Slides
Page 1
Charles River Laboratories 3Q 2025 Results November 5, 2025 © 2025 Charles River Laboratories International, Inc.
Page 2
2 Safe Harbor Caution Concerning Forward-Looking Statements. This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “may,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements also include statements about our projected future financial performance (including without limitation revenue and revenue growth rates, revenue growth drivers, operating income and margin, earnings per share, capital expenditures, operating and free cash flow, interest expense, interest rates, effective tax rate and tax benefits, foreign exchange rates, corporate expenses and costs, profitability, sales volume, and leverage ratios) whether reported, constant currency, organic, and/or factoring acquisitions, with respect to Charles River as a whole and/or any of our reporting or operating segments or business units; the impact of specific actions intended to cause improvements to specific reporting or operating segments or business units; our ability to achieve our financial goals; our expectations with respect to the impact of external interest rate fluctuations; our annual and other financial guidance; the assumptions that form the basis for our revised annual guidance; contract renewal rates; the estimated diluted shares outstanding; the expected performance of our venture capital and other strategic investments; client demand, including trends and the future demand for drug discovery, development, and CDMO products and services, and our intentions to expand those businesses, including our investments in our portfolio, the impact of client loss on our financial results, and the impact of client demand on certain of our business’ utilization capacity; our expectations with respect to the use of New Approach Methodologies (“NAMs”), including adoption timing and the financial impact of our continued investments in NAMs; our expectations with respect to study volume and mix; the impact of foreign exchange; our expectations with respect to our cancellation rate and the impact of such cancellations; the impact of significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition, including tariffs and proposed tariffs and our expectations with respect to offsetting associated costs, and potential budget cuts to the U.S. National Institutes of Health; our plans or prospects, expectations and long-term goals associated with our business; our expectations concerning the Company's commitment to, and ability to create long- term value for shareholders; results and impact of the Board of Directors’ comprehensive strategic review and evaluation of Charles River’s business and prospects; our ability to successfully execute on such strategic review; the impact of our restructuring initiatives, including annualized savings; the impact of our stock repurchase authorization; the impact of potential changes in Federal Reserve interest rates; our expectations regarding our expected acquisition and divestiture activity, including timing thereof, and stock repurchases and debt repayment; the development and performance of our services and products; expectations with respect to pricing, including the impact of price fluctuations, and scheduling of our products and services; market and industry conditions, including industry consolidation and the Company’s share of any market it participates in, outsourcing of services and identification of spending and scheduling trends by our clients and funding available to them; our expectations with respect to non-human primate (NHP) supply and the impact of the investigation by the U.S. Securities and Exchange Commission, including but not limited to the impact on our projected future financial performance; our ability to cooperate fully with the U.S. government; the timing to develop and implement and provide additional disclosure regarding new procedures regarding importation of NHPs, including procedures to reasonably ensure that NHPs imported to the United States are legally sourced; our expectations regarding the availability of NHPs, including the number of NHPs utilized in our studies and fluctuations in the number of NHPs sourced from origin countries; NHP sourcing costs; our expectations with respect to the adoption of animal alternatives; our ability to effectively manage constraints on NHP supply, including but not limited to as affected by our voluntary suspension of planned future shipments of NHPs from Cambodia, including expectations with respect to the amount of NHP-related work will be conducted in the U.S., any progress with regard to additional mitigation efforts, and the timing of shipments of NHPs from countries other than Cambodia; the impact of timing of NHP shipments; our compliance with the maintenance covenants under our credit agreement; the impact of the Company’s efforts to gain additional market share; the impact and timing of operations and cost structure alignment efforts, including on an annualized basis; the impact of hiring and increased staffing needs; the impact of bonus accruals; our expectations with respect to bookings, including impact on our financial performance and results; the potential outcome of, and impact to, our business and financial operations due to litigation and legal proceedings and tax law changes, including anticipated cash tax savings; our business strategy, including with respect to capital deployment and facilities expansion; our success in identifying, consummating, and integrating, and the impact of our acquisitions and divestitures, including the Noveprim acquisition, on the Company, our financial results, our service offerings, client perception, strategic relationships, earnings, and synergies; our ability to differentiate from the competition; our expectations regarding the financial performance of the companies we have acquired; our strategic agreements with our clients and opportunities for future similar arrangements; our ability to obtain new clients in targeted market segments and/or to accurately predict growth opportunities, including which client segments will be future growth drivers; the impact of our investments in specified business lines, products, sites and geographies, including the impact of our virtual power purchase agreements; our ability to meet economic challenges; and Charles River’s future performance as otherwise delineated in our forward-looking guidance. Forward-looking statements are based on Charles River’s current expectations and beliefs, and involve a number of risks and uncertainties that are difficult to predict and that could cause actual results to differ materially from those stated or implied by the forward-looking statements. Those risks and uncertainties include, but are not limited to: NHP supply constraints and the investigation by the U.S. Securities and Exchange Commission, including the impact on our projected future financial performance, the impact of actions intended to restrict the availability of purpose-bred NHPs from Cambodia, the timing of the resumption of Cambodia NHP imports, and our ability to manage supply impact; the ability to successfully integrate businesses we acquire, including Noveprim; our ability to identify and implement growth opportunities; the balance of our financial outlook; the timing, methodology, and magnitude of our share repurchases; negative trends in research and development spending, negative trends in the level of outsourced services, or other cost reduction actions by our clients; the ability to leverage and convert backlog to revenue; special interest groups; contaminations; industry trends; new displacement technologies; USDA and FDA regulations; changes in law; continued availability of products and supplies; loss of key personnel; interest rate and foreign currency exchange rate fluctuations; changes in tax regulation and laws; changes in generally accepted accounting principles; and any changes in business, political, or economic conditions due to the threat of future terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas. A further description of these risks, uncertainties, and other matters can be found in the Risk Factors detailed in Charles River's Annual Report on Form 10-K as filed on February 19, 2025, as well as other filings we make with the Securities and Exchange Commission. Because forward- looking statements involve risks and uncertainties, actual results and events may differ materially from results and events currently expected by Charles River, and Charles River assumes no obligation and expressly disclaims any duty to update information contained in this presentation except as required by law. Regulation G This presentation includes discussion of non-GAAP financial measures. We believe that the inclusion of these non-GAAP financial measures provides useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often one-time charges, consistent with the manner in which management measures and forecasts the Company’s performance. The non-GAAP financial measures included in this presentation are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. The company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules and regulations. In accordance with Regulation G, you can find the comparable GAAP measures and reconciliations to those GAAP measures on our website at ir.criver.com.
