Charles River Laboratories International (CRL) 10-K risk factor changes: FY2023 vs FY2022

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

- Our operations might be affected by the occurrence of a natural disaster or other catastrophic [removed: event, such as the COVID-19 pandemic.][added: event.]

- [removed: A reduction in demand] [added: Demand volatility, risk of credit losses,] or a reduction or delay in government funding of R&D may adversely affect our business.

- Failure to comply with U.S., state, local or international environmental, health and safety laws and regulations could result in fines and penalties and loss of [removed: licensure,] [added: licensure] and have a material adverse effect upon the Company’s business.

- Changes in U.S. and International Tax [removed: Law] [added: Law, results of tax audits,] or material changes in our stock price could have a material adverse impact on our effective tax [removed: rate.][added: rate and financial results.]

Our counterparties (including our clients who are competitors) may elect to terminate their agreements with us for various reasons including: the invocation of force majeure clauses, or the legal doctrines of impossibility or impracticability, or other similar legal [removed: doctrines, as a result of the COVID-19 pandemic;] [added: doctrines;] the products being tested fail to satisfy safety requirements; unexpected or undesired study results; production problems resulting in shortages of the drug being tested; a client’s decision to forego or terminate a particular study; our competitors’ establishment of alternative distribution channels; dissatisfaction with our performance under the agreement; the loss of funding for the particular research study; or general convenience/counterparty preference.

In recent years, we have been updating and consolidating [removed: systems] [added: platforms] and automating processes in many parts of our business with a variety of systems, including in connection with the integration of acquired businesses.

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, [added: regulatory requirements,] data conversion, associated regulatory compliance, network and system cutover, user training, and integration with existing [removed: processes or systems.]

Incongruities in any of these areas could cause operational problems during implementation including inconsistent practices, delayed report and/or data shipments, missed sales, [added: animal management/welfare issues, issues that require re-doing certain studies, personally identifiable information and data privacy issues,] billing errors and accounting errors.

[removed: While we have taken measures to protect our information systems from intrusion, in] [added: In] March 2019, we detected evidence that an unauthorized third party, who we believe was well resourced and highly sophisticated, accessed certain of our information systems and copied data.

[removed: In December] [added: By the end of] 2019, we disclosed that we had completed our remediation of the [removed: incident] identified [removed: in March of 2019.][added: incident.]

[removed: We] [added: As of the date of this filing, to our knowledge, we] have not experienced an information security breach or material cybersecurity incident [removed: within the last three years.][added: since that event.]

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

If we are not successful in selecting and integrating the businesses and technologies we [removed: acquire,] [added: acquire] or [added: partner with, or] in managing our current and future divestitures, our business may be adversely impacted.

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

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

Some of the same risks exist when we decide to sell a business, site, product line or service [removed: offering.][added: offering or decide to close a site.]

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

To address this issue, we [removed: are pursuing] [added: typically pursue] a number of strategies [added: designed] to improve our internal growth, including strengthening our presence in selected geographic markets through organic growth and strategic acquisitions and expanding our service offerings, including our expansion into the CDMO business.

Changes in foreign currency exchange [removed: rates,] [added: rates] could materially adversely impact our results.

While our financial results are reported in U.S. Dollars, the financial statements of many of our subsidiaries outside the U.S. are prepared using the [removed: local currency as the functional currency.]

- general economic and political conditions in the markets in which we [removed: operate, including implications of the COVID-19 pandemic;][added: operate;]

- potentially negative consequences from changes in U.S. and/or foreign [added: laws, including changes that may bar us from engaging in business transactions with certain clients, and changes in] tax laws, or interpretations and enforcement thereof, notably tax regulations issued and to-be-issued with respect to the potential adoption of global minimum taxation requirements and potential changes to existing tax law by the current U.S. Presidential administration and Congress;

- difficulties and costs associated with staffing and managing foreign operations, including risks of [removed: COVID-19 pandemic related suspensions of operations,] work stoppages and/or strikes, as well as violations of local laws or anti-bribery laws such as the U.S. Foreign Corrupt Practices Act (FCPA), the U.K. Bribery Act and the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions;

- unexpected changes in regulatory [removed: requirements (including as a result of the COVID-19 pandemic);][added: requirements;]

- the difficulties of compliance with a wide variety of foreign laws and [removed: regulations (including those relating to the COVID-19 pandemic);][added: regulations;]

- unfavorable labor regulations in foreign [removed: jurisdictions (including those relating to the COVID-19 pandemic);][added: jurisdictions;]

Our operations might be affected by the occurrence of a natural disaster or other catastrophic [removed: event, and have been (and will continue to be) affected by the COVID-19 pandemic.][added: event.]

Despite any precautions we take for natural disasters or other catastrophic events, these events, including terrorist attack, a [removed: pandemic (including the COVID-19 pandemic),] [added: pandemic,] epidemic or outbreak of a disease, hurricanes, tornadoes, fire, floods and ice and snow storms, could result in damage to and closure of our or our customers’ facilities or the infrastructure on which such facilities rely.

Notwithstanding, certain special interest groups categorically object [removed: to the use of animals for valid research purposes.]

However, research activities [removed: with animals] [added: involving animal models] have been the subject of adverse attention, including shareholder proposals and attempts to disrupt [removed: air] carriers from transporting [added: large] research [removed: models, impacting the industry.][added: models and actions aimed at preventing expansion of operations .]

[added: 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.

Disruptions to their continued supply from time to time arise from [added: colony] health problems (including as a result of the [removed: COVID-19 pandemic and the] spread of [removed: other] diseases), export or import laws/restrictions or embargoes, tariffs, inflation, international trade regulations, foreign government or economic instability, severe weather conditions, increased competition among suppliers for models, disruptions to the air travel system, activist campaigns, commercial disputes, supplier insolvency, geopolitical disputes, [removed: measures intended to slow the spread of COVID-19] or other ordinary course or unanticipated events.

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 [removed: of] [added: for] 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.

In connection with the civil investigation, the Company has voluntarily suspended planned future shipments of Cambodia non-human primates [added: into the United States] until such time that the Company and USFWS can agree upon and implement additional procedures to reasonably ensure that non-human primates imported 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 [removed: obtain] [added: import] Cambodia-sourced non-human [removed: primates.][added: primates into the United States, and overall supply of non-human primates from Cambodia on a world-wide basis is more limited than previously.]

While we continue to take steps to find alternative supply channels (and other global sources) and lock in supply (both for non-human primates and with respect to other limited supply products) with preferred sources through multi-year and/or minimum commitment [removed: contracts,] [added: contracts as well as through acquisitions of suppliers,] 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 importation or the transportation of models products.

[removed: Further, portions] [added: Portions] of our Cell Solutions business depends on the availability of appropriate donors.

Regulations intended to [removed: reduce the risk of introducing] [added: control] infectious [removed: diseases] [added: disease or requirements] in [removed: the blood supply (including COVID-19)] [added: cell therapy manufacturing processes] could also result in a decreased pool of potential donors or integrity of inventory.

In addition, [removed: health and] healthcare concerns among the public may result in a decline in donations.

section.

processes or systems.

For information regarding our processes and practices related to information and cybersecurity, please see Section 1C of this report, “Cybersecurity”.

local currency as the functional currency.

- ongoing uncertainties as a result of instability or changes in geopolitical conditions, including terrorist acts or military or political conflicts, such as those caused by the ongoing conflicts between Russia and Ukraine or Israel and Hamas (the potential escalation or geographic expansion of which could heighten other risks identified in this report);

- longer accounts receivable cycles in certain foreign countries;

to the use of animals for valid research purposes.

Additionally, our business is exposed to the risk of credit losses, which arises from our extension of credit to clients.

The collectability of accounts receivable may be adversely affected by various factors, including economic downturns, changes in clients’ financial conditions, and industry-specific challenges.

A deterioration in the creditworthiness of our clients could result in the need to establish or increase our allowance for credit losses.

We regularly assess the creditworthiness of our clients, establish credit limits, and monitor payment patterns.

However, our ability to manage credit risk and maintain an adequate allowance for credit losses may be impacted by factors beyond our control, such as unforeseen economic conditions or significant shifts in client payment behavior.

Additionally, changes in global or regional economic conditions may affect the overall credit environment and impact our customers' ability to fulfill their payment obligations.

Additionally, we have business that depends on our supply of large research models to clients.

Sudden or unexpected changes in demand, market conditions, or the regulatory environment for these models could have an adverse impact on our profitability.

Decreased demand could result in inventory surpluses, which could also significantly impact our results and operations.

In particular, if the price of non-human primates increases significantly, or if we are unable to transport the non-human primates in our possession to our clients because of governmental restrictions or limitations, our business may be materially adversely affected.

In addition, overall supply constraints with respect to large research models has led to an extremely dynamic pricing environment for non-human primates, which has, and could continue to, make it difficult to predict results, lead to reduced volumes, and require us to adjust operations.

Increasing demand could harm relationships with clients if we are unable to alter production capacity, or purchase products from other suppliers, to fill orders adequately.

Although we believe we are currently in compliance in all material respects with applicable national, regional and local laws, as well as other accepted guidance used by oversight bodies (including the USDA, the standards set by the International Air

- reputation for responsive client service and support;

- ability to place orders through eCommerce channels; and

For information regarding our efforts to support development and to provide the best translational models to supplement or replace traditional models, see “Our Strategy” included elsewhere in this Form 10-K.

sustain periods of marginally profitable or unprofitable sales.

The EU-US DPF was adopted in July 2023 and provides US-based organizations who self-certify with a reliable mechanism for personal data transfers from the EU, United Kingdom, and Switzerland.

Although these mechanisms are currently valid for purposes of transferring personal data, they could be subject to legal challenges and there is no assurance that we could satisfy or rely on these measures to lawfully transfer personal data.

provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

Violations of the PIPL or DSL could result in fines and penalties, suspension of data transfers, cancellation of business authorizations, personal liability for responsible company officers, as well as criminal and civil liability.

result in liability to us.

Additionally, we are subject to regular audits with respect to various tax returns and processes in the jurisdictions in which we operate.

Errors or omissions in tax returns, process failures, increase to tax rates or differences in interpretation of tax laws by tax authorities may lead to litigation, payments of additional taxes, penalties, and interest.

We are subject to regular review and audit by both domestic and foreign tax authorities.

As a result, we have received, and may in the future receive, assessments in multiple jurisdictions, on various tax-related assertions.

Any adverse outcome of such a review or audit could harm our financial condition and operating results, require adverse changes to our business practices, or subject us to additional litigation and regulatory inquiries.

In addition, the determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment and often involves uncertainty.

Although we believe our estimates are reasonable, the ultimate tax outcome may differ from the amounts recorded in our financial statements and may affect our financial results in the period or periods for which such determination is made.

Our tax expense and liabilities are affected by certain factors, such as changes in our business operations, acquisitions, investments, entry into new businesses and geographies, intercompany transactions, changes in foreign currency exchange rates, changes in our stock price, changes to our forecasts of income and loss and the mix of jurisdictions to which they relate, and changes in our tax assets and liabilities and their valuation.

This may be exacerbated by the increased use of cell-based and new alternative model methods not involving animal models, which may supplement and/or replace or supplant the use of traditional living animal models in biomedical research.

Refer to “Risk Factors – *New technologies may be developed, validated and increasingly used in biomedical research, which could reduce demand for some of our products and services*.” herein for our assessment of certain other relevant risk factors on this topic.

We are involved in legal proceedings that could adversely affect our business, financial condition, and results of operations.

- 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.

alternative exit strategies at acceptable prices and terms, and in a timely manner.

