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CHARLES RIVER LABORATORIES INTERNATIONAL, INC. - Annual Report: 2024 (Form 10-K)

Other, net   Changes in assets and liabilities:   Trade receivables and contract assets, net ()()Inventories ()()Accounts payable()()()Accrued compensation() ()Deferred revenue () Customer contract deposits () Other assets and liabilities, net()  Net cash provided by operating activities   Cash flows relating to investing activities   Acquisition of businesses and assets, net of cash acquired()()()Capital expenditures()()()Purchases of investments and contributions to venture capital investments()()()Proceeds from sale of investments   Proceeds from sale of businesses, net   Other, net ()()Net cash used in investing activities()()()Cash flows relating to financing activities   Proceeds from long-term debt and revolving credit facility   Proceeds from exercises of stock options   Payments on long-term debt, revolving credit facility, and finance lease obligations()()()Purchase of treasury stock()()()Payments of contingent consideration ()()Purchase of remaining equity interest of other redeemable noncontrolling interest()()()Other, net()()()Net cash used in financing activities()()()Effect of exchange rate changes on cash, cash equivalents, and restricted cash()  Net change in cash, cash equivalents, and restricted cash() ()Cash, cash equivalents, and restricted cash, beginning of period   Cash, cash equivalents, and restricted cash, end of period$ $ $ See Notes to Consolidated Financial Statements.
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS
(in thousands)

Redeemable Noncontrolling InterestsCommon stockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury StockTotal Equity
Attributable
to Common
Shareholders		Noncontrolling
Interest		Total
Equity
SharesAmountSharesAmount
December 25, 2021$  $ $ $ $() $ $ $ $ 
Net income — — —  — — —    
Other comprehensive (loss)()— — — — ()— — ()— ()
Dividends declared to noncontrolling interest()— — — — — — — — ()()
Purchase of redeemable noncontrolling interest()— — — — — — — — — — 
Adjustment to noncontrolling interest fair value — — ()— — — — ()— ()
Issuance of stock under employee compensation plans—    — — — —  —  
Purchase of treasury shares— — — — — —  ()()— ()
Retirement of treasury shares— ()()()()— ()  —  
Stock-based compensation— — —  — — — —  —  
December 31, 2022$  $ $ $ $() $ $ $ $ 
Net income — — —  — — —    
Other comprehensive income()— — — —  — —  —  
Dividends declared to noncontrolling interest()— — — — — — — — ()()
Adjustment of redeemable noncontrolling interests to redemption value()— —  — — — —  —  
Purchase of remaining equity interest of Vital River redeemable noncontrolling interest()— — — — — — — — — — 
Gain on purchase of remaining equity interest of Vital River redeemable noncontrolling interest()— —  — — — —  —  
Acquisition of redeemable noncontrolling interest — — — — — — — — — — 
Issuance of stock under employee compensation plans—    — — — —  —  
Purchase of treasury shares— — — — — —  ()()— ()
Retirement of treasury shares— ()()()()— ()  —  
Stock-based compensation— — —  — — — —  —  
December 30, 2023$  $ $ $ $() $ $ $ $ 
See Notes to Consolidated Financial Statements.
Redeemable Noncontrolling InterestsCommon stockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Treasury StockTotal Equity
Attributable
to Common
Shareholders		Noncontrolling
Interest		Total
Equity
SharesAmountSharesAmount
December 30, 2023$  $ $ $ $() $ $ $ $ 
Net income — — —  — — —    
Other comprehensive income (loss)()— — — — ()— — ()— ()
Dividends declared to noncontrolling interests()— — — — — — — — ()()
Adjustment of redeemable noncontrolling interests to redemption value — — ()— — — — ()— ()
Purchase of remaining equity interest of other redeemable noncontrolling interest()— — — — — — — — — — 
Adjustment of purchase price of Noveprim redeemable noncontrolling interest — — — — — — — — — — 
Issuance of stock under employee compensation plans—    — — — —  —  
Purchase of treasury shares— — — — — —  ()()— ()
Share repurchase excise tax— — — — — — — ()()— ()
Retirement of treasury shares— ()()()()— ()  —  
Stock-based compensation— — —  — — — —  —  
December 28, 2024$  $ $ $ $() $ $ $ $ 
See Notes to Consolidated Financial Statements.
    
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1.
reportable segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Solutions (Manufacturing). The Company’s RMS reportable segment includes the Research Models, Research Model Services, and Cell Solutions businesses.
Research Models includes the commercial production and sale of small research models, as well as the supply of large research models. Research Model Services includes: Insourcing Solutions (IS), which provides colony management of its clients’ research operations (including recruitment, training, staffing, and management services) within our clients’ facilities and utilizing our Charles River Accelerator and Development Lab (CRADL™) offerings, which provides vivarium space to clients, Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered models, and Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models, Cell Solutions supplies controlled, consistent, customized primary cells and blood components derived from normal and mobilized peripheral blood and bone marrow as well as cells from disease state donors.
