Item 1. Financial Statements

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Item 1. Financial Statements

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)

(in thousands, except per share amounts)


	Three Months Ended
		March 28, 2026		March 29, 2025
Service revenue		$	798,152	$	797,923
Product revenue		197,678		186,245
Total revenue		995,830		984,168
Costs and expenses
Cost of services provided (excluding amortization of intangible assets)		608,907		577,428
Cost of products sold (excluding amortization of intangible assets)		92,259		89,008
Selling, general and administrative		159,422		177,799
Amortization of intangible assets		15,345		65,264
Operating income		119,897		74,669
Other income (expense)
Interest income		1,033		1,404
Interest expense		(26,742)		(27,884)
Other (expense) income, net		(124,130)		(12,211)
Income (loss) before income taxes		(29,942)		35,978
Provision (benefit) for income taxes		(15,140)		10,100
Net income (loss)		(14,802)		25,878
Less: Net income attributable to noncontrolling interests		41		409
Net income (loss) attributable to common shareholders		$	(14,843)	$	25,469







Earnings (loss) per common share
Basic		$	(0.30)	$	0.50
Diluted		$	(0.30)	$	0.50

Weighted-average number of common shares outstanding
Basic		48,951		50,677
Diluted		48,951		50,853







See Notes to Unaudited Condensed Consolidated Financial Statements.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(in thousands)


	Three Months Ended
		March 28, 2026		March 29, 2025
Net income (loss)		$	(14,802)	$	25,878
Other comprehensive income (loss):
Foreign currency translation adjustment		(25,180)		60,381
Amortization of net loss, settlement losses, and prior service benefit included in total cost for pension and other post-retirement benefit plans		894		408

Other comprehensive income (loss), before income taxes		(24,286)		60,789
Less: Income tax expense (benefit) related to items of other comprehensive income		(4,593)		9,548
Comprehensive income (loss), net of income taxes		(34,495)		77,119
Less: Comprehensive loss related to noncontrolling interests, net of income taxes		(393)		(449)
Comprehensive income (loss) attributable to Charles River Laboratories International, Inc., net of income taxes		$	(34,102)	$	77,568
































See Notes to Unaudited Condensed Consolidated Financial Statements.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except per share amounts)


	March 28, 2026		December 27, 2025
Assets
Current assets:
Cash and cash equivalents	$	191,830	$	213,770
Trade receivables and contract assets, net of allowances for credit losses of $8,114 and $10,463, respectively	700,251		708,856
Inventories	359,723		299,103
Prepaid assets	102,146		96,108
Other current assets	134,856		129,212
Total current assets	1,488,806		1,447,049
Property, plant and equipment, net	1,510,154		1,655,219
Venture capital and strategic equity investments	209,723		206,972
Operating lease right-of-use assets, net	317,840		361,415
Goodwill	3,040,032		2,764,253
Intangible assets, net	248,989		339,995
Deferred tax assets	88,599		67,334
Other assets	826,165		293,185
Total assets	$	7,730,308	$	7,135,422
Liabilities, Redeemable Noncontrolling Interests and Equity
Current liabilities:
Accounts payable	$	133,952	$	148,800
Accrued compensation	166,888		268,854
Deferred revenue	194,330		210,418
Accrued liabilities	372,397		270,085
Other current liabilities	226,137		222,158
Total current liabilities	1,093,704		1,120,315
Long-term debt, net and finance leases	2,663,133		2,136,360
Operating lease right-of-use liabilities	393,113		434,048
Deferred tax liabilities	81,399		95,203
Other long-term liabilities	510,646		138,302
Total liabilities	4,741,995		3,924,228
Commitments and contingencies (Notes 2, 12, 14, and 16)
Redeemable noncontrolling interests	41,900		41,263
Equity:
Preferred stock, $0.01 par value; 20,000 shares authorized; no shares issued and outstanding	—		—
Common stock, $0.01 par value; 120,000 shares authorized; 49,342 shares issued and 48,167 shares outstanding as of March 28, 2026, and 49,217 shares issued and outstanding as of December 27, 2025	493		492
Additional paid-in capital	1,967,356		1,947,301
Retained earnings	1,373,777		1,388,620
Treasury stock, at cost, 1,175 and zero shares, as of March 28, 2026 and December 27, 2025, respectively	(209,990)		—
Accumulated other comprehensive loss	(191,042)		(171,783)
Total Charles River Laboratories International, Inc. equity	2,940,594		3,164,630
Nonredeemable noncontrolling interest	5,819		5,301
Total equity	2,946,413		3,169,931
Total liabilities, redeemable noncontrolling interests and equity	$	7,730,308	$	7,135,422
See Notes to Unaudited Condensed Consolidated Financial Statements.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)


	Three Months Ended
	March 28, 2026		March 29, 2025
Cash flows relating to operating activities
Net income (loss)	$	(14,802)	$	25,878
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	67,151		120,364
Long-lived asset impairments	15,863		10,576
Stock-based compensation	22,381		13,135
Deferred income taxes	(29,417)		(19,041)
Write down of inventories	1,489		6,762
Losses and impairments on venture capital and strategic equity investments, net	1,138		10,374
Provision for credit losses	47		2,007
(Gain) loss on divestitures, net	117,981		(3,376)

Other, net	(34,675)		3,731
Changes in assets and liabilities:
Trade receivables and contract assets, net	(65,319)		(29,353)
Inventories	26,004		(21,882)
Accounts payable	20,455		25,251
Accrued compensation	(83,758)		15,263
Deferred revenue	5,197		(1,213)
Customer contract deposits	(135)		9,167
Other assets and liabilities, net	(8,523)		4,054
Net cash provided by operating activities	41,077		171,697
Cash flows relating to investing activities
Acquisition of businesses and assets, net of cash acquired	(405,006)		—
Capital expenditures	(55,908)		(59,324)
Purchases of investments and contributions to venture capital investments	(8,492)		(5,302)
Proceeds from sale of investments	2,922		1,602
Proceeds from sale of businesses and assets, net	60,096		17,441
Other, net	(1,457)		104
Net cash used in investing activities	(407,845)		(45,479)
Cash flows relating to financing activities
Proceeds from long-term debt and revolving credit facility	912,462		416,341
Payments on long-term debt, revolving credit facility, and finance lease obligations	(355,676)		(149,394)
Proceeds from exercises of stock options	1,223		—
Purchase of treasury stock	(208,285)		(353,132)

Purchase of remaining equity interest of other redeemable noncontrolling interests	—		(19,140)
Other, net	(2,000)		—
Net cash provided by (used in) financing activities	347,724		(105,325)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	1,248		5,265
Net change in cash, cash equivalents, and restricted cash	(17,796)		26,158
Cash, cash equivalents, and restricted cash, beginning of period	215,997		205,570
Cash, cash equivalents, and restricted cash, end of period	$	198,201	$	231,728






