Charles River Laboratories is a leading provider of critical research tools and integrated support services that enable innovative and efficient drug discovery and development. Charles River is the global leader inproviding the animal research models required in research and development for new drugs devices and therapies and has been in this business for more than 50 years. Charles River Laboratories International has a market cap of $1.88 billion; its shares were traded at around $28.13 with a P/E ratio of 9.8 and P/S ratio of 1.4. Charles River Laboratories International had an annual average earning growth of 6.4% over the past 5 years. Highlight of Business Operations: We are using this period of market uncertainty to streamline our operations, and have implemented actions to improve our operating efficiency. The actions we implemented in the first quarter of 2009 include initiating restrictions on hiring, a salary freeze for a substantial percentage of our workforce, including all incentive-eligible employees, continued tight control of discretionary spending and implementing a headcount reduction affecting 3% of our total workforce, predominately in our Preclinical Services (PCS) business segment, and the planned closure of our Arkansas facility. As a result of these actions, the Company recorded a charge for severance costs of $7.1 million or $0.07 per share in the first quarter. We expect that these actions will reduce costs by approximately $20.0 million in 2009, with an annual run-rate of approximately $25.0 million. We also are pursuing
Our net income was $25.4 million for the three months ended March 28, 2009, compared to $44.1 million for the three months ended March 29, 2008. Diluted earnings per share for the first quarter of 2009 were $0.38, compared to $0.63 for the first quarter of 2008.
Cost of Products Sold and Services Provided. Cost of products sold and services provided during the first quarter of 2009 was $193.3 million, a decrease of $14.0 million, or 6.8%, from $207.3 million during the first quarter of 2008. Cost of products sold and services provided during the three months ended March 28, 2009 was 64.1% of net sales, compared to 61.4% during the three months ended March 29, 2008 due to unfavorable utilization due to the lower sales.
Amortization of Other Intangibles. Amortization of other intangibles for the three months ended March 28, 2009 was $6.1 million, a decrease of $1.5 million, from $7.6 million for the three months ended March 29, 2008.
As of March 28, 2009, we had $55.0 million in marketable securities with $36.0 million in time deposits and $18.9 million in auction rate securities rated AAA by a major credit rating agency. Our auction rate securities are guaranteed by U.S. federal agencies. The current overall credit concerns in the capital markets as well as the failed auction status of these securities have impacted our ability to liquidate our auction rate securities. If the auctions for the securities we own continue to fail, the investment may not be readily convertible to cash until a future auction of these investments is successful. Based on our ability to access our cash and other short-term investments, our expected operating cash flows, and other sources of cash, we do not anticipate the current lack of liquidity on these investments will affect our ability to operate our business as usual.
Net cash used in investing activities for the three months ending March 28, 2009 and March 29, 2008 was $62.3 million and $10.3 million, respectively. Our capital expenditures during the first quarter of 2009 were $24.6 million, of which $7.6 million was related to RMS and $17.0 million to PCS. For 2009, we project capital expenditures to be in the range of $100-$120 million. We anticipate that future capital expenditures will be funded by operating activities marketable securities and existing credit facilities. During the first quarter of 2009, we purchased $37.7 million of marketable securities.
Read the The complete ReportCRL is in the portfolios of Robert Olstein of Olstein Financial Alert Fund, Ron Baron of Baron Funds, Andreas Halvorsen of Viking Global Investors LP, Richard Perry of Perry Capital, Richard Aster Jr of Meridian Fund.