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What changed in Charles River Laboratories's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Charles River Laboratories's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+435 added−395 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-19)

Top changes in Charles River Laboratories's 2025 10-K

435 paragraphs added · 395 removed · 325 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

129 edited+29 added−17 removed153 unchanged
Biggest changeAttorney’s Office for the Southern District of Florida that a Cambodian non-human primate supplier and two Cambodian officials had been criminally charged in connection with illegally importing non-human primates into the United States; client demand, particularly future demand for drug discovery and development products and services, including the outsourcing of these services; our expectations with respect to our ability to meet financial targets; our expectations regarding stock repurchases, including the number of shares to be repurchased, expected timing and duration, the amount of capital that may be expended and the treatment of repurchased shares; our ability to successfully execute our business strategy; our ability to timely build infrastructure to satisfy capacity needs and support business growth; our ability to fund our operations for the foreseeable future; the impact of unauthorized access into our information systems, including the timing and effectiveness of any enhanced security and monitoring present spending trends and other cost reduction activities by our clients; future actions by our management; the outcome of contingencies; changes in our business strategy, business practices and methods of generating revenue; the development and performance of our services and products; market and industry conditions, including competitive and pricing trends and the impact of those conditions, including on our allowances for credit losses; our strategic relationships with leading pharmaceutical and biotechnology companies, venture capital investments, and opportunities for future similar arrangements; our cost structure; our expectations regarding our acquisitions and divestitures, including their impact and projected timing; our expectations with respect to revenue growth and operating synergies (including the impact of specific actions intended to cause related improvements); the nature, timing and impact of specific actions intended to improve overall operating efficiencies and profitability (and our ability to accommodate future demand with our infrastructure), including actions to optimize our global footprint, and gains and losses attributable to businesses we plan to close, consolidate, divest or repurpose and the impact of operations and restructuring actions (including as estimated on an annualized basis); our expectations with respect to study cancellation rates and the impact of such cancellations; our expectations with respect to tax rates and benefits; changes in our expectations regarding future stock option, restricted stock, performance share units and other equity grants to employees and directors; expectations with respect to foreign currency exchange; assessing (or changing our assessment of) our tax positions for financial statement purposes; our liquidity; and the impact of litigation, including our ability to successfully defend litigation against us.
Biggest changeFor example, we may use forward-looking statements when addressing topics such as: our expectations regarding the availability of non-human primates and our ability to diversify our non-human primate (NHP) supply chain; the outcome of (1) the putative securities class action lawsuit filed against us and certain current/former officers on May 19, 2023; (2) the derivative lawsuit filed against members of the Board of Directors and certain current/former officers on November 8, 2023; and (3) the derivative lawsuit filed against certain current/former members of the Board of Directors and certain current/former officers on August 2, 2024; the timing and impact of the development and implementation of enhanced procedures to reasonably ensure that non-human primates we import are purpose-bred; changes and uncertainties in the global economy and financial markets; client demand, particularly future demand for drug discovery and development products and services, including the outsourcing of these services; our expectations with respect to our ability to meet financial targets; the Company’s plans or prospects, expectations and long-term goals associated with our business; the Company's expectations concerning future financial and operating performance, including the Company's commitment to, and ability to create long-term value for shareholders and to successfully execute on the Board of Directors’ comprehensive strategic review and evaluation of Charles River’s business and prospects; our expectations regarding stock repurchases, including the number of shares to be repurchased, expected timing and duration, the amount of capital that may be expended and the treatment of repurchased shares; our ability to successfully execute our business strategy; our ability to timely build infrastructure to satisfy capacity needs and support business growth; our ability to fund our operations for the foreseeable future; the impact of unauthorized access into our information systems, including the timing and effectiveness of any enhanced security and monitoring present spending trends and other cost reduction activities by our clients; future actions by our management; the outcome of contingencies; changes in our business strategy, business practices and methods of generating revenue; the development and performance of our services and products; market and industry conditions, including competitive and pricing trends and the impact of those conditions, including on our allowances for credit losses; our strategic relationships with leading pharmaceutical and biotechnology companies, venture capital investments, and opportunities for future similar arrangements; our cost structure; our expectations regarding our acquisitions and divestitures, including their impact, terms, projected timing, and planned funding; our expectations with respect to revenue growth and operating synergies (including the impact of specific actions intended to cause related improvements); the nature, timing and impact of specific actions intended to improve overall operating efficiencies and profitability (and our ability to accommodate future demand with our infrastructure), including actions to optimize our global footprint, and gains and losses attributable to businesses we plan to close, consolidate, divest or repurpose and the impact of operations and restructuring actions (including as estimated on an annualized basis); our expectations with respect to study cancellation rates and the impact of such cancellations; our expectations with respect to tax rates and benefits, including the impact of tax legislation on our operations; changes in our expectations regarding future stock option, restricted stock, performance share units and other equity grants to employees and directors; expectations with respect to foreign currency exchange; assessing (or changing our assessment of) our tax positions for financial statement purposes; our liquidity; the impact of newly issued accounting pronouncements on our consolidated financial statements and related disclosures; and the impact of litigation, including our ability to successfully defend litigation against us.
Our small research models include inbred, outbred, and hybrid strains, as well as mutant strains, genetically engineered models and humanized models with biological features, which enable research aims. Certain of our research models are proprietary rodent models used to research treatments in several therapeutic areas.
Our small research models include inbred, outbred, and hybrid strains, as well as mutant strains, genetically engineered models and humanized models with biological features, which enable research aims. Certain strains of our research models are proprietary rodent models used to research treatments in several therapeutic areas.
All of our sites are subject to registration, licensing and regulation, as appropriate under international treaties and conventions, including national, regional and local laws relating to: • the surface and air transportation of chemicals, biological reagents and laboratory specimens; • the handling, use, storage and disposal of chemicals (including narcotics and psychotropic drugs), biological reagents, laboratory specimens, hazardous waste and radioactive materials; • the procurement, handling, use, storage and disposal of human cells, tissues and cellular and tissue-based products for research purposes; • the safety and health of employees and visitors to our facilities; and • protection of the environment and general public.
All of our sites are subject to registration, licensing and regulation, as appropriate under international treaties and conventions, including national, regional and local laws relating to: • the surface and air transportation of chemicals, biological reagents and laboratory specimens; • the handling, use, storage and disposal of chemicals (including narcotics and psychotropic drugs), biological reagents, laboratory specimens, hazardous waste and radioactive materials; • the procurement, handling, use, storage and disposal of human cells, tissues and cellular and tissue-based products for research and manufacturing purposes; • the safety and health of employees and visitors to our facilities; and • protection of the environment and general public.
In addition, we license technology from other companies when it enhances our product and services businesses. Licensing has recently become a larger company-wide initiative, particularly as we increase our focus on innovative technologies that further diversify and enhance our portfolio. Corporate Governance We are committed to operating our business with integrity and accountability.
In addition, we license technology from other companies when it enhances our product and services businesses. Licensing has become a larger company-wide initiative, particularly as we increase our focus on innovative technologies that further diversify and enhance our portfolio. Corporate Governance We are committed to operating our business with integrity and accountability.
We have been at the forefront of animal welfare improvements in our industry and continue to show our commitment with special recognition programs for employees who demonstrate an extraordinary commitment in this critical aspect of our business. We created our own Humane Care Imperative (HCI), which is overseen by our Global Animal Welfare and Training corporate group.
We have been at the forefront of animal welfare improvements in our industry and continue to show our commitment with special recognition programs for employees who demonstrate an extraordinary commitment in this critical aspect of our business. We created our own Humane Care Imperative (HCI), which is overseen by our Global Animal Welfare corporate group.
Furthermore, our non-GLP and early-stage discovery work performed at our Safety Assessment facilities, which are not subject to GLP regulations, is typically carried out under a quality management system. Our Safety Assessment facilities and Manufacturing facilities are regularly inspected by regulatory compliance monitoring authorities, our clients’ quality assurance departments and our own internal quality audit program.
Furthermore, our non-GLP and early-stage discovery work performed at our Safety Assessment facilities, which are not subject to GLP regulations, is typically carried out under a quality management system. Our Safety Assessment facilities are regularly inspected by regulatory compliance monitoring authorities, our clients’ quality assurance departments, and our own internal quality audit program.
We work closely with the scientific community to understand how living conditions, handling procedures and reduction of stress play an important role in the quality and efficiency of research. We are committed to working with the industry to support development and to provide the best translational models to supplement or replace traditional live animal models.
We work closely with the scientific community to understand how living conditions, enrichment handling procedures and reduction of stress play an important role in the quality and efficiency of research. We are committed to working with the industry to support development and to provide the best translational models to supplement or replace traditional live animal models.
Endosafe® Trillium® utilizes three biological proteins, which we believe provides superior accuracy and testing outcomes to competitors’ single-protein recombinant alternatives, as well as equivalence to LAL-based testing method. Endosafe® Trillium® represents a next-generation solution to our industry-leading Endosafe® bacterial endotoxin detection portfolio. Celsis ® .
Endosafe® Trillium® utilizes three biological proteins, which we believe provides superior accuracy and testing outcomes to competitors’ single-protein recombinant alternatives, as well as equivalence to LAL-based testing method. Endosafe® Trillium® represents a next-generation solution to our industry-leading Endosafe® bacterial endotoxin detection portfolio.
Over this time, we have built upon our core competency of in vivo biology to develop a diverse and expanding portfolio of products and services, which now encompasses the broader non-clinical drug research process.
Over this time, we have built upon our core competency of in vivo biology to develop a diverse and continuously expanding portfolio of products and services, which now encompasses the broader non-clinical drug research process.
We maintain client engagement, lead development support, digital experience, eCommerce, and event management departments, which address both our clients’ routine and more specialized needs and purposely serve as a scientific support and information resource for them.
We maintain client engagement, lead development support, digital experience, eCommerce, and event management departments, which address both our clients’ routine and more specialized needs and purposely serve as a support and information resource for them.
We offer a single source of services for discovering and characterizing novel drug candidates for preclinical development by providing a full spectrum of discovery services — from identification and validation of novel targets, low molecular weight small molecule compounds, oligonucleotides, and biotherapeutics with actual or potential intellectual property value, through to delivery of preclinical drug and biotherapeutic candidates ready for safety assessment and progression toward the clinic.
We offer a single source of services for discovering and characterizing novel drug candidates for preclinical development by providing a full spectrum of discovery services — from identification and validation of novel targets, low molecular weight small molecule compounds, oligonucleotides, and biotherapeutics with actual or potential intellectual property value, through to delivery of preclinical drug and therapeutic candidates ready for safety assessment and progression toward the clinic.
Through these optimization initiatives, we expect to close or consolidate approximately 15 additional sites over the next two years, principally focused on the DSA and RMS segments. These footprint optimization efforts will enhance the efficiency and economies of scale in our global infrastructure, leading to a more disciplined operating model. 2 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Through these optimization initiatives, we expect to close or consolidate approximately 12 additional sites over the next two years, principally focused on the DSA and RMS segments. These footprint optimization efforts will enhance the efficiency and economies of scale in our global infrastructure, leading to a more disciplined operating model. 2 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Our products and services, supported by our global infrastructure and deep scientific expertise, enable our clients to overcome many of the challenges of non-clinical life sciences research. In 2024, our total revenue was $4.0 billion. As part of our efforts to manage the Company through the current demand environment, we have undertaken a comprehensive review of our global footprint.
Our products and services, supported by our global infrastructure and deep scientific expertise, enable our clients to overcome many of the challenges of non-clinical life sciences research. In 2025, our total revenue was $4.0 billion. As part of our efforts to manage the Company through the current demand environment, we have undertaken a comprehensive review of our global footprint.
We are a market leader in endotoxin testing products and services, which are used for FDA-required quality control testing of injectable drugs and medical devices, their components, and the processes by which they are manufactured. Endotoxin testing is an in vitro process that uses a processed extract from horseshoe crabs, known as limulus amebocyte lysate (LAL).
We are a market leader in endotoxin testing products and services, which are used for globally, including FDA, required quality control testing of injectable drugs and medical devices, their components, and the processes by which they are manufactured. Endotoxin testing is an in vitro process that uses a processed extract from horseshoe crabs, known as limulus amebocyte lysate (LAL).
We provide enhanced value to clients who use us as a full-service integrated partner over a longer period of time. Large, Global Partner . We believe there is an important advantage in being a full service, high-quality provider of research models and associated services, discovery and non-clinical in vivo and in vitro services and manufacturing solutions on a global scale.
We provide enhanced value to clients who use us as a full-service integrated partner over a longer period of time. Large, Global Partner . We believe there is an important advantage in being a comprehensive, high-quality provider of research models and associated services, non-clinical in vivo and in vitro services and manufacturing solutions on a global scale.
Our go-to-market approach employs a number of sales and marketing strategies, including dedicated sales teams for each of our major lines of business and global and key account managers who represent the entire portfolio. We also maintain several sales specialists that either have specific technical expertise (often degreed scientists) or cover unique markets.
Our go-to-market approach employs several sales and marketing strategies, including dedicated sales teams for each of our major lines of business and global and key account managers who represent the entire portfolio. We also maintain several sales specialists that either have specific technical expertise (often degreed scientists) or cover unique markets.
Many of our clients, especially large biopharmaceutical companies, have decided to limit the number of suppliers with which they work. They frequently choose to partner with large companies similar to Charles River, that can offer clients support across the non-clinical drug research process as a result of broader portfolios and experience in project management.
Many of our clients, especially large biopharmaceutical companies, have decided to limit the number of suppliers with which they work. They frequently choose to partner with large companies similar to Charles River, that can offer clients support across the non-clinical drug development process as a result of broader portfolios and experience in project management.
It is estimated that the market for regulated safety assessment services is 60% outsourced or more, while emerging growth areas such as discovery and certain research model services are currently believed to be less outsourced. We currently operate in over 130 sites and in over 20 countries worldwide (excluding certain Insourcing Solutions sites).
It is estimated that the market for regulated safety assessment services is 60% outsourced or more, while emerging growth areas such as discovery and certain research model services are currently believed to be less outsourced. We currently operate in over 120 sites and in over 20 countries worldwide (excluding certain Insourcing Solutions sites).
Girshick was promoted to Chief Operating Officer of the Company, adding the Research Models and Services, Microbial Solutions and CDMO businesses as well as the Global Information Technologies group to her responsibilities. Since 2023, Ms. Girshick also has general oversight of the Corporate Sales and Marketing team and our Corporate and External Affairs function. Joseph W.
Girshick was promoted to Chief Operating Officer of the Company, adding the Research Models and Services, Microbial Solutions and CDMO businesses as well as the Global Information Technologies group to her responsibilities. Since 2023, Ms. Girshick also has general oversight of the Corporate Sales and Marketing team and our Corporate and External Affairs function.
Shannon Parisotto , age 51, joined us in 2000 in our Nevada operation. Ms. Parisotto progressed through a number of finance management positions of increasing responsibility, and in 2010, was promoted to Corporate Vice President, Preclinical Services, Finance. In this role, Ms. Parisotto was responsible for the financial operations of the global Preclinical Services business. Beginning in 2011, Ms.
Shannon Parisotto , age 52, joined us in 2000 in our Nevada operation. Ms. Parisotto progressed through a number of finance management positions of increasing responsibility, and in 2010, was promoted to Corporate Vice President, Preclinical Services, Finance. In this role, Ms. Parisotto was responsible for the financial operations of the global Preclinical Services business. Beginning in 2011, Ms.
The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Overview We are a leading, non-clinical global drug development partner with a mission to create healthier lives.
The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. Overview We are a leading, full service, non-clinical global drug development partner with a mission to create healthier lives.
The FDA and foreign regulatory agencies typically require that the safety and efficacy of new drug candidates be tested on research models like ours prior to testing in humans. As a result, our research models are an essential part of the drug discovery and development process.
The FDA and foreign regulatory agencies require that the safety and efficacy of most new drug candidates be tested on research models like ours prior to testing in humans. As a result, our research models are an essential part of the drug discovery and development process.
While the recent biopharmaceutical demand environment has been less robust, we believe that our portfolio provides flexible solutions and scientific expertise that meet the customized needs for virtual and small biotechnology companies, which have limited or no infrastructure.
While the biopharmaceutical demand environment has been less robust in recent years, we believe that our portfolio provides flexible solutions and scientific expertise that meet the customized needs for virtual and small biotechnology companies, which have limited or no infrastructure.
As of 2024, we have conducted safety culture training and workshops to the executive leadership team, site general managers and all people leaders. In 2023 we initiated a formal Environment, Health, Safety and Sustainability Assessment program conducting 17 site assessments in the inaugural year of the program.
In 2024, we conducted safety culture training and workshops to the executive leadership team, site general managers and all people leaders. In 2023 we initiated a formal Environment, Health, Safety and Sustainability Assessment program conducting 17 site assessments in the inaugural year of the program.
Discovery and Safety Assessment We currently offer regulated and non-regulated DSA services to support the discovery, development, and regulatory-required safety testing of potential new drugs, including in vitro and in vivo studies, laboratory support services, including bioanalytical and strategic non-clinical consulting and program management.
Discovery and Safety Assessment We currently offer regulated and non-regulated DSA services to support the discovery, development, and regulatory-required safety testing of potential new drugs, including in vitro and in vivo studies, laboratory support services, such as bioanalytical and strategic non-clinical consulting and program management.
In 2025, we initiated the integration of our Discovery Services and Safety Assessment businesses into one overarching DSA organization. This unification focuses on a combined sales force and leadership approach, with integrated scientific expertise to facilitate a more seamless client experience and make us a stronger and even more responsive partner for our clients. 4 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
In 2025, we initiated the integration of our Discovery Services and Safety Assessment businesses into one overarching DSA organization. This unification leverages a combined sales force and leadership approach, with integrated scientific expertise to facilitate a more seamless client experience and make us a stronger and even more responsive partner for our clients. 4 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
All such persons have been elected to serve until their successors are elected and qualified or until their earlier resignation or removal. James C. Foster , age 74, joined us in 1976 as General Counsel. During his tenure, Mr.
All such persons have been elected to serve until their successors are elected and qualified or until their earlier resignation or removal. James C. Foster , age 75, joined us in 1976 as General Counsel. During his tenure, Mr.
We only use accredited and experienced transporters for importing and exporting animals who are specialists in their field. We comply with global requirements which are evaluated by import and export authorities at each point of exit and entry.
We only use licensed and experienced transporters for importing and exporting animals who are specialists in their field. We comply with global requirements which are evaluated by import and export authorities at each point of exit and entry.
In order to attract the best candidate for each position, we prioritize widescale recruitment efforts to attract a larger pool of applicants from a variety of backgrounds. Our hiring process is designed to ensure fair and objective decisions lead to the most qualified candidate being hired. We strive to make our hiring practices accessible, including offering reasonable accommodations as appropriate.
In order to attract the best candidate for each position, we prioritize wide-scale recruitment efforts to attract a larger pool of applicants from a variety of backgrounds. Our hiring process is designed to ensure fair and objective decisions lead to the most qualified candidate being hired. We strive to make our hiring practices accessible, including offering reasonable accommodations as appropriate.
