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UNITED STATES
SECURITES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q

|/x/ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15() OF THE
SECURITIES EXCHANGE ACT OF 1934
|--- | --------------------------------------------------------------------------------------

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001
OR

|/ / | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15() OF THE
SECURITIES EXCHANGE ACT OF 1934
|--- | ---------------------------------------------------------------------------------------

Commission file number 333-91845

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CHARLES RIVER LABORATORIES, INC.

(Exact Name of Registrant as specified in its Charter)

DELAWARE(State of Incorporation)

76-0509980(I.R.S. Employer Identification No.)251 BALLARDVALE STREET, WILMINGTON, MASSACHUSETTS(Address of Principal Executive Offices)

01887(Zip Code)


978-658-6000(Registrant's Telephone Number, Including Area Code)

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Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes /x/  No / /

As
of July 28, 2001 there were 1,000 shares of the registrant's common stock outstanding

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Charles River Laboratories, Inc.
Form 10-Q
For the Quarterly Period Ended June 30, 2001

Table of Contents

|                              |  |                                          |  |                                                                                                                      |  | Page
|----------------------------- |  | ---------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------- |  | ----
|Part I. Financial Information |  |                                         
|                              |  | Item 1.                                  |  | Financial Statements:                                                                                                |  |     
|                              |  |                                          |  | Condensed Consolidated Statements of Income (Unaudited) for the three months ended June 30, 2001 and June 24, 2000   |  | 3   
|                              |  |                                          |  | Condensed Consolidated Statements of Income (Unaudited) for the six months ended June 30, 2001 and June 24, 2000     |  | 4   
|                              |  |                                          |  | Condensed Consolidated Balance Sheets as of June 30, 2001 (Unaudited) and December 30, 2000                          |  | 5   
|                              |  |                                          |  | Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2001 and June 24, 2000 |  | 6   
|                              |  |                                          |  | Notes to Unaudited Condensed Consolidated Interim Financial Statements                                               |  | 7   
|                              |  | Item 2.                                  |  | Management's Discussion and Analysis of Financial Condition and Results of Operations                                |  | 14  
|Part II Other Information     |  |                                         
|                              |  | Item 6. Exhibits and Reports on Form 8-K |  | 19                                                                                                                  
|                              |  |                                          |  | Signature                                                                                                            |  | 22  

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CHARLES RIVER LABORATORIES, INC.        CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)        FOR THE THREE MONTHS ENDED JUNE 30, 2001 AND JUNE 24, 2000        (dollars in thousands)

|                                                                                                        |                                          | Three Months Ended |        
|------------------------------------------------------------------------------------------------------- | ---------------------------------------- | ------------------ | -------
|
|Net sales related to products                                                                           |                                          | $                  | 60,644 
|Net sales related to services                                                                           |                                          |                    | 56,176 
|                                                                                                        |                                          |                    |        
|Total net sales                                                                                         |                                          |                    | 116,820
|Costs and Expenses                                                                                      |                                          |                    |        
|                                                                                                        | Cost of products sold                    |                    |        
|                                                                                                        | Cost of services provided                |                    |        
|                                                                                                        | Selling, general and administrative      |                    |        
|                                                                                                        | Amortization of goodwill and intangibles |                    |        
|                                                                                                        |                                          |                    |        
|Operating income                                                                                        |                                          |                    | 24,492 
|Other income (expense)                                                                                  |                                          |                    |        
|                                                                                                        | Interest income                          |                    |        
|                                                                                                        | Interest expense                         |                    |        
|                                                                                                        | Other income (expense)                   |                    |        
|                                                                                                        |                                          |                    |        
|Income before income taxes, minority interests, earnings from equity investments and extraordinary item |                                          |                    | 18,776 
|Provision for (benefit from) income taxes                                                               |                                          |                    | 7,659  
|                                                                                                        |                                          |                    |        
|Income before minority interests, earnings from equity investments and extraordinary item               |                                          |                    | 11,117 
|Minority interests                                                                                      |                                          |                    | (652   
|Earnings from equity investments, net of tax                                                            |                                          |                    | 136    
|                                                                                                        |                                          |                    |        
|Income before extraordinary item                                                                        |                                          |                    | 10,601 
|Extraordinary loss, net of tax benefit of $852                                                          |                                          |                    | (1,583 
|                                                                                                        |                                          |                    |        
|Net Income                                                                                              |                                          | $                  | 9,018  
|                                                                                                        |                                          |                    |        

See
Notes to Condensed Consolidated Financial Statements

3

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CHARLES RIVER LABORATORIES, INC.        CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)        FOR THE SIX MONTHS ENDED JUNE 30, 2001 AND JUNE 24, 2000        (dollars in thousands)

|                                                                                                        |                                          | Six Months Ended |        
|------------------------------------------------------------------------------------------------------- | ---------------------------------------- | ---------------- | -------
|
|Net sales related to products                                                                           |                                          | $                | 122,722
|Net sales related to services                                                                           |                                          |                  | 93,129 
|                                                                                                        |                                          |                  |        
|Total net sales                                                                                         |                                          |                  | 215,851
|Costs and Expenses                                                                                      |                                          |                  |        
|                                                                                                        | Cost of products sold                    |                  |        
|                                                                                                        | Cost of services provided                |                  |        
|                                                                                                        | Selling, general and administrative      |                  |        
|                                                                                                        | Amortization of goodwill and intangibles |                  |        
|                                                                                                        |                                          |                  |        
|Operating income                                                                                        |                                          |                  | 43,866 
|Other income (expense)                                                                                  |                                          |                  |        
|                                                                                                        | Interest income                          |                  |        
|                                                                                                        | Interest expense                         |                  |        
|                                                                                                        | Other income                             |                  |        
|                                                                                                        |                                          |                  |        
|Income before income taxes, minority interests, earnings from equity investments and extraordinary item |                                          |                  | 32,000 
|Provision for income taxes                                                                              |                                          |                  | 13,214 
|                                                                                                        |                                          |                  |        
|Income before minority interests, earnings from equity investments and extraordinary item               |                                          |                  | 18,786 
|Minority interests                                                                                      |                                          |                  | (1,216 
|Earnings from equity investments, net of tax                                                            |                                          |                  | 219    
|                                                                                                        |                                          |                  |        
|Income before extraordinary item                                                                        |                                          |                  | 17,789 
|Extraordinary loss, net of tax benefit of $980                                                          |                                          |                  | (1,820 
|                                                                                                        |                                          |                  |        
|Net Income                                                                                              |                                          | $                | 15,969 
|                                                                                                        |                                          |                  |        