- potential international conflicts, including terrorist acts;

- longer accounts receivable cycles in certain foreign countries (including as a result of the COVID-19 pandemic and the impact of measures intended to reduce the spread of COVID-19);

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.

As described herein, the COVID-19 pandemic has already, and may continue to, disrupt our operations, though the full extent of such impact remains uncertain.

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 evolving, 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.

Effects of the pandemic have included, or may in the future include, among others:

- deterioration of worldwide, regional or national economic conditions and activity, which adversely affects global demand for our products and services;

- disruptions to our operations as a result of the potential health impact on our employees and crew, and on the workforces of our customers and business partners;

- temporary and/or partial closures of our facilities or the facilities of our customers (including academic institutions, government laboratories and private foundations) and third-party service providers;

- interruption of the operations of global supply chains and those of our suppliers;

- constraints on international routes for shipment of products and materials impact timelines to support client demands;

- disruptions to our business from, or additional costs related to, new regulations, directives or practices implemented in response to the pandemic, such as travel restrictions, shelter in place/stay in place/work from home orders, increased inspection regimes, hygiene measures (such as quarantining and physical distancing) or increased implementation of remote working arrangements;

- reduced cash flows and financial condition, including potential liquidity constraints;

- reduced access to capital, including the ability to refinance any existing obligations, as a result of any credit tightening generally or due to declines in global financial markets, including to the prices of publicly-traded equity securities of us, our peers and of listed companies generally;

- deterioration in the financial condition and prospects of our customers or attempts by customers, suppliers or service providers to invoke force majeure contractual clauses, or the legal doctrines of impossibility or impracticability, or other similar doctrines, as a result of delays or other disruptions;

- delays in the commencement of, or the suspension or cancellation of, client studies; and

- the effects described elsewhere in these Risk Factors.

The COVID-19 pandemic has caused us to modify our business practices, including but not limited to health management of employees, customers and suppliers, management of production inventory, supply chain risk management, compensation practices and capital expenditure planning.

We have formed a tiered structure of designated COVID-19 crisis management teams throughout our organization to identify, implement and monitor such actions as required by the dynamic exigencies arising from the pandemic.

Such measures and others may not be sufficient to mitigate all the risks posed by COVID-19, and our ability to perform critical functions could be materially adversely affected.

Although disruption and effects from the COVID-19 pandemic may be temporary, given the dynamic nature of these circumstances and the worldwide nature of our business and operations, the duration of any business disruption and the related financial impact to us cannot be reasonably estimated at this time but could materially affect our business, results of operations and financial condition.

Any negative attention, threats, acts of vandalism or legal

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 Cell Solutions facilities in early 2020, which reopened shortly thereafter.

For our

We are also subject to similar contamination risks with respect to our large research models.

Our Cell Solutions business is subject to extensive and complex regulation by federal, state and local governments in the U.S. and in the other countries in which it operates.

While we have taken steps to mitigate the impact on us, such as implementing SCCs, the efficacy and longevity of these mechanisms remains uncertain.

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.

On March 25, 2022, the UK adopted a new International Data Transfer Agreement (IDTA) and international data transfer addendum to the EU SCCs for international data transfers (Addendum).

A discussion of our results of operations for the fiscal year ended December [removed: 25, 2021] [added: 31, 2022] and a comparison of our results for the fiscal years ended December [removed: 25, 2021] [added: 31, 2022] and December [removed: 26, 2020] [added: 25, 2021] 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: 25, 2021,] [added: 31, 2022,] filed with the SEC on February [removed: 16, 2022.][added: 22, 2023.]

We are a [added: leading,] full service, [removed: leading,] non-clinical global drug development partner.

We currently operate in [removed: over 150 locations] [added: 155 sites] and in [removed: 21] [added: over 20] countries worldwide, which numbers exclude certain Insourcing Solutions (IS) sites.

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 services) within our clients’ facilities as well as our own vivarium space, utilizing [removed: both] our Charles River Accelerator and Development Lab (CRADL) [removed: and our Explora BioLabs options.][added: option.]

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

U.S. [removed: Department of Justice Investigation] [added: Government Investigations] into Non-Human Primate Supply Chain

On February 16, 2023, [removed: we were] [added: 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 [removed: our] [added: the Company’s] conduct regarding several shipments of non-human primates from Cambodia.

On February 17, 2023 [removed: we] [added: the Company] received a grand jury subpoena requesting certain documents related to such investigation.

[removed: We are] [added: The Company is] aware of a parallel civil investigation being undertaken by the DOJ and USFWS.

[removed: We are] [added: The Company is] cooperating with the DOJ and the USFWS and [removed: believe] [added: believes] that the concerns raised with respect to [removed: our] [added: the Company’s] conduct are without merit.

[removed: We maintain] [added: 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 [removed: we] [added: 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, [removed: we have] [added: the Company has] voluntarily suspended future shipments of non-human primates from Cambodia [added: to the United States] until such time that [removed: we] [added: the Company] and USFWS can agree upon and implement additional procedures to reasonably ensure that non-human primates imported [removed: to the United States] from Cambodia are [removed: purpose-bred.]

[removed: While these discussions with USFWS are ongoing, we have also agreed to continue] [added: The Company continues] to care for the Cambodia-sourced non-human primates from certain recent shipments [removed: 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, [removed: USFWS] [added: USFWS, SEC] or other governmental authorities as a result of the investigations.

[removed: Neither] [added: None of] the [removed: DOJ nor] [added: DOJ,] USFWS [added: or SEC] has provided [removed: us] [added: the Company] with any specific timeline or indication as to when these investigations [removed: or] [added: or, specific to the DOJ and USFWS,] discussions regarding future processes and [removed: procedures] [added: procedures,] will be concluded or resolved.

[removed: Because it is in the early stages, we] [added: The Company] 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” [removed: and Item 3, “Legal Proceedings”] disclosed herein for our assessment of risk factors surrounding this matter.

The [removed: preliminary] purchase price of SAMDI was [removed: $60] [added: $62.8] million, [added: net of $0.4 million in cash,] inclusive of a 20% strategic equity interest previously owned by [removed: us.][added: us of $12.6 million.]

[removed: This] [added: Prior to divestiture, this] business [removed: will be] [added: was] reported [removed: as part of] [added: in] our [removed: DSA] [added: Manufacturing] reportable segment.

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

We routinely evaluate strategic fit and fundamental performance of our global infrastructure and divest operations that do not meet key business [removed: criteria.][added: criteria or where 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 [removed: $169] [added: $167] million in cash, subject to certain customary closing adjustments, and future contingent payments up to an additional $30 million.

The demand and pricing for our products and services continued to increase [removed: meaningfully] in fiscal year [removed: 2022.][added: 2023, but at a slower pace than in recent years.]

[removed: Many] [added: Despite the near-term market pressures, many] of our pharmaceutical and biotechnology clients continued to [removed: intensify their use] [added: benefit from the long-term value] of strategic outsourcing to improve their operating efficiency and to access capabilities that they do not maintain internally.

A reduction in the biotechnology funding environment from peak levels in 2021 [removed: also did not have] [added: resulted in] a [removed: meaningful impact on] [added: moderation of] demand from small and mid-size biotechnology [removed: clients, which continued to be the primary driver of revenue growth.][added: clients.]

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

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

Clients are increasingly adopting CRADL™’s flexible model to access [removed: laboratory] [added: vivarium] space without having to invest in internal infrastructure.

To support client demand, we [removed: are continuing to expand] [added: have expanded] CRADL™’s footprint both organically and through the acquisition of Explora BioLabs in April 2022.

[removed: Our] DSA [removed: reportable segment] continued to benefit from [removed: these] [added: sustained] trends in fiscal year [removed: 2022.][added: 2023.]

[removed: Demand] [added: Revenue] for our products and services that support our clients’ manufacturing activities increased across most of our Manufacturing Solutions businesses in fiscal year [removed: 2022.][added: 2023 however, demand in this reportable segment was impacted by clients’ more cautious spending trends in fiscal year 2023, as well as destocking activities and other challenges associated with CDMO and biopharmaceutical clients.]

[removed: We believe the initiatives that we have implemented to improve the performance of our CDMO business are beginning to gain traction, and will enable] Charles River [removed: to be] [added: remains] a premier scientific partner for development, testing, and manufacturing of advanced drug modalities and [added: the acquisition of the CDMO businesses in 2021, Cognate and Vigene,] further [removed: enhance] [added: enhanced] our presence in the high-growth cell and gene therapy sector.

[removed: Overview of] [added: Consolidated] Results of Operations and Liquidity

Revenue for fiscal year [removed: 2022] [added: 2023] was [removed: $4.0] [added: $4.1] billion compared to [removed: $3.5] [added: $4.0] billion in fiscal year [removed: 2021.][added: 2022.]

The [removed: 2022] [added: 2023] increase as compared to the corresponding period in [removed: 2021] [added: 2022] was [removed: $435.9] [added: $153.3] million, or [removed: 12.3%,] [added: 3.9%,] and was primarily due to [removed: the] increased [removed: demand] [added: volume and pricing] within our [removed: DSA segment, the impact of the 53rd week,] [added: Safety Assessment business] and our recent [removed: acquisitions;] [added: acquisition of Explora BioLabs;] partially offset by the [removed: recent divestitures (principally RMS Japan and CDMO Sweden),] [added: divestiture of our Avian business] and the [removed: negative] effect of changes in foreign currency exchange rates when compared to [removed: the corresponding period in 2021.][added: fiscal year 2022.]

In fiscal year [removed: 2022,] [added: 2023,] our operating income and operating income margin were [removed: $651.0] [added: $617.3] million and [removed: 16.4%,] [added: 14.9%,] respectively, compared with [removed: $589.9] [added: $651.0] million and [removed: 16.7%,] [added: 16.4%,] respectively, in fiscal year [removed: 2021.][added: 2022.]

Net income attributable to common shareholders [removed: increased] [added: decreased] to [removed: $486.2] [added: $474.6] million in fiscal year [removed: 2022,] [added: 2023,] from [removed: $391.0] [added: $486.2] million in the corresponding period of [removed: 2021.][added: 2022.]

The [removed: increase] [added: decrease] in net income attributable to common shareholders of [removed: $95.2] [added: $11.6] million was primarily due to [removed: the increase in] [added: lower] operating income described [removed: above, the gain] [added: above and higher interest expense due to higher interest rates] on [removed: the divestiture of] our [removed: Avian business of $123.4 million,] [added: variable debt,] partially offset by [removed: higher provision for] [added: lower] income [removed: taxes] [added: tax expense during fiscal year 2023] compared to the corresponding period [removed: in 2021.][added: of 2022.]

During fiscal year [removed: 2022,] [added: 2023,] our cash flows from operations was [removed: $619.6] [added: $683.9] million compared with [removed: $760.8] [added: $619.6] million for fiscal year [removed: 2021.][added: 2022.]

In fiscal year 2023, biopharmaceutical clients reprioritized their drug development programs and were more cautious with their budgetary spending amidst the uncertainty in the broader market environment, including a slowdown in biotechnology funding activities, as well as macroeconomic challenges, including higher interest rates.

While these clients were more cautious with their early-stage R&D spending in fiscal year 2023, these large biopharmaceutical clients were the principal driver of revenue growth.

We have recently experienced an increase in our allowance for credit losses, which increased to $25.7 million as of December 30, 2023 from $11.3 million as of December 31, 2022 and may expect this trend to continue if the biotechnology funding environment remains consistent or further softens.

Revenue for RMS increased, principally driven by pricing.

China reported healthy growth rates despite pressure from more cautious spending on biomedical research activity from clients within China.

The Safety Assessment revenue growth rate moderated due to our clients’ budgetary spending constraints but continued to report a solid growth rate for the fiscal year due to a combination of price increases and study volume.

