June Investor Conference Presentation
June 8-9, 2022
Charles River Laboratories
James C. Foster
Chairman, President & Chief Executive Officer
EVERY STEP OF THE WAY |
© 2022 Charles River Laboratories International, Inc. |
Safe Harbor Statement
Caution Concerning Forward-Looking Statements. This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “anticipate,” “believe,” “expect,” “intend,” “will,” “may,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements also include statements about the impact of the COVID-19 pandemic for our business, financial condition and results of operations, including the long-term growth prospects and as compared to other companies, and the prospects for recovery therefrom; the effectiveness of our capital deployment strategy, in light of the COVID-19 pandemic and our ability to reduce capex, preserve jobs, support client research programs and sustain our financial position; our compliance with the maintenance covenants under our credit agreement; our projected 2022 and other future financial performance (including without limitation revenue and revenue growth rates, operating income and margin, earnings per share, capital expenditures, operating and free cash flow, net interest expense, effective tax rate, foreign exchange rates, corporate expenses, and leverage ratios) whether reported, constant currency, organic, and/or factoring acquisitions, with respect to Charles River as a whole and/or any of our reporting or operating segments or business units; our expectations with respect to the impact of external interest rate fluctuations;; the assumptions that form the basis for our guidance, including the anticipated impact of higher compensation costs and of the 53rd week in 2022; the estimated diluted shares outstanding; the expected performance of our venture capital and other strategic investments; client demand, particularly the future demand for drug discovery, development, and CDMO products and services, and our intentions to expand those businesses, including our investments in our portfolio; the impact of foreign exchange; our expectations regarding stock repurchases and debt repayment; the development and performance of our services and products; expectations with respect to pricing of our products and services; market and industry conditions, including industry consolidation and the Company’s share of any market it participates in, outsourcing of services and identification of spending trends by our clients and funding available to them; the potential outcome of, and impact to, our business and financial operations due to litigation and legal proceedings and tax law changes; our business strategy, including with respect to capital deployment and leverage; our success in identifying, consummating, and integrating, and the impact of, our acquisitions, on the Company, our service offerings, client perception, strategic relationships, revenue, revenue growth rates, earnings, and synergies; our expectations regarding the financial performance of the companies we have acquired; our strategic agreements with our clients and opportunities for future similar arrangements; our ability to obtain new clients in targeted market segments and/or to predict which client segments will be future growth drivers; the impact of our investments in specified business lines, products, sites and geographies; and Charles River’s future performance as otherwise delineated in our forward-looking guidance. Forward- looking statements are based on Charles River’s current expectations and beliefs, and involve a number of risks and uncertainties that are difficult to predict and that could cause actual results to differ materially from those stated or implied by the forward-looking statements. Those risks and uncertainties include, but are not limited to: the COVID-19 pandemic, its duration, its impact on our business, results of operations, financial condition, liquidity, business practices, operations, suppliers, third party service providers, clients, employees, industry, ability to meet future performance obligations, ability to efficiently implement advisable safety precautions, and internal controls over financial reporting; the COVID-19 pandemic’s impact on client demand, the global economy and financial markets; the ability to successfully integrate businesses we acquire (including Explora Biolabs, Cognate BioServices and Vigene Biosciences and risks and uncertainties associated with Cognate’s and Vigene’s products and services, which are in areas that the Company did not previously operate); the timing and magnitude of our share repurchases; negative trends in research and development spending, negative trends in the level of outsourced services, or other cost reduction actions by our clients; the ability to convert backlog to revenue; special interest groups; contaminations; industry trends; new displacement technologies; USDA and FDA regulations; changes in law;; continued availability of products and supplies; loss of key personnel; interest rate and foreign currency exchange rate fluctuations; changes in tax regulation and laws; changes in generally accepted accounting principles; and any changes in business, political, or economic conditions due to the threat of future terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas. A further description of these risks, uncertainties, and other matters can be found in the Risk Factors detailed in Charles River’s Annual Report on Form 10-K as filed on February 16, 2022, as well as other filings we make with the Securities and Exchange Commission. Because forward- looking statements involve risks and uncertainties, actual results and events may differ materially from results and events currently expected by Charles River, and Charles River assumes no obligation and expressly disclaims any duty to update information contained in this presentation except as required by law.