The Company’s DSA reportable segment includes discovery services and safety assessment services. The Company provides regulated and non-regulated DSA services to support the discovery, development, and regulatory-required safety testing of potential new drugs, including in vitro (non-animal) and in vivo (in research models) studies, laboratory support services, including bioanalytical and strategic non-clinical consulting and program management to support product development.
The Company’s Manufacturing reportable segment includes Microbial Solutions, which provides in vitro lot-release testing products, microbial detection products, and species identification services and Biologics Solutions (Biologics), which performs specialized testing of biologics (Biologics Testing Solutions) as well as contract development and manufacturing products and services (CDMO). In December of 2022, the Company sold the Avian Vaccine Services business (Avian), reported in the Manufacturing segment, which supplied specific-pathogen-free chicken eggs and chickens.
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
- Machinery and equipment
-
Furniture and fixtures
-
Computer hardware and software
-
Vehicles
-
When the Company disposes of property, plant and equipment, it removes the associated cost and accumulated depreciation from the related accounts on its consolidated balance sheet and includes any resulting gain or loss recorded in Other (expense) income, net in the accompanying consolidated statements of income.
67
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
% to approximately %. The Company accounts for the investments in limited partnerships (LPs) and limited liability corporations (LLCs), which are variable interest entities, under the equity method of accounting. For publicly held investments in the LPs and LLCs, the Company adjusts for changes in fair market value based on reported share holdings at the end of each fiscal quarter. The Company is not the primary beneficiary because it has no power to direct the activities that most significantly affect the LPs’ and LLCs’ economic performance.
Under the equity method of accounting, the Company’s portion of the investment gains and losses, as reported in the fund’s financial statements on a quarterly lag each reporting period, is recorded in Other (expense) income, net in the accompanying consolidated statements of income. In addition, the Company adjusts the carrying value of these investments to reflect its estimate of changes to fair value since the fund’s financial statements are based on information from the fund’s management team, market prices of known public holdings of the fund, and other information.
68
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company held contracts at December 28, 2024 with a face value of $ million and contracts with a face value of $ million at December 30, 2023, which are recorded in Other assets.
to years. Certain lease agreements contain options to purchase the leased property and options to terminate the lease. Payments to be made in option periods are recognized as part of the right-of-use lease assets and lease liabilities when it is reasonably certain that the option to extend the lease will be exercised or the option to terminate the lease will not be exercised, or is not at the Company’s option. The Company determines whether the reasonably certain threshold is met by considering contract-, asset-, market-, and entity-based factors.
69
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
days in the United States and consistent with prevailing practice in international markets. A contract asset is recorded when a right to consideration in exchange for goods or services transferred to a customer is conditioned other than the passage of time. Client receivables are recorded separately from contract assets since only the passage of time is required before consideration is due. A contract liability is recorded when consideration is received, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a contract. Contract liabilities are recognized as revenue after control of the products or services is transferred to the customer and all revenue recognition criteria have been met. Cumulative catch-up adjustments to revenue are periodically recorded that affect the corresponding contract asset or contract liability, including adjustments arising from a change in the measure of progress, a change in an estimate of the transaction price (including any changes in the assessment of whether an estimate of variable consideration), or a contract modification.
71
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.
% equity interest of Noveprim Group (Noveprim), a leading supplier of non-human primates (NHPs) located in Mauritius, resulting in a % controlling interest. The Company had previously acquired a % equity interest in 2022 for $ million plus additional contingent payments up to $ million based on future performance. The total consideration allocable to the Noveprim acquisition is $ million,
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 million additional cash paid for the % equity interest, elimination of historical activity and intercompany balances of $ million which includes a remeasurement gain on the % equity investment of $ million, contingent consideration of $ million, deferred purchase price of $ million payable from 2024 through 2027, offset by post-closing adjustments for working capital of $ million. The purchase price reflected an agreement with the seller on working capital and debt, which was adjusted from $ million to $ million during fiscal year 2024. As a result of measurement period adjustments to the purchase price, goodwill and remeasurement gains on the previous % equity investment during fiscal year 2024, were increased by $ million and $ million, respectively. Remeasurement gains are recorded in Other income (expense), net, within the consolidated statements of income. The contingent consideration fair value is estimated using a Monte Carlo Simulation model and the maximum contingent contractual payments are up to $ million based on future performance and milestone achievements from fiscal years 2023 through 2025. The Company has the call option right to purchase the remaining % equity interest up until after the sixth anniversary of closing the % equity interest. On the first anniversary of the expiration of the call option, a put option will be triggered giving the seller the right to require the Company to acquire the remaining shares of the seller. The redemption price for the call/put is fixed and ranges from $ million to $ million depending on when exercised. The noncontrolling interest is classified as a redeemable noncontrolling interest in the mezzanine section of the consolidated balance sheets. The acquisition was funded through a combination of available cash and proceeds from the Company’s Credit Facility. This business is reported as part of the Company’s DSA reportable segment for NHPs vertically integrated into the DSA supply chain and the RMS reportable segment for those NHPs sold to third party customers. The Company incurred transaction and integration costs in connection with the acquisition of $ million and $ million during fiscal years 2024 and 2023, respectively, which was included in Selling, general and administrative expenses within the consolidated statements of income.