Safety Assessment growth was supported by the meaningful scale of the backlog for this business, although it has recently decreased.

DSA backlog decreased to $2.45 billion as of December 30, 2023 from $3.15 billion as of December 31, 2022.

In fiscal year 2023, demand in our Discovery Services business declined, as clients reprioritize their program and conserve their early-stage spending, which resulted in lower proposal activity and a longer lead time to commence new projects.

Demand for our cell and gene therapy CDMO services improved meaningfully in fiscal year 2023 as the initiatives that we have implemented to improve the performance of our CDMO business gained traction and generated a healthy pipeline of new business opportunities including working on two commercial products.

In response to recent trends described above, we have undertaken restructuring actions within all reportable segments at various locations across North America, Europe and Asia.

This includes workforce right-sizing actions, resulting in severance and transition costs; and costs related to the consolidation of facilities, resulting in asset impairment and accelerated depreciation

charges.

Restructuring charges recognized during fiscal year 2023 were approximately $30 million, of which $18 million related to asset impairment and accelerated depreciation charges and $12 million related to severance charges.

We expect that these effectuated actions as well as other upcoming planned actions will result in approximately $60 million to $70 million of cost savings on an annualized basis.

On November 30, 2023, we completed our acquisition of an additional 41% equity interest of Noveprim Group (“Noveprim”), a leading provider of non-human primates (“NHPs”) used for biomedical, pharmaceutical and toxicological research purposes, resulting in a 90% controlling interest.

The acquisition strengthens and diversifies the supply chain for our DSA segment.

We had previously acquired a 49% equity stake in 2022 for $90.0 million up-front and additional future contingent payments up to $5.0 million based on future performance.

The total preliminary purchase price for the Noveprim acquisition is $374.8 million, which includes $144.6 million additional cash paid for the 41% equity interest, elimination of historical activity and intercompany balances of $198.8 million which includes a remeasurement gain on the 49% equity investment of $103.2 million, contingent consideration of $33.3 million, deferred purchase price of $12.0 million payable from 2024 through 2027, offset by estimated post-closing adjustments for working capital of $13.8 million.

This business is reported as part of our DSA reportable segment for NHPs vertically integrated into our Safety Assessment supply chain and the RMS reportable segment for NHPs sold to third party customers.

Recent Divestiture

purpose-bred.

The carrying value of the inventory related to these shipments is approximately $27 million as of December 30, 2023, which reflects the value of the shipments in accordance with our inventory accounting policy.

On May 16, 2023, the Company received an inquiry from the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) requesting it to voluntarily provide information, subsequently augmented with a document subpoena, primarily related to the sourcing of non-human primates, and the Company is cooperating with the request.

The value of the biological assets acquired was $168 million for fiscal year 2023.

Our global operations make the effective tax rate sensitive to significant tax law changes.

Several countries have begun to enact legislation to implement the Organization for Economic Cooperation and Development’s (OECD) international tax framework, including the Pillar II global minimum tax regime with effect from January 1, 2024 or later.

We are currently monitoring these developments, but do not expect there to be a material financial impact.

The decrease in operating income and operating income margins for fiscal year 2023 was primarily due to higher operating costs within our Manufacturing segment, restructuring and asset impairment charges principally in our DSA and Manufacturing segments, and the divestiture of the Avian business; partially offset by contributions of higher revenue described above.

The increase in net cash provided by operating activities was primarily driven by the amounts and timing of compensation payments and inventory purchases.

| Service revenue | | | $ | 3,440,019 | | | | | $ | 3,216,904 | | | | | $ | 223,115 | | | | | 6.9 | | % |

| Product revenue | | | 689,390 | | | | | | 759,156 | | | | | | (69,766) | | | | | | (9.2) | | % |

| | | | $ | 4,129,409 | | | | | $ | 3,976,060 | | | | | $ | 153,349 | | | | | 3.9 | | % |

| RMS | | | $ | 792,343 | | | | | $ | 739,175 | | | | | $ | 53,168 | | | | | 7.2 | | % | | | | (0.6) | | % |

| DSA | | | 2,615,623 | | | | | | 2,447,316 | | | | | | 168,307 | | | | | | 6.9 | | % | | | | 0.3 | | % |

| Manufacturing | | | 721,443 | | | | | | 789,569 | | | | | | (68,126) | | | | | | (8.6) | | % | | | | 0.4 | | % |

| Total revenue | | | $ | 4,129,409 | | | | | $ | 3,976,060 | | | | | $ | 153,349 | | | | | 3.9 | | % | | | | 0.2 | | % |

Analysis of Segment Results

| | | | 2023 | | | | | | 2022 | | | | | | $ change | | | | | | % change | | | | | | Impact of FX | | |

| RMS | | | $ | 154,666 | | | | | $ | 160,410 | | | | | $ | (5,744) | | | | | (3.6) | | % | | | | (1.4) | | % |

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

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

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

The acquisition was funded through a combination of available cash and proceeds from our Credit Facility.

Fiscal Year 2022 Acquisition

Fiscal Year 2021 Acquisitions

On June 28, 2021, we acquired Vigene Biosciences, Inc. (Vigene), a gene therapy CDMO, providing viral vector-based gene delivery solutions.

The acquisition enables clients to seamlessly conduct analytical testing, process development, and manufacturing for advanced modalities with the same scientific partner.

The 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).

This business is reported as part of our Manufacturing reportable segment.

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.

On March 30, 2021, we acquired Retrogenix Limited (Retrogenix), an outsourced discovery services provider specializing in bioanalytical services utilizing its proprietary cell microarray technology.

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

The purchase price of Retrogenix was $53.9 million, net of $8.5 million in cash.

Included in the purchase price are additional payments up to $6.9 million, which are contingent on future performance.

This business is reported as part of our DSA reportable segment.

On March 29, 2021, we acquired Cognate BioServices, Inc. (Cognate), a cell and gene therapy CDMO offering comprehensive manufacturing solutions for cell therapies, as well as for the production of plasmid DNA and other inputs in the CDMO value chain.

The acquisition of Cognate establishes us as a scientific partner for cell and gene therapy development, testing, and manufacturing, providing clients with an integrated solution from basic research and discovery through cGMP production.

The purchase price of Cognate was $877.9 million, net of $70.5 million in cash, and includes $15.7 million of consideration for an approximate 2% ownership interest not 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 Senior Notes issued in fiscal 2021.

On March 3, 2021, we acquired certain assets from a distributor that supports our DSA reportable segment.

The purchase price was $35.4 million, which includes $19.5 million in cash paid ($5.5 million of which was paid in fiscal 2020), and $15.9 million of contingent consideration (the maximum contingent contractual payments are up to $17.5 million).

The business is reported as part of our DSA reportable segment.

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

On December 31, 2020, 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.

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

The purchase price of Distributed Bio was $97.0 million, net of $0.8 million in cash.

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 $14.1 million of contingent consideration (the maximum contingent contractual payments are up to $21.0 million).

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.

Recent Divestitures

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

This business was reported in our Manufacturing reportable segment.

For example, we may use forward-looking statements when addressing topics such as: our expectations regarding the availability of non-human primates and our ability to diversify our non-human primate supply chain; the outcome of [added: (1)] the U.S. [removed: Department of Justice] [added: government] investigations [added: and inquiries] related to [added: the non-human primate supply chain (including] shipments of non-human primates from Cambodia received by the [removed: Company;] [added: Company), (2)] the [added: putative securities class action lawsuit filed against us and certain current/former officers on May 19, 2023, and (3) the derivative lawsuit filed against members of the Board of Directors and certain current/former officers on November 8, 2023; the] timing [added: and impact] of the development and implementation of [removed: additional] [added: enhanced] procedures to reasonably ensure that non-human primates [removed: imported to the United States from Cambodia] [added: we source] are purpose-bred; [removed: the COVID-19 pandemic, its duration, its impact on our business, results of operations, financial condition, liquidity, use of our borrowings, business practices, operations, 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;] changes and uncertainties in the global economy and financial markets, including any changes 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 two Cambodian officials had been criminally charged in connection with illegally importing non-human primates into the United States; client demand, particularly future demand for drug discovery and development products and services, including the outsourcing of these services; our expectations 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 [removed: trends;] [added: trends and the impact of those conditions, including on] our [added: allowances for credit losses; our] strategic relationships with leading pharmaceutical and biotechnology companies, venture capital investments, and opportunities for future similar arrangements; our cost structure; [removed: the impact of] [added: our expectations regarding our] acquisitions and [removed: divestitures;] [added: divestitures, including their impact and projected timing;] our expectations with respect to revenue growth and operating synergies (including the impact of specific actions intended to cause related 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 [removed: repurpose;] [added: repurpose and the impact of operations and cost structure alignment efforts (including as estimated on an annualized basis); our expectations with respect to study cancellation rates and the impact of such cancellations;] 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; [added: our liquidity;] and [added: the impact of litigation, including] our [removed: liquidity.][added: ability to successfully defend litigation against us.]

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 [added: 1500 indices, the New York Stock Exchange (NYSE) Arca Biotechnology Index, the NYSE Composite and many of the Russell indices, among others.]

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

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

Discovery activities typically extend anywhere from 4 to [removed: 6] [added: 7] years in conventional pharmaceutical research and development (R&D) timelines.

We currently operate in [removed: over 150 locations] [added: 155 sites] and in [removed: 21] [added: over 20] countries worldwide (excluding certain Insourcing Solutions sites).

In [removed: 2022,] [added: 2023,] our total revenue was [removed: $4.0] [added: $4.1] billion.

We have three [removed: reporting] [added: reportable] segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA) and Manufacturing Solutions (Manufacturing).

[removed: With over 150 different stocks] and [removed: strains, we continue to maintain our position as a global leader in the production and] sale of the most widely used [removed: rodent] research [removed: model strains] [added: models, including over 140 different stocks] and [added: strains of] purpose-bred [removed: rats and mice.][added: rodents.]

[removed: 4,200] [added: In 2023, RMS accounted for 19.2%] of our [added: total revenue and approximately 4,300 of our] employees, including approximately [removed: 190] [added: 200] science professionals with advanced degrees.

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

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

In [removed: 2022,] [added: 2023,] our DSA segment represented [removed: 61.6%] [added: 63.3%] of our total revenue and employed approximately [removed: 13,200] [added: 13,400] of our employees including approximately 1,800 science professionals with advanced degrees.

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

In [removed: 2022,] [added: 2023,] Manufacturing accounted for [removed: 19.8%] [added: 17.4%] of our total revenue from continuing operations and approximately 3,000 of our employees, including approximately 400 science professionals with advanced degrees.

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

A significant portion of [removed: this] [added: our Research Models] business involves the commercial production and sale of 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: 8] [added: 7] countries, in close proximity to major biohubs and client concentrations.

Our research models include commonly used laboratory strains, disease models and specialized strains with compromised immune systems, which are in demand as early-stage tools in the drug [removed: discovery] [added: research] and development process.

We are also a premier provider of high quality, purpose bred, [removed: SPF] large research models to the biomedical research community.

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

We currently have three service offerings in research models services: [added: Insourcing Solutions,] Genetically Engineered Models and Services (GEMS), [removed: Insourcing Solutions] and Research Animal Diagnostic Services (RADS).

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 [removed: both] our Charles River Accelerator and Development Lab (CRADL™) [removed: and our Explora BioLabs options, in which] [added: offerings, where] we provide vivarium space to our clients.

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

The business supplies controlled, consistent, customized primary cells and blood components derived from normal and mobilized peripheral [removed: blood, bone marrow,] [added: blood] and [removed: cord blood.][added: bone marrow.]

