Charles River Laboratories International, Inc. (CRL) Q1 2026 Earnings Call

Investor webinar replay

Replay transcript excerpt

outlook has increased by approximately $8 million to a range of $103 to $108 million, primarily attributable to short-term borrowings to fund stock repurchases in the first quarter. At the end of the first quarter, our net leverage was 2.6 times. The non-GAAP tax rate in the first quarter was 22.5%, a decrease of 20 basis points year-over-year, due primarily to the favorable impact from last year's enactment of OB3, or the One Big Beautiful Bill. Our non-GAAP tax rate guidance for the full year remains unchanged at 22% to 23%, although it's currently trending towards the lower end of the range due to a favorable geographic mix. Free cash flow was negative $15 million in the first quarter, or a reduction of $127 million compared to the prior year period. This decline was expected and mainly driven by higher performance-based cash bonus payments for 2025, which are paid in the first quarter. CapEx declined modestly to $56 million, or approximately 5.6% of revenue in the first quarter, from $59 million last year. Our free cash flow outlook remains unchanged at $375 to $400 million in 2026. Turning to 2026 full-year guidance, we are reaffirming our organic revenue and non-GAAP earnings per share guidance, which had previously factored in the impact of the divestitures. All of our guidance referenced today assumes the planned divestiture of certain European discovery sites being completed in May, and as Birgit mentioned, we have completed the divestiture of the CDMO and cell solutions businesses this week. We continue to expect an organic revenue decline of 0.5% to 1.5% and non-GAAP earnings per share of $10.80 to $11.30 or 5% to 10% growth over 2025. This guidance includes earnings accretion of approximately $0.10 per share from the divestitures. On a reported basis, we ...