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The following table provides a rollforward for the Company’s accrued restructuring costs related to all restructuring activities:
Read in the filing ↗ Also in 10-Q of Nov 5, 2025, 10-Q of May 7, 2026, 10-Q of Aug 5, 2026, 10-Q of Nov 4, 2026
Failure to successfully realize cost savings from our restructuring initiatives would adversely impact our growth and profitability.
Read in the filing ↗ Also in 10-K of Feb 18, 2026
The following table presents restructuring costs as included within the Company’s unaudited condensed consolidated statements of income:
Read in the filing ↗ Also in 10-Q of Nov 5, 2025, 10-Q of May 7, 2026, 10-Q of Aug 5, 2026, 10-Q of Nov 4, 2026
(4) These adjustments primarily include site consolidation, severance, impairment, and other costs related to the Company’s restructuring actions.
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• If we are not successful in realizing cost savings from our restructuring initiatives, our business may be adversely impacted.
Read in the filing ↗ Also in 10-K of Feb 18, 2026
The following table provides a rollforward for all of the Company’s severance and transition costs related to all restructuring activities:
Read in the filing ↗ Also in 10-K of Feb 18, 2026
(4) These adjustments primarily include site consolidation (including site transition costs), severance, impairment, and other costs related to the Company’s restructuring actions.
Read in the filing ↗ Also in 8-K of Feb 19, 2025, 8-K of May 7, 2025, 8-K of Aug 6, 2025, 8-K of Nov 5, 2025, 8-K of Feb 18, 2026, 8-K of May 7, 2026, 8-K of Aug 5, 2026, 8-K of Nov 4, 2026
The following table presents restructuring costs as included within the Company’s consolidated statements of income for fiscal years 2024, 2023 and 2022:
Read in the filing ↗ Also in 10-K of Feb 18, 2026
In the third quarter of 2024, the DSA segment’s GAAP operating margin decreased to 20.6% from 22.1% in the third quarter of 2023 primarily driven by lower revenue and higher severance costs related to restructuring initiatives. On a non-GAAP basis, the operating margin increased to 27.4% from 27.2% in the third quarter of 2023. The non-GAAP operating margin increase was primarily driven by the benefit of cost savings associated with restructuring initiatives.
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In the first quarter of 2025, the RMS segment’s GAAP operating margin increased to 20.5% from 19.5% in the first quarter of 2024. The GAAP operating margin increase was primarily driven by lower costs associated with the Company's restructuring initiatives, including site consolidations costs. On a non-GAAP basis, the operating margin decreased to 27.1% from 27.6%, primarily driven by lower NHP revenue, partially offset by the benefit of cost savings associated with restructuring initiatives.
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In response to recent trends observed across each of our businesses, we have undertaken and will continue to implement restructuring actions at various locations across North America, Europe, and Asia. This includes workforce right-sizing actions,
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Severance and Transition Costs Asset Impairments and Other Costs Total (in thousands) Twelve Months Ended December 27, 2025 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Cost of services provided (excluding amortization of intangible assets) $ 12,164 $ 57,112 $ 69,276 Cost of products sold (excluding amortization of intangible assets) 3,085 9,003 12,088 Selling, general and administrative 13,761 4,689 18,450 Total restructuring costs $ 29,010 $ 70,804 $ 99,814 Twelve Months Ended December 28, 2024 Cost of services provided (excluding amortization of intangible assets) $ 28,348 $ 26,643 $ 54,991 Cost of products sold (excluding amortization of intangible assets) 2,786 18,348 21,134 Selling, general and administrative 23,051 7,809 30,860 Total restructuring costs $ 54,185 $ 52,800 $ 106,985 Twelve Months Ended December 30, 2023 Cost of services provided (excluding amortization of intangible assets) $ 7,408 $ 14,812 $ 22,220 Cost of products sold (excluding amortization of intangible assets) 1,146 3,262 4,408 Selling, general and administrative 3,054 — 3,054 Total restructuring costs $ 11,608 $ 18,074 $ 29,682
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In the fourth quarter of 2024, the RMS segment’s GAAP operating margin decreased to 6.7% from 18.9% in the fourth quarter of 2023. On a non-GAAP basis, the operating margin decreased to 22.8% from 23.1%. The GAAP and non-GAAP operating margin declines were primarily driven by research models services and NHP sales, partially offset by higher pricing for small research models and from cost savings associated with restructuring initiatives. On a GAAP basis, the lower operating margin also reflects higher costs associated with the Company’s restructuring initiatives, including severance and site consolidation costs, as well as higher amortization expense related to the Noveprim acquisition.