Our Discovery Services business includes services to streamline and enhance drug discovery programs for our clients, including [removed: an innovative, antibody discovery][added: expertise and capabilities in all stages of Discovery and all major modalities including small molecules, antibodies and cell and gene therapies.]

This seamless discovery organization, along with its broad capabilities [removed: 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.

[removed: 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 modalities.

- hit identification and optimization to deliver candidate [removed: molecules,] [added: molecules across modalities,] including computer-aided drug design;

These *in vivo* activities typically extend anywhere from 1 to [removed: 7] [added: 2] years in conventional pharmaceutical R&D timelines; and

Our safety assessment business also provides expertise in a variety of therapeutic areas and [removed: modalities, as well as the development of surgically implanted medical devices.][added: modalities.]

*Toxicology.* We provide a broad specialty toxicology offering from inhalation and infusion to [removed: development] [added: developmental] and reproductive toxicology.

Our services include a broad offering of *in vitro* and *in vivo* capabilities and study types designed to identify possible safety risks as well as a broad offering of *in vitro* and *in vivo* studies in support of general toxicology (acute, sub-acute and chronic studies), genetic toxicology, safety pharmacology, [added: off-target screening, receptor identification profiling,] reproductive and developmental toxicology, juvenile toxicology, and carcinogenicity bioassays that are required for regulatory submissions supporting “first-in-human” to “first-to-the-market” strategies for potential human therapeutics.

[added: Toxicology studies performed for any of these] compounds are typically performed using *in vitro* and *in vivo* research models to identify any potential adverse effects that a compound has on an organism over a variety of doses and over various time periods of exposure.

*Pathology Services.* The ability to identify and characterize clinical and anatomic pathologic changes is critical in determining the safety and efficacy of potential new therapeutics, industrial and agricultural chemicals, veterinary medicines, and medical [removed: devices.]

In addition to all standard anatomic and clinical pathology techniques, we provide specialized evaluations such as cytology, platelet function, assay development, immunohistochemistry, in situ hybridization, electron microscopy, image analysis, tissue morphometry and [removed: stereology] [added: spatial analysis] services.

Supplemental studies can also be performed to assess the renal, gastrointestinal and autonomic nervous systems, as well [removed: as,] [added: as] dependency potential.

Our [removed: safety assessment] [added: Safety Assessment] facilities comply with animal welfare requirements and GLP to the extent required by the FDA, Environmental Protection Agency, United States Department of Agriculture (USDA), European Medicines Agency, European Chemicals Agency and the Organization for Economic Co-operation and Development (OECD), [added: Canadian Council on Animal Care (CCAC)] as well as other international regulatory agencies.

Our [removed: safety assessment facilities, along with our Biologics Solutions] [added: Safety Assessment facilities] and [removed: Microbial Solutions facilities,] [added: Manufacturing facilities] are regularly inspected by U.S. and other regulatory compliance monitoring authorities, our clients’ quality assurance departments and our own internal quality [added: audit] program.

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

We continue to maintain our position as a global leader in the production

Our RMS segment also includes our Insourcing Solutions business, which includes our CRADL™ (Charles River Accelerator and Development Lab) footprint.

Our small research models include inbred, outbred, and hybrid strains, as well as mutant strains and genetically engineered models with biological features, which enable research aims.

We are also a premier provider of high quality, purpose bred, large research models to the biomedical research community.

While we provide some non-human primates directly to customers who utilize

them primarily for safety testing of new therapies, most of the non-human primates associated with our business are utilized in connection with our customers’ studies conducted by our Safety Assessment business.

In both cases - non-human primates we provide directly to customers and non-human primates which are utilized in our Safety Assessment business – these large research models are sourced from Charles River audited and approved suppliers, some of which we have an ownership and/or operational involvement.

See Note 2, “Acquisitions and Divestitures”, included in the notes to our consolidated financial statements included elsewhere in this Form 10-K for a description of the recent acquisition of Noveprim Group.

We believe there are growing opportunities to assist

devices.

Generally, the

We recently launched Endosafe® Trillium®, our new animal-free recombinant test for endotoxin detection.

Endosafe® Trillium® utilizes three biological proteins, which we believe provides superior accuracy and testing outcomes to competitors’ single-protein recombinant alternatives, as well as equivalence to LAL-based testing method.

Endosafe® Trillium® represents a next-generation solution to our industry-leading Endosafe® bacterial endotoxin detection portfolio.

Accugenix® also offers an in- house solution with our Axcess® instrument that allows clients to perform identification testing in their own lab with access to our proprietary library.

Our CDMO services establish us as a premier scientific partner for cell and gene therapy development, testing, and manufacturing.

The full integrated advanced therapeutics portfolio enables us to provide clients with an integrated solution from basic research and discovery through cGMP production; driving efficiency and accelerating clients’ speed-to-market by integrating preclinical CRO activities with manufacturing and testing.

This provides our clients with a seamless experience across the value chain with the same advanced therapeutics scientific partner.

Our cGMP CDMO facilities have the capability to manufacture and store raw materials, drug substance, and drug product, which are suitable for use in clinical trials as well as for commercial manufacturing.

Our objective is to be the scientific partner of choice to accelerate biomedical research and therapeutic innovation.

We are committed to working with the industry to support development and to provide the best translational models to supplement or replace traditional models.

These include *in vitro* models as well as in silico predictive tools.

In the last 4 years, we have

invested approximately $200 million in alternative methodologies, including technologies and digital platforms that reduce/modify animal use via strategic acquisitions, partnerships, and internal investments.

and manufacturing processes they will choose to outsource.

cutting-edge capabilities.

As part of this ongoing assessment, we may determine certain capital could be better deployed in other long-term growth opportunities.

In 2023, we added a fourth “R” to the longstanding 3Rs framework - Responsibility.

In 2023, we established the management Office for Responsible Animal Usage to oversee responsible animal utilization and reduction practices, and operating standards of care.

Our Board of Directors also established a new Responsible Animal Use Committee to assist the Company in improving our impact on responsible animal utilization, including evaluating and advising scientific and technological opportunities which may appropriately reduce the impact of animals in the Company’s operations.

Additionally, in 2023 we committed to report to shareholders on an annual basis, beginning in 2024, on the measures the Company takes to reinforce confidence that the NHPs we import are purpose-bred.

Approximately 20,000 of our employees are considered full-time

We launched a Safety-First Culture initiative in 2022 to ensure that every person working for and on behalf of Charles River recognizes the importance of putting safe working practices first.

As part of this campaign, all sites were requested to form safety committees comprised of both management and employees, initiate site safety champion recognition programs and all site general managers attended safety culture training as did many of our key executives.

We also launched the first module of our people leader safety culture training and initiated a formal Environment, Health, Safety and Sustainability Assessment program with 12 site assessments in 2023.

Our commitment to equity spans

Imported animals are

quarantined in our quarantine facilities as required by government agencies and tested to ensure they meet both the government mandates and our own specifications for pathogens and health of the animals.

Our Manufacturing businesses produce FDA regulated endotoxin test kits at an FDA registered facility.

We also manufacture sterility and microbial limits test kits used in FDA Regulated pharmaceutical applications, reagents, cell banks used in research and biopharmaceutical production, clinical trial vaccines and vaccine support products as well as an animal-free recombinant cascade reagent (rCR), Endosafe® Trillium®, which is an alternative to the natural LAL product.

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.

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

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.

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

Our research models include:

- inbred, which are bred to be homogeneous;

- hybrid, which are the offspring of parents from two different genotypes;

- outbred, which are purposefully bred for heterogeneity;

- spontaneous mutant, whose genotype results in a naturally occurring genetic mutation (such as immune deficiency); and

- other genetically modified research models, such as knock-out models with one or more disabled genes and transgenic models.

Through our phenotyping platforms, we can also design and conduct the relevant studies and tests allowing characterization of the generated models.

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.

Toxicology studies performed for any of these

We expect our comprehensive portfolio

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

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 partner through our integrated value chain.

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.

Avian Vaccine Services. Our Avian Vaccine Services business has been a global leader for the supply of SPF fertile chicken eggs and chickens.

SPF chicken embryos are used by vaccine producers as self-contained “bioreactors” for the manufacture of live viruses.

These viruses are used as a raw material for human and veterinary vaccine applications.

Our Avian Vaccine Services business had a worldwide presence with several SPF egg production facilities in the U.S., and contracted production capabilities in Hungary.

It also operated a specialized avian laboratory in the U.S., providing quality control test reagents for SPF flocks, offering testing services to vaccine companies and commercial poultry operations and manufacturing poultry diagnostics and bulk antigens for poultry vaccines.

Our Avian Vaccine Services business was divested in December 2022.

Our objective is to be the preferred strategic non-clinical drug development partner for our clients.

To connect with our therapeutic design and testing capabilities in Discovery Services we can also manufacture cell and gene therapies for clinical and commercial use.

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

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

We frequently assist our clients in solving problems

As of December 31, 2022, women made up

and client expectations regarding data integrity within our regulated businesses.

Our Manufacturing businesses produce FDA licensed endotoxin test kits, sterility and microbial limits rest kits, reagents, cell banks used in research and biopharmaceutical production, clinical trial vaccines and vaccine support products.

Beginning in 2011, Ms. Parisotto’s role was expanded to include additional business segments, and in 2015, she was

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 [added: to the United States] until such time that the Company and USFWS can agree upon and implement additional procedures to reasonably ensure that non-human primates imported [removed: to the United States] from Cambodia are purpose-bred.

[removed: While these discussions with USFWS are ongoing, the] [added: The] Company [removed: has also agreed to continue] [added: continues] to care for the Cambodia-sourced non-human primates from certain recent shipments [removed: 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, [removed: USFWS] [added: USFWS, SEC] or other governmental authorities as a result of the investigations.

[removed: Neither] [added: None of] the [removed: DOJ nor] [added: DOJ,] USFWS [added: or SEC] has provided the Company with any specific timeline or indication as to when [added: these investigations or, specific to the DOJ and USFWS, discussions regarding future processes and procedures, will be concluded or]

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

The carrying value of the inventory related to these shipments is approximately $27 million as of December 30, 2023, which reflects the value of the shipments in accordance with the Company’s inventory accounting policy.

On May 16, 2023, the Company received an inquiry from the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) requesting it to voluntarily provide information, subsequently augmented with a document subpoena, primarily related to the sourcing of non-human primates, and the Company is cooperating with the request.

resolved.

A putative securities class action was filed on May 19, 2023 against the Company and a number of its current/former officers in the United States District Court for the District of Massachusetts.

On August 31, 2023, the court appointed the State Teachers Retirement System of Ohio as lead plaintiff.

An amended complaint was filed on November 14, 2023 that, among other things, included only James Foster, the Chief Executive Officer and David R.

Smith, the former Chief Financial Officer as defendants along with the Company.

The amended complaint asserts claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the Exchange Act) on behalf of a putative class of purchasers of Company securities from May 5, 2020 through February 21, 2023, alleging that certain of the Company’s disclosures about its practices with respect to the importation of non-human primates made during the putative class period were materially false or misleading.

The Company filed a motion to dismiss.

While the Company cannot predict the outcome of this matter, it believes the class action to be without merit and plans to vigorously defend against it.

The Company cannot reasonably estimate the maximum potential exposure or the range of possible loss in association with this matter.

On November 8, 2023, a stockholder filed a derivative lawsuit in the U.S. District Court of the District of Delaware asserting claims on the Company’s behalf against the members of the Company’s Board of Directors and certain of the Company’s current/former officers (James Foster, the Chief Executive Officer; David R.

Smith, the former Chief Financial Officer; and Flavia Pease, the current Chief Financial Officer).

