Charles River Laboratories International CRL · USD

SEGMENT AND GEOGRAPHIC INFORMATIONThe 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 (loss). Operating income (loss) is the measure of profit or loss regularly provided to and used by the CODM to assess performance and allocate resources. Operating income (loss) is defined as revenue less costs of revenue; selling, general, and administrative expenses; amortization of intangible assets; goodwill impairments; and intangible asset impairments. For each segment, the CODM uses operating income (loss) 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.

REVENUE FROM CONTRACTS WITH CUSTOMERSDisaggregation of RevenueThe following table disaggregates the Company’s revenue by reportable segment and timing of transfer of products or services:Timing of Revenue Recognition:202520242023(in thousands)RMSServices and products transferred over time$389,091 $380,899 $377,947 Services and products transferred at a point in time456,991 448,478 414,396 Total RMS revenue846,082 829,377 792,343 DSAServices and products transferred over time2,400,414 2,446,751 2,611,564 Services and products transferred at a point in time2,477 4,529 4,059 Total DSA revenue2,402,891 2,451,280 2,615,623 ManufacturingServices and products transferred over time383,682 407,474 381,942 Services and products transferred at a point in time382,727 361,858 339,501 Total Manufacturing revenue766,409 769,332 721,443 Total revenue$4,015,382 $4,049,989 $4,129,409 Contract Balances from Contracts with CustomersThe following table provides information about client receivables, contract assets, and contract liabilities from contracts with customers:December 27, 2025December 28, 2024(in thousands)Assets from contracts with customersClient receivables$518,728 $527,705 Unbilled revenue200,591 211,511 Total719,319 739,216 Less: Allowance for credit losses(10,463)(18,301)Trade receivables and contract assets, net$708,856 $720,915 Liabilities from contracts with customersCurrent deferred revenue$210,418 $248,322 Long term deferred revenue (included in Other long-term liabilities)45,632 34,291 Customer contract deposits (included in Other current liabilities)106,599 89,446 Approximately 90% of unbilled revenue as of December 28, 2024, which was $212 million, was billed during fiscal year 2025. Approximately 90% of unbilled revenue as of December 30, 2023, which was $228 million, was billed during fiscal year 2024.Approximately 80% of contract liabilities as of December 28, 2024, which was $283 million were recognized as revenue during fiscal year 2025. Approximately 80% of contract liabilities as of December 30, 2023, which was $273 million, were recognized as revenue during fiscal year 2024.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.

COMMITMENTS AND CONTINGENCIESInsuranceThe Company maintains certain insurance policies that maintain large deductibles up to approximately $2 million, some with or without stop-loss limits, depending on market availability. Insurance policies at certain locations are based on a percentage of the insured assets, for which deductibles for certain property may exceed $15.0 million in the event of a catastrophic event. In addition, the Company purchased representation and warranty insurance in support of some acquisitions, in which deductibles could reach $4.4 million.LitigationOn February 17, 2023, the Company received a grand jury subpoena requesting certain documents related to an investigation by the U.S. Department of Justice (DOJ) and the U.S. Fish and Wildlife Service (USFWS) into the Company’s conduct regarding several shipments of non-human primates from Cambodia in late 2022 and early 2023 (the NHP Shipments). The DOJ also undertook a parallel civil investigation related to the NHP Shipments. Due to a number of factors, including the age of these NHP’s, during the fourth quarter of fiscal year 2024, the Company recorded a charge of $27 million to costs of products sold within the accompanying consolidated statements of income (loss) to reflect the reduction in carrying value of this inventory to zero. In July 2025, the Company was informed that USFWS had determined to clear the NHP Shipments for legal entry into the United States. Furthermore, in August 2025 the Company was advised by the DOJ that both the grand jury investigation and the parallel civil investigation had been closed. On May 16, 2023, the Company received an inquiry from the Enforcement Division of the U.S. Securities and Exchange Commission (SEC) requesting it to voluntarily provide information, subsequently augmented with a document subpoena and additional inquiries, primarily related to the sourcing of non-human primates and related disclosures, and the Company cooperated with the requests. The Company’s Audit Committee retained counsel to conduct an independent investigation into certain issues raised in the investigations. On November 14, 2025, the SEC’s Division of Enforcement (Division) notified the Company that it concluded its investigation and, based on the information available to the Division, it does not intend to recommend an enforcement action by the SEC against the Company.

