Good morning, everyone. I'm Eric Caldwell. It's my pleasure to introduce Charles River. A little bit different. We've been on stage before. We've been on stage before at a— Yeah. —different company, but it's a little bittersweet not having Jim here. I'm glad for him in retirement, but it's also great to see both of you. Birgit obviously is a lifer at the company, what, over 30 years? Glenn, we knew each other at Premier, and- Yep. —you joined— Five months ago. —five, I was going to say four, f ive months ago. Yeah. Fantastic to have you both with us, and I'm probably sharing secrets that I shouldn't share. But Charles River was, once again, the number one most requested company at the conference. Thank you. Great to hear. Great to hear. You've got some attention. It looks like we already have a couple of questions coming in, but again, anyone who needs to send a question up to the front, please do so. I want to just start off right off the bat. You took over as CEO in May formally, right? Yep. Again, been with the company over three decades. You've seen it all, done it all there. Talk about the experience so far and then just basic observations. What's harder than you thought? What's easier or better than you thought? Great question. The transition has actually been quite smooth, and as you said, I spent nearly my entire career at Charles River. With that, I certainly know where Charles River's strengths is, but I also know where we need to be faster and sharper. And, certainly, that's going to be my focus area. What I did over the last few months is I spent a lot of times meeting with stakeholders. I spent quite a bit of time visiting over 40 of our sites and in about seven countries, so visiting our employees, listening to them, and also making sure that they are aligned and understand our strategy and what we want to execute on. I also spent a considerable amount of time with shareholders, and with our board and with our clients, all to really make sure I understand and refresh myself of what they need from us, and what Charles River needs to execute on to become an even stronger company. What I found was a lot of feedback that gave me confidence that Charles River is quite well positioned for the future, but also that our strategy, that we call Pathway to Purpose, is aligned with what they think we should do and is aligned with what we are currently executing on. What I also found going to our sites is that we are already executing on many of the things that are part of Pathway to Purpose, which is modernizing the company, refining our portfolio, and growing through a client-centric approach. You know about the divestitures, you know about some of the M&A we have already done. I saw tons of examples of how we are modernizing the company. What surprised me, maybe in a nutshell, is the excitement and the confidence in the company and in me personally, which is great to see. I have been enjoying it, and I am looking forward making a real difference, and also looking forward to our Investor Day next week and sharing more about it. Yeah. That will be great. Glenn, you are right, it was five months, April 6th, I would think— Yeah. —that was the day. You have been at several other companies, including several in healthcare. You have seen probably a pretty wide spectrum from day one where you stepped in, what was working, what was not working, what did you want to change or do differently? What is your early impression of Charles River? I assume it was left in a pretty good position, not a lot of cleanup here, but. Yeah, no. Uh— It's a great company. Yeah. I am very fortunate to work for the organization. I think first and foremost, it's a complex business. Drug development is complex, and our business is taking a little bit of time to understand, get up to the learning curve. I have actually been out with Birgit on 16 or 17 site visits. I think the biggest impression I have is we have really committed people and deep scientific expertise. That's obvious when you get out to the sites. I think second is we have these very strong, longstanding relationships with our clients, and our business is very sticky, and I think that's really important. That's an observation. Our business has got significant scale in the preclinical, nonclinical space. Nobody has the scale we have. Having said that, I think there's opportunities within certain parts of our business where we can gain more scale. Bioanalysis, bioanalytics would be one of those examples. That's an area I would say of opportunity. We are going to talk more, I am sure, about acquisitions and organic growth in this area because it's an important part of our business. In terms of Pathway to Purpose, there's a big opportunity for us, I think, to modernize our company. How can we automate more, take a lot of the manual processes out of the equation, be more efficient, more productive? Those are things we are going to lay out next week, which will not only make us more efficient, it actually shrinks the drug development process for our clients and obviously helps our overall margins moving forward. Those are some initial observations. Obviously, excited