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				Six Months Ended
	June 27, 2026		June 28, 2025		June 27, 2026		June 28, 2025
Service revenue	$	808,287	$	840,836	$	1,606,439	$	1,638,759
Product revenue	195,791		191,299		393,469		377,544
Total revenue	1,004,078		1,032,135		1,999,908		2,016,303
Costs and expenses
Cost of services provided (excluding amortization of intangible assets)	552,007		584,876		1,160,914		1,162,304
Cost of products sold (excluding amortization of intangible assets)	88,697		90,192		180,956		179,200
Selling, general and administrative	228,897		191,549		388,319		369,348
Amortization of intangible assets	14,589		65,384		29,934		130,648
Operating income	119,888		100,134		239,785		174,803
Other income (expense)
Interest income	1,032		1,097		2,065		2,501
Interest expense	(30,340)		(29,967)		(57,082)		(57,851)
Other (expense) income, net	(37,410)		154		(161,540)		(12,057)
Income before income taxes	53,170		71,418		23,228		107,396
Provision for income taxes	53,930		18,725		38,790		28,825
Net income (loss)	(760)		52,693		(15,562)		78,571
Less: Net income attributable to noncontrolling interests	722		367		763		776
Net income (loss) attributable to common shareholders	$	(1,482)	$	52,326	$	(16,325)	$	77,795







Earnings (loss) per common share
Basic	$	(0.03)	$	1.06	$	(0.34)	$	1.56
Diluted	$	(0.03)	$	1.06	$	(0.34)	$	1.55

Weighted-average number of common shares outstanding
Basic	48,021		49,149		48,486		49,913
Diluted	48,021		49,316		48,486		50,089







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				Six Months Ended
	June 27, 2026		June 28, 2025		June 27, 2026		June 28, 2025
Net income (loss)	$	(760)	$	52,693	$	(15,562)	$	78,571
Other comprehensive income (loss):
Foreign currency translation adjustment	(9,516)		121,220		(34,696)		181,601
Amortization of net loss, settlement losses, and prior service benefit included in total cost for pension and other post-retirement benefit plans	893		457		1,787		865

Other comprehensive income (loss), before income taxes	(8,623)		121,677		(32,909)		182,466
Less: Income tax expense (benefit) related to items of other comprehensive income	(3,122)		20,371		(7,715)		29,919
Comprehensive income (loss), net of income taxes	(6,261)		153,999		(40,756)		231,118
Less: Comprehensive income (loss) related to noncontrolling interests, net of income taxes	168		2,894		(225)		2,445
Comprehensive income (loss) attributable to Charles River Laboratories International, Inc., net of income taxes	$	(6,429)	$	151,105	$	(40,531)	$	228,673
































See Notes to Unaudited Condensed Consolidated Financial Statements.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands, except per share amounts)


	June 27, 2026		December 27, 2025
Assets
Current assets:
Cash and cash equivalents	$	192,025	$	213,770
Trade receivables and contract assets, net of allowances for credit losses of $8,715 and $10,463, respectively	711,755		708,856
Inventories	346,260		299,103
Prepaid assets	100,409		96,108
Other current assets	178,657		129,212
Total current assets	1,529,106		1,447,049
Property, plant and equipment, net	1,494,914		1,655,219
Venture capital and strategic equity investments	206,470		206,972
Operating lease right-of-use assets, net	330,247		361,415
Goodwill	3,076,851		2,764,253
Intangible assets, net	253,174		339,995
Deferred tax assets	53,827		67,334
Other assets	587,556		293,185
Total assets	$	7,532,145	$	7,135,422
Liabilities, Redeemable Noncontrolling Interests and Equity
Current liabilities:
Accounts payable	$	140,983	$	148,800
Accrued compensation	187,835		268,854
Deferred revenue	203,035		210,418
Accrued liabilities	380,101		270,085
Other current liabilities	222,792		222,158
Total current liabilities	1,134,746		1,120,315
Long-term debt, net and finance leases	2,619,985		2,136,360
Operating lease right-of-use liabilities	407,708		434,048
Deferred tax liabilities	78,668		95,203
Other long-term liabilities	402,511		138,302
Total liabilities	4,643,618		3,924,228
Commitments and contingencies (Notes 2, 12, 14, and 16)
Redeemable noncontrolling interests	42,537		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; 49,550 shares issued and 47,728 shares outstanding as of June 27, 2026, and 49,217 shares issued and outstanding as of December 27, 2025	496		492
Additional paid-in capital	1,986,023		1,947,301
Retained earnings	1,372,295		1,388,620
Treasury stock, at cost, 1,822 and zero shares, as of June 27, 2026 and December 27, 2025, respectively	(323,189)		—
Accumulated other comprehensive loss	(195,989)		(171,783)
Total Charles River Laboratories International, Inc. equity	2,839,636		3,164,630
Nonredeemable noncontrolling interest	6,354		5,301
Total equity	2,845,990		3,169,931
Total liabilities, redeemable noncontrolling interests and equity	$	7,532,145	$	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)


