Charles River Laboratories Reports Decline in Revenue and Net Income for Q3 2024

Charles River Laboratories International, Inc. reported its financial results for the third quarter and the nine months ended September 28, 2024, revealing a decline in total revenue and net income compared to the same periods in 2023. Total revenue for Q3 2024 was $1,009.8 million, a decrease of 1.6% from $1,026.6 million in Q3 2023. For the nine months ended September 28, 2024, total revenue was $3,047.4 million, down 2.2% from $3,115.9 million in the prior year.

Service revenue for Q3 2024 decreased by 4.3% to $832.5 million, while product revenue increased by 13.0% to $177.3 million, driven by growth in large research model product sales, particularly from the acquisition of Noveprim. The Research Models and Services (RMS) segment reported revenue growth of 5.9%, while the Discovery and Safety Assessment (DSA) segment saw a decline of 7.4%. The Manufacturing Solutions segment experienced a 12.0% increase in revenue.

Net income for Q3 2024 was $70.3 million, down from $88.0 million in Q3 2023, with net income attributable to common shareholders also declining to $68.7 million from $87.4 million. For the nine-month period, net income was $239.0 million, compared to $291.4 million in the previous year. Earnings per share (EPS) for Q3 2024 were $1.34 (basic) and $1.33 (diluted), down from $1.70 and $1.69, respectively, in Q3 2023.

The company incurred significant restructuring charges of $30.6 million in Q3 2024 and $65.6 million for the nine months, reflecting ongoing efforts to streamline operations and reduce costs, with expected annualized savings of approximately $200 million. Unallocated corporate costs increased by 53.8% in Q3 2024, primarily due to higher employee compensation and benefits.

Strategically, Charles River completed the acquisition of an additional 41% equity interest in Noveprim Group, resulting in a 90% controlling interest, for a total consideration of $392.4 million. The company also acquired SAMDI Tech, Inc. for $62.8 million in January 2023, enhancing its drug discovery capabilities.

As of September 28, 2024, total assets were reported at $8.0 billion, down from $8.2 billion at the end of 2023. The company’s total equity increased to $3.8 billion, reflecting retained earnings growth. Cash and cash equivalents stood at $210.2 million, a decrease from $276.8 million at the end of 2023. The company also announced a stock repurchase authorization of $1 billion, with $899.3 million remaining under the current program.

Charles River Laboratories is currently under investigation by the U.S. Department of Justice and the U.S. Fish and Wildlife Service regarding shipments of non-human primates, and it is cooperating with these investigations.