Various studies and reports estimate that it takes between 10 to 15 years, up to $2.5 billion excluding time costs and exploration of between 10,000 and 15,000 drug molecules to produce a single Food and Drug Administration (FDA)-approved drug.
Various studies and reports estimate that it takes between 10 to 15 years, up to $2.6 billion excluding time costs and exploration of between 10,000 and 15,000 drug molecules to produce a single Food and Drug Administration (FDA)-approved drug.
These Pulse surveys were issued twice during 2024 and serve as a foundation for more meaningful conversations and actions between our people and people leaders to continue making Charles River a best place to work, learn, and grow.
These Pulse surveys were issued twice during 2025 and serve as a foundation for more meaningful conversations and actions between our people and people leaders to continue making Charles River a best place to work, learn, and grow.
Ten of the eleven members of our Board of Directors are independent and have no significant financial, business or personal ties to us or management. Our Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee of our Board of Directors are each composed entirely of independent directors.
Nine of the eleven members of our Board of Directors are independent and have no significant financial, business or personal ties to us or management. Our Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee of our Board of Directors are each composed entirely of independent directors.
We have stable, long-term relationships with many of our clients. During 2024, no single client accounted for more than 4% of our total revenue and no single client accounted for more than 8% of the revenue of any of our three business segments.
We have stable, long-term relationships with many of our clients. During 2025, no single client accounted for more than 4% of our total revenue and no single client accounted for more than 8% of the revenue of any of our three business segments.
Additionally, several of our laboratories conduct biosafety and analytical testing such as identity, stability, sterility and potency and viral clearance testing in support of our clients’ manufacturing programs and to fulfill their validation requirements, as applicable.
Additionally, several of our laboratories conduct biosafety and analytical testing such as identity, stability, sterility and potency and viral clearance testing in support of our clients’ manufacturing programs and to fulfill their validation requirements and lot release requirements, as applicable.
Our offerings include: • target discovery and validation; • disease biology; • target deconvolution through proteomics and cell microarray technology; • hit identification, hit-to-lead progression and lead optimization to deliver candidate molecules and biotherapeutics across modalities, making use of state-of-the-art techniques such as computer-aided drug design, structural biology and machine learning/artificial intelligence; • early non-clinical pharmacokinetic and pharmacodynamic studies, transporter-mediated drug-drug interaction, and in vitro and in vivo assays to assess mechanism, bioavailability and metabolism as required for regulatory approval; • appropriate in vivo Discovery Services evaluation, which is essential to generate confidence in the initial safety of a novel therapeutic agent, its fate in an intact mammalian system and its potential to translate into an efficacious treatment in humans; • target engagement and safety biomarker development to support non-clinical and potentially downstream clinical studies.
Our offerings include: • target discovery and validation; • disease biology; • target deconvolution through proteomics and cell microarray technology; • hit identification, hit-to-lead progression and lead optimization to deliver candidate molecules across modalities, making use of state-of-the-art techniques such as computer-aided drug design, structural biology, cell painting, and machine learning/artificial intelligence; • early non-clinical in vitro toxicity and safety studies to assess off-target toxicities, including studies required for regulatory approval; • early non-clinical pharmacokinetic and pharmacodynamic studies, transporter-mediated drug-drug interaction, and in vitro and in vivo assays to assess mechanism, bioavailability and metabolism as required for regulatory approval; • appropriate in vivo Discovery Services evaluation, which is essential to generate confidence in the efficacy and initial safety of a novel therapeutic agent, its fate in an intact mammalian system and its potential to translate into an efficacious treatment in humans; and • target engagement and safety biomarker development to support non-clinical and potentially downstream clinical studies.
We are focused on leveraging our competitive advantages to ensure we are recognized as the premier preferred provider, thereby enabling us to build broader and deeper long-term strategic relationships with our clients. Digital Enhancements. As the healthcare industry evolves, technology is playing an essential role.
We are focused on leveraging our competitive advantages to ensure we are recognized as the premier preferred partner to our clients, thereby enabling us to build broader and deeper long-term strategic relationships with them. Digital Enhancements. As the healthcare industry evolves, technology is playing an essential role.
This includes extensive scientific, technical and therapeutic area expertise, timely access to data, documentation and data visualization through secure portals, provision of data in sponsor-specific formats for data warehousing needs, accelerated reporting, reduced standard reporting timelines and industry-leading Standard Exchange of Non-Clinical Data (SEND) capabilities, a global footprint, streamlined and simplified processes and communications, including professional project and relationship management.
This includes extensive scientific, technical and therapeutic area expertise, timely access to data and scientific documentation through secure portals, provision of data in customized, sponsor-specific formats for data warehousing needs, accelerated reporting, reduced standard reporting timelines and industry-leading Standard Exchange of Non-Clinical Data (SEND) capabilities, a global footprint, streamlined and simplified processes and communications, including professional project, program, portfolio, and relationship management.
In 2024 we have continued our safety-first culture journey by requiring all operational people leaders to include a health and safety goal as part of their annual performance, conducted 23 additional site program assessments and provided quarterly updates to business leadership on injury data analysis, trends to track performance against goals, and opportunities to invest in impactful safety improvements.
In 2025 we have continued our safety-first culture journey by requiring all operational people leaders to include a health and safety goal as part of their annual performance, conducted 26 additional site program assessments and provided quarterly updates to business leadership on injury data analysis, trends to track performance against goals, and opportunities to invest in impactful safety improvements.
GLP requirements are significantly harmonized throughout the world and our laboratories are capable of conducting studies in compliance with all applicable requirements. Regulatory monitoring authorities such as the FDA, Medicines and Healthcare Products Regulatory Agency and OECD countries have indicated an increased emphasis on the management of electronic records and signatures generated by computerized systems to ensure data integrity.
GLP requirements are significantly harmonized throughout the world and our laboratories are capable of conducting studies in compliance with all applicable requirements. Regulatory monitoring authorities such as the FDA, Medicines and Healthcare Products Regulatory Agency and OECD countries have indicated a continued emphasis on the management of electronic records and signatures generated by computerized systems to ensure data integrity.
In addition to all standard anatomic and clinical pathology techniques, we provide specialized evaluations such as digital primary and peer review histopathology options, cytology, platelet function, assay development, immunohistochemistry, in situ hybridization, image analysis, tissue morphometry and spatial analysis services. Safety Pharmacology. Our clients are also required to conduct an assessment of safety pharmacology.
In addition to all standard anatomic and clinical pathology techniques, we provide specialized evaluations such as digital primary and peer review histopathology options, cytology, platelet function, assay development, immunohistochemistry, in situ hybridization, image analysis, tissue morphometry and spatial analysis services. Safety Pharmacology. Our clients are also required to conduct safety pharmacology studies.
Our Safety Assessment facilities comply with animal welfare and GLP regulations to the extent required by the FDA, Environmental Protection Agency, United States Department of Agriculture (USDA), Centers for Disease Control and Prevention (CDC), European Medicines Agency, European Chemicals Agency and the Organization for Economic Co-operation and Development (OECD), Canadian Council on Animal Care (CCAC) as well as other international regulatory agencies.
Our Safety Assessment facilities comply with animal welfare and GLP regulations to the extent required by the FDA, Environmental Protection Agency, United States Department of Agriculture (USDA), Centers for Disease Control and Prevention (CDC), Standards Council of Canada, National Competent Authorities, Standards Council of Canada, National Competent Authorities, European Medicines Agency, European Chemicals Agency and the Organization for Economic Co-operation and Development (OECD), Canadian Council on Animal Care (CCAC) as well as other international regulatory agencies.
Our Accugenix® business provides state-of-the-art microbial 6 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. identification services and products for manufacturing in the biopharmaceutical, medical device, nutraceutical and consumer care industries. We expect our comprehensive portfolio of offerings and global network of laboratories to drive increased adoption of our quality control testing solutions across both sterile and non-sterile applications. Endosafe ® .
Our Accugenix® business provides state-of-the-art microbial identification services and products for manufacturing in the biopharmaceutical, medical device, nutraceutical and consumer care industries. We expect our comprehensive portfolio of offerings and global network of laboratories to drive increased adoption of our quality control testing solutions across both sterile and non-sterile applications. Endosafe ® .
The Animal Welfare Act (AWA) governs the care and use of animals used for research in the U.S. other than laboratory rats, mice and fish bred for use in research. As a result, most of our U.S. small animal research model operations are not subject to regulation under the AWA.
The Animal Welfare Act (AWA) governs the care and use of animals used for research in the U.S. other than laboratory rats, mice and fish bred for use in research. As a result, most of our U.S. small animal research model operations are not subject to regulatory oversight.
Mergers and acquisitions remain one of our top, long-term priorities for disciplined capital deployment and enhancing growth strategy with focus on enhancing the breadth of our scientific capabilities principally within our core competencies, expanding our global scale, and maintaining our leadership position in advanced and emerging therapies.
Mergers and acquisitions remain one of our top, long-term priorities for disciplined capital deployment and enhancing growth strategy with focus on enhancing the breadth of our scientific capabilities principally within our core competencies, expanding our global scale, and maintaining our leadership position.
First, studies vary in duration (i.e., some studies or projects that are included in December 28, 2024 backlog may be completed in 2025, while others may be completed in later years). Second, the scope of studies or projects may change, which may either increase or decrease their value.
First, studies vary in duration (i.e., some studies or projects that are included in December 27, 2025 backlog may be completed in 2026, while others may be completed in later years). Second, the scope of studies or projects may change, which may either increase or decrease their value.
In addition, our Laboratory Sciences group is able to measure a wide range of non-clinical and clinical biomarkers related to the safety and efficacy of the drugs and/or chemicals being developed.
In addition, our Laboratory Sciences group can measure a wide range of non-clinical and clinical biomarkers related to the safety and efficacy of the drugs and/or chemicals being developed.
In particular, we are an industry leader in the areas of microbial detection and microbial identification to support process development and ongoing commercial production. Our portfolio spans a broad range of traditional and rapid methods, which provide the highest testing quality, enhanced productivity and reduced cycle time. Deep Scientific Expertis e.
In particular, we are an industry leader in the areas of microbial detection and microbial identification to support clinical development and ongoing commercial production. Our portfolio spans a broad range of traditional and rapid methods, which provide the highest testing quality, enhanced productivity and reduced cycle time. Deep Scientific Expertise .
Biologics Testing Services Our Biologics Testing Services business provides clients with analytical testing and related capabilities to support the safe manufacture of their biologic drugs, as well as a suite of manufacturing services to produce our clients’ advanced therapeutics.
Biologics Solutions . Our Biologics Solutions (Biologics) business is comprised of our Biologics Testing Services business and CDMO business. Biologics Testing Services Our Biologics Testing Services business provides clients with analytical testing and related capabilities to support the safe manufacture of their biologic drugs, as well as a suite of manufacturing services to produce our clients’ advanced therapeutics.
As a global organization, our growth and development depend on hiring, engaging, and retaining a skilled and global workforce in a highly competitive marketplace. In fiscal 2024, we hired over 2,200 people and our voluntary turnover for all employees was approximately 11.1%. We pride ourselves on supporting our people both professionally and personally throughout their employee experience with us.
As a global organization, our growth and development depend on hiring, engaging, and retaining a skilled and global workforce in a highly competitive marketplace. In fiscal 2025, we hired over 2,600 people and our voluntary turnover for all employees was approximately 10.1%. We pride ourselves on supporting our people both professionally and personally throughout their employee experience with us.
The fully integrated advanced therapeutics portfolio enables us to provide clients with an integrated solution from basic research and discovery through cGMP production; driving efficiency and accelerating clients’ speed-to-market by integrating preclinical CRO activities with manufacturing and testing. This provides our clients with a seamless experience across the value chain with the same advanced therapeutics scientific partner.
The fully integrated advanced therapeutics portfolio enables us to provide clients with an integrated solution from analytical and process development through cGMP production; driving efficiency and accelerating clients’ speed-to-market by integrating preclinical CRO activities with manufacturing and testing. This provides our clients with a seamless experience across the value chain with the same advanced therapeutics scientific partner.
Our strategic imperatives and operational goals are centered around our intense focus on initiatives designed to allow us to drive profitable growth, enhance our operating efficiency and better position ourselves to function successfully in the current and future business environment, which we believe will collectively enable us to maximize value for our shareholders. 10 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Our strategic imperatives and operational goals are centered around our intense focus on initiatives designed to allow us to drive profitable growth, enhance our operating efficiency and better position ourselves to function successfully in the current and future business environment, which we believe will collectively enable us to maximize value for our shareholders.
For regulated species, the AWA requires producers and those working with regulated species to provide veterinary care and to follow specific husbandry practices such as cage size, shipping conditions, sanitation and 14 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. environmental enrichment to ensure the welfare of these animals. Separately, facilities using live vertebrate animals in research funded by the U.S.
For regulated species, the AWA requires producers and those working with regulated species to provide veterinary care and to follow specific husbandry practices such as cage size, shipping conditions, sanitation and environmental enrichment to ensure the welfare of these animals. Separately, facilities using live vertebrate animals in research funded by the U.S.
Clients Our clients consist primarily of major biopharmaceutical companies; many small, emerging, and established biotechnology, agricultural and industrial chemical, life science, veterinary medicine, medical device, diagnostic and consumer product companies; contract research and contract manufacturing organizations; and other commercial entities, as well as leading hospitals, academic institutions, government agencies, and non-governmental organizations.
Clients Our clients consist primarily of major biopharmaceutical companies; many small, emerging, and established biotechnology, agricultural and industrial chemical, life science, veterinary medicine, medical device, diagnostic and consumer product companies; contract research and contract manufacturing organizations; and other commercial entities, as well as leading 11 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. hospitals, academic institutions, government agencies, and non-governmental organizations.
We are taking decisive action to manage the Company through the current demand environment, including appropriately right-sizing our infrastructure, optimizing operations, and driving efficiency with a goal to protect operating margin.
We continue to take decisive action to manage the Company through the current demand environment, including appropriately right-sizing our infrastructure, optimizing operations, and driving efficiency with a goal to protect operating margin.
Our goal is to enhance the client experience and reinforce our role as a flexible and responsive partner to our clients, including through leveraging technology such as our Apollo™ cloud-based platform to provide real-time access to scientific data and self-service tools for clients. • Continuing to evaluate additional strategies to enhance the business.
Our goal is to enhance the client experience and reinforce our role as a flexible and responsive partner to our clients, including through leveraging technology such as our Apollo™ cloud-based platform to provide real-time access to scientific data and self-service tools for clients. 10 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. • Continuing to evaluate additional strategies to enhance the business.
Our global regulatory compliance programs are managed by global quality systems, such as vendor supplier programs, enterprise quality management systems and global computer system validation. Within each regulated business, we have established Quality Assurance Units (QAUs) responsible for risk based internal audit programs to manage regulatory requirements and client expectations.
Our global regulatory compliance programs are managed by global quality systems, such as vendor supplier programs, enterprise quality management systems and global computer system validation. Within each regulated business, we have 16 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. established Quality Assurance Units (QAUs) responsible for risk based internal audit programs to manage regulatory requirements and client expectations.
Copies of our Corporate Governance Guidelines, Code of Business Conduct and Ethics and Related Person Transactions Policy are available on our website at http://ir.criver.com under the “Investor Relations - Corporate Governance” caption. 16 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Information about Our Executive Officers Below are the names, ages and principal occupations of each of our current executive officers.
Copies of our Corporate Governance Guidelines, Code of Business Conduct and Ethics and Related Person Transactions Policy are available on our website at http://ir.criver.com under the “Investor Relations - Corporate Governance” caption. Information about Our Executive Officers Below are the names, ages and principal occupations of each of our current executive officers.
Our internal strategic marketing and marketing operations teams support the field sales and business development teams while developing and implementing programs to build awareness about products and services and create opportunities for interaction with our clients in the biomedical research industry.
Our internal strategic marketing and marketing operations teams support the field sales and business development teams while developing and implementing programs to build awareness about products and services, create opportunities for interaction with our clients in the biomedical research industry, and drive lead generation and revenue growth.
These clients also value our ability to provide a broad range of services where we work hand in hand with our clients to design, plan and manage integrated projects and programs. This includes classically outsourced services, “insourced” services and hybrid offerings blending resources from both our clients and our staff.
These clients also value our ability to provide a broad range of services where we work hand in hand with our clients to design, plan and manage integrated projects and programs. This includes classically outsourced services, “insourced” services and hybrid offerings blending resources from both our clients and our staff. Decisive Actions to Position for the Future.
Our laboratories in the U.S., Germany, Ireland 7 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. and France provide timely and regulatory-compliant services in the areas of analytical, molecular biology, virology, cell-based bioassays, bioanalysis, immunochemistry, microbiology, cell biology, in vivo and in vitro studies and related services.
Our laboratories in the U.S., Germany, Ireland and France provide timely and regulatory-compliant services in the areas of analytical, molecular biology, virology, cell-based bioassays, bioanalysis, immunochemistry, microbiology, cell biology, in vivo and in vitro studies and related services.
We also support safety studies to test industrial chemical, agrochemicals, consumer products, veterinary medicines and medical devices. For human pharmaceutical candidates, once a lead candidate is selected, toxicology studies are required to support clinical trials in humans and for regulatory approval.
We also support safety studies to test industrial chemical, agrochemicals, consumer products, veterinary medicines and medical devices. For human pharmaceutical candidates, once a lead candidate is selected, toxicology studies are required to support clinical trials in humans and for 5 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. regulatory approval.
We believe that our ability to provide solutions that address all aspects of early-stage drug research are increasingly attractive to our clients, and we continue to design and market our commercial activities to deliver flexible, customized programs designed by segment to meet our clients’ global and site-specific needs.
We believe that our ability to provide solutions that address aspects of drug research through development and manufacturing are increasingly attractive to our clients, and we continue to design and market our commercial activities to deliver flexible, customized programs designed by segment to meet our clients’ global and site-specific needs.
Health and Safety We are committed to creating a healthy and safe workplace for our employees and visitors to our facilities. This commitment is outlined in our Global Policy on Safety & Sustainability where we define the company’s approach to embedding safety and sustainably into our company’s purpose.
Health and Safety We are committed to creating a healthy and safe workplace for our employees and visitors to our facilities. This commitment is outlined in our Global Policy on Safety & Sustainability where we define the company’s approach to embedding safety and 14 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. sustainably into our company’s purpose.
The legacy method required a 14-day sample incubation period and was subjective. Using the Celsis® protocol and instrumentation, clients can detect contamination within 6 days and make definitive product release decisions. We also offer Celsis Complete™ and Celsis Advantage™ services.
The legacy method required a 14-day sample incubation period and was subjective. Using the Celsis® protocol and instrumentation, clients can detect contamination within 4 to 7 days and make objective product release decisions. We also offer Celsis Complete™ and Celsis Advantage™ services.
By utilizing our streamlined and efficient facilities, we help clients create a flexible and integrated infrastructure in order to improve their workload and staffing requirements. This allows our clients to optimize internal capacity and/or staff while ensuring the conduct of effective quality research for their projects.