Page 3
3 Strategic Review Update ▪ Provided an update on our comprehensive strategic review ▪ Board strongly supports CRL’s strategic direction and believes we should continue to focus on: ̶ Strengthening leading scientific portfolio within core markets ̶ Divesting underperforming or non-core assets ̶ Maximizing financial performance ̶ Maintaining disciplined approach to capital deployment ▪ Thank the Board for the progress that is has made on a thorough and collaborative review process, which has and will continue to evaluate a wide range of value-creation options to help ensure the best strategic path forward for CRL
Page 4
4 Focus on Strategic Actions to Further Drive Long-Term Shareholder Value Creation ▪ Strengthening Portfolio by Investing in Core Growth: Continuing to strengthen our portfolio by investing in core growth initiatives, including through M&A, partnerships, and internal development efforts ̶ Have built a scientifically differentiated portfolio which enables us to take advantage of unique opportunities present across the evolving biopharma landscape ̶ Focus on science and innovative solutions designed to enhance efficiency and speed to market for our clients’ life-saving therapeutic programs positioned us extremely well to continue to adapt and lead industry through advances in drug development such as NAMs (new approach methodologies) ▪ Identified areas of future growth, all of which are well within our core competencies ̶ Including opportunities across all three business segments ̶ Specifically, will evaluate opportunities to enhance scientific capabilities in bioanalysis, in vitro services, and NAMs, as well as our geographic presence ▪ Refining Portfolio: As part of portfolio review over past several months, evaluated strategic fit and fundamental performance of our global businesses and infrastructure, and, as appropriate, will take actions to drive long-term value creation ̶ Addresses our ongoing efforts to streamline operations and maximize financial performance
Page 5
5 Focus on Strategic Actions to Further Drive Long-Term Shareholder Value Creation, cont. ▪ Refining Portfolio (cont): Actions are expected to result in sale of certain underperforming or non-core businesses, which will enable us to focus on more profitable growth opportunities ̶ In aggregate, these businesses represent ~7% of estimated 2025 revenue ̶ Expected to result in non-GAAP earnings per share accretion of at least $0.30 on an annualized basis once divestitures completed o Does not include any benefit from the reinvestment of transaction proceeds or impact to interest expense ̶ Will strive to complete any potential divestitures by middle of 2026 ▪ Maximizing Financial Performance by Driving Greater Efficiency: Also will continue to focus on new initiatives to drive greater business efficiency and maximize financial performance ▪ Taken extensive action with a goal to protect our operating margin and reinvigorate earnings growth ▪ Over past few years, have already implemented restructuring initiatives that are expected to result in ~$225M in cumulative, annualized cost savings in 2026 ̶ Represents >5% of cost structure
Page 6
6 Focus on Strategic Actions to Further Drive Long-Term Shareholder Value Creation, cont. ▪ Also implementing additional initiatives designed to drive greater operating efficiencies, including through process improvement, procurement synergies, and implementation of a global business services model ▪ Additional initiatives expected to generate incremental net cost savings of ~$70M annually, fully realized in 2026 ▪ Expect to continue to transform relationships with clients through best-in-class technology platforms and access to critical data, becoming an even more efficient partner for them ▪ Maintaining Disciplined Approach to Capital Deployment: Will continue to regularly review optimal balance between strategic acquisitions, stock repurchases, debt repayment, and other uses of capital ▪ As part of our capital allocation strategy, in October, Board approved a new, $1.0B stock repurchase authorization ̶ Replaces previous stock repurchase authorization that we had repurchased $450.7M in common stock since August 2024 ̶ Will regularly and carefully evaluate prudent level of stock repurchases going forward, and will take into consideration valuation, future growth prospects, expected returns and earnings accretion from repurchases, as well as leverage and other uses of cash ▪ With these actions clearly outlined, intently focused on executing this plan to enhance CRL’s long-term value by building upon the core strengths of unique portfolio, advancing scientific innovation, and driving greater efficiency in both our operations and clients’ R&D and manufacturing efforts
Page 7
7 Clear Signs That Client Demand Has Stabilized ▪ Many global biopharma clients appear to have progressed through their restructuring efforts, and biotech funding environment showed increasing signs of improvement throughout 3Q25 ▪ These are positive signals that the industry may be on a path towards recovery ̶ Improvement in DSA proposal activity in 3Q25 strongly supports this view ▪ At the same time, there is still some uncertainty in our end markets; therefore, will continue to remain cautious at this time ̶ Focused on strong execution to drive further wallet share gains with our clients
Page 8
8 3Q25 Demand Trends ▪ 3Q25 business trends were consistent with those we described in August, with: ̶ RMS performance benefiting from favorable timing of NHP shipments in 3Q25 ̶ DSA revenue declining sequentially as 1Q25 bookings strength that contributed to meaningful outperformance in 1H25 returned to recent historical levels ̶ Manufacturing revenue declining primarily due to completion of work for a commercial CDMO client ▪ Collectively, trends were slightly better than we had expected, which led to modest outperformance in 3Q25
Page 9
9 3Q25 Revenue ($ in millions) 3Q25 3Q24 YOY Δ Organic Δ Revenue $1,004.9 $1,009.8 (0.5)% (1.6)% ▪ Organic revenue declines in DSA and Manufacturing were partially offset by growth in RMS segment ▪ 3Q25 revenue slightly outperformed outlook provided in August ▪ Revenue for small and mid-sized biotech clients declined, reflecting tighter budgets likely driven by softer biotech funding environment as we exited 2024 and in 1H25 ▪ Revenue for global biopharma clients remained below last year’s level, primarily due to loss of a large commercial client in CDMO business, whose work at Memphis site wound down in 2Q25 ̶ However, revenue increased for global biopharma clients in both RMS and DSA segments, demonstrating that preclinical demand from this client base has bottomed and is beginning to improve ̶ Consistent with upward trajectory in DSA bookings at beginning of 2025 ▪ Revenue for global academic and government clients increased slightly in 3Q25 ̶ Have not experienced any meaningful impact from NIH budget uncertainty or government shutdown to date See ir.criver.com for reconciliations of GAAP to Non-GAAP results
Page 10
See ir.criver.com for reconciliations of GAAP to Non-GAAP results.10 3Q25 Operating Margin ▪ The anticipated non-GAAP operating margin decline primarily reflected lower sales volume in DSA and lower commercial CDMO revenue in Manufacturing ▪ For full year, continue to expect operating margin will be flat to a 30-basis-point decline, unchanged from prior outlook 3Q25 3Q24 YOY Δ GAAP OM% 13.3% 11.6% 170 bps Non-GAAP OM% 19.7% 19.9% (20) bps
Page 11
