Charles River Reports Strong Growth in Sales and Earnings.Business Editors and Medical Writers BIOWIRE2K WILMINGTON, Mass.--(BW HealthWire)--Aug. 2, 2001 Charles River Charles River River, eastern Massachusetts, U.S. The longest river wholly in the state, it flows into Boston Bay after a course of about 80 mi (130 km). Navigable for about 7 mi (11 km), its estuary separates the cities of Boston and Cambridge. Laboratories International, Inc. (NYSE NYSE See: New York Stock Exchange :CRL CRL - Carnegie Representation Language. Carnegie Group, Inc. Frame language derived from SRL. Written in Common LISP. Used in the product Knowledge Craft. ), reported today that sales increased 51% in the second quarter of 2001 compared to the second quarter of 2000. Sales for this year's second quarter were $116.8 million, a $39.4 million increase over second quarter 2000 sales of $77.4 million. Net income before extraordinary items was $10.6 million for the second quarter, or $0.24 per diluted share, an increase of 70% compared to $0.14 per diluted share in the second quarter of 2000 (excluding a one-time, non-cash favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. tax adjustment of $0.20). Fully-diluted earnings per share (EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. ) for the second quarter will exceed by $0.03 the consensus First Call estimate of $0.21 per share. The Company experienced strong revenue and earnings growth in the second quarter of this year, in both its biomedical bi·o·med·i·cal adj. 1. Of or relating to biomedicine. 2. Of, relating to, or involving biological, medical, and physical sciences. products and services and research model segments. While strategic acquisitions continued to contribute significantly to results, the Company also experienced solid organic growth. On a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis (adjusted to give effect to acquisitions completed earlier this year), and before unfavorable currency effects, sales increased 17% in the second quarter. Commenting on these results, James C. Foster James Clifford Foster is the chairman and chief executive officer of Charles River Laboratories, Inc., an international company that works on the drug discovery and development process. , Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said, "We're very pleased with our results for the second quarter. This is the fourth consecutive quarter since our June 2000 IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. in which we've experienced excellent revenue growth, while maintaining our commitment to strong profitability. Our two strategic acquisitions completed in the first quarter (Primedica and PAI PAI plasminogen activator inhibitor. PAI Plasminogen activator inhibitor, see there ) performed exceptionally well, both in terms of growth and profitability. This performance reflects a successful integration process, driven by multiple synergies. Our other drug discovery and development services also evidenced continued solid growth, as the demand from the biomedical research Biomedical research (or experimental medicine), in general simply known as medical research, is the basic research or applied research conducted to aid the body of knowledge in the field of medicine. community for high quality outsourcing services remained strong. Our biomedical products and services segment now comprises nearly 60% of our revenues, reflecting a great deal of progress in adding and expanding value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. that leverage our core research model capabilities." Mr. Foster continued: "While our biomedical products and services segment continues to grow dynamically, we've also seen very good organic growth in our research models segment, particularly in the US. Our longstanding leadership position in this unique market continues to advance steadily. Our commitment to being the technology leader is evidenced by our investment in R&D collaborations in animal cloning and transgenics trans·gen·ics n. (used with a sing. or pl. verb) The study of or methodology used to create transgenic animals or plants. , as well as our acquisition of new disease models used in diabetes and cardiovascular research. We've also recently entered into a strategic alliance with The Jackson Laboratory The Jackson Laboratory was founded in Bar Harbor, Maine in 1929 by former University of Maine and University of Michigan president C. C. Little under the name Roscoe B. Jackson Memorial Laboratory. to breed and distribute its genetically unique mouse models in Europe and Asia. We expect that these new technology platforms, products and strategic relationships will allow us to continue to grow and expand our very profitable research models business." Continuing his remarks, Mr. Foster indicated: "We were delighted to complete in July our second follow-on equity offering this year, a $250 million transaction that raised $55 million in net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). for the Company. These proceeds will be used for debt repayment and for general corporate purposes. We continue to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about the strength of our markets, and the long-term trends in pre-clinical drug discovery and development, including outsourcing. We believe we have and will continue to gain share in the markets for products or "tools" as well as services that support global biomedical research activities. At the same time, we plan to expand our presence in these markets through new technology platforms and targeted strategic acquisitions." The following forward-looking guidance is subject to the qualifications set forth below, and is based on current exchange rates. For the third quarter of 2001, Charles River expects sales in the range of $114 million to $117 million, an increase of more than 50% over the prior year. The Company expects fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of before extraordinary items in the range of $0.21 to $0.22, an increase of more than 75% over the prior year. For fiscal 2001, the Company projects earnings per share in the range of $0.85 to $0.87, compared to the First Call consensus for 2001 EPS of $0.77, or $0.80 when adjusting for actual second quarter results. For 2001, with the benefit of acquisitions completed in the first quarter, Charles River estimates revenues will exceed $445 million, or more than 45% growth on a reported basis compared to 2000 revenues. Mr. Foster is scheduled to appear on the cable television network CNBC CNBC Center for the Neural Basis of Cognition (artificial intelligence) CNBC Consumer News and Business Channel CNBC Congress of National Black Churches, Inc. on Friday morning, August 3, at approx. 