By utilizing our streamlined and efficient facilities, we help clients create a flexible and integrated infrastructure and partner with their teams to reduce the workload and staffing requirements. This allows our clients to optimize internal capacity and/or staff while ensuring the conduct of effective quality research for their projects.
Our clients’ R&D needs continue to evolve. These clients are increasingly emphasizing studies that have greater translation to the clinic so that they can make appropriate decisions regarding the progression of potential therapeutic entities earlier in the development process.
Strategic Outsourcing Drives Efficiency, Innovation, and Growth. Our clients’ R&D needs continue to evolve. These clients are increasingly emphasizing studies that have greater translation to the clinic so that they can make appropriate decisions regarding the progression of potential therapeutic entities earlier in the development process.
We are committed to being the worldwide leader in the humane care of research animals and implementation of the “3Rs” initiative (Replacement, Reduction, and Refinement). As researchers, we are responsible to our clients, our animals and the public for the health and well-being of the animals in our care.
Commitment to Animal Welfare . We are committed to being the worldwide leader in the humane care of research animals and implementation of the “3Rs” initiative (Replacement, Reduction, and Refinement). As researchers, we are responsible to our clients, our employees, our animals and the public at large for the health and well-being of the animals in our care.
We intend to continue to broaden the scope of the products and services that we provide across the drug discovery and non-clinical development continuum primarily through internal development, and also, through focused acquisitions and our strategic partnerships strategy, all of which are intended to enable us with the flexibility to adapt and innovate to meet our client’s changing needs.
We intend to continue to broaden the scope of the products and services that we provide across the research and development continuum primarily through internal development, and also, through focused acquisitions within our core markets and our strategic partnerships strategy, all of which are intended to enable us with the flexibility to adapt and innovate to meet our client’s changing needs.
We also face competition from the internal discovery and development resources of our clients. • For RMS, we have four main competitors of which one is a government funded, not-for-profit entity; one is a public company in the U.S.; one is privately held in Europe; and one is privately held in the U.S. • For DSA, both our discovery services and safety assessment services have numerous competitors.
We also face competition from the internal discovery and development resources of our clients. • For RMS, we have four main competitors of which one is a government funded, not-for-profit entity; one is a division of a public company in the U.S.; one is privately held in the U.S, and one is a public company in China. 12 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. • For DSA, both our discovery services and safety assessment services have numerous competitors.
Part of the decisive action we have and continue to implement to manage the Company through the current demand environment includes restructuring initiatives to manage costs and generate efficiency by reducing staffing levels to align with the pace of demand. We have reduced our total headcount by approximately 8% since the end of 2023.
Part of the decisive action we have and continue to implement to manage the Company through the current demand environment includes selective hiring and restructuring initiatives to manage costs and generate efficiency by consolidating sites and reducing staffing levels to align with the pace of demand. We have reduced our total headcount by approximately 2% since the end of 2024.
In addition to interactions with our direct sales force, our primary promotional activities include presenting scientific symposia to targeted audiences, publishing scientific papers, technical support pieces and white papers, and newsletters, hosting webinars and virtual seminars and making presentations at, and participating in, scientific conferences and trade shows in North America, Europe and Asia.
In addition to interactions with our direct sales force, our primary promotional activities include: demand generation through all available marketing channels, online and offline; presenting scientific symposia to targeted audiences; publishing scientific papers, technical support pieces and white papers, and newsletters; hosting webinars and virtual seminars; and making presentations at, and participating in, scientific conferences and trade shows in North America, Europe and Asia.
To ensure that we have proper regulatory oversight over our electronic records, a dedicated quality function reviews our computerized system practices to ensure that appropriate record controls are in place and that a robust audit strategy confirms requirements are met for compliance.
To ensure that we have proper regulatory oversight over our electronic records, a dedicated quality function reviews our computerized system practices, including those related to cloud or AI based systems, to ensure that appropriate record controls are in place and that a robust audit strategy confirms requirements are met for compliance.
This includes services to streamline and enhance drug discovery programs for our clients, including expertise and capabilities in all stages of discovery and all major modalities including small molecules, biologics (antibodies), oligonucleotides, and cell and gene therapies.
Discovery services can streamline and enhance drug discovery programs for our clients, providing expertise and capabilities in all stages of discovery and all major modalities including small molecules, biologics, oligonucleotides, and cell and gene therapies.
A significant portion of our Research Models business involves the commercial production and sale of small research models, principally purpose-bred rats and mice for use by researchers in fundamental biology through to drug discovery and development.
Our Research Models business is principally comprised of the production and sale of the most widely used small research models, primarily rodents. A significant portion of our Research Models business involves the commercial production and sale of small research models, typically purpose-bred rats and mice for use by researchers in fundamental biology through to drug discovery and development.
Our strategy is to deliver a comprehensive and integrated portfolio of drug discovery and non-clinical development products, services and solutions to support our clients’ discovery and early-stage drug research, process development, scale up, manufacturing and product release efforts, and enable them to bring new and improved therapies to market faster and more cost effectively.
Our strategy is to deliver a comprehensive and integrated portfolio of drug research and development products, services and solutions to support our clients’ basic research and early-stage drug development, analytical testing, manufacturing and product release efforts, and enable them to bring new and improved therapies to market faster and more cost effectively.
In 2024, Manufacturing accounted for 19.0% of our total revenue from continuing operations and approximately 2,800 of our employees, including approximately 380 science professionals with advanced degrees. Research Models and Services . Our RMS segment is comprised of three businesses that provide foundational tools that enable our clients to discover new molecules: Research Models, Research Model Services and Cell Solutions.
In 2025, Manufacturing accounted for 19.1% of our total revenue and approximately 2,600 of our employees, including approximately 350 science professionals with advanced degrees. Research Models and Services . Our RMS segment is comprised of three businesses that provide foundational tools that enable our clients to discover new molecules: Research Models, Research Model Services and Cell Solutions. Research Models .
This technological revolution is not only helping streamline processes and operations, but the effects of this digitization directly impact patients. We are committed in our efforts to reduce the timeline to develop, safe and innovative new treatments for patients who desperately need them.
This technological revolution is not only helping streamline processes and operations, but the effects of this digitalization directly impact our biopharmaceutical clients. We are committed in our efforts to reduce the timeline to develop, safe and innovative 9 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. new treatments for patients who desperately need them.
We also continue to enhance our small molecule, biologics, and advanced modalities portfolios in areas of greatest industry need, where outsourcing provides major benefits for our clients and where we could provide significant benefits given our unique early-stage development portfolio and global footprint. 8 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Commitment to Animal Welfare .
We continue to enhance our small molecule, biologics, and advanced modalities portfolios in areas of greatest industry need, where outsourcing provides major benefits for our clients and where we could provide significant benefits given our unique early-stage development portfolio and global footprint.
Approximately 18,600 of our employees are considered full-time employees, while approximately 1,400 are considered part-time employees. Our workforce was distributed geographically approximately as follows: 61% in North America, 32% in Europe, 5% in Asia, and 2% in other regions.
Approximately 18,300 of our employees are considered full-time employees, while approximately 1,400 are considered part-time employees. Our workforce was distributed geographically approximately as follows: 59% in North America, 32% in Europe, 7% in Asia, and 3% in other regions.
We collaborate with the works councils and believe we have good relationships with our employees. Values At Charles River, our values of Care, Lead, Own, and Collaborate guide our decisions and actions; they are standards we hold ourselves to each and every day and are critical to success in fulfilling our goals.
Values At Charles River, our values of Care, Lead, Own, and Collaborate guide our decisions and actions; they are standards we hold ourselves to each and every day and are critical to success in fulfilling our goals.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeBusiness and Operational Risks • We bear financial risk for contracts that may be terminated or reduced in scope, underpriced, subject to cost overruns or delays. • Upgrading and integrating our business systems could result in implementation issues and business disruptions. • We have in the past experienced and in the future could experience unauthorized access into our information systems. • If we are not successful in executing our business strategy, including our failure in selecting and integrating the businesses and technologies we acquire, or in managing our current and future site closures and divestitures, our business may be adversely impacted. • If we are not successful in realizing cost savings from our restructuring initiatives, our business may be adversely impacted. • Our business is subject to risks relating to operating internationally, including changes in foreign currency exchange rates. • Our operations might be affected by the occurrence of a natural disaster or other catastrophic event. • Negative attention from special interest groups may impair our business.
Biggest changeBusiness and Operational Risks • We bear financial risk for contracts that may be terminated or reduced in scope, underpriced, subject to cost overruns or delays. • Upgrading and integrating our business systems could result in implementation issues and business disruptions. • We have in the past experienced and in the future could experience unauthorized access into our information systems. • Uncertainties with respect to the development, deployment, and use of artificial intelligence present new risks and challenges and could adversely affect our business and reputation. • If we are not successful in executing our business strategy, including our failure in selecting and integrating the businesses and technologies we acquire, or in managing our current and future site closures and divestitures, our business may be adversely impacted. • If we are not successful in realizing cost savings from our restructuring initiatives, our business may be adversely impacted. • Our business is subject to risks relating to operating internationally, including changes in foreign currency exchange rates. • Our operations might be affected by the occurrence of a natural disaster or other catastrophic event. • Negative attention from special interest groups may impair our business. • Our review of potential strategic alternatives may not result in an executed or consummated transaction or other strategic alternative, and the process of reviewing strategic alternatives or the outcome could adversely affect our business.
As a global drug development partner, we face a range of potential liabilities, which may include: • risks associated with errors or omissions in reporting of study detail in non-clinical studies that may lead to inaccurate reports, which may undermine the usefulness of a study or data from the study, or which may potentially advance studies absent the necessary support or inhibit studies from proceeding to the next level of testing; • risks associated with our possible failure to properly care for our clients’ property, such as research models and samples, study compounds, records, work in progress, other archived materials or goods and materials in transit, while in our possession; • risks that models in our breeding facilities or in facilities that we manage may be infected with diseases that may be harmful to them or humans, despite preventive measures for the quarantine and handling of imported animals; • risks that we may have errors and omissions and/or product liabilities related to our products designed to conduct lot release testing of medical devices, injectable drugs, food, beverages, and home and beauty products (primarily through our Microbial Solutions business), or in the testing of biologics and other services performed by our Biologics Solutions business, which could result in us or our clients failing to identify unsafe or contaminated materials; 32 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. • risk of transmitting dangerous infectious diseases, as a result of the failure of our screening and testing processes, or new pathogens that may be undetected by such processes; and • recent acquisitions have expanded our business into the CDMO market, which entails additional risks of liability, including potential product liability claims, errors and omissions claims in connection with our services and potential liability under indemnification agreements between us and our officers and directors.
As a global drug development partner, we face a range of potential liabilities, which may include: • risks associated with errors or omissions in reporting of study detail in non-clinical studies that may lead to inaccurate reports, which may undermine the usefulness of a study or data from the study, or which may potentially advance studies absent the necessary support or inhibit studies from proceeding to the next level of testing; • risks associated with our possible failure to properly care for our clients’ property, such as research models and samples, study compounds, records, work in progress, other archived materials or goods and materials in transit, while in our possession; • risks that models in our breeding facilities or in facilities that we manage may be infected with diseases that may be harmful to them or humans, despite preventive measures for the quarantine and handling of imported animals; • risks that we may have errors and omissions and/or product liabilities related to our products designed to conduct lot release testing of medical devices, injectable drugs, food, beverages, and home and beauty products (primarily through our Microbial Solutions business), or in the testing of biologics and other services performed by our Biologics Solutions business, which could result in us or our clients failing to identify unsafe or contaminated materials; • risk of transmitting dangerous infectious diseases, as a result of the failure of our screening and testing processes, or new pathogens that may be undetected by such processes; and 34 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. • recent acquisitions have expanded our business into the CDMO market, which entails additional risks of liability, including potential product liability claims, errors and omissions claims in connection with our services and potential liability under indemnification agreements between us and our officers and directors.
Despite any precautions we take for natural disasters or other catastrophic events, these events, including terrorist attack, a pandemic, epidemic or outbreak of a disease, geopolitical conflict, information system disruption, hurricanes, tornadoes, fire, wildfire, floods and ice and snow storms, could result in damage to and closure of our or our customers’ facilities or the infrastructure on which such facilities rely.
Despite any precautions we take for natural disasters or other catastrophic events, these events, including terrorist attack, a pandemic, epidemic or outbreak of a disease, geopolitical conflict, information system disruption, hurricanes, tornadoes, fire, wildfire, floods and ice and snow storms, could result in damage to and closure of our or our customers’ facilities, our suppliers’ facilities, or the infrastructure on which such facilities rely.
These threats also may be further enhanced in frequency or effectiveness through threat actors’ use of artificial intelligence technologies, which are becoming more widely adopted and increasingly sophisticated. As of the date of this filing, to our knowledge, we have not experienced an information security breach or material cybersecurity incident since an event in 2019.
These threats also may be further enhanced in frequency or effectiveness through threat actors’ use of artificial intelligence technologies, which are becoming more widely adopted and increasingly sophisticated. As of the date of this filing, to our knowledge, we have not experienced a material information security breach or material cybersecurity incident since an event in 2019.
Although we carry business interruption insurance and typically have provisions in our contracts that protect us in certain events, our coverage might not be adequate to compensate us for all losses that may occur. Any natural disaster or catastrophic event affecting us or our customers could have a significant negative impact on our operations and financial performance.
Although we carry business interruption insurance and typically have provisions in our contracts that protect us in certain events, our coverage might not be adequate to compensate us for all losses that may occur. Any natural disaster or catastrophic event affecting us, our customers, or our suppliers, could have a significant negative impact on our operations and financial performance.
A reduction or delay in government funding of R&D may adversely affect our business. A portion of revenue, predominantly in our RMS segment, is derived from clients at academic institutions and research laboratories whose funding is partially dependent on both the level and timing of funding from government sources such as the U.S.
A reduction or delay in government funding of R&D may adversely affect our business. A portion of revenue, predominantly in our RMS segment, is derived from clients at academic institutions and basic research laboratories whose funding is partially dependent on both the level and timing of funding from government sources such as the U.S.
We compete on a variety of factors, including: • reputation for on-time quality performance; • reputation for regulatory compliance; • reputation for responsive client service and support; • expertise and experience in multiple specialized areas; • scope and breadth of service and product offerings across the drug discovery and development spectrum; • scope and breadth of service and product offerings across the manufacturing support spectrum; 28 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. • ability to provide flexible and customized solutions to support our clients’ drug discovery, non-clinical development, and manufacturing support needs; • broad geographic availability (with consistent quality); • price/value, spend and flexibility; • technological and scientific expertise and efficient drug development processes; • quality of facilities; • financial stability; • size; • ability to acquire, process, analyze and report data in an accurate manner; • ability to place orders through eCommerce channels; and • accessibility of client data through secure portals.
We compete on a variety of factors, including: • reputation for on-time quality performance; • reputation for regulatory compliance; • reputation for responsive client service and support; • expertise and experience in multiple specialized areas; • scope and breadth of service and product offerings across the drug discovery and development spectrum; • scope and breadth of service and product offerings across the manufacturing support spectrum; • ability to provide flexible and customized solutions to support our clients’ drug discovery, non-clinical development, and manufacturing support needs; • broad geographic availability (with consistent quality); • price/value, spend and flexibility; • technological and scientific expertise and efficient drug development processes; • quality of facilities; • financial stability; • size; 30 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. • ability to acquire, process, analyze and report data in an accurate manner; • ability to place orders through eCommerce channels; and • accessibility of client data through secure portals.
Many of our services, products and processes rely on intellectual property. In some cases, that intellectual property is owned by another party and licensed to us, sometimes exclusively. To protect our intellectual property rights, we primarily rely upon trade secret, patent, and copyright law, as well as contractual provisions relating to intellectual property ownership and control and confidentiality.
Many of our services, products and processes rely on intellectual property. In some cases, that intellectual property is owned by another party and licensed to us, sometimes exclusively. To protect our intellectual property rights, we primarily rely upon trade secret, patent, trademark, and copyright law, as well as contractual provisions relating to intellectual property ownership and control and confidentiality.
The outsourcing trend in non-clinical and clinical stages of drug discovery and development may decrease, which could impair our growth. Over the past decade, pharmaceutical and biotechnology companies have generally increased their outsourcing of non-clinical and clinical research support activities, such as discovery and safety assessment.
The outsourcing trend in non-clinical and clinical stages of drug discovery and development may decrease, which could impair our growth. Over the past decade, pharmaceutical and biotechnology companies have generally increased their outsourcing of non-clinical and clinical research support activities, such as drug discovery, safety assessment and clinical trial support.
As we build out IT infrastructure to support regulatory requirements for applications and data systems, we are doing so utilizing contemporary validation practices. As with all work conducted in our regulatory sites, these too are subject to government inspections.
As we build out IT infrastructure to support regulatory requirements for applications and data systems, we are doing so utilizing contemporary validation practices. As with all work conducted in our regulated sites, these too are subject to government inspections.
Any actual or perceived failure to comply with any such laws, rules, regulations, standards or contractual obligations could subject us to denial of the right to conduct business, significant fines, civil or criminal penalties, costly litigation (including class 31 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. actions), government investigation or inquiries, enforcement actions, claims, proceedings, judgements, awards, penalties, sanctions or other adverse impacts that could have a material adverse effect on our business.
Any actual or perceived failure to comply with any such laws, rules, regulations, standards or contractual obligations could subject us to denial of the right to conduct business, significant fines, civil or criminal penalties, costly litigation (including class actions), government investigation or inquiries, enforcement actions, claims, proceedings, judgements, awards, penalties, sanctions or other adverse impacts that could have a material adverse effect on our business. 33 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties 17 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. and the risks described below should be carefully considered together with the other information set forth in this report and in future documents we file with the SEC.
Consequently, you should not consider the following to be a complete discussion of all potential risks or uncertainties and the risks described below should be carefully considered together with the other information set forth in this report and in future documents we file with the SEC. 18 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Disruption in the financial market could also have a material adverse effect on our financial position, results of operations and liquidity. For additional information regarding our debt, please see Note 11. Debt and Other Financing Arrangements, included in the notes to our consolidated financial statements included elsewhere in this Form 10-K.
Disruption in the financial markets could also have a material adverse effect on our financial position, results of operations and liquidity. For additional information regarding our debt, please see Note 11. Debt and Other Financing Arrangements, included in the notes to our consolidated financial statements included elsewhere in this Form 10-K.
To the extent long-lived tangible assets, intangible assets, or goodwill are impaired, their carrying value will be written down to their implied fair values and a charge will be made to our net income. Such an impairment charge could materially and adversely affect our operating results.
To the extent long-lived tangible assets, intangible assets, or goodwill are impaired, their carrying value will be written down to their fair values and a charge will be made to our net income (loss). Such an impairment charge could materially and adversely affect our operating results.
While we are committed to working with the industry to support development and to provide the best translational models to supplement or replace traditional models as part of our 3Rs initiative, the use of animals in research is highly regulated and proposed changes to current regulations will need to be carefully evaluated to ensure that they do not compromise the safety and efficacy of new drugs and medical treatments.
