Charles River Laboratories International (CRL) 10-K risk factor changes: FY2022 vs FY2021

Set forth below, elsewhere in this Form [removed: 10-K] [added: 10-K,] and in other documents we file with the SEC are risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-looking statements contained in this Form 10-K.

The summary below is not exhaustive and is qualified by reference to the full set of risk factors set forth in this "Risk Factors" [added: section.]

- We bear financial risk for contracts that may be terminated or reduced in scope, underpriced, subject to cost overruns or [removed: delayed.][added: delays.]

- Several of our product and service [removed: offerings] [added: offerings, including our non-human primate supply,] are dependent on a limited source of supply that, when interrupted, adversely affects our business.

Legal [removed: &] [added: and] Regulatory Risk Factors

- [removed: Contract] [added: Non-clinical contract] research services create a risk of liability.

Labor [removed: &] [added: and] Employment Risk Factors

[removed: The continuation of this outbreak may have, and] [added: Eliminating] the [removed: emergence] [added: use] of [removed: other epidemic or pandemic crises could have,] [added: animals in research may have] material adverse effects on our business, results of operations, or financial [removed: condition.][added: condition.]

The COVID-19 pandemic is dynamic and [removed: expanding,] [added: evolving,] and its ultimate scope, duration and effects are uncertain.

[removed: This pandemic has and continues to result in, and any future epidemic or pandemic crises may potentially result in,] direct and indirect adverse effects on our industry and customers, which in turn has (with respect to COVID-19) and may (with respect to future epidemics or crises) impact our business, results of operations and financial condition.

Effects of the [removed: current] pandemic have included, or may in the future include, among others:

We bear financial risk for contracts that may be terminated or reduced in scope, underpriced, subject to cost overruns or [removed: delayed.][added: delays.]

Many of our agreements, including those which underlie our strategic relationships with some of our more significant clients, [removed: provide] [added: allow] for termination or reduction in scope with little or no notice.

In general, the process of planning and preparing for these types of integrated, wide-scale implementations is extremely complex and we are required to address a number of challenges, including information security assessment and remediation, data conversion, [added: associated regulatory compliance,] network and system cutover, user training, and integration with existing processes or systems.

[added: While we have implemented additional security safeguards and continue to enhance existing safeguards,] such efforts may not be successful, in which case we could suffer significant harm.

During the last two decades, we have steadily expanded our business through numerous acquisitions, including our recent acquisitions of [removed: HemaCare, Cellero,] Distributed Bio, Retrogenix, [removed: Cognate BioServices, Inc. (Cognate),] [added: Cognate, Vigene,] and [removed: Vigene Biosciences, Inc. (Vigene).][added: Explora BioLabs.]

- difficulties in achieving business and financial success (due to unplanned events such as the COVID-19 pandemic and the long-term economic impact of the [removed: pandemic);][added: pandemic and the ongoing conflict between the Russian Federation and Ukraine);]

- potential losses resulting from [added: operational weaknesses or] undiscovered liabilities of acquired companies that are not covered by the indemnifications we may obtain from sellers or any insurance we may acquire in connection with transactions;

- disagreements or disputes with prior owners of an acquired business, technology, service or product that may result in [added: legal settlements,] litigation expenses and diversion of our management’s attention.

Such divestitures could involve additional risks, other than those listed above, including: difficulties in the separation of operations, services, products, and personnel, the need to agree to retain or assume certain current or future liabilities in order to complete the [removed: divestiture,] [added: divestitures,] and write-offs, including those related to goodwill and other intangible assets and which could have an adverse effect on our results of operations and financial condition.

[removed: In addition, we may encounter difficulty in finding buyers or] alternative exit strategies at acceptable prices and terms, and in a timely manner.

We may not be successful in managing these or any other significant risks that we encounter in divesting a business, site or product line or service offering and, as a result, we may not achieve some or all of the expected benefits of the [removed: divestiture.][added: divestitures.]

- potentially negative consequences from changes in U.S. and/or foreign tax laws, or interpretations and enforcement thereof, notably tax regulations issued and to-be-issued with respect to the [removed: Tax Cuts and Jobs Act] [added: potential adoption] of [removed: 2017 (2017 Tax Act)] [added: global minimum taxation requirements] and [added: potential changes to existing tax law by] the [removed: EU Anti-Tax Avoidance Directives I and II,] [added: current U.S. Presidential administration] and [removed: the creation of the Joint Chiefs of Global Tax Enforcement;][added: Congress;]

[removed: Any negative attention, threats, acts of vandalism or legal] action directed against our animal research or procurement activities, or our third-party service providers, such as our airline carriers or suppliers, or that restrict our or their ability to access protected or conservation areas, could impair our ability to operate our business efficiently.

[added: For additional discussion of the factors that we believe have recently] been influencing R&D budgets at our clients, please see the sections entitled “Our Strategy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-K.

Further, our [removed: Research and GMP-Compliant Cells] [added: Cell Solutions] operations are structured to produce research materials, such as blood products based on customers’ existing demand, and perceived potential changes in demand, for these products.

[removed: The] [added: As a result of the COVID-19 pandemic and the] impact of measures intended to reduce the spread of [removed: COVID-19 caused us to] [added: COVID-19, we] temporarily [removed: suspend] [added: suspended] blood donations [added: at one of our Cell Solutions facilities] in early 2020, which [removed: have since resumed, at our Research and GMP-Compliant Cells facilities, further limiting our ability to respond to changes in demand.][added: reopened shortly thereafter.]

Furthermore, we [removed: will] have significant business which [removed: will] materially [removed: depend] [added: depends] upon the regulatory approval of the products it [removed: will manufacture] [added: manufactures] for its contract development and manufacturing organization (CDMO) [removed: customers.][added: clients.]

As such, if these [removed: customers] [added: clients] experience a delay in, or failure to receive, approval for any of their product candidates or fail to maintain regulatory approval of their products that we develop or manufacture, our revenue and profitability could be materially adversely affected.

Additionally, if the [removed: Food and Drug Administration] [added: FDA] or a comparable foreign regulatory authority does not approve of our facilities for the manufacture of a customer product, observes significant deficiencies or violations at its facilities or withdraws such approval in the future, our customers may choose to identify alternative manufacturing facilities and/or relationships, which could significantly impact our CDMO capacity and capabilities and results of operations therefrom.

Several of our product and service [removed: offerings] [added: offerings, including our non-human primate supply,] are dependent on a limited source of supply that, when interrupted, adversely affects our business.

We depend on a limited international source of supply for certain products, such as large research [removed: models.][added: models, including non-human primates.]

[removed: For example, as] [added: As] with other industry participants, certain of our activities rely on a sufficient supply of large research models, which has seen increasing demand as compared to supply in [removed: 2020 and 2021 and into 2022] [added: recent years] due to a variety of factors.

First, the surge of research relating to COVID-19 [removed: has] increased [removed: short term] [added: short-term] demand.

Second, China [removed: supplies] [added: previously supplied] a significant portion of certain critical large research models, which have been subject to geographic export restrictions applicable to many animal species since the beginning of the COVID-19 pandemic.

While we continue to take steps to find alternative supply channels [added: (and other global sources)] and lock in supply [added: (both for non-human primates and] with [added: respect to other limited supply products) with] preferred sources through multi-year and/or minimum commitment contracts, [added: there are limited sources and] such mitigating efforts may not prove successful at ensuring a steady and timely supply or may require (and in the past have required) us to pay significantly higher prices for such products during periods of global shortage or restrictions on the [added: importation or the] transportation of [added: models] products.

Further, portions of our [removed: Research and GMP-Compliant Cells] [added: Cell Solutions] business depends on the availability of appropriate donors.

Due to any pandemic, epidemic or outbreak in one or more regions in which our [removed: Research and GMP-Compliant Cells] [added: Cell Solutions] business operates, the portion of the donor pool that typically donates may be unable, or unwilling to donate, thereby significantly reducing the availability of research products upon which we rely.

If donor participation declines, we may not be able to reduce costs sufficiently to maintain profitability of the [removed: Research and GMP-Compliant Cells] [added: Cell Solutions] business.

Our CDMO services establish us as a premier scientific partner for cell and gene therapy development, testing, and manufacturing; enable us to provide clients with an integrated solution from basic research and discovery through cGMP production; enable us to drive efficiency and accelerate clients’ speed-to-market by integrating manufacturing and the required testing; and enable our clients to seamlessly conduct analytical testing, process development, and manufacturing for advanced modalities with the same scientific [removed: partner][added: partner.]

- Our business, results of operations, or financial condition could be adversely affected by disruptions in the global economy caused by the ongoing conflict between the Russian Federation and Ukraine.

- Increasing focus on environmental, social and governance matters may impact our business, financial results or stock price.

As we build out IT infrastructure to support regulatory requirements for applications and data systems, we are doing so utilizing contemporary validation practices.

As with all work conducted in our regulatory sites, these too are subject to government inspections.

We have not experienced an information security breach or material cybersecurity incident within the last three years.

In addition, we may encounter difficulty in finding buyers or

Our business, results of operations, or financial condition could be adversely affected by disruptions in the global economy caused by the ongoing conflict between the Russian Federation and Ukraine.

In February 2022, the Russian Federation launched an invasion of the country of Ukraine, resulting in negative impacts to the global economy.

Furthermore, governments in the U.S., Canada, the United Kingdom, and European Union have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia.

Although we have no operations in Russia or Ukraine, we have ceased doing business with our Russian customers and distributors.

Additional risks to our business that may emerge as a result of the armed conflict include, among others, shortages in materials; increased costs for transportation, energy, and raw materials; adverse changes to international trade policies and relations, including increased trade barriers or restrictions on global trade; cyberattacks; supply disruptions; lower consumer demand; and changes to foreign exchange rates and financial markets, any of which may adversely affect our business and supply chain.

This pandemic has and continues to result in, and any future epidemic or pandemic crises may potentially result in,

Any negative attention, threats, acts of vandalism or legal

And third, in concert with legal matters affecting the Cambodian supply of non-human primates, the non-human primate supply chain globally has recently experienced constriction.

More broadly, in November 2022 the U.S. Department of Justice (DOJ) announced that a Cambodia supplier of non-human primates and two Cambodian officials had been criminally charged in connection with illegally importing non-human primates into the United States.

While the Company was not named or referenced in the November 2022 proceedings, the Company shortly thereafter announced that Cambodia was the primary country of origin of non-human primates imports to Charles River, and that it had begun to operate under the expectation that for some time period supply of Cambodia-sourced non-human primates (which according to CDC statistics, account for approximately 60% of supply to the United States) would be difficult to obtain in the United States.

Subsequent to the Company’s announcement, USFWS denied clearance to certain shipments of non-human primates the Company had received from Cambodia.

And as noted in Item 3.

“Legal Proceedings” in this Annual Report on Form 10-K, in February 2023 the Company was informed by the DOJ that in conjunction with the U.S. Fish and Wildlife Service (USFWS), they had commenced a grand jury investigation into the Company’s conduct regarding several shipments of non-human primates, which is occurring in parallel to a civil investigation being undertaken by the DOJ and USFWS.

In connection with the civil investigation, the Company has voluntarily suspended planned future shipments of Cambodia non-human primates until such time that the Company and USFWS can agree upon and implement additional procedures to reasonably ensure that non-human primates imported to the United States from Cambodia are purpose-bred.

Accordingly, the Company believes that for some undetermined period of time it will not be able to obtain Cambodia-sourced non-human primates.

Finally, we may be unable to obtain supply due to governmental restrictions or limitations, including (as noted above) non-human primates.

For example, in December 2022, the FDA Modernization Act 2.0 was passed, which requires the FDA to develop and implement a strategy to reduce the use of animals in testing while maintaining the safety and effectiveness of medical products and to explore the use of non-animal alternatives to animal testing.

While there have been significant advancements in the development of alternative methods, the complete elimination of animals in research will be a gradual process that may take many years to achieve.

The use of animals in research is highly regulated and proposed changes to current regulations will need to be carefully evaluated to ensure that they do not compromise the safety and efficacy of new drugs and medical treatments.

For additional discussion of the factors specifically affecting our non-human primates including related oversight trade compliance agencies, please see the sections entitled “Item 1A.

Risk Factors – Industry Risk Factors - Several of our product and service offerings, including our non-human primate supply, are dependent on a limited source of supply that, when interrupted, adversely affects our business”, and “Item 3.

Legal Proceedings” included elsewhere in this Form 10-K.

For our

service lines and may adversely affect our financial condition and results of operations.

Legal and Regulatory Risk Factors

Federal, state and local regulations do change, requiring prompt adoption to remain in a constant state of compliance.

Changes in the regulations could require us to alter how we operate our business, potentially resulting in a significantly increased cost of compliance.

The EU GDPR imposes stringent obligations regarding the collection, control, use, sharing, disclosure and other processing of personal data of individuals within the EU and European Economic Area (EEA).

EU member states may also impose additional requirements in relation to personal data through their national implementing legislation.

The EU GDPR also imposes specific restrictions on the transfer of personal data to countries outside of the EU and EEA, including the use of appropriate safeguards to enable such transfers, such as Standard Contractual Clauses (SCC).

In 2022, the EU Commission and the U.S. announced that they have agreed in principle on a new Trans-Atlantic Data Privacy Framework.

While there remains some uncertainty regarding this framework, it is expected to enter into force in 2023.

Additionally, we are subject to the privacy and data protection laws of the UK, including the UK Data Protection Act of 2018 (UK GDPR).

Similar to the EU GDPR, the UK GDPR imposes restrictions on the processing of personal data, as well as transfers of personal data from the UK to other countries.

section.

- Our business may be further adversely impacted by the COVID-19 pandemic.

The COVID-19 pandemic is dynamic and expanding.

While we have implemented additional security safeguards, including:

- remediation of the March 2019 incident;

- cooperation with U.S. Federal authorities’ investigation into the incident and established an ongoing relationship to better understand the ever-changing nature of cybersecurity related threats;

- additional visibility into our network and environment;

- additional monitoring of our environment;

- active threat hunting in our environment;

- enhanced protection for externally facing web applications;

- the addition of Multi-Factor Authentication to ingress points;

- the addition of denial of service attack protection; and

- increased network segmentation,

For additional discussion of the factors that we believe have recently

Furthermore, changes in government budgetary priorities as a result of the COVID-19 pandemic and the impact of measures intended to reduce the spread of COVID-19 could reduce government funding of R&D that is unrelated to the disease, which could adversely affect our business and our financial results.