See
Notes to Condensed Consolidated Financial Statements

4

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CHARLES RIVER LABORATORIES, INC.        CONDENSED CONSOLIDATED BALANCE SHEETS        (dollars in thousands)

|                                                                                                   |                                                                      | June 30, 2001 |                                            | December 30, 2000 |  
|-------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ------------- | ------------------------------------------ | ----------------- | -
|
|Assets                                                                                             |                                                                      |               |                                            |                   |  
|Current assets                                                                                     |                                                                      |               |                                            |                   |  
|                                                                                                   | Cash and cash equivalents                                            |               | $                                          | 28,416            |  
|                                                                                                   | Trade receivables, less allowances of $1,016 and $1,036 respectively |               |                                            | 87,271            |  
|                                                                                                   | Inventories                                                          |               |                                            | 36,607            |  
|                                                                                                   | Deferred income taxes                                                |               |                                            | 2,055             |  
|                                                                                                   | Due from affiliates                                                  |               |                                            | 83                |  
|                                                                                                   | Other current assets                                                 |               |                                            | 7,223             |  
|                                                                                                   |                                                                      |               |                                            |                   |  
|                                                                                                   |                                                                      |               | Total current assets                       |                   |  
|Property, plant and equipment, net                                                                 |                                                                      |               | 141,807                                    |                   |  
|Goodwill and other intangibles, less accumulated amortization of $14,601 and $10,810, respectively |                                                                      |               | 89,480                                     |                   |  
|Investments in affiliates                                                                          |                                                                      |               | 2,799                                      |                   |  
|Deferred tax asset                                                                                 |                                                                      |               | 82,669                                     |                   |  
|Deferred financing costs                                                                           |                                                                      |               | 7,431                                      |                   |  
|Other assets                                                                                       |                                                                      |               | 17,300                                     |                   |  
|                                                                                                   |                                                                      |               |                                            |                   |  
|                                                                                                   |                                                                      |               | Total assets                               |                   | $
|                                                                                                   |                                                                      |               |                                            |                   |  
|Liabilities and Shareholders' Equity                                                               |                                                                      |               |                                            |                   |  
|Current liabilities                                                                                |                                                                      |               |                                            |                   |  
|                                                                                                   | Current portion of long-term debt                                    |               | $                                          | 685               |  
|                                                                                                   | Current portion of capital lease obligations                         |               |                                            | 164               |  
|                                                                                                   | Accounts payable                                                     |               |                                            | 9,501             |  
|                                                                                                   | Accrued compensation                                                 |               |                                            | 20,789            |  
|                                                                                                   | Deferred income                                                      |               |                                            | 15,953            |  
|                                                                                                   | Accrued interest                                                     |               |                                            | 3,440             |  
|                                                                                                   | Accrued liabilities                                                  |               |                                            | 24,950            |  
|                                                                                                   | Accrued income taxes                                                 |               |                                            | 4,981             |  
|                                                                                                   |                                                                      |               |                                            |                   |  
|                                                                                                   |                                                                      |               | Total current liabilities                  |                   |  
|Long-term debt                                                                                     |                                                                      |               | 201,280                                    |                   |  
|Capital lease obligations                                                                          |                                                                      |               | 428                                        |                   |  
|Accrued ESLIRP                                                                                     |                                                                      |               | 10,641                                     |                   |  
|Other long-term liabilities                                                                        |                                                                      |               | 3,312                                      |                   |  
|                                                                                                   |                                                                      |               |                                            |                   |  
|                                                                                                   |                                                                      |               | Total liabilities                          |                   |  
|                                                                                                   |                                                                      |               |                                            |                   |  
|Commitments and contingencies                                                                      |                                                                      |               |                                            |                   |  
|Minority interests                                                                                 |                                                                      |               | 12,453                                     |                   |  
|Shareholders' equity                                                                               |                                                                      |               |                                            |                   |  
|                                                                                                   | Common stock, $1 par value, 1000 shares authorized and outstanding   |               |                                            | 1                 |  
|                                                                                                   | Capital in excess of par value                                       |               |                                            | 316,451           |  
|                                                                                                   | Retained earnings                                                    |               |                                            | (101,720          | )
|                                                                                                   | Loans to officers                                                    |               |                                            | (341              | )
|                                                                                                   | Accumulated other comprehensive income                               |               |                                            | (19,827           | )
|                                                                                                   |                                                                      |               |                                            |                   |  
|                                                                                                   |                                                                      |               | Total shareholders' equity                 |                   |  
|                                                                                                   |                                                                      |               |                                            |                   |  
|                                                                                                   |                                                                      |               | Total liabilities and shareholders' equity |                   | $
|                                                                                                   |                                                                      |               |                                            |                   |  

See
Notes to Condensed Consolidated Financial Statements

5

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CHARLES RIVER LABORATORIES, INC.        CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)        (dollars in thousands)

