Charles River Laboratories International, Inc. · NYSE:CRL
Charles River Laboratories International — Investor Presentation (November 2002)
25 slides from Charles River Laboratories International's investor presentation, Nov 27, 2002
Slide 1: A unique focus on the pre-clinical space
A unique focus on the pre-clinical space INVESTMENT HIGHLIGHTS • Predictable and consistent financial performance • Leading market shares • Longstanding customers • Acquisition track record • Experienced management team • Growth driven by pharma R&D spending • Preclinical outsourcing INVESTMENT HIGH
Slide 2: Production and laboratory facilities in 16 countries
production and laboratory facilities in 16 countries contract staffing locations CRITICAL PATH TO DRUG DEVELOPMENT
Slide 3: Growth in Pharma R&D Spending
GROWTH IN PHARMA R&D SPENDING
Slide 4: U.S. Pharma R&D spending and business segments
Source: 2001 PhRMA Annual Survey—U.S. Pharma R&D spending, domestic and abroad. BUSINESS SEGMENTS Research Models Biomedical Products & Services
Slide 5: Revenue Composition
REVENUE COMPOSITION 2001 Sales: $466 million
Slide 6: Customers and animal research models
• Customers include all major pharmaceutical and biotech companies • No commercial customer accounts for > 3% of revenues ANIMAL RESEARCH MODELS: 42% OF REVENUES • More than 130 genetically and virally defined research models • Movement towards disease models—Diabetes, Alzheimer's, Cardiovascular •
Slide 7: Unique Competitive Advantages
UNIQUE COMPETITIVE ADVANTAGES • Global reach • Long-standing customer relationships • Scientific depth • Biosecurity
Slide 8: Market Share Leader
MARKET SHARE LEADER 2001 Worldwide Market Opportunity: $475+ million
Slide 9: Charles River is 4x Larger than its Next Competitor
Charles River is 4x Larger than its Next Competitor Source: Company estimates NEW DEVELOPMENTS STRATEGIC PARTNERSHIP WITH THE JACKSON LABORATORIES • Premier mammalian genetic research institution • Hundreds of unique mouse models • Exclusive distribution in Europe and Japan
Slide 10: Capacity Expansion
CAPACITY EXPANSION • Canada production facility • Added 25% more space • Massachusetts production facility • Added 40% more space • California production facility • Added 33% more space
Slide 11: Charles River is #1 in all major markets
Charles River is #1 in all major markets DISCOVERY SERVICES Transgenic Services • Facilities in US, France, Japan Laboratory and Research Services • Genetic testing • Infectious disease testing • Drug efficacy testing Contract Site Management • $25 million five-year NCI-Frederick contract 4 year CAG
Slide 12: New Developments: Discovery Services
NEW DEVELOPMENTS DISCOVERY SERVICES • Growth of Transgenic Services business • New facility in Wilmington, MA added 70,000 sq ft—50% occupied, 50% expansion space
Slide 13: Discovery & Development Services
DISCOVERY & DEVELOPMENT SERVICES • Contract site management • 9 new contracts worldwide • 10% headcount increase
Slide 14: Major Acquisitions: Biolabs
2001 pro forma growth of 20% (4 year CAGR: 156%) MAJOR ACQUISITIONS BIOLABS —June 2002 Description Privately held pre-clinical outsourcing services in western Ireland Performs bioassay, animal health, and medical device support 2001 Revenue $10 million Rationale Established a base for expansion of o
Slide 15: Major Acquisitions: Springborn Laboratories
MAJOR ACQUISITIONS SPRINGBORN LABORATORIES —October 2002 Description Privately held Ohio-based general and specialty toxicology services LTM Revenue $15 million Rationale Expanded geographic base and customer base to medium and small biopharmaceutical customers EPS Impact Neutral to slightly accreti
Slide 16: Joint Venture: Charles River Proteomics Services
JOINT VENTURE CHARLES RIVER PROTEOMICS SERVICES—October 2002 80/20 joint venture between Charles River and Proteome Systems Ltd provides leading-edge proteomics testing and analysis to enable researchers to rapidly identify proteins that may have commercial value as drug targets, biomarkers, or as t
Slide 17: Proteome Systems
proteome systems integrated proteome technology
Slide 18: In Vitro Technologies
IN VITRO TECHNOLOGIES • Only FDA-approved alternative to animal testing • Endotoxin testing for injectable drug / medical device lot release 4 year CAGR: 18%
Slide 19: In Vitro (Non-Animal) Technologies: Expanded Market Opportunities
IN VITRO (NON-ANIMAL) TECHNOLOGIES— EXPANDED MARKET OPPORTUNITIES • In Vitro Pyrogen Test • Aimed at $50 million market for lot-release testing of products derived from human blood and biologicals
Slide 20: Corporate Objective: Deliver 20% Annual Growth
CORPORATE OBJECTIVE: DELIVER 20% ANNUAL GROWTH * DRIVERS • Increased pharma/biotech R&D spending • Increased outsourcing • Investment in genomics and proteomics • Creating new specialty models • Expanding in vitro technologies • Increased R&D focus • Acquisitions * Assumes 12-15% organic growth and
Slide 21: Growth Through Strategic Acquisitions
Note: Results are not to scale. GROWTH THROUGH STRATEGIC ACQUISITIONS • 21 acquisitions and alliances since 1994 • Stringent criteria for acquisitions • Non-dilutive • 20% operating margin • 15%+ top-line growth • Leading player • Scientific leadership • Leverage worldwide infrastructure FINANCIAL O
Slide 22: Net Sales
Net Sales Re 11% cAGR: Biomedical Products & Services 4-Year CAGR: 52% (Sin millions) sat17 1998 1999 2000 ©2001, 93.2001 @3 2002 YTD 2001 YTD 2002
Slide 23: Operating margins by segment
1999 +2000 2001 @32001 3.2002 ‘YTD 2001 YTD 2002 1998 largins: Segments 20.3% 208% 21.9% 20.9% 217% 25.2% 22.0% 25.4% Corporate 17.2% 186% 21.2% © 19.4% 19.4% 23.0% 20.0% 22.2% I Research Models Ill Biomedical Products & Services
Slide 24: Solid Financial Performance
SOLID FINANCIAL PERFORMANCE • Exceeded Wall Street earnings estimates in all 9 quarters post IPO • Provided guidance of $1.41 to $1.43 for CY 2002 vs. $0.94 for CY 2001(1)
Slide 25: Strong Capitalization and Financial Objectives
(1) Excludes $0.02 Q4:01 consolidation charge. STRONG CAPITALIZATION As of Dec. 29, 2001 As of Sept. 28, 2002 Actual Actual ($ in millions) Cash & Cash Equivalents $ 58.3 $ 117.4 Term Loans $ 68.6 $ 0.0 Senior Subordinated Notes 78.9 0.0 Other Debt 9.3 3.5 Senior Convertible Debentures 0.0 185.0 Tot
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