See ir.criver.com for reconciliations of GAAP to Non-GAAP results11 3Q25 EPS 3Q25 3Q24 YOY Δ GAAP EPS $1.10 $1.33 (17.3)% Non-GAAP EPS $2.43 $2.59 (6.2)% ▪ EPS modestly above our prior outlook ▪ The tax rate was most significant YOY headwind as we had anticipated, due to enactment of new tax legislation ─ Tax was non-GAAP EPS headwind of $0.24 per share YOY in 3Q25
Page 12
12 Updates 2025 Guidance REVISED PRIOR Revenue growth, reported (1.5)%-(0.5)% (2.5)%-(0.5)% Impact of divestitures/(acquisitions), net N/M N/M (Favorable)/unfavorable impact of FX ~(1.0)% ~(0.5)% Revenue growth, organic (2.5)%-(1.5)% (3.0)%-(1.0)% GAAP EPS estimate $4.15-$4.35 $4.25-$4.65 Acquisition-related amortization and other acquisition and integration-related costs ~$3.65 ~$3.60 Costs associated with restructuring actions ~$1.30 ~$1.40 Certain venture capital and other strategic investment losses/(gains), net $0.50 ~$0.17 Other items ~$0.50 ~$0.50 Non-GAAP EPS estimate $10.10-$10.30 $9.90-$10.30 See ir.criver.com for reconciliations of GAAP to Non-GAAP results
Page 13
See ir.criver.com for reconciliations of GAAP to Non-GAAP results13 DSA Results – Revenue ($ in millions) 3Q25 3Q24 YOY Δ Revenue, reported $600.7 $615.1 (2.3)% (Favorable)/unfavorable impact of FX (1.2)% Impact of divestitures 0.4% Revenue growth, organic (3.1)% ▪ Organic revenue decline driven by lower revenue for both discovery and safety assessment services ▪ As was the case during 1H25, lower sales volume was partially offset by modest benefit from favorable study mix ▪ Spot pricing remained stable overall
Page 14
14 DSA Demand KPIs Period Qtr-End Backlog* ($ in billions) Net Bookings* ($ in millions) Net Book-to-Bill** (Quarterly) 3Q25 $1.80 $494 0.82x 2Q25 $1.93 $506 0.82x 1Q25 $1.99 $616 1.04x 4Q24 $1.97 $510 0.85x 3Q24 $2.12 $522 0.85x • Changes in backlog and net bookings may not foot due primarily to quarterly FX impacts, as well as other reconciling items. Figures are presented on a reported basis, not adjusted for FX. ** Note: DSA net book-to-bill calculated by taking quarterly net bookings divided by quarterly DSA revenue. ▪ DSA demand environment remained quite stable from trends we described one quarter ago, including net-book-to-bill ratio, which was identical to 2Q25 ▪ Cancellation rate improved in 3Q25 and continued to normalize toward historical levels
Page 15
15 DSA Demand KPIs, cont. ▪ Net bookings sequential decrease reflected lighter booking activity for small and mid-sized biotech clients during summer months ▪ Bookings activity from biotech clients improved since summer ̶ Cautiously optimistic that biotech demand will accelerate over the coming quarters, assuming clients continue to have access to more robust funding for their IND-enabling programs ▪ Booking trends for global biopharma clients remained healthy in 3Q25, and were stable on both a sequential and YOY basis ▪ Encouraged by these overall booking trends that led to a steady increase in the DSA net book-to-bill in each month since the beginning of 3Q25 ▪ DSA proposal activity improved in 3Q25, particularly for biotech clients for which proposals increased at a high- single-digit rate both YOY and sequentially ▪ Collectively reinforces our cautious optimism that booking activity for biotech clients will continue to improve
Page 16
16 DSA Outlook ▪ For 2025, expect DSA revenue will decline by 2.5% to 3.5% on an organic basis ▪ As the focus begins to shift to 2026, we are closely monitoring level of bookings required to drive DSA revenue growth next year ▪ Still too early to provide a preliminary outlook for 2026 because still fully engaged in budgeting process and will need to monitor demand activity over next several quarters ̶ Bookings at end of 2025 and in 1Q26 will meaningfully influence our growth potential, as will other drivers such as backlog conversion, change orders, study mix, and related factors ▪ Firmly believe that DSA business demand trends are stable and there are positive signs indicating that biopharma demand will rebound, including: ̶ Improved biotech funding and proposal activity in 3Q25 ̶ More certainty around tariffs and drug pricing in global biopharma sector
Page 17
See ir.criver.com for reconciliations of GAAP to Non-GAAP results17 DSA Results – Operating Margin ▪ YOY decline primarily due to impact of lower study volume ▪ Expect 4Q25 DSA operating margin will face additional pressure from two primary factors: ̶ Higher staffing costs due to hiring, in part to backfill open positions ̶ Higher, third-party NHP sourcing costs due to procurement of additional models to support better- than-expected study demand this year 3Q25 3Q24 YOY Δ DSA GAAP OM% 20.5% 20.6% (10) bps DSA Non-GAAP OM% 25.4% 27.4% (200) bps
Page 18
See ir.criver.com for reconciliations of GAAP to Non-GAAP results18 RMS Results – Revenue ▪ Higher revenue growth rate was driven by favorable timing of NHP shipments ̶ As previously noted, NHP shipments were accelerated into 3Q25, and as a result, NHP shipments are expected to be a modest headwind in 4Q25 ▪ For FY 2025, continue to expect RMS will report flat to slightly positive organic revenue growth as quarterly fluctuations from NHP shipments largely normalize on an annual basis and the underlying RMS demand environment remains ($ in millions) 3Q25 3Q24 YOY Δ Revenue, reported $213.5 $197.8 7.9% (Favorable)/unfavorable impact of FX (1.4)% Revenue growth, organic 6.5%
Page 19
19 RMS Results – Revenue, cont. ▪ From a client perspective, revenue from both academic and government clients increased again in 3Q25, including a slight increase in North America ▪ Have not experienced any meaningful revenue loss related to NIH budgets and the uncertainty in Washington to date, aside from a small, $3M reduction in scope of an NIH aging contract referenced last quarter ▪ Demand from small and mid-sized biotech clients has been more challenging this year, having a notable effect on growth rates for small models, particularly in North America in 3Q25, as well as CRADL site occupancy ▪ Revenue for small models was essentially flat in 3Q25, as revenue increases in Europe and China were offset by North America ̶ In North America, price increases could not fully offset unit volume declines, particularly for biotech clients ▪ Insourcing Solutions (IS) revenue was flat because CRADL occupancy has remained relatively stable this year ▪ Overall demand from early-stage biotech for IS services remained constrained due to funding challenges
Page 20
See ir.criver.com for reconciliations of GAAP to Non-GAAP results20 RMS Results – Operating Margin ▪ Improvement was primarily due to favorable mix resulting from higher NHP revenue, as well as benefit of cost savings resulting from restructuring initiatives ̶ Previously anticipated that 3Q25 RMS operating margin would be robust due to favorable timing of NHP shipments ▪ Continue to expect 4Q25 RMS operating margin will moderate due to timing of NHP shipments and normal seasonality in small models business 3Q25 3Q24 YOY Δ RMS GAAP OM% 16.2% 13.9% 230 bps RMS Non-GAAP OM% 25.0% 21.0% 400 bps
Page 21
See ir.criver.com for reconciliations of GAAP to Non-GAAP results21 Manufacturing Results – Revenue ($ in millions) 3Q25 3Q24 YOY Δ Revenue, reported $190.7 $196.9 (3.1)% (Favorable)/unfavorable impact of FX (2.0)% Revenue growth, organic (5.1)% ▪ Revenue decrease largely driven by lower commercial revenue from CDMO clients ▪ CDMO and Biologics Testing businesses are driving a slightly less favorable outlook for segment ̶ Now expect Manufacturing revenue will be flat to slightly lower on an organic basis in 2025, compared to prior outlook of approximately flat ▪ Microbial Solutions business continued to perform very well, reporting high-single-digit revenue growth in 3Q25