SAMDI Tech, Inc.
On January 27, 2023, the Company acquired SAMDI Tech, Inc., (SAMDI), a leading provider of high-quality, label-free high-throughput screening (HTS) solutions for drug discovery research. The acquisition of SAMDI will provide clients with seamless access to the premier, label-free HTS MS platform and create a comprehensive, library of drug discovery solutions. The purchase price of SAMDI was $ million, net of $ million in cash, inclusive of a % strategic equity interest previously owned by the Company of $ million. The acquisition was funded through a combination of available cash and proceeds from the Company’s Credit Facility. This business is reported as part of the Company’s DSA reportable segment. significant transaction and integration costs were incurred with the acquisition for the fiscal year 2024. The Company incurred transaction and integration costs in connection with the acquisition of $ million during fiscal year 2023, which was included in Selling, general and administrative expenses within the consolidated statements of income.
Fiscal 2022 Acquisition
Explora BioLabs Holdings, Inc.
On April 5, 2022, the Company acquired Explora BioLabs Holdings, Inc. (Explora BioLabs), a provider of contract vivarium research services, providing biopharmaceutical clients with turnkey in vivo vivarium facilities, management and related services to efficiently conduct their early-stage research activities. The acquisition of Explora BioLabs complements the Company’s existing Insourcing Solutions business, specifically the CRADL™ (Charles River Accelerator and Development Lab) footprint, and offers incremental opportunities to partner with an emerging client base, many of which are engaged in cell and gene therapy development. The purchase price of Explora BioLabs was $ million, net of $ million in cash. The acquisition was funded through proceeds from the Company’s Credit Facility. This business is reported as part of the Company’s RMS reportable segment. The Company incurred transaction and integration costs in connection with the acquisition of $ million, and $ million during fiscal years 2023 and 2022, respectively, which was primarily included in Selling, general and administrative expenses within the consolidated statements of income.
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 $ $ Inventories   Other current assets (excluding cash)   Property, plant and equipment   Operating lease right-of-use asset, net   
Goodwill (1)
   Definite-lived intangible assets   
Other long-term assets (2)
   Deferred revenue ()()Other current liabilities ()()()Operating lease right-of-use liabilities (Long-term)() ()Deferred tax liabilities()()()Other long-term liabilities() ()
Redeemable noncontrolling interest (3)
()  Total purchase price allocation$ $ $ 
(1) The goodwill resulting from these transactions is primarily attributable to the potential growth of the Company’s segments from new customers introduced to the acquired businesses or synergies to be realized from acquiring an internal supplier servicing the DSA business and the assembled workforce of the acquirees, thus is not deductible for tax purposes. Explora BioLabs had $ million of goodwill due to prior asset acquisition that is deductible for tax purposes.
(2) Other long-term assets acquired from the Noveprim acquisition include $ million of biological assets, which will be amortized over an estimated eight-year useful life.
(3) Refer to Note 12 – Equity and Noncontrolling Interests for further a description of the % noncontrolling interest fair value.
 $ $ Other intangible assets   Total definite-lived intangible assets$ $ $ Weighted Average Amortization Life(in years)Client relationships— Other intangible assetsTotal definite-lived intangible assets
Divestitures
The Company routinely evaluates the strategic fit and fundamental performance of its global businesses, divesting operations that do not meet key business criteria. As part of this ongoing assessment, the Company determined that certain capital could be better deployed in other long-term growth opportunities.
Avian Vaccine Services
On December 20, 2022, the Company sold its Avian Vaccine Services business (Avian) to a private investor group for a purchase price of $ million in cash, subject to certain customary closing adjustments. The Company may also earn up to $ million of contingent payments, which are tied to certain annual results of the Avian business from January 2024 through December 2027. The contingent payments have been fair valued at $ million using a discounted probability weighted model. The Avian business was reported in the Company’s Manufacturing reportable segment. During the fiscal year 2022, the
74
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 million within Other income (expense) on the Company’s consolidated statements of income. Property, plant, and equipment, net Operating lease right-of-use assets, net Goodwill Client relationships, net Other assets Total assets$ LiabilitiesCurrent liabilities$ Operating lease right-of-use liabilities Long-term liabilities Total liabilities$ 
3.
 $ $ Services and products transferred at a point in time   Total RMS revenue   DSAServices and products transferred over time   Services and products transferred at a point in time   Total DSA revenue   ManufacturingServices and products transferred over time   Services and products transferred at a point in time   Total Manufacturing revenue   Total revenue$ $ $ 
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 $ Unbilled revenue  Total  Less: Allowance for credit losses()()Trade receivables and contract assets, net$ $ Liabilities from contracts with customersCurrent deferred revenue$ $ Long term deferred revenue (included in Other long-term liabilities)  
Customer contract deposits (included in Other current liabilities)
  
Approximately % of unbilled revenue as of December 30, 2023, which was $ million, was billed during fiscal year 2024. Approximately % of unbilled revenue as of December 31, 2022, which was $ million, was billed during fiscal year 2023.