See Notes to Unaudited Condensed Consolidated Financial Statements.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS (UNAUDITED)

(in thousands)


	Redeemable Noncontrolling Interests		Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Total Charles River Laboratories, Inc. Equity		Noncontrolling Interest		Total Equity
Shares			Amount					Shares			Amount
December 27, 2025	$	41,263	49,217	$	492	$	1,947,301		$	1,388,620		$	(171,783)	—	$	—	$	3,164,630	$	5,301	$	3,169,931
Net income (loss)	(477)		—	—		—			(14,843)			—		—	—		(14,843)		518		(14,325)
Other comprehensive income (loss), net of tax	(434)		—	—		—			—			(19,259)		—	—		(19,259)		—		(19,259)
Dividends declared to noncontrolling interests	(2,000)		—	—		—			—			—		—	—		—		—		—
Adjustment of redeemable noncontrolling interests to redemption value	3,548		—	—		(3,548)			—			—		—	—		(3,548)		—		(3,548)
Issuance of stock under employee compensation plans	—		125	1		1,222			—			—		—	—		1,223		—		1,223
Purchase of treasury shares	—		—	—		—			—			—		1,175	(208,285)		(208,285)		—		(208,285)
Share repurchase excise tax	—		—	—		—			—			—		—	(1,705)		(1,705)		—		(1,705)
Stock-based compensation	—		—	—		22,381			—			—		—	—		22,381		—		22,381
March 28, 2026	$	41,900	49,342	$	493	$	1,967,356		$	1,373,777		$	(191,042)	1,175	$	(209,990)	$	2,940,594	$	5,819	$	2,946,413




















	Redeemable Noncontrolling Interests		Common Stock			Additional Paid-In Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)		Treasury Stock			Total Charles River Laboratories, Inc. Equity		Noncontrolling Interest		Total Equity
Shares			Amount					Shares			Amount
December 28, 2024	$	41,126	51,141	$	511	$	1,966,237		$	1,812,100		$	(317,345)	—	$	—	$	3,461,503	$	5,449	$	3,466,952
Net income	75		—	—		—			25,469			—		—	—		25,469		334		25,803
Other comprehensive income (loss), net of tax	(858)		—	—		—			—			52,099		—	—		52,099		—		52,099
Adjustment of redeemable noncontrolling interests to redemption value	1,320		—	—		(1,320)			—			—		—	—		(1,320)		—		(1,320)
Issuance of stock under employee compensation plans	—		60	1		—			—			—		—	—		1		—		1
Purchase of treasury shares	—		—	—		—			—			—		2,086	(353,132)		(353,132)		—		(353,132)
Share repurchase excise tax	—		—	—		—			—			—		—	(3,419)		(3,419)		—		(3,419)
Stock-based compensation	—		—	—		13,135			—			—		—	—		13,135		—		13,135
March 29, 2025	$	41,663	51,201	$	512	$	1,978,052		$	1,837,569		$	(265,246)	2,086	$	(356,551)	$	3,194,336	$	5,783	$	3,200,119


See Notes to Unaudited Condensed Consolidated Financial Statements.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements are unaudited and have been prepared by Charles River Laboratories International, Inc. (the Company) in accordance with accounting principles generally accepted in the United States (U.S. GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). The year-end condensed consolidated balance sheet data was derived from the Company’s audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for fiscal year 2025 as filed with the SEC on February 18, 2026. The unaudited condensed consolidated financial statements, in the opinion of management, reflect all normal and recurring adjustments necessary for a fair statement of the Company’s financial position and results of operations.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires that the Company make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, judgments, and methodologies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known.

Newly Adopted Accounting Pronouncements

In July 2025, the FASB issued ASU 2025-05, “Financial Instruments – Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivables and Contract Assets.” ASU 2025-05 provides a practical expedient to assume that the current conditions as of the balance sheet date do not change for the remaining life of the asset if the expected credit losses were estimated under the reasonable and supportable approach. The ASU was effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption was permitted, and if practical expedient is elected, the amendments in this update should be applied on a prospective basis. The Company’s adoption of this standard on a prospective basis in the three months ended March 28, 2026 did not have a significant impact on the unaudited condensed consolidated financial statements and the related disclosures.

Newly Issued Accounting Pronouncements

In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350 - 40) - Targeted Improvements to the Accounting for Internal-Use Software.” ASU 2025-06 improves the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, including the methods that entities may use to develop software in the future. The ASU is effective for fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted, and the amendments in this ASU may be adopted using either a prospective transition approach, a modified transition approach or a retrospective transition approach. The Company is currently evaluating the impact this new standard will have on the condensed consolidated financial statements and the related disclosures.

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses (Subtopic 220-40)” which requires enhanced disclosure of income statement expense categories to improve transparency and provide financial statement users with more detailed information about the nature, amount and timing of expenses impacting financial performance. This new guidance is effective for the Company for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027, with early adoption permitted. The amendments in this ASU may be adopted using the prospective or retrospective methods. The Company is currently evaluating the method of adoption and the impact this new standard will have on the related disclosures in the condensed consolidated financial statements.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note 1, “Description of Business and Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for fiscal year 2025 as filed with the SEC on February 18, 2026.

Consolidation

The Company’s unaudited condensed consolidated financial statements reflect its financial statements and those of its subsidiaries in which the Company holds a controlling financial interest. For consolidated entities in which the Company owns or is exposed to less than 100% of the economics, the Company records net income attributable to noncontrolling interests in its unaudited condensed consolidated statements of income equal to the percentage of the economic or ownership interest retained

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

in such entities by the respective noncontrolling parties. Redeemable noncontrolling interests, where the noncontrolling interest holders have the ability to require the Company to purchase the remaining interests, are classified in the mezzanine section of the unaudited condensed consolidated balance sheets, which is presented above the equity section and below liabilities. Intercompany balances and transactions are eliminated in consolidation.

The Company’s fiscal year is typically based on 52-weeks, with each quarter composed of 13 weeks ending on the last Saturday on, or closest to, March 31, June 30, September 30, and December 31. A 53rd week in the fourth quarter of the fiscal year is occasionally necessary to align with a December 31 calendar year-end.

Segment Reporting

The Company reports its results in three reportable segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Solutions (Manufacturing).

The Company’s RMS reportable segment includes products and services offered within Research Models, Research Model Services, and Cell Solutions. Research Models includes the commercial production and sale of small research models, as well as the supply of large research models. Research Model Services includes: Insourcing Solutions (IS), which provides colony management of clients’ research operations (including recruitment, training, staffing, and management services) within the clients’ facilities and utilizing the Charles River Accelerator and Development Lab (CRADL™) offerings, which provide vivarium space to clients, Genetically Engineered Models and Services (GEMS), which performs contract breeding and other services associated with genetically engineered models; and Research Animal Diagnostic Services (RADS), which provides health monitoring and diagnostics services related to research models, and Cell Solutions which supplies controlled, consistent, customized primary cells and blood components derived from normal and mobilized peripheral blood and bone marrow as well as cells from disease state donors.