|                                                             |                                                                                   | Six Months Ended                                                 |       
|------------------------------------------------------------ | --------------------------------------------------------------------------------- | ---------------------------------------------------------------- | ------
|
|Cash flows relating to operating activities                  |                                                                                   |                                                                  |       
|                                                             | Net income                                                                        |                                                                  | $     
|                                                             | Adjustments to reconcile net income to net cash provided by operating activities: |                                                                  |       
|                                                             |                                                                                   | Depreciation and amortization                                    |       
|                                                             |                                                                                   | Amortization of debt issuance costs and discounts                |       
|                                                             |                                                                                   | Extraordinary loss, net of tax                                   |       
|                                                             |                                                                                   | Earnings from equity investments                                 |       
|                                                             |                                                                                   | Minority interests                                               |       
|                                                             |                                                                                   | Deferred income taxes                                            |       
|                                                             |                                                                                   | Loss on property, plant, and equipment write-downs and disposals |       
|                                                             |                                                                                   | Other non-cash items                                             |       
|                                                             | Changes in assets and liabilities:                                                |                                                                  |       
|                                                             |                                                                                   | Trade receivables                                                |       
|                                                             |                                                                                   | Inventories                                                      |       
|                                                             |                                                                                   | Due from affiliates                                              |       
|                                                             |                                                                                   | Other current assets                                             |       
|                                                             |                                                                                   | Other assets                                                     |       
|                                                             |                                                                                   | Accounts payable                                                 |       
|                                                             |                                                                                   | Accrued compensation                                             |       
|                                                             |                                                                                   | Deferred income                                                  |       
|                                                             |                                                                                   | Accrued interest                                                 |       
|                                                             |                                                                                   | Accrued liabilities                                              |       
|                                                             |                                                                                   | Accrued income taxes                                             |       
|                                                             |                                                                                   | Accrued ESLIRP                                                   |       
|                                                             |                                                                                   | Other long-term liabilities                                      |       
|                                                             |                                                                                   |                                                                  |       
|                                                             | Net cash provided by operating activities                                         |                                                                  |       
|                                                             |                                                                                   |                                                                  |       
|Cash flows relating to investing activities                  |                                                                                   |                                                                  |       
|                                                             | Capital expenditures                                                              |                                                                  |       
|                                                             | Contingent payments for prior year acquisitions                                   |                                                                  |       
|                                                             | Acquisition of businesses, net of cash acquired                                   |                                                                  |       
|                                                             | Proceeds from sale of animal colony                                               |                                                                  |       
|                                                             |                                                                                   |                                                                  |       
|                                                             | Net cash used in investing activities                                             |                                                                  |       
|                                                             |                                                                                   |                                                                  |       
|Cash flows relating to financing activities                  |                                                                                   |                                                                  |       
|                                                             | Proceeds from long term debt and revolving credit facility                        |                                                                  |       
|                                                             | Payments on long-term debt and revolving credit facility                          |                                                                  |       
|                                                             | Premium paid for early retirement of debt                                         |                                                                  |       
|                                                             | Payment of deferred financing costs                                               |                                                                  |       
|                                                             | Payments on capital lease obligations                                             |                                                                  |       
|                                                             | Capital contribution from parent                                                  |                                                                  |       
|                                                             | Payments on officer loans                                                         |                                                                  |       
|                                                             |                                                                                   |                                                                  |       
|                                                             | Net cash provided by financing activities                                         |                                                                  |       
|                                                             |                                                                                   |                                                                  |       
|Effect of exchange rate changes on cash and cash equivalents |                                                                                   |                                                                  | (1,585
|                                                             |                                                                                   |                                                                  |       
|Net change in cash and cash equivalents                      |                                                                                   |                                                                  | (4,713
|Cash and cash equivalents, beginning of period               |                                                                                   |                                                                  | 33,129
|                                                             |                                                                                   |                                                                  |       
|Cash and cash equivalents, end of period                     |                                                                                   | $                                                                | 28,416
|                                                             |                                                                                   |                                                                  |       
|Supplemental cash flow information                           |                                                                                   |                                                                  |       
|                                                             | Cash paid for interest                                                            |                                                                  | $     
|                                                             | Cash paid for taxes                                                               |                                                                  |       

See Notes to Condensed Consolidated Financial Statements

6

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CHARLES RIVER LABORATORIES, INC.        NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS        (dollars in thousands)

1.  Basis of Presentation

The condensed consolidated interim financial statements are unaudited, and certain information and footnote disclosure related thereto normally included in
financial statements prepared in accordance with generally accepted accounting principles in the United States, have been omitted in accordance with Rule 10-01 of
Regulation S-X. In the opinion of management, the accompanying unaudited condensed consolidated financial statements were prepared following the same policies and procedures used in
the preparation of the audited financial statements and reflect all adjustments (consisting of normal recurring adjustments) considered necessary to present fairly the financial position and results
of operations of Charles River Laboratories, Inc. ("the Company"). The results of operations for the interim periods are not necessarily indicative of the results for the entire fiscal year.
These condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10K for the year ended December 30, 2000.

Certain
amounts in prior year financial statements and related notes have been reclassified to conform with current year presentation.

2.  Charles River Laboratories International, Inc.'s Public Offerings

On March 21, 2001, Charles River International, Inc. ("CRLI"), our parent company, consummated a public offering ("the Follow-on
Offering") of 8,050,000 shares of its common stock at a price of $19.00 per share. CRLI issued 3,500,000 shares of common stock and existing shareholders sold an additional 4,550,000 shares, which
included the exercise of the over-allotment option of 1,050,000 shares. CRLI received proceeds of $62,222, net of underwriter's commissions and follow-on offering costs. These
proceeds were contributed to the Company and recorded as a capital contribution. The Company has used $61,923 of the contribution to repay existing debt, including issuance discounts. A premium of
$210 was paid as a result of the early repayment of a portion of the convertible note. The uses of cash to repay debt are as follows:

Repayment of term loan A

$
6,000Repayment of term loan B


18,000Repayment of term loan C


6,000Repayment of revolver


17,000Repayment of convertible note*


9,210Repayment of other debt and early paydown of capital lease obligations


5,713$
61,923




An
extraordinary loss before tax of $2,800 was recorded due to the write off of issuance discounts ($1,653) and deferred financing costs ($937) and the payment of a
premium relating to the early extinguishment of debt ($210). This extraordinary loss has been recorded net of a tax benefit of $980.

On
June 28, 2000, CRLI consummated an initial public offering (the "IPO") of 16,100,000 shares of its common stock at a price of $16.00 per share. CRLI used part of the
proceeds to make a capital contribution of $122,288 to the Company. The Company used the contribution plus cash on hand of $300 to repay $115,500 of its existing debt, including issuance discounts,
and to pay premiums of $7,088.

7

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3.  Acquisitions and Disposals

Acquisitions

On January 8, 2001, the Company purchased 100% of the common stock of Pathology Associates International Corporation ("PAI"). Consideration, including
acquisition expenses, of $35,238 was paid with respect to this acquisition consisting of $25,557 in cash and a $12,000 callable convertible note. The convertible note has a five year term and bears
interest at 2% per annum. As the stated interest
rate attached to this $12,000 note is lower than the prevailing borrowing rate available to the Company, a discount of $2,319, which is being amortized over the life of the note, was recorded upon
issuance. Consideration of $9,681 was recorded with respect to the convertible note. Under certain conditions, the note is convertible into shares of CRLI's common stock at a premium to CRLI's stock
price on the date the note was issued. During the second quarter of 2001, the Company repaid $9,000, including issuance discounts of $1,653 of the convertible note. The cash consideration was funded
in part through a $15,000 drawdown from the Company's revolving credit facility. This acquisition was recorded as a purchase business combination and the Company is consolidating the operations of PAI
from the date of acquisition.

Effective
February 27, 2001 the Company acquired Primedica Corporation ("Primedica") for consideration, including acquisition expenses, of $51,107. Consideration was comprised
of $25,708 of cash, $16,375 of CRLI common stock and $9,024 in assumed debt. Consideration paid in the form of CRLI common stock was recorded in the Company's Condensed Consolidated Interim Financial
Statements as a capital contribution from parent. This acquisition was recorded as a purchase business combination and the Company is consolidating the operations of Primedica from the date of
acquisition. In connection with the Primedica acquisition the Company amended its senior credit facility to add a $25,000 Term Loan C and to increase the interest rate on the Term Loan A. The interest
rate on the Term Loan A, as amended, and the Term Loan C is based on the LIBOR rate plus 1.75% and 3.25%, respectively.