Approximately % of contract liabilities as of December 30, 2023, which was $ million were recognized as revenue during fiscal year 2024. Approximately % of contract liabilities as of December 31, 2022, which was $ million, were recognized as revenue during fiscal year 2023.
When the Company does not have the unconditional right to advanced billings, both advanced client payments and unpaid advanced client billings are excluded from deferred revenue, with the advanced billings also being excluded from client receivables. The Company excluded approximately $ million and $ million of unpaid advanced client billings from both client receivables and deferred revenue in the accompanying consolidated balance sheets as of December 28, 2024 and December 30, 2023, respectively.
Allowance for Credit Losses
 $ $ Provisions   Reductions()()()Ending balance$ $ $ 
Net provision expenses were $ million, $ million, and $ million in fiscal years 2024, 2023, and 2022, respectively and include recoveries of balances previously written off, which are excluded from the table above.
Transaction Price Allocated to Future Performance Obligations
The Company discloses the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of December 28, 2024. Excluded from the disclosure is the value of unsatisfied performance obligations for contracts with an original expected length of one year or less, contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed and service revenue recognized in accordance with ASC 842, “Leases”. The aggregate amount of transaction price allocated to the remaining performance obligations for all open customer contracts as of December 28, 2024 was $ million. The Company will recognize revenues for these performance obligations as they are satisfied, approximately % of which is expected to occur within the next and the remainder recognized thereafter during the remaining contract term.

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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
million, $ million, and $ million in lease revenue in fiscal years 2024, 2023, and 2022, respectively. Due to the nature of these arrangements and timing of the contractual lease term, the remaining revenue to be recognized related to these lease performance obligations is not material to the consolidated financial statements.
4.
reportable segments (RMS, DSA, and Manufacturing). The reportable segments comprise the structure used by the Company’s Chief Executive Officer, who is the Chief Operating Decision Maker (CODM), to make key operating decisions and assess performance. These segments are strategic business units with differing products and services.
The Company’s CODM evaluates the segments operating performance based on operating income. Operating income is the measure of profit or loss regularly provided to and used by the CODM to assess performance and allocate resources. Operating income is defined as revenue less costs of revenue; selling, general, and administrative expenses; amortization of intangible assets; and goodwill impairments. For each segment, the CODM uses operating income in the annual budgeting and quarterly forecasting process when comparing to actual results. Asset information on a reportable segment basis is not disclosed as this information is not separately identified and internally reported to the Company’s CODM. The following table presents the results of operations by reportable segment:
 $ $ Cost of revenue (excluding amortization of intangible assets)   Selling, general and administrative   Amortization of intangible assets   Operating income$ $ $ DSARevenue$ $ $ Cost of revenue (excluding amortization of intangible assets)   Selling, general and administrative   Amortization of intangible assets   Operating income$ $ $ ManufacturingRevenue$ $ $ Cost of revenue (excluding amortization of intangible assets)   Selling, general and administrative   Amortization of intangible assets   Goodwill impairment   Operating income (loss)$()$ $ Restricted cash included in Other current assets  Restricted cash included in Other assets  Cash, cash equivalents, and restricted cash, end of period$ $ 
6.
 $ Work in process  
Finished products (1)
  Inventories$ $ 
(1) This balance is net of an approximate $ million write down as of December 28, 2024, associated with the carrying value of assets currently associated with the February 16, 2023, Cambodia-sourced non-human primate matter. See Note 18. Commitments and Contingencies
 million.
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7.
 $ 
Buildings (1)
  
Machinery and equipment (1)
  Leasehold improvements  Furniture and fixtures  
Computer hardware and software (1)
  
Vehicles (1)
  Construction in progress  Total  Less: Accumulated depreciation()()Property, plant and equipment, net$ $ 
(1) These balances include assets under finance leases. See Note 17. Leases.
Depreciation expense in fiscal years 2024, 2023 and 2022 was $ million, $ million, and $ million, respectively.
8.
 $ $ Capital contributions   Distributions()()()Gain (loss)()()()Foreign currency translation() ()Ending balance$ $ $ 
The Company also invests, with minority positions, directly in equity of predominantly privately held companies. Strategic investments are summarized below:
December 28, 2024December 30, 2023December 31, 2022
(in thousands)
Beginning balance$ $ $ 
Purchase of investments   
Distributions()()()
Gain (loss) (1)
() ()
Reduction for acquisition of entities (1)
 () 
Foreign currency translation() ()
Ending balance$ $ $ 
(1) Refer to Note 2 – Acquisitions and Divestitures for further discussion of the 2023 Noveprim and SAMDI acquisitions.
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9.
 $ $ $ Other assets:Life insurance policies    Total assets measured at fair value$ $ $ $ Accrued liabilities measured at fair value:Contingent consideration$ $ $ $ Other long-term liabilities measured at fair value:Contingent consideration    Total liabilities measured at fair value$ $ $ $ 
 December 30, 2023
 Level 1Level 2Level 3Total
Current assets measured at fair value:(in thousands)
Cash equivalents$ $ $ $ 
Other assets:
Life insurance policies    
Interest rate swap    
Total assets measured at fair value$ $ $ $ 
Other long-term liabilities measured at fair value:
Contingent consideration    
Total liabilities measured at fair value$ $ $ $ 
During fiscal years 2024 and 2023, there were no transfers between fair value levels.