	Six Months Ended
	June 27, 2026		June 28, 2025
Cash flows relating to operating activities
Net income (loss)	$	(15,562)	$	78,571
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	134,441		239,871
Long-lived asset impairments	26,279		31,203
Stock-based compensation	42,162		30,184
Deferred income taxes	12,077		(41,030)
Write down of inventories	3,165		11,067
(Gains) losses and impairments on venture capital and strategic equity investments, net	(6,936)		12,899
Gain on sale of assets	(38,484)		—
Provision for credit losses	1,124		2,191
(Gain) loss on divestitures, net	181,386		(3,376)

Other, net	(12,595)		2,266
Changes in assets and liabilities:
Trade receivables and contract assets, net	(87,135)		(18,490)
Inventories	43,747		(13,953)
Accounts payable	21,276		16,241
Accrued compensation	(64,858)		38,990
Deferred revenue	5,593		11,306
Customer contract deposits	(4,543)		568
Other assets and liabilities, net	(20,335)		(22,208)
Net cash provided by operating activities	220,802		376,300
Cash flows relating to investing activities
Acquisition of businesses and assets, net of cash acquired	(467,254)		—
Capital expenditures	(87,013)		(94,622)
Purchases of investments and contributions to venture capital investments	(11,805)		(8,090)
Proceeds from sale of investments	11,059		2,106
Proceeds from sale of businesses and assets, net	176,563		17,441
Other, net	(1,298)		347
Net cash used in investing activities	(379,748)		(82,818)
Cash flows relating to financing activities
Proceeds from long-term debt and revolving credit facility	1,265,258		963,363
Payments on long-term debt, revolving credit facility, and finance lease obligations	(745,927)		(887,706)
Proceeds from exercises of stock options	1,620		1
Purchase of treasury stock	(323,881)		(360,484)
Payments of contingent consideration	(11,400)		(21,822)
Purchase of remaining equity interests of other redeemable noncontrolling interest	—		(19,140)
Other, net	(2,607)		(6,458)
Net cash provided by (used in) financing activities	183,063		(332,246)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	467		17,934
Net change in cash, cash equivalents, and restricted cash	24,584		(20,830)
Cash, cash equivalents, and restricted cash, beginning of period	215,997		205,570
Cash, cash equivalents, and restricted cash, end of period	$	240,581	$	184,740






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
Net income (loss)	187		—	—		—			(1,482)			—		—	—		(1,482)		535		(947)
Other comprehensive loss, net of tax	(554)		—	—		—			—			(4,947)		—	—		(4,947)		—		(4,947)
Dividends declared to noncontrolling interests	(606)		—	—		—			—			—		—	—		—		—		—
Adjustment of redeemable noncontrolling interest to redemption value	1,610		—	—		(1,610)			—			—		—	—		(1,610)		—		(1,610)


Issuance of stock under employee compensation plans	—		208	3		496			—			—		—	—		499		—		499
Purchase of treasury shares	—		—	—		—			—			—		647	(112,437)		(112,437)		—		(112,437)
Share repurchase excise tax	—		—	—		—			—			—		—	(762)		(762)		—		(762)
Stock-based compensation	—		—	—		19,781			—			—		—	—		19,781		—		19,781
June 27, 2026	42,537		49,550	496		1,986,023			1,372,295			(195,989)		1,822	(323,189)		2,839,636		6,354		2,845,990












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 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
Net income (loss)	(159)		—	—		—			52,326			—		—	—		52,326		526		52,852
Other comprehensive income, net of tax	2,527		—	—		—			—			98,779		—	—		98,779		—		98,779
Adjustment of redeemable noncontrolling interest to redemption value	2,383		—	—		(2,383)			—			—		—	—		(2,383)		—		(2,383)
Dividends declared to noncontrolling interests	(6,458)		—	—		—			—			—		—	—		—		—		—


Issuance of stock under employee compensation plans	—		143	1		—			—			—		—	—		1		—		1
Purchase of treasury shares	—		—	—		—			—			—		50	(6,787)		(6,787)		—		(6,787)
Stock-based compensation	—		—	—		17,049			—			—		—	—		17,049		—		17,049
June 28, 2025	39,956		51,344	513		1,992,718			1,889,895			(166,467)		2,136	(363,338)		3,353,321		6,309		3,359,630










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 Accounting Standards Update (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 and six month periods ended June 27, 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, with early adoption permitted. 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. The ASU is effective for fiscal years 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 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. In May 2026, the Company sold the Cell Solutions business, reported in the RMS segment, which supplied 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), in vivo (in research models) and in silico studies, laboratory support services, including bioanalytical and strategic non-clinical consulting and program management to support product development. In May 2026, the Company sold certain European Discovery Services businesses.

