Full Press Release Details
River Laboratories Announces Fourth-Quarter and Full-Year 2018 Results
and Provides 2019 Guidance
Fourth-Quarter Revenue of $601.5 Million and Full-Year Revenue of $2.27
Fourth-Quarter GAAP Earnings per Share of $1.21 and Non-GAAP Earnings
per Share of $1.49 -
Full-Year GAAP Earnings per Share of $4.59 and Non-GAAP Earnings per
Provides 2019 Guidance -
Announces Binding Offer to Acquire Citoxlab -
WILMINGTON, Mass.--(BUSINESS WIRE)--February 13, 2019--Charles River
Laboratories International, Inc. (NYSE: CRL) today reported its results
for the fourth-quarter and full-year 2018 and provided guidance for
2019. For the quarter, revenue was $601.5 million, an increase of 25.7%
from $478.5 million in the fourth quarter of 2017.
Acquisitions, which included MPI Research and KWS BioTest, contributed
15.7% to consolidated fourth-quarter revenue growth. The impact of
foreign currency translation reduced reported revenue growth by 1.4%.
Excluding the effect of these items, organic revenue growth of 11.4% was
driven by all three business segments.
On a GAAP basis, fourth-quarter net income from continuing operations
attributable to common shareholders was $59.7 million, compared to a net
loss of $29.8 million for the same period in 2017. Fourth-quarter
diluted earnings per share on a GAAP basis were $1.21, compared to a
loss per share of $0.63 for the fourth quarter of 2017. The increase was
primarily driven by last year's GAAP loss per share that resulted from
one-time expenses related to U.S. tax reform, which reduced earnings by
$78.5 million, or $1.66 per share.
On a non-GAAP basis, net income from continuing operations was $73.2
million for the fourth quarter of 2018, an increase of 7.3% from $68.2
million for the same period in 2017. Fourth-quarter diluted earnings per
share on a non-GAAP basis were $1.49, an increase of 6.4% from $1.40 per
share for the fourth quarter of 2017.
The non-GAAP net income and earnings per share increases were driven
primarily by higher revenue, including the contribution from the MPI
acquisition, and operating margin improvement, as well as a lower
tax rate. These increases were partially offset by higher interest
expense and losses on the Company's venture capital investments. The
losses from the Company's venture capital investments were $0.10 per
share in the fourth quarter of 2018, compared to gains of $0.13 in the
fourth quarter of 2017.
James C. Foster, Chairman, President and Chief Executive Officer, said,
"We believe our strong financial performance in 2018 and outlook for
2019 reflect continuing robust industry fundamentals and the benefit of
actions we have taken to enhance our position as the leading early-stage
CRO. By focusing on expanding our global scale and enhancing our
scientific expertise, by improving our operating efficiency, and by
providing a more seamless and flexible client experience, we are able to
provide the individualized support which our clients require to expedite
their drug research efforts and meet their extensive scientific needs."
"The proposed acquisition of Citoxlab would be another strategic
expansion of our portfolio. We believe this acquisition would further
strengthen our Discovery and Safety Assessment business and enhance our
ability to achieve our long-term growth goals," Mr. Foster concluded.
Fourth-Quarter Segment Results
Research Models and Services (RMS)
Revenue for the RMS segment was $128.5 million in the fourth quarter of
2018, an increase of 6.7% from $120.4 million in the fourth quarter of
2017. Organic revenue growth was 8.1%, driven primarily by higher
revenue for research model services, as well as increased demand for
research models in China. Research model services benefited from a large
government contract in the Insourcing Solutions (IS) business, which
commenced in September 2018, and strong client demand in the Genetically
Engineered Models and Services business.
In the fourth quarter of 2018, the RMS segment's GAAP operating margin
increased to 24.6% from 10.5% in the fourth quarter of 2017. The GAAP
operating margin increase was related primarily to an asset impairment
and other charges in the fourth quarter of 2017 associated with the
Company's research model production site in Maryland. On a non-GAAP
basis, the operating margin decreased to 25.1% from 25.9% in the fourth
quarter of 2017. The non-GAAP operating margin decrease was driven
primarily by the large government contract in the Insourcing Solutions
Discovery and Safety Assessment (DSA)
Revenue for the DSA segment was $358.2 million in the fourth quarter of
2018, an increase of 41.5% from $253.2 million in the fourth quarter of
2017. Acquisitions contributed 29.6% to DSA revenue growth, due
primarily to the revenue contribution from MPI Research. Organic revenue
growth of 12.9% was driven by both the Safety Assessment and Discovery
Services businesses. By client segment, the DSA revenue increase was
driven primarily by robust demand from biotechnology clients.
In the fourth quarter of 2018, the DSA segment's GAAP operating margin
increased to 18.8% from 18.5% in the fourth quarter of 2017. On a
non-GAAP basis, the operating margin increased to 23.2% from 21.8% in
the fourth quarter of 2017. The GAAP and non-GAAP operating margin
increases were driven primarily by higher revenue in both the Discovery
Services and Safety Assessment businesses.
Manufacturing Support (Manufacturing)
Revenue for the Manufacturing segment was $114.9 million in the fourth
quarter of 2018, an increase of 9.6% from $104.8 million in the fourth
quarter of 2017. Organic revenue growth was 11.4%, driven primarily by
robust demand in the Microbial Solutions and Biologics Testing Solutions
In the fourth quarter of 2018, the Manufacturing segment's GAAP
operating margin increased to 35.1% from 34.7% in the fourth quarter of
2017. On a non-GAAP basis, the operating margin decreased to 37.4% from
37.6% in the fourth quarter of 2017.
For 2018, revenue increased by 22.0% to $2.27 billion from $1.86 billion
in 2017. Organic revenue growth was 8.7%.
On a GAAP basis, net income from continuing operations attributable to
common shareholders was $224.9 million in 2018, an increase of 82.1%
from $123.5 million in 2017. Diluted earnings per share on a GAAP basis
in 2018 were $4.59, an increase of 80.7% from $2.54 in 2017.
On a non-GAAP basis, net income from continuing operations was $295.4