Contingent Consideration
 $ $ Additions   Payments ()()Total gains or losses (realized/unrealized):Adjustment of previously recorded contingent liability  ()Foreign currency translation ()()Ending balance$ $ $ 
The Company estimates the fair value of contingent consideration obligations through valuation models, such as probability-weighted and option pricing models, that incorporate probability adjusted assumptions and simulations related to the achievement of the milestones and the likelihood of making related payments. The unobservable inputs used in the fair value measurements include the probabilities of successful achievement of certain financial targets, forecasted results or targets, volatility, and discount rates. The remaining maximum potential payments are approximately $ million, of which the value accrued as of December 28, 2024 is approximately $ million. As of December 28, 2024 the weighted average probability of
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
%. The average volatility and weighted average cost of capital is approximately % and %, respectively.
Cash Flow Hedge
The Company is exposed to market fluctuations in interest rates as well as variability in foreign exchange rates. The Company had an interest rate swap with a notional amount of $ million that matured November 2, 2024 and was utilized to manage interest rate fluctuation related to floating rate borrowings under the revolving credit facility, at a fixed rate of %.
Debt Instruments
The book value of the Company’s revolving loans are variable rate loans carried at amortized cost which approximates the fair value. The fair value is based on significant other observable inputs, including current interest and foreign currency exchange rates, it is deemed to be Level 2 within the fair value hierarchy.
The book value of the Company’s Senior Notes are fixed rate obligations carried at amortized cost. Fair value is based on quoted market prices as well as borrowing rates available to the Company. As the fair value is based on significant other observable outputs, it is deemed to be Level 2 within the fair value hierarchy.
% Senior Notes due 2028$ $ $ $ 
% Senior Notes due 2029
    
% Senior Notes due 2031
    
10.
 $ $ $ Acquisitions    Foreign exchange()   December 30, 2023    Acquisitions    )Other income (expense)
The Company did not have any U.S. dollar denominated loans borrowed by a non-U.S. Euro functional currency entity under the Credit Facility during fiscal years or 2023.
Principal Maturities
 2026 2027 2028 2029 Thereafter Total$ 
Letters of Credit
As of December 28, 2024 and December 30, 2023, the Company had $ million and $ million, respectively, in outstanding letters of credit.
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12.
 $ $ Less: Net income attributable to noncontrolling interests   Net income attributable to Charles River Laboratories International Inc.$ $ $ Calculation of net income per share attributable to Charles River Laboratories International Inc. common shareholdersNet income attributable to Charles River Laboratories International Inc.$ $ $ Other()()Total deferred tax liabilities()()Net deferred taxes$()$()
The Company has recognized its deferred tax assets on the belief that it is more likely than not that they will be realized. Exceptions primarily relate to deferred tax assets for net operating losses in Luxembourg, Sweden, state research and development tax credits, certain capital losses, and fixed assets in the U.K. and Ireland.
 $ $ Additions (reductions) charged to income tax provision, net   Reductions due to divestitures, restructuring() ()Currency translation and other() ()Ending balance$ $ $ 
As of December 28, 2024, the Company had tax-effected deferred tax assets for net operating loss carryforwards of $ million, as compared to $ million as of December 30, 2023. Of this amount, $ million are definite-lived and begin to expire in 2027, and the remainder of $ million can be carried forward indefinitely. The Company has deferred tax assets for tax credit carryforwards of $ million. The entire $ million are definite-lived and begin to expire after 2039. Additionally, the Company records a benefit to operating income for research and development and other credits in Quebec, France, the Netherlands, and the U.K. related to its DSA facilities.
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 $ $ Additions to tax positions for current year   Effect of foreign exchange() Fair value of plan assets at end of year$ $ Net balance sheet liability$ $ Amounts recognized in balance sheet:Noncurrent assets$ $ Current liabilities  Noncurrent liabilities  
Actuarial gains and losses are driven by changes in economic assumptions, principally discount rates.
 $ $ Net prior service cost (credit)()()()Net amount recognized$ $ $  $ Fair value of plan assets  
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 $ Fair value of plan assets   $ $ Interest cost   Expected return on plan assets()()()Amortization of prior service credit ()()Amortization of net loss   Net periodic benefit cost    $ $ 
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
 $ $ Operating cash flows from finance leases   Finance cash flows from finance leases   Non-cash leases activity:Right-of-use lease assets obtained in exchange for new operating lease liabilities$ $ $ Right-of-use lease assets obtained in exchange for new finance lease liabilities   
Lease term and discount rate
December 28, 2024December 30, 2023December 31, 2022
Weighted-average remaining lease term (in years)
Operating lease
Finance lease
Weighted-average discount rate
Operating lease % % %
Finance lease % % %
At the lease commencement date, the discount rate implicit in the lease is used to discount the lease liability if readily determinable. If not readily determinable or leases do not contain an implicit rate, the Company’s incremental borrowing rate is used as the discount rate, which is based on the information available at the lease commencement date and represents a rate that would be incurred to borrow, on a collateralized basis, over a similar term, an amount equal to the lease payments in a similar economic environment.