The Company’s DSA reportable segment includes discovery and safety assessment services. The Company provides regulated and non-regulated DSA services to support the discovery, development, and regulatory-required safety testing of potential new drugs, including in vitro (non-animal) and in vivo (in research models) studies, laboratory support services, including bioanalytical and strategic non-clinical consulting and program management to support product development.

The Company’s Manufacturing reportable segment includes Microbial Solutions, which provides in vitro lot-release testing products, microbial detection products, and species identification services and Biologics Solutions (Biologics), which performs specialized testing of biologics (Biologics Testing Solutions) as well as contract development and manufacturing products and services (CDMO).

2. ACQUISITIONS AND DIVESTITURES.

Fiscal 2026 Acquisitions

PathoQuest SAS

On April 17, 2026, the Company completed the acquisition of an additional 79% equity interest in PathoQuest SAS (PathoQuest), a provider of next-generation sequencing solutions for manufacturing quality-control testing for biopharmaceutical companies, resulting in a 100% controlling interest. The preliminary purchase price for PathoQuest was €51.6 million (or approximately $60.0 million based on current exchange rates), subject to customary closing adjustments. The acquisition was funded through a combination of available cash and proceeds from the Credit Facility. This business will be reported as part of the Company’s Manufacturing reportable segment. Due to the limited time between the acquisition date and the filing of this Quarterly Report on Form 10-Q, it is not practicable for the Company to disclose the preliminary allocation of the purchase price to assets acquired and liabilities assumed. The Company incurred transaction and integration costs in connection with the acquisition of $0.6 million for the three months ended March 28, 2026, which was included in Selling, general and administrative expenses within the unaudited condensed consolidated statements of income (loss).

K.F. Cambodia

On January 14, 2026, the Company completed the acquisition of certain assets of K.F. Cambodia Ltd (Cambodian NHP Supplier), a leading supplier of non-human primates (NHPs) located in Cambodia. The preliminary purchase price for the Cambodian NHP Supplier was $507.3 million, consisting of $335.0 million paid at closing and $172.3 million representing the acquisition date fair value of deferred consideration, which is payable upon the satisfaction of certain post-close conditions. As of March 28, 2026 $105.0 million of deferred consideration remains to be paid which is recorded in Accrued liabilities on the unaudited condensed consolidated balance sheets. The acquisition was funded through a combination of available cash and proceeds from the Company’s Credit Facility. This business is reported as part of the Company’s DSA reportable segment for NHPs vertically integrated into the DSA supply chain and the RMS reportable segment for those NHPs sold to third party customers. The Company incurred transaction and integration costs in connection with the acquisition of $6.5 million for the three months ended March 28, 2026, which was included in Selling, general and administrative expenses within the unaudited condensed consolidated statements of income (loss). Pro forma financial information as well as the disclosure of actual revenue

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

and operating income (loss) have not been included because the Cambodian NHP Supplier’s financial results are not significant when compared to the Company’s consolidated financial results.

Purchase price information

The preliminary purchase price allocation was as follows:


	Cambodian NHP Supplier(1)
	January 14, 2026
	(in thousands)

Inventories	$	108,106

Property, plant and equipment	9,858

Goodwill (2)	340,985

Other long-term assets (3)	283,048

Other current liabilities	(2,414)


Other long-term liabilities (4)	(232,324)

Total purchase price allocation	$	507,259

(1) Purchase price allocation is preliminary and subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed, including certain obligations. Any additional adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition.
(2) The goodwill resulting from this transaction is primarily attributable to synergies to be realized from acquiring an internal supplier servicing the DSA business and the assembled workforce. Goodwill of $108.7 million of the Cambodian NHP Supplier is deductible for tax purposes upon making the remaining deferred payments.
(3) Other long-term assets acquired include $283.0 million of biological assets, which will be amortized over an estimated eleven year useful life.
(4) Other long-term liabilities include pre acquisition uncertain tax positions of the seller associated with the acquired assets.

Divestitures

The Company routinely evaluates the strategic fit and fundamental performance of its global businesses, divesting operations that do not meet key business criteria. As part of this ongoing assessment, the Company determined that certain capital could be better deployed in other long-term growth opportunities.

Divestiture of Certain European Discovery Services Businesses

On February 25, 2026, the Company signed an agreement to sell certain European Discovery Services businesses (European Discovery Divestiture) to IQVIA Inc. (IQVIA) for $145.0 million in cash, subject to certain customary closing conditions, and future contingent payments up to $10.0 million based on future performance. The results of the European Discovery Services businesses were reported in the Company’s DSA reportable segment. During the three months ended March 28, 2026, the disposal group and the related assets and liabilities met the criteria for held-for-sale and were classified on the unaudited condensed consolidated balance sheets within Other assets and Other long-term liabilities, respectively. No changes were made to the prior period. The proposed transaction is expected to close in the second quarter of fiscal year 2026.

Divestiture of CDMO and Cell Solutions

On May 6, 2026, the Company completed the sale of its CDMO and Cell Solutions businesses (CDMO and Cell Solutions Divestiture) to GI Partners (GI) for future contingent performance-based payments up to $50.0 million, subject to certain customary closing adjustments. Additionally, the Company may be required to fund up to $45.0 million of future EBITDA losses and capital expenditures of the divested businesses over a four year period. The results of the CDMO and Cell Solutions businesses’ were reported in the Company’s Manufacturing reportable segment and RMS reportable segment, respectively. During the three months ended March 28, 2026, these businesses and the related assets and liabilities met the criteria for held-for-sale, resulting in a pre-tax loss of $118.0 million, which represents the excess of its carrying value over the fair value less cost to sell. As the loss taken cannot exceed the fair value of the long-lived assets, any excess of the carrying value over the fair value less cost to sell will be recorded upon disposal. The loss is recognized within Other (expense) income within the unaudited condensed consolidated statements of income (loss). The assets and liabilities are reported on the unaudited condensed consolidated balance sheets within Other assets and Other long-term liabilities, respectively. No changes were made to the prior period. The Company will complete its analysis related to the transaction, including determining the final loss on sale, which will be recognized in the second quarter of fiscal year 2026.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The carrying amounts of the major classes of assets and liabilities associated with the European Discovery Divestiture and CDMO and Cell Solutions Divestiture were as follows:


	March 28, 2026
	European Discovery Divestiture		CDMO and Cell Solutions Divestiture