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In response to recent trends observed across each of our businesses in the global market environment, we have undertaken and will continue to implement restructuring actions at various locations across North America, Europe and Asia. This includes workforce right-sizing actions, resulting in severance and transition costs; and costs related to the consolidation of facilities to optimize our global footprint and drive greater operating efficiency across the company, resulting in asset impairment, accelerated depreciation, and other site consolidation charges. During fiscal year 2023, we began taking restructuring actions as a result of these emerging business trends. We incurred restructuring charges of $32.2 million and $56.0 million, during the three and six months ended June 28, 2025, respectively, and $107.0 million and $29.7 million during fiscal 2024 and fiscal 2023, respectively. We expect that these effectuated actions, as well as other upcoming planned actions designed to optimize our global footprint to drive greater operating efficiency, will result in approximately $225 million of cost savings on an annualized basis, of which approximately $175 million will impact fiscal year 2025.
Read in the filing ↗ Also in 10-Q of Nov 5, 2025
In the third quarter of 2024, the RMS segment’s GAAP operating margin decreased to 13.9% from 15.2% in the third quarter of 2023. The GAAP operating margin decline was driven primarily by higher amortization expense related to the Noveprim acquisition coupled with higher costs associated with the Company’s restructuring initiatives, including severance and site consolidation costs. On a non-GAAP basis, the operating margin increased to 21.0% from 18.9%. The non- GAAP operating margin increase was primarily driven by higher pricing for small research models, a favorable revenue mix related to the Noveprim acquisition, and the benefit of cost savings associated with the Company's restructuring initiatives.
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In the second quarter of 2025, the DSA segment’s GAAP operating margin decreased to 19.9% from 22.1% in the second quarter of 2024. The GAAP operating margin decline was primarily driven by lower revenue, higher costs associated with the Company's restructuring initiatives, and higher third-party legal costs related to U.S. government investigations into the Company's NHP supply chain. On a non- GAAP basis, the operating margin increased to 27.4% from 27.1% in the second quarter of 2024. The non-GAAP operating margin increase was primarily driven by the benefit of cost savings resulting from the Company's restructuring initiatives, partially offset by lower revenue. 2
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In the first quarter of 2025, the DSA segment’s GAAP operating margin decreased to 15.9% from 19.0% in the first quarter of 2024. The GAAP operating margin decline was primarily 2 driven by lower revenue, higher costs associated with the Company's restructuring initiatives, as well as higher third-party legal costs related to U.S. government investigations into the Company's NHP supply chain. On a non- GAAP basis, the operating margin increased to 23.9% from 23.5% in the first quarter of 2024. The non-GAAP operating margin increase was primarily driven by the benefit of cost savings resulting from the Company's restructuring initiatives, partially offset by lower revenue.
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In fiscal year 2024, biopharmaceutical clients intensified their actions around restructuring initiatives and reprioritized their drug development programs, leading to constrained budgetary spending. The uncertainty from a combination of a macroeconomic slowdown, pending patent expirations, and the impact of the Inflation Reduction Act (IRA) on drug pricing had led to significant cost-cutting measures by our large biopharmaceutical clients, including significant restructuring initiatives aimed at improving efficiency and reprioritization of spending shifting to late-stage clinical pipelines. In addition, while biotechnology companies benefited from a more favorable funding environment in fiscal year 2024, recovery for this client base has occurred at a more gradual pace than anticipated due in part to uncertainty around future funding levels and the broader interest rate environment.
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resulting in severance and transition costs; and costs related to the consolidation of facilities to optimize our global footprint and drive greater operating efficiency across the Company, resulting in asset impairment, accelerated depreciation, and other site consolidation charges. During fiscal 2023, the Company began to take restructuring actions as a result of these emerging business trends. The Company incurred restructuring charges of $107.0 million and $29.7 million during the fiscal years 2024 and 2023, respectively. We expect that these effectuated actions, as well as other upcoming planned actions designed to optimize our global footprint to drive greater operating efficiency, will result in approximately $225 million of cost savings on an annualized basis, of which approximately $100 million impacted fiscal 2024.