The complaint alleges that the defendants breached their fiduciary duties to the Company and its stockholders because certain of the Company’s disclosures about its practices with respect to the importation of non-human primates were materially false or misleading.

The complaint also alleges that the defendants breached their fiduciary duties by causing the Company to fail to maintain adequate internal controls over securities disclosure and compliance with applicable law and by failing to comply with the company’s Code of Business Conduct and Ethics.

The Company intends to file a motion to dismiss.

While the Company cannot predict the outcome of this matter, it believes the derivative lawsuit to be without merit and plans to vigorously defend against it.

The Company cannot reasonably estimate the maximum potential exposure or the range of possible loss in association with this matter.

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

FOR THE FISCAL YEAR ENDED December [removed: 31, 2022][added: 30, 2023]

[removed: ][added: ]

On June [removed: 24, 2022,] [added: 30, 2023,] the aggregate market value of the registrant’s voting common stock held by non-affiliates of the registrant was approximately [removed: $11,392,457,233.][added: $10,686,736,278.]

As of January [removed: 25, 2023,] [added: 27, 2024,] there were [removed: 50,985,527] [added: 51,349,770] 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: 2023] [added: 2024] Annual Meeting of Shareholders [added: currently] scheduled to be held on May [removed: 9, 2023,] [added: 8, 2024,] which will be filed with the Securities and Exchange Commission (SEC) not later than 120 days after December [removed: 31, 2022,] [added: 30, 2023,] are incorporated by reference into Part III of this Annual Report on Form 10-K.

With the exception of the portions of the [removed: 2023] [added: 2024] 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: 2022][added: 2023]

| 1A | | | [Risk [removed: Factors](#idd22d620c469429cbe87d18055ca22f6_16)] [added: Factors](#ic6467edc77a545dbbaf755b735281537_16)] | | | [removed: [17](#idd22d620c469429cbe87d18055ca22f6_16)] [added: [17](#ic6467edc77a545dbbaf755b735281537_16)] | | |

| 1B | | | [Unresolved Staff [removed: Comments](#idd22d620c469429cbe87d18055ca22f6_19)] [added: Comments](#ic6467edc77a545dbbaf755b735281537_19)] | | | [removed: [35](#idd22d620c469429cbe87d18055ca22f6_19)] [added: [35](#ic6467edc77a545dbbaf755b735281537_19)] | | |

| 3 | | | [Legal [removed: Proceedings](#idd22d620c469429cbe87d18055ca22f6_25)] [added: Proceedings](#ic6467edc77a545dbbaf755b735281537_25)] | | | [removed: [35](#idd22d620c469429cbe87d18055ca22f6_25)] [added: [36](#ic6467edc77a545dbbaf755b735281537_25)] | | |

| 4 | | | [Mine Safety [removed: Disclosures](#idd22d620c469429cbe87d18055ca22f6_28)] [added: Disclosures](#ic6467edc77a545dbbaf755b735281537_28)] | | | [removed: [36](#idd22d620c469429cbe87d18055ca22f6_28)] [added: [37](#ic6467edc77a545dbbaf755b735281537_28)] | | |

| 5 | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#idd22d620c469429cbe87d18055ca22f6_34)] [added: Securities](#ic6467edc77a545dbbaf755b735281537_34)] | | | [removed: [37](#idd22d620c469429cbe87d18055ca22f6_34)] [added: [38](#ic6467edc77a545dbbaf755b735281537_34)] | | |

| 7 | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#idd22d620c469429cbe87d18055ca22f6_46)] [added: Operations](#ic6467edc77a545dbbaf755b735281537_40)] | | | [removed: [39](#idd22d620c469429cbe87d18055ca22f6_40)] [added: [40](#ic6467edc77a545dbbaf755b735281537_40)] | | |

| 7A | | | [Quantitative and Qualitative [removed: Disclosures](#idd22d620c469429cbe87d18055ca22f6_55)] [added: Disclosures](#ic6467edc77a545dbbaf755b735281537_58)] about Market Risk | | | [removed: [53](#idd22d620c469429cbe87d18055ca22f6_55)] [added: [53](#ic6467edc77a545dbbaf755b735281537_58)] | | |

| 8 | | | [Financial Statements and Supplementary [removed: Data](#idd22d620c469429cbe87d18055ca22f6_58)] [added: Data](#ic6467edc77a545dbbaf755b735281537_61)] | | | [removed: [54](#idd22d620c469429cbe87d18055ca22f6_58)] [added: [54](#ic6467edc77a545dbbaf755b735281537_61)] | | |

| 9 | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#idd22d620c469429cbe87d18055ca22f6_142)] [added: Disclosure](#ic6467edc77a545dbbaf755b735281537_160)] | | | [removed: [99](#idd22d620c469429cbe87d18055ca22f6_142)] [added: [103](#ic6467edc77a545dbbaf755b735281537_160)] | | |

| 9C | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#idd22d620c469429cbe87d18055ca22f6_151)] [added: Inspections](#ic6467edc77a545dbbaf755b735281537_169)] | | | [removed: [99](#idd22d620c469429cbe87d18055ca22f6_151)] [added: [104](#ic6467edc77a545dbbaf755b735281537_169)] | | |

| 10 | | | [Directors, Executive Officers and Corporate [removed: Governance](#idd22d620c469429cbe87d18055ca22f6_157)] [added: Governance](#ic6467edc77a545dbbaf755b735281537_175)] | | | [removed: [100](#idd22d620c469429cbe87d18055ca22f6_157)] [added: [105](#ic6467edc77a545dbbaf755b735281537_175)] | | |

| 12 | | | [Security Ownership of Certain Beneficial Owners and Management and Related [removed: Stockholder](#idd22d620c469429cbe87d18055ca22f6_163)] [added: Stockholder](#ic6467edc77a545dbbaf755b735281537_181)] Matters | | | [removed: [100](#idd22d620c469429cbe87d18055ca22f6_163)] [added: [106](#ic6467edc77a545dbbaf755b735281537_181)] | | |

| 13 | | | [removed: Certain] [added: [Certain] Relationships and Related Transactions, and Director [removed: Independence] [added: Independence](#ic6467edc77a545dbbaf755b735281537_184)] | | | [removed: [100](#idd22d620c469429cbe87d18055ca22f6_166)] [added: [106](#ic6467edc77a545dbbaf755b735281537_184)] | | |

| 14 | | | [Principal Accountant Fees and [removed: Services](#idd22d620c469429cbe87d18055ca22f6_169)] [added: Services](#ic6467edc77a545dbbaf755b735281537_187)] | | | [removed: [100](#idd22d620c469429cbe87d18055ca22f6_169)] [added: [106](#ic6467edc77a545dbbaf755b735281537_187)] | | |

| 15 | | | [Exhibits and Financial Statement [removed: Schedules](#idd22d620c469429cbe87d18055ca22f6_175)] [added: Schedules](#ic6467edc77a545dbbaf755b735281537_193)] | | | [removed: [101](#idd22d620c469429cbe87d18055ca22f6_175)] [added: [107](#ic6467edc77a545dbbaf755b735281537_193)] | | |

| 1 | | | [Business](#ic6467edc77a545dbbaf755b735281537_13) | | | [1](#ic6467edc77a545dbbaf755b735281537_13) | | |

| 1C | | | [Cybersecurity](#ic6467edc77a545dbbaf755b735281537_1736) | | | [35](#ic6467edc77a545dbbaf755b735281537_1736) | | |

| 2 | | | [Properties](#ic6467edc77a545dbbaf755b735281537_22) | | | [36](#ic6467edc77a545dbbaf755b735281537_22) | | |

| 6 | | | [Reserved](#ic6467edc77a545dbbaf755b735281537_37) | | | [39](#ic6467edc77a545dbbaf755b735281537_37) | | |

| 9A | | | [Controls and Procedures](#ic6467edc77a545dbbaf755b735281537_163) | | | [103](#ic6467edc77a545dbbaf755b735281537_163) | | |

| 9B | | | [Other Information](#ic6467edc77a545dbbaf755b735281537_166) | | | [104](#ic6467edc77a545dbbaf755b735281537_166) | | |

| 11 | | | [Executive Compensation](#ic6467edc77a545dbbaf755b735281537_178) | | | [105](#ic6467edc77a545dbbaf755b735281537_178) | | |

| 16 | | | [Form 10-K Summary](#ic6467edc77a545dbbaf755b735281537_196) | | | [108](#ic6467edc77a545dbbaf755b735281537_196) | | |

| [Signatures](#ic6467edc77a545dbbaf755b735281537_199) | | | | | | [109](#ic6467edc77a545dbbaf755b735281537_199) | | |

| 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) | | |

| 11 | | | [Executive Compensation](#idd22d620c469429cbe87d18055ca22f6_160) | | | [100](#idd22d620c469429cbe87d18055ca22f6_160) | | |

| 16 | | | [Form 10-K Summary](#idd22d620c469429cbe87d18055ca22f6_178) | | | [102](#idd22d620c469429cbe87d18055ca22f6_178) | | |

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

*Cybersecurity Risk Management and Strategy*

Charles River places high importance on identifying and eliminating potential cybersecurity threats to its employees, customers, IT infrastructure, proprietary technologies and confidential information.

Our cybersecurity risk management is based on recognized industry governance frameworks, including the International Organization for Standardization (ISO), the National Institute of Standards and Technology (NIST), the Center for Internet Security Controls (CIS), and the Cloud Security Alliance (CSA).

We use these frameworks together with information collected from internal and 3rd party assessments to develop policies such as our technology acceptable use policy for information assets, our access requirements for data, systems, or technologies, and policies for the protection and use of personal information of our employees and customers.

We protect our IT assets through industry-standard techniques such as multifactor authentication, malware defenses, network and endpoint monitoring, and access review processes.

We also work with our business units to leverage and implement foundational cybersecurity principles, such as security by design, defense-in-depth, least privilege, and resilience-focused backups, throughout our organization.

We deliver cybersecurity awareness and confidential information protection training to our employees, and we send our employees ethical simulated phishing and spear-phishing emails to test their compliance with our policies.

We engage third parties to conduct annual penetration testing, and we use external risk assessors to measure our program to industry standard frameworks.

Our information security management system is certified to the ISO/IEC 27001:2013 standard by the British Standards Institution (BSI); certificate IS 780367.

We also collaborate with experts and industry partners to exchange information about threats, best practices, and trends.

Our cybersecurity risk management extends to risks associated with our use of third-party service and technology providers as well as partnerships with third parties we may enter into.

For instance, we conduct risk and compliance assessments of third parties that request access to our IT resources and information or who provide technology products to Charles River.

Our cybersecurity risk management is an important part of our comprehensive business continuity program and enterprise risk management.

Our global information security team periodically engages with a cross-functional group of Charles River subject-matter experts and leaders to assess and refine Charles River’s cybersecurity risk posture and preparedness.

For example, we regularly evaluate and update contingency strategies for our business in the event that a portion of our IT systems were to be unavailable due to a cybersecurity incident.

We practice our response to potential cybersecurity incidents through regular tabletop exercises.

We also perform threat hunting and red team exercises.

Through these processes, during our fiscal year 2023 and through the date of this filing we did not identify risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected, or are reasonably likely to materially affect, our business strategy, results of operations, or financial condition.

However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.

For more information about these risks, please see the section titled “Item 1A.

Risk Factors – Business and Operational Risk Factors - We have in the past experienced and in the future could experience unauthorized access into our information systems.”

*Governance of Cybersecurity Risk Management*

Our board of directors, as a whole, has oversight responsibility for Charles River’s strategic and operational risks.