Assets
Current assets	$	43,437	$	61,611
Property, plant, and equipment, net	49,034		—
Operating lease right-of-use assets, net	20,252		—
Goodwill	46,653		—
Intangible assets, net	52,849		—
Other assets	1,800		12,626
Assets held for sale (Other assets)	$	214,025	$	74,237

Liabilities
Current liabilities	36,477		31,048
Operating lease right-of-use liabilities	18,325		23,594
Long-term liabilities	32,002		2,760
Liabilities held for sale (Other long-term liabilities)	$	86,804	$	57,402

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by reportable segment and timing of transfer of products or services:


	Three Months Ended
		March 28, 2026		March 29, 2025
		(in thousands)
Timing of Revenue Recognition:
RMS
Services and products transferred over time		$	94,203	$	97,004
Services and products transferred at a point in time		114,164		116,069
Total RMS revenue		208,367		213,073
DSA
Services and products transferred over time		596,233		591,520
Services and products transferred at a point in time		690		1,089
Total DSA revenue		596,923		592,609
Manufacturing
Services and products transferred over time		90,893		91,467
Services and products transferred at a point in time		99,647		87,019
Total Manufacturing revenue		190,540		178,486
Total revenue		$	995,830	$	984,168

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contract Balances from Contracts with Customers

The following table provides information about client receivables, contract assets, and contract liabilities from contracts with customers:


	March 28, 2026		December 27, 2025
	(in thousands)
Assets from contracts with customers
Client receivables	$	512,743	$	518,728
Unbilled revenue	195,622		200,591
Total	708,365		719,319
Less: Allowance for credit losses	(8,114)		(10,463)
Trade receivables and contract assets, net	$	700,251	$	708,856

Liabilities from contracts with customers
Current deferred revenue	$	194,330	$	210,418
Long-term deferred revenue (included in Other long-term liabilities)	47,063		45,632
Customer contract deposits (included in Other current liabilities)	104,746		106,599

Approximately 75% of unbilled revenue as of December 27, 2025, which was $201 million, was billed during the three months ended March 28, 2026. Approximately 70% of unbilled revenue as of December 28, 2024, which was $212 million, was billed during the three months ended March 29, 2025.

Approximately 55% of contract liabilities as of December 27, 2025, which was $256 million, were recognized as revenue during the three months ended March 28, 2026. Approximately 60% of contract liabilities as of December 28, 2024, which was $283 million, were recognized as revenue during the three months ended March 29, 2025.

When the Company does not have the unconditional right to advanced billings, both advanced client payments and unpaid advanced client billings are excluded from deferred revenue, with the advanced billings also being excluded from client receivables. The Company excluded approximately $44 million and $43 million of unpaid advanced client billings from both client receivables and deferred revenue in the accompanying unaudited condensed consolidated balance sheets as of March 28, 2026 and December 27, 2025, respectively.

Allowance for Credit Losses

The following is a summary of the activity of the Company’s allowance for credit losses:


	Three Months Ended
		March 28, 2026		March 29, 2025
		(in thousands)
Beginning balance		$	10,463	$	18,301
Provisions		47		2,007
Reductions		(2,396)		(4,050)
Ending balance		$	8,114	$	16,258

Net recoveries were $0.5 million during the three months ended March 28, 2026, while net provision expenses were $1.5 million during the three months ended March 29, 2025. These amounts include recoveries of balances previously written off, which are excluded from the table above.

Transaction Price Allocated to Future Performance Obligations

The Company discloses the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of March 28, 2026. Excluded from the disclosure is the value of unsatisfied performance obligations for contracts with an original expected length of one year or less, contracts for which revenue is recognized at the amount to which the Company has the right to invoice for services performed, and service revenue recognized in accordance with ASC 842, “Leases”. The aggregate amount of transaction price allocated to the remaining performance obligations for all open customer contracts as of March 28, 2026 was $702.2 million. The Company will recognize revenues for these performance obligations as they are satisfied, approximately 50% of which is expected to occur within the next twelve months and the remainder recognized thereafter during the remaining contract term.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Other Performance Obligation****s

As part of the Company’s service offerings, the Company has identified performance obligations related to leasing Company owned assets. In certain arrangements, customers obtain substantially all of the economic benefits of the identified assets, which may include manufacturing suites and related equipment, and have the right to direct the assets’ use over the term of the contract. The associated revenue is recognized on a straight-line basis over the term of the lease, which is generally less than one year, and recorded within service revenue. The Company recognized $12.2 million and $11.6 million in lease revenue during the three months ended March 28, 2026 and March 29, 2025. Due to the nature of these arrangements and timing of the contractual lease term, the remaining revenue to be recognized related to these lease performance obligations is not material to the unaudited condensed consolidated financial statements.

4. SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in three reportable segments: RMS, DSA, and Manufacturing. The reportable segments comprise the structure used by the Company’s Chief Executive Officer, who is the Chief Operating Decision Maker (CODM), to make key operating decisions and assess performance. These segments are strategic business units with differing products and services.

The Company’s CODM evaluates the segments operating performance based on operating income. Operating income is the measure of profit or loss regularly provided to and used by the CODM to assess performance and allocate resources. Operating income is defined as revenue less costs of revenue; selling, general, and administrative expenses; and amortization of intangible assets. For each segment, the CODM uses operating income in the annual budgeting and quarterly forecasting process when comparing to actual results. Asset information on a reportable segment basis is not disclosed as this information is not separately identified and internally reported to the Company’s CODM. The following table presents the results of operations by reportable segment:


	Three Months Ended
		March 28, 2026		March 29, 2025
		(in thousands)
RMS
Revenue		$	208,367	$	213,073
Cost of revenue (excluding amortization of intangible assets)		153,963		139,296
Selling, general and administrative		1,595		24,206
Amortization of intangible assets		3,036		5,966
Operating income		$	49,773	$	43,605

DSA
Revenue		$	596,923	$	592,609
Cost of revenue (excluding amortization of intangible assets)		435,160		420,143
Selling, general and administrative		47,524		65,293
Amortization of intangible assets		10,364		13,221
Operating income		$	103,875	$	93,952

Manufacturing
Revenue		$	190,540	$	178,486
Cost of revenue (excluding amortization of intangible assets)		112,043		106,997
Selling, general and administrative		29,713		34,032
Amortization of intangible assets		1,945		46,077
Operating income (loss)		$	46,839	$	(8,620)

Unallocated Corporate (1)
Selling, general and administrative		$	80,590	$	54,268
Operating loss		$	(80,590)	$	(54,268)

(1) Operating income for unallocated corporate consists of costs associated with departments such as senior executives, corporate accounting, legal, tax, human resources, treasury, and investor relations.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


	Three Months Ended
		March 28, 2026		March 29, 2025
		(in thousands)
Revenue
RMS		$	208,367	$	213,073
DSA		596,923		592,609
Manufacturing		190,540		178,486
Total revenue		$	995,830	$	984,168