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). In May 2026, the Company sold the contract development and manufacturing products and services (CDMO) business, reported in the Manufacturing segment.

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 total consideration for the PathoQuest acquisition was $67.6 million, net of $0.5 million acquired cash. This amount consists of $62.3 million of cash consideration, $5.6 million representing the fair value for the 21% strategic equity interest previously owned by the Company, and an offsetting estimated post-closing adjustment for working capital of $0.3 million. The acquisition was funded through a combination of cash on hand and borrowings under the Credit Facility. PathoQuest’s results are reported within the Company’s Manufacturing reportable segment. The Company incurred transaction and integration costs in connection with the acquisition of $1.3 million and $1.9 million for the three and six months ended June 27, 2026, respectively, 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 and operating income (loss) have not been presented separately because PathoQuest financial results are not significant to the Company’s consolidated financial results.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 June 27, 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 $6.0 million and $12.5 million for the three and six months ended June 27, 2026, respectively, 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 and operating income (loss) have not been presented separately 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 allocations were as follows:


	PathoQuest SAS(1)		Cambodian NHP Supplier(1)
	April 17, 2026		January 14, 2026
	(in thousands)
Trade receivables	$	866	$	—
Inventories	841		114,688
Other current assets (excluding cash)	2,034		—
Property, plant and equipment, net	2,223		9,858
Operating lease right-of-use asset, net	1,941		—
Goodwill (2)	41,574		335,906
Intangible assets, net	20,033		—
Other assets (3)	8,598		282,517
Deferred revenue	(881)		—
Other current liabilities	(6,259)		(2,414)
Operating lease right-of-use liabilities	(1,954)		—
Other long-term liabilities (4)	(1,455)		(233,296)
Total purchase price allocation	$	67,561	$	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 these transactions is primarily attributable to the potential growth of the Company’s segments from new customers introduced to the acquired businesses or synergies to be realized from acquiring an internal supplier servicing the DSA business and the assembled workforce of the acquirees. With the exception of $102.6 million of goodwill related to the Cambodian NHP Supplier, which will be deductible for tax purposes upon making the remaining deferred payments, goodwill is not deductible for tax purposes.
(3) Other assets acquired resulting from Cambodian NHP Supplier include $283.0 million of biological assets, which will be amortized over an estimated eleven year useful life.
(4) Cambodian NHP Supplier other long-term liabilities include pre-acquisition uncertain tax positions of the seller associated with the acquired assets.

Measurement period adjustments recorded during the period, as well as the related effects on current period earnings, were immaterial.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The definite-lived intangible assets acquired were as follows:


		PathoQuest SAS
Definite-Lived Intangible Assets	(in thousands)
Client relationships		$	5,085
Developed technology		14,948
Total definite-lived intangible assets		$	20,033

Weighted Average Amortization Life
Client relationships		13
Developed technology		13
Total definite-lived intangible assets		13

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 May 22, 2026, the Company sold certain European Discovery Services businesses (European Discovery Divestiture) to IQVIA Inc. (IQVIA) for a preliminary purchase price of $125.2 million in cash, net of costs to sell and subject to certain customary closing adjustments. The Company may also earn up to $10.0 million of contingent payments, which are tied to future performance. The contingent payments have been valued at $2.8 million using a discounted probability weighted model. The results of the European Discovery Services businesses were reported in the Company’s DSA reportable segment. During the three and six months ended June 27, 2026, the Company recorded a pre-tax gain on the divestiture of $0.3 million within Other (expense) income, net on the unaudited condensed consolidated statements of income (loss).

