Company: CRL
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001100682-25-000011
Chunk: 165

Company: CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 165
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912 Interest rate swap— 966 — 966 Total assets measured at fair value$— $41,907 $— $41,907 Other long-term liabilities measured at fair value:Contingent consideration— — 33,265 33,265 Total liabilities measured at fair value$— $— $33,265 $33,265 During fiscal years 2024 and 2023, there were no transfers between fair value levels.Contingent ConsiderationThe following table provides a rollforward of the contingent consideration related to the Company’s acquisitions.Fiscal Year202420232022(in thousands)Beginning balance$33,265 $13,431 $37,244 Additions— 33,265 3,838 Payments— (15,130)(11,476)Total gains or losses (realized/unrealized):Adjustment of previously recorded contingent liability16,046 1,810 (15,340)Foreign currency translation— (111)(835)Ending balance$49,311 $33,265 $13,431 The Company estimates the fair value of contingent consideration obligations through valuation models, such as probability-weighted and option pricing models, that incorporate probability adjusted assumptions and simulations related to the achievement of the milestones and the likelihood of making related payments. The unobservable inputs used in the fair value measurements include the probabilities of successful achievement of certain financial targets, forecasted results or targets, volatility, and discount rates. The remaining maximum potential payments are approximately $55 million, of which the value accrued as of December 28, 2024 is approximately $49 million. As of December 28, 2024 the weighted average probability of 

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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

achieving the maximum target is approximately 90%. The average volatility and weighted average cost of capital is approximately 20% and 8%, respectively. Cash Flow HedgeThe Company is exposed to market fluctuations in interest rates as well as variability in foreign exchange rates. The Company had an interest rate swap with a notional amount of $500 million that matured November 2, 2024 and was utilized to manage interest rate fluctuation related to floating rate borrowings under the revolving credit facility, at a fixed rate of 4.65%. Debt InstrumentsThe book value of the Company’s revolving loans are variable rate loans carried at