Page 22
22 Manufacturing Results – CDMO & Biologics Testing ▪ CDMO ̶ As discussed throughout the year, relationship with one commercial cell therapy client has ended and the work wound down during 2Q25 ̶ Creates ~$20M revenue headwind for CDMO business in 2H25 when compared to 1H25 ̶ However, we are continuing to work with another commercial cell therapy client at our Memphis site ▪ Biologics Testing ̶ Revenue decline driven by continued impact of lower sample volumes this year from both biopharma and CDMO clients • Particularly several large clients facing project delays or regulatory challenges ̶ Booking activity did improve during 3Q25, so cautiously optimistic that demand trends in Biologics Testing will stabilize
Page 23
23 Manufacturing Results – Microbial Solutions ▪ Microbial Solutions generated robust revenue growth, and remains on track to grow at a high-single-digit rate for 2025 ▪ Experienced strong demand across our comprehensive manufacturing quality-control testing portfolio, including: ̶ Accugenix® microbial identification services, led by increased Axcess instrument placements ̶ Share gains for Endosafe® testing platform ̶ Higher sales of Celsis® microbial detection products ▪ Clients continue to choose our Endosafe® cartridge-based platform for rapid test results, and we have been increasingly able to gain share due to placement of automated systems and technology that drive efficiency in our clients’ quality-control testing labs
Page 24
See ir.criver.com for reconciliations of GAAP to Non-GAAP results24 Manufacturing Results – Operating Margin 3Q25 3Q24 YOY Δ Manufacturing GAAP OM% 20.9% 20.4% 50 bps Manufacturing Non-GAAP OM% 26.7% 28.7% (200) bps ▪ Non-GAAP operating margin decrease due principally to lower commercial revenue from CDMO clients
Page 25
25 NAMs Strategy/Scientific Advisory Board ▪ Recent press release launching our Scientific Advisory Board ▪ Former FDA Principal Deputy Commissioner Dr. Namandjé Bumpus will lead the Advisory Board ▪ Board’s mission is to provide strategic guidance to our team of internal scientists and business leaders in evolving CRL’s comprehensive commercial and regulatory strategy to advance NAMs in the biopharma industry ▪ Extremely pleased that Dr. Bumpus has agreed to oversee this important initiative to drive alternative method innovation and adoption
Page 26
26 NAMs Strategy Update, cont. ▪ Highlighting some of our NAMs capabilities utilized across our portfolio, including: ̶ In our Biologics Testing business, next-generation sequencing (NGS) solutions provide an in vitro approach for pathogen testing, as well as genetic characterization of cell lines and drug products produced under GMP conditions ̶ In Microbial Solutions, Endosafe® Trillium® recombinant bacterial endotoxin test is an animal-free product that reduces reliance on horseshoe crab-derived LAL for endotoxin testing o Continue to see increased client adoptions of Trillium®, albeit from a small base after its launch last year ̶ In the DSA segment, developing in vitro assessments of human immunogenicity to support clients developing biotherapeutics, including monoclonal antibodies and cell and gene therapies o As well as to gain share in the biosimilars market, for which animal testing is minimal and no longer required o By providing clients with valuable immunogenicity data, we will be able to help offer insights into the potential immune response against a drug ▪ Continue to believe that adoption of more NAMs-enabled approaches will be a gradual, long-term transition by clients because the scientific capabilities to fully replace animal models do not exist today ▪ As a leader in drug development and manufacturing support solutions, we have the breadth of scientific capabilities, regulatory expertise, and access to data that will enable us to be at the forefront of NAMs innovation ▪ Makes CRL the logical partner for biopharma companies to advance their use of NAMs and alternative technologies over time
Page 27
27 Michael G. Knell Appointed Interim CFO ▪ Mike Knell has been with CRL since 2017 as Senior Vice President and Chief Accounting Officer ▪ Has agreed to lead the Finance organization through the transition until a new CFO can be named ▪ He is a valuable member of our management team and has worked closely with the CFOs during his tenure ▪ Has a deep knowledge of our business, financial reporting and forecasting processes, as well as the Finance team ▪ Working together collaboratively to ensure a seamless transition of the CFO role
Page 28
See ir.criver.com for reconciliations of GAAP to Non-GAAP results28 Updated 2025 Guidance 2025 Guidance Revenue growth/(decrease), reported (1.5)%-(0.5)% Revenue growth/(decrease), organic (2.5)%-(1.5)% GAAP EPS $4.15-$4.35 Non-GAAP EPS $10.10-$10.30 ▪ 3Q25 revenue and non-GAAP EPS modestly exceeded prior outlook ▪ As a result of the 3Q25 outperformance, narrowing revenue and non-GAAP EPS guidance ̶ Non-GAAP EPS includes a $0.10 guidance improvement at midpoint
Page 29
(1) Organic revenue growth is defined as reported revenue growth adjusted for acquisitions, divestitures and foreign currency translation. 29 2025 Segment Revenue Outlook 2025 Reported Revenue Growth 2025 Organic Revenue Growth(1) RMS Slightly positive Flat to slightly positive DSA Low-single-digit decline (3.5)%-(2.5)% decline Manufacturing Flat to slightly positive Flat to slightly negative Consolidated (1.5)%-(0.5)% decline (2.5)%-(1.5)% decline See ir.criver.com for reconciliations of GAAP to Non-GAAP results ▪ DSA segment outlook narrowed from prior outlook to reflect better-than-expected performance to date ̶ Started the year with an initial DSA outlook of a mid- to high-single-digit organic revenue decline ▪ Manufacturing segment outlook slightly tempered on an organic basis ▪ Revenue outlook for RMS segment is unchanged on an organic basis ▪ Consolidated non-GAAP operating margin outlook is unchanged at flat to 30 bps decline YOY
Page 30
See ir.criver.com for reconciliations of GAAP to Non-GAAP results30 Unallocated Corporate Expenses ($ in millions) 3Q25 2Q25 3Q24 GAAP $63.8 $70.5 $76.8 Non-GAAP $58.9 $60.7 $66.2 ▪ 3Q25 non-GAAP decrease to 5.9% of revenue (from 6.6% in 3Q24) due primarily to lower health and fringe-related costs ▪ Continue to expect 2025 non-GAAP unallocated corporate costs will be at ~5.5% of total revenue, unchanged from prior outlook
Page 31
31 Net Interest Expense ($ in millions) 3Q25 2Q25 3Q24 Interest expense, net $24.0 $28.9 $28.8 ▪ Net interest expense represented both a sequential and YOY decline primarily as a result of shifting debt to lower-interest-rate geographies ▪ Expect total net interest expense will be $100M-$105M consistent with prior outlook ▪ At the end of 3Q25, outstanding debt was $2.2B with ~70% at a fixed interest rate, compared to $2.3B at the end of the 2Q25 ▪ In addition to lowering our interest expense, continued debt repayment resulted in gross and net leverage ratios of 2.1x at the end of 3Q25 See ir.criver.com for reconciliations of GAAP to Non-GAAP results
Page 32
See ir.criver.com for reconciliations of GAAP to Non-GAAP results32 Tax Rate 3Q25 2Q25 3Q24 GAAP 36.3% 26.2% 23.0% Non-GAAP 28.3% 22.7% 21.3% ▪ Increase in non-GAAP tax rate YOY was primarily due to the impact of the One Big Beautiful Bill Act, or OB3, as well as the impact of the enactment of certain Global Minimum Tax provisions ▪ Continue to expect non-GAAP tax rate will be in the range of 23.5%-24.5%, unchanged from prior outlook