Divestiture of CDMO and Cell Solutions

On May 6, 2026, the Company sold its CDMO and Cell Solutions businesses (CDMO and Cell Solutions Divestiture) to GI Partners (GI) for net cash paid to the buyer of $12.4 million, net of costs to sell and 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 to GI over a four-year period, which is expected to be fully used by GI. Conversely, the Company may also earn up to $50.0 million of contingent payments, which are tied to future performance and achievement of milestones. The contingent payments receivable have been valued at $15.7 million using a discounted probability weighted model. 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 and six months ended June 27, 2026, the Company recorded a pre-tax loss on the divestiture of $63.7 million and $181.7 million, respectively, within Other (expense) income, net on the unaudited condensed consolidated statements of income (loss). These businesses and the related assets and liabilities met the criteria for held-for-sale as of March 28, 2026, resulting in a pre-tax loss of $118.0 million recognized for the three months ended March 28, 2026, which represents the excess of its carrying value over the fair value less cost to sell.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As a result of the divestitures, the Company derecognized the net assets of the European Discovery Divestiture and CDMO and Cell Solutions Divestiture as follows:


	European Discovery Divestiture		CDMO and Cell Solutions Divestiture
	May 22, 2026		May 6, 2026
	(in thousands)
Assets
Current assets	$	50,464	$	67,330
Property, plant, and equipment, net	49,522		294
Operating lease right-of-use assets, net	19,083		—
Goodwill	37,701		—
Intangible assets, net	53,502		—
Other assets	1,268		14,285
Total assets	$	211,540	$	81,909

Liabilities
Current liabilities	37,177		33,709
Operating lease right-of-use liabilities	17,769		23,316
Long-term liabilities	31,671		2,925
Total liabilities	$	86,617	$	59,950

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				Six Months Ended
	June 27, 2026		June 28, 2025		June 27, 2026		June 28, 2025
	(in thousands)
Timing of Revenue Recognition:
RMS
Services and products transferred over time	$	94,370	$	97,748	$	188,573	$	194,752
Services and products transferred at a point in time	115,105		115,523		229,269		231,592
Total RMS revenue	209,475		213,271		417,842		426,344
DSA
Services and products transferred over time	605,935		617,865		1,202,168		1,209,385
Services and products transferred at a point in time	572		164		1,262		1,253
Total DSA revenue	606,507		618,029		1,203,430		1,210,638
Manufacturing
Services and products transferred over time	84,904		106,617		175,797		198,084
Services and products transferred at a point in time	103,192		94,218		202,839		181,237
Total Manufacturing revenue	188,096		200,835		378,636		379,321
Total revenue	$	1,004,078	$	1,032,135	$	1,999,908	$	2,016,303

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:


	June 27, 2026		December 27, 2025
	(in thousands)
Assets from contracts with customers
Client receivables	$	524,810	$	518,728
Unbilled revenue	195,660		200,591
Total	720,470		719,319
Less: Allowance for credit losses	(8,715)		(10,463)
Trade receivables and contract assets, net	$	711,755	$	708,856

Liabilities from contracts with customers
Current deferred revenue	$	203,035	$	210,418
Long-term deferred revenue (included in Other long-term liabilities)	48,137		45,632
Customer contract deposits (included in Other current liabilities)	100,447		106,599

Approximately 85% of unbilled revenue as of December 27, 2025, which was $201 million, was billed during the six months ended June 27, 2026. Approximately 85% of unbilled revenue as of December 28, 2024, which was $212 million, was billed during the six months ended June 28, 2025.

Approximately 70% of contract liabilities as of December 27, 2025, which was $256 million, were recognized as revenue during the six months ended June 27, 2026. Approximately 70% of contract liabilities as of December 28, 2024, which was $283 million, were recognized as revenue during the six months ended June 28, 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 $50 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 June 27, 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:


	Six Months Ended
		June 27, 2026		June 28, 2025
		(in thousands)
Beginning balance		$	10,463	$	18,301
Provisions		1,124		2,191
Reductions		(2,872)		(7,654)
Ending balance		$	8,715	$	12,838

Net recoveries were $0.2 million during the six months ended June 27, 2026, while net provision expenses were $1.0 million during the six months ended June 28, 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 June 27, 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 June 27, 2026 was $699.9 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 $8.7 million and $12.1 million in lease revenue during the three months ended June 27, 2026 and June 28, 2025. The Company recognized $20.9 million and $23.6 million in lease revenue during the six months ended June 27, 2026 and June 28, 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.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO 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				Six Months Ended
	June 27, 2026		June 28, 2025		June 27, 2026		June 28, 2025
	(in thousands)
RMS
Revenue	$	209,475	$	213,271	$	417,842	$	426,344
Cost of revenue (excluding amortization of intangible assets)	143,825		143,135		297,788		282,431
Selling, general and administrative	26,498		28,369		28,093		52,575
Amortization of intangible assets	2,875		5,981		5,911		11,947
Operating income	$	36,277	$	35,786	$	86,050	$	79,391

DSA
Revenue	$	606,507	$	618,029	$	1,203,430	$	1,210,638
Cost of revenue (excluding amortization of intangible assets)	412,340		421,907		847,500		842,050
Selling, general and administrative	60,115		60,270		107,639		125,563
Amortization of intangible assets	9,653		13,071		20,017		26,292
Operating income	$	124,399	$	122,781	$	228,274	$	216,733