The Audit Committee of the Board of Directors has been delegated by the Board responsibility by reviewing and discussing Charles River’s risk assessment and risk management practices, including cybersecurity risks, with members of management.

The Audit Committee, in turn, periodically discusses its review and assessment with the board of directors.

Our management team is responsible for day-to-day assessment and management of cybersecurity risks.

On our management team, our Chief Information Officer has primary oversight of material risks from cybersecurity threats.

The Chief Information Officer is Charles River’s Senior Vice President responsible for the Global Technology organization and for information protection at Charles River.

The Chief Information Officer has more than 25 years of experience in the field, including serving as the Senior Vice President of Charles River’s Digital Transformation organization, leading the development and implementation of information technology strategies and roadmaps for digital and automation solutions.

Our Chief Information Security Officer reports to our Chief Information Officer.

Our Chief Information Security Officer has more than 25 years of experience working in information technology-related roles, of which 10 years has been in information security leadership, and holds degrees in bio-medical engineering and computer science.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

Our Chief Information Officer and Chief Information Security Officer assess our cybersecurity readiness through internal assessment tools as well as third-party control tests, vulnerability assessments, audits, and evaluation against industry standards.

We have governance and compliance structures that are designed to elevate issues relating to cybersecurity to our Chief Information Officer and Chief Information Security Officer, such as potential threats or vulnerabilities.

We also employ various defensive and monitoring techniques based on industry frameworks and cybersecurity standards.

Our Chief Information Officer and our Chief Information Security Officer meet annually with the full Board, and periodically, but generally at least quarterly, with the Chief Executive Officer, Chief Operations Officer, and Audit Committee to review the company’s information technology systems and discuss key cybersecurity risks.

Our Chief Information Security Officer has direct access to the Chair of our Audit Committee and keeps the Audit Committee apprised of any developments that may emerge in between regularly scheduled meetings that require its attention.

Additionally, our Incident Response Plan includes escalation protocols to raise occurrences that require attention from the Audit Committee or the board of directors as a whole.

Approximately [removed: 2/3rds] [added: 60%] of our real estate portfolio (by area) is owned including all facilities over [removed: 225,000] [added: 200,000] square feet.

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

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, [added: France,] and [removed: France.][added: Germany.]

For additional information, see Note [removed: 14.][added: 17.]

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: 2022.][added: 2023.]

As of January [removed: 25, 2023,] [added: 27, 2024,] there were [removed: 75] [added: 67] 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: 2022:][added: 2023:]

| October [removed: 23, 2022] [added: 29, 2023] to November [removed: 19, 2022] [added: 25, 2023] | | | [removed: 58] [added: 17] | | | | | | [removed: 207.63] [added: 167.72] | | | | | | — | | | | | | 129,105 | | |

| November [removed: 20, 2022] [added: 26, 2023] to December [removed: 31, 2022] [added: 30, 2023] | | | [removed: 518] [added: 440] | | | | | | [removed: 228.13] [added: 197.08] | | | | | | — | | | | | | 129,105 | | |

During the fourth quarter of fiscal year [removed: 2022,] [added: 2023,] we did not repurchase any shares of common stock under our stock repurchase program or in open market trading.

As of December [removed: 31, 2022,] [added: 30, 2023,] 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: 30, 2017] [added: 29, 2018] and ending on December [removed: 31, 2022] [added: 30, 2023] (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: 2017] [added: 2018] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2022] [added: 2023] | | |

| October 1, 2023 to October 28, 2023 | | | 133 | | | | | | $ | 195.40 | | | | | — | | | | | | $ | 129,105 | |

| Total | | | 590 | | | | | | | | | | | | — | | | | | | | | |

| Charles River Laboratories International, Inc. | | | $ | 100 | | | | | $ | 136 | | | | | $ | 225 | | | | | $ | 330 | | | | | $ | 195 | | | | | $ | 212 | |

| S&P 500 | | | 100 | | | | | | 131 | | | | | | 156 | | | | | | 200 | | | | | | 164 | | | | | | 207 | | |

| S&P 500 Health Care | | | 100 | | | | | | 121 | | | | | | 137 | | | | | | 173 | | | | | | 170 | | | | | | 173 | | |

| September 25, 2022 to October 22, 2022 | | | 101 | | | | | | $ | 196.80 | | | | | — | | | | | | $ | 129,105 | |

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

| Charles River Laboratories International, Inc. | | | $ | 100 | | | | | $ | 102 | | | | | $ | 139 | | | | | $ | 230 | | | | | $ | 337 | | | | | $ | 199 | |

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

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

| [Report of Independent Registered Public Accounting [removed: Firm](#idd22d620c469429cbe87d18055ca22f6_61)] [added: Firm](#ic6467edc77a545dbbaf755b735281537_64)] (PCAOB ID 238) | | | [removed: [55](#idd22d620c469429cbe87d18055ca22f6_61)] [added: [55](#ic6467edc77a545dbbaf755b735281537_64)] | | |

| [Consolidated Statements of Income for fiscal [removed: years](#idd22d620c469429cbe87d18055ca22f6_64) 2022,] [added: years](#ic6467edc77a545dbbaf755b735281537_67) 2023, 2022 [and](#ic6467edc77a545dbbaf755b735281537_67)] 2021 [removed: [and](#idd22d620c469429cbe87d18055ca22f6_64) 2020] | | | [removed: [57](#idd22d620c469429cbe87d18055ca22f6_64)] [added: [58](#ic6467edc77a545dbbaf755b735281537_67)] | | |

| [Consolidated Statements of Comprehensive Income for fiscal [removed: years](#idd22d620c469429cbe87d18055ca22f6_67) [](#idd22d620c469429cbe87d18055ca22f6_64)2022,] [added: years](#ic6467edc77a545dbbaf755b735281537_70) [](#ic6467edc77a545dbbaf755b735281537_67)2023, 2022 [and](#ic6467edc77a545dbbaf755b735281537_70)] 2021 [removed: [and](#idd22d620c469429cbe87d18055ca22f6_67) 2020] | | | [removed: [58](#idd22d620c469429cbe87d18055ca22f6_67)] [added: [59](#ic6467edc77a545dbbaf755b735281537_70)] | | |

| [Consolidated Balance [removed: Sheets](#idd22d620c469429cbe87d18055ca22f6_70)] [added: Sheets](#ic6467edc77a545dbbaf755b735281537_73)] as of December [added: 30, 2023 [and](#ic6467edc77a545dbbaf755b735281537_73) December] 31, 2022 [removed: [and](#idd22d620c469429cbe87d18055ca22f6_70) December 25, 2021] | | | [removed: [59](#idd22d620c469429cbe87d18055ca22f6_70)] [added: [60](#ic6467edc77a545dbbaf755b735281537_73)] | | |

| [Consolidated Statements of Cash Flows for fiscal [removed: years](#idd22d620c469429cbe87d18055ca22f6_73) [](#idd22d620c469429cbe87d18055ca22f6_64)2022, 2021] [added: years](#ic6467edc77a545dbbaf755b735281537_76) [](#ic6467edc77a545dbbaf755b735281537_67)2023, 2022] and [removed: 2020] [added: 2021] | | | [removed: [60](#idd22d620c469429cbe87d18055ca22f6_73)] [added: [61](#ic6467edc77a545dbbaf755b735281537_76)] | | |

| [Consolidated Statements of Changes in Equity for fiscal [removed: years](#idd22d620c469429cbe87d18055ca22f6_76) [](#idd22d620c469429cbe87d18055ca22f6_64)2022, 2021] [added: years](#ic6467edc77a545dbbaf755b735281537_79) [](#ic6467edc77a545dbbaf755b735281537_67)2023, 2022] and [removed: 2020] [added: 2021] | | | [removed: [62](#idd22d620c469429cbe87d18055ca22f6_76)] [added: [62](#ic6467edc77a545dbbaf755b735281537_79)] | | |

| [Notes to Consolidated Financial [removed: Statements](#idd22d620c469429cbe87d18055ca22f6_79)] [added: Statements](#ic6467edc77a545dbbaf755b735281537_82)] | | | [removed: [63](#idd22d620c469429cbe87d18055ca22f6_79)] [added: [63](#ic6467edc77a545dbbaf755b735281537_82)] | | |

| [Note 1. Description of Business and Summary of Significant [removed: Accounting](#idd22d620c469429cbe87d18055ca22f6_82)] [added: Accounting](#ic6467edc77a545dbbaf755b735281537_85)] | | | [removed: [63](#idd22d620c469429cbe87d18055ca22f6_82)] [added: [63](#ic6467edc77a545dbbaf755b735281537_85)] | | |

| [Note 2. Acquisitions and [removed: Divestitures](#idd22d620c469429cbe87d18055ca22f6_85)] [added: Divestitures](#ic6467edc77a545dbbaf755b735281537_88)] | | | [removed: [72](#idd22d620c469429cbe87d18055ca22f6_85)] [added: [71](#ic6467edc77a545dbbaf755b735281537_88)] | | |

| [Note 3. Revenue from Contracts with [removed: Customers](#idd22d620c469429cbe87d18055ca22f6_88)] [added: Customers](#ic6467edc77a545dbbaf755b735281537_94)] | | | [removed: [77](#idd22d620c469429cbe87d18055ca22f6_88)] [added: [77](#ic6467edc77a545dbbaf755b735281537_94)] | | |

| [Note 4. Segment and Geographic [removed: Information](#idd22d620c469429cbe87d18055ca22f6_94)] [added: Information](#ic6467edc77a545dbbaf755b735281537_100)] | | | [removed: [78](#idd22d620c469429cbe87d18055ca22f6_94)] [added: [79](#ic6467edc77a545dbbaf755b735281537_100)] | | |

| [Note [removed: 5.] [added: 8.] Venture Capital Investments and Marketable [removed: Securities](#idd22d620c469429cbe87d18055ca22f6_100)] [added: Securities](#ic6467edc77a545dbbaf755b735281537_106)] | | | [removed: [80](#idd22d620c469429cbe87d18055ca22f6_100)] [added: [81](#ic6467edc77a545dbbaf755b735281537_106)] | | |

| [Note [removed: 6.] [added: 9.] Fair [removed: Value](#idd22d620c469429cbe87d18055ca22f6_103)] [added: Value](#ic6467edc77a545dbbaf755b735281537_109)] | | | [removed: [80](#idd22d620c469429cbe87d18055ca22f6_103)] [added: [81](#ic6467edc77a545dbbaf755b735281537_109)] | | |

| [Note [removed: 7.] [added: 10.] Goodwill and Intangible [removed: Assets](#idd22d620c469429cbe87d18055ca22f6_106)] [added: Assets](#ic6467edc77a545dbbaf755b735281537_115)] | | | [removed: [82](#idd22d620c469429cbe87d18055ca22f6_106)] [added: [83](#ic6467edc77a545dbbaf755b735281537_115)] | | |

| [Note [removed: 8.] [added: 11.] Debt and Other Financing [removed: Arrangements](#idd22d620c469429cbe87d18055ca22f6_109)] [added: Arrangements](#ic6467edc77a545dbbaf755b735281537_121)] | | | [removed: [83](#idd22d620c469429cbe87d18055ca22f6_109)] [added: [84](#ic6467edc77a545dbbaf755b735281537_121)] | | |

| [Note [removed: 9.] [added: 12.] Equity and Noncontrolling [removed: Interest](#idd22d620c469429cbe87d18055ca22f6_115)] [added: Interest](#ic6467edc77a545dbbaf755b735281537_127)] | | | [removed: [85](#idd22d620c469429cbe87d18055ca22f6_115)] [added: [86](#ic6467edc77a545dbbaf755b735281537_127)] | | |

| [Note [removed: 11.] [added: 14.] Employee Benefit [removed: Plans](#idd22d620c469429cbe87d18055ca22f6_121)] [added: Plans](#ic6467edc77a545dbbaf755b735281537_136)] | | | [removed: [90](#idd22d620c469429cbe87d18055ca22f6_121)] [added: [91](#ic6467edc77a545dbbaf755b735281537_136)] | | |

| [Note [removed: 12.] [added: 15.] Stock-based [removed: Compensation](#idd22d620c469429cbe87d18055ca22f6_124)] [added: Compensation](#ic6467edc77a545dbbaf755b735281537_139)] | | | [removed: [93](#idd22d620c469429cbe87d18055ca22f6_124)] [added: [95](#ic6467edc77a545dbbaf755b735281537_139)] | | |

| [Note [removed: 13.] [added: 16.] Restructuring and Asset [removed: Impairments](#idd22d620c469429cbe87d18055ca22f6_130)] [added: Impairments](#ic6467edc77a545dbbaf755b735281537_142)] | | | [removed: [95](#idd22d620c469429cbe87d18055ca22f6_130)] [added: [97](#ic6467edc77a545dbbaf755b735281537_142)] | | |