As a result of the COVID-19 pandemic and the impact of measures intended to reduce the spread of COVID-19, we temporarily

suspended blood donations at one of our Research and GMP-Compliant Cells facilities in early 2020, which have since resumed.

The presence of these infectious agents in our animal production facilities and certain

In recent years FDA has issued guidance that now requires submissions to be presented in a format that conforms with the FDA’s SEND (Standardization for Exchange of Nonclinical Data) standards that apply to our clients’ NDA and IND submissions and require us to provide electronic data in specific formats that will allow for more efficient, higher quality regulatory reviews.

Federal, state and local regulations change often, and new regulations are frequently adopted.

Changes in the regulations could require us to change the way in which we operate our business and the cost of compliance with new or changed regulations could be significant.

For example, in February 2022, the FDA released guidance that is intended to remain in effect through the duration of the COVID-19 public health emergency.

The guidance provides biopharmaceutical companies with alternate options for study designs, large animal model selection, and additional considerations for drug development paradigms.

Additionally, following the United Kingdom’s withdrawal from the EU, we also are subject to the U.K. General Data Protection Regulation (“U.K. GDPR”) (i.e., a version of the GDPR as implemented into U.K. law).

The cost of compliance, and the potential for fines and penalties for non-compliance, with GDPR and U.K. GDPR may have a significant adverse effect on our business and operations.

Recent legal developments in the European Economic Area (EEA), including recent rulings from the Court of Justice of the European Union and from various EU member state data protection authorities, have created complexity and uncertainty regarding transfers of personal data from the EEA to the United States and other so-called third countries outside the EEA.

Similar complexities and uncertainties also apply to transfers from the United Kingdom to third countries.

Moreover, on June 4, 2021, the European Commission adopted new SCCs, which impose on companies additional obligations relating to personal data transfers out of the EEA, including the obligation to update internal privacy practices, conduct transfer impact assessments and, as required, to implement additional security measures.

The new SCCs may increase the legal risks and liabilities under EU laws associated with cross-border data transfers, and result in material increased compliance and operational costs.

The PIPL imposes significant potential penalties for violations, including fines of up to RMB 50 million or five percent (5%) of annual turnover, civil and criminal liability, and potential revocation of

business licensure.

In addition, in November 2020, California voters approved the California Privacy Rights Act (CPRA) which modifies the CCPA and will impose additional data protection obligations on companies doing business in California, including granting additional privacy rights to consumers and creating a new state privacy regulator to implement and enforce the CCPA and CPRA.

Numerous other states, including Virginia and Colorado, have also enacted or are in the process of enacting or considering comprehensive state-level data privacy and security laws, rules and regulations.

In 2017, significant U.S. tax law changes from the 2017 Tax Act went into effect.

There remain certain provisions enacted as part of the 2017 Tax Act which still require clarification and guidance from the Internal Revenue Service (IRS) and Treasury Department.

In 2021, U.S. proposed legislation continued to be introduced.

If enacted, these or other changes in US.

tax laws could impact our profits, effective tax rate and cash flows.

Additionally, the OECD, the European Commission (EC) and individual taxing jurisdictions have recently focused on issues related to the taxation of multinational enterprises.

In 2015, the OECD released its final reports for reform of the international tax system, meant to address concerns regarding base erosion and profit shifting (BEPS).

A discussion of our results of operations for the fiscal year ended December [removed: 26, 2020] [added: 25, 2021] and a comparison of our results for the fiscal years ended December [removed: 26, 2020] [added: 25, 2021] and December [removed: 28, 2019] [added: 26, 2020] was included in Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended December [removed: 26, 2020,] [added: 25, 2021,] filed with the SEC on February [removed: 17, 2021.][added: 16, 2022.]

For [added: over] 75 years, we have been in the business of providing the research models required in [added: the] research and development of new drugs, devices, and therapies.

Over this time, we have built upon our original core competency of laboratory animal medicine and science (research model technologies) to develop a diverse portfolio of discovery and safety assessment services, both Good Laboratory Practice (GLP) and non-GLP, [removed: which is able to support] [added: that supports] our clients from target identification through non-clinical development.

We also provide a suite of products and services to support our clients’ manufacturing activities, including our [removed: newly acquired] contract development and manufacturing organization (CDMO) business.

Utilizing our broad portfolio of products and services enables our clients to create a more [added: efficient and] flexible drug development model, which reduces their costs, enhances their productivity and effectiveness, and increases speed to market.

Our client base includes major global [removed: biopharmaceutical] [added: pharmaceutical] companies, many biotechnology companies; agricultural and industrial chemical, life science, veterinary medicine, medical device, diagnostic and consumer product companies; contract research and contract manufacturing organizations; and other commercial entities, as well as leading hospitals, academic institutions, and government agencies around the world.

We currently operate in over [removed: 110] [added: 150] locations and in [removed: over 20] [added: 21] countries worldwide, which numbers exclude [removed: our] [added: certain] Insourcing Solutions (IS) sites.

Our RMS reportable segment includes the Research Models, Research Model Services, and [removed: Research and GMP-Compliant Cells] [added: Cell Solutions] businesses.

Research Model Services includes: Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered models; Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models; and Insourcing Solutions (IS), which provides colony management of our clients’ research operations (including recruitment, training, staffing, and management [removed: services).][added: services) within our clients’ facilities as well as our own vivarium space, utilizing both our Charles River Accelerator and Development Lab (CRADL) and our Explora BioLabs options.]

[removed: Research and GMP-Compliant Cells supplies] [added: Cell Solutions provides] controlled, consistent, customized primary cells and blood components derived from normal and mobilized peripheral blood, bone marrow, and cord blood.

Our Manufacturing reportable segment includes Microbial Solutions, which provides *in vitro* (non-animal) lot-release testing products, microbial detection products, and species identification [removed: services;] [added: services and] Biologics Solutions (Biologics), which performs specialized testing of biologics (Biologics Testing Solutions) as well as contract development and manufacturing products and services [removed: (CDMO); and Avian Vaccine Services (Avian), which supplies specific-pathogen-free chicken eggs and chickens.][added: (CDMO).]

On June 28, 2021, we acquired Vigene Biosciences, Inc. (Vigene), a gene therapy [removed: contract development and manufacturing organization (CDMO),] [added: CDMO,] providing viral vector-based gene delivery solutions.

The [removed: preliminary] purchase price of Vigene was $323.9 million, net of $2.7 million in cash, and includes $34.5 million of contingent consideration (maximum contingent payments of up to $57.5 million based on future performance).

On March 30, 2021, we acquired Retrogenix Limited (Retrogenix), an [removed: early-stage CRO providing specialized] [added: outsourced discovery services provider specializing in] bioanalytical services utilizing its proprietary cell microarray technology.

The [removed: preliminary] purchase price of Cognate was [removed: $879.0] [added: $877.9] million, net of $70.5 million in cash, [removed: subject to certain post-closing adjustments] and includes $15.7 million of consideration for an approximate 2% ownership interest not [removed: acquired.][added: initially acquired, but redeemed in April 2022 with the ultimate payout tied to performance in 2021.]

The acquisition was funded through a combination of available cash and proceeds from our Credit Facility and [removed: recently issued] Senior [removed: Notes.][added: Notes issued in fiscal 2021.]

The total consideration includes $80.8 million cash paid, settlement of $3.0 million in convertible promissory notes previously issued by us during prior fiscal years, and [removed: $14.0] [added: $14.1] million of contingent consideration (the maximum contingent contractual payments are up to $21.0 million).

The purchase price [removed: for Cellero] [added: of Explora BioLabs] was [removed: $36.9] [added: $284.5] million, net of [removed: $0.5] [added: $6.6] million in cash.

The acquisition was funded through [removed: available cash.][added: proceeds from our Credit Facility.]

This business [removed: is] [added: will be] reported as part of our [removed: RMS] [added: DSA] reportable segment.

We sold our RMS Japan operations to The Jackson Laboratory for a [removed: preliminary] purchase price of [removed: $73.5] [added: $70.9] million, which included [removed: $8.2] [added: $7.9] million in cash, [removed: $3.6] [added: $3.8] million pension over funding, and certain post-closing adjustments.

We also sold our gene therapy CDMO site in Sweden to a private investor group for a [removed: preliminary] purchase price of $59.6 million, net of $0.2 million in cash and certain post-closing adjustments.

A 53rd week in the fourth quarter of the fiscal year is occasionally necessary to align with a December 31 calendar year-end, which [removed: will occur] [added: occurred] in fiscal year 2022.

Our ability to continue to deliver our leading suite of research and non-clinical development solutions has endeavored our clients to increasingly choose to partner with us for our flexible and efficient outsourcing solutions, broad scientific capabilities, and global scale, [removed: as well as] [added: resulting in strong revenue growth across all three of] our [removed: resilience throughout the pandemic.][added: reportable segments in fiscal year 2022.]

Many of our large biopharmaceutical clients have continued to increase investments in their drug discovery and early-stage development efforts and have strengthened their relationships with [removed: both CROs,] [added: outsourced partners,] like [removed: us,] [added: Charles River,] and biotechnology companies to assist them in bringing new drugs to market.

Our DSA reportable segment continued to benefit from these trends in fiscal year [removed: 2021.][added: 2022.]

We believe [removed: the acquisitions of Citoxlab (2019), MPI Research (2018), and WIL Research (2016) have solidified] [added: that] our [added: comprehensive] scientific capabilities and global scale, [removed: and] [added: as well as] the breadth and depth of our scientific expertise, quality, and responsiveness remain key criteria when our clients make the decision to outsource to us.

[removed: As biotechnology funding remains robust and our] [added: Biotechnology] clients continue to [removed: pursue] [added: move] their [added: programs forward and utilize outsourcing to achieve their] goal of more efficient and effective drug research to bring innovative new therapies to [removed: market, they are evaluating outsourcing more of their research programs, such as discovery services.][added: market.]

[removed: Overall, demand] [added: Demand] for our products and services that support our clients’ manufacturing activities [removed: intensified] [added: increased across most of our Manufacturing Solutions businesses] in fiscal year [removed: 2021.][added: 2022.]

[removed: Demand for] [added: Within] our Biologics Solutions [removed: business] [added: business, biologics testing services] continued to [removed: meaningfully accelerate] [added: benefit from robust demand] driven by our analytical testing services to address the rapidly growing proportion of biologic drugs in the pipeline and on the market, including cell and gene [removed: therapies and COVID-19 therapeutics.][added: therapies.]

[removed: In 2021, we continued to enhance] [added: We enhanced] our Biologics Solutions portfolio [added: in 2021] with the acquisitions of Cognate (March 2021) and Vigene (June 2021) to expand our scientific capabilities into the cell and gene therapy CDMO sector.

We believe [removed: these businesses] [added: the initiatives that we have implemented to improve the performance of our CDMO business are beginning to gain traction, and will] enable Charles River to be a premier scientific partner for development, testing, and manufacturing of advanced drug modalities and further enhance our presence in the high-growth cell and gene therapy sector.

Demand [added: and pricing] for our Research Models and Services [removed: returned to pre-pandemic levels as clients returned] [added: increased meaningfully due] to [removed: their research sites and resumed their] [added: our clients’ focus on scientific innovation resulting in increased] biomedical research [removed: efforts in earnest,] [added: activity,] which drove robust revenue growth in fiscal year [removed: 2021.][added: 2022.]

Demand for research model services continued to perform very well, [added: led by our Insourcing Solutions business,] particularly [removed: for] our [removed: IS and GEMS businesses.][added: CRADL™ operations.]

Revenue for fiscal year [removed: 2021] [added: 2022] was [removed: $3.5] [added: $4.0] billion compared to [removed: $2.9] [added: $3.5] billion in fiscal year [removed: 2020.][added: 2021.]

The [removed: 2021] [added: 2022] increase as compared to the corresponding period in [removed: 2020] [added: 2021] was [removed: $616.3] [added: $435.9] million, or [removed: 21.1%,] [added: 12.3%,] and was primarily due to the increased demand [removed: across all of our reporting segments, principally] within [added: our] DSA [removed: and] [added: segment,] the impact of [removed: RMS recovering from] the [removed: effects of the COVID-19 pandemic in the prior period, as discussed in the above “Business Trends” section, as well as] [added: 53rd week, and our recent acquisitions; partially offset by] the recent [removed: acquisitions, principally within our Manufacturing reporting segment;] [added: divestitures (principally RMS Japan] and [removed: by] [added: CDMO Sweden), and] the [removed: positive] [added: negative] effect of changes in foreign currency exchange rates when compared to the corresponding period in [removed: 2020.][added: 2021.]

In fiscal year [removed: 2021,] [added: 2022,] our operating income and operating income margin were [removed: $589.9] [added: $651.0] million and [removed: 16.7%,] [added: 16.4%,] respectively, compared with [removed: $432.7] [added: $589.9] million and [removed: 14.8%,] [added: 16.7%,] respectively, in fiscal year [removed: 2020.][added: 2021.]

Net income attributable to common shareholders increased to [removed: $391.0] [added: $486.2] million in fiscal year [removed: 2021,] [added: 2022,] from [removed: $364.3] [added: $391.0] million in the corresponding period of [removed: 2020.][added: 2021.]

The increase in net income attributable to common shareholders of [removed: $26.7] [added: $95.2] million was primarily due to the increase in operating income described above, [added: the gain on the divestiture of our Avian business of $123.4 million,] partially offset by [removed: venture capital investment losses in fiscal year 2021 as] [added: higher provision for income taxes] compared to [removed: gains incurred for] the corresponding period in [removed: 2020.][added: 2021.]

We are a full service, leading, non-clinical global drug development partner.

Our DSA segment is comprised of two businesses: Discovery Services and Safety Assessment.