to be here and looking forward to doing great things. I joined at a very good time. We're at a point of inflection for our business. It's happening here in the third quarter, and we're now seeing a pretty significant improvement in our business in the second half of the year. That's great. You've already foreshadowed this, but you have an Investor Day next week. Right. I know you're not going to give us the numbers. Not going to ask for them. You're free to, but I'm not going to ask for them. But talk to us about the agenda. Right. What's the layup? I'm going to do a two-parter here, but look, I'm a straight shooter, kind of blunt at times. The last two LRPs were disasters, and I now have two new faces on stage in the top two spots in the company from a Wall Street-facing perspective at least. How does that impact what you say and how you say what you're going to say a week from now? Yeah, certainly. Giving long-term financials is difficult at all times. It is particularly difficult when you are in a downturn area, but it also is something that you have to give a lot of thought to and to really decide how you approach it. How we are approaching giving targets next week is that we are looking at what we are already executing on. Not something that we are hoping to do in the future or will be doing in the future, but you will hear about a lot of things that are going on at Charles River right now that is in the process. We also based our targets on what we are currently seeing and where we have clear, absolutely clear opportunities. You will hear from us that we are not looking at any moonshots in there, that we are not putting anything in there that could happen but may not be. So those are targets that we have confidence in, and that we think we know how to get there and that we are actually executing on. In addition, we will spend a lot of time talking about what we are executing on, how it translates into our strategy, why we believe it translates into demand and durable shareholder value, and how we will get to our margin targets, for example. So a lot of information about, and details about how we are going to get there. You also will meet the team, which I think will be a tremendous opportunity to see our leadership team in action. We have an incredible team with a lot of experience, both within the industry, within their functions, but also within Charles River. So I am very excited, and I hope certainly that you walk away and you will say that makes a lot of sense and you are excited too. From a process standpoint, if it is too much to ask, tell me so, but same process as the past three years, three segments, margin, organic growth kind of layout? Yeah, we're going to certainly give details around financial targets by segment as well. So we'll give that level of breakdown. I think, in terms of the timeframe, just hold off on that question for now. Okay. Fair enough. But obviously, we want to make sure it's in a reasonable period of time so that we can be held accountable to the numbers, but not too far out there where it's not realistic in terms of the timeframe. So we'll be more specific next week on that. Sounds great. Discovery and Safety Assessment, DSA segment. You're coming off of a quarter where you had 13% sequential growth in bookings, 39% year-over-year. You've now executed several quarters above 1.1. Last quarter, obviously 1.19. I think you made comments yesterday at an event that that's not the new go rate, but feel free to chime in on that. Nor would I expect it to be. That being said, I guess the drum roll, the question is, are 1.1 book-to-bills the new norm again? 1.05, 1.1? Are we going back to normal times? Is it a wet finger in the air? Nobody knows question. Yeah, I can start here, and then Glenn will add some details to that. Number one, we would be more than happy to stay with a 1.19. Yeah, sure. It's a spectacular net book-to-bill. We weren't expecting it to be quite that high, and it's just that a net book-to-bill becomes harder as you grow, right? Your bookings just have to go up. That's number one. We have said repeatedly in our business, because of the nature of the studies, we can actually grow with a net book-to-bill above 1.1, but we certainly would like to have it higher. We didn't want to indicate that we don't think it could happen, but it being such a spectacular number, we don't expect it up. We have great metrics internally for our proposals, as you said, capture rates, bookings. We already had raised our guidance to growth for the rest of the year. We're pretty happy with this as a step up. Now we need to just see it build and build the backlog back. That's a big thing too. We had several, nearly years, where backlog was eroding. Now we need to spend a little time to build it back, get some quarters under our belt to really see where that's going. Yeah, I would just add a couple of things. We have obviously been very encouraged by the last three quarters' net book-to-bill numbers. It is one of the reasons why we raised our guidance on the most recent earnings call. We raised our guidance by 1.5 on organic growth. We raised our EPS guidance. Seeing