Page 33
(1) Amortization includes all amortization and inventory step-up items, including amortization of intangible assets, amortization of inventory fair value adjustments included in cost of products sold or costs of services provided, and amortization of biological assets principally related to the Noveprim acquisition. In addition, amortization for FY 2025 guidance includes accelerated amortization of certain CDMO client relationships in the Biologics Solutions reporting unit within the Manufacturing segment. 33 Cash Flow ($ in millions) 3Q25 3Q24 FY 2025 GUIDANCE Free cash flow (FCF) $178.2 $213.1 $470-$500 Capex $35.6 $38.7 ~$200 Depreciation $44.8 $48.5 ~$180 Amortization (1) $40.4 $39.7 ~$230 See ir.criver.com for reconciliations of GAAP to Non-GAAP results ▪ 3Q25 FCF YOY decrease from record level last year (in 3Q24) was primarily driven by lower earnings ̶ FCF improved sequentially by $8.9M as a result of continued improvement in working capital ▪ Lower capex reflects our focus on disciplined capital spending ▪ FY 2025 FCF guidance increased from prior outlook of $430M-$470M, due to the robust 3Q25 cash generation ̶ Capex continues to be well below peak capital spending in recent years ̶ Improved FCF outlook reflects tightly managed capital spending and disciplined working capital management
Page 34
34 Robust Free Cash Flow and Stock Repurchases ▪ In October, the Board refreshed stock repurchase authorization to a new, $1.0B authorization ̶ All of which is available for future stock repurchases ▪ We will continue to evaluate the optimal balance between strategic acquisitions, stock repurchases, debt repayment, and other uses of capital as part of disciplined capital allocation strategy ▪ With strong FCF generation, we will regularly evaluate making additional stock repurchases under this authorization ▪ As part of the strategic review, we will continue to work diligently to maximize our financial performance, including through disciplined capital deployment and by actively managing our cost structure
Page 35
(1) Organic revenue growth is defined as reported revenue growth adjusted for acquisitions, divestitures, and foreign currency translation 35 2025 Guidance Summary GAAP Non-GAAP Revenue growth/(decrease) (1.5)%-(0.5%) reported (2.5)%-(1.5)% organic(1) Unallocated corporate ~6.0% of revenue ~5.5% of revenue Operating margin Low-double-digit OM% Flat to 30 bps decrease vs. 2024 Net interest expense $100M-$105M $100M-$105M Tax rate 27.0%-28.0% 23.5%-24.5% EPS $4.15-$4.35 $10.10-$10.30 Cash flow Operating cash flow $670M-$700M Free cash flow $470M-$500M Capital expenditures ~$200M ~$200M See ir.criver.com for reconciliations of GAAP to Non-GAAP results
Page 36
36 4Q25 Outlook 4Q25 Outlook Reported revenue YOY Flat to low-single-digit decline YOY Organic revenue YOY Low- to mid-single-digit decline YOY Non-GAAP EPS Sequential Flat to 10% decline vs. 3Q25 ▪ From a sequential perspective vs. 3Q25: ̶ RMS revenue will be lower due to the acceleration of NHP shipments into 3Q25, as well as normal Q4 seasonality ̶ DSA revenue is expected to be stable to modestly below 3Q25 level ̶ Manufacturing revenue is expected to improve due to the year-end ordering patterns in the Microbial Solutions business ▪ 4Q25 non-GAAP EPS are expected to be flat to 10% below 3Q25 level of $2.43 reflecting margin pressure: ̶ DSA segment due in part to higher staffing and NHP sourcing costs ̶ RMS segment due to timing of NHP shipments and normal seasonal trends
Page 37
37 Closing Remarks ▪ Pleased with our 3Q25 performance, which modestly exceeded our expectations, and with the actions that we will undertake as part of the Board’s strategic review ▪ Initiatives to strengthen our portfolio, maximize financial performance, and maintain a disciplined capital allocation strategy will further strengthen our market position and lead to long-term shareholder value creation
Page 38
3Q25 Regulation G Financial Reconciliations & Appendix © 2025 Charles River Laboratories International, Inc.
Page 39
39 September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Revenue $ 213,474 $ 197,824 $ 639,818 $ 625,120 Operating income 34,553 27,544 113,944 100,641 Operating income as a % of revenue 16.2 % 13.9 % 17.8 % 16.1 % Add back: Amortization related to acquisitions 12,905 9,086 36,266 26,731 Acquisition, integration, and divestiture-related adjustments (3) — — 14 337 Severance 136 2,651 3,664 3,685 Asset impairment 4,635 1,266 7,458 14,909 Site consolidation charges 1,053 1,052 3,545 3,983 Total non-GAAP adjustments to operating income $ 18,729 $ 14,055 $ 50,947 $ 49,645 Operating income, excluding non-GAAP adjustments $ 53,282 $ 41,599 $ 164,891 $ 150,286 Non-GAAP operating income as a % of revenue 25.0 % 21.0 % 25.8 % 24.0 % Depreciation and amortization $ 21,939 $ 18,389 $ 63,410 $ 53,050 Capital expenditures $ 3,173 $ 7,186 $ 14,099 $ 36,543 Revenue $ 600,685 $ 615,060 $ 1,811,323 $ 1,847,931 Operating income 123,153 126,436 339,886 379,651 Operating income as a % of revenue 20.5 % 20.6 % 18.8 % 20.5 % Add back: Amortization related to acquisitions 19,198 19,818 55,581 58,712 Acquisition, integration, and divestiture-related adjustments (3) 2,407 1,714 4,755 7,497 Severance (148) 12,550 5,068 20,463 Asset impairment 693 552 22,390 1,064 Site consolidation charges 3,985 772 10,690 2,604 Third-party legal and advisory costs and certain related items(4) 3,242 6,713 25,029 11,014 Total non-GAAP adjustments to operating income $ 29,377 $ 42,119 $ 123,513 $ 101,354 Operating income, excluding non-GAAP adjustments $ 152,530 $ 168,555 $ 463,399 $ 481,005 Non-GAAP operating income as a % of revenue 25.4 % 27.4 % 25.6 % 26.0 % Depreciation and amortization $ 44,001 $ 47,751 $ 128,660 $ 141,269 Capital expenditures $ 25,709 $ 22,773 $ 78,730 $ 91,176 Revenue $ 190,693 $ 196,879 $ 570,014 $ 574,389 Operating income 39,926 40,188 43,367 111,099 Operating income as a % of revenue 20.9 % 20.4 % 7.6 % 19.3 % Add back: Amortization related to acquisitions (2) 8,265 10,802 100,675 32,363 Acquisition, integration, and divestiture-related adjustments (3) — 143 — 1,386 Severance 1,281 4,892 3,102 8,086 Asset impairment 91 — 6,449 25 Site consolidation charges 1,263 502 4,239 1,567 Total non-GAAP adjustments to operating income $ 10,900 $ 16,339 $ 114,465 $ 43,427 Operating income, excluding non-GAAP adjustments $ 50,826 $ 56,527 $ 157,832 $ 154,526 Non-GAAP operating income as a % of revenue 26.7 % 28.7 % 27.7 % 26.9 % Depreciation and amortization $ 17,377 $ 20,298 $ 127,343 $ 60,176 Capital expenditures $ 5,191 $ 8,735 $ 33,631 $ 28,180 CONTINUED ON NEXT SLIDE CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Nine Months Ended Research Models and Services Discovery and Safety Assessment Manufacturing Solutions SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)(1) (in thousands, except percentages) Three Months Ended RECONCILIATION OF GAAP TO NON-GAAP
Page 40