Manufacturing
Revenue	$	188,096	$	200,835	$	378,636	$	379,321
Cost of revenue (excluding amortization of intangible assets)	84,539		110,026		196,582		217,023
Selling, general and administrative	35,890		32,416		65,603		66,448
Amortization of intangible assets	2,061		46,332		4,006		92,409
Operating income (loss)	$	65,606	$	12,061	$	112,445	$	3,441

Unallocated Corporate (1)
Selling, general and administrative	$	106,394	$	70,494	$	186,984	$	124,762
Operating loss	$	(106,394)	$	(70,494)	$	(186,984)	$	(124,762)

(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				Six Months Ended
	June 27, 2026		June 28, 2025		June 27, 2026		June 28, 2025
	(in thousands)
Revenue
RMS	$	209,475	$	213,271	$	417,842	$	426,344
DSA	606,507		618,029		1,203,430		1,210,638
Manufacturing	188,096		200,835		378,636		379,321
Total revenue	$	1,004,078	$	1,032,135	$	1,999,908	$	2,016,303

Operating Income (Loss)
RMS	$	36,277	$	35,786	$	86,050	$	79,391
DSA	124,399		122,781		228,274		216,733
Manufacturing	65,606		12,061		112,445		3,441
Segment operating income	226,282		170,628		426,769		299,565
Unallocated Corporate	(106,394)		(70,494)		(186,984)		(124,762)
Operating income	$	119,888	$	100,134	$	239,785	$	174,803
Other income (expense):
Interest income	1,032		1,097		2,065		2,501
Interest expense	(30,340)		(29,967)		(57,082)		(57,851)
Other (expense) income, net	(37,410)		154		(161,540)		(12,057)
Income (loss) before income taxes	$	53,170	$	71,418	$	23,228	$	107,396

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:
June 27, 2026	$	4,989	$	20,433	$	5,634	$	49	$	31,105
June 28, 2025	3,640		18,500		11,161		1,997		35,298
Six Months Ended:
June 27, 2026	$	16,557	$	57,942	$	11,908	$	606	$	87,013
June 28, 2025	10,926		53,021		28,440		2,235		94,622

Depreciation and amortization (1)
Three Months Ended:
June 27, 2026	$	15,733	$	41,633	$	7,389	$	2,535	$	67,290
June 28, 2025	19,710		42,575		55,343		1,879		119,507
Six Months Ended:
June 27, 2026	$	31,873	$	81,547	$	15,788	$	5,233	$	134,441
June 28, 2025	41,471		84,659		109,966		3,775		239,871
(1) Depreciation and amortization includes both inventory step up amortization expense and biological assets amortization expense.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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:
June 27, 2026	$	539,861	$	263,074	$	127,508	$	60,517	$	13,118	$	1,004,078
June 28, 2025	549,860		281,859		135,585		54,503		10,328		1,032,135

Six Months Ended:
June 27, 2026	$	1,083,670	$	540,651	$	237,075	$	115,998	$	22,514	$	1,999,908
June 28, 2025	1,086,815		545,109		260,938		96,445		26,996		2,016,303

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

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)
Property, plant and equipment, net
June 27, 2026	$	836,050	$	396,869	$	159,070	$	60,569	$	42,356	$	1,494,914
December 27, 2025	919,236		468,638		163,337		61,814		42,194		1,655,219

5. SUPPLEMENTAL CASH FLOW INFORMATION


	Six Months Ended
	June 27, 2026		June 28, 2025
	(in thousands)
Cash paid for income taxes	$	17,777	$	73,988
Cash paid for interest	53,199		55,115
Non-cash investing activities:
Purchases of Property, plant and equipment included in Accounts payable and Accrued liabilities	$	23,001	$	25,367
Assets acquired under finance leases	2,298		13

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


	June 27, 2026		June 28, 2025
	(in thousands)
Supplemental cash flow information:
Cash and cash equivalents	$	192,025	$	182,824

Restricted cash included in Other current assets	24,427		398
Restricted cash included in Other assets	24,129		1,518
Cash, cash equivalents, and restricted cash, end of period	$	240,581	$	184,740

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6. SUPPLEMENTAL BALANCE SHEET INFORMATION

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


	June 27, 2026		December 27, 2025
	(in thousands)
Bearer biological assets	$	391,609	$	135,647
Assets held for sale	—		21,223
Life insurance policies	83,273		66,318
Restricted cash	24,129		1,561
Long-term pension assets	36,984		37,256
Other long-term assets	51,561		31,180
Other assets	$	587,556	$	293,185

Subsequent to June 27, 2026, the Company surrendered certain company-owned life insurance policies. In connection with these transactions, the Company received aggregate proceeds of approximately $58.1 million. The carrying value of these policies at June 27, 2026 was $59.5 million, resulting in an immaterial pre-tax loss which will be recognized in the third quarter.

