drugs that they have parked, and the VCs will have to spend less per company and per drug, and maybe pharma will be weighing in more aggressively, so directionally, the opportunities are definitely quite positive. How quickly that happens is unclear, and as we said earlier, we're going to have some of the work that we have booked at lower price points is going to begin to bleed through our P&L. So we're going to have to get through that as well. But I think directionally, we're seeing the beginnings of some positive signs. Great. Okay. And then I guess on the CDMO and the relationship with Vertex, they just signed Lonza in September here for the global. So is there any changes to your existing relationship there? Is that just kind of adding capacity beyond what you guys can provide? Yeah. I mean, that's a necessity for Vertex. Number one, not to have all their eggs in one basket. Number two, they think this is going to be a really important drug. Sickle cell anemia is a tough disease, and it's a pretty big patient population. So having us both doing that, I believe they have another provider overseas as well. So that's just a smart thing to do. It's had no impact on either our relationship with them or the amount of demand that we're seeing from them. So all good. Awesome. Thank you. Sure. Next, we'll hear from Patrick Donnelly with Citi. Please go ahead. Hey, guys. Thanks for taking the questions. Jim, maybe more on the facility side. I saw you guys are kind of shutting down 15 or so facilities across DSA and RMS. Can you just talk about, I guess, the decision there? I mean, I'm sure it's a little bit in response to demand, some of the cost cuts, but where the footprint is. And then again, to some of the earlier questions, if and when demand comes back, what the footprint looks like and how much capacity you guys will have for recovery there. So we're certainly not going to reduce our footprint so that when demand comes back, we don't have enough space, which I guess is the essence of your question. Yeah. We've done a lot of M&A, whatever it is, north of 65 acquisitions since we took the company private. And all of those acquisitions have at least one, if not multiple sites. They're operating businesses that have positive growth rates and positive margins. And so we typically keep them. And I think one of the things that we can do better and will do better, it's kind of baked into this third-quarter announcement, is our ability not to sell to the client based upon how we're structured or where our facilities are, but sort of to amalgamate these sites. So what we have is we have too many sort of small sites floating around that don't have particularly attractive margins that are relatively close to another large site that may have some capacity. So we get to fully utilize a larger site and not have these small sites sort of dangling participles, which are difficult to manage and difficult to have good operating metrics. And a smaller portfolio is beneficial for us. So it really feels like a wonderful opportunity right now to clean up some of this small stuff that's floating around, amalgamate it. That should help with margins. That should help with throughput. That should help with utilizing our sites in a more robust fashion. So we'll continue to do that. We'll think more carefully about that as we buy additional companies at whatever point so that our infrastructure is just more rigorously designed. Okay. That's helpful. And then Flavia, maybe just a quick one on the interest expense. I know you guys did the swap. It's a little bit of a benefit here. Can you just high-level help us think about the go-forward, the framework for 2025 on the below the line stuff? It'd be helpful. Thank you, guys. Yeah. I think we were pleased to have entered into the swap when we did about two years ago. It was definitely economically favorable. It helped provide an additional portion of our debt to lock into lower interest rates in the time that the Fed raised interest. We are now at the tail end of that with the first rate reduction already, obviously, in the books. And so I think we feel good. We still have, even when the swap expires in November, we'll still have a significant portion of our debt will remain fixed. We're going to be looking at our credit facility, which runs through, I think, April of 2026. So we'll be looking at renewing that in the early part of next year. And I think we feel really good about, obviously, record free cash flow generation this quarter, what we've done from a capital allocation perspective, being able to pay down debt meaningfully this year. Leverage is in a really good place, which allowed us also to do a modest share buyback that Jim talked about. So overall, we feel really good about the balance sheet and the progress we've made this year. Okay. Thank you. Once again, ladies and gentlemen, if you would like to signal for a question, simply press star one on your telephone keypad. Again, star one. And we'll pause for just a moment. It appears we have no further questions at this time. I'd like to turn the floor back over to Todd Spencer for closing remarks. Thank you for joining us this morning on the conference call. We look forward to seeing you at upcoming conferences. This concludes the call. Thank you. Thank you. That does conclude today's Charles River Laboratories third-quarter 2024 earnings call. Thank you for your participation, and you may disconnect at this time and have a wonderful day.