We provide regulated and non-regulated DSA services to support the research, development, and regulatory-required safety testing of potential new drugs, including therapeutic discovery and optimization plus in vitro and in vivo studies, laboratory support services, and strategic non-clinical consulting and program management to support product development.

In December of 2022, we sold the Avian Vaccine Services (Avian) business, reported in the Manufacturing segment, which supplied specific-pathogen-free chicken eggs and chickens.

U.S. Department of Justice Investigation into Non-Human Primate Supply Chain

On February 16, 2023, we were informed by the U.S. Department of Justice (DOJ) that in conjunction with the U.S. Fish and Wildlife Service (USFWS), it had commenced an investigation into our conduct regarding several shipments of non-human primates from Cambodia.

On February 17, 2023 we received a grand jury subpoena requesting certain documents related to such investigation.

We are aware of a parallel civil investigation being undertaken by the DOJ and USFWS.

We are cooperating with the DOJ and the USFWS and believe that the concerns raised with respect to our conduct are without merit.

We maintain 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, and has operated under the belief that all shipments of non-human primates we received satisfied the material requirements, documentation and related processes and procedures of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) documentation and related processes and procedures, which guides the release of each import by USFWS.

Notwithstanding our efforts and good-faith belief, in connection with the civil investigation, we have voluntarily suspended future shipments of non-human primates from Cambodia until such time that we and USFWS can agree upon and implement additional procedures to reasonably ensure that non-human primates imported to the United States from Cambodia are purpose-bred.

While these discussions with USFWS are ongoing, we have also agreed to continue to care for the Cambodia-sourced non-human primates from certain recent shipments that are now in the United States.

The carrying value of the inventory related to these shipments is approximately $20 million.

We are not able to predict what action, if any, might be taken in the future by the DOJ, USFWS or other governmental authorities as a result of the investigations.

Neither the DOJ nor USFWS has provided us with any specific timeline or indication as to when these investigations or discussions regarding future processes and procedures will be concluded or resolved.

Because it is in the early stages, we cannot predict the timing, outcome or possible impact of the investigations, including without limitation any potential fines, penalties or liabilities.

Refer to Item 1A, “Risk Factors” and Item 3, “Legal Proceedings” disclosed herein for our assessment of risk factors surrounding this matter.

Aside from the matter above, we believe there are no other matters pending against us that could have a material impact on our business, financial condition, or results of operations.

Russia-Ukraine Conflict

In February 2022, the Russian Federation launched an invasion of the country of Ukraine resulting in conflict in the region and a variety of sanctions against the Russian Federation enacted by several governments, including the U.S, United Kingdom, Canada and European Union.

The conflict has had and continues to have, direct and indirect adverse effects on financial markets and global supply chain disruptions.

We do not have any direct operations in either Russia or Ukraine and there were no material impacts to our financial statements during fiscal year 2022 as a result of the situation.

We will continue to monitor the situation as it evolves for potential impacts to our operating and financial results such as increased inflation, supply chain, or cybersecurity risks in subsequent periods.

Refer to Item 1A, “Risk Factors” disclosed herein for our assessment of risk factors surrounding inflationary, supply chain and cybersecurity risks.

Fiscal Year 2023 Acquisition

On January 30, 2023, we 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 preliminary purchase price of SAMDI was $60 million, inclusive of a 20% strategic equity interest previously owned by us.

Fiscal Year 2022 Acquisition

On April 5, 2022, we 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 our existing Insourcing Solutions business, specifically our CRADL™ footprint, and offers incremental opportunities to partner with an emerging client base, many of which are engaged in cell and gene therapy development.

Fiscal Year 2021 Acquisitions

As of December 31, 2022, the fair value of the contingent consideration was zero as certain financial targets have not and are not expected to be achieved.

As of December 31, 2022, the fair value of the contingent consideration was zero as certain operational targets were not achieved.

During fiscal year 2022, $7.0 million of contingent consideration was paid as certain operational milestones were achieved.

Other financial targets associated with the contingent consideration were not met and the fair value of the remaining contingent consideration is zero as of December 31, 2022.

We routinely evaluate strategic fit and fundamental performance of our global infrastructure and divest operations that do not meet key business criteria.

As part of this assessment, we determined that this capital could be better deployed in other long-term growth opportunities.

On December 20, 2022, we completed the sale of our Avian Vaccine Services (Avian) business to a private investor group for a preliminary purchase price of $169 million in cash, subject to certain customary closing adjustments, and future contingent payments up to an additional $30 million.

This business was reported in our Manufacturing reportable segment.

We are a full service, non-clinical contract research organization (CRO).

Our DSA reportable segment includes services required to take a drug through the early development process including discovery services, which are non-regulated services to assist clients with the identification, screening, and selection of a lead compound for drug development, and regulated and non-regulated (GLP and non-GLP) safety assessment services.

COVID-19

*Overview*

On March 11, 2020, the World Health Organization declared the outbreak of a strain of novel coronavirus disease, COVID-19, a global pandemic.

The COVID-19 pandemic is dynamic, and its ultimate scope, duration and effects are uncertain.

This pandemic has and continues to result in, and any future epidemic or pandemic crises may potentially result in, direct and indirect adverse effects on our industry and customers, which in turn has (with respect to COVID-19) and may (with respect to future epidemics or crises) impact our business, results of operations and financial condition.

Further, the COVID-19 pandemic may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not expect to present significant risks to our operations or financial results.

Refer to Item 1A, “Risk Factors”, included herein for risk factors reflecting the impact of the COVID-19 pandemic.

Giving consideration to each of these risk factors, the following

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

is our current estimate and belief of the impact of the COVID-19 pandemic during fiscal year 2021 and how it may continue to affect us in subsequent periods.

*Business continuity*

To date, we generally have not experienced significant challenges in implementing our business continuity plans.

All of our operating sites remain open and adequately staffed as of the date of this annual report.

For certain operations or sites experiencing logistical delays, we have experienced some inefficiencies as it relates to completing work or fulfilling orders; however, we do not believe material expenditures will be required or material resource constraints will occur.

Logistical delays include a small number of sites that have experienced reduced operations (including as a result of increased employee absenteeism) or voluntarily closed, as well as delays in transportation activities.

We have comprehensive business continuity plans in place for each site globally and are continuously updating these to address the evolving COVID-19 pandemic situation.

We have continuously refined our plans as the virus has spread and have encouraged and expressed our expectations that employees work remotely whenever possible.

We are adhering to guidelines from government, health, and other regulatory agencies for those employees who need to come into our sites to fulfill their responsibilities.

Due to the nature of our business, many employees already work in biosecure environments that require personal protective equipment (PPE) and adhere to other procedures to safely accomplish their daily responsibilities.

Accordingly, to date, we believe we have been able to efficiently implement the additional safety precautions.

*Supply chain*

We are focused on ensuring that we have adequate inventory and supplies on hand given the potential disruption of the COVID-19 pandemic to our suppliers and their supply chain.

Accordingly, we have and expect to continue to increase inventory and supplies in 2022.

We continuously engage with our suppliers to limit any potential disruption to our supply chain.

However, notwithstanding generally successful efforts to maintain supply chain continuity, we have experienced increased costs and delays throughout our supply chain during the pandemic.

*Financial condition and results of our global operations*

We are a global company that operates in over 110 locations and in over 20 countries worldwide.

As we perform business across various borders, we are experiencing a continuum of impacts in each location as the COVID-19 pandemic has impacted the global economy in different phases.

We are continuing to see demand for products and services across all of our businesses, although as described below within Results of Operations, the impact of the COVID-19 pandemic on the level of demand varies with our different businesses.

While there is uncertainty, our clients are still in need of the products and services we provide to biomedical research to advance discovery and develop new therapies for the treatment of disease, including the COVID-19 pandemic.

Due to certain restrictions in place at the various sites of our clients and suppliers (including client and supplier site closures), there have been challenges relating to timely receiving and shipping products globally in all businesses.

Should these restrictions continue, demand/supply issues may persist and could impact revenue growth, operating income (including operating income margins) and cash flows.

We have observed some impact due to constraints from internal site restrictions, remote work, resources, and productivity.

However, we believe the impact to us has not been as significant as to companies in many other industries because of the nature of our businesses, the classification of our businesses as essential or critical, as the case may be, and our business continuity plans.

*Recoverability and/or impairment of assets*

The COVID-19 pandemic did not, and is not expected to, impact the ability to timely account for assets on our balance sheet.

There are judgments involved as it relates to reviewing our allowance for credit losses, valuation of inventory, and valuations/recovery of investments.

We believe we have the necessary support for estimates derived for these account balances.

The information called for by this item is incorporated herein by reference to “Item 7.

Management’s Discussion and Analysis of Results of Operations - Liquidity and Capital Resources” of this Report; and Note 1 “Description of Business and Summary of Significant Accounting Policies - Fair Value” included in Item 8 of this Report.

We are exposed to market risk from changes in interest rates and currency exchange rates, which could affect our future results of operations and financial condition.

We manage our exposure to these risks through our regular operating and financing activities.

Interest Rate Risk

We are exposed to changes in interest rates while conducting normal business operations as a result of ongoing financing activities.

As of December 25, 2021, our debt portfolio was comprised primarily of floating interest rate borrowings.

A 100-basis point increase in interest rates would increase our annual pre-tax interest expense by $11.6 million.

Foreign Currency Exchange Rate Risk

We operate on a global basis and have exposure to some foreign currency exchange rate fluctuations for our financial position, results of operations, and cash flows.

While the financial results of our global activities are reported in U.S. dollars, our foreign subsidiaries typically conduct their operations in their respective local currency.

The principal functional currencies of the Company’s foreign subsidiaries are the Euro, British Pound, and Canadian Dollar.

During fiscal year 2021, the most significant drivers of foreign currency translation adjustment the Company recorded as part of other comprehensive income (loss) were the Japanese Yen, British Pound, Euro, and Hungarian Forint.

Fluctuations in the foreign currency exchange rates of the countries in which we do business will affect our financial position, results of operations, and cash flows.

As the U.S. dollar strengthens against other currencies, the value of our non-U.S. revenue, expenses, assets, liabilities, and cash flows will generally decline when reported in U.S. dollars.

The impact to net income as a result of a U.S. dollar strengthening will be partially mitigated by the value of non-U.S. expenses, which will decline when reported in U.S. dollars.

As the U.S. dollar weakens versus other currencies, the value of the non-U.S. revenue, expenses, assets, liabilities, and cash flows will generally increase when reported in U.S. dollars.

For fiscal year 2021, our revenue would have decreased by $122.1 million and our operating income would have decreased by $5.3 million, if the U.S. dollar exchange rate had strengthened by 10%, with all other variables held constant.

We attempt to minimize this exposure by using certain financial instruments in accordance with our overall risk management and our hedge policy.

We do not enter into speculative derivative agreements.

During fiscal years 2021 and 2020 we entered into foreign exchange forward contracts to limit our foreign currency exposure related to both intercompany loans and a U.S. dollar denominated loan borrowed by a non-U.S. Euro functional currency entity under our Credit Facility.

Refer to Note 14, “Foreign Currency Contracts,” to our consolidated financial statements contained in Item 8, “Financial Statements and Supplementary Data,” in this Annual Report on Form 10-K for further details regarding these types of forward contracts.

For example, we may use forward-looking statements when addressing topics such as: [added: our expectations regarding] the [added: availability of non-human primates and our ability to diversify our non-human primate supply chain; the outcome of the U.S. Department of Justice investigations related to shipments of non-human primates from Cambodia received by the Company; the timing of the development and implementation of additional procedures to reasonably ensure that non-human primates imported to the United States from Cambodia are purpose-bred; the] COVID-19 pandemic, its duration, its impact on our business, results of operations, financial condition, liquidity, use of our borrowings, business practices, operations, [added: demand,] suppliers, inventory and supplies, third party service providers, customers, employees, industry, ability to meet future performance obligations, ability to timely account for assets on our balance sheet, ability to efficiently implement advisable safety precautions, and internal controls over financial reporting; [removed: the COVID-19 pandemic’s impact on demand,] [added: changes and uncertainties in] the global economy and financial markets, [added: including any] changes [added: in business, political, or economic conditions due to the November 16, 2022 announcement by the U.S. Department of Justice through the U.S. Attorney’s Office for the Southern District of Florida that a Cambodian non-human primate supplier] and [removed: uncertainties] [added: two Cambodian officials had been criminally charged] in [added: connection with illegally importing non-human primates into] the [removed: global economy;] [added: United States;] client demand, particularly future demand for drug discovery and development products and services, including the outsourcing of these services; our expectations [added: with respect to our ability to meet financial targets; our expectations] regarding stock repurchases, including the number of shares to be repurchased, expected timing and duration, the amount of capital that may be expended and the treatment of repurchased shares; our ability to successfully execute our business strategy; our ability to timely build infrastructure to satisfy capacity needs and support business growth, our ability to fund our operations for the foreseeable future, the impact of unauthorized access into our information systems, including the timing and effectiveness of any enhanced security and monitoring present spending trends and other cost reduction activities by our clients; future actions by our management; the outcome of contingencies; changes in our business strategy, business practices and methods of generating revenue; the development and performance of our services and products; market and industry conditions, including competitive and pricing trends; our strategic relationships with leading pharmaceutical and biotechnology companies, venture capital investments, and opportunities for future similar arrangements; our cost structure; the impact of acquisitions and divestitures; our expectations with respect to revenue growth and operating synergies (including the impact of specific actions intended to cause related [removed: improvements);] [added: improvements, particularly with respect to our CDMO business);] the impact of specific actions intended to improve overall operating efficiencies and profitability (and our ability to accommodate future demand with our infrastructure), including gains and losses attributable to businesses we plan to close, consolidate, divest or repurpose; changes in our expectations regarding future stock option, restricted stock, performance share units and other equity grants to employees and directors; expectations with respect to foreign currency exchange; assessing (or changing our assessment of) our tax positions for financial statement purposes; and our liquidity.

[removed: Our stock is traded on the New York Stock Exchange under the symbol “CRL” and is included in the Standard & Poor’s 500 and Composite] 1500 indices, the Dow Jones U.S. Health Care Index, the New York Stock Exchange (NYSE) Arca Biotechnology Index, the NYSE Composite and many of the Russell indices, among others.

