Full Press Release Details
River Laboratories Announces Fourth-Quarter and Full-Year 2016 Results
from Continuing Operations and Provides 2017 Guidance
Fourth-Quarter Revenue of $466.8 Million and Full-Year 2016 Revenue of
Fourth-Quarter GAAP Earnings per Share of $0.93 and Non-GAAP Earnings
per Share of $1.21 -
Full-Year GAAP Earnings per Share of $3.22 and Non-GAAP Earnings per
Provides 2017 Guidance -
Contract Development and Manufacturing Business for $75 Million -
WILMINGTON, Mass.--(BUSINESS WIRE)--February 14, 2017--Charles River
Laboratories International, Inc. (NYSE: CRL) today reported its results
for the fourth-quarter and full-year 2016 and provided guidance for
2017. For the quarter, revenue from continuing operations was $466.8
million, an increase of 31.9% from $353.9 million in the fourth quarter
of 2015. Revenue growth was driven primarily by the Discovery and Safety
Assessment and Manufacturing Support segments. Research Models and
Services revenue also increased.
The acquisitions of WIL Research, Agilux Laboratories, Blue Stream
Laboratories, and Oncotest contributed 20.9% to consolidated
fourth-quarter revenue growth, both on a reported basis and in constant
currency. The addition of a 53rd week at the end of 2016,
which is periodically required to align to a December 31st
calendar year end, contributed approximately 5.1% to reported
fourth-quarter revenue growth. The impact of foreign currency
translation reduced reported revenue growth by 2.4%. Excluding the
effect of these items, organic revenue growth was 8.3%.
On a GAAP basis, net income from continuing operations attributable to
common shareholders was $44.7 million for the fourth quarter of 2016, an
increase of 36.4% from $32.8 million for the same period in 2015.
Fourth-quarter diluted earnings per share on a GAAP basis were $0.93, an
increase of 34.8% from $0.69 for the fourth quarter of 2015.
On a non-GAAP basis, net income from continuing operations was $58.3
million for the fourth quarter of 2016, an increase of 23.3% from $47.3
million for the same period in 2015. Fourth-quarter diluted earnings per
share on a non-GAAP basis were $1.21, an increase of 21.0% from $1.00
per share for the fourth quarter of 2015. Both the GAAP and non-GAAP
earnings per share increases were driven primarily by the acquisition of
new businesses, notably WIL Research, as well as higher revenue for
A gain from the Company's venture capital investments contributed $0.02
per share in the fourth quarter of 2016, compared to a negligible impact
for the same period in 2015.
James C. Foster, Chairman, President and Chief Executive Officer, said,
"Our fourth-quarter results provided a strong finish to an exceptional
year in which we met our long-term revenue goals for all of our
businesses except Discovery, and our long-term operating margin targets
for the three business segments. We were very pleased that three of our
businesses, Safety Assessment, Microbial Solutions, and Biologics
Testing Solutions, reported low-double-digit organic revenue growth for
the full year. Client demand for our unique portfolio of essential
products and services remained strong across each of our client
segments, particularly for our biotechnology clients, who were the
primary driver of our revenue growth in 2016."
"Our continued investments to broaden our early-stage portfolio, the
scientific expertise of our staff, our focus on productivity and
efficiency initiatives, and our ability to offer flexible partnership
structures are the primary reasons that we are the partner of choice for
many of our clients. Based on our view of the opportunities in 2017, we
believe we will again deliver high single-digit organic revenue growth
and earnings per share growth at a faster rate than revenue," Mr. Foster
Fourth-Quarter Segment Results
Research Models and Services (RMS)
Revenue for the RMS segment was $124.7 million in the fourth quarter of
2016, an increase of 9.5% from $113.8 million in the fourth quarter of
2015. Organic revenue growth was 5.7%. Revenue growth was driven
primarily by higher sales of research model services, and sales of
research models also increased.
In the fourth quarter of 2016, the RMS segment's GAAP operating margin
increased to 26.7% from 24.1% in the fourth quarter of 2015. On a
non-GAAP basis, the operating margin increased to 27.3% from 25.4% in
the fourth quarter of 2015. Both the GAAP and non-GAAP operating margin
increases were due primarily to higher sales volume and the benefit of
efficiency initiatives.
Discovery and Safety Assessment (DSA)
Revenue from continuing operations for the DSA segment was $241.7
million in the fourth quarter of 2016, an increase of 50.6% from $160.5
million in the fourth quarter of 2015. Growth was driven primarily by
the acquisitions of WIL Research, Agilux Laboratories, and Oncotest,
which contributed 41.6% to DSA revenue growth. Organic revenue growth
was 7.9%. Low-double-digit growth in the legacy Safety Assessment
business was partially offset by lower revenue for the legacy Discovery
Services business, which declined due primarily to softer demand from
global clients for Early Discovery services. Robust demand from
biotechnology clients continued to drive revenue growth in the DSA
In the fourth quarter of 2016, the DSA segment's GAAP operating margin
declined to 18.1% from 23.1% in the fourth quarter of 2015. The margin
decline was due to costs associated with the evaluation and integration
of acquisitions, including amortization of intangible assets, as well as
the benefit from a tax law change in Quebec in the fourth quarter of
2015. On a non-GAAP basis, the operating margin decreased to 23.8% from
27.1% in the fourth quarter of 2015, due primarily to the tax law change
in Quebec, which benefited both the GAAP and non-GAAP DSA operating
margin by approximately 230 basis points in the fourth quarter of 2015.
The acquisition of WIL reduced the fourth-quarter operating margin by
approximately 100 basis points, and foreign exchange benefited the DSA
operating margin by approximately 80 basis points due primarily to a
weaker British pound.
Manufacturing Support (Manufacturing)
Revenue for the Manufacturing segment was $100.3 million in the fourth
quarter of 2016, an increase of 26.2% from $79.5 million in the fourth
quarter of 2015. The acquisitions of Blue Stream Laboratories and WIL
Research's contract development and manufacturing (CDMO) services