CRL Filings — Charles River Laboratories International, Inc. - FilingSpy
CRL
Charles River Laboratories International, Inc.
A maker of research animals and drug-development services, Charles River Laboratories supplies the lab rats, mice, and testing that pharmaceutical and biotech companies rely on to bring new medicines to market. It began in 1947 when a young veterinarian, Dr. Henry Foster, started a one-man operation in a Boston loft overlooking the Charles River—the source of its name—personally breeding and hand-delivering the animals to local scientists. Foster paid for his first thousand rat cages with savings from a job as a vet on ships hauling horses to Poland.
Operating income rose 20% as the CDMO divestiture removed a cost drag, but a $64M loss on the sale pushed the company to a net loss.
The CDMO divestiture reshaped the quarter. fell 2.7% to $1.0 billion as divested businesses dropped out, but rose 19.7% to $119.9 million and widened 2.2 points to 11.9%, driven by a $38.5 million site sale gain and the absence of the CDMO charges that had depressed prior-year results. A $63.7 million loss on the divestiture itself, however, pushed the to a net loss of $1.5 million, leaving the company still in transition.
Key takeaways
The Manufacturing swung from a 6.0% a year ago to 34.9%, as the CDMO divestiture eliminated the intangible and operating costs that had caused repeated losses and impairments.
A $38.5 million gain on the of a Wilmington site and lower legal costs tied to the now-closed primate import investigations further boosted .
declined 2.7% to $1,004.1 million, as the CDMO and European Discovery divestitures removed revenue from the consolidated top line, partially offset by higher Microbial Solutions endotoxin product sales.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue fell 2.7% to $1.0B; operating income rose 19.7% to $119.9M driven by divestiture benefits and lower amortization.
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Consolidated decreased 2.7% to $1,004.1M, primarily from the CDMO and European Discovery divestitures, partially offset by higher Microbial Solutions endotoxin product revenue.
increased 19.7% to $119.9M, with margin expanding 220 to 11.9%, driven by a $38.5M gain on the Wilmington site sale, lower intangible , and reduced legal costs.
The company recorded a $63.7 million loss on the CDMO and Cell Solutions divestiture, which, combined with a 101.4% , drove a net loss of $1.5 million despite the improvement.
DSA held at $2.0 billion, and the 's improved on lower and legal costs, though dipped 1.9% as cautious biopharma client spending persisted.
for the first six months fell to $220.8 million from $376.3 million a year ago, pressured by higher variable compensation payments and acquisition, integration, and divestiture costs.
What changed
The CDMO divestiture that was flagged as a watch item in Q1 FY2026 progressed: the company recorded a $63.7 million loss on the transaction this quarter, on top of the $118.0 million pre-tax loss on assets held for sale booked in Q1, confirming the exit from a business that had generated $376 million in impairments and repeated operating losses.
DSA remained at $1.9–$2.0 billion for a second consecutive quarter, and the 's improved to 20.5% from 19.0% a year ago, suggesting the stabilization in client spending that had been sought for multiple quarters is taking hold, though has not yet returned to growth.
The social-engineering breach disclosed in Q1 FY2026 did not escalate: the company reported no material disruption and the incident did not appear as a new risk factor this quarter, though the investigation into potential data exfiltration remains open.
The securities class action saw a procedural development: the lead plaintiff moved to withdraw and substitute a new plaintiff, while the First Circuit's partial reversal of the dismissal keeps the case alive, though no financial exposure has been quantified.
What to watch
DSA net book-to-bill ratio and growth in Q3 FY2026 — whether the stable $2.0 billion finally converts to revenue growth after three years of decline, signaling a genuine recovery in biopharma client spending.
Manufacturing margin sustainability — whether the 34.9% margin is repeatable now that the CDMO business is gone, or if the $38.5 million site sale gain flattered the result and the underlying Microbial Solutions and Biologics Testing businesses run at a lower margin.
Completion and final proceeds of the CDMO and Cell Solutions divestiture — whether additional losses are recorded beyond the $181.7 million already recognized across Q1 and Q2, and how the freed-up capital is deployed.
Outcome of the social-engineering breach investigation — whether sensitive client or employee data was exfiltrated, and whether the incident triggers contract terminations, regulatory action, or reputational damage.
Manufacturing surged to $65.6M (34.9% margin) from $12.1M (6.0%) a year ago, largely due to the CDMO divestiture eliminating significant and cost burdens.
DSA grew slightly to $2.0B, but dipped 1.9% to $606.5M; rose 1.3% to $124.4M on lower and legal costs tied to the NHP supply chain investigation.
Net loss attributable to common shareholders was $1.5M, swinging from $52.3M income a year ago, as a $63.7M loss on the CDMO and Cell Solutions divestiture and a 101.4% outweighed operating gains.
fell to $220.8M from $376.3M, pressured by higher variable compensation payments and acquisition, integration, and divestiture-related costs.
Quantitative and Qualitative Disclosures About Market Risk
The Company’s exposure to market risk from changes in interest rates and currency exchange rates has not changed materially from its exposure discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2025 as filed with the SEC on February 18, 2…
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The Company’s exposure to market risk from changes in interest rates and currency exchange rates has not changed materially from its exposure discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2025 as filed with the SEC on February 18, 2026. Our interest rate and currency exchange rate risks are fully described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” of our Annual Report on Form 10-K for fiscal year 2025 and in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” herein.
Company faces revived securities class action and stayed derivative suits over non-human primate import disclosures.
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A securities class action, originally filed May 2023, alleges false/misleading disclosures about non-human primate importation from May 2020–Feb 2023.
The First Circuit partially reversed the district court's dismissal on August 15, 2025, returning the case to district court.
On October 16, 2025, the moved to withdraw due to lack of standing and substitute Oklahoma Firefighters Pension and Retirement System.
Two stockholder derivative lawsuits, filed Nov 2023 and Aug 2024, allege fiduciary breaches and insider trading related to the same import disclosures.
Both derivative suits are stayed pending further developments in the securities class action.
The Company believes all matters are without merit and plans to defend vigorously, but cannot estimate potential loss or exposure.
In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2025 Form 10-K and in Part II, “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 28…
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In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2025 Form 10-K and in Part II, “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 28, 2026 (Q1 10-Q) which could materially affect our business, financial condition, and/or future results. The risks described in our 2025 Form 10-K and in our Q1 10-Q are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. Except for the risk factor disclosed in Part II, Item 1A of the Q1 10-Q, which is hereby incorporated by reference into this Part II, Item 1A of this Form 10-Q, there have been no material changes to the Company’s risk factors since the 2025 Form 10-K.
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.