As
of June 30, 2001, the Company has finalized the purchase price allocation associated with the PAI acquisition, however, the Primedica purchase price allocation will be
finalized by the end of the fiscal year. The Company's allocation of purchase price for these acquisitions, based on valuations, of which Primedica's valuation has not been finalized, is as follows:

PAI

PrimedicaNet current assets

$
3,126

$
6,415Property, plant and equipment


1,276


24,637Non-current assets


159


35Non-current liabilities





(859
)Estimated fair value, net tangible assets acquired


4,561


30,228Goodwill and other intangible assets


30,677


20,879Consideration


35,238


51,107Less: assumed debt





(9,024
)$
35,238

$
42,083


8

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Net
current assets in the above preliminary purchase price allocation includes a $530 severance liability recorded in accordance with EITF 95-3
"Recognition of Liabilities in Connection with a Purchase Business Combination" ("EITF 95-3"). This liability relates to severance benefits to be provided to
certain Primedica employees. Approximately $111 of these severance benefits were paid in the second quarter of 2001. The remaining $419 will be paid by the end of fiscal 2002.

Goodwill
and other intangible assets recorded in the accompanying condensed consolidated interim financial statements associated with these acquisitions are being amortized over their
estimated useful lives ranging from 2 to 20 years.

The
following selected unaudited pro forma consolidated results of operations are presented as if each of the acquisitions had occurred as of the beginning of the period immediately
preceding the period of acquisition after giving effect to certain adjustments for the amortization of goodwill, additional interest expense and related income tax effects. The pro forma data is for
informational purposes only and does not necessarily reflect the results of operations had the companies operated as one during the period. No effect has been given for synergies, if any, that may
have been realized through the acquisitions.

Six Months EndedJune 30, 2001

June 24, 2000Net sales

$
228,019

$
196,812Income before extraordinary item


17,582


6,971Net income


15,762


6,971


Disposals

During the fourth quarter of 2000, the Company recorded a pre-tax restructuring charge of $1,290 associated with the closing of a facility in
France. As of December 31, 2000, $1,078 of this charge was unpaid and included in the consolidated balance sheet as an accrued liability. In the first and second quarter of 2001 the Company
recorded additional charges of $979 relating to additional severance payments negotiated with employees following labor disputes arising in the first quarter. These charges have been recorded in
selling, general and administrative expenses in the condensed consolidated interim statements of income. A summary of the activities associated with these restructuring reserves is as follows:

Employee
Separations

Other

TotalDecember 30, 2000

$
993

$
85

$
1,078Additional charges recorded  through the second quarter 2001


979





979Amounts paid  through the second quarter 2001


(81
)

(66
)

(147
)June 30, 2001

$
1,891

$
19

$
1,910


9

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4.  Supplemental Balance Sheet Information

The composition of inventories is as follows:

June 30, 2001

December 30, 2000Raw materials and supplies

$
4,175

$
4,052Work in process


3,364


1,530Finished products


29,068


28,928Inventories

$
36,607

$
34,510


Inventories
are stated at the lower of cost or market. Cost is determined principally on the average cost method. Costs for large animals are accumulated in inventory
until the large animals are sold.

The
composition of property, plant and equipment is as follows:

June 30, 2001

December 30, 2000Land

$
8,985

$
9,367Buildings


145,658


142,569Machinery and equipment


106,921


95,407Leasehold improvements


16,858


5,747Furniture and fixtures


2,551


1,992Vehicles


2,353


2,378Construction in progress


9,009


5,102292,335


262,562Less accumulated depreciation


(150,528
)

(145,561
)Net property, plant and equipment

$
141,807

$
117,001


10

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CHARLES RIVER LABORATORIES, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (Continued)

(dollars in thousands)

5.  Income Taxes

The provision for income taxes recorded for the six months ended June 24, 2000 included a tax benefit of $4,762, which was the result of the Company
reassessing the valuation allowance relating to state income taxes associated with the deferred tax asset. This reassessment was a result of the use of proceeds from CRLI's IPO to repay indebtedness,
which significantly reduced the Company's interest costs.

6.  Commitments and Contingencies

Various lawsuits, claims and proceedings of a nature considered normal to its business are pending against the Company. In the opinion of management, the
outcome of such proceedings and litigation currently pending will not materially affect the Company's condensed consolidated financial statements.

On
April 27, 2001, the Company's French subsidiaries obtained a favorable legal judgement in a contract dispute, with a damages award of 26,500 French Francs or approximately
$3,500. The defendant has appealed the decision and no amounts have been recorded as of June 30, 2001 with respect to this judgement.

The
Company is currently under a court order issued in June 1997 to remove its large animal operations from two islands located in the Florida Keys and to refoliate the
islands. The Company removed its large animal operations from the island in the first quarter of 2000. The Company continues to hold discussions with the state of Florida and federal authorities
regarding the extent of refoliation required on the islands and believes the reserves recorded in the accompanying condensed consolidated financial statements are sufficient to provide for the
estimated exposure in connection with the refoliation. The Company has provided a letter of credit in regards to the completion of the refoliation on the island for $350.

7.  Business Segment Information

The following table presents sales and other financial information by product line segment for the three and six month periods ended June 30, 2001 and
June 24, 2000. Sales to unaffiliated customers represent net sales originating in entities primarily engaged in either research models or biomedical products and services.

|                                 |                               | Three Month Period Ended |   | Six Month Period Ended
|-------------------------------- | ----------------------------- | ------------------------ | - | ----------------------
|
|Research Models                  |                               |                          |   |                       
|                                 | Net sales                     |                          | $ | 48,013                
|                                 | Gross margin                  |                          |   | 20,917                
|                                 | Operating income              |                          |   | 13,681                
|                                 | Depreciation and amortization |                          |   | 2,331                 
|                                 | Capital expenditures          |                          |   | 2,479                 
|Biomedical Products and Services |                               |                          |   |                       
|                                 | Net sales                     |                          |   | 68,807                
|                                 | Gross margin                  |                          |   | 22,853                
|                                 | Operating income              |                          |   | 12,476                
|                                 | Depreciation and amortization |                          |   | 4,259                 
|                                 | Capital expenditures          |                          |   | 4,994                 

11

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The
net sales for the three months ended June 24, 2000 reported above differ from the net sales previously reported on Form 10-Q filed for the second
quarter ended June 24, 2000 by $2,839 and $494 for Research Models and Biomedical Products and Services, respectively. The net sales for the six months ended June 24, 2000 reported above
differ from the net sales previously reported by $5,513 and $1,022 for Research Models and Biomedical Products and Services, respectively. These amounts have been reclassified from cost of sales to
net sales in accordance with Emerging Issues Task Force Issue 00-10 "Accounting for Shipping and Handling Fees and Costs" (Refer to Note 1 to the Consolidated Financial Statements
for the year ended December 30, 2000 filed on SEC Form 10-K.)