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Through the ongoing actions, the Company expects to achieve approximately $300 million of cumulative annualized cost savings by the end of 2026, with more than $175 million realized through fiscal 2025. In addition, the Create the Future program is expected to generate incremental cost savings in excess of $300 million between 2027 and 2030. Workforce-related actions have primarily resulted in severance and transition costs, while facility optimization activities have resulted in asset impairment charges, accelerated depreciation, and other site-related costs. Restructuring charges were $19.2 million and $73.8 million during the three and nine months ended September 26, 2026, respectively, compared with $99.8 million and $107.0 million in fiscal 2025 and 2024, respectively. For further details of these costs, see Note 15 - Restructuring and Asset Impairments in Part I, Item 1.
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Fiscal Year 2025 2024 2023 (in thousands) Beginning balance $ 286,771 $ 304,248 $ 294,753 Additions (reductions) charged to income tax provision, net 13,106 965 963 Reductions due to divestitures, restructuring — (1,877) — Enacted tax law changes (12,937) — — Currency translation and other 36,385 (16,565) 8,532 Ending balance $ 323,325 $ 286,771 $ 304,248
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In September 2026, the Company announced “Create the Future,” a multi-year restructuring program intended to modernize operations, improve client experience, and enhance profitability through AI and automation, simplification and digitization, and enterprise optimization. Create the Future builds upon actions already underway, including process improvements, procurement synergies, global business service expansion, workforce optimization, and real estate footprint rationalization.
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Part of the decisive action we have and continue to implement to manage the Company through the current demand environment includes selective hiring and restructuring initiatives to manage costs and generate efficiency by consolidating sites and reducing staffing levels to align with the pace of demand. We have reduced our total headcount by approximately 2% since the end of 2024.
Read in the filing ↗ Also in 10-K of Feb 19, 2025
Fiscal Year 2022 Severance and Transition Costs Asset Impairments and Other Costs Total (in thousands) Twelve Months Ended Cost of services provided (excluding amortization of intangible assets) $ 928 $ 1,784 $ 2,712 Cost of products sold (excluding amortization of intangible assets) 532 1,765 2,297 Selling, general and administrative 2,441 763 3,204 Total restructuring costs $ 3,901 $ 4,312 $ 8,213
Read in the filing ↗ Also in 10-K of Feb 19, 2025, 10-K of Feb 19, 2025
In response to recent trends, we continue to implement cost savings initiatives focused on driving greater efficiencies, as well as restructuring actions that have been implemented over the past three years that were focused on workforce right-sizing and site optimization. More recently, additional efficiency initiatives have targeted incremental savings through process improvement, procurement synergies, and implementation of a global business services model. Collectively, these actions are expected to generate approximately $300 million in cumulative, annualized cost savings by the end of 2026, of which more than $175 million benefitted fiscal 2025. Workforce right-sizing actions resulted in severance and transition costs while costs related to the consolidation of facilities to optimize our global footprint and drive greater operating efficiency across the company resulted in asset impairments, accelerated depreciation, and other site consolidation charges. We incurred restructuring charges of $99.8 million and $107.0 million during the fiscal years 2025 and 2024, respectively.
Read in the filing ↗ Also in 10-Q of May 7, 2026, 10-Q of Aug 5, 2026
The Company has undertaken restructuring actions impacting the reportable segments at various locations across North America, Europe and Asia to manage the Company through the current demand environment, including appropriately right-sizing the Company’s infrastructure, optimizing operations, and driving efficiency. This includes workforce right-sizing actions resulting in severance and transition costs; and costs related to the consolidation of facilities resulting in long-lived asset
Read in the filing ↗ Also in 10-K of Feb 19, 2025, 10-Q of Nov 5, 2025, 10-K of Feb 18, 2026, 10-Q of May 7, 2026
Non-GAAP earnings per share are expected to increase by approximately 4% to 9% in 2026, as a result of the benefit from incremental cost savings related to restructuring and efficiency initiatives, as well as the earnings accretion from the completed acquisition of the assets of K.F. (Cambodia) Ltd. A lower tax rate will also contribute to non-GAAP earnings per share growth in 2026.