While we are committed to working with the industry to support development and to provide the best translational models to supplement or replace traditional models as part of our Replacement, Reduction, and Refinement (3Rs) initiative, the use of animals in research is highly regulated and proposed changes to current regulations will need to be carefully evaluated to ensure that they do not compromise the safety and efficacy of new drugs and medical treatments.
Our CDMO services establish us as a premier scientific partner for cell and gene therapy development, testing, and manufacturing; enable us to provide clients with an integrated solution from basic research and discovery through cGMP production; enable us to drive efficiency and accelerate clients’ speed-to-market by integrating manufacturing and the required testing; and enable our clients to seamlessly conduct analytical testing, process development, and manufacturing for advanced modalities with the same scientific partner.
Our CDMO services establish us as a premier scientific partner for cell and gene therapy development, testing, and manufacturing; enable us to provide clients with an integrated solution from analytical and process development through cGMP production; enable us to drive efficiency and accelerate clients’ speed-to-market by integrating manufacturing and the required testing; and enable our clients to seamlessly conduct analytical testing, process development, and manufacturing for advanced modalities with the same scientific partner.
Moreover, we are subject to the privacy and data protection laws of China, including the Personal Information Protection Law (PIPL) and Data Security Law (DSL), which promulgated requirements relating to the collection, processing, transfer and security of personal information in or from China.
Similarly, we are subject to the privacy and data protection laws of China, including the Personal Information Protection Law (PIPL) and Data Security Law (DSL), which promulgated requirements relating to the collection, processing, transfer and security of personal information in or from China.
Any decline or lower than expected growth in our served markets could diminish demand for our products and services, which would adversely affect our results of operations and financial condition. In 2024, we experienced such a lower-than-expected demand growth in a number of businesses, including the businesses that comprise our DSA reporting segment.
Any decline or lower than expected growth in our served markets could diminish demand for our products and services, which would adversely affect our results of operations and financial condition. In recent years, we experienced such a lower-than-expected demand growth in a number of businesses, including the businesses that comprise our DSA reporting segment.
Unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Company, (2) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders, (3) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or the Company’s certificate of incorporation 33 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. or the Company’s by-laws (in each case, as they may be amended from time to time), or (4) any action asserting a claim governed by the internal affairs doctrine shall be a state court located within the state of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware).
Unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Company, (2) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders, (3) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law or the Company’s certificate of incorporation or the Company’s by-laws (in each case, as they may be amended from time to time), or (4) any action asserting a claim governed by the internal affairs doctrine shall be a state court located within the state of Delaware (or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware).
Our strategy is to deliver a comprehensive and integrated portfolio of drug discovery and non-clinical development products, services and solutions to support our clients’ discovery and early-stage drug research, process development, scale up and manufacturing efforts, and enable them to bring new and improved therapies to market faster and more cost effectively.
Our strategy is to deliver a comprehensive and integrated portfolio of drug discovery and non-clinical development products, services and solutions to support our clients’ discovery, preclinical, early clinical and early stage scale up and early stage manufacturing efforts, and enable them to bring new and improved therapies to market faster and more cost effectively.
Disruptions to their continued supply from time to time arise from colony health problems (including as a result of the spread of diseases), export or import laws/restrictions or embargoes, tariffs, inflation, international trade regulations, foreign government or economic instability, severe weather conditions, increased competition among suppliers for models, disruptions to the air travel system, activist campaigns, commercial disputes, supplier insolvency, geopolitical disputes, or other ordinary course or unanticipated events.
Disruptions to their continued supply from time to time arise from colony health problems (including as a result of the spread of diseases), export or import laws/restrictions or embargoes, tariffs, inflation, international trade regulations, foreign government 25 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. or economic instability, severe weather conditions, increased competition among suppliers for models, disruptions to the air travel system, activist campaigns, commercial disputes, supplier insolvency, geopolitical disputes, or other ordinary course or unanticipated events.
Additionally, if the FDA or a comparable foreign regulatory authority does not approve of our facilities for the manufacture of a client product, observes significant deficiencies or violations at its facilities or withdraws such approval in the future, our clients may choose to identify alternative manufacturing facilities and/or relationships, which could significantly impact our CDMO capacity and capabilities and results of operations therefrom and could have a negative impact on our reputation and financial results.
Additionally, if the FDA or a comparable foreign regulatory authority does not approve of our facilities for the manufacture of a client product, observes significant deficiencies or violations at its facilities or withdraws such approval in the future, our clients may choose to identify alternative manufacturing facilities and/or relationships, which could significantly impact our CDMO capacity and capabilities and results of operations therefrom and could have a negative impact on our reputation and financial results. 27 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Our ability to continue to grow and win new business is dependent in large part upon the ability and willingness of the pharmaceutical and biotechnology industries to continue to spend on molecules in the non-clinical phases of R&D (and in particular discovery and safety assessment) and to outsource the products and services we provide.
Our ability to continue to grow and win new business is dependent in large part upon the ability and willingness of the pharmaceutical and biotechnology industries to continue to invest in discovery in the non-clinical phases of R&D (and in particular discovery and safety assessment) and to outsource the products and services we provide.
Changes in the regulations could require us to alter how we operate our business, potentially resulting in a significantly increased cost of compliance. Our donor collection centers are registered with the FDA and the FDA periodically conducts inspections of those facilities and operations.
Changes in the regulations could require us to alter how we operate our business, potentially resulting in a significantly increased cost of compliance. Our donor collection center is registered with the FDA and the FDA periodically conducts inspections of those facilities and operations.
Legal and Regulatory Risk Factors • Any failure by us to comply with applicable regulations and related guidance could harm our reputation and operating results, and compliance with new regulations and guidance may result in additional costs. • Failure to comply with applicable data privacy and security laws in various jurisdictions could subject us to denial of the right to conduct business, fines, criminal penalties and/or other enforcement actions that could have a material adverse effect on our business. 18 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. • Failure to comply with U.S., state, local or international environmental, health, safety and sustainability laws and regulations could result in fines and penalties and loss of licensure and have a material adverse effect upon the Company’s business. • Changes in U.S. and International Tax Law, results of tax audits, or material changes in our stock price could have a material adverse impact on our effective tax rate and financial results. • Non-clinical and clinical contract research services create a risk of liability. • The failure to successfully obtain, maintain and enforce intellectual property rights and defend against assertions of third parties to intellectual property rights could adversely affect us. • Our by-laws designate the state courts located in the State of Delaware as the sole and exclusive forum for certain actions, which could limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable and may discourage lawsuits with respect to certain claims. • We are involved in legal proceedings that could adversely affect our business, financial condition, and results of operations.
Legal and Regulatory Risk Factors • Any failure by us to comply with applicable regulations and related guidance could harm our reputation and operating results, and compliance with new regulations and guidance may result in additional costs. 19 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. • Failure to comply with applicable data privacy and security laws in various jurisdictions could subject us to denial of the right to conduct business, fines, criminal penalties and/or other enforcement actions that could have a material adverse effect on our business. • Failure to comply with U.S., state, local or international environmental, health, safety and sustainability laws and regulations could result in fines and penalties and loss of licensure and have a material adverse effect upon the Company’s business. • Changes in U.S. and International Tax Law, results of tax audits, or material changes in our stock price could have a material adverse impact on our effective tax rate and financial results. • Non-clinical and clinical contract research services create a risk of liability. • The failure to successfully obtain, maintain and enforce intellectual property rights and defend against assertions of third parties to intellectual property rights could adversely affect us. • Our by-laws designate the state courts located in the State of Delaware as the sole and exclusive forum for certain actions, which could limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable and may discourage lawsuits with respect to certain claims. • We are involved in legal proceedings that could adversely affect our business, financial condition, and results of operations. • Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition can have an adverse effect on our business and financial statements.
Any negative attention, threats, acts of vandalism or legal action directed against our animal research or procurement activities (including species or research models), or our third-party service providers, such as our airline carriers or suppliers, or that restrict our or their ability to access protected or conservation areas, could impair our ability to operate our business efficiently. 23 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Any negative attention, threats, acts of vandalism or legal action directed against our animal research or procurement activities (including species of research models), or our third-party service providers, such as our airline carriers or suppliers, or that restrict our or their ability to access protected or conservation areas, could impair our ability to operate our business efficiently.
If we are unable to develop new services and products and/or create demand for those newly developed services and products, our future business, results of operations, financial condition and cash flows could be adversely affected. Costs increasing more rapidly than market prices in certain of our businesses could reduce profitability.
If we are unable to develop new services and products and/or create demand for those newly developed services and products, our future business, results of operations, financial condition and cash flows could be adversely affected. 31 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Costs increasing more rapidly than market prices in certain of our businesses could reduce profitability.
Factors such as insufficient capital, inflation, supply chain interruptions, inadequate forecasting, increases in construction material costs, or labor shortages 21 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. could interfere with the successful execution of our strategy and our ability to timely build infrastructure to satisfy capacity needs and support business growth.
Factors such as insufficient capital, inflation, supply chain interruptions, inadequate forecasting, increases in construction material costs, or labor shortages could interfere with the successful execution of our strategy and our ability to timely build infrastructure to satisfy capacity needs and support business growth.
Our results of operations in any quarter may vary from quarter to quarter and are influenced by the risks discussed above, as well as: changes in the general global economy; changes in the mix of our products and services; cyclical buying patterns of our clients; the financial performance of our strategic and venture capital investments; certain acquisition-related adjustments, including change in fair value of contingent payments both receivable from or payable to counterparties; and the occasional extra week (“53rd week”) that we recognize in a fiscal year (and fourth fiscal quarter thereof), including 2022, due to our fiscal year ending on the last Saturday in December.
Our results of operations in any quarter may vary from quarter to quarter and are influenced by the risks discussed above, as well as: changes in the general global economy; changes in the mix of our products and services; changes in government regulation or in practices related to the pharmaceutical or biotechnology industries, including with respect to the use of NAMs; cyclical buying patterns of our clients; the financial performance of our strategic and venture capital investments; certain acquisition-related adjustments, including change in fair value of contingent payments both receivable from or payable to counterparties; and the occasional extra week (“53rd week”) that we recognize in a fiscal year (and fourth fiscal quarter thereof), due to our fiscal year ending on the last Saturday in December.
Due to any pandemic, epidemic or outbreak in one or more regions in which our Cell Solutions business operates, the portion of the donor pool that typically donates may be unable, or unwilling to donate, thereby 24 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. significantly reducing the availability of research products upon which we rely.
Due to any pandemic, epidemic or outbreak in one or more regions in which our Cell Solutions business operates, the portion of the donor pool that typically donates may be unable, or unwilling to donate, thereby significantly reducing the availability of research products upon which we rely.
Risk Factors – Industry Risk Factors - Several of our product and service offerings, including our non-human primate supply, are dependent on a limited source of supply that, 26 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. when interrupted, adversely affects our business”, and “Item 3. Legal Proceedings” included elsewhere in this Form 10-K.
Risk Factors – Industry Risk Factors - Several of our product and service offerings, including our non-human primate supply, are dependent on a limited source of supply that, when interrupted, adversely affects our business”, and “Item 3. Legal Proceedings” included elsewhere in this Form 10-K.
In some cases, we may produce or import animals carrying infectious agents capable of causing disease in humans; and in the case of such a contamination or undiagnosed infection, there could be a possible risk of human exposure and infection and liability for damages to infected persons.
In some cases, we may produce or import animals carrying infectious agents capable of causing disease in humans; and in the case of such a contamination or undiagnosed infection, there could be a possible risk of human exposure and infection and liability for damages to infected persons. 29 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
If a counterparty terminates a contract with us, we are typically entitled under the terms of the contract to receive revenue earned to date as well as certain other costs and, in some cases, termination fees; however, in many cases we are not entitled to any termination fees in the event of a termination.
If a counterparty 20 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. terminates a contract with us, we are typically entitled under the terms of the contract to receive revenue earned to date as well as certain other costs and, in some cases, termination fees; however, in many cases we are not entitled to any termination fees in the event of a termination.
Such disruptions could include significant delays in the shipments of our products, reduce our capacity to provide services, adversely impact unique manufacturing capabilities, result in our customers’ inability to pay for our products or services and, ultimately, result in the loss of revenue and clients.
Such disruptions could include significant delays in the shipments of our products, reduce our capacity to provide services, adversely impact unique manufacturing capabilities, result in our customers’ inability to pay for our products or 24 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. services and, ultimately, result in the loss of revenue and clients.
The EU GDPR also imposes specific restrictions on the transfer of personal data to countries outside of the EU and EEA, including the use of appropriate safeguards to enable such transfers, such as Standard Contractual Clauses (SCCs) and the EU-US Data Privacy Framework (DPF).
The EU GDPR also imposes specific restrictions on the transfer of personal data to countries outside of the EU and EEA, including the use of appropriate safeguards to enable such transfers, such as Standard Contractual Clauses (SCCs) and the EU- 32 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. US Data Privacy Framework (DPF).
Such actions result in incremental severance and benefits costs and replacing lost talent in the future may result in higher costs, all of which could adversely affect our financial results. 34 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Financial and Accounting Risk Factors Our debt level could adversely affect our business and growth prospects.
Such actions result in incremental severance and benefits costs and replacing lost talent in the future may result in higher costs, all of which could adversely affect our financial results. Financial and Accounting Risk Factors Our debt level could adversely affect our business and growth prospects.
Our ability to gain access to such technologies depends, in part, on our ability to convince innovators that we can successfully 29 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. develop and commercialize their inventions. We cannot guarantee that we will be able to identify new technologies of interest to our clients.
Our ability to gain access to such technologies depends, in part, on our ability to convince innovators that we can successfully develop and commercialize their inventions. We cannot guarantee that we will be able to identify new technologies of interest to our clients.
Acquisitions and alliances involve numerous risks which may include: • difficulties in achieving business and financial success (due to unplanned events such as ongoing geopolitical conflicts, such as between the Russian Federation and Ukraine, and between Israel and Hamas, as well as the US-China relationship which could potentially influence sourcing patterns and tariff costs); 20 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. • difficulties and expenses incurred in assimilating and integrating operations, services, products, information technology platforms, technologies or pre-existing relationships with our clients, distributors and suppliers; • challenges with developing and operating new businesses, including those that are materially different from our existing businesses, which may require the development or acquisition of new internal capabilities and expertise; • potential losses resulting from operational weaknesses or undiscovered liabilities of acquired companies that are not covered by the indemnifications we may obtain from sellers or any insurance we may acquire in connection with transactions; • loss of key employees; • loss of key customers; • the presence or absence of adequate internal controls and/or significant fraud in the financial systems of acquired companies; • diversion of management’s attention from other business concerns; • a more expansive regulatory environment; • dilution to earnings, or in the event of acquisitions made through the issuance of our common stock to the shareholders of the acquired company, dilution to the percentage of ownership of our existing shareholders; • differences in foreign business practices, customs and importation regulations, language and other cultural barriers in connection with the acquisition of foreign companies; • new technologies and products may be developed that cause businesses or assets we acquire to become less valuable; and • disagreements or disputes with prior owners of an acquired business, technology, service or product that may result in legal settlements, litigation expenses and diversion of our management’s attention.
Acquisitions and alliances involve numerous risks which may include: • difficulties in achieving business and financial success (due to unplanned events such as ongoing geopolitical conflicts or economic factors such as fluctuations in interest and foreign exchange rates, as well as tax regulations); • difficulties and expenses incurred in assimilating and integrating operations, services, products, information technology platforms, technologies or pre-existing relationships with our clients, distributors and suppliers; • challenges with developing and operating new businesses, including those that are materially different from our existing businesses, which may require the development or acquisition of new internal capabilities and expertise; • potential losses resulting from operational weaknesses or undiscovered liabilities of acquired companies that are not covered by the indemnifications we may obtain from sellers or any insurance we may acquire in connection with transactions; • loss of key employees; • loss of key customers; • the presence or absence of adequate internal controls and/or significant fraud in the financial systems of acquired companies; • diversion of management’s attention from other business concerns; • a more expansive regulatory environment; • dilution to earnings, or in the event of acquisitions made through the issuance of our common stock to the shareholders of the acquired company, dilution to the percentage of ownership of our existing shareholders; • differences in foreign business practices, customs and importation regulations, language and other cultural barriers in connection with the acquisition of foreign companies; • new technologies and products may be developed that cause businesses or assets we acquire to become less valuable; and • disagreements or disputes with prior owners of an acquired business, technology, service or product that may result in legal settlements, litigation expenses and diversion of our management’s attention.
We also are or have been subject to government investigations and civil investigative demands seeking information with respect to alleged violations of law, including as discussed in Part I, Item 3, Legal Proceedings, investigations by the DOJ, USFWS, and SEC.
We also have been subject to government investigations and civil investigative demands seeking information with respect to alleged violations of law, including as discussed in Part I, Item 3, Legal Proceedings, pertaining to an investigation by the SEC.
Furthermore, if health insurers were to change their practices with respect to reimbursements for pharmaceutical products, our clients may spend less or reduce their growth in spending on R&D.
Furthermore, if health insurers were to change their practices with respect to reimbursements for pharmaceutical products, our clients may spend less or reduce their growth in spending on R&D. 28 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Where expenses are incurred in currencies other than those in which contracts are priced, fluctuations in the relative value of those currencies could have a material adverse effect on our results of operations.
Where expenses are incurred in currencies other than those in which contracts are priced, fluctuations in the relative value of those currencies could have a material adverse effect on our results of operations. 23 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Any such delay in delivering products to our clients may create liability for us to our customers for breach of contract or cause us to experience order cancellations and loss of customers.
Any such delay in delivering products to our clients may create liability for us to our customers for breach of contract or cause us to experience 26 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. order cancellations and loss of customers.
Bribery Act and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; 22 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. • unexpected changes in regulatory requirements; • the difficulties of compliance with a wide variety of foreign laws and regulations; • unfavorable labor regulations in foreign jurisdictions; • tariff regulations; • longer accounts receivable cycles in certain foreign countries; • potentially reduced protection of our intellectual property rights in certain foreign countries; and • compliance with export controls, import requirements and other trade regulations, including those relating to certain products of which there is limited supply.
Bribery Act and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions; • unexpected changes in regulatory requirements; • the difficulties of compliance with a wide variety of foreign laws and regulations; • unfavorable labor regulations in foreign jurisdictions; • changes in trade relationships, including new tariffs, trade protection measures, import or export licensing requirements, trade embargoes and sanctions, and other trade barriers; • longer accounts receivable cycles in certain foreign countries; • potentially reduced protection of our intellectual property rights in certain foreign countries; and • compliance with export controls, import requirements and other trade regulations, including those relating to certain products of which there is limited supply.
As discussed in the section above entitled “Our Strategy,” we are taking decisive action to manage the Company through the current demand environment, including appropriately right-sizing our infrastructure, optimizing operations, and driving efficiency with a goal to protect operating margin.