We have audited the accompanying consolidated balance sheets of Charles River Laboratories International, Inc. and its subsidiaries (the “Company”) as of December [removed: 31, 2022] [added: 30, 2023] and December [removed: 25, 2021,] [added: 31, 2022,] and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December [removed: 31, 2022,] [added: 30, 2023,] 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: 31, 2022,] [added: 30, 2023,] based on criteria established in [removed: *Internal] [added: Internal] Control - Integrated [removed: Framework*] [added: 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: 31, 2022] [added: 30, 2023] and December [removed: 25, 2021,] [added: 31, 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December [removed: 31, 2022] [added: 30, 2023] 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: 31, 2022,] [added: 30, 2023,] based on criteria established in [removed: *Internal] [added: Internal] Control - Integrated [removed: Framework*] [added: Framework] (2013) issued by the COSO.

As described in Management’s Report on Internal Control Over Financial Reporting, management has excluded [removed: Explora BioLabs] [added: Noveprim Group (“Noveprim”)] from its assessment of internal control over financial reporting as of December [removed: 31, 2022] [added: 30, 2023,] because it was acquired by the Company in a purchase business combination during [removed: 2022.][added: 2023.]

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

[removed: Explora BioLabs] [added: Noveprim] is a [removed: wholly-owned] subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent [removed: 1.5% and 1.1%,] [added: less than 1%,] respectively, of the related consolidated financial statement amounts as of and for the year ended December [removed: 31, 2022.][added: 30, 2023.]

[removed: 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 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: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the consolidated financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that (i) [removed: relates] [added: relate] 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: matter] [added: matters] below, providing [removed: a] separate [removed: opinion] [added: opinions] on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

As described in Notes 1 and 3 to the consolidated financial statements, the Company recognized Discovery and Safety Assessment (DSA) revenue from services and products transferred over time of [removed: $2,440.6] [added: $2,611.6] million for the year-ended December [removed: 31, 2022,] [added: 30, 2023,] of which the majority relates to services that are delivered to the customer based on the extent of progress towards completion of the performance obligation that management [removed: measures using the cost-to-cost (input method).]

The principal considerations for our determination that performing procedures relating to DSA service revenue recognized over time using the input method is a critical audit matter are [removed: the] [added: a] high degree of auditor subjectivity and effort in performing procedures and evaluating audit evidence related to the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation.

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

These procedures also included, among others (i) reading contracts and reports describing the results of services provided for a sample of DSA service contracts; (ii) [removed: evaluating and] testing management’s process for determining the amount of DSA service revenue recognized over time for a sample of DSA service [removed: contracts, which included] [added: contracts; (iii)] evaluating the [added: appropriateness of the input method used by management; (iv) evaluating the] reasonableness of the ratio of costs incurred to date to the total estimated costs at completion of the performance obligations through performing a retrospective comparison of actual costs incurred to historical estimated costs for completed service contracts; and [removed: (iii)] [added: (v)] testing actual costs incurred for a sample of in-progress service contracts by examining evidence of costs incurred.

[removed: February 22, 2023][added: | 2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Service revenue | | | $ | [removed: 3,216,904] [added: 3,440,019] | | | | | $ | [removed: 2,755,579] [added: 3,216,904] | | | | | $ | [removed: 2,296,156] [added: 2,755,579] | |

| Product revenue | | | [removed: 759,156] [added: 689,390] | | | | | | [removed: 784,581] [added: 759,156] | | | | | | [removed: 627,777] [added: 784,581] | | |

| Total revenue | | | [removed: 3,976,060] [added: 4,129,409] | | | | | | [removed: 3,540,160] [added: 3,976,060] | | | | | | [removed: 2,923,933] [added: 3,540,160] | | |

| Cost of services provided (excluding amortization of intangible assets) | | | [removed: 2,143,318] [added: 2,295,983] | | | | | | [removed: 1,837,487] [added: 2,143,318] | | | | | | [removed: 1,533,230] [added: 1,837,487] | | |

| Cost of products sold (excluding amortization of intangible assets) | | | [removed: 370,091] [added: 330,870] | | | | | | [removed: 368,035] [added: 370,091] | | | | | | [removed: 317,162] [added: 368,035] | | |

| [Note](#ic6467edc77a545dbbaf755b735281537_154) [5. Supplemental Cash Flow Information](#ic6467edc77a545dbbaf755b735281537_154) | | | [80](#ic6467edc77a545dbbaf755b735281537_154) | | |

| [Note 6. Inventory](#ic6467edc77a545dbbaf755b735281537_1767) | | | [80](#ic6467edc77a545dbbaf755b735281537_1767) | | |

| [Note 7. Property, Plant and Equipment, Net](#ic6467edc77a545dbbaf755b735281537_1774) | | | [80](#ic6467edc77a545dbbaf755b735281537_1774) | | |

| [Note 13. Income Taxes](#ic6467edc77a545dbbaf755b735281537_133) | | | [89](#ic6467edc77a545dbbaf755b735281537_133) | | |

| [Note 17. Leases](#ic6467edc77a545dbbaf755b735281537_148) | | | [99](#ic6467edc77a545dbbaf755b735281537_148) | | |

| [Note 18. Commitments and Contingencies](#ic6467edc77a545dbbaf755b735281537_157) | | | [101](#ic6467edc77a545dbbaf755b735281537_157) | | |

A company’s internal control over

*Acquisition of Noveprim – Valuation of Biological Assets*

As described in Notes 1 and 2 to the consolidated financial statements, on November 30, 2023, the Company completed the acquisition of Noveprim, resulting in a 90% controlling interest.

Of the acquired long-term assets, $167.8 million of biological assets were recorded.

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

To determine the fair value, management utilized the multiple period excess earnings model, which relies on the following key assumptions: projections of cash flows from the acquired entities, which includes future revenue, cost of revenue, operating income margins, and productivity rates, as well as the discount rate based on market participant’s weighted average cost of capital.

The principal considerations for our determination that performing procedures relating to the valuation of biological assets acquired in the acquisition of Noveprim is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the biological assets acquired; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the cost of revenue, productivity rates, and discount rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the biological assets acquired.

These procedures also included, among others (i) reading the purchase agreement; (ii) testing management’s process for developing the fair value estimate of the biological assets acquired; (iii) evaluating the appropriateness of the multiple period excess earnings model; (iv) testing the completeness and accuracy of the underlying data used in the multiple period excess earnings model; and (v) evaluating the reasonableness of the significant assumptions used by management related to the cost of revenue, productivity rates, and discount rate.

Evaluating management’s assumptions related to the cost of revenue and productivity rates involved considering (i) the past performance of Noveprim; (ii) the consistency with external research data; and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multiple period excess earnings model and (ii) the reasonableness of the discount rate assumption.

measures using the cost-to-cost (input method).

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

February 14, 2024

| Other comprehensive income (loss), before income taxes | | | 68,501 | | | | | | (102,806) | | | | | | (29,008) | | |

| Net income | | | $ | 480,370 | | | | | $ | 492,608 | | | | | $ | 398,837 | |

| Long-lived asset impairment charges | | | 41,911 | | | | | | 5,816 | | | | | | 733 | | |

| Other, net | | | 1,592 | | | | | | 21,726 | | | | | | 2,567 | | |

| Adjustment to noncontrolling interest fair value | | | — | | | | | | — | | | | | | (21,312) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (21,312) | | | | | | — | | | | | | (21,312) | | |

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

| Net income | | | — | | | | | | — | | | | | | — | | | | | | 474,624 | | | | | | — | | | | | | — | | | | | | — | | | | | | 474,624 | | | | | | 2,254 | | | | | | 476,878 | | |

| Gain on purchase of remaining equity interest of Vital River redeemable noncontrolling interest | | | — | | | | | | — | | | | | | 1,151 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,151 | | | | | | — | | | | | | 1,151 | | |

| Retirement of treasury shares | | | (105) | | | | | | (1) | | | | | | (3,847) | | | | | | (20,307) | | | | | | — | | | | | | (105) | | | | | | 24,155 | | | | | | — | | | | | | — | | | | | | — | | |

| December 30, 2023 | | | 51,338 | | | | | | $ | 513 | | | | | $ | 1,905,578 | | | | | $ | 1,887,218 | | | | | $ | (196,427) | | | | | — | | | | | | $ | — | | | | | $ | 3,596,882 | | | | | $ | 5,394 | | | | | $ | 3,602,276 | |

The Company participates in certain supplier finance programs that are immaterial to the consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU 2023-07, “Improvements to Reportable Segment Disclosures (Topic 280)”.

ASU 2023-07 modifies reportable segment disclosure requirements, primarily through enhanced disclosures about segment expenses categorized as significant or regularly provided to the Chief Operating Decision Maker (CODM).

In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, and contain other disclosure requirements.

The purpose of the amendments is to enable investors to better understand an entity’s overall performance and assess potential future cash flows.

This ASU is effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024, with early adoption permitted.

In December 2023, the FASB issued ASU 2023-09, “Improvements to Income Tax Disclosures (Topic 740)”.

ASU 2023-09 requires enhanced disclosures on income taxes paid, adds disaggregation of continuing operations before income taxes between foreign and domestic earnings and defines specific categories for the reconciliation of jurisdictional tax rate to effective tax rate.

The Company is currently evaluating the impact this new standard will have on the related disclosures in the consolidated financial statements.

participants at the measurement date.

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

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

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

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

| Comprehensive income, before income taxes | | | 389,802 | | | | | | 369,829 | | | | | | 421,259 | | |

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

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

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

| December 28, 2019 | | | 48,936 | | | | | | $ | 489 | | | | | $ | 1,531,785 | | | | | $ | 280,329 | | | | | $ | (178,019) | | | | | — | | | | | | $ | — | | | | | $ | 1,634,584 | | | | | $ | 3,244 | | | | | $ | 1,637,828 | |

| Net income | | | — | | | | | | — | | | | | | — | | | | | | 364,304 | | | | | | — | | | | | | — | | | | | | — | | | | | | 364,304 | | | | | | 1,852 | | | | | | 366,156 | | |

| Purchase of redeemable noncontrolling interest and recognition of related contingent consideration | | | — | | | | | | — | | | | | | (2,379) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,379) | | | | | | — | | | | | | (2,379) | | |

| Retirement of treasury shares | | | (146) | | | | | | (1) | | | | | | (4,759) | | | | | | (19,219) | | | | | | — | | | | | | (146) | | | | | | 23,979 | | | | | | — | | | | | | — | | | | | | — | | |

In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance.” ASU 2021-10 requires disclosures about transactions with a government that have been accounted for by a grant or contribution accounting model to increase transparency about the types of transactions, the accounting for the transactions, and the effect on the financial statements.