 $ 2026  2027  2028  2029  Thereafter  Total minimum future lease payments  Less: Imputed interest  Total lease liabilities$ $ 
Total minimum future lease payments (relating to an operating lease) of approximately $ million for a lease that has not commenced as of December 28, 2024, as the Company does not yet control the underlying asset, are not included in the consolidated financial statements. This lease is expected to commence in fiscal year 2025 with a lease term of approximately years.
101
CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18.
million, some with or without stop-loss limits, depending on market availability. Insurance policies at certain locations are based on a percentage of the insured assets, for which deductibles for certain property may exceed $ million in the event of a catastrophic event. In addition, the Company purchased representation and warranty insurance in support of some acquisitions, in which deductibles could reach $ million.
Litigation
On February 17, 2023, the Company received a grand jury subpoena requesting certain documents related to an investigation by the U.S. Department of Justice (DOJ) and the U.S. Fish and Wildlife Service (USFWS) into the Company’s conduct regarding several shipments of non-human primates from Cambodia. That investigation remains ongoing and the Company continues to cooperate with the investigation. As also previously disclosed, a parallel civil investigation is being undertaken by the DOJ and USFWS. The Company is also cooperating with that investigation, and although the Company continues to dispute the merits of certain positions taken by the DOJ and USFWS in the civil investigation, the Company has discussed a potential resolution of that matter with the DOJ and USFWS. Those discussions are ongoing. Although the Company maintains a global supplier onboarding and oversight program incorporating risk-based due diligence, auditing, and monitoring practices to help ensure the quality of our supplier relationships and compliance with applicable U.S. and international laws and regulations, including the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), in connection with the civil investigation, the Company has voluntarily suspended future shipments of non-human primates from Cambodia to the United States until such time that the Company and USFWS can agree upon and implement additional procedures to reasonably ensure that non-human primates imported from Cambodia are purpose-bred. The Company continues to care for the Cambodia-sourced non-human primates from certain shipments in the United States. Due to a number of factors, including the age of these NHP’s, during the fourth quarter of fiscal year 2024, the Company recorded a charge of $ million to costs of products sold within the accompanying consolidated statements of income to reflect the reduction in carrying value of this inventory to zero. On May 16, 2023, the Company received an inquiry from the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) requesting it to voluntarily provide information, subsequently augmented with a document subpoena and additional inquiries, primarily related to the sourcing of non-human primates and related disclosures, and the Company is cooperating with the requests. The Company’s Audit Committee has retained counsel to conduct an independent investigation into certain issues raised in the investigations, and that work is ongoing. The Company cannot predict what action, if any, might be taken in the future by the DOJ, USFWS, SEC or other governmental authorities. None of the DOJ, USFWS or SEC has provided the Company with any specific timeline or indication as to when these investigations or, specific to the DOJ and USFWS, discussions regarding resolution and future processes and procedures, will be concluded or resolved. The Company cannot predict the timing, outcome or possible impact of the investigations, including without limitation any potential fines, penalties or liabilities.
A putative securities class action (Securities Class Action) was filed on May 19, 2023 against the Company and a number of its current/former officers in the United States District Court for the District of Massachusetts. On August 31, 2023, the court appointed the State Teachers Retirement System of Ohio as lead plaintiff. An amended complaint was filed on November 14, 2023 that, among other things, included only James Foster, the Chief Executive Officer and David R. Smith, the former Chief Financial Officer as defendants along with the Company. The amended complaint asserts claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") on behalf of a putative class of purchasers of Company securities from May 5, 2020 through February 21, 2023, alleging that certain of the Company’s disclosures about its practices with respect to the importation of non-human primates made during the putative class period were materially false or misleading. On July 1, 2024, the court dismissed the complaint, denied the plaintiff’s informal request for leave to amend, and entered judgment for defendants. On July 30, 2024, the plaintiff filed a notice of appeal in the United States Court of Appeals for the First Circuit. While the Company cannot predict the final outcome of this matter, it believes the class action to be without merit and plans to vigorously defend against it. The Company cannot reasonably estimate the maximum potential exposure or the range of possible loss in association with this matter.
On November 8, 2023, a stockholder filed a derivative lawsuit in the U.S. District Court of the District of Delaware asserting claims on the Company’s behalf against the members of the Company’s Board of Directors and certain of the Company’s current/former officers (James Foster, the Chief Executive Officer; David R. Smith, the former Chief Financial Officer; and Flavia Pease, the current Chief Financial Officer). The complaint alleges that the defendants breached their fiduciary duties to the Company and its stockholders because certain of the Company’s disclosures about its practices with respect to the importation of non-human primates were materially false or misleading. The complaint also alleges that the defendants breached their fiduciary duties by causing the Company to fail to maintain adequate internal controls over securities disclosure and compliance with applicable law and by failing to comply with the company’s Code of Business Conduct and Ethics. The
102

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
million as of December 28, 2024 and the majority of these obligations are expected to be settled during 2025.