As discussed in the section above entitled “Our Strategy,” we are taking decisive action to manage the Company through the current demand environment, including appropriately right-sizing our infrastructure, driving efficiency, and optimizing operations, including through process improvement, procurement synergies, and implementation of a global business services model, with a goal to protect operating margin.
Cancellation of a large contract or proximate delay, cancellation or conclusion of multiple contracts could materially adversely affect our business and, therefore, may adversely affect our operating results. 19 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Cancellation of a large contract or proximate delay, cancellation or conclusion of multiple contracts could materially adversely affect our business and, therefore, may adversely affect our operating results.
However, this exclusive forum provision will not apply to suits brought under the federal securities laws for which the federal courts have exclusive jurisdiction.
However, this exclusive 35 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. forum provision will not apply to suits brought under the federal securities laws for which the federal courts have exclusive jurisdiction.
However, there is still significant competition for qualified personnel in the veterinary, pharmaceutical and biotechnology fields. Failure to retain qualified existing personnel and recruit additional key scientific, technical, and managerial personnel in a timely manner, could harm our business. We depend on the availability of, and good relations with, our team members.
Failure to retain qualified existing personnel and recruit additional key scientific, technical, and managerial personnel in a timely manner, could harm our business. We depend on the availability of, and good relations with, our team members.
In addition, we may encounter in closing or difficulty in finding buyers or alternative exit strategies at acceptable prices and terms, and in a timely manner.
In addition, we may encounter difficulty in finding buyers or alternative exit strategies at acceptable prices and terms, and in a timely 22 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. manner.
We believe that operating results for any particular quarter are not necessarily a 35 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. meaningful indication of future results. Nonetheless, fluctuations in our quarterly operating results could negatively affect the market price of our common stock.
The next fiscal year with a 53rd week is scheduled to occur in 2028. We believe that operating results for any particular quarter are not necessarily a meaningful indication of future 38 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. results. Nonetheless, fluctuations in our quarterly operating results could negatively affect the market price of our common stock.
For additional discussion of the factors that we believe have recently been influencing R&D budgets at our clients, please see the sections entitled “Our Strategy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K. 25 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
For additional discussion of the factors that we believe have recently been influencing R&D budgets at our clients, please see the sections entitled “Our Strategy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K. Additionally, we have businesses that depend on our supply of large research models to clients.
In particular, if the price of non-human primates increases significantly, or if we are unable to transport the non-human primates in our possession to our clients because of governmental restrictions or limitations, our business may be materially adversely affected.
Decreased demand could result in inventory surpluses, which could also significantly impact our results and operations. In particular, if the price of non-human primates increases significantly, or if we are unable to transport the non-human primates in our possession to our clients because of governmental restrictions or limitations, our business may be materially adversely affected.
As of December 28, 2024, we had $2.2 billion of debt and finance leases (debt).
As of December 27, 2025, we had $2.1 billion of debt and finance leases (debt).
While there have been significant advancements in the development of alternative methods, the complete elimination of animals in research will be a gradual process that may take many years to achieve.
Eliminating the use of animals in research may have material adverse effects on our business, results of operations, or financial condition. While there have been significant advancements in the development of alternative methods, the complete elimination of animals in research will be a gradual process that may take many years to achieve.
As these methods continue to advance, they may supplement, and in some cases possibly replace or supplant methodologies that are currently in use, such as the use of traditional living animals in biomedical research. In addition, technological improvements, such as imaging and other translational biomarker technologies, could impact demand for animal research models.
As these methods continue to advance, they may supplement, and in some cases possibly replace or supplant methodologies that are currently in use, such as the use of traditional living animals in biomedical research.
While it is not possible to predict whether and when any such changes will occur, changes at the local, state or federal level, or in laws and regulations in effect in foreign jurisdictions in which we operate or have business relationships, may significantly impact our domestic and foreign businesses and/or those of our clients.
While it is not possible to predict whether and when any such changes will occur, updates at the local, state or federal level, or to laws and regulations in foreign jurisdictions where we operate or maintain business relationships, may materially affect our domestic and/or international operations.
Foster or other members of senior management do not continue in their present positions, particularly if they depart the Company with little to no notice, our business may be adversely impacted.
If members of senior management do not continue in their present positions, particularly if they do not give reasonable advance notice should they choose to depart from the Company, our business may be adversely impacted.
During the last two decades, we have steadily expanded our business through numerous acquisitions and partnerships. However, businesses and technologies may not be available on terms and conditions we find acceptable. We risk spending time and money investigating and negotiating with potential acquisition or alliance partners, but not completing transactions.
However, businesses and technologies may not be available on terms and conditions we find acceptable. We risk spending time and money investigating and negotiating with potential acquisition or alliance partners, but not completing transactions.
While we entered into an amended employment agreement with Mr. Foster in 2021, most members of our senior management do not have employment agreements, except in jurisdictions outside of the United States where employment contracts are common for most employees. If Mr.
Most members of our senior management do not have employment agreements, except in jurisdictions outside of the United States where employment contracts are common for most employees.
Upon completion of a quantitative impairment test, it was determined that the fair value of the reporting unit was below its carrying value, resulting in a goodwill impairment of approximately $215.0 million. We will continue to closely monitor future performance and any potential impacts on the value of the reporting unit.
Upon completion of a quantitative impairment test, it was determined that the fair value of the reporting unit was below its carrying value, resulting in a goodwill impairment of approximately $215.0 million.
In connection with the civil investigation, the Company has voluntarily suspended planned future shipments of Cambodia non-human primates into the United States until such time that the Company and USFWS can agree upon and implement additional procedures to reasonably ensure that non-human primates imported to the United States from Cambodia are purpose-bred.
Specific to the Company, in 2023, in connection with a now closed investigation by the DOJ and USFWS into the Company’s conduct regarding several shipments of non-human primates from Cambodia, the Company announced it was voluntarily suspending planned future shipments of Cambodia non-human primates into the United States until such time that the Company and USFWS could agree upon and implement additional procedures to reasonably ensure that non-human primates imported to the United States from Cambodia are purpose-bred.
More broadly, in November 2022 the U.S. Department of Justice (DOJ) announced that a Cambodia supplier of non-human primates and two Cambodian officials had been criminally charged in connection with illegally importing non-human primates into the United States.
Department of Justice (DOJ) announced that a Cambodia supplier of non-human primates and two Cambodian officials had been criminally charged in connection with illegally importing non-human primates into the United States, which led to an effective cessation of imports from Cambodia to the United States for a period of time.
For additional discussion on this topic, see section herein titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations - Goodwill and Intangible Assets .” General Risk Factors Since we do not expect to pay any cash dividends for the foreseeable future, our shareholders will benefit from an investment in our common stock only if it appreciates in value.
Goodwill and Intangible Assets, included in the notes to our consolidated financial statements included elsewhere in this Form 10-K. General Risk Factors Since we do not expect to pay any cash dividends for the foreseeable future, our shareholders will benefit from an investment in our common stock only if it appreciates in value.
The scientific community continues to develop cell-based and new alternative model methodologies (NAMs), which do not involve working with animal models and are designed to increase the translation from findings in early-stage discovery and pre-clinical studies to human studies, and vice-versa.
New technologies may be developed, validated and increasingly used in biomedical research, which could reduce demand for some of our products and services. The scientific community continues to develop NAMs, which do not involve working with animal models and are designed to increase the translation from findings in early-stage discovery and pre-clinical studies to human studies, and vice-versa.
While we have implemented additional security safeguards since that event and continue to enhance existing safeguards, such efforts may not be successful, in which case we could suffer significant harm.
While we have implemented additional security safeguards since that event and continue to enhance existing safeguards, such efforts may not be successful, in which case we could suffer significant harm. We are at risk of being targeted, and we have in the past been victim to, business email compromise fraud, which results in payments being made to illegitimate bank accounts.
Ensuring that our collection, use, transfer, storage and other processing of personal information complies with such requirements can increase operating costs, impact the development of new products or services, and reduce operational efficiency. 30 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Ensuring that our collection, use, transfer, storage and other processing of personal information complies with such requirements can increase operating costs, impact the development of new products or services, and reduce operational efficiency. Internationally, virtually every jurisdiction in which we operate has established its own data privacy and security legal framework with which we must comply.
As of December 28, 2024, the carrying amount of goodwill and other intangibles on our consolidated balance sheet was $3.6 billion, property, plant and equipment was $1.6 billion, and operating lease right-of-use assets was $412.5 million. During the fourth quarter ended December 28, 2024, a triggering event was identified for the Biologics Solutions reporting unit.
As of December 27, 2025, the carrying amount of goodwill and other intangibles on our consolidated balance sheet was $3.1 billion, property, plant and equipment was $1.7 billion, and operating lease right-of-use assets was $361.4 million.
Separately, through our various Manufacturing segment businesses, we aim to be the premier provider of products and services that ensure our clients produce and release their products safely. If we are unable to successfully execute on this strategy, this could negatively impact our future results of operations and market capitalization.
As a focus, CRL aims to be the premier provider of products and services that ensure our clients develop, produce and release their products safely. Separately, through our various Manufacturing segment businesses, we aim to be the premier provider of products and services that ensure our clients produce and release their products safely.
Accordingly, many regulations, and often new regulations, are expected to result in higher regulatory standards and often additional revenues for companies that service these industries.
Accordingly, many regulations, and often new regulations, are expected to result in higher regulatory standards and often additional revenues for companies that service these industries. Some changes in regulations, including the relaxation of certain requirements or the use of streamlined or expedited approval procedures, may reduce the scope of preclinical testing needed.
For information regarding our processes and practices related to information and cybersecurity, please see Section 1C of this report, “Cybersecurity”. If we are not successful in selecting and integrating the businesses and technologies we acquire or partner with, or if we do not manage our current and future site closures and divestitures, our business may be adversely impacted.
If we are not successful in selecting and integrating the businesses and technologies we acquire or partner with, or if we do not manage our current and future site closures and divestitures, our business may be adversely impacted. During the last two decades, we have steadily expanded our business through numerous acquisitions and partnerships.
Further, manufacturers, including Charles River, have recently introduced recombinant versions of LAL, which has been historically derived from live animals.
In addition, technological improvements, such as imaging and other translational biomarker technologies, could impact demand for animal research models. Further, manufacturers, including Charles River, have recently introduced recombinant versions of LAL, which has been historically derived from live animals.
Increasing demand could harm relationships with clients if we are unable to alter production capacity, or purchase products from other suppliers, to fill orders adequately. Decreased demand could result in inventory surpluses, which could also significantly impact our results and operations.
Sudden or unexpected changes in demand, market conditions, or the regulatory environment for these models could have an adverse impact on our profitability. Increasing demand could harm relationships with clients if we are unable to alter production capacity, or purchase products from other suppliers, to fill orders adequately.
For example, in December 2022, the FDA Modernization Act 2.0 was passed, which clarifies methods manufacturers and sponsors can use to investigate the safety and efficacy of a drug. Eliminating the use of animals in research may have material adverse effects on our business, results of operations, or financial condition.
Other changes that increase regulatory obligations or affect the competitiveness of our services may lessen the demand for certain offerings. For example, in December 2022, the FDA Modernization Act 2.0 was passed, which clarified the methods manufacturers and sponsors may use to investigate the safety and efficacy of a drug.
Because of the specialized scientific nature of our business, we are highly dependent upon attracting and retaining qualified scientific, technical and managerial personnel. We have a strong record of employee retention, and we strive to reduce the impact of the potential loss of existing employees by having an established organizational talent review process that identifies successors and potential talent needs.
We have a strong record of employee retention, and we strive to reduce the 36 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. impact of the potential loss of existing employees by having an established organizational talent review process that identifies successors and potential talent needs. However, there is still significant competition for qualified personnel in the veterinary, pharmaceutical and biotechnology fields.
These types of events, including manufacturing disruptions, delays in clients’ clinical programs, and/or failures to obtain marketing approvals may adversely affect our business and/or results of operations. 27 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Contaminations in our animal populations can damage our inventory, harm our reputation for contaminant-free production, result in decreased sales and cause us to incur additional costs.
Contaminations in our animal populations can damage our inventory, harm our reputation for contaminant-free production, result in decreased sales and cause us to incur additional costs.
We could incur judgments or enter into settlements of claims that could have a material adverse effect on our results of operations in any particular period. Labor and Employment Risk Factors We depend on key personnel and may not be able to retain these employees, which could harm our business.
We could incur judgments or enter into settlements of claims that could have a material adverse effect on our results of operations in any particular period. Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition can have an adverse effect on our business and financial statements.
Implementation of healthcare reform legislation, such as certain provisions of the Inflation Reduction Act, may have certain benefits, but also may contain costs that could limit the profits that can be made from the development of new drugs.
Implementation of healthcare reform legislation, including certain provisions of the Inflation Reduction Act, may offer some benefits, but may also introduce costs or changes that affect the potential financial returns associated with developing new drugs.
In addition, subsequently the FDA conducted an inspection at the same Company facility resulting in the Company receiving a Form FDA 483 Notice of Inspectional Observations which the Company is in process of responding to, and which will include commitments to mitigate identified observations.
In addition, subsequently the FDA conducted an inspection at the same Company facility resulting in the Company receiving a Form FDA 483 Notice of Inspectional Observations. In October 2025, a successful pre-license inspection was performed and we are closely partnered with this client through the remaining steps of their biologics license resubmission.
Our success depends to a significant extent on the continued services of our senior management and other members of management who have skills and industry experience aligned with our strategic objectives. James C. Foster, our Chief Executive Officer and President since 1992 and Chairman since 2000, has held various positions with us for four decades.
Labor and Employment Risk Factors We depend on key personnel and may not be able to retain these employees, which could harm our business. Our success depends to a significant extent on the continued services of our senior management and other members of management who have skills and industry experience aligned with our strategic objectives.
Further, we are at risk of being targeted, and we have in the past been victim to, business email compromise fraud, which results in payments being made to illegitimate bank accounts. Although these instances have not resulted in our incurring material losses, if similar instances occur in the future, we may incur such losses.
Although these instances have not resulted in our incurring material losses, if similar instances occur in the future, we may incur such losses. We leverage software and hardware solutions from technology and services providers, including software-as-a-service and public cloud infrastructure, who have been subject to cybersecurity incidents in the past and may have incidents or breaches in the future.
For example, the NIH announced on February 7, 2025, a policy significantly reducing research grants by limiting payments for indirect overhead. While, as of the date of this filing, the order has been temporarily stayed, there can be no assurance that it will not take effect or that other adverse actions will not be taken.
For example, the NIH announced on February 7, 2025, a policy significantly reducing research grants by limiting payments for indirect overhead. This policy was subject to an injunction at the district court and appellate court levels.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur information security management system is certified to the ISO/IEC 27001:2013 and 27017:2018 standards by the British Standards Institution (BSI); certificates IS 780367 and CLOUD 806141,respectively. We also collaborate with experts and industry partners to exchange information about threats, best practices, and trends.
Biggest changeOur information security management system is certified to the ISO/IEC 27001:2022 and 27017:2018 standards by the British Standards Institution (BSI); certificates IS 780367 and CLOUD 806141, respectively. We also collaborate with experts and industry partners to exchange information about threats, best practices, and trends.
Through these processes, during our fiscal year 2024 and through the date of this filing we did not identify risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations, or financial condition.
Through these processes, during our fiscal year 2025 and through the date of this filing we did not identify risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations, or financial condition.
However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an 36 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. undetected cybersecurity incident. For more information about these risks, please see the section titled “Item 1A.
However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an 39 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. undetected cybersecurity incident. For more information about these risks, please see the section titled “Item 1A.
The Chief Information Officer has more than 25 years of experience in the field, including serving as the Senior Vice President of Charles River’s Digital Transformation organization, leading the development and implementation of information technology strategies and roadmaps for digital and automation solutions. Our Chief Information Security Officer reports to our Chief Information Officer.
The Chief Information Officer has more than 30 years of experience in the field, including serving as the Senior Vice President of Charles River’s Digital Transformation organization, leading the development and implementation of information technology strategies and roadmaps for digital and automation solutions. Our Chief Information Security Officer reports to our Chief Information Officer.
Our management team is responsible for day-to-day assessment and management of cybersecurity risks. On our management team, our Chief Information Officer has primary oversight of material risks from cybersecurity threats. The Chief Information Officer is Charles River’s Senior Vice President responsible for the Global Technology organization and for information protection at Charles River.
Our management team is responsible for day-to-day assessment and management of cybersecurity risks. On our management team, our Chief Information Officer has primary oversight of material risks from cybersecurity threats. The Chief Information Officer is Charles River’s Executive Vice President responsible for the Global Technology organization and for information protection at Charles River.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeManufacturing is supported in over 10 countries with large, owned properties in the U.S., Ireland, and China which are supplemented by additional leased facilities in the U.S., the United Kingdom, France, and Germany. None of our leases is individually material to our business operations.
Biggest changeManufacturing is supported in over 10 countries with large, owned properties in the U.S. and Ireland, which are supplemented by additional leased facilities in the U.S., the United Kingdom, France, China, Ireland, and Germany. None of our leases is individually material to our business operations.
Within the DSA business, we own or lease large facilities (greater than 50,000 square feet) in 7 countries including the U.S., Canada, China, France, Hungary, the Netherlands, and the United Kingdom. We own large RMS facilities in Canada, France, the United Kingdom, and the U.S with additional large facilities leased in China and the U.S.
Within the DSA business, we own or lease large facilities (greater than 50,000 square feet) in 9 countries including the U.S., Canada, China, France, Hungary, the Netherlands, Cambodia, Mauritius, and the United Kingdom. We own large RMS facilities in Canada, France, the United Kingdom, and the U.S with additional large facilities leased in China and the U.S.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company cannot predict the timing, outcome or possible impact of the investigations, including without limitation any potential fines, penalties or liabilities. A putative securities class action (Securities Class Action) was filed on May 19, 2023 against the Company and a number of its current/former officers in the United States District Court for the District of Massachusetts.
Biggest changeA putative securities class action (Securities Class Action) was filed on May 19, 2023 against the Company and a number of its current/former officers in the United States District Court for the District of Massachusetts. On August 31, 2023, the court appointed the State Teachers Retirement System of Ohio as lead plaintiff.
District Court of the District of Delaware asserting claims on the Company’s behalf against the members of the Company’s Board of Directors and certain of the Company’s current/former officers (James Foster, the Chief Executive Officer; David R. Smith, the former Chief Financial Officer; and Flavia Pease, the current Chief Financial Officer).
District Court of the District of Delaware asserting claims on the Company’s behalf against the members of the Company’s Board of Directors and certain of the Company’s current/former officers (James Foster, the Chief Executive Officer; David R. Smith, a former Chief Financial Officer; and Flavia Pease, a former Chief Financial Officer).
On May 16, 2023, the Company received an inquiry from the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) requesting it to voluntarily provide information, subsequently augmented with a document subpoena and additional inquiries, primarily related to the sourcing of non-human primates and related disclosures, and the Company is cooperating with the requests.
Item 3. Legal Proceedings On May 16, 2023, the Company received an inquiry from the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) requesting it to voluntarily provide information, subsequently augmented with a document subpoena and additional inquiries, primarily related to the sourcing of non-human primates and related disclosures, and the Company cooperated with the requests.