Operating Income (Loss)
RMS		$	49,773	$	43,605
DSA		103,875		93,952
Manufacturing		46,839		(8,620)
Segment operating income		200,487		128,937
Unallocated Corporate		(80,590)		(54,268)
Operating income		$	119,897	$	74,669
Other income (expense):
Interest income		1,033		1,404
Interest expense		(26,742)		(27,884)
Other (expense) income, net		(124,130)		(12,211)
Income (loss) before income taxes		$	(29,942)	$	35,978

Capital expenditures and depreciation and amortization (related to both intangible assets and certain assets acquired in business combinations) by reportable segment are as follows:


	RMS		DSA		Manufacturing		Unallocated Corporate		Consolidated
	(in thousands)
Capital Expenditures



Three Months Ended:
March 28, 2026	$	11,568	$	37,509	$	6,274	$	557	$	55,908
March 29, 2025	7,286		34,521		17,279		238		59,324

Depreciation and amortization (1)



Three Months Ended:
March 28, 2026	$	16,140	$	39,914	$	8,399	$	2,698	$	67,151
March 29, 2025	21,761		42,084		54,623		1,896		120,364
(1) Depreciation and amortization includes both inventory step up amortization expense and biological assets amortization expense.

Revenue represents sales originating in entities physically located in the identified geographic area. Revenue by geographic area is as follows:


	U.S.		Europe		Canada		Asia Pacific		Other (1)		Consolidated
	(in thousands)




Three Months Ended:
March 28, 2026	$	543,809	$	277,577	$	109,567	$	55,481	$	9,396	$	995,830
March 29, 2025	536,955		263,250		125,353		41,942		16,668		984,168

(1) The Other category represents operations located in Brazil, Israel, and Mauritius.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Long-lived assets consist of property, plant, and equipment, net. Long-lived assets by geographic area are as follows:


	U.S.		Europe		Canada		Asia Pacific		Other		Consolidated
	(in thousands)
Long-lived assets
March 28, 2026	$	794,015	$	450,338	$	162,414	$	60,906	$	42,481	$	1,510,154
December 27, 2025	919,236		468,638		163,337		61,814		42,194		1,655,219

5. SUPPLEMENTAL CASH FLOW INFORMATION


	Three Months Ended
	March 28, 2026		March 29, 2025
	(in thousands)
Cash paid for income taxes	$	1,727	$	17,324
Cash paid for interest	28,993		29,088
Non-cash investing activities:
Purchases of Property, plant and equipment included in Accounts payable and Accrued liabilities	$	20,796	$	22,391
Assets acquired under finance leases	1,910		—

Cash, cash equivalents and restricted cash are included in the accompanying unaudited condensed consolidated balance sheets as follows:


	March 28, 2026		March 29, 2025
	(in thousands)
Supplemental cash flow information:
Cash and cash equivalents	$	191,830	$	229,356
Cash classified as held for sale in Other assets	2,840		—
Restricted cash included in Other current assets	1,929		904
Restricted cash included in Other assets	1,602		1,468
Cash, cash equivalents, and restricted cash, end of period	$	198,201	$	231,728

6. SUPPLEMENTAL BALANCE SHEET INFORMATION

The composition of other assets included in the accompanying unaudited condensed consolidated balance sheets is as follows:


	March 28, 2026		December 27, 2025
	(in thousands)
Bearer biological assets	$	406,254	$	135,647
Assets held for sale	288,262		21,223
Life insurance policies	64,383		66,318
Restricted cash	1,602		1,561
Long-term pension assets	36,989		37,256
Other long-term assets	28,675		31,180
Other assets	$	826,165	$	293,185

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The composition of other long-term liabilities included in the accompanying unaudited condensed consolidated balance sheets is as follows:


	March 28, 2026		December 27, 2025
	(in thousands)
Long-term pension liability, accrued executive supplemental life insurance retirement plan and deferred compensation plan	$	66,302	$	68,440
Long term tax liability	201,569		15,339
Liabilities held for sale	144,206		—
Deferred revenue	47,063		45,632
Other	51,506		8,891
Other long-term liabilities	$	510,646	$	138,302

7. INVENTORY

Inventories

The composition of inventories is as follows:


	March 28, 2026		December 27, 2025
	(in thousands)
Raw materials and supplies	$	30,937	$	40,959
Work in process	53,335		88,743
Finished products	275,451		169,401
Inventories	$	359,723	$	299,103

For the three months ended March 28, 2026, the Company did not incur inventory step up amortization expense. Inventory step up amortization expense for the three months ended March 29, 2025 was $6.2 million.

8. PROPERTY, PLANT AND EQUIPMENT, NET

The composition of property, plant and equipment, net is as follows:


	March 28, 2026		December 27, 2025
	(in thousands)
Land	$	73,192	$	72,022
Buildings (1)	1,074,802		1,097,572
Machinery and equipment (1)	973,729		1,093,556
Leasehold improvements	341,013		438,230
Furniture and fixtures	23,309		27,873
Computer hardware and software (1)	281,770		284,913
Vehicles (1)	6,543		7,152
Construction in progress	167,348		171,604
Total	2,941,706		3,192,922
Less: Accumulated depreciation	(1,431,552)		(1,537,703)
Property, plant and equipment, net	$	1,510,154	$	1,655,219

(1) These balances include assets under finance leases.

In March 2026, the Company completed the sale of certain assets at the Wilmington, Massachusetts site. The assets consisted of office, laboratory and mixed-use buildings within our RMS segment and unallocated corporate, and was sold to an unrelated third party for cash consideration of $60.1 million, net of costs to sell. In conjunction with the sale, the Company has entered into a long-term operating lease for certain buildings to support RMS and unallocated corporate operations. Upon meeting the criteria for sale leaseback, the Company derecognized the book value of $21.6 million and recognized a pre-tax gain of $38.5 million. The gain was recognized within the RMS reportable segment and unallocated corporate for $23.2 million and $15.3 million, respectively, and is included in Selling, general and administrative expenses within the unaudited condensed consolidated statements of income (loss). As of December 27, 2025, the Company included the above assets as held for sale

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

within Other assets on the unaudited condensed consolidated balance sheets.

Depreciation expense in the three months ended March 28, 2026 and March 29, 2025 was $41.3 million and $43.4 million, respectively.