very positive signs on net book-to-bill, on proposal volume sequentially and year-over-year. We are building back some of the backlog that was depleted over the last couple of years. Things are all pointing in the right direction. We are very optimistic. The numbers were better than we thought, and hopefully those trends will continue as we get out through the rest of the year. I know you can only guess where I am heading with this. You talked about IND-enabling studies coming back into the fold versus some of the longer term work. In the past, before COVID and then the post-COVID anomalies, this was an industry, and you were a company that would have backlog duration. You would burn through the totality of that backlog, at least in terms of revenue dollars. That amount of backlog would be completely burnt in revenue, on average, seven to nine months. There were periods where it was six months. With three quarters above 1.1, I think the common question continues to come up. It sounds like mix is getting better, demand environment is great, and the awards are well above the 1.0 + that you need to grow. Why are we not looking at an even greater acceleration? I know you have answers to that, and I know that is your answer. Yeah. But it continues to come up, and there is a logical thought process behind the question. Yeah, absolutely. I can totally understand the question. Actually, next week at the investor conference, our head of the DSA business will be there. She will be prepared to talk about that a little bit, too. But we're coming out of a period where we actually were declining— Right. —for many quarters. We just hit a quarter where we have a little bit of growth. Let us take a step up. We guided up for the second half of the year. We need to see this trend continuing. We need to rebuild our backlog. Just make sure, we're not expecting the market to have a hockey stick either. So I would say just give it some time, let us work through this, and then we can see. Hopefully, we're going to continue above 1.1, but there's so many variables in there that we just want to be realistic about it. Fair enough. You talked about this proposal to booking capture rate last quarter. Win rate— Yep. — effectively. You said you've seen improvement, but you've also. Probably the same answer as the last question. You're not calling it a trend. Is it just too soon to call it a trend? What would be the driver of that win rate? You said you've been aggressively going after some business. Yeah. Most people think price. Win rates, we look at capture rates, actually bounces around quite a bit — Yeah. — a quarter or months to months. We want to see several quarters of capture rates being above what we used to see. We're seeing a quarter, we're seeing maybe quarter and a half, two quarters, which is great to see, but with the mathematical bounce in these metrics, I want to see this for a longer time period. There was also a question about are you gaining share. Without external data to validate that, I always shy away to say, "Hey, we're gaining share." So give us a year, give us a year and a half of capture rates, and maybe then I'm comfortable talking about share gain here. In the meantime, what it tells us, even on a shorter period, is that strategies we have in place to win work seem to be working. Price would be the obvious, but we are not the company that leads in discounting. We might have dynamic pricing to win work or to not lose work, but what we are going after right now is winning proposals as aggressively as we can because of how we go to market. Following up on proposals, making sure that our start times are at the shortest period possible whenever our clients want it. We have optimized our portfolio, so we are fully focused back on our core, which is DSA. That is not just our sales group, but it is my time, it is our leadership's time. I think this all helps, and also how we differentiate ourselves to win the work in a time where our clients all are looking for getting more molecules into the clinic as fast as possible. A couple of years ago, discussions were about price. How cheap can you do it? Is there another piece of discount? Often, clients went for it, often, they did not go for it. Right now, the discussions are, when can you start? When can I get my data? How quickly can I get, and how many molecules can I get into the clinic? Just about every one of our big clients have those lofty targets of how many more molecules they want and need in the clinic so they can hit their goals of commercial approvals. I think that is what I mean with being aggressive about winning the work. Have you seen any evidence of AI-driven volume at this point? I would say very little. There are obviously AI-native companies out there that get great funding, and they are our clients, just like a conventional biotech, because it does not matter if it is an AI-designed molecule, they still have to go through the validation. They still have to go through the regulatory process. Yes, we have clients. Yes, they have funding. Yes, they have a lot of programs. But in an overall aspect of Charles River and how many clients we have, it