Charles River Laboratories International, Inc. Q4 FY2025 earnings call

• The fourth - quarter 2025 financial results were at the upper ends of the revenue and non - GAAP earnings per share ranges. - The biopharma demand environment stabilized, with significant improvements in DSA net bookings, especially in the first and fourth quarters. - Strategic initiatives were advanced, such as the planned acquisitions of KF Cambodia and PathoQuest. - Progress was made on the divestiture of businesses totaling approximately 7% of 2025 annual revenue. - Jim Foster announced his retirement in May, and Birgit H. Gershick will become the next CEO.

DSA: Fourth quarter revenue was $591,600,000, a 3.3% organic decline; full-year revenue had a 2.6% organic decline. RMS: Fourth quarter revenue was $206,300,000, a 0.9% organic decline; full-year revenue saw a 1.2% organic increase. Manufacturing Solutions: Fourth quarter revenue was $196,400,000, a 2.1% organic decline; full-year revenue had a 1.6% organic decline. Details on revenue contribution % are as summarized above.

• In 2026, organic revenue is expected to range from a 1% decrease to at least flat compared to 2025. - The operating margin is expected to improve by 20 to 50 basis points from 19.8% in 2025. - Non - GAAP earnings per share are expected to be in the range of $10.70 to $11.20. - RMS revenue is expected to have a low - to mid - single - digit organic decline. - DSA revenue is expected to be between slightly positive and a low single - digit organic decrease. - The Manufacturing segment's organic revenue growth rate is expected to rebound to a low single - digit increase.

• Uncertainties in the biotech funding environment can impact demand. - Challenges with NAMS, including data availability and proof of concept. - Volatility in cancellations and slippage in the business operations.

Q: Delve into the broader NHP topic, and the dichotomy between RMS and DSA.

A: RMS volume impact is due to timing, while DSA has higher sourcing costs because of more NHP studies than expected.

Q: Regarding backlog and hiring needs.

A: Physical capacity is in good shape currently, and headcount is in sync with demand.

Q: Impact of AI.

A: AI is a NAMS, seen as an enabling technology, not a disruptor.

Q: DSA cancellations.

A: Cancellations are normal and manageable.

Q: Demand in China and biologics.

A: The China business performs well, and biologics returned to growth in the fourth quarter.

Q: Volatility in DSA demand.

A: Attributed to the macro environment, but funding in the biotech industry is improving.

Q: Capital deployment and the opportunity in China.

A: NHP sourcing is in a good state, and capital deployment is balanced.

Q: Client base using NAMS.

A: NAMS are used across the client base, with some being beneficial and utilizable.

Q: Divestiture process.

A: The process is ongoing, and it is hoped to be closed in the first half, with proceeds used strategically.

Q: Compounding effect of NHP insourcing.

A: The KF acquisition is expected to have a $0.60 accretion in 2027.