9. VENTURE CAPITAL AND STRATEGIC EQUITY INVESTMENTS

Venture capital investments are summarized below:


	Three Months Ended
	March 28, 2026		March 29, 2025
	(in thousands)
Beginning balance	$	125,696	$	116,561
Capital contributions	6,402		5,216
Distributions	(2,988)		(2,653)
Gains (losses) and impairments	481		(8,634)

Foreign currency translation	(172)		551
Ending balance	$	129,419	$	111,041

The Company also invests, with minority positions, directly in equity of predominantly privately held companies. Strategic investments are summarized below:


	Three Months Ended
	March 28, 2026		March 29, 2025
	(in thousands)
Beginning balance	$	81,276	$	101,790
Purchase of investments	2,000		2,241
Distributions	(1,059)		—
Gains (losses) and impairments	(1,619)		(1,740)



Foreign currency translation	(294)		694
Ending balance	$	80,304	$	102,985

10. FAIR VALUE

Assets and liabilities measured at fair value on a recurring basis are summarized below:


	March 28, 2026
	Level 1		Level 2		Level 3		Total
	(in thousands)


Other assets measured at fair value:
Life insurance policies	$	—	$	56,482	$	—	$	56,482
Total assets measured at fair value	$	—	$	56,482	$	—	$	56,482

Accrued liabilities measured at fair value:
Contingent consideration	$	—	$	—	$	30,000	$	30,000



Total liabilities measured at fair value	$	—	$	—	$	30,000	$	30,000

The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. During the three months ended March 28, 2026, there were no transfers between levels.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


	December 27, 2025
	Level 1		Level 2		Level 3		Total
	(in thousands)

Other assets measured at fair value:
Life insurance policies	$	—	$	58,427	$	—	$	58,427

Total assets measured at fair value	$	—	$	58,427	$	—	$	58,427

Accrued liabilities measured at fair value:
Contingent consideration	$	—	$	—	$	30,000	$	30,000



Total liabilities measured at fair value	$	—	$	—	$	30,000	$	30,000

During the year ended December 27, 2025, there were no transfers between levels.

Contingent Consideration

The following table provides a rollforward of the contingent consideration related to the Company’s acquisitions.


	Three Months Ended
	March 28, 2026		March 29, 2025
	(in thousands)
Beginning balance	$	30,000	$	49,311



Adjustment of previously recorded contingent liability	—		909

Ending balance	$	30,000	$	50,220

The Company estimates the fair value of contingent consideration obligations through valuation models, such as probability-weighted and option pricing models, which incorporate probability adjusted assumptions and simulations related to the achievement of the milestones and the likelihood of making related payments. The unobservable inputs used in the fair value measurements include the probabilities of successful achievement of certain financial targets, forecasted results or targets, volatility, and discount rates. The remaining maximum potential payments are approximately $30.0 million, the full value of which is accrued as of March 28, 2026. As of March 28, 2026, the weighted average probability of achieving the maximum target is approximately 100%. The volatility and weighted average cost of capital is approximately 20% and 8%, respectively.

Debt Instruments

The book value of the Company’s revolving loans are variable rate loans carried at amortized cost which approximates the fair value. The fair value is based on significant other observable inputs, including current interest and foreign currency exchange rates, it is deemed to be Level 2 within the fair value hierarchy.

The book value of the Company’s Senior Notes are fixed rate obligations carried at amortized cost. Fair value is based on quoted market prices as well as borrowing rates available to the Company. As the fair value is based on significant other observable outputs, it is deemed to be Level 2 within the fair value hierarchy. The book value, excluding issuance costs, and fair value of the Company’s Senior Notes is summarized below:


	March 28, 2026				December 27, 2025
	Book Value		Fair Value		Book Value		Fair Value
	(in thousands)
4.25% Senior Notes due 2028	$	500,000	$	483,550	$	500,000	$	493,800
3.75% Senior Notes due 2029	500,000		470,600		500,000		483,550
4.00% Senior Notes due 2031	500,000		462,500		500,000		474,050

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

11. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table provides a rollforward of the Company’s goodwill:


	RMS		DSA (1)		Manufacturing (2)		Total
	(in thousands)
December 27, 2025	$	510,844	$	1,678,518	$	574,891	$	2,764,253
Acquisitions	—		340,985		—		340,985
Divestitures (3)	—		(46,653)		—		(46,653)
Foreign exchange	257		(14,376)		(4,434)		(18,553)
March 28, 2026	$	511,101	$	1,958,474	$	570,457	$	3,040,032
(1) DSA includes accumulated impairment losses of $1 billion, which were recognized in fiscal years 2008 and 2010.
(2) Manufacturing includes an accumulated impairment losses of $380 million, which was recognized in fiscal years 2024 and 2025.
(3) DSA divestiture balance represents balances transferred to assets held for sale in connection with the European Discovery Divestiture.

The increase in goodwill during the three months ended March 28, 2026 is primarily related to the acquisition of the Cambodian NHP Supplier in the DSA reportable segment; partially offset by the European Discovery Divestiture in the DSA reportable segment and the effect of foreign exchange.

Intangible Assets, Net

The following table displays intangible assets, net by major class:


	March 28, 2026						December 27, 2025
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
	(in thousands)
Client relationships	$	896,978	$	(668,985)	$	227,993	$	1,325,779	$	(1,016,198)	$	309,581
Technology	116,729		(106,606)		10,123		142,084		(124,172)		17,912
Trademarks and trade names	4,724		(3,288)		1,436		8,882		(6,869)		2,013

Other	18,398		(8,961)		9,437		21,052		(10,563)		10,489
Intangible assets	$	1,036,829	$	(787,840)	$	248,989	$	1,497,797	$	(1,157,802)	$	339,995

The decrease in intangible assets for the three months ended March 28, 2026 related primarily to the reclassification of certain intangible assets to assets held for sale included within Other assets associated with the European Discovery Divestiture and CDMO and Cell Solutions Divestiture, and to a lesser extent normal amortization over the useful lives.

Amortization expense of definite-lived intangible assets for three months ended March 28, 2026 and March 29, 2025 was $15.3 million and $65.3 million, respectively. Amortization expense for the three months ended March 29, 2025 includes $35.5 million of accelerated amortization expense as a result of a decrease in the remaining useful life of certain CDMO client relationships due to a loss of key customers in 2025.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

12. DEBT AND OTHER FINANCING ARRANGEMENTS

Long-term debt, net and finance leases consists of the following:


	March 28, 2026		December 27, 2025
	(in thousands)
Revolving facility	$	1,165,073	$	616,503
4.25% Senior Notes due 2028	500,000		500,000
3.75% Senior Notes due 2029	500,000		500,000
4.00% Senior Notes due 2031	500,000		500,000
Other debt	7,335		7,842
Finance leases	10,629		27,876
Total debt and finance leases	2,683,037		2,152,221
Less:
Current portion of long-term debt	6,699		166
Current portion of finance leases	1,587		3,228
Current portion of long-term debt and finance leases	8,286		3,394
Long-term debt and finance leases	2,674,751		2,148,827
Debt discount and debt issuance costs	(11,618)		(12,467)
Long-term debt, net and finance leases	$	2,663,133	$	2,136,360

As of March 28, 2026 and December 27, 2025, the weighted average interest rate on the Company’s debt was 3.95% and 4.05%, respectively.