In
addition, management has revised how it classifies certain European services within the existing business segments, which resulted in a reclassification of $2,609 and $5,225 of net
sales from Research Models to Biomedical Products and Services for the three and six month periods ended June 24, 2000, respectively. Furthermore, these reclassifications resulted in operating
income shifting from Research Models to Biomedical Products and Services for the three and six month periods ended June 24, 2000 by $493 and $1,189, respectively.

Total
assets attributable to the research models segment as of June 30, 2001 and December 30, 2000 were $289,199 and $300,107, respectively. Total assets attributable to
the biomedical products and services segment as of June 30, 2001 and December 30, 2000 were $213,942 and $96,845, respectively.

A
reconciliation of segment operating income to consolidated operating income is as follows:

|                               |  | Three Month Period Ended |        | Six Month Period Ended |  
|------------------------------ |  | ------------------------ | ------ | ---------------------- | -
|
|Total segment operating income |  | $                        | 26,157 |                        | $
|Unallocated corporate overhead |  |                          | (1,665 | )                      |  
|                               |  |                          |        |                        |  
|Consolidated operating income  |  | $                        | 24,492 |                        | $
|                               |  |                          |        |                        |  

8.  Comprehensive Income

The components of comprehensive income for the three and six month periods ended June 30, 2001 and June 24, 2000 are set forth below:

|                             |  | Three Month Period Ended |       | Six Month Period Ended |  
|---------------------------- |  | ------------------------ | ----- | ---------------------- | -
|
|Net income                   |  | $                        | 9,018 |                        | $
|Foreign currency translation |  |                          | (853  | )                      |  
|                             |  |                          |       |                        |  
|Comprehensive income         |  | $                        | 8,165 |                        | $
|                             |  |                          |       |                        |  

9.  Recently Issued Accounting Standards

In July 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141 (FAS 141), "Business
Combinations" and No. 142 (FAS 142), "Goodwill and Other Intangible Assets." FAS 141 supercedes Accounting Principles Board Opinion No. 16, "Business Combinations."
FAS 141 requires that the purchase method of accounting be used for all business

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combinations initiated after June 30, 2001, establishes specific criteria for the recognition of intangible assets separately from goodwill, and requires that unallocated negative goodwill be
written off immediately as an extraordinary gain instead of being deferred and amortized. Provisions of FAS 141 will be effective for the Company's business acquisitions that are consummated
after July 1, 2001. FAS 142 supercedes Accounting Principles Board Opinion No. 17, "Intangible Assets," and addresses the accounting for goodwill and intangible assets subsequent
to their acquisition. Under FAS 142, goodwill and indefinite lived intangible assets will no longer be amortized but will be tested for impairment at least annually at the reporting unit level.
In addition, the amortization period of intangible assets with finite lives will no longer be limited to forty years. The general provisions of FAS 142 will be effective for the Company as of
the beginning of fiscal 2002. However, certain provisions will be effective for all business acquisitions consummated after June 30, 2001. Management believes the adoption of FAS 142 in
fiscal 2002 will result in a significant decrease in amortization of goodwill and intangibles on the consolidated statement of income and is currently in the process of quantifying the impact.

10.  Subsequent Events

On July 20, 2001, we completed an acquisition of 100% of the common stock of Genetic Models, Inc. for cash consideration of $4,000. This
acquisition will be recorded as a purchase business combination in the third quarter of 2001.

On
July 25, 2001, CRLI consummated a public offering of 8,000,000 shares of common stock at a price of $29.00 per share. In the offering, CRLI issued 2,000,000 shares of common
stock and existing shareholders sold 6,000,000 shares. On July 30, 2001 existing shareholders sold an additional 724,700
shares of common stock through the exercise of the underwriters' overallotment option. CRLI received proceeds of approximately $55,216, net of the underwriters' commission. CRLI plans to use the
proceeds to repay a portion of our debt, retire obligations incurred in connection with recent acquisitions and for general corporate purposes.

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Management's Discussion and Analysis of Financial Condition and Results of Operations

Six Months ended June 30, 2001 Compared to the Six Months ended June 24, 2000

Net Sales.Net sales for the six months ended June 30, 2001 were $215.9 million,
an increase of $66.0 million, or 44.0%, from $149.9 million for the six months ended June 24, 2000. On a pro forma basis, taking into effect our acquisitions of PAI and Primedica
and excluding the negative impact of currency, our net sales increased by 15.0%.

Research Models.Net sales of research models for the six months ended June 30, 2001 were $97.5 million,
an increase of $10.1 million, or 11.6%, from $87.4 million for the six months ended June 24, 2000. Small animal research model sales increased in North America by 13.0% due to
improved pricing, a shift to higher priced specialty units and an increase in unit volume. Excluding the negative impact of currency translation of $2.1 million, small animal research model
sales in Europe increased 10.1%. Small animal research model sales in Japan, which we began consolidating during the first quarter of 2000, were $21.8 million for the six months ended
June 30, 2001. Our large animal breeding and import conditioning business sales decreased by $2.3 million for the six months ended June 30, 2001 due to the closure of our
conditioning facility in the UK during the second quarter of 2000 and the sale of our Florida breeding colony, which was sold in the first quarter of 2000.

Biomedical Products and Services.Net sales of biomedical products and services for the six months ended
June 30, 2001 were $118.4 million, an increase of $55.9 million, or 89.4%, from $62.5 million for the six months ended June 24, 2000. We acquired two businesses
during the first quarter of 2001, Pathology Associates International Corporation ("PAI") on January 8 and Primedica Corporation ("Primedica") on February 27, which contributed
$49.2 million of sales in the six months ended June 30, 2001.

Cost of Products Sold and Services Provided.Cost of products sold and services provided for
the six months ended June 30, 2001 was $135.4 million, an increase of $45.0 million, or 49.8%, from $90.4 million for the six months ended June 24, 2000. Cost of
products sold and services provided for the six months ended June 30, 2001 were 62.7% of the net sales compared to 60.3% for the six months ended June 24, 2000 primarily due to the shift
in sales mix and our recent acquisitions.

Research Models.Cost of products sold and services provided for research models for the six months ended
June 30, 2001 was $56.0 million, an increase of $4.9 million, or 9.6%, compared to $51.1 million for the six months ended June 24, 2000. Cost of products sold and
services provided for the six months ended June 30, 2001 improved to 57.4% of net sales compared to 58.5% of net sales for the six months ended June 24, 2000. Cost of products sold and
services provided increased at a lower rate than net sales due to the more favorable product mix, improved pricing as well as improved capacity utilization, principally in our North America and Japan
regions.