We have built upon our original core competency of laboratory animal medicine and science (research model technologies) to develop a diverse portfolio of discovery and safety assessment services, both Good Laboratory Practice (GLP) and non-GLP, [removed: which is able to support] [added: that supports] our clients from target identification through non-clinical development.

We also provide a suite of products and services to support our clients’ manufacturing activities, including our [removed: newly acquired] contract development and manufacturing organization (CDMO) business.

Utilizing our broad portfolio of products and services enables our clients to create a more [added: efficient and] flexible drug development model, which reduces their costs, enhances their productivity and effectiveness, and increases speed to market.

For [added: over] 75 years, we have been in the business of providing the research models required in the research and development of new drugs, devices and therapies.

[removed: Our client base includes global] [added: We provide our research models to numerous clients around the world, including most] pharmaceutical companies, a broad range of biotechnology companies, [added: contract research organizations] and many government agencies, [removed: hospitals] [added: hospitals,] and academic [removed: institutions around the world.][added: institutions.]

We currently operate in over [removed: 110] [added: 150] locations and in [removed: over 20] [added: 21] countries worldwide (excluding [removed: our] [added: certain] Insourcing Solutions sites).

Through our RMS segment, we have [removed: supplied] [added: provided foundational tools for the discovery of new molecules by supplying] research models to the drug development industry since 1947.

With over [removed: 160] [added: 150] different stocks and strains, we continue to maintain our position as a global leader in the production and sale of the most widely used rodent research model strains and purpose-bred rats and mice.

In [removed: 2021, RMS] [added: 2022, Manufacturing] accounted for [removed: 19.5%] [added: 19.8%] of our total revenue [added: from continuing operations] and approximately [removed: 3,900] [added: 3,000] of our employees, including approximately [removed: 190] [added: 400] science professionals with advanced degrees.

Our DSA [removed: business] segment provides services that enable our clients to outsource their innovative drug discovery research, their related [added: preclinical] drug development activities, and [removed: their] regulatory-required safety testing of potential new drugs, vaccines, industrial and agricultural chemicals, consumer products, veterinary medicines and medical devices.

The demand for these services is driven by the needs of large global pharmaceutical companies that continue to transition to an outsourced drug development model, [removed: as well as by the needs of] [added: in addition to] mid-size and emerging biotechnology companies, industrial and agrochemical companies and non-governmental organizations that rely on outsourcing.

We are the largest provider of [added: outsourced] drug discovery, non-clinical development and [added: regulated] safety testing services worldwide.

We have extensive expertise in the discovery of [removed: clinical] [added: preclinical] candidates and in the design, execution and reporting of safety assessment studies for numerous types of compounds including [added: cell and gene therapies,] small and large molecule pharmaceuticals, industrial and agricultural chemicals, vaccines, consumer products, veterinary medicines, [removed: cell and gene therapies,] biocides and medical devices.

In [removed: 2021,] [added: 2022,] our DSA segment represented [removed: 59.5%] [added: 61.6%] of our total revenue and employed approximately [removed: 12,400] [added: 13,200] of our employees including approximately [removed: 1,600] [added: 1,800] science professionals with advanced degrees.

Within our Manufacturing segment, we work with our clients and the biopharmaceutical industry to ensure the [added: quality and] safe production and release of [added: commercial therapies and] products manufactured both by our clients [removed: and, with the acquisition of our CDMO services,] [added: and] internally for our clients.

Our Manufacturing Segment is comprised of three businesses: Microbial Solutions, Biologics Solutions, and Avian Vaccine [removed: Services.][added: Services, which was divested in December 2022.]

[removed: Our] Biologics [added: Solutions is comprised of both our Biologics] Testing Solutions [removed: business] [added: business, which] provides specialized testing of biologics frequently outsourced by global pharmaceutical and biotechnology [removed: companies.][added: companies, and our CDMO business, which provides comprehensive contract development and manufacturing solutions for cell and gene therapies.]

[removed: Our] [added: Prior to being divested, our] Avian Vaccine Services business [removed: provides] [added: provided] specific-pathogen-free (SPF) fertile chicken eggs, SPF chickens and diagnostic products used to manufacture vaccines, principally veterinary vaccines.

Our RMS segment is comprised of three [removed: businesses:] [added: businesses that provide foundational tools that enable our clients to discover new molecules:] Research Models, Research Model Services and [removed: Research and GMP-Compliant Cells.][added: Cell Solutions.]

Our Research Models business is comprised of the production and sale of [added: the most widely used small] research models.

A significant portion of this business involves the commercial production and sale of [added: small] research models, principally purpose-bred rats and mice for use by researchers.

We have a global footprint with production facilities strategically located in [removed: 7] [added: 8] countries, in close proximity to [removed: our clients.][added: major biohubs and client concentrations.]

The research models we supply have been, and continue to be, some of the most extensively used in the world, largely as a result of our geographic footprint and continuous commitment to [removed: innovation] [added: innovation, quality,] and [removed: quality.][added: biosecurity.]

Research Model Services. RMS offers a variety of [removed: services] [added: flexible solutions] designed to support our clients' use of research models in basic research and screening non-clinical drug candidates.

The creation of a genetically engineered model (GEM) is a critical scientific event, but it is only [removed: the first] [added: one] step in the discovery process, and our scientists can advise clients on how to efficiently create custom models utilizing in-licensed technologies and approaches to modify the genome.

We manage the research operations of government entities, academic organizations and commercial clients (including recruitment, training, staffing and management services) both within our clients’ facilities and utilizing [added: both] our Charles River Accelerator and Development Lab (CRADL™) [removed: option,] [added: and our Explora BioLabs options,] in which we [removed: lease] [added: provide vivarium] space to our clients.

Our [removed: Research and GMP-Compliant Cells] [added: Cell Solutions] business provides human-derived cellular materials used in the development and production of cell therapies.

[removed: Research and GMP-Compliant Cells] [added: Our Cell Solutions business] supports biotechnology and pharmaceutical companies, academic institutions and other research organizations who rely on high-quality, viable and functional human primary cells and blood components for biomedical and drug discovery research and cell therapy [removed: development.][added: development, including clinical trials.]

We currently offer regulated and non-regulated DSA [removed: services,] [added: services to support the research, development, and regulatory-required safety testing of potential new drugs,] including therapeutic discovery and optimization plus *in vitro* and *in vivo* studies, laboratory support services, and strategic non-clinical consulting and program management to support product development.

We offer a full spectrum of discovery services from identification and validation of novel targets, chemical compounds and antibodies with actual or potential intellectual property value through to delivery of [removed: non-clinical] [added: preclinical] drug and therapeutic candidates ready for safety assessment.

Our Discovery Services business includes [removed: Early Discovery and *In Vivo* and *In Vitro* Discovery businesses] [added: services] to streamline and enhance [removed: the integrated support we can provide for clients’] drug discovery [removed: programs.][added: programs for our clients, including an innovative, antibody discovery]

This seamless discovery [removed: organization] [added: organization, along with its broad capabilities across small and large molecules, antibodies, and cell and gene therapy,] allows us to better engage with clients at any stage of their drug discovery programs and support their complex scientific needs.

We believe there are growing opportunities to assist our clients in a variety of drug discovery applications and platforms from target discovery to candidate selection and across the full range of [removed: modalities, including small molecules and large molecules and cell and gene therapy candidates.][added: modalities.]

[removed: *Early Discovery.*] We are a [removed: global] leader in integrated drug discovery services.

Our full suite of service offerings, together with our knowledge and expertise, allows us to [added: engage and] support our clients at [removed: the earliest stages] [added: any stage] of their [removed: research,] [added: discovery or early-stage development programs,] including the design and implementations of their research programs, and to stay with them through the entire drug discovery process.

Our [removed: Early] Discovery service capabilities include:

- early nonclinical pharmacokinetic and pharmacodynamic studies, transporter-mediated drug-drug interaction, and *in vitro* and *in vivo* assays to assess mechanism, bioavailability and metabolism as required for regulatory approval of new drugs; [removed: and]

Additionally, we offer ion channel and drug transporter testing for both discovery and non-clinical [removed: purposes, as well as genome editing services.][added: purposes.]

Our stock is traded on the New York Stock Exchange under the symbol “CRL” and is included in the Standard & Poor’s 500 and Composite

We are a full service, leading, non-clinical global drug development partner with a mission to create healthier lives.

Our client base includes major global pharmaceutical companies, many biotechnology companies; agricultural and industrial chemical, life science, veterinary medicine, medical device, diagnostic and consumer product companies; contract research and contract manufacturing organizations; and other commercial entities, as well as leading hospitals, academic institutions, and government agencies around the world.

In 2022, our total revenue was $4.0 billion.

In 2022, RMS accounted for 18.6% of our total revenue and approximately

4,200 of our employees, including approximately 190 science professionals with advanced degrees.

In fiscal 2022, we 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 our existing Insourcing Solutions business, specifically our CRADL™ (Charles River Accelerator and Development Lab) footprint, and offers incremental opportunities to partner with an emerging client base.

Our expanded service offering provides greater flexibility for our clients’ research and supports increased scientific complexity.

Cell Solutions.

Our Discovery Services business operates as a single source of services for discovering and characterizing novel drug candidates for preclinical development.

platform, an integrated, end-to-end platform for therapeutic antibody and cell and gene therapy discovery and development, and large molecule and cell therapy discovery capabilities.

Through comprehensive *in vivo* and *in vitro* offerings, Discovery Services helps to reduce the time needed to research, develop, and assess the efficacy of new therapeutics under development.

Our Safety Assessment business is a global leader in both non-regulated and regulated (GLP) outsourced safety assessment services.

*Toxicology.* We provide a broad specialty toxicology offering from inhalation and infusion to development and reproductive toxicology.

Toxicology studies performed for any of these

In addition, our Laboratory Sciences group is able to measure a wide range of nonclinical and clinical biomarkers related to the safety and efficacy of the drugs and/or chemicals being developed.

Our Microbial Solutions business operates as a rapid, efficient testing platform for microbial detection and identification of sterile and non-sterile applications.

Microbial Solutions is a premier global provider of in vitro methods for conventional and rapid quality control testing, including FDA-mandated lot release testing for sterile biopharmaceutical products.

We expect our comprehensive portfolio

We have worked closely with regulatory agencies in states where we collect to limit our impact on the horseshoe crab population.

Our Biologics Testing Services business encompasses process development and quality-control testing to support the manufacture of biologics.

maintain government-licensed manufacturing facilities and to manufacture and release market-approved therapeutic products for patient treatment.

Our CDMO services include primary expertise in gene-modified cell therapy with growing capabilities in gene therapy, including plasma DNA and viral vectors.

Similar to our cGMP facilities, our CDMO facilities also grow and store well-characterized early-stage client cell lines and virus seed stocks for later development or manufacture of therapeutic proteins and vaccines for clinical trials.

Our Avian Vaccine Services business was divested in December 2022.

infrastructure costs or are cost-prohibitive for clients to maintain independently.

*Digital Enhancements.* We believe the healthcare industry is at a unique inflection point post COVID, where vaccines and treatments were developed in record time, and there is increasing focus on personalized medicine and rare diseases.

As the industry evolves, technology is playing an essential role.

This technological revolution is not only helping streamline processes and operations, but the effects of this digitization directly impact patients.

We are committed in our efforts to reduce the timeline to develop, safe and innovative new treatments for patients who desperately need them.

To progress this forward, we strive to understand the true challenges that can slow drug research and development and re-imagine the way we work and collaborate to create digitally native solutions that improve efficiency, speed up processes and enable automated, data driven outcomes.

Our commitment to understanding the problem before finding a solution has enabled us to keep clients—and ultimately patients—at the center of the way we look at problems.

By using customer-centric design thinking, agile-based test and learn processes in short iterative cycles, and automating existing processes, we optimize client experiences and bring holistic solutions to pressing concerns.

The biopharmaceutical industry also continues to evolve and become more sophisticated, with research yielding new types of treatments with increasing complexity, and more targeted and individualized therapies.

We are committed to a disciplined approach that seeks to target businesses that are a sound strategic fit.

Mergers and acquisitions remain one of our top, long-term priorities for disciplined capital deployment and enhancing growth strategy with focus on enhancing the breadth of our scientific capabilities, expanding our global scale, and maintaining our leadership position in advanced and emerging therapies.

ventures that will allow us to access innovative capabilities and cutting-edge or nascent technologies with a modest investment component.

We also view these partnerships as an investment in new and emerging sciences and technologies as they allow us to gain insights to cutting-edge capabilities.

We routinely evaluate strategic fit and fundamental performance of our businesses.

We are a full service, non-clinical contract research organization (CRO).

In 2021, our total revenue was $3.5 billion and our income before income taxes, was $480.7 million.

In fiscal 2021, we

acquired Distributed Bio, Inc. (Distributed Bio), a next-generation antibody discovery company with technologies specializing in enhancing the probability of success for delivering high-quality, readily formattable antibody fragments to support antibody and cell and gene therapy candidates to biopharmaceutical clients, as well as Retrogenix Limited (Retrogenix), an early-stage contract research organization providing specialized bioanalytical services for antibodies and related therapeutic products utilizing its proprietary cell microarray technology to identify potential interactions with a host of cell surface and secreted proteins.

In 2021 we added CDMO services to our Biologics Solutions business through the acquisitions of Cognate BioServices, Inc. and Vigene Biosciences, Inc. (Vigene).

In 2021, Manufacturing accounted for 21.0% of our total revenue from continuing operations and approximately 2,900 of our employees, including approximately 290 science professionals with advanced degrees.

We provide our research models to numerous clients around the world, including most pharmaceutical companies, a broad range of biotechnology companies, other contract research organizations and many government agencies, hospitals, and academic institutions.

Research and GMP-Compliant Cells.

In 2020 we acquired HemaCare Corporation (HemaCare) and Cellero, LLC (Cellero) to establish our Research and GMP-Compliant Cells business.

On December 31, 2020, we acquired Distributed Bio, a next-generation antibody discovery company with technologies specializing in enhancing the probability of success for delivering high-quality, readily formattable antibody fragments to support antibody and cell and gene therapy candidates to biopharmaceutical clients.