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We are taking decisive action to manage the Company through the current demand environment, including appropriately right-sizing our infrastructure, optimizing operations, and driving efficiency with a goal to protect operating margin. We are committed to initiatives to generate more revenue, contain costs, and protect shareholder value through enhanced commercial initiatives, restructuring and efficiency actions to drive cost savings, as well as a balanced approach to capital deployment, including:
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The Manufacturing segment’s GAAP operating margin increased to 20.9% from 20.4% in the third quarter of 2024 as a result of lower acquisition-related amortization adjustments in the CDMO business and lower costs associated with the Company's restructuring initiatives. On a non-GAAP basis, the operating margin decreased to 26.7% from 28.7% in the third quarter of 2024, driven primarily by lower revenue in the CDMO business.
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The Manufacturing segment’s GAAP operating margin was 24.6%, compared to (4.8)% in the first quarter of 2025. The increase was primarily the result of lower accelerated amortization expense related to certain CDMO client relationships. On a non-GAAP basis, the operating margin increased to 25.9% from 23.1% in the first quarter of 2025, driven primarily by the benefit of cost savings resulting from the Company's restructuring initiatives.
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2024 GUIDANCE Revenue growth, reported 1.0% – 4.0% Impact of divestitures/(acquisitions), net ~(0.5)% (Favorable)/unfavorable impact of foreign exchange ~(0.5)% Revenue growth, organic (1) 0.0% – 3.0% GAAP EPS estimate $7.90 – $8.40 Acquisition-related amortization (2) ~$2.40 Acquisition and integration-related adjustments ~$0.10 (3) Costs associated with restructuring actions (4) ~$0.25 Other items (5) ~$0.25 Non-GAAP EPS estimate $10.90 – $11.40
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Frontage Holdings Corporation is a publicly traded company on The Stock Exchange of Hong Kong. Charles River is participating in a consortium with Hongkong Tigermed Co., Limited (a subsidiary of Hangzhou Tigermed Consulting Co., Ltd.) and Dr. Song Li to first take Frontage private, after which Frontage will be restructured and Charles River will ultimately own the assets and liabilities related to its bioanalysis and DMPK businesses in Exton, Pennsylvania. Further details are as follows:
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The Company is updating its financial guidance for 2024, which was previously revised on August 7, 2024. Revenue and non-GAAP earnings per share guidance have been narrowed and slightly raised from the midpoint of the previous ranges to principally reflect the third-quarter financial performance, which exceeded the Company's prior outlook. In addition, GAAP earnings per share guidance has been reduced due primarily to increased charges related to the Company's additional restructuring actions.
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operating income as a percentage of revenue decreased primarily due to the lower revenue described above, as well as higher severance related to recent restructuring activities, adjustments to contingent consideration associated with the acquisition of Noveprim, and higher third-party legal costs and a $27 million inventory charge to cost of revenue incurred in connection with the investigations by the U.S. government into the non-human primate supply chain compared to the corresponding period in 2023.
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Primarily as a result of the non-cash goodwill impairment, the Manufacturing segment’s GAAP operating margin decreased to (93.6)% from 18.5% in the fourth quarter of 2023. On a non-GAAP basis, the operating margin increased to 28.7% from 25.4% in the fourth quarter of 2023 driven primarily by improved operating leverage from higher revenue in the Microbial Solutions business, as well as the benefit of cost savings associated with restructuring initiatives.
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2025 GUIDANCE Revenue growth/(decrease), reported (7.0)% – (4.5)% Impact of divestitures/(acquisitions), net N/M (Favorable)/unfavorable impact of foreign exchange 1.0% – 1.5% Revenue growth/(decrease), organic (1) (5.5)% – (3.5)% GAAP EPS estimate $4.30 - $4.80 Acquisition-related amortization and other ~$3.50 acquisition- and integration-related costs (2) Costs associated with restructuring actions (3) ~$1.00 Other items (4) ~$0.30 Non-GAAP EPS estimate $9.10 – $9.60
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In the third quarter of 2025, the RMS segment’s GAAP operating margin increased to 16.2% from 13.9% in the third quarter of 2024. On a non-GAAP basis, the operating margin increased to 25.0% from 21.0%. The GAAP and non-GAAP operating margin increases were primarily driven by the favorable revenue mix related to large research models, as well as the benefit of cost savings resulting from the Company's restructuring initiatives.