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.    Controls and Procedures
(a)   Evaluation of Disclosure Controls and Procedures
Based on their evaluation, required by paragraph (b) of Rules 13a-15 or 15d-15, promulgated by the Securities Exchange Act of 1934, as amended (Exchange Act), the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, are effective, at a reasonable assurance level, as of December 28, 2024, to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurances of achieving the desired control objectives, and management necessarily was required to apply its judgment in designing and evaluating the controls and procedures.
(b)   Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Under the supervision and with the participation of our management, including our CEO and CFO, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our assessment and those criteria, management concluded that the Company maintained effective internal control over financial reporting as of December 28, 2024.
The effectiveness of our internal control over financial reporting as of December 28, 2024, has been audited by PricewaterhouseCoopers LLP, an Independent Registered Public Accounting Firm, as stated in their report which appears in Item 8, “Financial Statements and Supplementary Data” in this Annual Report on Form 10-K.
(c) Changes in Internal Controls Over Financial Reporting
There were no material changes in the Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of the Exchange Act Rules 13a-15 or 15d-15 that occurred during the fourth quarter of 2024 that materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.
Item 9B.    Other Information
During the quarter ended December 28, 2024, none of our officers or directors or any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.

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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
PART III
Item 10.    Directors, Executive Officers and Corporate Governance
A.    Directors and Compliance with Section 16(a) of the Exchange Act
Any information required by this Item regarding our directors and compliance with Section 16(a) of the Exchange Act by our officers and directors will be included in the 2025 Proxy Statement under the sections captioned “Nominees for Directors” and “Delinquent Section 16(a) Reports” and is incorporated herein by reference thereto. The information required by this Item regarding our corporate governance will be included in the 2025 Proxy Statement under the section captioned “Corporate Governance” and is incorporated herein by reference thereto.
B.    Our Executive Officers
The information required by this Item regarding our executive officers is reported in Part I of this Form 10-K under the heading “Item 1. Business”
C.    Audit Committee Financial Expert
The information required by this Item regarding the audit committee of the Board of Directors and financial experts will be included in the 2025 Proxy Statement under the section captioned “The Board of Directors and its Committees-Audit Committee and Financial Experts” and is incorporated herein by reference thereto.
D.    Insider Trading Policy
We have an Insider Trading Policy governing the purchase, sale, and/or other dispositions of our securities by directors, officers, and employees of the Company. The Insider Trading Policy is designed to promote compliance with insider trading laws, rules, and regulations and any applicable listing standards. Our Insider Trading Policy is posted on our website and can be accessed by selecting the “Corporate Governance” link at http://ir.criver.com.
E.    Code of Ethics
We have adopted a Code of Business Conduct and Ethics that applies to all of our employees and directors, including our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions. Our Code of Business Conduct and Ethics is posted on our website and can be accessed by selecting the “Corporate Governance” link at http://ir.criver.com. We will provide to any person, without charge, a copy of our Code of Business Conduct and Ethics. To obtain a copy, please mail a request to the Corporate Secretary, Charles River Laboratories International, Inc., 251 Ballardvale Street, Wilmington, MA 01887. Information on our website is not incorporated by reference in this annual report.
F.    Changes to Board Nomination Procedures
Since December 2021, there have been no material changes to the procedures by which security holders may recommend nominees to our Board of Directors.
Item 11.    Executive Compensation
, shortly after our annual meeting of shareholders and the release of our first quarter financial results, for granting annual stock awards to eligible recipients, absent an extraordinary event. The Compensation Committee believes this aligns timing of equity grants with the planning of annual salary increases (also in the second quarter of our fiscal year), allowing our managers to take a holistic view of total compensation. is intended to ensure that options are awarded at a time when the exercise price fully reflects all recently disclosed information. In the case of new hires eligible to receive equity grants, grants are generally made on the first business day of the month following the date the individual commences employment.
All grants to executive officers are approved by the Compensation Committee itself and not pursuant to any delegated authority.
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CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
stock option grants with the release of material, non-public information in a manner that would provide advantageous option exercise prices to grant recipients. Option exercise prices are, in all cases, equal to the closing price of our common stock on the date of grant.
B.     Actions to Recover Erroneously Awarded Compensation
At no point during or after the last completed fiscal year did we prepare an accounting statement that required the recovery of erroneously awarded compensation pursuant to the company’s clawback policy, nor was there an outstanding balance as of the end of the last completed fiscal year of erroneously awarded compensation to be recovered from the application of the policy to a prior restatement.
The remainder of the information required by this Item will be included in the 2025 Proxy Statement under the sections captioned “2024 Director Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation and Related Information,” “Compensation Committee Interlocks and Insider Participation” and “Report of Compensation Committee,” and is incorporated herein by reference thereto.
Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item will be included in the 2025 Proxy Statement under the sections captioned “Beneficial Ownership of Securities” and “Equity Compensation Plan Information” and is incorporated herein by reference thereto.