40 September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 CONTINUED FROM PREVIOUS SLIDE $ (63,833) $ (76,763) $ (188,595) $ (196,357) Add back: Acquisition, integration, and divestiture-related adjustments (3) 772 4,082 3,663 7,719 Severance 3,527 6,443 5,103 9,237 Asset impairment — — 184 — Site consolidation charges 767 — 1,436 — Third-party legal and advisory costs (4) (146) — 6,230 — Total non-GAAP adjustments to operating expense $ 4,920 $ 10,525 $ 16,616 $ 16,956 Unallocated corporate overhead, excluding non-GAAP adjustments $ (58,913) $ (66,238) $ (171,979) $ (179,401) Revenue $ 1,004,852 $ 1,009,763 $ 3,021,155 $ 3,047,440 Operating income 133,799 117,405 308,602 395,034 Operating income as a % of revenue 13.3 % 11.6 % 10.2 % 13.0 % Add back: Amortization related to acquisitions (2) 40,368 39,706 192,522 117,806 Acquisition, integration, and divestiture-related adjustments (3) 3,179 5,939 8,432 16,939 Severance 4,796 26,536 16,937 41,471 Asset impairment 5,419 1,818 36,481 15,998 Site consolidation charges 7,068 2,326 19,910 8,154 Third-party legal and advisory costs and certain related items(4) 3,096 6,713 31,259 11,014 Total non-GAAP adjustments to operating income $ 63,926 $ 83,038 $ 305,541 $ 211,382 Operating income, excluding non-GAAP adjustments $ 197,725 $ 200,443 $ 614,143 $ 606,416 Non-GAAP operating income as a % of revenue 19.7 % 19.9 % 20.3 % 19.9 % Depreciation and amortization $ 85,164 $ 88,198 $ 325,035 $ 259,637 Capital expenditures $ 35,580 $ 38,721 $ 130,202 $ 157,351 (1) (2) (3) (4) CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Nine Months Ended SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED)(1) (in thousands, except percentages) Three Months Ended RECONCILIATION OF GAAP TO NON-GAAP Unallocated Corporate Overhead Total Third-party legal and advisory costs incurred within Unallocated Corporate are associated with the execution of the Cooperation Agreement with a shareholder. Within our DSA business, third-party legal costs incurred are associated with investigations by the U.S. government into the NHP supply chain. Additionally included within DSA, due to the utilization of NHPs, are reductions to the previous $27 million inventory charge incurred during fiscal 2024, to write down inventory associated with the Cambodia-sourced non-human primate matter from February 16, 2023, as a result of the cases being closed during fiscal 2025. These adjustments are related to the evaluation and integration of acquisitions and divestitures, and primarily include transaction, advisory, certain third-party integration, certain compensation costs, and related costs; as well as fair value adjustments associated with contingent consideration arrangements. Amortization related to acquisitions for the nine months ended September 27, 2025 includes $71.0 million of accelerated amortization of certain client relationships in the Biologics Solutions reporting unit within the Manufacturing Solutions segment. Charles River management believes that supplementary non-GAAP financial measures provide useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often-one-time charges and other items which are outside our normal operations, consistent with the manner in which management measures and forecasts the Company’s performance. The supplementary non-GAAP financial measures included are not meant to be considered superior to, or a substitute for results of operations prepared in accordance with U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance.
Page 41
41 September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 $ 54,422 $ 68,679 $ 132,217 $ 225,996 — 379 — 1,081 — 599 — 9,621 62,632 82,315 302,104 209,332 20,201 (2,507) 31,594 (9,171) — — (3,376) 658 — 292 — 1,504 3,236 3,596 3,236 3,596 (20,148) (19,608) (72,330) (46,323) $ 120,343 $ 133,745 $ 393,445 $ 396,294 49,213 51,394 49,680 51,461 213 189 186 252 49,426 51,583 49,866 51,713 $ 1.11 $ 1.34 $ 2.66 $ 4.39 $ 1.10 $ 1.33 $ 2.65 $ 4.37 $ 2.45 $ 2.60 $ 7.92 $ 7.70 $ 2.43 $ 2.59 $ 7.89 $ 7.66 (1) (2) (3) (4) (5) (6) CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Nine Months Ended Net income available to Charles River Laboratories International, Inc. common shareholders Add back: Adjustment of redeemable noncontrolling interest (2) Three Months Ended (in thousands, except per share data) RECONCILIATION OF GAAP EARNINGS TO NON-GAAP EARNINGS (UNAUDITED)(1) Incremental dividends attributable to noncontrolling interest holders (3) Non-GAAP adjustments to operating income (4) Venture capital and strategic equity investment (gains) losses and impairments, net (Gain) loss on divestitures (5) Tax effect of non-GAAP adjustments: Non-cash tax provision related to international financing structure (6) Enacted tax law changes Tax effect of the remaining non-GAAP adjustments Net income available to Charles River Laboratories International, Inc. common shareholders, excluding non-GAAP adjustments Weighted average shares outstanding - Basic Effect of dilutive securities: Stock options, restricted stock units and performance share units Weighted average shares outstanding - Diluted Earnings per share attributable to common shareholders: This amount relates to the recognition of deferred tax assets expected to be utilized as a result of changes to the Company's international financing structure. Basic Diluted The amount included in 2025 relates to a gain on the sale of a DSA site while the amount included in 2024 relates to a loss on the sale of a DSA site. This amount excludes non-GAAP adjustments attributable to noncontrolling interest holders. This amount represents incremental declared dividends attributable to Noveprim noncontrolling interest holders who receive preferential dividends for fiscal year 2024. This amount represents accretion adjustments of the Noveprim redeemable noncontrolling interest. Charles River management believes that supplementary non-GAAP financial measures provide useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often-one-time charges and other items which are outside our normal operations, consistent with the manner in which management measures and forecasts the Company’s performance. The supplementary non-GAAP financial measures included are not meant to be considered superior to, or a substitute for results of operations prepared in accordance with U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance. Basic, excluding non-GAAP adjustments Diluted, excluding non-GAAP adjustments
Page 42
42 Total CRL RMS Segment DSA Segment MS Segment (0.5)% 7.9 % (2.3)% (3.1)% (1.3)% (1.4)% (1.2)% (2.0)% 0.2 % — % 0.4 % — % (1.6)% 6.5 % (3.1)% (5.1)% Total CRL RMS Segment DSA Segment MS Segment (0.9)% 2.4 % (2.0)% (0.8)% (0.5)% (0.5)% (0.5)% (0.7)% 0.1 % — % 0.2 % — % (1.3)% 1.9 % (2.3)% (1.5)% (1) (2) (3) Three Months Ended September 27, 2025 TO NON-GAAP REVENUE GROWTH, ORGANIC (UNAUDITED) (1) RECONCILIATION OF GAAP REVENUE GROWTH CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Revenue growth, reported (Increase) decrease due to foreign exchange Impact of divestitures (2) Non-GAAP revenue growth, organic (3) Nine Months Ended September 27, 2025 Revenue growth, reported (Increase) decrease due to foreign exchange Impact of divestitures (2) Non-GAAP revenue growth, organic (3) Organic revenue growth is defined as reported revenue growth adjusted for divestitures and foreign exchange. Impact of divestitures relates to the sale of a site within DSA. Charles River management believes that supplementary non-GAAP financial measures provide useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often-one-time charges and other items which are outside our normal operations, consistent with the manner in which management measures and forecasts the Company’s performance. The supplementary non-GAAP financial measures included are not meant to be considered superior to, or a substitute for results of operations prepared in accordance with U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance.