On July 1, 2024, the court dismissed the complaint, denied the plaintiff’s informal request for leave to amend, and entered judgment for defendants. On July 30, the plaintiff filed a notice of appeal in the United States Court of Appeals for the First Circuit.
On July 1, 2024, the court dismissed the complaint, denied the plaintiff’s informal request for leave to amend, and entered judgment for defendants. On July 30, the plaintiff filed a notice of appeal in the United States Court of Appeals for the First Circuit. Oral arguments took place on May 5, 2025. On August 15, 2025, the U.S.
On August 31, 2023, the court appointed the State Teachers Retirement System of Ohio as lead plaintiff. An amended complaint was filed on November 14, 2023 that, among other things, included only James Foster, the Chief Executive Officer and David R. Smith, the former Chief Financial Officer as defendants along with the Company.
An amended complaint was filed on November 14, 2023 that, among other things, included only James Foster, the Chief Executive Officer and David R. Smith, the former Chief Financial Officer as defendants along with the Company.
Removed
Item 3. Legal Proceedings On February 17, 2023, the Company received a grand jury subpoena requesting certain documents related to an investigation by the U.S. Department of Justice (DOJ) and the U.S. Fish and Wildlife Service (USFWS) into the Company’s conduct regarding several shipments of non-human primates from Cambodia.
Added
The Company’s Audit Committee retained counsel to conduct an independent investigation into 40 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. certain issues raised in the investigations.
Removed
That investigation remains ongoing and we are continuing to cooperate with the investigation. As also previously disclosed, a parallel civil investigation is being undertaken by the DOJ and 37 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. USFWS.
Added
On November 14, 2025, the SEC’s Division of Enforcement (Division) notified the Company that it concluded its investigation and, based on the information available to the Division, it does not intend to recommend an enforcement action by the SEC against the Company. Similarly, the Company’s independent investigation into these matters has also concluded, with no material findings.
Removed
We are also cooperating with that investigation, and although we continue to dispute the merits of certain positions taken by the DOJ and USFWS in the civil investigation, we have discussed a potential resolution of that matter with the DOJ and USFWS. Those discussions are ongoing.
Added
Court of Appeals for the First Circuit reversed in part the district court’s dismissal on the pleadings of the securities fraud claims. The case returned to U.S. District Court for the District of Massachusetts.
Removed
Although the Company maintains a global supplier onboarding and oversight program incorporating risk-based due diligence, auditing, and monitoring practices to help ensure the quality of our supplier relationships and compliance with applicable U.S. and international laws and regulations, including the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), in connection with the civil investigation, the Company has voluntarily suspended future shipments of non-human primates from Cambodia to the United States until such time that the Company and USFWS can agree upon and implement additional procedures to reasonably ensure that non-human primates imported from Cambodia are purpose-bred.
Added
On October 16, 2025, the plaintiff filed a motion to withdraw the State Teachers Retirement System of Ohio as lead plaintiff, due to lack of statutory standing, and substitute Oklahoma Firefighters Pension and Retirement System.
Removed
The Company continues to care for the Cambodia-sourced non-human primates from certain shipments in the United States.
Removed
Due to a number of factors, including the age of these NHP’s during the fourth quarter of fiscal year 2024, the Company recorded a charge of $27 million to costs of products sold within the accompanying consolidated statements of income to reflect the reduction in carrying value of this inventory to zero.
Removed
The Company’s Audit Committee has retained counsel to conduct an independent investigation into certain issues raised in the investigations, and that work is ongoing. We are not able to predict what action, if any, might be taken in the future by the DOJ, USFWS, SEC or other governmental authorities.
Removed
None of the DOJ, USFWS or SEC has provided the Company with any specific timeline or indication as to when these investigations or, specific to the DOJ and USFWS, discussions regarding resolution and future processes and procedures, will be concluded or resolved.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThis authorization fully replaces a prior stock repurchase authorization of $1.3 billion that had $129.1 million remaining when it was terminated. In fiscal year 2024, the Company repurchased 0.5 million shares of common stock for $100.7 million under the new stock repurchase program.
Biggest changeOn October 29, 2025, the Company’s Board of Directors approved a new stock repurchase authorization of $1.0 billion. This new authorization replaces the prior stock repurchase authorization of $1.0 billion that had $549.3 million remaining on the plan when it was terminated. As of December 27, 2025, the Company had $1.0 billion remaining on the current authorized stock repurchase program.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock began trading on the New York Stock Exchange on June 23, 2000 under the symbol “CRL.” There were no equity securities that were not registered under the Securities Act of 1933, as amended, sold during fiscal year 2024.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock began trading on the New York Stock Exchange on June 23, 2000 under the symbol “CRL.” There were no equity securities that were not registered under the Securities Act of 1933, as amended, sold during fiscal year 2025.
Information used in the graph was obtained from Standards & Poor’s Institutional Market Services, a source believed to be reliable, but the Company is not responsible for any errors or omissions in such information. 39 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Information used in the graph was obtained from Standards & Poor’s Institutional Market Services, a source believed to be reliable, but the Company is not responsible for any errors or omissions in such information. 42 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Comparison of 5-Year Cumulative Total Return The following stock performance graph compares the annual percentage change in the Company’s cumulative total shareholder return on its Common Stock during a period commencing on December 28, 2019 and ending on December 28, 2024 (as measured by dividing (1) the sum of (A) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (B) the difference between the Company’s share price at the end and the beginning of the measurement period; by (2) the share price at the beginning of the measurement period) with the cumulative total return of the S&P 500 Index and the S&P 500 Health Care Index during such period.
Comparison of 5-Year Cumulative Total Return The following stock performance graph compares the annual percentage change in the Company’s cumulative total shareholder return on its Common Stock during a period commencing on December 26, 2020 and ending on December 27, 2025 (as measured by dividing (1) the sum of (A) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (B) the difference between the Company’s share price at the end and the beginning of the measurement period; by (2) the share price at the beginning of the measurement period) with the cumulative total return of the S&P 500 Index and the S&P 500 Health Care Index during such period.
Shareholders As of January 25, 2025, there we re 63 r egistered shareholders of the outstanding shares of common stock.
Shareholders As of January 24, 2026, there we re 62 r egistered shareholders of the outstanding shares of common stock.
As of December 28, 2024, the Company had $899.3 million remaining on the current authorized stock repurchase program. Additionally, our stock-based compensation plans permit the netting of common stock upon vesting of restricted stock, restricted stock units, and performance share units in order to satisfy individual statutory tax withholding requirements.
Additionally, our stock-based compensation plans permit the netting of common stock upon vesting of restricted stock, restricted stock units, and performance share units in order to satisfy individual statutory tax withholding requirements.
Issuer Purchases of Equity Securities The following table provides information relating to our purchases of shares of our common stock during the fourth quarter of fiscal 2024: Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands) September 29, 2024 to October 26, 2024 198 $ 194.96 — $ 899,326 October 27, 2024 to November 23, 2024 — — — 899,326 November 24, 2024 to December 28, 2024 430 199.06 — 899,326 Total 628 — On August 2, 2024, the Company’s Board of Directors approved a stock repurchase authorization of $1.0 billion .
Issuer Purchases of Equity Securities The following table provides information relating to our purchases of shares of our common stock during the fourth quarter of fiscal 2025: Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in thousands) September 28, 2025 to October 25, 2025 130 $ 170.69 — $ 549,285 October 26, 2025 to November 22, 2025 — — — 1,000,000 November 23, 2025 to December 27, 2025 418 176.09 — 1,000,000 Total 548 — In fiscal year 2025, the Company repurchased 2.1 million shares of common stock for $350.0 million under the prior stock repurchase program.
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN Among Charles River Laboratories International, Inc., The S&P 500 Index and The S&P 500 Health Care Index Fiscal Year 2019 2020 2021 2022 2023 2024 Charles River Laboratories International, Inc. $ 100 $ 166 $ 243 $ 143 $ 156 $ 123 S&P 500 100 118 152 125 158 197 S&P 500 Health Care 100 113 143 140 143 147
COMPARISON OF 5-YEAR CUMULATIVE TOTAL RETURN Among Charles River Laboratories International, Inc., The S&P 500 Index and The S&P 500 Health Care Index Fiscal Year 2020 2021 2022 2023 2024 2025 Charles River Laboratories International, Inc. $ 100 $ 147 $ 87 $ 94 $ 74 $ 81 S&P 500 100 129 105 133 166 196 S&P 500 Health Care 100 126 124 126 129 148

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAnalysis of Segment Results The following table presents operating income (loss) by reportable segment: Fiscal Year 2024 2023 $ change % change Impact of FX (in thousands, except percentages) RMS $ 114,411 $ 154,666 $ (40,255) (26.0) % (0.3) % DSA 442,510 606,076 (163,566) (27.0) % 0.6 % Manufacturing (71,453) 88,329 (159,782) (180.9) % (0.9) % Unallocated corporate (258,121) (231,810) (26,311) 11.4 % 0.2 % Total operating income $ 227,347 $ 617,261 $ (389,914) (63.2) % 0.3 % Operating income % of revenue 5.6 % 14.9 % (930) bps The following presents and discusses our consolidated financial results by each of our reportable segments: RMS Fiscal Year 2024 2023 $ change % change Impact of FX (in thousands, except percentages) Revenue $ 829,377 $ 792,343 $ 37,034 4.7 % (0.2) % Cost of revenue (excluding amortization of intangible assets) 580,491 509,970 70,521 13.8 % Selling, general and administrative 110,982 105,965 5,017 4.7 % Amortization of intangible assets 23,493 21,742 1,751 8.1 % Operating income $ 114,411 $ 154,666 $ (40,255) (26.0) % (0.3) % Operating income % of revenue 13.8 % 19.5 % (570) bps RMS revenue increased $37.0 million due primarily to an increase in large research model product revenue, principally due to the recent acquisition of Noveprim, which contributed $39.4 million, and an increase in small research model revenue in all geographic areas; partially offset by lower Cell Solutions product revenue and Insourcing Solutions services revenue.
Biggest changeAnalysis of Segment Results The following table presents operating income (loss) by reportable segment: Fiscal Year 2025 2024 $ change % change Impact of FX (in thousands, except percentages) RMS $ 44,567 $ 114,411 $ (69,844) (61.0) % 1.9 % DSA 424,555 442,510 (17,955) (4.1) % 1.5 % Manufacturing (184,284) (71,453) (112,831) 157.9 % 8.2 % Unallocated corporate (259,676) (258,121) (1,555) 0.6 % 0.4 % Total operating income $ 25,162 $ 227,347 $ (202,185) (88.9) % 0.9 % Operating income % of revenue 0.6 % 5.6 % (500) bps The following presents and discusses our consolidated financial results by each of our reportable segments: RMS Fiscal Year 2025 2024 $ change % change Impact of FX (in thousands, except percentages) Revenue $ 846,082 $ 829,377 $ 16,705 2.0 % 0.8 % Cost of revenue (excluding amortization of intangible assets) 576,250 580,491 (4,241) (0.7) % Selling, general and administrative 101,529 110,982 (9,453) (8.5) % Amortization of intangible assets 21,736 23,493 (1,757) (7.5) % Intangible asset impairment 102,000 — 102,000 100.0 % Operating income $ 44,567 $ 114,411 $ (69,844) (61.0) % 1.9 % Operating income % of revenue 5.3 % 13.8 % (850) bps RMS revenue increased $16.7 million primarily driven by an increase in large research model product revenue, an increase in small research model revenue in China and Europe, an increase in Insourcing Solutions services revenue, and the effect of changes in foreign currency exchange rates; partially offset by lower Cell Solutions product revenue.
Research Model Services includes: Insourcing Solutions (IS), which provides colony management of our clients’ research operations (including recruitment, training, staffing, and management services) within our clients’ facilities as well as our own vivarium space, utilizing our Charles River Accelerator and Development Lab (CRADL™) offerings, Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered models; and Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models; and Cell Solutions provides controlled, consistent, customized primary cells and blood components derived from normal and mobilized peripheral blood and bone marrow as well as cells from disease state donors.
Research Model Services includes: Insourcing Solutions (IS), which provides colony management of our clients’ research operations (including recruitment, training, staffing, and management services) within our clients’ facilities as well as our own vivarium space, utilizing our Charles River Accelerator and Development Lab (CRADL™) offerings, Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered models; and Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models; and Cell Solutions, which provides controlled, consistent, customized primary cells and blood components derived from normal and mobilized peripheral blood and bone marrow as well as cells from disease state donors.
Due to a number of factors, including the age of these NHP’s, during the fourth quarter of fiscal year 2024, we recorded a charge of $27 million to costs of products sold within the accompanying consolidated statements of income to reflect the reduction in carrying value of this inventory to zero.
Due to a number of factors, including the age of these NHP’s, during the fourth quarter of fiscal year 2024, we recorded a charge of $27 million to costs of products sold within the accompanying consolidated statements of income (loss) to reflect the reduction in carrying value of this inventory to zero.
Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset or asset group, net of any sublease income, if applicable, and its eventual disposition.
Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use or sale of the asset or asset group, net of any sublease income, if applicable, and its eventual disposition.
During fiscal year 2024, cash used in investing activities was primarily driven by capital expenditures, an immaterial asset acquisition, and net purchases and sales in investments related to certain venture capital and strategic equity investments.
Cash used in investing activities in fiscal year 2024 was primarily driven by capital expenditures, an immaterial asset acquisition, and net purchases and sales in investments related to certain venture capital and strategic equity investments.
In fiscal years 2024 and 2023 we performed the quantitative goodwill impairment test for our reporting units. Fair value was determined by using a weighted combination of a market-based approach and an income approach, as this combination was deemed to be the most indicative of our fair value in an orderly transaction between market participants.
In fiscal years 2025 and 2024 we performed the quantitative goodwill impairment test for our reporting units. Fair value was determined by using a weighted combination of a market-based approach and an income approach, as this combination was deemed to be the most indicative of our fair value in an orderly transaction between market participants.
New Accounting Pronouncements For a discussion of new accounting pronouncements, refer to Note 1, “Description of Business and Summary of Significant Accounting Policies” to our consolidated financial statements contained in Item 8, “Financial Statements and Supplementary Data,” in this Annual Report on Form 10-K. 47 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
New Accounting Pronouncements For a discussion of new accounting pronouncements, refer to Note 1, “Description of Business and Summary of Significant Accounting Policies” to our consolidated financial statements contained in Item 8, “Financial Statements and Supplementary Data,” in this Annual Report on Form 10-K. 51 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
We currently operate in over 130 sites and in over 20 countries worldwide, which numbers exclude certain Insourcing Solutions (IS) sites. Segment Reporting Our three reportable segments are Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Solutions (Manufacturing).
We currently operate in over 120 sites and in over 20 countries worldwide, which numbers exclude certain Insourcing Solutions (IS) sites. Segment Reporting Our three reportable segments are Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Solutions (Manufacturing).
On May 16, 2023, we received an inquiry from the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) requesting us to voluntarily provide information, subsequently augmented with a document subpoena and additional inquiries, primarily related to the sourcing of non-human primates and related disclosures, and we are cooperating with the requests.
On May 16, 2023, we received an inquiry from the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) requesting us to voluntarily provide information, subsequently augmented with a document subpoena and additional inquiries, primarily related to the sourcing of non-human primates and related disclosures, and we cooperated with the requests.
Capital expenditures declined for the fiscal year 2024 compared to 2023, primarily as a result of disciplined spend management in light of the global economic and demand environment.
Capital expenditures declined for fiscal year 2025 compared to fiscal year 2024, primarily as a result of disciplined spend management in light of the global economic and demand environment.
Revenue is recorded in the amount invoiced since that amount corresponds directly to the value of our performance to date. During fiscal year 2024, $2.4 billion, or approximately 60%, of our total revenue recognized ($4.0 billion) is DSA service and product revenue transferred over time.
Revenue is recorded in the amount invoiced since that amount corresponds directly to the value of our performance to date. During fiscal year 2025, $2.4 billion, or approximately 60%, of our total revenue recognized is DSA service and product revenue transferred over time.
In our recent acquisitions, customer relationship intangible assets (also referred to as client relationships) and certain biological assets have been the most significant identifiable assets acquired.
In our prior acquisitions, customer relationship intangible assets (also referred to as client relationships) and certain biological assets have been the most significant identifiable assets acquired.
The determination of the fair value of intangible assets (including goodwill) and certain biological assets, which represent a significant portion of the purchase price in certain recent acquisitions, requires the use of significant judgment with regard to (i) the fair value; and (ii) whether such assets are amortizable or non-amortizable and, if the former, the period and the method by which the asset will be amortized.
The determination of the fair value of intangible assets (including goodwill) and certain biological assets, which represented a significant portion of the purchase price in prior acquisitions, requires the use of significant judgment with regard to (i) the fair value; and (ii) whether such assets are amortizable or non-amortizable and, if the former, the period and the method by which the asset will be amortized.
Actual cash flows arising from a particular intangible asset could vary from projected cash flows which could imply different carrying values from those established at the dates of acquisition and which could result in impairment of such asset.
Actual cash flows arising from a particular long-lived asset could vary from projected cash flows which could imply different carrying values from those established at the dates of acquisition and which could result in impairment of such asset.
Government Investigations into Non-Human Primate Supply Chain On February 17, 2023, we received a grand jury subpoena requesting certain documents related to an investigation by the U.S. Department of Justice (DOJ) and the U.S. Fish and Wildlife Service (USFWS) into our conduct regarding several shipments of non-human primates from Cambodia.
Government Investigations into Non-Human Primate Supply Chain On February 17, 2023, we received a grand jury subpoena requesting certain documents related to an investigation by the U.S. Department of Justice (DOJ) and the U.S. Fish and Wildlife Service (USFWS) into our conduct regarding several shipments of non-human primates from Cambodia in late 2022 and early 2023 (the NHP Shipments).
Additionally, our stock-based compensation plans permit the netting of common stock upon vesting of restricted stock, restricted stock units, and performance share units in order to satisfy individual statutory tax withholding requirements. During fiscal year 2024 and 2023, we acquired 0.1 million shares for $18.5 million and $24.2 million, respectively, through such netting.
Additionally, our stock-based compensation plans permit the netting of common stock upon vesting of restricted stock, restricted stock units, and performance share units in order to satisfy individual statutory tax withholding requirements. During fiscal year 2025 and 2024, we acquired 0.1 million shares for $10.1 million and $18.5 million, respectively, through such netting.
Operating cash flow is derived by adjusting our net income for items including, but not limited to (1) non-cash operating items such as depreciation and amortization, stock-based compensation, 51 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. goodwill impairment, debt financing costs, deferred income taxes, long-lived asset impairment changes, gains and/or losses on venture capital and strategic equity investments, gains and/or losses on divestitures, changes in fair value of c ontingent consideration, a s well as (2) changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associat ed with transactions and when they are recognized in our results of operations.