The acquisition of Distributed Bio expands our capabilities with an innovative, antibody discovery platform, and leveraging their antibody libraries and immune-engineering platform, creates an integrated, end-to-end platform for therapeutic antibody and cell and gene therapy discovery and development.

In April 2021, we acquired Retrogenix, an early-stage contract research organization providing specialized bioanalytical services utilizing its

proprietary cell microarray technology analytical platform, which provides on target and off target safety assessment of antibodies and related modalities.

The acquisition of Retrogenix enhances our scientific expertise with additional large molecule and cell therapy discovery capabilities.

*In Vivo and In Vitro Discovery Services*.

In addition, we provide a growing portfolio of *in vitro* assays in support of lead optimization to candidate selection activities.

Examples of this include early pharmacokinetic and pharmacodynamic studies and *in vitro* assays to assess mechanism, bioavailability, metabolism, efficacy, pharmacology and safety.

Through strategic technology partnerships, we also offer artificial intelligence-enabled drug design and multiple advanced biology analytics platforms, both *in vivo* and *in vitro*, that address human and disease translatability.

Our Microbial Solutions business provides *in vitro* methods for conventional and rapid quality control testing.

environment.

We have worked closely with the South Carolina Department of Natural Resources to protect the horseshoe crab and, in the regions where those protections are in place, the horseshoe crab population is growing.

In 2021, we launched AccuFUN-ID, a service that identifies fungal isolates through MALDI-TOF technology, which is a critical element for environmental programs in pharmaceutical and other regulated product manufacturing industries.”

In 2021, we acquired Cognate BioServices, Inc., a cell and gene therapy contract development and manufacturing organization (CDMO) offering comprehensive manufacturing solutions for cell and gene therapies, as well as for the production of plasmid DNA and other inputs in the CDMO value chain, and Vigene, a gene therapy CDMO, providing plasmid DNA and viral vector-based gene delivery solutions.

Avian Vaccine Services.

The production of SPF eggs is performed under biosecure conditions, similar in many ways to our research model production.

Separately, through our various Manufacturing segment businesses, we aim to be the premier provider of products and services that ensure our clients produce and release their products safely.

for our clients and where we could provide significant benefits given our unique early-stage development portfolio and global footprint.

Because of this strategy, we have been successfully renewing the majority of our strategic commercial partnerships.

clinical portfolio.

Antibody discovery services has tens of competitors in the U.S., Europe and China.

U.S., one is a public company in Europe, and one is a public company in China.

Avian has one main competitor to its SPF eggs business, which is a private company in Europe, and numerous competitors for specialized avian laboratory services.

The COVID-19 pandemic has further underscored for us the importance of keeping our employees safe and healthy.

In response to the pandemic, we have taken actions to protect our workforce so they can more safely and effectively perform their work.

Charles River established a global crisis management team, which includes a team of internal and external experts who have been closely monitoring the COVID-19 outbreak and its impact on employee safety and our business operations.

As we navigate the pandemic and focus on keeping people safe, we continue to establish stringent safety protocols at our operating sites.

As always, our goal is to provide a safe work environment for our employees, while still meeting our client’s needs for their research solutions.

Our global and site business continuity plans are comprehensive, active, and continuously updated as we continue to meet requirements for planned and new projects, including work supporting COVID-19 research efforts.

payments.

These regulations require that we manufacture our

On February 16, 2023, the Company was informed by the U.S. Department of Justice (DOJ) that in conjunction with the U.S. Fish and Wildlife Service (USFWS), it had commenced an investigation into the Company’s conduct regarding several shipments of non-human primates from Cambodia.

On February 17, 2023 the Company received a grand jury subpoena requesting certain documents related to such investigation.

The Company is aware of a parallel civil investigation being undertaken by the DOJ and USFWS.

The Company is cooperating with the DOJ and the USFWS and believes that the concerns raised with respect to the Company’s conduct are without merit.

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, and has operated under the belief that all shipments of non-human primates it received satisfied the material requirements, documentation and related processes and procedures of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) documentation and related processes and procedures, which guides the release of each import by USFWS.

Notwithstanding our efforts and good-faith belief, in connection with the civil investigation, the Company has voluntarily suspended future shipments of non-human primates from Cambodia until such time that the Company and USFWS can agree upon and implement additional procedures to reasonably ensure that non-human primates imported to the United States from Cambodia are purpose-bred.

While these discussions with USFWS are ongoing, the Company has also agreed to continue to care for the Cambodia-sourced non-human primates from certain recent shipments that are now in the United States.

We are not able to predict what action, if any, might be taken in the future by the DOJ, USFWS or other governmental authorities as a result of the investigations.

Neither the DOJ nor USFWS has provided the Company with any specific timeline or indication as to when

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

these investigations or discussions regarding future processes and procedures will be concluded or resolved.

Because it is in the early stages, the Company cannot predict the timing, outcome or possible impact of the investigations, including without limitation any potential fines, penalties or liabilities.

We are not party to any legal proceedings that we believe are material to our business or financial condition.

FOR THE FISCAL YEAR ENDED December [removed: 25, 2021][added: 31, 2022]

[removed: ][added: ]

On June [removed: 26, 2021,] [added: 24, 2022,] the aggregate market value of the registrant’s voting common stock held by non-affiliates of the registrant was approximately [removed: $18,338,961,840.][added: $11,392,457,233.]

As of January [removed: 21, 2022,] [added: 25, 2023,] there were [removed: 50,486,047] [added: 50,985,527] shares of the registrant’s common stock outstanding, $0.01 par value per share.

Portions of the registrant’s definitive Proxy Statement for its [removed: 2022] [added: 2023] Annual Meeting of Shareholders scheduled to be held on May [removed: 10, 2022,] [added: 9, 2023,] which will be filed with the Securities and Exchange Commission (SEC) not later than 120 days after December [removed: 25, 2021,] [added: 31, 2022,] are incorporated by reference into Part III of this Annual Report on Form 10-K.

With the exception of the portions of the [removed: 2022] [added: 2023] Proxy Statement expressly incorporated into this Annual Report on Form 10-K by reference, such document shall not be deemed filed as part of this Form 10-K.

FOR FISCAL YEAR [removed: 2021][added: 2022]

| 1A | | | [Risk [removed: Factors](#i3b4c4eb652194ed5994dc94bc56e5bfe_16)] [added: Factors](#idd22d620c469429cbe87d18055ca22f6_16)] | | | [removed: [16](#i3b4c4eb652194ed5994dc94bc56e5bfe_16)] [added: [17](#idd22d620c469429cbe87d18055ca22f6_16)] | | |

| 1B | | | [Unresolved Staff [removed: Comments](#i3b4c4eb652194ed5994dc94bc56e5bfe_19)] [added: Comments](#idd22d620c469429cbe87d18055ca22f6_19)] | | | [removed: [34](#i3b4c4eb652194ed5994dc94bc56e5bfe_19)] [added: [35](#idd22d620c469429cbe87d18055ca22f6_19)] | | |

| 3 | | | [Legal [removed: Proceedings](#i3b4c4eb652194ed5994dc94bc56e5bfe_25)] [added: Proceedings](#idd22d620c469429cbe87d18055ca22f6_25)] | | | [removed: [35](#i3b4c4eb652194ed5994dc94bc56e5bfe_25)] [added: [35](#idd22d620c469429cbe87d18055ca22f6_25)] | | |

| 4 | | | [Mine Safety [removed: Disclosures](#i3b4c4eb652194ed5994dc94bc56e5bfe_28)] [added: Disclosures](#idd22d620c469429cbe87d18055ca22f6_28)] | | | [removed: [35](#i3b4c4eb652194ed5994dc94bc56e5bfe_28)] [added: [36](#idd22d620c469429cbe87d18055ca22f6_28)] | | |

| 5 | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i3b4c4eb652194ed5994dc94bc56e5bfe_34)] [added: Securities](#idd22d620c469429cbe87d18055ca22f6_34)] | | | [removed: [36](#i3b4c4eb652194ed5994dc94bc56e5bfe_34)] [added: [37](#idd22d620c469429cbe87d18055ca22f6_34)] | | |

| 7 | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i3b4c4eb652194ed5994dc94bc56e5bfe_46)] [added: Operations](#idd22d620c469429cbe87d18055ca22f6_46)] | | | [removed: [38](#i3b4c4eb652194ed5994dc94bc56e5bfe_40)] [added: [39](#idd22d620c469429cbe87d18055ca22f6_40)] | | |

| 7A | | | [Quantitative and Qualitative [removed: Disclosures](#i3b4c4eb652194ed5994dc94bc56e5bfe_55)] [added: Disclosures](#idd22d620c469429cbe87d18055ca22f6_55)] about Market Risk | | | [removed: [54](#i3b4c4eb652194ed5994dc94bc56e5bfe_55)] [added: [53](#idd22d620c469429cbe87d18055ca22f6_55)] | | |

| 8 | | | [Financial Statements and Supplementary [removed: Data](#i3b4c4eb652194ed5994dc94bc56e5bfe_58)] [added: Data](#idd22d620c469429cbe87d18055ca22f6_58)] | | | [removed: [55](#i3b4c4eb652194ed5994dc94bc56e5bfe_58)] [added: [54](#idd22d620c469429cbe87d18055ca22f6_58)] | | |

| 9 | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i3b4c4eb652194ed5994dc94bc56e5bfe_145)] [added: Disclosure](#idd22d620c469429cbe87d18055ca22f6_142)] | | | [removed: [108](#i3b4c4eb652194ed5994dc94bc56e5bfe_145)] [added: [99](#idd22d620c469429cbe87d18055ca22f6_142)] | | |

| 9C | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i3b4c4eb652194ed5994dc94bc56e5bfe_2017)] [added: Inspections](#idd22d620c469429cbe87d18055ca22f6_151)] | | | [removed: [110](#i3b4c4eb652194ed5994dc94bc56e5bfe_2017)] [added: [99](#idd22d620c469429cbe87d18055ca22f6_151)] | | |

| 10 | | | [Directors, Executive Officers and Corporate [removed: Governance](#i3b4c4eb652194ed5994dc94bc56e5bfe_157)] [added: Governance](#idd22d620c469429cbe87d18055ca22f6_157)] | | | [removed: [111](#i3b4c4eb652194ed5994dc94bc56e5bfe_157)] [added: [100](#idd22d620c469429cbe87d18055ca22f6_157)] | | |

| 11 | | | [Executive [removed: Compensation](#i3b4c4eb652194ed5994dc94bc56e5bfe_160)] [added: Compensation](#idd22d620c469429cbe87d18055ca22f6_160)] | | | [removed: [111](#i3b4c4eb652194ed5994dc94bc56e5bfe_160)] [added: [100](#idd22d620c469429cbe87d18055ca22f6_160)] | | |

| 12 | | | [Security Ownership of Certain Beneficial Owners and Management and Related [removed: Stockholder](#i3b4c4eb652194ed5994dc94bc56e5bfe_163)] [added: Stockholder](#idd22d620c469429cbe87d18055ca22f6_163)] Matters | | | [removed: [111](#i3b4c4eb652194ed5994dc94bc56e5bfe_163)] [added: [100](#idd22d620c469429cbe87d18055ca22f6_163)] | | |

| 13 | | | Certain Relationships and Related Transactions, and Director Independence | | | [removed: [111](#i3b4c4eb652194ed5994dc94bc56e5bfe_166)] [added: [100](#idd22d620c469429cbe87d18055ca22f6_166)] | | |

| 14 | | | [Principal Accountant Fees and [removed: Services](#i3b4c4eb652194ed5994dc94bc56e5bfe_169)] [added: Services](#idd22d620c469429cbe87d18055ca22f6_169)] | | | [removed: [111](#i3b4c4eb652194ed5994dc94bc56e5bfe_169)] [added: [100](#idd22d620c469429cbe87d18055ca22f6_169)] | | |

| 15 | | | [Exhibits and Financial Statement [removed: Schedules](#i3b4c4eb652194ed5994dc94bc56e5bfe_175)] [added: Schedules](#idd22d620c469429cbe87d18055ca22f6_175)] | | | [removed: [112](#i3b4c4eb652194ed5994dc94bc56e5bfe_175)] [added: [101](#idd22d620c469429cbe87d18055ca22f6_175)] | | |

| 16 | | | [Form 10-K [removed: Summary](#i3b4c4eb652194ed5994dc94bc56e5bfe_178)] [added: Summary](#idd22d620c469429cbe87d18055ca22f6_178)] | | | [removed: [113](#i3b4c4eb652194ed5994dc94bc56e5bfe_178)] [added: [102](#idd22d620c469429cbe87d18055ca22f6_178)] | | |

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| 1 | | | [Business](#idd22d620c469429cbe87d18055ca22f6_13) | | | [1](#idd22d620c469429cbe87d18055ca22f6_13) | | |

| 2 | | | [Properties](#idd22d620c469429cbe87d18055ca22f6_22) | | | [35](#idd22d620c469429cbe87d18055ca22f6_22) | | |

| 6 | | | [Reserved](#idd22d620c469429cbe87d18055ca22f6_37) | | | [38](#idd22d620c469429cbe87d18055ca22f6_37) | | |

| 9A | | | [Controls and Procedures](#idd22d620c469429cbe87d18055ca22f6_145) | | | [99](#idd22d620c469429cbe87d18055ca22f6_145) | | |

| 9B | | | [Other Information](#idd22d620c469429cbe87d18055ca22f6_148) | | | [99](#idd22d620c469429cbe87d18055ca22f6_148) | | |

| [Signatures](#idd22d620c469429cbe87d18055ca22f6_181) | | | | | | [103](#idd22d620c469429cbe87d18055ca22f6_181) | | |

| 1 | | | [Business](#i3b4c4eb652194ed5994dc94bc56e5bfe_13) | | | [1](#i3b4c4eb652194ed5994dc94bc56e5bfe_13) | | |

| 2 | | | [Properties](#i3b4c4eb652194ed5994dc94bc56e5bfe_22) | | | [34](#i3b4c4eb652194ed5994dc94bc56e5bfe_22) | | |

| 6 | | | [Reserved](#i3b4c4eb652194ed5994dc94bc56e5bfe_37) | | | [37](#i3b4c4eb652194ed5994dc94bc56e5bfe_37) | | |

| 9A | | | [Controls and Procedures](#i3b4c4eb652194ed5994dc94bc56e5bfe_148) | | | [109](#i3b4c4eb652194ed5994dc94bc56e5bfe_148) | | |

| 9B | | | [Other Information](#i3b4c4eb652194ed5994dc94bc56e5bfe_151) | | | [110](#i3b4c4eb652194ed5994dc94bc56e5bfe_151) | | |

| [Signatures](#i3b4c4eb652194ed5994dc94bc56e5bfe_181) | | | | | | [114](#i3b4c4eb652194ed5994dc94bc56e5bfe_181) | | |

[removed: We] [added: Within the DSA business, we] own [added: or lease] large facilities [removed: (facilities over] [added: (greater than] 50,000 square feet) [removed: for our DSA businesses] in [removed: Canada, China, France, Hungary, Netherlands, Scotland and the U.S. and lease large facilities in England and] [added: 9 countries including] the [removed: U.S. We own large RMS facilities in] [added: U.S.,] Canada, [added: Scotland,] France, [removed: Germany, Italy, England] [added: China,] and [removed: the U.S. We lease large RMS facilities in China.][added: Netherlands.]

