Charles River provides update on strategic review

Charles River (CRL) announced an update on its board of directors’ strategic review of the company’s business and growth prospects. The company said, “The Board strongly supports the Company’s strategic direction and believes it should continue to focus on strengthening its leading scientific portfolio within its core markets, divesting underperforming or non-core assets, maximizing its financial performance, and maintaining a disciplined approach to capital deployment. To further support this strategy, the Company is taking the following actions to drive long-term shareholder value creation: Charles River has built a scientifically differentiated portfolio to take advantage of the unique opportunities that are present across the evolving biopharmaceutical landscape. Its focus on science and innovative solutions designed to enhance the efficiency and speed to market of its clients’ therapeutic programs will enable the Company to continue to adapt and lead the industry through advances in drug development. To further support its strategy, Charles River has identified areas of future growth that align with its core competencies across its three business segments, which it will continue to invest in through strategic acquisitions, technology partnerships, and internal development efforts. Specifically, the Company is evaluating opportunities to enhance its scientific capabilities in the areas of bioanalysis, in vitro services including new approach methodologies, or NAMs, and related solutions, as well as to strengthen its geographic presence. As part of its ongoing efforts to streamline operations and maximize financial performance, the Company has evaluated the strategic fit and fundamental performance of its global portfolio and infrastructure and, as appropriate, will take actions to ensure its business is strategically and financially aligned in the interest of long-term value creation. These actions are expected to result in the sale of certain underperforming or non-core businesses, which will enable the Company to focus on more profitable growth opportunities. In aggregate, these businesses represent approximately 7% of the Company’s estimated 2025 revenue. The proposed divestitures, once completed, are expected to result in non-GAAP earnings per share accretion of at least $0.30 on an annualized basis, before assuming any reinvestment of the transaction proceeds. Charles River has taken extensive action during the current demand environment with a goal to protect its operating margin and reinvigorate earnings growth, and has implemented restructuring initiatives over past several years that are expected to result in approximately $225 million in cumulative, annualized cost savings in 2026. In addition to these actions, the Company is also implementing initiatives designed to drive greater operating efficiencies through process improvement, procurement synergies, and implementing a global business services model. The additional initiatives are expected to generate incremental net cost savings of approximately $70 million annually, which will be fully realized in 2026. Charles River remains committed to deploying capital in a disciplined and value-enhancing manner. The Company will continue to regularly review the optimal balance between strategic acquisitions, stock repurchases, debt repayment, and other uses of capital to support its disciplined capital allocation strategy. As part of this strategy, in October, the Board of Directors approved a new, $1.0 billion stock repurchase authorization. This replaces the previous stock repurchase authorization, for which the Company had repurchased $450.7 million in common stock since August 2024. “