Biomedical Products and Services.Cost of products sold and services provided for biomedical products and services for
the six months ended June 30, 2001 was $79.4 million, an increase of $40.1 million compared to $39.3 million for the six months ended June 24, 2000. Cost of products
sold and services provided as a percentage of net sales increased to 67.1% for the six months ended June 30, 2001 from 62.9% for the six months ended June 24, 2000. Cost of products sold
and services provided increased as a percentage of sales for the six months ended June 30, 2001 due to the addition of PAI and Primedica. Although PAI and Primedica's current gross margins are
lower than the gross margins of our other biomedical products and services businesses, they have improved since the time of acquisition.

Selling, General and Administrative Expenses.Selling, general and administrative expenses for
the six months ended June 30, 2001 were $32.7 million, an increase of $8.5 million, or 35.1%, from $24.2 million for the six months ended June 24, 2000. Selling,
general and administrative expenses for

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the six months ended June 30, 2001 were 15.1% of net sales compared to 16.1% of net sales for the six months ended June 24, 2000.

Research Models.Selling, general and administrative expenses for research models for the six months ended
June 30, 2001 were $14.2 million, an increase of $2.1 million, or 17.4%, compared to $12.1 million for the six months ended June 24, 2000. Selling, general and
administrative expenses for the six months ended June 30, 2001 were 14.6% of net sales, compared to 13.8% for the six months ended June 24, 2000, principally due to a $1.0 million
restructuring charge in France.

Biomedical Products and Services.Selling, general and administrative expenses for biomedical products and services for
the six months ended June 30, 2001 were $14.5 million, an increase of $5.2 million, or 55.9%, compared to $9.3 million for the six months ended June 24, 2000.
Selling, general and administrative expenses for the six months ended June 30, 2001 decreased to 12.2% of net sales, compared to 14.9% of net sales for the six months ended June 24,
2000, due to greater economics of scale realized through our acquisitions of PAI and Primedica.

Unallocated Corporate Overhead.Unallocated corporate overhead, which consists of various
corporate expenses, was $4.0 million for the six months ended June 30, 2001, compared to $2.8 million for the six months ended June 24, 2000 due mainly to increased
research and development expenses resulting from our technology deals as well as increased administrative expenses.

Amortization of Goodwill and Other Intangibles.Amortization of goodwill and other intangibles
for the six months ended June 30, 2001 was $3.8 million, an increase of $2.0 million from $1.8 million for the six months ended June 24, 2000. The increase was due
to the effect of additional amortization of goodwill and other intangibles resulting from our PAI and Primedica acquisitions.

Operating Income.Operating income for the six months ended June 30, 2001 was
$43.9 million, an increase of $10.5 million, or 31.4%, from $33.4 million for the six months ended June 24, 2000. Operating income for the six months ended June 30,
2001 was 20.3% of net sales, compared to 22.3% of net sales for the six months ended June 24, 2000. Operating income as a percentage of net sales decreased due to the additional amortization
expense incurred as a result of our acquisitions.

Research Models.Operating income from sales of research models for the six months ended June 30, 2001 was
$27.0 million, an increase of $3.0 million, or 12.5%, from $24.0 million for the six months ended June 24, 2000. Operating income from sales of research models for the six
months ended June 30, 2001 was 27.7% of net sales, compared to 27.4% for the six months ended June 24, 2000 due to increased sales offset somewhat by the restructuring charge in France.

Biomedical Products and Services.Operating income from sales of biomedical products and services for the six months
ended June 30, 2001 was $20.9 million, an increase of $8.7 million, or 71.3%, from $12.2 million for the six months ended June 24, 2000. Operating income from sales
of biomedical products and services for the six months ended June 30, 2001 decreased to 17.7% of net sales, compared to 19.5% of net sales for the six months ended June 24, 2000, due to
the additional amortization expense resulting from the acquisitions of PAI and Primedica as well as their lower margins.

Interest Expense.Interest expense for the six months ended June 30, 2001 was
$12.9 million, compared to $19.2 million for the six months ended June 24, 2000. The $6.3 million decrease is primarily due to the reduction of debt in the third quarter of
2000, along with further debt repayments and interest rate reductions in the first and second quarters of 2001.

Other Income.During the six months ended June 30, 2001, we received insurance proceeds
relating to damaged production facilities, which resulted in a net gain of $0.5 million.

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Income Taxes.The effective tax rate for the six months ended June 30, 2001 of 41.3%
compares favorably to the effective tax rate of 46.7%, excluding the $4.8 million tax benefit, for the six months ended June 24, 2000. The impact of leverage for the six months ended
June 24, 2000 had an unfavorable effect on our tax rate by lowering our pretax income and increasing the impact of the permanent differences on the tax rate.

Income Before Extraordinary Loss.Income before extraordinary loss for the six months ended
June 30, 2001 was $17.8 million, an increase of $5.1 million from $12.7 million for the six months ended June 24, 2000. The increase is driven by the increase in
operating income, the decrease in interest expense and the decrease in our effective tax rate.

Extraordinary Loss.We recorded an extraordinary loss of $1.8 million during the first
six months of 2001. The pre-tax loss of $2.8 million is the result of the write off of issuance discounts and deferred financing costs as well as the payment of a premium associated
with the debt repayments, net of tax benefits of $1.0 million.

Net Income.Net income for the six months ended June 30, 2001 was $16.0 million,
an increase of $3.3 million from net income of $12.7 million for the six months ended June 24, 2000. The increase is attributable to the reasons mentioned above.

Three Months Ended June 30, 2001 Compared to the Three Months Ended June 24, 2000

Net Sales.Net sales for the three months ended June 30, 2001 were
$116.8 million, an increase of $39.4 million, or 50.9%, from $77.4 million for the three months ended June 24, 2000. On a pro forma basis, taking into effect our
acquisitions of PAI and Primedica and excluding the negative impact of currency, our net sales increased by 17.5%.

Research Models.Net sales of research models for the three months ended June 30, 2001 were
$48.0 million, an increase of $1.7 million, or 3.7%, from $46.3 million for the three months ended June 24, 2000. Small animal research model sales increased in North
America by 12.6% due to improved pricing, a shift to higher priced specialty units and an increase in unit volume. Excluding the negative impact of currency translation of $0.9 million, small
animal research model sales in Europe increased 5.4%. Small animal research model sales in Japan increased 12.9%, excluding the negative impact of currency translation. Our large animal breeding and
import conditioning business sales decreased by $0.4 million for the three months ended June 30, 2001 due to the closure of our conditioning facility in the UK during the second quarter
of 2000.