[removed: We lease large Manufacturing facilities in England, France and the U.S.] None of our leases is individually material to our business operations.

Many of our leases have an option to [removed: renew,] [added: renew] and we believe that we will be able to successfully renew expiring leases on [removed: terms] satisfactory [removed: to us.][added: terms.]

[removed: We believe that our facilities in] [added: In] each of our reportable [removed: segments] [added: segments, we believe that our facilities] are adequate for our operations and that suitable additional space will be available when needed.

[removed: For additional information, see Note 16, “Leases”] [added: Leases] included in Item 8, “Financial Statements and Supplementary Data” in this Form 10-K.

We track room utilization on an ongoing basis and, depending on the needs of our clients at given times, we may need to execute on contingency plans for expansion, which average between [removed: six] [added: nine] and [removed: fifteen] [added: twenty-four] months to complete.

In certain circumstances, we dispose of or consolidate [added: operations, which could result in impairment charges.]

Approximately 2/3rds of our real estate portfolio (by area) is owned including all facilities over 225,000 square feet.

The remaining facilities are owned or covered by either land or facility leases.

We own large RMS facilities in Canada, France, England and the U.S with additional large facilities leased in China and the U.S. Manufacturing is supported in over 10 countries with large, owned properties in the U.S., Ireland, and China which are supplemented by additional leased facilities in the U.S., England, and France.

For additional information, see Note 14.

Specific sites may be expanded to accommodate the business requirements resulting from a targeted consolidation plan.

We own or lease the land and buildings where we have facilities.

We own large Manufacturing facilities in the U.S., Ireland and China.

We may also expand at specific sites in order to accommodate needs resulting from any consolidation strategy.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

operations, which could result in impairment charges.

Our common stock began trading on the New York Stock Exchange on June 23, 2000 under the symbol “CRL.” There were no equity securities that were not registered under the Securities Act of 1933, as amended, sold during fiscal year [removed: 2021.][added: 2022.]

As of January [removed: 21, 2022,] [added: 25, 2023,] there were [removed: 78] [added: 75] registered shareholders of the outstanding shares of common stock.

The following table provides information relating to our purchases of shares of our common stock during the fourth quarter of fiscal [removed: 2021:][added: 2022:]

| September [removed: 26, 2021] [added: 25, 2022] to October [removed: 23, 2021] [added: 22, 2022] | | | [removed: 96] [added: 101] | | | | | | $ | [removed: 412.67] [added: 196.80] | | | | | — | | | | | | $ | 129,105 | |

| October [removed: 24, 2021] [added: 23, 2022] to November [removed: 20, 2021] [added: 19, 2022] | | | [removed: 101] [added: 58] | | | | | | [removed: 444.18] [added: 207.63] | | | | | | — | | | | | | 129,105 | | |

| November [removed: 21, 2021] [added: 20, 2022] to December [removed: 25, 2021] [added: 31, 2022] | | | [removed: 500] [added: 518] | | | | | | [removed: 365.87] [added: 228.13] | | | | | | — | | | | | | 129,105 | | |

During the fourth quarter of fiscal year [removed: 2021,] [added: 2022,] we did not repurchase any shares of common stock under our stock repurchase program or in open market trading.

As of December [removed: 25, 2021,] [added: 31, 2022,] we had $129.1 million remaining on the authorized stock repurchase program.

The following stock performance graph compares the annual percentage change in the Company’s cumulative total shareholder return on its Common Stock during a period commencing on December [removed: 31, 2016] [added: 30, 2017] and ending on December [removed: 25, 2021] [added: 31, 2022] (as measured by dividing (1) the sum of (A) the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and (B) the difference between the Company’s share price at the end and the beginning of the measurement period; by (2) the share price at the beginning of the measurement period) with the cumulative total return of the S&P 500 Index and the S&P 500 Health Care Index during such period.

[removed: ][added: ]

| | | | [removed: 2016] [added: 2017] | | | | | | [removed: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | |

| Charles River Laboratories International, Inc. | | | $ | 100 | | | | | $ | [removed: 144] [added: 102] | | | | | $ | [removed: 147] [added: 139] | | | | | $ | [removed: 199] [added: 230] | | | | | $ | [removed: 330] [added: 337] | | | | | $ | [removed: 485] [added: 199] | |

| Total | | | 677 | | | | | | | | | | | | — | | | | | | | | |

Our Board of Directors has authorized, in aggregate, a stock repurchase program of $1.3 billion.

| S&P 500 | | | 100 | | | | | | 96 | | | | | | 126 | | | | | | 149 | | | | | | 192 | | | | | | 157 | | |

| S&P 500 Health Care | | | 100 | | | | | | 106 | | | | | | 129 | | | | | | 146 | | | | | | 184 | | | | | | 180 | | |

| Total | | | 697 | | | | | | | | | | | | — | | | | | | | | |

In July 2010, our Board of Directors authorized a $500.0 million stock repurchase program, and subsequently approved increases to the program of $250.0 million in fiscal year 2010, $250.0 million in fiscal year 2013, $150.0 million in fiscal year 2014, and $150.0 million in fiscal year 2017, for an aggregate authorization of $1.3 billion.

| S&P 500 | | | 100 | | | | | | 122 | | | | | | 116 | | | | | | 153 | | | | | | 181 | | | | | | 233 | | |

| S&P 500 Health Care | | | 100 | | | | | | 122 | | | | | | 130 | | | | | | 157 | | | | | | 178 | | | | | | 225 | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i3b4c4eb652194ed5994dc94bc56e5bfe_61)] [added: Firm](#idd22d620c469429cbe87d18055ca22f6_61)] (PCAOB ID 238) | | | [removed: [56](#i3b4c4eb652194ed5994dc94bc56e5bfe_61)] [added: [55](#idd22d620c469429cbe87d18055ca22f6_61)] | | |

| [Consolidated Statements of Income for fiscal [removed: years](#i3b4c4eb652194ed5994dc94bc56e5bfe_64) 2021,] [added: years](#idd22d620c469429cbe87d18055ca22f6_64) 2022, 2021 [and](#idd22d620c469429cbe87d18055ca22f6_64)] 2020 [removed: [and](#i3b4c4eb652194ed5994dc94bc56e5bfe_64) 2019] | | | [removed: [59](#i3b4c4eb652194ed5994dc94bc56e5bfe_64)] [added: [57](#idd22d620c469429cbe87d18055ca22f6_64)] | | |

| [Consolidated Statements of Comprehensive Income for fiscal [removed: years](#i3b4c4eb652194ed5994dc94bc56e5bfe_67) [](#i3b4c4eb652194ed5994dc94bc56e5bfe_64)2021,] [added: years](#idd22d620c469429cbe87d18055ca22f6_67) [](#idd22d620c469429cbe87d18055ca22f6_64)2022, 2021 [and](#idd22d620c469429cbe87d18055ca22f6_67)] 2020 [removed: [and](#i3b4c4eb652194ed5994dc94bc56e5bfe_67) 2019] | | | [removed: [60](#i3b4c4eb652194ed5994dc94bc56e5bfe_67)] [added: [58](#idd22d620c469429cbe87d18055ca22f6_67)] | | |

| [Consolidated Balance [removed: Sheets](#i3b4c4eb652194ed5994dc94bc56e5bfe_70)] [added: Sheets](#idd22d620c469429cbe87d18055ca22f6_70)] as of December [added: 31, 2022 [and](#idd22d620c469429cbe87d18055ca22f6_70) December] 25, 2021 [removed: [and](#i3b4c4eb652194ed5994dc94bc56e5bfe_70) December 26, 2020] | | | [removed: [61](#i3b4c4eb652194ed5994dc94bc56e5bfe_70)] [added: [59](#idd22d620c469429cbe87d18055ca22f6_70)] | | |

| [Consolidated Statements of Cash Flows for fiscal [removed: years](#i3b4c4eb652194ed5994dc94bc56e5bfe_73) [](#i3b4c4eb652194ed5994dc94bc56e5bfe_64)2021, 2020] [added: years](#idd22d620c469429cbe87d18055ca22f6_73) [](#idd22d620c469429cbe87d18055ca22f6_64)2022, 2021] and [removed: 2019] [added: 2020] | | | [removed: [62](#i3b4c4eb652194ed5994dc94bc56e5bfe_73)] [added: [60](#idd22d620c469429cbe87d18055ca22f6_73)] | | |

| [Consolidated Statements of Changes in Equity for fiscal [removed: years](#i3b4c4eb652194ed5994dc94bc56e5bfe_76) [](#i3b4c4eb652194ed5994dc94bc56e5bfe_64)2021, 2020] [added: years](#idd22d620c469429cbe87d18055ca22f6_76) [](#idd22d620c469429cbe87d18055ca22f6_64)2022, 2021] and [removed: 2019] [added: 2020] | | | [removed: [64](#i3b4c4eb652194ed5994dc94bc56e5bfe_76)] [added: [62](#idd22d620c469429cbe87d18055ca22f6_76)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i3b4c4eb652194ed5994dc94bc56e5bfe_79)] [added: Statements](#idd22d620c469429cbe87d18055ca22f6_79)] | | | [removed: [65](#i3b4c4eb652194ed5994dc94bc56e5bfe_79)] [added: [63](#idd22d620c469429cbe87d18055ca22f6_79)] | | |

| [Note 1. Description of Business and Summary of Significant [removed: Accounting](#i3b4c4eb652194ed5994dc94bc56e5bfe_82)] [added: Accounting](#idd22d620c469429cbe87d18055ca22f6_82)] | | | [removed: [65](#i3b4c4eb652194ed5994dc94bc56e5bfe_82)] [added: [63](#idd22d620c469429cbe87d18055ca22f6_82)] | | |

| [Note 2. Acquisitions and [removed: Divestitures](#i3b4c4eb652194ed5994dc94bc56e5bfe_85)] [added: Divestitures](#idd22d620c469429cbe87d18055ca22f6_85)] | | | [removed: [73](#i3b4c4eb652194ed5994dc94bc56e5bfe_85)] [added: [72](#idd22d620c469429cbe87d18055ca22f6_85)] | | |

| [Note 3. Revenue from Contracts with [removed: Customers](#i3b4c4eb652194ed5994dc94bc56e5bfe_88)] [added: Customers](#idd22d620c469429cbe87d18055ca22f6_88)] | | | [removed: [82](#i3b4c4eb652194ed5994dc94bc56e5bfe_88)] [added: [77](#idd22d620c469429cbe87d18055ca22f6_88)] | | |

| [Note 4. Segment and Geographic [removed: Information](#i3b4c4eb652194ed5994dc94bc56e5bfe_94)] [added: Information](#idd22d620c469429cbe87d18055ca22f6_94)] | | | [removed: [84](#i3b4c4eb652194ed5994dc94bc56e5bfe_94)] [added: [78](#idd22d620c469429cbe87d18055ca22f6_94)] | | |

| [Note [removed: 6.] [added: 5.] Venture Capital Investments and Marketable [removed: Securities](#i3b4c4eb652194ed5994dc94bc56e5bfe_100)] [added: Securities](#idd22d620c469429cbe87d18055ca22f6_100)] | | | [removed: [88](#i3b4c4eb652194ed5994dc94bc56e5bfe_100)] [added: [80](#idd22d620c469429cbe87d18055ca22f6_100)] | | |

| [Note [removed: 7.] [added: 6.] Fair [removed: Value](#i3b4c4eb652194ed5994dc94bc56e5bfe_103)] [added: Value](#idd22d620c469429cbe87d18055ca22f6_103)] | | | [removed: [89](#i3b4c4eb652194ed5994dc94bc56e5bfe_103)] [added: [80](#idd22d620c469429cbe87d18055ca22f6_103)] | | |

| [Note [removed: 8.] [added: 7.] Goodwill and Intangible [removed: Assets](#i3b4c4eb652194ed5994dc94bc56e5bfe_106)] [added: Assets](#idd22d620c469429cbe87d18055ca22f6_106)] | | | [removed: [90](#i3b4c4eb652194ed5994dc94bc56e5bfe_106)] [added: [82](#idd22d620c469429cbe87d18055ca22f6_106)] | | |

| [Note [removed: 10.] [added: 9.] Equity and Noncontrolling [removed: Interest](#i3b4c4eb652194ed5994dc94bc56e5bfe_112)] [added: Interest](#idd22d620c469429cbe87d18055ca22f6_115)] | | | [removed: [93](#i3b4c4eb652194ed5994dc94bc56e5bfe_112)] [added: [85](#idd22d620c469429cbe87d18055ca22f6_115)] | | |

| [Note [removed: 12.] [added: 11.] Employee Benefit [removed: Plans](#i3b4c4eb652194ed5994dc94bc56e5bfe_118)] [added: Plans](#idd22d620c469429cbe87d18055ca22f6_121)] | | | [removed: [97](#i3b4c4eb652194ed5994dc94bc56e5bfe_118)] [added: [90](#idd22d620c469429cbe87d18055ca22f6_121)] | | |

| [Note [removed: 15.] [added: 13.] Restructuring and Asset [removed: Impairments](#i3b4c4eb652194ed5994dc94bc56e5bfe_127)] [added: Impairments](#idd22d620c469429cbe87d18055ca22f6_130)] | | | [removed: [105](#i3b4c4eb652194ed5994dc94bc56e5bfe_127)] [added: [95](#idd22d620c469429cbe87d18055ca22f6_130)] | | |

[removed: CHARLES RIVER LABORATORIES INTERNATIONAL, INC.][added: To the Board of Directors and Shareholders of Charles River Laboratories International, Inc.:]

We have audited the accompanying consolidated balance sheets of Charles River Laboratories International, Inc. and its subsidiaries (the “Company”) as of December [removed: 25, 2021] [added: 31, 2022] and December [removed: 26, 2020,] [added: 25, 2021,] and the related consolidated statements of income, [removed: of] comprehensive income, [removed: of] changes in equity and [removed: of] cash flows for each of the three years in the period ended December [removed: 25, 2021,] [added: 31, 2022,] including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December [removed: 25, 2021,] [added: 31, 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December [removed: 25, 2021] [added: 31, 2022] and December [removed: 26, 2020,] [added: 25, 2021,] and the results of its operations and its cash flows for each of the three years in the period ended December [removed: 25, 2021] [added: 31, 2022] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December [removed: 25, 2021,] [added: 31, 2022,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded [removed: Cognate BioServices, Inc. (Cognate) and Vigene Biosciences, Inc. (Vigene)] [added: Explora BioLabs] from its assessment of internal control over financial reporting as of December [removed: 25, 2021] [added: 31, 2022] because [removed: they were] [added: it was] acquired by the Company in [added: a] purchase business [removed: combinations] [added: combination] during [removed: 2021.][added: 2022.]