Regulation G
This presentation includes discussion of non-GAAP financial measures. We believe that the inclusion of these non-GAAP financial measures provides useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often one-time charges, consistent with the manner in which management measures and forecasts the Company’s performance. The non-GAAP financial measures included in this presentation are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. The company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules and regulations. In accordance with Regulation G, you can find the comparable GAAP measures and reconciliations to those GAAP measures on our website at ir.criver.com.
A Leading Contract Research & Manufacturing Organization
CRL worked on
>85%
of FDA- approved
novel drugs in 2021, including 100% of CNS drugs and >90% of oncology drugs
Doubled
revenue and
non-GAAP EPS since 2016 (1)
#1
Position in
Research Models,
Safety Assessment &
Microbial Solutions
~$20B
Outsourced
addressable market
Low-
Double-
Digit
CRL organic
revenue growth
expected
2021-2024E(2)
90
Novel
molecules
originated for clients since 1999
>$4.5B
Invested >25
acquisitions over last ~10 years (3)
Collectively meeting or exceeding our investment criteria
(1) Revenue and non-GAAP EPS increases from FY 2016 to FY 2021.
3 EVERY STEP OF THE WAY(2) Represents 2024 financial target issued at May 2021 Investor Day.
(3) Cumulative purchase prices for acquisitions since 2012.
Charles River Overview
- A leading drug discovery, non-clinical development, and manufacturing company
-
- Revenue of $3.5B (FY 2021)
- Ability to work with clients to discover new drugs and move downstream with them throughout non-clinical development and to support their safe manufacture
- Each commercial client account below 4% of total revenue
- A multinational company with ~20,000 employees worldwide
- >120 facilities strategically located in >20 countries, proximate to our major client hubs
Client Base(1) |
Geographic Revenue(1) |
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Academic/ |
Asia- |
|||
Pac |
||||
Gov’t |
||||
5% |
||||
~10% |
Europe |
|||
Biotech |
Globals |
|||
~40% |
North |
30% |
||
~30% |
||||
America |
||||
65% |
Other (2)
~20%
See ir.criver.com for reconciliations of GAAP to non-GAAP results. |
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4 |
EVERY STEP OF THE WAY |
(1) Based on CRL’s FY 2021 revenue. Geographic revenue excludes Japan to reflect divestiture of RMS Japan in Oct. 2021. |
(2) Other clients include agricultural & industrial chemical, CRO, animal health, life science, CDMO, consumer product, and medical device |
companies.
The Power of Our Unique Portfolio
Research & Development Continuum
Discovery Preclinical Phase 1Phase 2Phase 3 Commercial
Research Models |
RMS with HemaCare & Cellero |
Discovery Services
Safety Assessment
Manufacturing
Business Segments(1)
RMS |
|
19% of Revenue |
|
(20% of Non-GAAP OI) |
|
DSA |
|
60% of Revenue |
Manufacturing |
(53% of Non-GAAP OI) |
21% of Revenue
(27% of Non-
GAAP OI)
Only CRO with an integrated, non-clinical portfolio that spans the drug research process from target discovery through market approval
See ir.criver.com for reconciliations of GAAP to non-GAAP results.
5 EVERY STEP OF THE WAY (1) Based on CRL’s FY 2021 revenue and non-GAAP operating income. Not adjusted for RMS Japan
and CDMO Sweden divestitures, which do not have a meaningful impact on this business segment revenue/OI breakout.
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Disclaimer
Charles River Laboratories International Inc. published this content on 08 June 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 June 2022 11:11:06 UTC.
Publicnow 2022
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Technical analysis trends CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Short Term | Mid-Term | Long Term | |
Trends | Neutral | Bearish | Bearish |
Income Statement Evolution
Sell Buy |
|
Mean consensus | BUY |
Number of Analysts | 16 |
Last Close Price | 247,21 $ |
Average target price | 329,50 $ |
Spread / Average Target | 33,3% |