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RMS operating income increased $13.3 million compared to the corresponding period in 2024. RMS operating income as a percentage of revenue for the nine months ended September 27, 2025 was 17.8%, an increase of 170 bps from 16.1% for the corresponding period in 2024. Operating income and operating income as a percentage of revenue increased primarily due to the higher revenue described above, lower charges related to restructuring activities, including asset impairments and site
Read in the filing ↗ Also in 10-Q of Aug 6, 2025, 10-Q of Aug 6, 2025
DSA operating income decreased $18.0 million compared to fiscal year 2024. DSA operating income as a percentage of revenue for fiscal year 2025 was 17.7%, a decrease of 40 bps from 18.1% for fiscal year 2024. Operating income and operating income as a percentage of revenue decreased primarily due to the lower revenue described above, increased restructuring activities, including asset impairments and site consolidation charges; partially offset by the absence of the inventory charge
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In the third quarter of 2024, the GAAP operating margin decreased to 11.6% from 14.8% in the third quarter of 2023. This GAAP decrease was primarily driven by costs associated with the Company’s restructuring initiatives. On a non-GAAP basis, the operating margin improved in all three segments; however, the improvements were more than offset by higher unallocated corporate costs, which resulted in the third-quarter operating margin decreasing to 19.9% from 20.5%.
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In general we require cash to fund our working capital needs, capital expansion, acquisitions, debt payments, lease payments, venture capital investment, restructuring initiatives, and pension obligations. Our principal sources of liquidity have been our cash flows from operations supplemented by long-term borrowings. Based on our current business plan, we believe that our existing funds, when combined with cash generated from operations and our access to financing resources, are sufficient to fund our operations for the foreseeable future.
Read in the filing ↗ Also in 10-Q of Nov 5, 2025, 10-Q of May 7, 2026, 10-Q of Aug 5, 2026, 10-Q of Nov 4, 2026
In the first quarter of 2025, the GAAP operating margin decreased to 7.6% from 12.5% in the first quarter of 2024. The GAAP decrease was primarily driven by lower revenue and higher amortization expense related to accelerated amortization of certain CDMO client relationships. On a non-GAAP basis, the first-quarter operating margin increased to 19.1% from 18.5%, driven primarily by the benefit of cost savings resulting from restructuring initiatives, partially offset by lower revenue.
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The Company has undertaken restructuring actions within each of its reportable segments which include right-sizing the infrastructure, optimizing operations, and driving efficiency. This includes workforce right-sizing actions resulting in severance and transition costs; and costs related to the consolidation of facilities resulting in long-lived asset impairments (principally property, plant, and equipment and right-of-use assets), accelerated depreciation charges, and certain other costs. Generally, these actions are in response to recent macroeconomic impacts on the Company.
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Decisive Actions to Position for the Future. We continue to take decisive action to manage the Company through the current demand environment, including appropriately right-sizing our infrastructure, optimizing operations, and driving efficiency with a goal to protect operating margin. We are committed to initiatives to generate more revenue, contain costs, and protect shareholder value through enhanced commercial initiatives, restructuring and efficiency actions to drive cost savings, as well as a balanced approach to capital deployment. These initiatives have included:
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In the third quarter of 2026, the RMS segment’s GAAP operating margin increased to 19.9% from 16.2% in the third quarter of 2025, primarily due to lower costs related to the Cell Solutions divestiture and restructuring initiatives. On a non-GAAP basis, the operating margin decreased to 24.4% from 25.0%. The non-GAAP operating margin decrease was primarily driven by the impact of an unfavorable revenue mix, both geographically and related to large research models.
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• Restructuring initiatives to manage costs and generate efficiency by reducing staffing levels to align with the level of demand, as well as evaluating our global footprint to optimize, consolidate, and simplify operations. We have also engaged in global footprint optimization efforts to maximize capacity and enhance our capabilities. We have taken a client-centric approach to these actions with a goal of serving our clients more efficiently and seamlessly in order to capture synergies and savings that extend beyond the facility costs.