Biomedical Products and Services.Net sales of biomedical products and services for the three months ended
June 30, 2001 were $68.8 million, an increase of $37.7 million from $31.1 million for the three months ended June 24, 2000. We acquired two businesses during the
first quarter of 2001, Pathology Associates International Corporation ("PAI") on January 8 and Primedica Corporation ("Primedica") on February 27, which contributed $33.1 million
of sales in the three months ended June 30, 2001.

Cost of Products Sold and Services Provided.Cost of products sold and services provided for
the three months ended June 30, 2001 was $73.1 million, an increase of $27.2 million, or 59.3%, from $45.9 million for the three months ended June 24, 2000. Cost of
products sold and services provided for the three months ended June 30, 2001 were 62.6% of the net sales compared to 59.3% for the three months ended June 24, 2000, primarily due to the
shift in sales mix and our recent acquisitions.

Research Models.Cost of products sold and services provided for research models for the three months ended
June 30, 2001 was $27.1 million, an increase of $0.2 million, or 0.7%, compared to $26.9 million for the three months ended June 24, 2000. Cost of products sold and
services provided for the three months ended June 30, 2001 improved to 56.5% of net sales compared to 58.1% of net

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sales for the three months ended June 24, 2000. Cost of products sold and services provided increased at a lower rate than net sales due to the more favorable product mix, improved pricing as
well as improved capacity utilization, principally in our North America and Japan regions.

Biomedical Products and Services.Cost of products sold and services provided for biomedical products and services for
the three months ended June 30, 2001 was $46.0 million, an increase of $27.0 million, compared to $19.0 million for the three months ended June 24, 2000. Cost of
products sold and services provided as a percentage of net sales increased to 66.8% for the three months ended June 30, 2001 from 61.1% for the three months ended June 24, 2000. Cost of
products sold and services provided increased as a percentage of sales for the three months ended June 30, 2001 due to the addition of PAI and Primedica. Although PAI and Primedica's current
gross margins are lower than the gross margins of our other biomedical products and services businesses, they have improved since the time of acquisition.

Selling, General and Administrative Expenses.Selling, general and administrative expenses for
the three months ended June 30, 2001 were $17.3 million, an increase of $4.9 million, or 39.5%, from $12.4 million for the three months ended June 24, 2000. Selling,
general and administrative expenses for the three months ended June 30, 2001 were 14.8% of net sales compared to 16.0% of net sales for the three months ended June 24, 2000.

Research Models.Selling, general and administrative expenses for research models for the three months ended
June 30, 2001 were $7.2 million, a decrease of $0.1 million, or 1.4%, compared to $7.3 million for the three months ended June 24, 2000. Selling, general and
administrative expenses for the three months ended June 30, 2001 were 15.0% of net sales, compared to 15.8% for the three months ended June 24, 2000, principally due to economics of
scale.

Biomedical Products and Services.Selling, general and administrative expenses for biomedical products and services for
the three months ended June 30, 2001 were $8.5 million, an increase of $3.5 million, or 70.0%, compared to $5.0 million for the three months ended June 24, 2000.
Selling, general and administrative expenses for the three months ended June 30, 2001 decreased to 12.4% of net sales, compared to 16.1% of net sales for the three months ended June 24,
2000, due to greater economics of scale and synergies realized through our acquisitions of PAI and Primedica.

Unallocated Corporate Overhead.Unallocated corporate overhead, which consists of various
corporate expenses, was $1.6 million of expense for the three months ended June 30, 2001, compared to $0.1 million expense for the three months ended June 24, 2000 due
mainly to increased research and development expenses resulting from our technology deals as well as increased administrative expenses along with reduced pension income in the second quarter of 2001.

Amortization of Goodwill and Other Intangibles.Amortization of goodwill and other intangibles
for the three months ended June 30, 2001 was $2.0 million, an increase of $1.1 million from $0.9 million for the three months ended June 24, 2000. The increase was
due to the effect of additional amortization of goodwill and other intangibles resulting from our PAI and Primedica acquisitions.

Operating Income.Operating income for the three months ended June 30, 2001 was
$24.5 million, an increase of $6.3 million, or 34.6%, from $18.2 million for the three months ended June 24, 2000. Operating income for the three months ended
June 30, 2001 was 21.0% of net sales, compared to 23.5% of net sales for the three months ended June 24, 2000. Operating income as a percentage of net sales decreased due to the
additional amortization expense incurred as a result of our acquisitions, as well as the lower gross margins at which PAI and Primedica currently operate.

Research Models.Operating income from sales of research models for the three months ended June 30, 2001 was
$13.7 million, an increase of $1.7 million, or 14.2%, from $12.0 million for the three months ended June 24, 2000. Operating income from sales of research models for the
three months ended June 30, 2001 was 28.5% of net sales, compared to 25.9% for the three months ended June 24, 2000. The improvement is due to our increase in sales and better capacity
utilization.

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Biomedical Products and Services.Operating income from sales of biomedical products and services for the three months
ended June 30, 2001 was $12.4 million, an increase of $6.1 million from $6.3 million for the three months ended June 24, 2000. Operating income from sales of
biomedical products and services for the three months ended June 30, 2001 decreased to 18.0% of net sales, compared to 20.3% of net sales for the three months ended June 24, 2000, due to
the additional amortization expense resulting from the acquisitions of PAI and Primedica as well as their lower gross margins.

Interest Expense.Interest expense for the three months ended June 30, 2001 was
$5.9 million, compared to $9.9 million for the three months ended June 24, 2000. The $4.0 million decrease is primarily due to the reduction of debt in the third quarter of
2000, along with further debt repayments and interest rate reductions in the first and second quarters of 2001.

Income Taxes.The effective tax rate for the three months ended June 30, 2001 of 40.8%
is unchanged from the effective tax rate for the three months ended June 24, 2000, excluding the $4.8 million tax benefit.

Income before Extraordinary Loss.Income before extraordinary loss for the three months ended
June 30, 2001 was $10.6 million, an increase of $1.0 million from $9.6 million for the three months ended June 24, 2000. The increase is driven by the increase in
operating income and the decrease in interest expense.

Extraordinary Loss.We recorded an extraordinary loss of $1.6 million during the second
quarter of 2001. The pre-tax loss of $2.4 million is the result of the write-off of issuance discounts and deferred financing costs as well as the payment of a premium
associated with the debt repayments, net of tax benefits of $0.8 million.

Net Income.Net income for the three months ended June 30, 2001 was $9.0 million,
a decrease of $0.6 million from net income of $9.6 million for the three months ended June 24, 2000. The decrease is attributable to the reasons mentioned above.