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


	June 27, 2026		December 27, 2025
	(in thousands)
Long-term pension liability, accrued executive supplemental life insurance retirement plan and deferred compensation plan	$	71,943	$	68,440
Long term tax liability	211,137		15,339

Deferred revenue	48,137		45,632
Other	71,294		8,891
Other long-term liabilities	$	402,511	$	138,302

7. INVENTORY

Inventories

The composition of inventories is as follows:


	June 27, 2026		December 27, 2025
	(in thousands)
Raw materials and supplies	$	32,094	$	40,959
Work in process	60,056		88,743
Finished products	254,110		169,401
Inventories	$	346,260	$	299,103

Inventory step up amortization expense for the three months ended June 27, 2026 and June 28, 2025 was $1.5 million and $4.2 million, respectively. Inventory step up amortization expense for the six months ended June 27, 2026 and June 28, 2025 was $1.5 million and $10.4 million, respectively.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

8. PROPERTY, PLANT AND EQUIPMENT, NET

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


	June 27, 2026		December 27, 2025
	(in thousands)
Land	$	72,702	$	72,022
Buildings (1)	1,096,562		1,097,572
Machinery and equipment (1)	984,500		1,093,556
Leasehold improvements	348,871		438,230
Furniture and fixtures	23,528		27,873
Computer hardware and software (1)	287,586		284,913
Vehicles (1)	5,904		7,152
Construction in progress	135,503		171,604
Total	2,955,156		3,192,922
Less: Accumulated depreciation	(1,460,242)		(1,537,703)
Property, plant and equipment, net	$	1,494,914	$	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 within Other assets on the unaudited condensed consolidated balance sheets.

Depreciation expense in the three months ended June 27, 2026 and June 28, 2025 was $39.3 million and $44.3 million, respectively. Depreciation expense in the six months ended June 27, 2026 and June 28, 2025 was $80.6 million and $87.7 million, respectively.

9. VENTURE CAPITAL AND STRATEGIC EQUITY INVESTMENTS

Venture capital investments are summarized below:


	Six Months Ended
	June 27, 2026		June 28, 2025
	(in thousands)
Beginning balance	$	125,696	$	116,561
Capital contributions	9,716		8,000
Distributions	(11,649)		(3,868)
Gains (losses) and impairments	9,961		(8,952)

Foreign currency translation	(351)		2,290
Ending balance	$	133,373	$	114,031

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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


	Six Months Ended
	June 27, 2026		June 28, 2025
	(in thousands)
Beginning balance	$	81,276	$	101,789
Purchase of investments	2,000		2,241
Distributions	(1,062)		—
Gains (losses) and impairments	(3,025)		(3,947)


Foreign currency translation	(470)		1,959
Reduction for acquisition of entities	(5,622)		—
Ending balance	$	73,097	$	102,042

10. FAIR VALUE

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


	June 27, 2026
	Level 1		Level 2		Level 3		Total
	(in thousands)


Other assets measured at fair value:
Life insurance policies	$	—	$	75,331	$	—	$	75,331
Total assets measured at fair value	$	—	$	75,331	$	—	$	75,331

Accrued liabilities measured at fair value:
Contingent consideration	$	—	$	—	$	22,500	$	22,500
Other long-term liabilities measured at fair value:
Contingent consideration	$	—	$	—	$	22,500	$	22,500

Total liabilities measured at fair value	$	—	$	—	$	45,000	$	45,000

The Company recognizes transfers between levels within the fair value hierarchy, if any, at the end of each quarter. During the six months ended June 27, 2026, there were no transfers between levels.


	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.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contingent Consideration

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


	Six Months Ended
	June 27, 2026		June 28, 2025
	(in thousands)
Beginning balance	$	30,000	$	49,311
Additions	45,000		—
Payments	(30,000)		(25,000)
Total gains or losses (realized/unrealized):
Adjustment of previously recorded contingent liability	—		1,819

Ending balance	$	45,000	$	26,130

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 $45.0 million, the full value of which is accrued as of June 27, 2026.