Page 43
43 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GAAP TO NON-GAAP REVENUE AND EARNINGS PER SHARE (EPS) Guidance for the Twelve Months Ended December 27, 2025E 2025 GUIDANCE CURRENT PRIOR Revenue growth/(decrease), reported (1.5)% – (0.5)% (2.5)% – (0.5)% Impact of divestitures/(acquisitions), net N/M N/M (Favorable)/unfavorable impact of foreign exchange ~(1.0)% ~(0.5)% Revenue growth/(decrease), organic (1) (2.5)% – (1.5)% (3.0)% – (1.0)% GAAP EPS estimate $4.15 – $4.35 $4.25 – $4.65 Acquisition-related amortization and other acquisition- and integration-related costs (2) ~$3.65 ~$3.60 Costs associated with restructuring actions (3) ~$1.30 ~$1.40 Certain venture capital and other strategic investment losses/(gains), net (4) $0.50 ~$0.17 Other items (5) ~$0.50 ~$0.50 Non-GAAP EPS estimate $10.10 – $10.30 $9.90 – $10.30 Footnotes to Guidance Table: (1) Organic revenue growth is defined as reported revenue growth adjusted for completed acquisitions and divestitures, as wel l as foreign currency translation. (2) These adjustments include amortization related to intangible assets, inclusive of the acceleration of amortization expens e related to certain CDMO client relationships, as well as the purchase accounting step-up on inventory and certain long-term biological assets. In addition, these adjustments include some costs related to the evaluation and integration of acquisitions and divestitures. (3) These adjustments primarily include site consolidation (including site transition costs), severance, impairment, and othe r costs related to the Company’s restructuring actions. (4) Certain venture capital and other strategic investment performance only includes recognized gains or losses on certain in vestments. The Company does not forecast the future performance of these investments. (5) These items primarily relate to (i) certain third-party legal costs related to investigations by the U.S. government into the NHP supply chain related to our DSA segment; (ii) additionally included within the DSA segment, due to the utilization of NHPs , are reductions to the previous $27 million inventory charge incurred during fiscal 2024, to write down inventory associated with the Cambodia-sourced NHP matter from February 16, 2023, as a result of the cases being closed during fiscal 2025; and (iii) c ertain third-party advisory costs related to the Company entering into a Cooperation Agreement with a shareholder.
Page 44
44 September 27, 2025 June 28, 2025 September 28, 2024 September 27, 2025 September 28, 2024 $ 87,200 $ 71,418 $ 91,241 $ 194,596 $ 309,905 Amortization related to acquisitions (2) 40,368 75,219 39,706 192,522 117,806 Acquisition, integration, and divestiture-related adjustments (3) 3,179 3,448 5,939 8,432 16,939 Severance 4,796 3,727 26,536 16,937 41,471 Asset impairments 5,419 20,756 1,818 36,481 15,998 Site consolidation charges 7,068 7,717 2,326 19,910 8,154 Third-party legal and advisory costs and certain related items(4) 3,096 17,193 6,713 31,259 11,014 Venture capital and strategic equity investment (gains) losses and impairments, net 20,201 1,424 (2,507) 31,594 (9,171) (Gain) loss on divestitures (5) — — — (3,376) 658 $ 171,327 $ 200,902 $ 171,772 $ 528,355 $ 512,774 $ 31,644 $ 18,725 $ 20,946 $ 60,469 $ 70,867 — — (292) — (1,504) (3,236) — (3,596) (3,236) (3,596) 20,148 26,837 19,608 72,330 46,323 $ 48,556 $ 45,562 $ 36,666 $ 129,563 $ 112,090 36.3 % 26.2 % 23.0 % 31.1 % 22.9 % 28.3 % 22.7 % 21.3 % 24.5 % 21.9 % (1) (2) (3) (4) (5) (6) Charles River management believes that supplementary non-GAAP financial measures provide useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often-one-time charges and other items which are outside our normal operations, consistent with the manner in which management measures and forecasts the Company’s performance. The supplementary non-GAAP financial measures included are not meant to be considered superior to, or a substitute for results of operations prepared in accordance with U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance. This amount relates to the recognition of deferred tax assets expected to be utilized as a result of changes to the Company's international financing structure. The amount included in 2025 relates to a gain on the sale of a DSA site while the amount included in 2024 relates to a loss on the sale of a DSA site. Third-party legal and advisory costs incurred within Unallocated Corporate are associated with the execution of the Cooperation Agreement with a shareholder. Within our DSA business, third-party legal costs incurred are associated with investigations by the U.S. government into the NHP supply chain. Additionally included within DSA, due to the utilization of NHPs, are reductions to the previous $27 million inventory charge incurred during fiscal 2024, to write down inventory associated with the Cambodia-sourced non-human primate matter from February 16, 2023, as a result of the cases being closed during fiscal 2025. Amortization related to acquisitions for the nine months ended September 27, 2025 includes $71.0 million of accelerated amortization of certain client relationships in the Biologics Solutions reporting unit within the Manufacturing Solutions segment. These adjustments are related to the evaluation and integration of acquisitions and divestitures, and primarily include transaction, advisory, certain third-party integration, certain compensation costs, and related costs; as well as fair value adjustments associated with contingent consideration arrangements. Add back: Income before income taxes & noncontrolling interests, excluding specified charges (Non- GAAP) Provision for income taxes (GAAP) Non-cash tax benefit related to international financing structure (6) Enacted tax law changes Provision for income taxes (Non-GAAP) Tax effect of the remaining non-GAAP adjustments Total rate (GAAP) Total rate, excluding specified charges (Non-GAAP) Income before income taxes & noncontrolling interests Three Months Ended (in thousands) CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GAAP TAX RATE TO NON-GAAP TAX RATE (UNAUDITED) (1) Nine Months Ended
Page 45