Operating cash flow is derived by adjusting our net income (loss) for items including, but not limited to (1) non-cash operating items such as depreciation and amortization, stock-based compensation, goodwill impairments, debt financing costs, deferred income taxes, write downs of inventories, provisions of credit losses, long-lived asset impairment charges, gains and/or losses and impairments on venture capital and strategic equity investments, gains and/or losses on divestitures, changes in fair value of c ontingent consideration, a s well as (2) changes in operating assets and liabilities, which reflect timing differences between the receipt and payment of cash associat ed with transactions and when they are recognized in our results of operations. 55 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended December 30, 2023, filed with the SEC on February 14, 2024. In addition to historical consolidated financial information, the following discussion contains forward-looking statements. Actual results may differ significantly from those projected in the forward-looking statements.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended December 28, 2024, filed with the SEC on February 19, 2025. In addition to historical consolidated financial information, the following discussion contains forward-looking statements. Actual results may differ significantly from those projected in the forward-looking statements.
If the estimated future cash flows decrease below our current expectations, specifically as a result of lower revenue growth rates or operating income margins, or due to an increase of the weighted-average cost of capital, the fair value may further decrease resulting in an incremental material goodwill impairment.
If the estimated future cash flows decrease below our current expectations, specifically as a result of lower 48 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. revenue growth rates or operating income margins, or due to an increase of the weighted-average cost of capital, the fair value may further decrease resulting in an incremental material goodwill impairment.
The terms of the Credit Facility are substantially the same with the interest rates equal to (A) for revolving loans denominated in U.S. dollars, at the Company’s option, either the base rate (which is the higher of (1) the prime rate, (2) the federal funds rate plus 0.50%, or (3) the one-month adjusted SOFR rate plus 1.0%) or the adjusted SOFR rate, (B) for revolving loans denominated in euros, the adjusted EURIBOR rate and (C) for revolving loans denominated in sterling, the daily simple SONIA rate, in each case, plus an interest rate margin based upon the Company’s leverage ratio.
The Credit Facility maintains interest rates equal to (A) for revolving loans denominated in U.S. dollars, at our option, either the base rate (which is the higher of (1) the prime rate, (2) the federal funds rate plus 0.50%, or (3) the one-month adjusted SOFR rate plus 1.0%) or the adjusted SOFR rate, (B) for revolving loans denominated in euros, the adjusted EURIBOR rate and (C) for revolving loans denominated in sterling, the daily simple SONIA rate, in each case, plus an interest rate margin based upon our leverage ratio.
Applying the practical expedient, we do not assess whether a significant financing 44 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. component exists if the period between when we perform our obligations under the contract and when the customer pays is one year or less. Our contracts do not generally contain significant financing components. Contracts with customers may contain multiple performance obligations.
Applying the practical expedient, we do not assess whether a significant financing component exists if the period between when we perform our obligations under the contract and when the customer pays is one year or less. Our contracts do not generally contain significant financing components. Contracts with customers may contain multiple performance obligations.
We had an interest rate swap with a notional amount of $500 million to manage interest rate fluctuation related to our floating rate borrowings under the revolving credit facility, at a fixed rate of 4.65%. Our swap matured on November 2, 2024 and we have not entered into any additional interest rate swap contracts.
We had an interest rate swap with a notional amount of $500 million to manage interest rate fluctuation related to our floating rate borrowings under the revolving credit facility, at a fixed rate of 4.65%. Our swap matured in fiscal year 2024 and we have not entered into any additional interest rate swap contracts.
Our off-balance sheet commitments related to our outstanding letters of credit as of December 28, 2024 were $22.4 million. Foreign Currency Exchange Rate Risk We operate on a global basis and have exposure to some foreign currency exchange rate fluctuations for our financial position, results of operations, and cash flows.
Our off-balance sheet commitments related to our outstanding letters of credit as of December 27, 2025 were $22.0 million. Foreign Currency Exchange Rate Risk We operate on a global basis and have exposure to some foreign currency exchange rate fluctuations for our financial position, results of operations, and cash flows.
Revenue is recorded proportionally as costs are incurred. The right-to-invoice measure of progress is generally related to rate per unit contracts, as the extent of progress towards completion is measured based on discrete service or time-based increments, such as samples tested or labor hours incurred.
Revenue is recorded proportionally as costs are incurred. The right-to-invoice measure of progress is generally related to rate per unit contracts, as the extent of progress towards completion is measured based on 47 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. discrete service or time-based increments, such as samples tested or labor hours incurred.
Estimates of future cash flows require assumptions related to revenue and operating income growth, asset-related expenditures, working capital levels and other factors. Different assumptions from those made in our analysis could materially affect projected cash flows and our evaluation of goodwill for impairment. 45 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Estimates of future cash flows require assumptions related to revenue and operating income growth, asset-related expenditures, working capital levels and other factors. Different assumptions from those made in our analysis could materially affect projected cash flows and our evaluation of goodwill for impairment.
Our 2028 Senior Notes have semiannual interest payments due May 1 and November 1. Our 2029 and 2031 Senior Notes have semiannual interest payments due March 15 and September 15.
Our 2028 Senior Notes have semi-annual interest payments due May 1 and November 1. Our 2029 and 2031 Senior Notes have semi-annual interest payments due March 15 and September 15.
As of December 28, 2024, we had approximately $379 million of unconditional purchase obligations, the majority of which are expected to be settled during 2025. We invest in several venture capital funds that invest in start-up companies, primarily in the life sciences industry.
As of December 27, 2025, we had approximately $340 million of unconditional purchase obligations, the majority of which are expected to be settled during 2026. We invest in several venture capital funds that invest in start-up companies, primarily in the life sciences industry.
A discussion of our results of operations for the fiscal year ended December 30, 2023 and a comparison of our results for the fiscal years ended December 30, 2023 and December 31, 2022 was included in Item 7.
A discussion of our results of operations for the fiscal year ended December 28, 2024 and a comparison of our results for the fiscal years ended December 28, 2024 and December 30, 2023 was included in Item 7.
We have certain federal and state income tax liabilities of $17.9 million relating to the one-time Transition Tax on unrepatriated earnings under the 2017 Tax Act. The Transition Tax will be paid, interest free, with a final payment in 2025.
We had certain federal and state income tax liabilities of $17.9 million relating to the one-time Transition Tax on unrepatriated earnings under the 2017 Tax Act. The Transition Tax was paid, interest free, with a final payment in fiscal 2025.
Our valuation allowance was $286.8 million as of December 28, 2024. In the event actual results differ from our estimates, we will adjust our estimates in future periods and may establish additional allowances or reversals as necessary. We account for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions.
Our valuation allowance was $323.3 million as of December 27, 2025. In the event actual results differ from our estimates, we will adjust our estimates in future periods and may establish additional allowances or reversals as necessary. We account for uncertain tax positions using a “more-likely-than-not” threshold for recognizing and resolving uncertain tax positions.
In connection with certain business and asset acquisitions, we agreed to make additional payments based upon the achievement of certain financial targets and other milestones in connection with the respective acquisition. As of December 28, 2024, we had approximately $55 million of gross contingent payments, of which $49 million is the current fair value.
In connection with certain business and asset acquisitions, we agreed to make additional payments based upon the achievement of certain financial targets and other milestones in connection with the respective acquisition. As of December 27, 2025, we had approximately $30 million of gross contingent payments, of which $30 million is the current fair value.
As the U.S. dollar strengthens against other currencies, the value of our non-U.S. revenue, expenses, assets, liabilities, and cash flows will generally decline when reported in U.S. dollars. The impact to net income as a result of a U.S. dollar strengthening will be partially mitigated by the value of non-U.S. expenses, which will decline when reported in U.S. dollars.
The impact to net income (loss) as a result of a U.S. dollar strengthening will be partially mitigated by the value of non-U.S. expenses, which will decline when reported in U.S. dollars. As the U.S. dollar weakens versus other currencies, the value of the non-U.S. revenue, expenses, assets, liabilities, and cash flows will generally increase when reported in U.S. dollars.
Our total commitment to the funds as of December 28, 2024 was $215.8 million, of which we funded $167.3 million through December 28, 2024. Refer to Note 8. Venture Capital and Strategic Equity Investments to our consolidated financial statements contained in Item 8, “Financial Statements and Supplementary Data,” in this Annual Report on Form 10-K for further details.
Our total commitment to the funds as of December 27, 2025 was $234.3 million, of which we funded $184.9 million through December 27, 2025. Refer to Note 8. Venture Capital and Strategic Equity Investments to our consolidated financial statements contained in Item 8, “Financial Statements and Supplementary Data,” in this Annual Report on Form 10-K for further details.
Our Manufacturing reportable segment includes Microbial Solutions, which provides in vitro lot-release testing products, microbial detection products, and species identification services and Biologics Solutions (Biologics), which performs specialized testing of biologics (Biologics Testing Solutions) as well as contract development and manufacturing products and services (CDMO).
Our Manufacturing reportable segment includes Microbial Solutions, which provides in vitro lot-release testing products, microbial detection products, and species identification services and Biologics Solutions (Biologics), which performs specialized testing of biologics (Biologics Testing) as well as contract development and manufacturing products and services (CDMO). 44 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Costs as a percentage of revenue for fiscal year 2024 was 6.4%, an increase of 80 bps from 5.6% for fiscal year 2023.
Costs as a percentage of revenue for fiscal year 2025 was 6.5%, an increase of 10 bps from 6.4% for fiscal year 2024.
The expected payments of our operating and finance lease liabilities over the next twelve months are $77.9 million and $4.2 million, respectively as of December 28, 2024. In addition to the obligations on the balance sheet at December 28, 2024, we entered into unconditional purchase obligations in the ordinary course of business.
The expected payments of our operating and finance lease liabilities over the next twelve months are $80.7 million and $4.6 million, respectively as of December 27, 2025. In addition to the obligations on the balance sheet at December 27, 2025, we entered into unconditional purchase obligations in the ordinary course of business.
For fiscal year 2024, our revenue would 53 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. have decreased by $129.8 million, and our operating income would have decreased by $8.0 million, if the U.S. dollar exchange rate had strengthened by 1 0%, with all other variables held constant.
For fiscal year 2025, our revenue would have decreased by $135.6 million, and our operating income would have increased by $9.6 million, if the U.S. dollar exchange rate had strengthened by 1 0%, with all other variables held constant. 57 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
RMS operating income decreased $40.3 million compared to fiscal year 2023. RMS operating income as a percentage of revenue for fiscal year 2024 was 13.8%, a decrease of 570 bps from 19.5% for fiscal year 2023.
RMS operating income decreased $69.8 million compared to fiscal year 2024. RMS operating income as a percentage of revenue for fiscal year 2025 was 5.3%, a decrease of 850 bps from 13.8% for fiscal year 2024.
During fiscal year 2024, our cash flows from operations was $734.6 million compared with $683.9 million for fiscal year 2023.
During fiscal year 2025, our cash flows from operations was $737.6 million compared with $734.6 million for fiscal year 2024.
However, because of their more cautious view with regard to early-stage R&D spending, revenue due to both large biopharmaceutical clients and small and mid-sized biotechnology client declined in fiscal year 2024.
Because of a continued cautious view with regard to early-stage R&D spending, revenue to both large biopharmaceutical clients and small and mid-sized biotechnology clients declined in fiscal year 2025.
Results of Operations Consolidated Results of Operations and Liquidity Revenue for fiscal year 2024 was $4.0 billion compared to $4.1 billion in fiscal year 2023.
Results of Operations Consolidated Results of Operations and Liquidity Revenue for fiscal year 2025 was $4.02 billion compared to $4.05 billion in fiscal year 2024.
Unallocated Corporate Fiscal Year 2024 2023 $ change % change Impact of FX (in thousands, except percentages) Unallocated corporate $ 258,121 $ 231,810 $ 26,311 11.4 % 0.2 % Unallocated corporate % of revenue 6.4 % 5.6 % 80 bps Unallocated corporate costs consist of selling, general and administrative expenses that are not directly related or allocated to the reportable segments.
Unallocated Corporate Fiscal Year 2025 2024 $ change % change Impact of FX (in thousands, except percentages) Unallocated corporate $ 259,676 $ 258,121 $ 1,555 0.6 % 0.4 % Unallocated corporate % of revenue 6.5 % 6.4 % 10 bps Unallocated corporate costs consist of selling, general and administrative expenses that are not directly related or allocated to the reportable segments.
Goodwill We evaluate goodwill for impairment annually, during the fourth quarter, and when events occur or circumstances change that may reduce the fair value of the asset below its carrying amount.
During fiscal years 2025 and 2024, we did not enter into any business combinations. Goodwill We evaluate goodwill for impairment annually, during the fourth quarter, and when events occur or circumstances change that may reduce the fair value of the asset below its carrying amount.
During the fourth quarter ended December 28, 2024, a triggering event was identified for the Cell Therapy asset group within the Biologics Solutions business as there was a loss of key customers, resulting in a significant reduction in cash flows.
In fiscal 2024, a triggering event was identified for the CDMO Cell Therapy asset group within the Biologics Solutions business, part of the Manufacturing reportable segment, as there was a loss of key customers, resulting in a significant reduction in cash flows.
In fiscal year 2024, our operating income and operating income margin were $227.3 million and 5.6%, respectively, compared with $617.3 million and 14.9%, respectively, in fiscal year 2023.
In fiscal year 2025, our operating income and operating income margin were $25.2 million and 0.6%, respectively, compared with $227.3 million and 5.6%, respectively, in fiscal year 2024.
The following table presents our net cash used in financing ac tivities: Fiscal Year 2024 2023 (in thousands) Proceeds from long-term debt and revolving credit facility $ 1,081,581 $ 776,353 Proceeds from exercises of stock options 23,878 25,597 Payments on long-term debt, revolving credit facility, and finance lease obligations (1,493,769) (851,676) Purchase of treasury stock (119,175) (24,155) Purchase of remaining equity interest of other redeemable noncontrolling interest (12,000) (4,784) Payment of contingent considerations — (2,711) Other, net (31,442) (4,145) Net cash used in financing activities $ (550,927) $ (85,521) Financing activities primarily consist of the proceeds and repayments of debt and certain equity related transactions including treasury stock purchases and employee stock option exercises.
The following table presents our net cash used in financing ac tivities: Fiscal Year 2025 2024 (in thousands) Proceeds from long-term debt and revolving credit facility $ 1,227,534 $ 1,081,581 Payments on long-term debt, revolving credit facility, and finance lease obligations (1,349,317) (1,493,769) Proceeds from exercises of stock options 714 23,878 Purchase of treasury stock (360,673) (119,175) Payment of contingent considerations (21,822) — Purchase of remaining equity interest of other redeemable noncontrolling interest (19,140) (12,000) Other, net (14,022) (31,442) Net cash used in financing activities $ (536,726) $ (550,927) Financing activities primarily consist of the proceeds and repayments of debt and certain equity related transactions including treasury stock purchases and employee stock option exercises.
Despite the near-term market pressures, we believe clients will continue to benefit from the long-term value of strategic outsourcing to improve their operating efficiency and to access capabilities that they do not maintain internally.
Despite the near-term market pressures that led to a modest revenue decline in fiscal year 2025, we believe clients will continue to benefit from the long-term value of strategic outsourcing to improve their operating efficiency and to access capabilities that 45 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. they do not maintain internally.
The following table presents our net cash used in investing activities: Fiscal Year 2024 2023 (in thousands) Acquisitions of businesses and assets, net of cash acquired $ (5,479) $ (194,785) Capital expenditures (232,967) (318,528) Investments, net (11,189) (47,548) Other, net 4,549 (2,294) Net cash used in investing activities $ (245,086) $ (563,155) Investing activities primarily consist of cash used to fund capital expenditures to support the growth of our business, purchases and sales of investments related to our venture capital and strategic equity investment portfolios, and asset and business acquisitions and divestitures.
The following table presents our net cash used in investing activities: Fiscal Year 2025 2024 (in thousands) Capital expenditures $ (219,152) $ (232,967) Investments, net (10,974) (11,189) Proceeds from sale of businesses, net 17,441 — Acquisitions of businesses and assets, net of cash acquired — (5,479) Other, net 3,364 4,549 Net cash used in investing activities $ (209,321) $ (245,086) Investing activities primarily consist of cash used to fund capital expenditures to support the growth of our business, purchases and sales of investments related to our venture capital and strategic equity investment portfolios, and asset and business acquisitions and divestitures.
We may also estimate fair value based on market prices for similar assets, as appropriate. Changes in these estimates and assumptions could materially affect the determination of fair value for these assets.
Significant judgments are required to estimate future cash flows, including the selection of appropriate discount rates and other assumptions. We may also estimate fair value based on market prices for similar assets, as appropriate. Changes in these estimates and assumptions could materially affect the determination of fair value for these assets.
Several countries have begun to enact legislation to implement the Organization for Economic Cooperation and Development’s (OECD) international tax framework, including the Pillar II global minimum tax regime with effect from January 1, 2024 or later. We are currently monitoring these developments. To date, we have not nor, expect there to be a material financial impact.
Several countries have begun to enact legislation to implement the Organization for Economic Cooperation and Development’s (OECD) international tax framework, including the Pillar II global minimum tax regime with effect from January 1, 2024 or later.
For fiscal year 2024, net cash used in financing activities was primarily driven by the following activity: • Net repayments of $417.1 million towards our Credit Facility • Treasury stock purchases of $100.7 million associated with our stock repurchase program and $18.5 million due to the netting of common stock upon vesting of stock-based awards in order to satisfy individual statutory tax withholding requirements • Net proceeds from exercises of employee stock options of $23.9 million • Net dividend payments to noncontrolling interest holders of $14.5 million 52 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
For fiscal year 2024, net cash used in financing activities was primarily driven by the following activity: • Net repayments of $417.1 million towards our Credit Facility. • Treasury stock purchases of $100.7 million associated with our stock repurchase program and $18.5 million due to the netting of common stock upon vesting of stock-based awards in order to satisfy individual statutory tax withholding requirements • Net proceeds from exercises of employee stock options of $23.9 million • Dividend payments to noncontrolling interest holders of $14.5 million • Payment of $12.0 million for the remaining 10% equity interest in an other redeemable noncontrolling interest Financing and Market Risk We are exposed to market risk from changes in interest rates and currency exchange rates, which could affect our future results of operations and financial condition.
DSA operating income decreased $163.6 million compared to fiscal year 2023. DSA operating income as a percentage of revenue for fiscal year 2024 was 18.1%, a decrease of 510 bps from 23.2% for fiscal year 2023.
DSA operating income decreased $18.0 million compared to fiscal year 2024. DSA operating income as a percentage of revenue for fiscal year 2025 was 17.7%, a decrease of 40 bps from 18.1% for fiscal year 2024.
As of December 28, 2024, we had $701.4 million of operating leases inclusive of future minimum rental commitments under non-cancellable operating leases, net of income from subleases as well as $38.5 million of financing leases.
As of December 27, 2025, we had $626.6 million of operating leases inclusive of future minimum rental commitments under non-cancellable operating leases, net of income from subleases as well as $37.0 million of financing leases.