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, and 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:


	June 27, 2026				December 27, 2025
	Book Value		Fair Value		Book Value		Fair Value
	(in thousands)
4.25% Senior Notes due 2028	$	500,000	$	488,850	$	500,000	$	493,800
3.75% Senior Notes due 2029	500,000		478,000		500,000		483,550
4.00% Senior Notes due 2031	500,000		467,150		500,000		474,050

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	—		335,906		39,786		375,692
Divestitures	—		(37,701)		—		(37,701)
Foreign exchange	(551)		(19,320)		(5,522)		(25,393)
June 27, 2026	$	510,293	$	1,957,403	$	609,155	$	3,076,851
(1) DSA includes accumulated impairment losses of $1 billion, which were recognized in fiscal years 2008 and 2010.
(2) Manufacturing includes accumulated impairment losses of $380 million, which were recognized in fiscal years 2024 and 2025.

The increase in goodwill during the six months ended June 27, 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.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Intangible Assets, Net

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


	June 27, 2026						December 27, 2025
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
	(in thousands)
Client relationships	$	899,325	$	(679,409)	$	219,916	$	1,325,779	$	(1,016,198)	$	309,581
Technology	130,650		(107,075)		23,575		142,084		(124,172)		17,912
Trademarks and trade names	4,703		(3,367)		1,336		8,882		(6,869)		2,013

Other	18,164		(9,817)		8,347		21,052		(10,563)		10,489
Intangible assets	$	1,052,842	$	(799,668)	$	253,174	$	1,497,797	$	(1,157,802)	$	339,995

The decrease in intangible assets for the six months ended June 27, 2026 related primarily to the derecognition of certain intangible assets associated with the European Discovery Divestiture and CDMO and Cell Solutions Divestiture, and to a lesser extent normal amortization over the useful lives.

The following table details amortization expense of definite-lived intangible assets:


	Three Months Ended				Six Months Ended
	June 27, 2026		June 28, 2025		June 27, 2026		June 28, 2025
	(in thousands)
Amortization expense	$	14,589	$	65,384	$	29,934	$	130,648

Amortization expense for the three and six months ended June 28, 2025 includes $35.5 million and $71.0 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.

12. DEBT AND OTHER FINANCING ARRANGEMENTS

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


	June 27, 2026		December 27, 2025
	(in thousands)
Revolving facility	$	1,120,293	$	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	7,240		7,842
Finance leases	9,848		27,876
Total debt and finance leases	2,637,381		2,152,221
Less:
Current portion of long-term debt	5,460		166
Current portion of finance leases	1,166		3,228
Current portion of long-term debt and finance leases	6,626		3,394
Long-term debt and finance leases	2,630,755		2,148,827
Debt discount and debt issuance costs	(10,770)		(12,467)
Long-term debt, net and finance leases	$	2,619,985	$	2,136,360

As of June 27, 2026 and December 27, 2025, the weighted average interest rate on the Company’s debt was 4.08% and 4.05%, respectively.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Credit 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 June 27, 2026 and December 27, 2025, the Company had $21.7 million and $22.0 million, respectively, in outstanding letters of credit.

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				Six Months Ended
	June 27, 2026		June 28, 2025		June 27, 2026		June 28, 2025
	(in thousands)
Numerator:
Net income (loss)	$	(760)	$	52,693	$	(15,562)	$	78,571
Less: Net income attributable to noncontrolling interests	722		367		763		776
Net income (loss) attributable to common shareholders	(1,482)		52,326		(16,325)		77,795







Denominator:
Weighted-average shares outstanding - Basic	48,021		49,149		48,486		49,913
Effect of dilutive securities:
Stock options, restricted stock units and performance share units	—		167		—		176
Weighted-average shares outstanding - Diluted	48,021		49,316		48,486		50,089

Anti-dilutive common stock equivalents (1)(2)	858		1,128		637		1,003


(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 six months ended June 27, 2026, the Company repurchased 1.7 million shares of common stock for $300.0 million under the stock repurchase program. As of June 27, 2026, the Company had $700.0 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 0.1 million shares during the six months ended June 27, 2026 and 0.1 million shares in the six months ended June 28, 2025, for $20.7 million and $9.9 million, respectively, from such netting.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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)	(33,708)		1,787		(31,921)

Net current period other comprehensive income (loss)	(33,708)		1,787		(31,921)
Income tax (benefit) expense	(8,132)		417		(7,715)
June 27, 2026	$	(145,743)	$	(50,246)	$	(195,989)

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.

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 Group (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 June 27, 2026, the redemption value of $42.5 million exceeded the carrying value, resulting in an adjustment to additional paid in capital of $5.2 million for the six months ended June 27, 2026. As of June 28, 2025, the redemption value of $40.0 million exceeded the carrying value, resulting in an adjustment to additional paid in capital of $3.7 million for the six months ended June 28, 2025.