Liquidity and Capital Resources

Cash and cash equivalents of the Company totaled $28.4 million at June 30, 2001 compared with $33.1 million at December 30, 2000.
Our principal sources of liquidity are cash from operations as well as cash provided by our public offerings.

Net
cash provided by operating activities for the six months ended June 30, 2001 and June 24, 2000 was $18.4 million and $7.6 million, respectively. The
increase in cash provided by operations is primarily a result of our improved performance during the first six months of 2001.

Net
cash used in investing activities during the six months ended June 30, 2001 and June 24, 2000 was $63.2 million and $5.1 million, respectively. The
increase in cash used is a result of our business acquisitions. During the first quarter of 2001 we used net cash of $51.3 million to acquire PAI and Primedica. In the first quarter of 2000, we
used net cash of $6.0 million to acquire an additional 16% of equity in Charles River Japan. Also in order to grow our existing businesses we have incurred capital expenditures for the six
month periods ended June 30, 2001 and June 24, 2000 of $11.7 million and $6.1 million, respectively.

Net
cash provided by financing activities during the six months ended June 30, 2001 and June 24, 2000 were $41.7 million and $1.6 million, respectively.
During March 2001 Charles River Laboratories International, Inc. ("CRLI"), our parent company, consummated a follow-on offering which netted $62.2 million in proceeds.
The net proceeds were contributed by CRLI to the Company. We used $61.9 million of the capital contribution to repay portions of our existing debt and capital lease obligations. We plan to use
the remaining funds to repay additional portions of our existing debt. Also the Company received $40.0 million from our bank financing which was used to purchase PAI and Primedica.

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We anticipate that our operating cash flow, along with borrowings under our credit facility, will be sufficient to meet our anticipated future operating expenses, capital expenditures
and debt service obligations as they become due.

Quantitative and Qualitative Disclosure About Market Risk

We are subject to market risks arising from changes in interest rates and foreign currency exchange rates. Our primary interest rate exposure results from
changes in LIBOR or the base rate which are used to determine the applicable interest rates under our term loans and revolving credit facility. We have entered into an interest rate protection
agreement designed to protect us against fluctuations in interest rates with respect to at least 50% of the aggregate principal amount of the term loans and the senior subordinated notes. Our
potential loss over one year that would result from a hypothetical, instantaneous and unfavorable change of 100 basis points in the interest rate on all of our variable rate obligations would be
approximately $1.3 million. Fluctuations in interest rates will not affect the interest payable on the senior subordinated notes, which is fixed.

We
do not use financial instruments for trading or other speculative purposes.

We
also have exposure to some foreign currency exchange rate fluctuations for the cash flows received from our foreign affiliates. This risk is mitigated by the fact that their
operations are conducted in their respective local currencies, and it is not our intention to repatriate earnings prospectively. Currently, we do not engage in any foreign currency hedging activities
as we do not believe that our foreign currency exchange rate risk is material.

Recently Issued Accounting Standards

In July 2001, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 141 (FAS 141), "Business
Combinations" and No. 142 (FAS 142), "Goodwill and Other Intangible Assets." FAS 141 supercedes Accounting Principles Board Opinion No. 16, "Business Combinations."
FAS 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001, establishes specific criteria for the recognition of
intangible assets separately from goodwill, and requires that unallocated negative goodwill be written off immediately as an extraordinary gain instead of being deferred and amortized. Provisions of
FAS 141 will be effective for the Company's business acquisitions that are consummated after July 1, 2001. FAS 142 supercedes Accounting Principles Board Opinion No. 17,
"Intangible Assets," and addresses the accounting for goodwill and intangible assets subsequent to their acquisition. Under FAS 142, goodwill and indefinite lived intangible assets will no
longer be amortized but will be tested for impairment at least annually at the reporting unit level. In addition, the amortization period of intangible assets with finite lives will no longer be
limited to forty years. The general provisions of FAS 142 will be effective for the Company as of the beginning of fiscal 2002. However, certain provisions will be effective for all business
acquisitions consummated after June 30, 2001. Management believes the adoption of FAS 142 in fiscal 2002 will result in a significant decrease in amortization of goodwill and intangibles
on the consolidated statement of income and is currently in the process of quantifying the impact.

Factors Affecting Future Results

This document contains forward-looking statements. You can identify these statements by forward-looking words such as "may, "will," "expect," "anticipate,"
"believe," "estimate" and "continue" or similar words. You should read statements that contain these words carefully because they discuss our future expectations, projections of our future results of
operations or of our financial condition or state other "forward-looking" information. We believe that it is important to communicate our future expectations to our investors. However, there may be
events in the future that we are not able to accurately predict or control and that may cause our actual results to differ materially from those discussed as a result of various factors, including
contaminations at our facilities, changes in the pharmaceutical or biotechnology industries, competition and changes in government regulations or general economic or market conditions. These factors
should be considered carefully and readers

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should not place undue reliance on our forward-looking statements. You should be aware that the occurrence of the events described in "Management's Discussion and Analysis of Financial Condition
and Result of Operations" and elsewhere in this document could harm our business, operating results and financial condition. All forward-looking statements attributable to us or persons acting on our
behalf are expressly qualified in their entirety by the cautionary statements and Risk Factors contained in Company's SEC filings and CRLI's SEC filings including the Form S-3,
filed on July 6, 2001. We are under no duty to update the forward-looking statements after the date of this document or to conform these statements to actual results.

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Charles River Laboratories, Inc.    Form 10-Q    For the Quarterly Period Ended June 30, 2001

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

| | (a)   |  | The following exhibits are included as part of the Report on Form 10-Q.                                                                                                                                                                            
| | ----- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 3.1** |  | Certificate of Incorporation of Charles River Laboratories, Inc.                                                                                                                                                                                   
| | 4.1** |  | Amendment No. 1 dated June 15, 2001 to the Amended and Restated Investors' Agreement dated as of June 19, 2000.                                                                                                                                    
| | 10.1* |  | Amendment No. 1 to the Credit Agreement among Charles River Laboratories, Inc., the various financial institution, Fleet National Bank (as successor in interest to Union Bank of California) and Credit Suisse First Boston, dated April 18,
2001.
| | 99.1* |  | Amendment No. 1 to the 2000 Incentive Plan of Charles River Laboratories International, Inc. dated May 8, 2001.                                                                                                                                    
| | (b)   |  | No Reports on Form 8-K were filed during the quarter ended June 30, 2001                                                                                                                                                                           

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.

|                |  | CHARLES RIVER LABORATORIES, INC.                                                      
|--------------- |  | --------------------------------------------------------------------------------------
|August 10, 2001 |  |                                                                                       
|                |  | /s/THOMAS F. ACKERMANThomas F. Ackerman Sr. Vice President and Chief Financial Officer

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