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2026 GUIDANCE (1) Revenue growth/(decrease), reported At Least Flat to +1.5% Impact of divestitures/(acquisitions), net 0.0% - (0.5)% (Favorable)/unfavorable impact of foreign (1.0)% - (1.5)% exchange Revenue growth/(decrease), organic (2) (1.0)% to At Least Flat GAAP EPS estimate $6.30 – $6.80 Acquisition-related amortization and other $3.50 – $3.60 acquisition- and integration-related costs (3) Costs associated with restructuring actions (4) $0.80 – $0.85 Non-GAAP EPS estimate $10.70 – $11.20
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In the third quarter of 2024, the Manufacturing segment’s GAAP operating margin increased to 20.4% from 15.0% in the third quarter of 2023, and on a non-GAAP basis, the operating margin increased to 28.7%, from 24.5% in the third quarter of 2023. The GAAP and non-GAAP operating margin increases were driven primarily by improved operating leverage from higher revenue in each of segment’s businesses, as well as the benefit of cost savings associated with restructuring initiatives.
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In the second quarter of 2024, the GAAP operating margin decreased to 14.8% from 15.6% in the second quarter of 2023. This GAAP decrease was primarily driven by lower operating margins in the RMS and DSA segments, due in part to costs associated with the Company’s restructuring initiatives. On a non-GAAP basis, the second-quarter operating margin increased to 21.3% from 20.4%, driven primarily by lower performance-based compensation accruals, as well as operating margin improvement in the Manufacturing segment.
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In the second quarter of 2025, the RMS segment’s GAAP operating margin increased to 16.8% from 14.5% in the second quarter of 2024. On a non-GAAP basis, the operating margin increased to 25.3% from 23.1%. The GAAP and non-GAAP operating margin increases were primarily driven by the favorable revenue mix related to large research models and operating leverage from higher revenue for research models services, as well as the benefit of cost savings resulting from the Company's restructuring initiatives.
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The Manufacturing segment’s GAAP operating margin was (115.9)%, compared to (93.6)% in the fourth quarter of 2024. The decrease was primarily the result of larger impairments in the fourth quarter of 2025 related to the Biologics Solutions reporting unit, which includes both the CDMO and Biologics Testing businesses. On a non-GAAP basis, the operating margin increased to 32.1% from 28.7% in the fourth quarter of 2024, driven primarily by the benefit of cost savings resulting from the Company's restructuring initiatives.
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We continuously assess opportunities to drive greater efficiencies through process improvements, cost-savings initiatives, and restructuring actions. During the third quarter of fiscal 2026, we announced our Create the Future program, which formalizes and expands the Company’s ongoing transformation and efficiency initiatives under a unified operating framework. Create the Future builds upon actions already underway, including process improvements, procurement synergies, global business service expansion, workforce optimization, and real estate footprint rationalization, while introducing additional initiatives focused on AI-enabled automation, simplification and digitization, and enterprise optimization.
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In the second quarter of 2024, the RMS segment’s GAAP operating margin decreased to 14.5% from 23.3% in the second quarter of 2023. On a non-GAAP basis, the operating margin decreased to 23.1% from 26.4%. The GAAP and non-GAAP operating margin declines were driven primarily by lower NHP revenue. On a GAAP basis, the lower operating margin also reflects higher costs associated with the Company’s restructuring initiatives, including site consolidation costs related to the Company’s CRADL operations in California.
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RMS operating income decreased $69.8 million compared to fiscal year 2024. RMS operating income as a percentage of revenue for fiscal year 2025 was 5.3%, a decrease of 850 bps from 13.8% for fiscal year 2024. Operating income and operating income as a percentage of revenue decreased primarily due to a $102.0 million intangible asset impairment charge within the Cell Solutions asset group; partially offset by a decrease in restructuring activities, primarily related to asset impairment charges, and the increase from the revenue drivers described above.
Read in the filing ↗ Also in 10-K of Feb 19, 2025
In the fourth quarter of 2024, the DSA segment’s GAAP operating margin decreased to 10.4% from 20.2% in the fourth quarter of 2023. On a non-GAAP basis, the operating margin decreased to 24.7% from 26.0% in the fourth quarter of 2023. The GAAP and non-GAAP operating margin declines were primarily driven by lower revenue, partially offset by cost savings associated with restructuring initiatives. On a GAAP basis, the lower operating margin also reflects an NHP inventory write down, as well as higher acquisition-related adjustments associated with Noveprim.