Revolving Credit Facility

The Company has a revolving credit facility “Credit Facility” that provides for up to $2.0 billion of multi-currency revolving credit. The Credit Facility has a maturity date of December 2029, with no required scheduled payment before that date. The interest rates applicable to the revolving facility are equal to (A) for revolving loans denominated in U.S. dollars, at the Company’s option, either the base rate (which is the higher of (1) the prime rate, (2) the federal funds rate plus 0.50%, or (3) the one-month adjusted SOFR rate plus 1.0%) or the adjusted SOFR rate, (B) for revolving loans denominated in euros, the adjusted EURIBOR rate and (C) for revolving loans denominated in sterling, the daily simple SONIA rate, in each case, plus an interest rate margin based upon the Company’s leverage ratio.

Letters of Credit

As of March 28, 2026 and December 27, 2025, the Company had $22.0 million in outstanding letters of credit.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

13. EQUITY AND NONCONTROLLING INTERESTS

Earnings (Loss) Per Share

The following table reconciles the numerator and denominator in the computations of basic and diluted earnings (loss) per share:


	Three Months Ended
		March 28, 2026		March 29, 2025
		(in thousands)
Numerator:
Net income (loss)		$	(14,802)	$	25,878
Less: Net income attributable to noncontrolling interests		41		409
Net income (loss) attributable to common shareholders		(14,843)		25,469







Denominator:
Weighted-average shares outstanding - Basic		48,951		50,677
Effect of dilutive securities:
Stock options, restricted stock units and performance share units		—		176
Weighted-average shares outstanding - Diluted		48,951		50,853

Anti-dilutive common stock equivalents (1)(2)		615		958

(1) Anti-dilutive common stock equivalents represent amounts outstanding related to employee stock options, RSUs and PSUs for all periods presented.
(2) These common stock equivalents were outstanding for the periods presented, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.

Treasury Shares

On October 29, 2025, the Company’s Board of Directors approved a stock repurchase program of $1.0 billion. During the three months ended March 28, 2026, the Company repurchased 1.1 million shares of common stock for $200.0 million under the stock repurchase program. As of March 28, 2026, the Company had $800.0 million remaining on the authorized stock repurchase program.

The Company’s stock-based compensation plans permit the netting of common stock upon vesting of RSUs and PSUs in order to satisfy individual statutory tax withholding requirements. The Company acquired less than 0.1 million shares during the three months ended March 28, 2026 and March 29, 2025, for $8.3 million and $3.1 million, respectively, from such netting.

Accumulated Other Comprehensive Income (Loss)

Changes to each component of accumulated other comprehensive income (loss), net of income taxes, are as follows:


	Foreign Currency Translation Adjustment and Other		Pension and Other Post-Retirement Benefit Plans		Total
	(in thousands)
December 27, 2025	$	(120,167)	$	(51,616)	$	(171,783)
Other comprehensive income (loss)	(24,746)		894		(23,852)

Net current period other comprehensive income (loss)	(24,746)		894		(23,852)
Income tax (benefit) expense	(4,817)		224		(4,593)
March 28, 2026	$	(140,096)	$	(50,946)	$	(191,042)

Redeemable Noncontrolling Interests

The Company has held and continues to hold redeemable noncontrolling interests. Since the Company has the right to purchase, and the noncontrolling interest holders have the right to require the Company to purchase the remaining interest, which represents a derivative embedded within the equity instrument, the noncontrolling interest is classified in the mezzanine section of the unaudited condensed consolidated balance sheets, which is presented above the equity section and below liabilities.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The redeemable noncontrolling interests are measured at the greater of (i) the redemption amount or (ii) the historical value resulting from the original acquisition date fair value, increased or decreased for the noncontrolling interest’s share of net income (loss), equity capital contributions and distributions. The fair value of the redeemable noncontrolling interest is determined using the income approach, with key assumptions being projected cash flows and discount rates based on market participant’s weighted average cost of capital. To the extent redemption value exceeds carrying value, adjustments are recorded to additional paid-in capital, with any cumulative excess of redemption value over fair value recorded in retained earnings, which impacts net income (loss) attributable to common shareholders used in the calculation of earnings (loss) per common share.

Noveprim

The Company holds a 90% ownership interest in Noveprim. The Company has the right to purchase, and the noncontrolling interest holders have the right to sell, the remaining 10% equity interest at a fixed redemption value that ranges from $47.0 million to $54.0 million depending on when exercised. The Company has the call option right to purchase the remaining 10% equity up until one month after the sixth anniversary of closing the 41% equity stake (December 2029). On the first anniversary of the expiration of the call option (December 2030), a 12-month put option will be triggered giving the seller the right to require the Company to acquire the remaining shares of the seller for $54.0 million. The redemption value is accreted to the put purchase price of $54.0 million using the interest method through December 2030. As of March 28, 2026, the redemption value of $41.9 million exceeded the carrying value, resulting in an adjustment to additional paid in capital of $3.5 million for the three months ended March 28, 2026. As of March 29, 2025, the redemption value of $41.7 million exceeded the carrying value, resulting in an adjustment to additional paid in capital of $1.3 million.

Nonredeemable Noncontrolling Interest

The Company has an investment in an entity whose financial results are consolidated in the Company’s unaudited condensed consolidated financial statements, as it has the ability to exercise control over this entity. The interest of the noncontrolling party in this entity has been recorded as nonredeemable noncontrolling interest within Equity in the accompanying unaudited condensed consolidated balance sheets. The activity within the nonredeemable noncontrolling interest was not material during the three months ended March 28, 2026 and March 29, 2025.

14. INCOME TAXES

The Company’s effective tax rates for the three months ended March 28, 2026 and March 29, 2025 were 50.6% and 28.1%, respectively.


	March 28, 2026			March 29, 2025
	(in thousands, except percentages)
Income (loss) before income taxes	$	(29,942)		$	35,978
Provision (benefit) for income taxes	(15,140)			10,100
Effective tax rate	50.6		%	28.1		%

The difference in the effective tax rate for the three months ended March 28, 2026 compared to the corresponding prior year period was primarily attributable to the tax effects of the $118.0 million loss on assets held for sale in connection with the CDMO and Cell Solutions Divestiture, as well as accrued interest relating to acquired uncertain tax positions during the three months ended March 28, 2026.

For the three months ended March 28, 2026, the Company’s unrecognized tax benefits increased by $131.6 million to $158.1 million, primarily as a result of acquisitions. For the three months ended March 28, 2026, the amount of unrecognized income tax benefits that would impact the effective tax rate increased by $131.4 million to $153.2 million for the same reasons discussed above. The accrued interest and penalties on unrecognized tax benefits were $30.2 million and $32.7 million, respectively, as of March 28, 2026.