is not something where I am like, "This is driving my growth." Not yet. I do think AI will be a tailwind for us, and I do think AI will be a tailwind for drug development in general. So more efficient drug development will create more programs, more reinvestment, which is more opportunity for us, and hopefully we will win that opportunity. Early indication, yes. Big volume, not yet, but I'm sure that will come. Okay. Boy, I'll have a Pavlovian response even saying Cambodian monkey crisis five years ago around this time. We have to talk a little bit about NHPs. Okay. I know you, again, addressed some of this in recent commentary, and I'm sure we'll get a ton more next week. We have a fair amount of evidence now that China's in shortage. It's been a very heavy R&D growth market. The animals can only do so much in terms of progeny and output. There is a concern, and some would say an opportunity if you're an investor, that perhaps the Asia market reaches out into other parts of the world, tries to pick up demand. That drives hyperinflation in other parts of the world. It limits who can supply this market, and we get back into a heavily escalating price period, as we saw for a period of time a few years ago. I know you've addressed that, but not everyone's heard what you've said before. Talk to us about where we are. Talk to us about why that China hyperinflation and supply chain shortage, why that didn't impact your timing of shipments last quarter, which you simply said was normal and not a driver of year-over-year growth. Yeah. Talk to us about these dynamics, please. Yeah, certainly happy to. Just as a little bit of a background information. China is a market where the non-human primate is not native. They have to bring in their breeding stock from other countries. When they closed down their borders during the COVID time, they haven't had any import or exports of non-human primates since then. They haven't refreshed their breeding stock. That in itself can be managed, but they had really focused on just producing animals for studies. You are right that the animal availability in China is a little challenged. I would not say it is at a level where it is an emergency, but the farms are looking to refresh their breeding stock to increase their productivity. There, I believe there have been some imports for breeding stock, and that is now something that the Chinese government seemingly allows, so there are permits. That will take a few years because you have to grow up the breeding stock, and then you have to produce the offspring. It is not an immediate fix. We have seen pricing improve a little bit in China, frankly, to the level that we have seen a few years ago. Actually, pricing went down. Now it is just coming back up a little bit. It is not, I would not call it hyperinflation. Our volumes, we actually have a farm in China that we had bought for export, but then we could not export anymore because of the restrictions. Our Research Models and Services business is selling the animals to third-party clients. The volume is not very high, and the price increase is not really that material. When we talked about timing of shipments, it was more of the overall revenue that comes from it and how it impacts our Research Models and Services business. Really just about not being that material, what we are seeing right now, and we will have to see where pricing goes, but it is a known fact that they need more animals and that they are looking to produce more. It is an isolated market. They are not importing right now for studies, and they are not exporting for studies. At this stage, it does not have an impact on what is going on in the rest of the world. If they do, they could obviously allow that. The situation now is very different than what we have seen three or four years ago. Why is it different? Because Charles River has invested in non-human primates farms. So, just about 80% of our future needs are covered with that. There is a stability in the market. We are not relying on other third parties that may sell to the highest price. By the way, three years ago, there was a whole market that was not accessible, and that is not the fact right now. So pricing could move a little bit, not a bad thing. But I would not expect those spot prices, at least not overall market prices that you saw a few years ago. We do not model it. We do not put it in our target. I would not expect that going forward. Okay. When you talk about the benefits of the K.F. acquisition, which is largely a fourth- quarter benefit, maybe a little bit in the third, but largely fourth quarter, that is sustainable, right? That is once it kicks in, once you can take those newly acquired animals, get them shipped overseas, go through quarantine, prepared for studies, live in studies. Once you get that recurring volume of animals coming in, that margin lift, which you quote, is due to lower input costs, lower supply costs. You are taking out the middleman. That is a permanent benefit, correct? We are not going to hear about some abnormal comp or anomaly where fourth quarter is a one-timer and next year is not as good. Mm-hmm. Correct. I