Charles River Laboratories (CRL) investor relations material

Executive summary

• Q1 2026 revenue reached $995.8 million, up 1.2% year-over-year, with organic revenue down 1.5% due to segment declines offsetting Manufacturing growth.

• GAAP operating margin improved to 12.0% from 7.6%, while non-GAAP margin declined to 16.3% from 19.1%; non-GAAP EPS fell 12% to $2.06.

• GAAP net loss was $14.8 million (loss per share of $0.30), mainly due to a $118 million loss on divestitures.

• Significant cost savings initiatives underway, targeting $100 million incremental savings in 2026 and $300 million annualized by year-end.

• $200 million in shares repurchased under a $1 billion authorization.

Financial highlights

• Service revenue was $798.2 million and product revenue $197.7 million, both nearly flat year-over-year.

• Free cash flow was -$15 million, mainly due to higher bonus payments; CapEx was $56 million (5.6% of revenue).

• Cash and cash equivalents at quarter-end were $191.8 million; long-term debt stood at $2.66 billion.

• Net leverage at 2.6x at quarter end.

• Non-GAAP net income was $101.7 million, down 14.6% year-over-year.

Outlook and guidance

• 2026 organic revenue expected to decline 0.5%-1.5%; non-GAAP EPS guidance reaffirmed at $10.80-$11.30 (5%-10% growth).

• GAAP EPS guidance updated to $5.35–$5.85, reflecting divestiture impacts.

• Operating margin expansion of 120-150 basis points expected in 2026, with most improvement in the second half.

• Q2 non-GAAP EPS projected to increase at least 30% sequentially from Q1.

• Free cash flow outlook unchanged at $375-$400 million for 2026.