The Company’s prepaid and accrued tax positions are as follows:


	March 28, 2026		December 27, 2025		Affected Line Item in the Unaudited Condensed Consolidated Balance Sheets
	(in thousands)
Prepaid income tax	$	125,244	$	119,903	Other current assets
Accrued income taxes	48,739		39,016		Other current liabilities

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company conducts business in a number of tax jurisdictions. As a result, it is subject to tax audits on a regular basis including, but not limited to, such major jurisdictions as the U.S., the U.K., China, France, Germany, and Canada. With few exceptions, the Company is no longer subject to U.S. and international income tax examinations for years before 2021.

The Company and certain of its subsidiaries have ongoing tax controversies in the U.S., Canada, France, Ireland, the U.K., and India. The Company does not anticipate resolution of these audits will have a material impact on its unaudited condensed consolidated financial statements.

15. RESTRUCTURING AND ASSET IMPAIRMENTS

The Company has undertaken restructuring actions impacting the reportable segments at various locations across North America, Europe and Asia to manage the Company through the current demand environment, including appropriately right-sizing the Company’s infrastructure, optimizing operations, and driving efficiency. This includes workforce right-sizing actions resulting in severance and transition costs; and costs related to the consolidation of facilities resulting in long-lived asset impairments (principally property, plant, and equipment and right-of-use assets), accelerated depreciation charges, and certain other costs. Generally, these actions are in response to recent macroeconomic impacts on the Company.

The following table presents restructuring costs by reportable segment:


	Three Months Ended
		March 28, 2026		March 29, 2025
		(in thousands)
RMS		$	17,632	$	1,424
DSA		6,880		17,542
Manufacturing		462		3,711
Unallocated corporate		6,606		1,168
Total		$	31,580	$	23,845

The following table presents restructuring costs as included within the Company’s unaudited condensed consolidated statements of income:


	March 28, 2026						March 29, 2025
	Severance and Transition Costs		Asset Impairments and Other Costs		Total		Severance and Transition Costs		Asset Impairments and Other Costs		Total
	(in thousands)






Three Months Ended
Cost of services provided (excluding amortization of intangible assets)	$	4,791	$	21,194	$	25,985	$	7,698	$	13,173	$	20,871
Cost of products sold (excluding amortization of intangible assets)	1,199		1,191		2,390		263		1,233		1,496
Selling, general and administrative	228		2,977		3,205		453		1,025		1,478
Total restructuring costs	$	6,218	$	25,362	$	31,580	$	8,414	$	15,431	$	23,845

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Rollforward of Restructuring Activities

The following table provides a rollforward for the Company’s accrued restructuring costs related to all restructuring activities:


	Severance and Transition Costs		Asset Impairments		Other Costs		Total
	(in thousands)
Three Months Ended March 28, 2026
Beginning balance	$	23,005	$	—	$	—	$	23,005
Expense	6,218		15,561		9,801		31,580
Payments / utilization	(8,231)		—		(9,073)		(17,304)
Other non-cash adjustments	—		(15,561)		(728)		(16,289)
Foreign currency adjustments	(284)		—		—		(284)
Ending Balance	$	20,708	$	—	$	—	$	20,708

Three Months Ended March 29, 2025
Beginning balance	$	24,469	$	—	$	875	$	25,344
Expense	8,414		10,306		5,125		23,845
Payments / utilization	(9,052)		—		(5,268)		(14,320)
Other non-cash adjustments	—		(10,306)		143		(10,163)
Foreign currency adjustments	93		—		—		93
Ending Balance	$	23,924	$	—	$	875	$	24,799

As of March 28, 2026 and December 27, 2025, $20.7 million and $23.0 million, respectively, of severance and other personnel related costs liabilities were included in accrued compensation and accrued liabilities within the Company’s unaudited condensed consolidated balance sheets.

16. COMMITMENTS AND CONTINGENCIES

Litigation

A putative securities class action (Securities Class Action) was filed on May 19, 2023 against the Company and a number of its current/former officers in the United States District Court for the District of Massachusetts. On August 31, 2023, the court appointed the State Teachers Retirement System of Ohio as lead plaintiff. An amended complaint was filed on November 14, 2023 that, among other things, included only James Foster, the Chief Executive Officer and David R. Smith, the former Chief Financial Officer as defendants along with the Company. The amended complaint asserts claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the Exchange Act) on behalf of a putative class of purchasers of Company securities from May 5, 2020 through February 21, 2023, alleging that certain of the Company’s disclosures about its practices with respect to the importation of non-human primates made during the putative class period were materially false or misleading. On July 1, 2024, the court dismissed the complaint, denied the plaintiff’s informal request for leave to amend, and entered judgment for defendants. On July 30, 2025, the plaintiff filed a notice of appeal in the United States Court of Appeals for the First Circuit. Oral arguments took place on May 5, 2025. On August 15, 2025, the U.S. Court of Appeals for the First Circuit reversed in part the district court’s dismissal on the pleadings of the securities fraud claims. The case returned to U.S. District Court for the District of Massachusetts. On October 16, 2025, the plaintiff filed a motion to withdraw the State Teachers Retirement System of Ohio as lead plaintiff, due to lack of statutory standing, and substitute Oklahoma Firefighters Pension and Retirement System. While the Company cannot predict the final outcome of this matter, it believes the class action to be without merit and plans to vigorously defend against it. The Company cannot reasonably estimate the maximum potential exposure or the range of possible loss in association with this matter.

On November 8, 2023, a stockholder filed a derivative lawsuit in the U.S. District Court of the District of Delaware asserting claims on the Company’s behalf against the members of the Company’s Board of Directors and certain of the Company’s current/former officers (James Foster, the Chief Executive Officer; David R. Smith, a former Chief Financial Officer; and Flavia Pease, a former 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. On August 2, 2024, a different stockholder filed a lawsuit in the U.S. District Court of Delaware asserting similar derivative claims on the Company’s behalf against members of the Company’s current and former Board of Directors and the same current/former officers based on

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

similar allegations of purportedly misleading disclosures and non-compliance with legal rules and ethics standards in respect of the importation of non-human primates, as well as insider-trading claims against certain of the defendants. Both of these lawsuits are currently stayed by agreement of the parties pending further developments in the Securities Class Action pending in the United States Court of Appeals for the First Circuit. While the Company cannot predict the outcome of these matters, it believes the derivative lawsuits to be without merit and plans to vigorously defend against them. The Company cannot reasonably estimate the maximum potential exposure or the range of possible loss in association with these matters.

Aside from the matters above, the Company believes there are no other matters pending against the Company that could have a material impact on the Company’s business, financial condition, or results of operations.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

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