Full Press Release Details
River Laboratories Announces First-Quarter 2016 Results from Continuing
First-Quarter Revenue of $354.9 Million -
First-Quarter GAAP Earnings per Share of $0.78
Non-GAAP Earnings per Share of $0.98 -
WILMINGTON, Mass.--(BUSINESS WIRE)--May 4, 2016--Charles River
Laboratories International, Inc. (NYSE: CRL) today reported its results
for the first quarter of 2016. For the quarter, revenue from continuing
operations was $354.9 million, an increase of 10.8% from $320.4 million
in the first quarter of 2016. Foreign currency translation reduced
reported revenue growth by 1.6%. On a constant-currency basis, revenue
growth of 12.4% was driven primarily by the Discovery and Safety
Assessment and Manufacturing Support segments. Research Models and
Services revenue also increased. The acquisitions of Celsis, Oncotest,
and Sunrise Farms contributed 3.7% to consolidated first-quarter revenue
growth, both on a reported basis and in constant currency.
On a GAAP basis, net income from continuing operations attributable to
common shareholders for the first quarter of 2016 was $37.2 million, or
$0.78 per diluted share, compared to $31.5 million, or $0.66 per diluted
share, for the first quarter of 2015.
On a non-GAAP basis, net income from continuing operations was $46.5
million for the first quarter of 2016, an increase of 23.8% from $37.6
million for the same period in 2015. First-quarter diluted earnings per
share on a non-GAAP basis were $0.98, an increase of 24.1% compared to
$0.79 per share in the first quarter of 2014. The increase was driven
primarily by higher revenue and operating margin improvement. A gain
from the Company's life science venture capital investments also
contributed $0.04 per share in the first quarter of 2016, compared to a
gain of $0.02 per share for the same period in 2015.
James C. Foster, Chairman, President and Chief Executive Officer, said,
"I am very pleased to say that we are off to a great start in 2016. Our
first-quarter financial results were strong across our three business
segments. In addition to the contribution from acquisitions, revenue
also benefited from high-single-digit organic growth, with the most
significant contribution coming from the Safety Assessment business. We
were also pleased to see 4.6% constant-currency revenue growth in RMS,
with higher sales of models in all geographic regions-North America,
Europe, and Asia-and improvement in the services businesses. Higher
revenue and the benefit of efficiency initiatives drove a 24.1% increase
in non-GAAP earnings per share, to $0.98 in the first quarter of 2016.
As a result of the strong first-quarter performance, we are increasing
our guidance for 2016 non-GAAP earnings per share to a range of $4.32 to
"We remain optimistic about the opportunities for growth in 2016, which
are enhanced by the acquisition of WIL Research. WIL reinforces our
scientific leadership, adding a wealth of talent with deep expertise in
specialty areas. The acquisition of WIL Research is a key element of our
continued ability to support our clients' early-stage drug research
efforts, to achieve our long-term growth goals, and to enhance
shareholder value," Mr. Foster concluded.
First-Quarter Segment Results
Research Models and Services (RMS)
Revenue for the RMS segment was $124.0 million in the first quarter of
2016, an increase of 3.3% from $120.0 million in the first quarter of
2015. Foreign currency translation reduced reported revenue growth by
1.3%. On a constant-currency basis, revenue growth of 4.6% was driven by
higher sales of both research models and research model services in
North America, Europe, and Asia.
In the first quarter of 2016, the RMS segment's GAAP operating margin
was 29.5% compared to 24.0% in the first quarter of 2015. On a non-GAAP
basis, the operating margin increased to 30.0% from 26.3% in the first
quarter of 2015. The RMS operating margin improvement was primarily
attributable to higher revenue, as well as benefits from the Company's
global efficiency initiatives.
Discovery and Safety Assessment (DSA)
Revenue from continuing operations for the DSA segment was $158.0
million in the first quarter of 2016, an increase of 12.8% from $140.0
million in the first quarter of 2015. Foreign currency translation
reduced reported revenue growth by 1.9%. On a constant-currency basis,
revenue growth of 14.7% was driven primarily by double-digit revenue
growth in the Company's Safety Assessment business. The Discovery
Services business also reported higher revenue in the first quarter, due
primarily to the acquisition of Oncotest which contributed 2.1% to DSA
revenue growth. Sales to biotechnology clients continued to drive DSA
In the first quarter of 2016, the DSA segment's GAAP operating margin
was 19.5% compared to 16.8% in the first quarter of 2015. On a non-GAAP
basis, the operating margin increased to 23.3% from 19.8% in the first
quarter of 2015. The non-GAAP operating margin improvement was primarily
driven by higher pricing and capacity utilization for safety assessment
services, as well as a foreign exchange benefit due primarily to a
weaker Canadian dollar, which contributed approximately 160 basis points
Manufacturing Support (Manufacturing)
Revenue for the Manufacturing segment was $72.9 million in the first
quarter of 2016, an increase of 20.7% from $60.4 million in the first
quarter of 2015. Foreign currency translation reduced reported revenue
growth by 1.8%. On a constant-currency basis, revenue growth was 22.5%.
The acquisitions of Celsis and Sunrise Farms contributed 14.8% to
Manufacturing revenue growth in the first quarter of 2016. Robust
revenue growth for the Biologics Testing Solutions (Biologics) business
also contributed to the first-quarter increase.
In the first quarter of 2016, the Manufacturing segment's GAAP operating
margin was 26.7% compared to 27.8% in the first quarter of 2015. On a
non-GAAP basis, the operating margin increased to 31.4% from 29.9% in
the first quarter of 2015, primarily driven by operating margin
improvement in the Biologics and Avian Vaccine businesses.
Updates 2016 Guidance
On February 10, 2016, the Company provided 2016 financial guidance for
revenue growth and non-GAAP earnings per share which included the impact
of the pending WIL Research acquisition. The acquisition of WIL Research
was subsequently completed on April 4, 2016.
The Company is reaffirming its revenue growth guidance for 2016,
including the contribution from WIL Research. The Company is increasing