The Company’s adoption of this standard in fiscal year 2022 did not have an impact on the consolidated financial statements and related disclosures.

For the avian related inventory, costs included direct materials, such as animal feed, cost of personnel directly involved with the care of the eggs and flocks, and an allocation of facility overhead.

differences between the financial statements carrying amounts and their respective tax basis.

Due to the limited time between the acquisition date and the filing of this Annual Report on Form 10-K, it is not practicable for the Company to disclose the preliminary allocation of the purchase price to assets acquired and liabilities assumed.

This business is reported as part of the Company’s RMS reportable segment.

achieved.

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

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

Fiscal 2020 Acquisitions

Cellero, LLC

On August 6, 2020, the Company acquired Cellero, LLC (Cellero), a provider of cellular products for cell therapy developers and manufacturers worldwide.

The addition of Cellero enhances the Company’s unique, comprehensive solutions for the high-growth cell therapy market, strengthening the ability to help accelerate clients’ critical programs from basic research and proof-of-concept to regulatory approval and commercialization.

It also expands the Company’s access to high-quality, human-derived biomaterials with Cellero’s donor sites in the United States.

The purchase price for Cellero was $36.9 million, net of $0.5

million in cash.

The acquisition was funded through available cash.

HemaCare

On January 3, 2020, the Company acquired HemaCare Corporation (HemaCare), a business specializing in the production of human-derived cellular products for the cell therapy market.

The acquisition of HemaCare expands the Company’s comprehensive portfolio of early-stage research and manufacturing support solutions to encompass the production and customization of high-quality, human derived cellular products to better support clients’ cell therapy programs.

The purchase price of HemaCare was $376.7 million, net of $3.1 million in cash.

| | | | Cellero, LLC | | | | | | HemaCare Corporation | | |

| | | | August 6, 2020 | | | | | | January 3, 2020 | | |

| Trade receivables | | | $ | 1,500 | | | | | $ | 6,451 | |

| Inventories | | | 551 | | | | | | 8,468 | | |

| Goodwill (1) | | | 19,457 | | | | | | 210,196 | | |

| Deferred tax liabilities | | | (1,467) | | | | | | (38,529) | | |

| Other long-term liabilities | | | (740) | | | | | | (7,664) | | |

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: 31, 2022,] [added: 30, 2023,] 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: 31, 2022.][added: 30, 2023.]

Our assessment of the effectiveness of our internal control over financial reporting as of December [removed: 31, 2022] [added: 30, 2023] excluded [removed: Explora BioLabs,] [added: Noveprim,] which was acquired by the Company in [removed: 2022.][added: 2023.]

[removed: Explora BioLabs,] [added: Noveprim,] whose total assets and total revenues were excluded from the Company’s assessment, represented approximately [removed: 1.5% and 1.1%,] [added: less than 1%,] respectively, of the related consolidated amounts as of and for the fiscal year ended December [removed: 31, 2022.][added: 30, 2023.]

The effectiveness of our internal control over financial reporting as of December [removed: 31, 2022,] [added: 30, 2023,] 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.

[removed: There] [added: During fiscal year 2023, there] were no [removed: 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: 2022] [added: 2023] that materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

During fiscal year 2022, the Company continued to execute a plan to centralize certain accounting transaction processing functions to internal shared service centers.

During the quarter ended December 30, 2023, none of our officers or directors adopted or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K., except as follows:

- On November 14, 2023, James Foster, our Chair, President, and Chief Executive Officer, terminated a Rule 10b5-1 trading arrangement, dated February 23, 2023 for the sale of up to 112,341 shares of common stock.

Mr. Foster did not sell any shares pursuant to such plan, which, absent such termination, would have expired on March 1, 2025.

- On November 15, 2023, Birgit Girshick, our Corporate Executive Vice President & Chief Operating Officer, terminated a Rule 10b5-1 trading arrangement, dated February 24, 2023 for the sale of up to 25,320 shares of common stock.

Ms. Girshick did not sell any shares pursuant to such plan, which, absent such termination, would have expired on February 28, 2024.

- On November 22, 2023, Ms. Girshick entered into a Rule 10b5-1 trading arrangement for the sale of up to 22,362 shares of common stock, subject to certain conditions.

The arrangement’s expiration date is February 28, 2025.

During the quarter ended December 30, 2023, the Company did not adopt or terminate any “Rule 10b5-1 trading arrangement” as defined in Item 408(a) of Regulation S-K.

None.

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: 2023] [added: 2024] 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: 2023] [added: 2024] 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: 2023] [added: 2024] 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.

Insider Trading Policy

We have adopted an Insider Trading Policy governing the purchase, sale, and/or other dispositions of our securities by directors, officers, and employees of the Company.

The Insider Trading Policy is designed to promote compliance with insider trading laws, rules, and regulations and any applicable listing standards.

Our Insider Trading Policy is posted on our website and can be accessed by selecting the “Corporate Governance” link at http://ir.criver.com.

F.

In December 2021, we amended our By-laws to include a proxy access by-law.

Under our proxy access by-law, if a stockholder (or a group of up to 20 stockholders) who has owned at least 3% of our shares for at least three years and has complied with the other requirements set forth in our By-laws wants us to include director nominees (up to the greater of two nominees or 20% of the Board) in our proxy statement for an upcoming Annual Meeting, the nominations must be received in a timely manner, between 120 and 150 days prior to the anniversary of the date our proxy statement was first sent to stockholders in connection with the prior year’ annual meeting.

Since December 2008, there have been no material changes to the procedures by which security holders may recommend nominees to our Board of Directors.

The [added: remainder of the] information required by this Item will be included in the [removed: 2023] [added: 2024] Proxy Statement under the sections captioned [removed: “2022] [added: “2023] 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.

A.

Policies and Practices for Granting Certain Equity Awards.

The Compensation Committee of the Board of Directors is responsible for the review and approval of our policies and practices with respect to granting equity awards.

The Compensation Committee typically targets the second quarter of our fiscal year, shortly after our annual meeting of shareholders and the release of our first quarter financial results, for granting annual stock awards to eligible recipients, absent an extraordinary event.

The Compensation Committee believes this aligns timing of equity grants with the planning of annual salary increases (also in the second quarter of our fiscal year), allowing our managers to take a holistic view of total compensation.

The Compensation Committee seeks to structure equity grants so that they are awarded during an open window period as designated by our Insider Trading Policy, or, if Compensation Committee approval is provided during a non-window period, are typically made effective on the first business day following our press release with respect to financial results for the prior quarter.

This policy is intended to ensure that options are awarded at a time when the exercise price fully reflects all recently disclosed information.

In the case of new hires eligible to receive equity grants, grants are generally made on the first business day of the month following the date the individual commences employment.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

All grants to executive officers are made by the Compensation Committee itself and not pursuant to any delegated authority.

We have never had any programs, policies, or practices which are intended to time stock option grants with the release of material, non-public information in a manner that would provide advantageous option exercise prices to grant recipients.

Option exercise prices are, in all cases, equal to the closing price of our common stock on the date of grant.

B.

Actions to Recover Erroneously Awarded Compensation

At no point during or after the last completed fiscal year did we prepare an accounting statement that required the recovery of erroneously awarded compensation pursuant to the company’s clawback policy, nor was there an outstanding balance as of the end of the last completed fiscal year of erroneously awarded compensation to be recovered from the application of the policy to a prior restatement.

The information required by this Item will be included in the [removed: 2023] [added: 2024] 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: 2023] [added: 2024] 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: 2023] [added: 2024] Proxy Statement under the section captioned “Statement of Fees Paid to Independent Registered Public Accounting Firm” and is incorporated herein by reference thereto.

| 10.2* | | | [Charles River Laboratories International, Inc. Amended and Restated 2018 Incentive Plan, dated March 20, 2018, as amended [removed: and restated May 6, 2020](https://www.sec.gov/Archives/edgar/data/1100682/000110068220000012/ex101crl-ar2018incenti.htm)] [added: November 21, 2023](https://www.sec.gov/Archives/edgar/data/1100682/000110068224000007/crl1230202310-kex102.htm)] | | | [added: X] | | | [removed: 10-Q] | | | [removed: May 7, 2020] | | | [removed: 10.1] | | |

| 10.6* | | | [Charles River Laboratories International, Inc. Form of Restricted Stock Unit granted under the 2018 Incentive [removed: Plan](https://www.sec.gov/Archives/edgar/data/1100682/000110068220000026/ex102-rsu2020.htm)] [added: Plan](https://www.sec.gov/Archives/edgar/data/1100682/000110068224000007/crl1230202310-kex106.htm)] | | | [added: X] | | | [removed: 10-Q] | | | [removed: August 5, 2020] | | | [removed: 10.2] | | |

| [removed: 10.18*†] [added: 10.17*†] | | | [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 | | |

| 21.1 | | | [Subsidiaries of Charles River Laboratories International, [removed: Inc.](https://www.sec.gov/Archives/edgar/data/1100682/000110068223000006/crl1231202210-kex211.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/1100682/000110068224000007/crl1230202310-kex211.htm)] | | | X | | | | | | | | | | | |

| 23.1 | | | [Consent of PricewaterhouseCoopers [removed: LLP](https://www.sec.gov/Archives/edgar/data/1100682/000110068223000006/crl1231202210-kex231.htm)] [added: LLP](https://www.sec.gov/Archives/edgar/data/1100682/000110068224000007/crl1230202310-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/1100682/000110068223000006/crl1231202210-kex311.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068224000007/crl1230202310-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/1100682/000110068223000006/crl1231202210-kex312.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068224000007/crl1230202310-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/1100682/000110068223000006/crl1231202210-kex321.htm)] [added: Officer](https://www.sec.gov/Archives/edgar/data/1100682/000110068224000007/crl1230202310-kex321.htm)] | | | X | | | | | | | | | | | |

| 19 | | | [Insider Trading Policy](https://www.sec.gov/Archives/edgar/data/1100682/000110068224000007/crl1230202310-kex19.htm) | | | X | | | | | | | | | | | |

| 97 | | | [Financial Statement Compensation Recoupment Policy](https://www.sec.gov/Archives/edgar/data/1100682/000110068224000007/crl1230202310-kex97.htm) | | | X | | | | | | | | | | | |

| 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) | | | | | | 10-K | | | February 16, 2022 | | | 10.18 | | |

| February [removed: 22, 2023] [added: 14, 2024] | | | By: | | | /s/ FLAVIA H. PEASE | | |

| By: | | | /s/ JAMES C. FOSTER | | | *Chairman, President and Chief Executive Officer* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ FLAVIA H. PEASE | | | *Corporate Executive Vice President and* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ MICHAEL G. KNELL | | | *Corporate Senior Vice President and* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ NANCY C. ANDREWS | | | *Director* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ ROBERT J. BERTOLINI | | | *Director* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ DEBORAH T. KOCHEVAR | | | *Director* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ GEORGE LLADO | | | *Director* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ MARTIN MACKAY | | | *Director* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ GEORGE E. MASSARO | | | *Director* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ C. RICHARD REESE | | | *Director* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ CRAIG B. THOMPSON | | | *Director* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ RICHARD F. WALLMAN | | | *Director* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ VIRGINIA M. WILSON | | | *Director* | | | February [removed: 22, 2023] [added: 14, 2024] | | |

| By: | | | /s/ RESHEMA KEMPS-POLANCO | | | *Director* | | | February 14, 2024 | | |

| | | | Reshema Kemps-Polanco | | | | | | | | |

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