7:50 a.m. (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ), to discuss the performance of the Company in the second quarter. Charles River Laboratories International, Inc. is a holding company for Charles River Laboratories, Inc. Both companies are publicly registered, and each files separate financial statements and reports with the SEC. The income statement and balance sheet information provided below reflect the financial results for Charles River Laboratories International, Inc., which differ from those of Charles River Laboratories, Inc. as to certain balance sheet items. Charles River Laboratories, Inc., based in Wilmington, Massachusetts For other towns and places named Wilmington, see Wilmington. Wilmington is a town in Middlesex County, Massachusetts, United States. The population was 21,363 at the 2000 census. , is a leading provider of critical research tools and integrated support services support services Psychology Non-health care-related ancillary services–eg, transportation, financial aid, support groups, homemaker services, respite services, and other services that enable innovative and efficient drug discovery and development. The Company is the global leader in providing the animal research models required in research and development for new drugs, devices and therapies. The Company also offers a broad and growing portfolio of biomedical products and services that enable customers to reduce cost, increase speed, and enhance productivity and effectiveness in drug discovery and development. Charles River's customer base spans over 50 countries, and includes all of the major pharmaceutical and biotechnology companies Top 100 Biotechnology Companies The following is a list of the top 100 biotechnology companies ranked by revenue. The first nine companies qualify for the list of the top 50 pharmaceutical companies. , as well as many leading hospitals and academic institutions. The Company operates more than 76 facilities in 15 countries worldwide. This document contains "forward looking statements." Such statements involve a number of risks and uncertainties that could cause actual results to differ materially from those stated or implied by the forward looking statements, including acquisition integration risks, R&D risks, special interest groups, foreign exchange, contaminations, industry trends, new displacement technologies, outsourcing trends, USDA USDA, n.pr See United States Department of Agriculture. and FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. regulation, changes in law, continued availability of products and supplies, personnel and control, and others that are described in the Risk Factors contained in Company's Registration Statement of Form S-3, as filed on July 19, 2001, and as may be updated from time to time in the Company's periodic SEC filings. The Company disclaims any intent or obligation to update forward looking statements, and otherwise claims the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " protections for forward looking statements afforded under The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. As previously announced, investors can access a live webcast of the second quarter earnings conference call through a link that will be posted on the investor page of the Charles River Laboratories website, http://www.criver.com. The conference call begins on Friday, August 3, at 8:30 a.m. Eastern Standard Time and will be available thereafter for one week for replay.
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(dollars in thousands except for per share data)
Three Months Ended Six Months Ended
June 30, June 24, June 30, June 24,
2001 2000 2001 2000
Total Net Sales $116,820 $77,430 $215,851 $149,934
Cost of products sold
and services provided 73,050 45,853 135,419 90,445
Gross margin 43,770 31,577 80,432 59,489
Selling, general and
administrative 17,285 12,427 32,745 24,242
Amortization of goodwill
and intangibles 1,993 937 3,821 1,802
Operating income 24,492 18,213 43,866 33,445
Interest income
(expense) (5,594) (13,008) (12,299) (25,530)
Other income (expense) (122) 260 433 230
Income before taxes,
minority interests,
earnings from equity
investments and
extraordinary item 18,776 5,465 32,000 8,145
Provision for
income taxes 7,659 (2,864) 13,214 (396)
Income before minority
interests, earnings
from equity investments
and extraordinary item 11,117 8,329 18,786 8,541
Minority interests (652) (462) (1,216) (679)
Earnings from equity
investments 136 107 219 748
Net income before
extraordinary item $10,601 $7,974 $17,789 $8,610
Extraordinary loss,
net of tax benefit of
$852 and $980 (1,583) -- (1,820) --
Net income $9,018 $7,974 $15,969 $8,610
Earnings per common
share before
extraordinary item
Basic $0.26 $0.40 $0.46 $0.43
Diluted $0.24 $0.34 $0.42 $0.37
Earnings per common
share after
extraordinary item
Basic $0.22 $0.40 $0.42 $0.43
Diluted $0.21 $0.34 $0.38 $0.37
Weighted average number
of common shares
outstanding
Basic 40,175,630 19,820,369 38,403,244 19,820,369
Diluted 44,052,166 23,571,555 42,231,654 23,571,555
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
June 30, December 30,
2001 2000
Assets
Current assets
Cash and cash equivalents $ 28,416 $ 33,129
Trade receivables 87,271 45,949
Inventories 36,607 34,510
Other current assets 9,361 6,149
Total current assets 161,655 119,737
Property, plant and equipment, net 141,807 117,001
Goodwill and other intangibles 89,480 41,893
Deferred tax asset 96,323 105,027
Other assets 27,530 26,950
Total assets $516,795 $410,608
Liabilities and Shareholders' Equity
Current liabilities
Current portion of long-term debt $ 685 $ 231
Accounts payable 9,501 10,767
Accrued compensation 20,789 16,997
Other current liabilities 49,488 36,325
Total current liabilities 80,463 64,320
Long-term debt 201,280 201,957
Other long-term liabilities 14,381 14,074
Total liabilities 296,124 280,351
Minority interests 12,453 13,330
Total shareholders' equity 208,218 116,927
Total liabilities and shareholders' equity $516,795 $410,608
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