The following table presents our cash and cash equivalents and short-term investments: December 28, 2024 December 30, 2023 (in thousands) Cash and cash equivalents: Held in U.S. entities $ 4,219 $ 2,234 Held in non-U.S. entities 190,387 274,537 Total cash and cash equivalents 194,606 276,771 Short-term investments: Held in non-U.S. entities 62 68 Total cash, cash equivalents and short-term investments $ 194,668 $ 276,839 The following table presents our net cash provided by operating activities: Fiscal Year 2024 2023 (in thousands) Net income $ 25,291 $ 480,370 Adjustments to reconcile net income to net cash provided by operating activities 739,615 305,908 Changes in assets and liabilities (30,329) (102,380) Net cash provided by operating activities $ 734,577 $ 683,898 Net cash provided by cash flows from operating activities represents the cash receipts and disbursements related to all of our activities other than investing and financing activities.
The following table presents our cash and cash equivalents and short-term investments: December 27, 2025 December 28, 2024 (in thousands) Cash and cash equivalents: Held in U.S. entities $ 4,514 $ 4,219 Held in non-U.S. entities 209,256 190,387 Total cash and cash equivalents $ 213,770 $ 194,606 The following table presents our net cash provided by operating activities: Fiscal Year 2025 2024 (in thousands) Net income (loss) $ (142,163) $ 25,291 Adjustments to reconcile net income (loss) to net cash provided by operating activities 865,728 739,615 Changes in assets and liabilities 14,081 (30,329) Net cash provided by operating activities $ 737,646 $ 734,577 Net cash provided by cash flows from operating activities represents the cash receipts and disbursements related to all of our activities other than investing and financing activities.
We attempt to minimize this exposure by using certain financial instruments in accordance with our overall risk management and our hedge policy. We do not enter into speculative derivative agreements. Repurchases of Common Stock On August 2, 2024, our Board of Directors approved a stock repurchase authorization of $1.0 billion.
We attempt to minimize this exposure by using certain financial instruments in accordance with our overall risk management and our hedge policy. We do not enter into speculative derivative agreements. Repurchases of Common Stock In fiscal year 2025, we repurchased 2.1 million shares of common stock for $350.0 million under the prior stock repurchase program.
The 2024 decrease as compared to the corresponding period in 2023 was $79.4 million, or 1.9%, and was primarily due to our DSA business, which experienced lower volume driven by more cautious client spending as a result of the biopharmaceutical demand environment; partially offset by higher revenue within our Manufacturing businesses and the recent acquisition of Noveprim within our RMS business when compared to fiscal year 2023.
The decrease of $34.6 million, or 0.9% as compared to fiscal year 2024 was primarily due to our DSA business, which continued to experience lower volume driven by more cautious client spending as a result of the biopharmaceutical demand environment; partially offset by higher revenue in our RMS business, primarily driven by the increase in large research model product revenue when compared to fiscal year 2024.
Long-lived asset impairments associated with our right-of-use lease assets and property, plant, and equipment, recognized during fiscal years 2024 and 2023 were $51.8 million and $41.9 million, respectively. Income Taxes We prepare and file income tax returns based on our interpretation of each jurisdiction’s tax laws and regulations.
Long-lived asset impairments, inclusive of the intangible assets charge described above, recognized during fiscal years 2025 and 2024 were $259.1 million and $51.8 million, respectively. Income Taxes We prepare and file income tax returns based on our interpretation of each jurisdiction’s tax laws and regulations.
Income Taxes Fiscal Year 2024 2023 $ change % change (in thousands, except percentages) Provision for income taxes $ 67,823 $ 100,914 $ (33,091) (32.8) % Effective tax rate 72.8 % 17.4 % 5,540 bps Income tax expense for fiscal year 2024 was $67.8 million, a decrease of $33.1 million compared to $100.9 million for fiscal year 2023.
Income Taxes Fiscal Year 2025 2024 $ change % change (in thousands, except percentages) Provision for income taxes $ 42,660 $ 67,823 $ (25,163) (37.1) % Effective tax rate (42.9) % 72.8 % (11,570) bps Income tax expense for fiscal year 2025 was $42.7 million, a decrease of $25.2 million compared to $67.8 million for fiscal year 2024.
The increase in net cash provided by operating activities was primarily due to favorable performance across our revenue related accounts, including collections on trade receivables, deferred revenue, and customer deposits; benefiting cash provided by operations by $46.7 million, lower purchases of inventory supporting our Safety Assessment business, benefiting our cash provided by operations by $16.8 million; partially offset by $27.6 million related to accrued compensation, and timing of payments to our suppliers and vendors reducing our cash provided by operations by $14.3 million.
The increase in net cash provided by operating activities was primarily due to lower payments of variable compensation, benefiting cash provided by operations by approximately $79 million, our revenue related accounts, including collections on trade receivables, deferred revenue, and customer deposits; benefiting cash provided by operations by approximately $12 million; partially offset by higher purchases of inventory of $49 million.
The increase in net cash provided by operating activities was primarily due to favorable performance across our revenue related accounts, including collections on trade receivables, deferred revenue, and customer deposits; benefiting cash provided by operations by $46.7 million, lower purchases of inventory supporting our Safety Assessment business, benefiting our cash provided by operations by $16.8 million; partially offset by $27.6 million related to accrued compensation, and timing of payments to our suppliers and vendors reducing our cash provided by operations by $14.3 million.
The increase in net cash provided by operating activities was primarily due to lower payments of variable compensation, benefiting cash provided by operations by approximately $79 million, our revenue related accounts, including collections on trade receivables, deferred revenue, and customer deposits; benefiting cash provided by operations by approximately $12 million; partially offset by higher purchases of inventory of $49 million.
We had previously acquired a 49% equity interest in 2022 for $90.0 million plus additional contingent payments up to $5.0 million based on future performance.
On November 30, 2023, we completed our acquisition of an additional 41% equity interest of Noveprim Group (Noveprim), a leading supplier of NHPs located in Mauritius, resulting in a 90% controlling interest. We had previously acquired a 49% equity interest in 2022 for $90.0 million plus additional contingent payments up to $5.0 million based on future performance.
Net income available to Charles River Laboratories International Inc, common shareholders decreased to $10.3 million in fiscal year 2024, from $474.6 million in the corresponding period of 2023. The decrease in net income available to common shareholders of $464.3 million was due principally to the decreases in operating income described above.
Net loss available to Charles River Laboratories International Inc, common shareholders was $144.3 million in fiscal year 2025, compared to Net income available to Charles River Laboratories International Inc, common shareholders of $10.3 million in the corresponding period of fiscal year 2024.
In response, we conducted a quantitative impairment test for goodwill to determine if the goodwill in the Biologics Solutions reporting unit was impaired.
This resulted from a loss of key customers, ultimately resulting in a reduction in Biologics Solutions’ long range financial outlook. In response, we conducted a quantitative impairment test for goodwill to determine if the goodwill in the Biologics Solutions reporting unit was impaired.
The increase in our effective tax rate in fiscal year 2024 compared to fiscal year 2023 was primarily attributable to the impact of the non-deductible goodwill impairment of the Biologic Solutions reporting unit, as well as the non-taxable gain on Noveprim of $98.5 million in fiscal year 2023.
Our effective tax rate was (42.9)% for fiscal year 2025 compared to 72.8% for fiscal year 2024. The change in our effective tax rate in fiscal year 2025 compared to fiscal year 2024 was primarily attributable to the impact of the non-deductible goodwill impairment of the Biologic Solutions reporting unit.
As of the annual impairment test date, the fair value of the reporting unit exceeded its carrying value by approximately 16% and no impairment was recognized as of December 28, 2024. While the Discovery Services reporting unit is not currently impaired, we will continue to closely monitor future performance and any potential impacts on the value of the reporting unit.
As of the annual impairment test date, the fair value of the reporting unit exceeded its carrying value by approximately 16% and no impairment was recognized as of December 28, 2024.
Manufacturing operating income (loss) decreased $159.8 million compared to fiscal year 2023. Manufacturing operating income (loss) as a percentage of revenue for fiscal year 2024 was (9.3)%, a decrease of 2,150 bps from 12.2% for fiscal year 2023.
Manufacturing operating loss increased $112.8 million compared to fiscal year 2024. Manufacturing operating loss as a percentage of revenue for fiscal year 2025 was (24.0)%, an increase of 1,470 bps from (9.3)% for fiscal year 2024.
Revenue and Operating Income The following tables present consolidated revenue by type and by reportable segment: Fiscal Year 2024 2023 $ change % change (in thousands, except percentages) Service revenue $ 3,304,138 $ 3,440,019 $ (135,881) (4.0) % Product revenue 745,851 689,390 56,461 8.2 % $ 4,049,989 $ 4,129,409 $ (79,420) (1.9) % Fiscal Year 2024 2023 $ change % change Impact of FX (in thousands, except percentages) RMS $ 829,377 $ 792,343 $ 37,034 4.7 % (0.2) % DSA 2,451,280 2,615,623 (164,343) (6.3) % 0.2 % Manufacturing 769,332 721,443 47,889 6.6 % (0.2) % Total revenue $ 4,049,989 $ 4,129,409 $ (79,420) (1.9) % 0.1 % 48 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Revenue and Operating Income (Loss) The following tables present consolidated revenue by type and by reportable segment: Fiscal Year 2025 2024 $ change % change (in thousands, except percentages) Service revenue $ 3,250,099 $ 3,304,138 $ (54,039) (1.6) % Product revenue 765,283 745,851 19,432 2.6 % $ 4,015,382 $ 4,049,989 $ (34,607) (0.9) % Fiscal Year 2025 2024 $ change % change Impact of FX (in thousands, except percentages) RMS $ 846,082 $ 829,377 $ 16,705 2.0 % 0.8 % DSA 2,402,891 2,451,280 (48,389) (2.0) % 0.8 % Manufacturing 766,409 769,332 (2,923) (0.4) % 1.2 % Total revenue $ 4,015,382 $ 4,049,989 $ (34,607) (0.9) % 0.8 % 52 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Operating income and 49 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. operating income as a percentage of revenue decreased primarily due to the lower revenue described above, as well as higher severance related to recent restructuring activities, adjustments to contingent consideration associated with the acquisition of Noveprim, and higher third-party legal costs and a $27 million inventory charge to cost of revenue incurred in connection with the investigations by the U.S. government into the non-human primate supply chain compared to the corresponding period in 2023.
Operating income and operating income as a percentage of revenue decreased primarily due to the lower revenue described above, increased restructuring activities, including asset impairments and site consolidation charges; partially offset by the absence of the inventory charge 53 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. incurred in connection with the investigations by the U.S. government into the NHP supply chain and lower severance costs as compared to the corresponding period in fiscal year 2024.
This includes workforce right-sizing actions, 42 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. resulting in severance and transition costs; and costs related to the consolidation of facilities to optimize our global footprint and drive greater operating efficiency across the Company, resulting in asset impairment, accelerated depreciation, and other site consolidation charges.
Workforce right-sizing actions resulted in severance and transition costs while costs related to the consolidation of facilities to optimize our global footprint and drive greater operating efficiency across the company resulted in asset impairments, accelerated depreciation, and other site consolidation charges. We incurred restructuring charges of $99.8 million and $107.0 million during the fiscal years 2025 and 2024, respectively.
The acquisition was funded through a combination of available cash and proceeds from our Credit Facility. This business is reported as part of our DSA reportable segment. 43 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. U.S.
The acquisition was funded through a combination of available cash and proceeds from our Credit Facility. This business is reported as part of our DSA reportable segment for NHPs vertically integrated into the DSA supply chain and the RMS reportable segment for those NHPs sold to third party customers.
Within the DSA segment, these demand trends led to lower study volumes in both Safety Assessment and Discovery businesses, principally driven by softer demand from both large biopharmaceutical clients and small and mid-sized biotechnology clients.
Revenue for DSA declined in fiscal year 2025 as demand trends resulted in lower study volumes in both discovery and safety assessment services, driven by both large biopharmaceutical and small and mid-sized biotechnology clients.
The decreases in operating income and operating income margins for fiscal year 2024 were primarily due to the revenue impacts described above, charge related to the goodwill impairment within our Manufacturing business, recent restructuring activities, including severance, asset impairments, and other site consolidation costs, and an inventory charge incurred in connection with the investigations by the U.S. government into the non-human primate supply chain.
The decrease in operating income and operating income margin for fiscal year 2025 was primarily due to the intangible asset impairment charges within our Manufacturing and RMS businesses, the acceleration of amortization expense recognized as a result of a decrease in the remaining useful life of certain CDMO client relationships due to a loss of key customers, and the revenue impacts described above; partially offset by a decrease in charges related to goodwill impairments within our Manufacturing business, lower severance costs and the absence of an inventory charge incurred in connection with the investigations by the U.S. government into the non-human primate supply chain in fiscal year 2024.
DSA Fiscal Year 2024 2023 $ change % change Impact of FX (in thousands, except percentages) Revenue $ 2,451,280 $ 2,615,623 $ (164,343) (6.3) % 0.2 % Cost of revenue (excluding amortization of intangible assets) 1,697,166 1,675,472 21,694 1.3 % Selling, general and administrative 249,097 263,770 (14,673) (5.6) % Amortization of intangible assets 62,507 70,305 (7,798) (11.1) % Operating income $ 442,510 $ 606,076 $ (163,566) (27.0) % 0.6 % Operating income % of revenue 18.1 % 23.2 % (510) bps DSA revenue decreased $164.3 million primarily due to decreased revenue in our Safety Assessment and Discovery Services businesses due to decreased study volume driven by softer demand as a result of more cautious client spending in the biopharmaceutical environment, and the impact of a recently divested site related to our Safety Assessment business which contributed $8.5 million to the decrease; partially offset by the effect of changes in foreign currency exchange rates.
DSA Fiscal Year 2025 2024 $ change % change Impact of FX (in thousands, except percentages) Revenue $ 2,402,891 $ 2,451,280 $ (48,389) (2.0) % 0.8 % Cost of revenue (excluding amortization of intangible assets) 1,686,017 1,697,166 (11,149) (0.7) % Selling, general and administrative 239,767 249,097 (9,330) (3.7) % Amortization of intangible assets 52,552 62,507 (9,955) (15.9) % Operating income $ 424,555 $ 442,510 $ (17,955) (4.1) % 1.5 % Operating income % of revenue 17.7 % 18.1 % (40) bps DSA revenue decreased $48.4 million primarily due to lower volume driven by continued cautious client spending as a result of the current demand environment, partially offset by the effect of changes in foreign currency exchange rates.
As the U.S. dollar weakens versus other currencies, the value of the non-U.S. revenue, expenses, assets, liabilities, and cash flows will generally increase when reported in U.S. dollars.
Fluctuations in the foreign currency exchange rates of the countries in which we do business will affect our financial position, results of operations, and cash flows. As the U.S. dollar strengthens against other currencies, the value of our non-U.S. revenue, expenses, assets, liabilities, and cash flows will generally decline when reported in U.S. dollars.
During fiscal year 2024, the most significant drivers of foreign currency translation adjustment we recorded as part of other comprehensive income (loss) were the Euro, Canadian Dollar, and Mauritian Rupee. Fluctuations in the foreign currency exchange rates of the countries in which we do business will affect our financial position, results of operations, and cash flows.
During fiscal year 2025, the most significant drivers of foreign currency translation adjustment we recorded as part of other comprehensive income (loss) were the Euro, Great British Pound, Canadian Dollar, Hungarian Forint, Mauritian Rupee and Chinese Yuan.
Amounts outstanding under our revolving credit facility and our Senior Notes were as follows: December 28, 2024 December 30, 2023 (in thousands) Revolving credit facility $ 714,948 $ 1,129,243 4.25% Senior Notes due 2028 500,000 500,000 3.75% Senior Notes due 2029 500,000 500,000 4.0% Senior Notes due 2031 500,000 500,000 Total $ 2,214,948 $ 2,629,243 On December 13, 2024, the Company modified its revolving credit facility “Credit Facility”.
Amounts outstanding under our revolving credit facility and our Senior Notes were as follows: December 27, 2025 December 28, 2024 (in thousands) Revolving credit facility $ 616,503 $ 714,948 4.25% Senior Notes due 2028 500,000 500,000 3.75% Senior Notes due 2029 500,000 500,000 4.00% Senior Notes due 2031 500,000 500,000 Total $ 2,116,503 $ 2,214,948 The Revolving credit facility, “Credit Facility” provides for up to $2.0 billion in multi-currency revolving credit and has a maturity date of December 2029, with no required scheduled payment before that date.
We maintain an acquisition strategy that focuses on augmenting internal growth of existing businesses with complementary acquisitions. Our recent transactions are described below. On November 30, 2023, we completed our acquisition of an additional 41% equity interest of Noveprim Group (Noveprim), a leading supplier of non-human primates (NHPs) located in Mauritius, resulting in a 90% controlling interest.
We maintain an acquisition strategy that focuses on augmenting internal growth of existing businesses with complementary acquisitions. Our recent transactions are described below.
This business is reported as part of our DSA reportable segment for NHPs vertically integrated into the DSA supply chain and the RMS reportable segment for those NHPs sold to third party customers. On January 27, 2023, we acquired SAMDI Tech, Inc., (SAMDI), a leading provider of high-quality, label-free high-throughput screening (HTS) solutions for drug discovery research.
This business will be reported as part of our DSA reportable segment for NHPs vertically integrated into the DSA supply chain and the RMS reportable segment for those NHPs sold to third party customers.
We 46 CHARLES RIVER LABORATORIES INTERNATIONAL, INC. measure any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in our current business model. Significant judgments are required to estimate future cash flows, including the selection of appropriate discount rates and other assumptions.
In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written-down to their fair values. We measure any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in our current business model.
Operating income (loss) and operating income (loss) as a percentage of revenue decreased primarily due to the goodwill impairment of $215.0 million within our Biologics Solutions reporting unit, higher severance related to the recent restructuring activity, and accelerated amortization of certain client relationships in the CDMO business due to a change in estimate of the remaining useful life; partially offset by the higher revenue described above and improved operating leverage as well as lower legal costs from an environmental litigation related to the Microbial Solutions business compared to the corresponding period in 2023.
Operating loss and operating loss as a percentage of revenue increased primarily due to the $109.0 million intangible asset impairment charge within the CDMO Gene Therapy asset group, accelerated amortization expense as a result of a decrease in the remaining useful life of certain client relationships due to a loss of key customers within the CDMO business, higher charges related to restructuring activities, including asset impairments and site consolidation charges; partially offset by lower goodwill impairment charges within the Biologics Solutions reporting unit of $165.0 million compared to $215.0 million in the corresponding period for fiscal year 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeManagement’s Discussion and Analysis of Results of Operations - Liquidity and Capital Resources” of this Report; and Note 1 “Description of Business and Summary of Significant Accounting Policies - Fair Value” included in Item 8 of this Report. 54 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Biggest changeManagement’s Discussion and Analysis of Results of Operations - Liquidity and Capital Resources” of this Report; and Note 1 “Description of Business and Summary of Significant Accounting Policies - Fair Value” included in Item 8 of this Report. 58 CHARLES RIVER LABORATORIES INTERNATIONAL, INC.