DEBT AND OTHER FINANCING ARRANGEMENTSLong-term debt, net and finance leases consists of the following:December 27, 2025December 28, 2024(in thousands)Revolving credit facility$616,503 $714,948 4.25% Senior Notes due 2028500,000 500,000 3.75% Senior Notes due 2029500,000 500,000 4.00% Senior Notes due 2031500,000 500,000 Other debt7,842 15,603 Finance leases 27,876 28,444 Total debt and finance leases2,152,221 2,258,995 Less:Current portion of long-term debt166 155 Current portion of finance leases3,228 2,774 Current portion of long-term debt and finance leases3,394 2,929 Long-term debt and finance leases2,148,827 2,256,066 Debt discount and debt issuance costs(12,467)(15,861)Long-term debt, net and finance leases$2,136,360 $2,240,205 As of December 27, 2025 and December 28, 2024, the weighted average interest rate on the Company’s debt was 4.05% and 4.48%, respectively.Revolving Credit FacilityIn fiscal 2024, the Company modified its revolving credit facility “Credit Facility”. The Credit Facility provides for up to $2.0 billion (reduced from $3.0 billion) and has a maturity date of December 2029 (previously April 2026), with no required scheduled payment before that date. The terms of the Credit Facility are substantially the same with the interest rates 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. The Credit Facility includes certain customary representations and warranties, events of default, notices of material adverse changes to the Company’s business and negative and affirmative covenants. These covenants include (1) maintenance of a ratio of consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) less capital expenditures to consolidated cash interest expense, for any period of four consecutive fiscal quarters, of no less than 3.50 to 1.

INCOME TAXESThe components of income from operations before income taxes and the related provision for income taxes are presented below: Fiscal Year 202520242023(in thousands)Income (loss) before income taxes: U.S. $(290,645)$(290,308)$185,667 Non-U.S. 191,142 383,422 395,617 Total income (loss) before income taxes$(99,503)$93,114 $581,284 Income tax provision (benefit): Current: Federal$10,872 $36,349 $49,090 Foreign97,428 86,493 85,356 State9,729 12,175 17,817 Total current118,029 135,017 152,263 Deferred: Federal(40,755)(50,555)(42,987)Foreign(22,415)(6,922)779 State(12,199)(9,717)(9,141)Total deferred(75,369)(67,194)(51,349)Total provision for income taxes$42,660 $67,823 $100,914 Reconciliations of the statutory U.S. federal income tax rate to effective tax rates are as follows:Fiscal Year2025(in thousands)U.S. federal statutory tax rate(20,896)21.0 %State and local income taxes, net of federal income tax effect (1)(4,653)4.7 %Effect of cross-border tax lawsGlobal intangible low-taxed income, net of foreign tax credits6,284 (6.3)%Other17 — %Tax creditsResearch and development credit(2,721)2.7 %Change in valuation allowance2,040 (2.1)%Nontaxable or nondeductible ItemsStock-based compensation4,468 (4.5)%Goodwill impairment8,032 (8.1)%Nondeductible compensation4,961 (5.0)%Impact of acquisition and restructuring5,541 (5.6)%Other3,888 (3.5)%Foreign tax effectsCanadaEffect of rates different than statutory(9,790)9.8 %Tax on unremitted earnings6,946 (7.0)%Research and development credit(23,230)23.3 %Local income taxes22,182 (22.3)%Other(31)— %ChinaEffect of rates different than statutory(3,212)3.2 %Tax on unremitted earnings2,320 (2.3)%Other765 (0.8)%FranceEffect of rates different than statutory4,186 (4.2)%Research and development credit(2,785)2.8 %Other385 (0.4)%GermanyLocal income taxes2,376 (2.4)%Other(118)0.1 %IrelandEffect of rates different than statutory(2,534)2.5 %Other1,077 (1.1)%LuxembourgChange in valuation allowance(13,172)13.2 %Enactment of new tax laws13,172 (13.2)%Other11 — %MauritiusEffect of rates different than statutory(1,875)1.9 %Enactment of new tax laws3,154 (3.2)%Foreign local taxes - Qualified domestic minimum top-up tax3,514 (3.5)%Other(342)0.3 %United KingdomChange in valuation allowance9,188 (9.2)%Effect of rates different than statutory(5,991)6.0 %Goodwill impairment31,126 (31.3)%Impact of acquisition and restructuring1,847 (1.9)%Other(841)0.8 %Other foreign jurisdictions33 — %Changes in unrecognized tax benefits(2,662)2.

STOCK-BASED COMPENSATIONThe Company has stock-based compensation plans under which employees and non-employee directors are granted stock-based awards such as stock options, RSUs, and PSUs.During fiscal years 2025, 2024, and 2023, the primary share-based awards and their general terms and conditions are as follows:•Stock options, which entitle the holder to purchase a specified number of shares of common stock at an exercise price equal to the closing market price of common stock on the date of grant; typically vest over 4 years; and typically expire 10 years from date of grant.•RSUs, which represent an unsecured promise to grant at no cost a set number of shares of common stock upon the completion of the vesting schedule, and principally vest over 4 years. With respect to RSUs, recipients are not entitled to cash dividends and have no voting rights on the stock during the vesting period.•PSUs, which entitle the holder to receive at no cost, a specified number of shares of common stock within a range of shares from zero to a specified maximum and typically vest over 3 years. Payout of this award is contingent upon achievement of certain performance and market conditions.As of December 27, 2025, approximately 2.2 million shares were authorized for future grants under the Company’s share-based compensation plans. The Company settles employee share-based compensation awards with newly issued shares. The following table provides stock-based compensation by the financial statement line item in which it is reflected:Fiscal Year202520242023(in thousands)Cost of revenue$16,715 $15,658 $15,052 Selling, general and administrative54,368 54,233 56,996 Stock-based compensation, before income taxes71,083 69,891 72,048 Provision for income taxes(11,083)(10,487)(10,907)Stock-based compensation, net of income taxes$60,000 $59,404 $61,141 No stock-based compensation related costs were capitalized in fiscal years 2025, 2024, and 2023.Stock OptionsThe following table summarizes stock option activity under the Company’s stock-based compensation plans:Number of sharesWeighted AverageExercise PriceWeighted AverageRemainingContractual LifeAggregateIntrinsicValue(in thousands)(in years)(in thousands)Options outstanding as of December 28, 2024710 $231.19 Options granted21 $135.00 Options exercised(1)$179.66 Options canceled(40)$235.95 Options outstanding as of December 27, 2025690 $228.10 6.22$6,599 Options exercisable as of December 27, 2025518 $236.41 5.

