Company: CRL
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001100682-25-000021
Chunk: 28

Company: CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Filing Date: 2025-05-07
Form: 10-Q
Item: Item 2
Chunk 28
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 2024, respectively.

In response to recent trends observed across each of our businesses in the global market environment, we have undertaken and will continue to implement restructuring actions at various locations across North America, Europe and Asia. This includes workforce right-sizing actions, resulting in severance and transition costs; and costs related to the consolidation of facilities to optimize our global footprint and drive greater operating efficiency across the company, resulting in asset impairment, accelerated depreciation, and other site consolidation charges. During fiscal year 2023, we began taking restructuring actions as a result of these emerging business trends. We incurred restructuring charges of $23.8 million during the three months ended March 29, 2025 and $107.0 million and $29.7 million during fiscal 2024 and fiscal 2023, respectively. We expect that these 

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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

effectuated actions, as well as other upcoming planned actions designed to optimize our global footprint to drive greater operating efficiency, will result in approximately $225 million of cost savings on an annualized basis, of which approximately $175 million will impact fiscal year 2025.

Results of Operations

Consolidated Results of Operations and Liquidity

Revenue for three months ended March 29, 2025 decreased $27.4 million, or 2.7%, to $984.2 million compared to $1,011.6 million in the corresponding period in 2024. The decrease in revenue was primarily due to our DSA business, which experienced lower volume driven by continued cautious client spending as a result of the biopharmaceutical demand environment, and to a lesser extent driven by declines in both RMS and Manufacturing, when compared to the corresponding periods in 2024.

For the three months ended March 29, 2025, our operating income and operating income as a percentage of revenue were $74.7 million and 7.6% respectively, compared to $126.0 million and 12.5% respectively, in the corresponding period of 2024. The decreases in operating income and operating income as a percentage of revenue for the three months ended March 29, 2025 were primarily due to the revenue impacts described above coupled with accelerated amortization expense recognized as a result of a decrease in the remaining useful life of certain CDMO client relationships due to a loss of key customers, restructuring activities, including asset impairments, and other site consolidation costs, and third-party legal costs in