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 and six months ended June 27, 2026 and June 28, 2025.

14. INCOME TAXES

The Company’s effective tax rates were as follows:


	Three Months Ended						Six Months Ended
	June 27, 2026			June 28, 2025			June 27, 2026			June 28, 2025
	(in thousands, except percentages)
Income before income taxes	$	53,170		$	71,418		$	23,228		$	107,396
Provision for income taxes	53,930			18,725			38,790			28,825
Effective tax rate	101.4		%	26.2		%	167.0		%	26.8		%

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The difference in the effective tax rate for the three and six months ended June 27, 2026 compared to the corresponding prior year period was primarily attributable to the tax effects of the European Discovery and CDMO and Cell Solutions Divestitures, non-deductible transaction costs, and higher accrued interest relating to acquired uncertain tax positions.

For the three months ended June 27, 2026, the Company’s unrecognized tax benefits increased by $0.1 million to $158.2 million, primarily due to increases from acquisitions, offset by decreases from divestitures. For the three months ended June 27, 2026, the amount of unrecognized income tax benefits that would impact the effective tax rate increased by $0.1 million to $153.3 million for the same reasons discussed above. The accrued interest and penalties on unrecognized tax benefits were $32.7 million and $34.2 million, respectively, as of June 27, 2026.

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


	June 27, 2026		December 27, 2025		Affected Line Item in the Unaudited Condensed Consolidated Balance Sheets
	(in thousands)
Prepaid income tax	$	141,913	$	119,903	Other current assets
Accrued income taxes	45,027		39,016		Other current liabilities

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 2022.

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 within each of its reportable segments which include right-sizing the 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				Six Months Ended
	June 27, 2026		June 28, 2025		June 27, 2026		June 28, 2025
	(in thousands)
RMS	$	7,748	$	7,419	$	25,380	$	8,843
DSA	7,007		16,076		13,887		33,618
Manufacturing	717		7,444		1,179		11,155
Unallocated corporate	7,585		1,261		14,191		2,429
Total	$	23,057	$	32,200	$	54,637	$	56,045

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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


	June 27, 2026						June 28, 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)	$	1,436	$	13,699	$	15,135	$	(1,308)	$	26,451	$	25,143
Cost of products sold (excluding amortization of intangible assets)	(24)		528		504		(95)		1,425		1,330
Selling, general and administrative	841		6,577		7,418		5,130		597		5,727
Total restructuring costs	$	2,253	$	20,804	$	23,057	$	3,727	$	28,473	$	32,200

Six Months Ended
Cost of services provided (excluding amortization of intangible assets)	$	6,227	$	34,893	$	41,120	$	6,390	$	39,624	$	46,014
Cost of products sold (excluding amortization of intangible assets)	1,175		1,719		2,894		168		2,658		2,826
Selling, general and administrative	1,069		9,554		10,623		5,583		1,622		7,205
Total restructuring costs	$	8,471	$	46,166	$	54,637	$	12,141	$	43,904	$	56,045

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)
Six Months Ended June 27, 2026
Beginning balance	$	23,005	$	—	$	—	$	23,005
Expense	8,471		26,086		20,080		54,637
Payments / utilization	(15,794)		—		(16,408)		(32,202)
Other non-cash adjustments	—		(26,086)		(3,672)		(29,758)
Foreign currency adjustments	(114)		—		—		(114)
Ending Balance	$	15,568	$	—	$	—	$	15,568

Six Months Ended June 28, 2025
Beginning balance	$	24,469	$	—	$	875	$	25,344
Expense	12,141		31,062		12,842		56,045
Payments / utilization	(20,020)		—		(12,458)		(32,478)
Other non-cash adjustments	—		(31,062)		(1,259)		(32,321)
Foreign currency adjustments	474		—		—		474
Ending Balance	$	17,064	$	—	$	—	$	17,064

As of June 27, 2026 and December 27, 2025, $15.6 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.

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 then current Chief Executive Officer and David R. Smith, the former Chief Financial Officer as defendants along with the Company. The amended complaint asserts claims under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the Exchange Act) on behalf of a putative class of purchasers of Company securities from May 5, 2020 through February 21, 2023, alleging that certain of the Company’s disclosures about its practices with respect to the importation of non-human primates made during the putative class period were materially false or misleading. On July 1, 2024, the court dismissed the complaint, denied the plaintiff’s informal request for leave to amend, and entered judgment for defendants. On July 30, 2024, the plaintiff filed a notice of appeal in the United States Court of Appeals for the First Circuit. 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 then current Chief Executive Officer; David R. Smith, a former Chief Financial Officer; and Flavia Pease, the then 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. 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 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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