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In fiscal year 2024, our operating income and operating income margin were $227.3 million and 5.6%, respectively, compared with $617.3 million and 14.9%, respectively, in fiscal year 2023. The decreases in operating income and operating income margins for fiscal year 2024 were primarily due to the revenue impacts described above, charge related to the goodwill impairment within our Manufacturing business, recent restructuring activities, including severance, asset impairments, and other site consolidation costs, and an inventory charge incurred in connection with the investigations by the U.S. government into the non-human primate supply chain.
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In the second quarter of 2025, the GAAP operating margin decreased to 9.7% from 14.8% in the second quarter of 2024. GAAP net income available to common shareholders for the second quarter of 2025 was $52.3 million, or $1.06 per share, a decrease from net earnings of $90.0 million, or $1.74 per diluted share, for the same period in 2024. The GAAP decreases were primarily driven by higher amortization expense related to accelerated amortization of certain CDMO client relationships, costs associated with the Company's restructuring activities, and certain third-party legal and advisory costs.
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In the second quarter of 2024, the DSA segment’s GAAP operating margin decreased to 22.1% from 24.3% in the second quarter of 2023. On a non-GAAP basis, the operating margin decreased to 27.1% from 27.6% in the second quarter of 2023. The GAAP and non-GAAP operating margin decreases were driven primarily by the impact of lower sales volume, partially offset by lower performance-based compensation accruals. On a GAAP basis, the lower operating margin also reflects higher costs associated with the Company’s restructuring initiatives, as well as higher acquisition-related adjustments associated with Noveprim.
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In fiscal year 2025, demand from biopharmaceutical clients stabilized and began to show early signs of improvement as clients continued to navigate a challenging and evolving environment. Demand from larger biopharmaceutical clients began to improve early in the year following the prior year’s constrained budgetary spending as a result of restructuring initiatives and reprioritization of their drug development programs. Meanwhile, small and mid-sized biotechnology clients experienced a gradual improvement in funding over the course of fiscal year 2025, particularly in the second half of the year, that led to an improvement in DSA demand trends as we exited the year.
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Unallocated corporate costs consist of selling, general and administrative expenses that are not directly related or allocated to the reportable segments. The increase in unallocated corporate costs of $26.3 million, or 11.4%, compared to fiscal year 2023 is primarily related to severance associated with recent restructuring activities, adjustments to contingent consideration associated with a recent divestiture, and the absence of positive net settlements recognized on virtual power purchase agreements as compared to the corresponding period in 2023. Costs as a percentage of revenue for fiscal year 2024 was 6.4%, an increase of 80 bps from 5.6% for fiscal year 2023.
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In the first quarter of 2026, the DSA segment’s GAAP operating margin increased to 17.4% from 15.9% in the first quarter of 2025. The increase was primarily driven by lower third-party legal costs related to a non-human primate (NHP) supply matter, as well as lower costs associated with the Company's restructuring and efficiency initiatives. On a non-GAAP basis, the operating margin decreased to 21.0% from 23.9% in the first quarter of 2025. The non-GAAP operating 2 margin decrease was primarily driven by higher study-related direct costs associated with large-model sourcing and study starts.
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DSA operating income decreased $36.5 million compared to the corresponding period in 2024. DSA operating income as a percentage of revenue for the six months ended June 28, 2025 was 17.9%, a decrease of 260 bps from 20.5% for the corresponding period in 2024. Operating income and operating income as a percentage of revenue decreased primarily due to the lower revenue described above, restructuring activities, including asset impairments and site consolidation charges, and certain third-party legal costs incurred in connection with the investigations by the U.S. government into the non-human primate supply chain compared to the corresponding period in 2024.
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James C. Foster, Chair, President and Chief Executive Officer, said, “Forward- looking demand indicators were relatively stable in the third quarter, contributing to third-quarter financial performance which exceeded our prior outlook. We are continuing to navigate through a challenging period as global biopharmaceutical clients reduce spending in conjunction with major restructuring and pipeline reprioritization activities, but overall demand trends do not appear to have deteriorated further. In addition, biotech funding has improved in 2024, and demand appears to be demonstrating early signs of stabilization. These factors resulted in a slight, sequential improvement in net book-to-bill and the cancellation rate in the Safety Assessment business.”
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