think the important point to highlight, though, in Q4 is we have a bolus of shipments and NHP study starts in the quarter that are very high, whereas typically you would see them spread out over multiple quarters. The actual lower sourcing costs are here to stay. That is a permanent reduction in our cost base, and we would expect year-over-year on a full- year basis to see accretion and margin expansion as a result of that acquisition. So that will stay with us. But it is important to note that in Q4 we have a large amount of NHP revenue from Cambodia, and so you just cannot necessarily take the fourth quarter margins and say that is the going- off point. Yeah. If that is where you are going with the question. Yeah. Yeah. Deep snow, short snow, kind of seasonality almost— Yeah. —the underlying theme is the same. Yeah. Yeah. The real reason why we did the acquisition was to gain control of the supply chain. Yeah. Have supply chain resiliency. Obviously with that we also have the benefit of lower costs, better margins. That will continue as we go forward. Just be careful in taking a single quarter and extrapolating that into next year. The lower cost could actually, the cost could go up and maybe has gone up a bit with tariffs and inflation and fuel shipping. I mean, you do ship, r ight? Are you pricing or embedding the cost of the animal in the study at a market rate? I know I would expect it's not a spot rate, but like a standard market rate. Are you a little bit discounted to win over customers because you have such a better buy point? What are the dynamics on pricing to customers? What are the customers seeing? Yeah. What we're doing is we're pricing a study, and the animal is part of that, and we're pricing our studies so that we can stay competitive. Again, we're not the discounting leader. We're actually generally maybe the highest price or the same price than some of our better competitors. Do not look at it as how do we price the animal. It's really how do we make sure that we stay competitive on our studies, and that has inputs of animals, inputs of labor, inputs of facilities, and so on. We will make sure we're staying dynamic and competitive overall in the marketplace. I've got one from the audience, and I'm going to do a little bit of a preface because you did have some corporate transformation. You had some dispositions, including the cell and gene therapy CDMO, but there's someone in the audience asking more broadly about what you are seeing overall in terms of demand around cell and gene therapy. As we go into the end of the year, as there was a period where it was a bit softer, it wasn't quite meeting the base case that the company laid out with those original acquisitions, for example. If I could just perhaps tack on to that, one of the original theses of doing the CDMO acquisitions was that it linked into other parts of Charles River, where you could get a bit of a virtuous cycle, a cross- sell. Has unwinding that business actually impacted your broader cell and gene therapy support capabilities or demand? Yeah, let me address kind of both questions. Yes, we divested our CDMO business that was a cell and gene therapy business. Both reasons, market wasn't quite where we wanted it to be, but it also happened to be a business that it wasn't quite the right fit for us. It's very different than our services business. The science still was quite immature and needed a lot of resource, science, technology investment, much more than our current business. You see the benefits of our divestiture from a margin perspective. Looking at cell and gene therapy demand in general, I want to broaden it to complex modalities, and we do see an uptick in complex modalities, and we will actually talk about it next week, how complex modalities drive demand for our services in general. Because the more complex the work is, the more science is needed, the more endpoints, more analytical capabilities are needed. That's actually a good thing. From a perspective of our Manufacturing and Commercialization support business, there was some cross- work, so we're doing testing for some of the CDMO clients. We're continuing to do that. We have a close collaboration with the buyer on that and the clients. It's actually going really well, really smooth. The clients continue to see the benefit of both organizations working together on that. Nothing to be concerned of, really going really well. Good. I would just highlight the financial benefit is pretty obvious based upon our most recent quarter results— Yeah. —with the Manufacturing and Commercialization segment. We put margins up that were in the high 30%. We are indicating we are going to be approaching 40% as we exit the year, so a very fast-growing business with very high margins. We are in a good position to continue to see that growth. That is fantastic. Yeah. Unfortunately, I could keep going, but we have gone past our time. Thank you. I'll let you get onto a busy one-on-one schedule for the rest of the day, and hopefully you have a great week. Thanks again for joining us. Thank you. Thank you. Everyone, please join me in thanking Charles River. Thank you.