45 September 27, 2025 June 28, 2025 March 29, 2025 December 28, 2024 December 30, 2023 December 31, 2022 December 25, 2021 December 26, 2020 Total Debt & Finance Leases $ 2,188,089 $ 2,335,306 $ 2,514,223 $ 2,243,134 $ 2,652,717 $ 2,711,208 $ 2,666,359 $ 1,979,784 Plus: Other adjustments per credit agreement 28,065 26,130 50,220 49,311 33,265 13,431 37,244 2,328 Less: Unrestricted Cash and Cash Equivalents up to $150M (150,000) (150,000) (150,000) (150,000) (150,000) (150,000) (150,000) — Total Indebtedness per credit agreement $ 2,066,154 $ 2,211,436 $ 2,414,443 $ 2,142,445 $ 2,535,982 $ 2,574,639 $ 2,553,603 $ 1,982,112 Less: Cash and cash equivalents (net of $150M above) (57,097) (32,824) (79,356) (44,606) (126,771) (83,912) (91,214) (228,424) Net Debt $ 2,009,057 $ 2,178,612 $ 2,335,087 $ 2,097,839 $ 2,409,211 $ 2,490,727 $ 2,462,389 $ 1,753,688 September 27, 2025 June 28, 2025 March 29, 2025 December 28, 2024 December 30, 2023 December 31, 2022 December 25, 2021 December 26, 2020 Net income (loss) available to Charles River Laboratories International, Inc. common shareholders $ (83,482) $ (69,225) $ (31,563) $ 10,297 $ 474,624 $ 486,226 $ 390,982 $ 364,304 Adjustments: Adjust: Non-cash gains/losses and impairments of VC partnerships & strategic investments 59,058 37,853 36,791 20,627 (79,288) 35,498 66,004 — Less: Aggregate non-cash amount of nonrecurring gains — — — — — (32,638) (42,247) (1,361) Plus: Interest expense 111,488 116,369 119,171 126,288 136,710 108,870 107,224 76,825 Plus: Provision for income taxes 57,425 46,727 53,394 67,823 100,914 130,379 81,873 81,808 Plus: Depreciation and amortization 427,139 430,173 396,748 361,741 314,124 303,870 265,540 234,924 Plus: Non-cash nonrecurring losses 317,084 314,181 305,981 299,976 44,077 16,572 8,573 16,810 Plus: Non-cash stock-based compensation 70,687 66,751 66,288 69,891 72,048 73,617 71,461 56,341 Plus: Permitted acquisition-related costs 12,540 12,324 11,406 11,612 15,639 34,453 51,256 18,750 Plus: Pro forma EBITDA adjustments for permitted acquisitions — — — — 18,542 5,306 4,008 8 Adjusted EBITDA (per the calculation defined in compliance certificates) $ 971,939 $ 955,153 $ 958,216 $ 968,255 $ 1,097,390 $ 1,162,153 $ 1,004,675 $ 848,408 September 27, 2025 June 28, 2025 March 29, 2025 December 28, 2024 December 30, 2023 December 31, 2022 December 25, 2021 December 26, 2020 Gross leverage ratio per credit agreement (total debt divided by adjusted EBITDA) 2.13 2.32 2.52 2.21 2.31 2.22 2.54 2.34 Net leverage ratio (net debt divided by adjusted EBITDA) 2.1 2.3 2.4 2.2 2.2 2.1 2.5 2.1 September 27, 2025 June 28, 2025 March 29, 2025 December 28, 2024 December 30, 2023 December 31, 2022 December 25, 2021 Capital Expenditures 205,818 208,959 213,147 232,967 323,050 326,338 232,149 Cash Interest Expense 111,774 116,461 119,554 127,119 139,545 110,731 107,389 Interest Coverage ratio per the credit agreement (Adjusted EBITDA minus Capital Expenditures divided by cash interest expense) 6.85x 6.41x 6.23x 5.78x 5.55x 7.55x 7.19x (1) (2) Charles River management believes that supplementary non-GAAP financial measures provide useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often-one-time charges and other items which are outside our normal operations, consistent with the manner in which management measures and forecasts the Company’s performance. The supplementary non-GAAP financial measures included are not meant to be considered superior to, or a substitute for results of operations prepared in accordance with U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance. Pursuant to the definition in its credit agreement dated December 13, 2024, the Company has defined its pro forma leverage ratio as total debt divided by adjusted EBITDA for the trailing-twelve-month period. The Company has defined interest coverage ratio as adjusted EBITDA for the trailing- twelve-month period less the aggregate amount of capital expenditures for the trailing-twelve-period; divided by the consolidated interest expense for the period of four consecutive fiscal quarters. Total Debt represents third-party debt and financial lease obligations minus up to $150M of unrestricted cash and cash equivalents. Adjusted EBITDA represents net income, prepared in accordance with accounting principles generally accepted in the U.S. (GAAP), adjusted for interest, taxes, depreciation and amortization, and certain items that management believes are not reflective of the operational performance of the business. These adjustments include, but are not limited to, non-cash gains/loss on venture capital portfolios and strategic partnerships, acquisition and divestiture- related expenses including transaction and advisory costs; asset impairments; changes in fair value of contingent consideration obligations; employee stock compensation; historical EBITDA of companies acquired during the period; and other items identified by the company. Total Debt and EBITDA have not been restated for periods prior to Q4 2024 for the most recent amendment or any previous amendments. DEBT (2): (dollars in thousands, except for per share data) CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GROSS/NET LEVERAGE RATIO, INCLUDING GAAP NET INCOME TO ADJUSTED EBITDA (UNAUDITED) (1) ADJUSTED EBITDA (2): LEVERAGE RATIO: INTEREST COVERAGE RATIO:
Page 46
46 September 27, 2025 September 28, 2024 September 27, 2025 September 28, 2024 Net cash provided by operating activities $ 213,826 $ 251,792 $ 590,126 $ 575,215 Less: Capital expenditures (35,580) (38,721) (130,202) (157,351) Free cash flow $ 178,246 $ 213,071 $ 459,924 $ 417,864 (1) CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Charles River management believes that supplementary non-GAAP financial measures provide useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often-one-time charges and other items which are outside our normal operations, consistent with the manner in which management measures and forecasts the Company’s performance. The supplementary non-GAAP financial measures included are not meant to be considered superior to, or a substitute for results of operations prepared in accordance with U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance. Three Months Ended Nine Months Ended (in thousands) RECONCILIATION OF FREE CASH FLOW (NON-GAAP) (UNAUDITED)(1)
Page 47
47 Three Months Ended June 28, 2025 $ (70,494) Add back: Acquisition, integration, and divestiture-related adjustments (2) 2,161 Severance 574 Asset impairment 184 Site consolidation charges 503 Third-party legal and advisory costs (3) 6,376 Total non-GAAP adjustments to operating expense $ 9,798 Unallocated corporate overhead, excluding non-GAAP adjustments $ (60,696) (1) (2) (3) Charles River management believes that supplementary non-GAAP financial measures provide useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often-one-time charges and other items which are outside our normal operations, consistent with the manner in which management measures and forecasts the Company’s performance. The supplementary non-GAAP financial measures included are not meant to be considered superior to, or a substitute for results of operations prepared in accordance with U.S. GAAP. The Company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules, regulations and guidance. Third-party legal and advisory costs incurred within Unallocated Corporate are associated with the execution of the Cooperation Agreement with a shareholder. These adjustments are related to the evaluation and integration of acquisitions and divestitures, and primarily include transaction, advisory, certain third-party integration, certain compensation costs, and related costs; as well as fair value adjustments associated with contingent consideration arrangements. CHARLES RIVER LABORATORIES INTERNATIONAL, INC. RECONCILIATION OF GAAP TO NON-GAAP SELECTED BUSINESS SEGMENT INFORMATION (UNAUDITED) (1) (in thousands, except percentages) Unallocated Corporate Overhead
Page 48
© 2025 Charles River Laboratories International, Inc.