Item 13.    Certain Relationships and Related Transactions, and Director Independence
The information required by this Item will be included in the 2025 Proxy Statement under the sections captioned “Related Person Transaction Policy” and “Corporate Governance-Director Qualification Standards; Director Independence” and is incorporated herein by reference thereto.
Item 14.    Principal Accountant Fees and Services
The information required by this Item will be included in the 2025 Proxy Statement under the section captioned “Statement of Fees Paid to Independent Registered Public Accounting Firm” and is incorporated herein by reference thereto.
106

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.
PART IV
Item 15.    Exhibits and Financial Statement Schedules
Item 15(a)(1) and (2) Financial Statements and Schedules
See "Index to Consolidated Financial Statements and Financial Statements Schedules" at Item 8 to this Annual Report on Form 10-K. Other financial statement schedules have not been included because they are not applicable or the information is included in the financial statements or notes thereto.
Item 15(a)(3) and Item 15(b) Exhibits
We have identified below each management contract and compensation plan filed as an exhibit to this Annual Report on Form 10-K.
Exhibit No.DescriptionFiled with this Form 10-KIncorporation by Reference
FormFiling DateExhibit No.
3.1S-1/AJune 23, 20003.1
3.28-KDecember 15, 20213.1
4.1S-1/AJune 23, 20004.1
4.210-KFebruary 11, 20204.2
4.310-QAugust 5, 202010.3
4.48-KApril 3, 20184.1
4.58-KOctober 23, 20194.1
4.68-KOctober 23, 20194.2
4.78-KMarch 23, 20214.1
4.88-KMarch 23, 20214.2
4.98-KMarch 23, 20214.3
4.108-KMarch 23, 20214.4
4.11S-3May 4, 20214.1
4.12S-3May 4, 20214.2
10.1*10-QAugust 3, 201610.1
10.2*
10-KFebruary 14, 202410.2
10.3*10-KFebruary 14, 201710.4
10.4*10-KFebruary 14, 201710.7
10.5*10-QAugust 5, 202010.1
10.6*10-KFebruary 14, 202410.6
10.7*
 X
10.8*10-KFebruary 23, 200910.7
107

Exhibit No.DescriptionFiled with this Form 10-KIncorporation by Reference
FormFiling DateExhibit No.
10.9*10-QMay 4, 201610.1
10.10*10-KMarch 9, 200510.23
10.11*8-KMay 18, 202199.1
10.12*10-QMay 4, 202110.2
10.13†
X
10.148-KDecember 13, 202410.1
10.15*8-KDecember 27, 202110.1
10.16*8-KDecember 27, 202110.2
10.17*†
10-QMay 4, 202210.1
1910-KFebruary 14, 202419
21.1X
23.1X
31.1X
31.2X
32.1X
9710-KFebruary 14, 202497
101.INSeXtensible Business Reporting Language (XBRL) Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL documentX
101.SCHXBRL Taxonomy Extension Schema DocumentX
101.CALXBRL Taxonomy Calculation Linkbase DocumentX
101.DEFXBRL Taxonomy Definition Linkbase DocumentX
101.LABXBRL Taxonomy Label Linkbase DocumentX
101.PREXBRL Taxonomy Presentation Linkbase DocumentX
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Management contract or compensatory plan, contract or arrangement.
† Certain information in this exhibit was omitted by means of redacting a portion of the text and replacing it with [***]
Item 16.    Form 10-K Summary
None.
108
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 INTERNATIONAL, INC.
February 19, 2025By:/s/ FLAVIA H. PEASE
Flavia H. Pease
Corporate Executive Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities indicated below and on the dates indicated.
SignaturesTitleDate
By:/s/ JAMES C. FOSTERChairman, President and Chief Executive OfficerFebruary 19, 2025
James C. Foster
By:/s/ FLAVIA H. PEASECorporate Executive Vice President andFebruary 19, 2025
Flavia H. PeaseChief Financial Officer
By:/s/ MICHAEL G. KNELLCorporate Senior Vice President andFebruary 19, 2025
Michael G. KnellChief Accounting Officer
By:/s/ NANCY C. ANDREWSDirectorFebruary 19, 2025
Nancy C. Andrews
By:/s/ ROBERT J. BERTOLINIDirectorFebruary 19, 2025
Robert J. Bertolini
By:
/s/ RESHEMA KEMPS-POLANCO
Director
February 19, 2025
Reshema Kemps-Polanco
By:/s/ DEBORAH T. KOCHEVARDirectorFebruary 19, 2025
Deborah T. Kochevar
By:/s/ GEORGE LLADODirectorFebruary 19, 2025
George Llado
By:/s/ MARTIN MACKAYDirectorFebruary 19, 2025
Martin Mackay
By:/s/ GEORGE E. MASSARODirectorFebruary 19, 2025
George E. Massaro
By:
/s/ CRAIG B. THOMPSON
DirectorFebruary 19, 2025
Craig B. Thompson
By:/s/ RICHARD F. WALLMANDirectorFebruary 19, 2025
Richard F. Wallman
By:/s/ VIRGINIA M. WILSONDirectorFebruary 19, 2025
Virginia M. Wilson

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