LEASESOperating and Finance LeasesRight-of-use lease assets and lease liabilities are reported in the Company’s consolidated balance sheets as follows:December 27, 2025December 28, 2024(in thousands)Operating leasesOperating lease right-of-use assets, net$361,415 $412,490 Other current liabilities$57,663 $54,159 Operating lease right-of-use liabilities434,048 483,789 Total operating lease liabilities$491,711 $537,948 Finance leasesProperty, plant and equipment, net$24,664$28,900Current portion of long-term debt and finance leases$3,228$2,774Long-term debt, net and finance leases24,64825,670Total finance lease liabilities$27,876$28,444The following table presents the components of operating and finance lease costs within the Company’s consolidated statements of income (loss):Fiscal Year202520242023(in thousands)Operating lease costs$70,800 $71,058 $65,380 Finance lease costs:Amortization of right-of-use assets3,084 3,111 2,745 Interest on lease liabilities1,391 1,548 1,477 Short-term lease costs1,322 3,904 3,581 Variable lease costs40,134 29,192 22,159 Sublease income(2,804)(2,156)(2,067)Total lease costs$113,927 $106,657 $93,275 Other information related to leases was as follows:Supplemental cash flow informationFiscal Year202520242023(in thousands)Cash flows included in the measurement of lease liabilities:Operating cash flows from operating leases$78,730 $74,732 $60,239 Operating cash flows from finance leases1,449 1,529 1,476 Finance cash flows from finance leases3,591 2,917 2,297 Non-cash leases activity:Right-of-use lease assets obtained in exchange for new operating lease liabilities$10,483 $114,740 $75,987 Right-of-use lease assets obtained in exchange for new finance lease liabilities40 3,214 — Lease term and discount rateDecember 27, 2025December 28, 2024December 30, 2023Weighted-average remaining lease term (in years)Operating lease8.89.59.6Finance lease10.811.412.7Weighted-average discount rateOperating lease5.1 %5.1 %4.7 %Finance lease5.4 %5.3 %5.3 %At the lease commencement date, the discount rate implicit in the lease is used to discount the lease liability if readily determinable.

ACQUISITIONSThe Company makes strategic acquisitions designed to expand the portfolio of products and services to support the drug discovery and development continuum. The Company maintains an acquisition strategy that focuses on augmenting internal growth of existing businesses with complementary acquisitions. While the Company did not enter into any acquisitions in fiscal years 2025 or 2024, acquisition activity subsequent to fiscal year 2025 and for fiscal year 2023 are described below.Fiscal 2026 AcquisitionsPathoQuest SASOn January 9, 2026, the Company announced it has exercised its option to acquire the remaining approximate 79% equity interest in PathoQuest SAS (PathoQuest) for €51.6 million (or approximately $60.0 million based on current exchange rates), subject to customary closing adjustments. PathoQuest is a provider of next-generation sequencing solutions for manufacturing quality-control testing for biopharmaceutical companies. The proposed transaction is expected to close in the first quarter of 2026. The acquisition is expected to be funded through a combination of available cash and proceeds from the Credit Facility. This business will be reported as part of the Manufacturing reportable segment.K.F. (Cambodia) Ltd.On January 14, 2026, the Company completed the acquisition of certain assets of K.F. (Cambodia) Ltd (KF)., a leading supplier of non-human primates (NHPs) located in Cambodia. The purchase price of KF was $510.0 million, of which $335.0 million was paid up-front, with the remaining $175.0 million deferred until the completion of certain post-close conditions. The acquisition was funded through a combination of available cash and proceeds from the Company’s Credit Facility. This business will be 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. Due to the limited time between the acquisition date and the filing of this Annual Report on Form 10-K, it is not practicable for the Company to disclose the preliminary allocation of the purchase price to assets acquired and liabilities assumed.Fiscal 2023 AcquisitionsNoveprim GroupOn November 30, 2023, the Company completed the acquisition of an additional 41% equity interest of Noveprim Group (Noveprim), a leading supplier of non-human primates (NHPs) located in Mauritius, resulting in a 90% controlling interest.