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Charles River Laboratories International Reports Operating Results (10-Q)

August 06, 2009 | About:

Charles River Laboratories International (CRL) filed Quarterly Report for the period ended 2009-06-27.

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 $2.07 billion; its shares were traded at around $31.34 with a P/E ratio of 11.5 and P/S ratio of 1.6. Charles River Laboratories International had an annual average earning growth of 6.4% over the past 5 years.

Highlight of Business Operations:

Our net income attributable to common shareholders was $34.2 million for the three months ended June 27, 2009, compared to $49.1 million for the three months ended June 28, 2008. Diluted earnings per share for the second quarter of 2009 were $0.52, compared to $0.70 for the second quarter of 2008.

Our operating income for the six months ended June 27, 2009 was $90.6 million compared to $132.8 million for the six months ended June 28, 2008, a decrease of 31.8%. Our operating margin was 14.9% for the six months ended June 27, 2009 compared to 19.3% for the prior year. Net income attributable to common shareholders was $59.6 million for the six months ended June 27, 2009 compared to $93.2 million for the six months ended June 28, 2008. Diluted earnings per share from continuing operations for the first six months of 2009 were $0.91 compared to $1.32 for the first six months of 2008.

Amortization of Other Intangibles. Amortization of other intangibles for the three months ended June 27, 2009 was $7.3 million, a decrease of $0.3 million, from $7.6 million for the three months ended June 28, 2008.

Amortization of Other Intangibles. Amortization of other intangibles for the six months ended June 27, 2009 was $13.4 million, a decrease of $1.8 million, from $15.2 million for the six months ended June 28, 2008.

As of June 27, 2009, we had $69.7 million in marketable securities with $50.3 million in time deposits and $19.4 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 these investments. 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 six months ending June 27, 2009 and June 28, 2008 was $149.0 million and $70.1 million, respectively. Our capital expenditures during the first six months of 2009 were $45.1 million, of which $13.9 million was related to RMS and $31.2 million to PCS. For 2009, we project capital expenditures to be in the range of $100-$110 million. We anticipate that future capital expenditures will be funded by operating activities and existing credit facilities. During the first half of 2009, we purchased $54.3 million of marketable securities. We paid $51.2 million for acquisitions during 2009, primarily related to our purchase of Piedmont Research Center in the second quarter.

Read the The complete ReportCRL is in the portfolios of Andreas Halvorsen of Viking Global Investors LP, Robert Olstein of Olstein Financial Alert Fund, Ron Baron of Baron Funds, Richard Pzena of Pzena Investment Management LLC, PRIMECAP Management.

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