We have also excluded [removed: Cognate and Vigene] [added: Explora BioLabs] from our audit of internal control over financial reporting.

[removed: Cognate and Vigene are] [added: Explora BioLabs is a] wholly-owned [removed: subsidiaries] [added: subsidiary] whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting [removed: collectively] represent [removed: 2.5%] [added: 1.5%] and [removed: 3.1%,] [added: 1.1%,] respectively, of the related consolidated financial statement amounts as of and for the year ended December [removed: 25, 2021.][added: 31, 2022.]

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the [added: company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.]

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the consolidated financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that (i) [removed: relate] [added: relates] to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the accounts or disclosures to which [removed: they relate.][added: it relates.]

*Discovery and Safety Assessment [added: Service] Revenue Recognized Over [removed: Time*][added: Time Using the Input Method*]

As described in Notes 1 and 3 to the consolidated financial statements, the Company recognized [removed: revenue of $2,107.2 million in its] Discovery and Safety Assessment (DSA) [removed: segment in 2021, of which $2,103.4 million was recognized] [added: revenue from services and products transferred] over time [removed: as] [added: of $2,440.6 million for the year-ended December 31, 2022, of which the majority relates to] services [added: that] are delivered to the customer based on the extent of progress towards completion of the performance obligation [added: that management measures] using [removed: either] the cost-to-cost (input [removed: method) or right to invoice (output method) measures of progress.][added: method).]

Management uses the [removed: cost-to-cost] [added: input method] measure of progress when it best depicts the transfer of value to the customer, which occurs [added: as the Company incurs costs on its contract, generally related to fixed fee service contracts.]

Under the [removed: cost-to-cost] [added: input method] measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation.

The [removed: costs] [added: cost] calculation includes variables such as labor hours, allocation of overhead costs, research model costs, and subcontractor costs.

The principal considerations for our determination that performing procedures relating to DSA [added: service] revenue recognized over time [added: using the input method] is a critical audit matter are the high degree of auditor subjectivity and effort in performing procedures and [removed: in] evaluating audit evidence related to the [removed: extent] [added: ratio] of [removed: progress towards completion, actual] costs [removed: incurred, and management’s assumptions used in determining] [added: incurred to date to] the total estimated costs at completion [removed: related to labor hours, allocation] of [removed: overhead costs, research model costs, and subcontractor costs.][added: the performance obligation.]

These procedures included testing the effectiveness of controls relating to DSA [added: service] revenue recognized over [removed: time,] [added: time using the input method,] including controls over the [removed: extent] [added: ratio] of [removed: progress towards completion, actual] costs incurred [removed: and determination of] [added: to date to the] total estimated costs at [removed: completion, review] [added: completion] of [removed: agreements,] [added: the performance obligation,] review of [added: contracts, testing of] budget versus actual costs incurred and [removed: review] [added: testing] of revenue recognition.

These procedures also included, among [removed: others,] [added: others] (i) reading [removed: agreements] [added: contracts] and reports describing the results of services provided for a sample of [added: DSA] service [removed: contracts,] [added: contracts;] (ii) evaluating and testing management’s process for determining the amount of [added: DSA service] revenue recognized [added: over time] for a sample of [added: DSA] service contracts, which included evaluating the reasonableness of the [removed: estimates] [added: ratio] of costs [removed: and management’s assumptions related] [added: incurred] to [removed: labor hours, allocation of overhead costs, research model costs, and subcontractor] [added: date to the total estimated] costs [added: at completion of the performance obligations] through [added: performing] a [added: retrospective] comparison of actual [removed: current year project] costs [added: incurred] to historical [removed: management cost estimates] [added: estimated costs] for completed service [removed: contracts,] [added: contracts;] and (iii) testing actual costs incurred for a sample of [removed: in-process] [added: in-progress] service contracts by examining evidence of costs incurred.

| | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | |

| Service revenue | | | $ | [removed: 2,755,579] [added: 3,216,904] | | | | | $ | [removed: 2,296,156] [added: 2,755,579] | | | | | $ | [removed: 2,029,371] [added: 2,296,156] | |

| Product revenue | | | [removed: 784,581] [added: 759,156] | | | | | | [removed: 627,777] [added: 784,581] | | | | | | [removed: 591,855] [added: 627,777] | | |

| Total revenue | | | [removed: 3,540,160] [added: 3,976,060] | | | | | | [removed: 2,923,933] [added: 3,540,160] | | | | | | [removed: 2,621,226] [added: 2,923,933] | | |

| [Note 8. Debt and Other Financing Arrangements](#idd22d620c469429cbe87d18055ca22f6_109) | | | [83](#idd22d620c469429cbe87d18055ca22f6_109) | | |

| [Note 10. Income Taxes](#idd22d620c469429cbe87d18055ca22f6_118) | | | [87](#idd22d620c469429cbe87d18055ca22f6_118) | | |

| [Note 12. Stock-based Compensation](#idd22d620c469429cbe87d18055ca22f6_124) | | | [93](#idd22d620c469429cbe87d18055ca22f6_124) | | |

| [Note 14. Leases](#idd22d620c469429cbe87d18055ca22f6_136) | | | [96](#idd22d620c469429cbe87d18055ca22f6_136) | | |

| [Note 15. Commitments and Contingencies](#idd22d620c469429cbe87d18055ca22f6_139) | | | [98](#idd22d620c469429cbe87d18055ca22f6_139) | | |

| Unrealized losses on hedging instruments | | | (1,523) | | | | | | — | | | | | | — | | |

| Venture capital and strategic equity investments | | | 311,602 | | | | | | 201,352 | | |

| Intangible assets, net | | | 955,275 | | | | | | 1,061,192 | | |

| Other assets | | | 148,279 | | | | | | 151,537 | | |

| Noncontrolling interests (nonredeemable) | | | 4,785 | | | | | | 4,162 | | |

| Net income | | | $ | 492,608 | | | | | $ | 398,837 | | | | | $ | 365,306 | |

| Provision for credit losses | | | 6,706 | | | | | | 1,657 | | | | | | 6,376 | | |

| Gain on divestitures, net | | | (123,405) | | | | | | (25,026) | | | | | | — | | |

| Other, net | | | 27,542 | | | | | | 3,300 | | | | | | 7,704 | | |

| Purchases of additional equity interests, net | | | (30,533) | | | | | | — | | | | | | — | | |

| Cash, cash equivalents, and restricted cash, end of period | | | $ | 241,214 | | | | | $ | 246,314 | | | | | $ | 233,119 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | 486,226 | | | | | | — | | | | | | — | | | | | | — | | | | | | 486,226 | | | | | | 2,362 | | | | | | 488,588 | | |

| Purchase of treasury shares | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 130 | | | | | | (38,651) | | | | | | (38,651) | | | | | | — | | | | | | (38,651) | | |

| Retirement of treasury shares | | | (130) | | | | | | (1) | | | | | | (4,574) | | | | | | (34,076) | | | | | | — | | | | | | (130) | | | | | | 38,651 | | | | | | — | | | | | | — | | | | | | — | | |

| December 31, 2022 | | | 50,944 | | | | | | $ | 509 | | | | | $ | 1,804,940 | | | | | $ | 1,432,901 | | | | | $ | (262,057) | | | | | — | | | | | | $ | — | | | | | $ | 2,976,293 | | | | | $ | 4,785 | | | | | $ | 2,981,078 | |

A 53rd week in the fourth quarter of the fiscal year is occasionally necessary to align with a December 31 calendar year-end, which occurred in this fiscal year 2022.

The Company’s DSA reportable segment includes two businesses: Discovery Services and Safety Assessment.

The Company provides regulated and non-regulated DSA services to support the research, development, and regulatory-required safety testing of potential new drugs, including therapeutic discovery and optimization plus in vitro and in vivo studies, laboratory support services, and strategic non-clinical consulting and program management to support product development.

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.

In September 2022, the FASB issued ASU 2022-04, “Liabilities – Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” ASU 2022-04 requires quantitative and qualitative disclosures about the use of supplier finance programs.

The ASU is effective for fiscal years beginning after December 15, 2022, except for the amendment on rollforward information, which is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years for selected disclosures, and will be applied on a prospective basis.

- Interest rate swap contracts - Valued using market observable inputs, such as interest rate yield curves;

The Company records divestitures at fair value less cost to sell with any related gain or loss from sale recorded within Other income (expense) on the Company’s consolidated statements of income.

If the sale price includes contingent payments, these are fair valued using a probability weighted model.

If the business divested is part of a reporting unit, goodwill from the reporting unit is reallocated based on the fair value of the divested business compared to the fair value of the reporting unit.

Derivative Contracts

The Company is exposed to certain risks relating to its ongoing business operations including changes to interest rates and currency exchange rates.

The company uses derivative instruments primarily to manage currency exchange and interest rate risks.

The Company recognizes derivative instruments as either assets or liabilities and measures those instruments at fair value.

If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of the hedged item through earnings or recognized in other comprehensive items until the hedged item is recognized in earnings.

Derivatives that are not designated as hedges are recorded at fair value through earnings.

For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative is reported as a component of other comprehensive items and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item.

The Company uses an interest rate swap to manage interest rate fluctuation related to floating rate borrowings under the Credit Facility.

The Company uses short-term forward currency exchange contracts primarily to hedge certain balance sheet and operational exposures resulting from changes in currency exchange rates, predominantly intercompany loans.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| [Note 5. Supplemental Balance Sheet Information](#i3b4c4eb652194ed5994dc94bc56e5bfe_97) | | | [86](#i3b4c4eb652194ed5994dc94bc56e5bfe_97) | | |

| [Note 9. Long-Term Debt and Finance Lease Obligations](#i3b4c4eb652194ed5994dc94bc56e5bfe_109) | | | [91](#i3b4c4eb652194ed5994dc94bc56e5bfe_109) | | |

| [Note 11. Income Taxes](#i3b4c4eb652194ed5994dc94bc56e5bfe_115) | | | [95](#i3b4c4eb652194ed5994dc94bc56e5bfe_115) | | |

| [Note 13. Stock-based Compensation](#i3b4c4eb652194ed5994dc94bc56e5bfe_121) | | | [102](#i3b4c4eb652194ed5994dc94bc56e5bfe_121) | | |

| [Note 14. Foreign Currency Contracts](#i3b4c4eb652194ed5994dc94bc56e5bfe_124) | | | [104](#i3b4c4eb652194ed5994dc94bc56e5bfe_124) | | |

| [Note 16. Leases](#i3b4c4eb652194ed5994dc94bc56e5bfe_130) | | | [106](#i3b4c4eb652194ed5994dc94bc56e5bfe_130) | | |

| [Note 17. Commitments and Contingencies](#i3b4c4eb652194ed5994dc94bc56e5bfe_136) | | | [108](#i3b4c4eb652194ed5994dc94bc56e5bfe_136) | | |

To the Board of Directors and Shareholders of Charles River Laboratories International, Inc.

company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

*Acquisitions of Cognate BioServices, Inc. and Vigene Biosciences, Inc. – Valuation of Customer Relationship Intangible Assets*

As described in Notes 1 and 2 to the consolidated financial statements, the Company completed the acquisitions of Cognate BioServices, Inc. (Cognate) and Vigene Biosciences, Inc. (Vigene) in 2021.

The preliminary purchase price allocation for Cognate and Vigene included customer relationship intangible assets (also referred to as client relationships) of $257.2 million and $87.5 million, respectively.

The determination of the fair value of the intangible assets requires the use of significant judgment using management’s best estimates of inputs and assumptions that a market participant would use.

Significant judgments include (i) the fair value; and (ii) the period and the method by which the intangible assets will be amortized.

To determine the fair value of the acquired client relationships, management utilized the multiple period excess earnings model (a commonly accepted valuation technique), which relies on the following key assumptions: projections of cash flows from the acquired entities, which includes future revenue growth rates, operating income margins, and customer attrition rates, as well as the discount rates based on an analysis of the acquired entities’ weighted average cost of capital.

The principal considerations for our determination that performing procedures relating to the acquisition of Cognate and Vigene - valuation of acquired customer relationship intangible assets is a critical audit matter are (i) the high degree of auditor judgment and subjectivity in performing procedures relating to the fair value of the customer relationship intangible assets acquired due to the significant amount of judgment by management when developing the estimate, (ii) the significant audit effort in evaluating the significant assumptions related to the future revenue growth rates, operating income margins, customer attrition rates, and discount rates related to the Cognate customer relationship intangible assets and the future revenue growth rate, operating income margin, and discount rate related to the Vigene customer relationship intangible asset and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of acquired customer relationship intangible assets and development of key assumptions related to future revenue growth rates, operating income margins, customer attrition rates, and discount rates related to the Cognate customer relationship intangible assets and the future revenue growth rate, operating income margin, and discount rate related to the Vigene customer relationship intangible asset.

These procedures also included, among others, (i) reading the purchase agreement and (ii) testing management’s process for estimating the fair value of customer relationship intangible assets.

Testing management’s process included evaluating the appropriateness of the valuation model, testing the completeness and accuracy of data provided by management, and evaluating reasonableness of significant assumptions related to the estimated future revenue growth rates, operating income margins, customer attrition rates, and discount rates related to Cognate and estimated future revenue growth rate, operating income margin, and discount rate related to Vigene.

Evaluating the reasonableness of the estimated future revenue growth rates, operating income margins, customer attrition rates, and discount rates assumptions involved considering their consistency with data from external sources, past performance of the acquired businesses, and evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in the evaluation of the Company’s valuation model and management’s significant assumptions related to customer attrition and discount rates.

The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided.

as the Company incurs costs on its contract, generally related to fixed fee service contracts.

The right-to-invoice measure of progress is generally related to rate per unit contracts, as the extent of progress towards completion is measured based on discrete service or time-based increments, such as samples tested or labor hours incurred.

Revenue is recorded in the amount invoiced since that amount corresponds directly to the value of the Company’s performance to date.

February 16, 2022

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Fiscal Year | | | | | | | | | | | | | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Client relationships, net | | | 981,398 | | | | | | 721,505 | | |

| Other assets | | | 352,889 | | | | | | 352,626 | | |

| Other current liabilities | | | 137,641 | | | | | | 102,477 | | |

| Noncontrolling interest | | | 4,162 | | | | | | 3,567 | | |

| Gain on sale of businesses | | | (25,026) | | | | | | — | | | | | | — | | |

| Other, net | | | 4,957 | | | | | | 14,080 | | | | | | 2,988 | | |

| December 29, 2018 | | | 48,210 | | | | | | $ | 482 | | | | | $ | 1,447,512 | | | | | $ | 42,096 | | | | | $ | (172,703) | | | | | 1 | | | | | | $ | (55) | | | | | $ | 1,317,332 | | | | | $ | 2,446 | | | | | $ | 1,319,778 | |

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 [removed: 25, 2021,] [added: 31, 2022,] 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.

Based on our assessment and those criteria, management concluded that the Company maintained effective internal control over financial reporting as of December [removed: 25, 2021.][added: 31, 2022.]

The effectiveness of our internal control over financial reporting as of December [removed: 25, 2021,] [added: 31, 2022,] 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.

During fiscal year [removed: 2021,] [added: 2022,] the Company continued to execute a plan to centralize certain accounting transaction processing functions to internal shared service centers.

There were no other 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 [removed: 2021] [added: 2022] that materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

Our assessment of the effectiveness of our internal control over financial reporting as of December 31, 2022 excluded Explora BioLabs, which was acquired by the Company in 2022.

Explora BioLabs, whose total assets and total revenues were excluded from the Company’s assessment, represented approximately 1.5% and 1.1%, respectively, of the related consolidated amounts as of and for the fiscal year ended December 31, 2022.

We have excluded certain business acquisitions completed during fiscal year 2021 (Cognate and Vigene) from the assessment of the effectiveness of internal control over financial reporting as of December 25, 2021.

Total assets and total revenues of these acquired businesses that are excluded represent 2.5% and 3.1%, respectively, of the related consolidated financial statement amounts as of and for fiscal year ended December 25, 2021.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

None.

On February 15, 2022, we entered into a letter agreement with Mr. Smith, our Corporate Executive Vice President and Chief Financial Officer, that amends our existing Service Agreement with him and that establishes parameters regarding a gradual and well-planned transition of his responsibilities.

The letter agreement sets forth that in the event that Charles River appoints a successor to Mr. Smith’s role prior to September 30, 2022, Mr. Smith’s job title will change to Senior Financial Advisor though February 28, 2023, as he transitions his responsibilities to his successor.

Throughout this transition period, Mr. Smith will remain available to answer questions related to his role and to consult with his successor or our CEO about matters where Mr. Smith’s skill, expertise or insight is considered necessary.

Mr. Smith’s base compensation effective as of April 1, 2022 and through September 30, 2022 will be £479,981 per year.

Mr. Smith will be eligible to receive a bonus of up to 70% of his base annual salary for the 2022 fiscal year, such bonus to be reduced on a pro-rata basis to reflect time worked within the fiscal year up to and including September 30, 2022.

In lieu of a traditional annual equity grant made in May, Mr. Smith will receive a grant of restricted stock units on February 28, 2022 with a value of $1.5 million with a 12-month vesting period, such grant to be conditional upon Mr. Smith providing a smooth, structured handover of his responsibilities to his successor.

The vesting of any previously granted equity awards will be unaffected and continue through February 28, 2023, with any equity that remains unvested at that date to be forfeited.

The terms and conditions of any previously granted stock award agreements will be unaffected through February 28, 2023.

The letter agreement provides that, notwithstanding termination of his employment, Charles River will continue to procure accountant services to Mr. Smith to complete his US and UK annual tax returns until the 2025-2026 tax year.

In the event that a successor CFO is not appointed prior to September 30, 2022, Mr. Smith’s employment will continue as normal, and the terms of the letter agreement will no longer apply.

In consideration for the benefits provided under the letter agreement, Mr. Smith has agreed he is not entitled to other severance or compensation benefits.

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 [removed: 2022] [added: 2023] 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 [removed: 2022] [added: 2023] Proxy Statement under the section captioned “Corporate Governance” and is incorporated herein by reference thereto.

The information required by this Item regarding the audit committee of the Board of Directors and financial experts will be included in the [removed: 2022] [added: 2023] 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.

The information required by this Item will be included in the [removed: 2022] [added: 2023] Proxy Statement under the sections captioned [removed: “2021] [added: “2022] 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.

The information required by this Item will be included in the [removed: 2022] [added: 2023] Proxy Statement under the sections captioned “Beneficial Ownership of Securities” and “Equity Compensation Plan Information” and is incorporated herein by reference thereto.

The information required by this Item will be included in the [removed: 2022] [added: 2023] 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.

The information required by this Item will be included in the [removed: 2022] [added: 2023] Proxy Statement under the section captioned “Statement of Fees Paid to Independent Registered Public Accounting Firm” and is incorporated herein by reference thereto.

| 4.10 | | | [Form of Note for 4.000% Senior Notes due [removed: 2030] [added: 2031] (included with Exhibit 4.12)](https://www.sec.gov/Archives/edgar/data/0001100682/000095010321004449/dp148253_ex0402.htm) | | | | | | 8-K | | | March 23, 2021 | | | 4.4 | | |

| [removed: 10.12*] [added: 10.11*] | | | [Amended and Restated Employment Agreement by and between James C. Foster and Charles River International, Inc., dated May 18, 2021](https://www.sec.gov/Archives/edgar/data/0001100682/000095010321007423/dp151239_ex9901.htm) | | | | | | 8-K | | | May 18, 2021 | | | 99.1 | | |

| [removed: 10.13*] [added: 10.12*] | | | [Executive Incentive Compensation Program effective January 1, 2021](https://www.sec.gov/Archives/edgar/data/0001100682/000110068221000010/ex102eicpplandocument2021f.htm) | | | | | | 10-Q | | | May 4, 2021 | | | 10.2 | | |

| [removed: 10.14*] [added: 10.13*] | | | [Charles River Laboratories amended and restated Deferred Compensation Plan, as amended](https://www.sec.gov/Archives/edgar/data/0001100682/000110068221000010/ex103dcplandocument-amende.htm) | | | | | | 10-Q | | | May 4, 2021 | | | 10.3 | | |

| [removed: 10.15] [added: 10.14] | | | [Ninth Amended and Restated Credit Agreement, dated as of April 21, 2021, among Charles River Laboratories International, Inc., the Subsidiary Borrowers party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the other agents party thereto](https://www.sec.gov/Archives/edgar/data/0001100682/000095010321005992/dp149793_ex1001.htm) | | | | | | 8-K | | | April 23, 2021 | | | 10.1 | | |

| [removed: 10.16*] [added: 10.15*] | | | [Charles River Laboratories International, Inc. Restricted Stock Unit Award, dated December 25, 2021 granted to Joseph W. LaPlume](https://www.sec.gov/Archives/edgar/data/0001100682/000110068221000028/exhibit101-8xkfiled122721.htm) | | | | | | 8-K | | | December 27, 2021 | | | 10.1 | | |

| [removed: 10.17*] [added: 10.16*] | | | [Charles River Laboratories International, Inc. Performance Share Unit Award, dated December 25, 2021 granted to Joseph W. LaPlume](https://www.sec.gov/Archives/edgar/data/0001100682/000110068221000028/exhibit102-8xkfiled122721.htm) | | | | | | 8-K | | | December 27, 2021 | | | 10.2 | | |

| [removed: 10.18*†] [added: 10.17*†] | | | [Agreement between David Ross Smith and Charles River Discovery Research Services UK Limited dated February 15, 2022](https://www.sec.gov/Archives/edgar/data/1100682/000110068222000007/crl1225202110-kxex1018.htm) | | | [removed: X] | | | [added: 10-K] | | | [added: February 16, 2022] | | | [added: 10.18] | | |

| 21.1 | | | [Subsidiaries of Charles River Laboratories International, [removed: Inc.](https://www.sec.gov/Archives/edgar/data/1100682/000110068222000007/crl1225202110-k10xkxex211.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/1100682/000110068223000006/crl1231202210-kex211.htm)] | | | X | | | | | | | | | | | |

| 23.1 | | | [Consent of PricewaterhouseCoopers [removed: LLP](https://www.sec.gov/Archives/edgar/data/1100682/000110068222000007/crl1225202110-kxex231.htm)] [added: LLP](https://www.sec.gov/Archives/edgar/data/1100682/000110068223000006/crl1231202210-kex231.htm)] | | | X | | | | | | | | | | | |

| 31.1 | | | [Rule 13a-14(a)/15d-14(a) Certification of Chief Executive [removed: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068222000007/crl1225202110-kxex311.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068223000006/crl1231202210-kex311.htm)] | | | X | | | | | | | | | | | |

| 31.2 | | | [Rule 13a-14(a)/15d-14(a) Certification of Chief Financial [removed: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068222000007/crl1225202110-kxex312.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068223000006/crl1231202210-kex312.htm)] | | | X | | | | | | | | | | | |

| 32.1 | | | [Section 1350 Certification of the Chief Executive Officer and Chief Financial [removed: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068222000007/crl1225202110-kxex321.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068223000006/crl1231202210-kex321.htm)] | | | X | | | | | | | | | | | |

| 10.18*† | | | [Employment Offer Letter between Charles River Laboratories, Inc. and Flavia Pease, dated as of March 4, 2022](https://www.sec.gov/Archives/edgar/data/1100682/000110068222000016/crl3262022ex101.htm) | | | | | | 10-Q | | | May 4, 2022 | | | 10.1 | | |

| | | | | | | | | | | | | | | | | | |

| 2.1 | | | [Agreement and Plan of Merger, dated as of February 17, 2021, by and among Charles River Laboratories International, Inc., Memphis Merger Sub, Inc., Cognate BioServices, Inc. and Mercury Fund 2 Holdco LLC, solely in its capacity as the initial representative of the Company Shareholders](https://www.sec.gov/Archives/edgar/data/1100682/000095010321002397/dp146258_ex0201.htm) | | | | | | 8-K | | | February 17, 2021 | | | 2.1 | | |

| 10.11* | | | [Agreement between David Smith and Charles River Laboratories, Inc. effective October 26, 2020](https://www.sec.gov/Archives/edgar/data/1100682/000110068220000041/ex101drsrelocationagre.htm) | | | | | | 10-Q | | | October 29, 2020 | | | 10.1 | | |

| By: | | | /s/ JAMES C. FOSTER | | | *Chairman, President and Chief Executive Officer* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| By: | | | /s/ [removed: DAVID R. SMITH] [added: FLAVIA H. PEASE] | | | *Corporate Executive Vice President and* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| | | | [removed: David R. Smith] [added: Flavia H. Pease] | | | *Chief Financial Officer* | | | | | |

| By: | | | /s/ MICHAEL G. KNELL | | | *Corporate Senior Vice President and* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| By: | | | /s/ NANCY C. ANDREWS | | | *Director* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| By: | | | /s/ ROBERT J. BERTOLINI | | | *Director* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| By: | | | /s/ DEBORAH T. KOCHEVAR | | | *Director* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| By: | | | /s/ GEORGE LLADO | | | *Director* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| By: | | | /s/ MARTIN MACKAY | | | *Director* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| By: | | | /s/ GEORGE E. MASSARO | | | *Director* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| By: | | | /s/ C. RICHARD REESE | | | *Director* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| By: | | | /s/ RICHARD F. WALLMAN | | | *Director* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| By: | | | /s/ VIRGINIA M. WILSON | | | *Director* | | | February [removed: 16, 2022] [added: 22, 2023] | | |

| February 22, 2023 | | | By: | | | /s/ FLAVIA H. PEASE | | |

| | | | Flavia H. Pease | | | | | |

| By: | | | /s/ CRAIG B. THOMPSON | | | *Director* | | | February 22, 2023 | | |

| | | | Craig B. Thompson | | | | | | | | |

| February 16, 2022 | | | By: | | | /s/ DAVID R. SMITH | | |

| | | | David R. Smith | | | | | |

| By: | | | /s/ GEORGE M. MILNE, JR. | | | *Director* | | | February 16, 2022 | | |

| | | | George M. Milne, Jr. | | | | | | | | |