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Mar 28, 2020
Charles River Labs Q1 2020 Earnings Report
Reported an increase in revenue and non-GAAP EPS, but a decrease in GAAP EPS due to venture capital investment losses that were excluded from non-GAAP results. The COVID-19 pandemic reduced both the reported and organic revenue growth rates.
Key Takeaways
Charles River Laboratories announced strong Q1 2020 results, with revenue up 17.0% year-over-year to $707.1 million and non-GAAP EPS up 31.4% to $1.84. However, GAAP EPS decreased by 8.1% to $1.02 due to venture capital investment losses. The company revised its 2020 guidance due to the expected impact of the COVID-19 pandemic, anticipating a reduction in revenue of approximately $135 to $215 million.
First-quarter revenue was $707.1 million, up 17.0% from Q1 2019.
First-quarter GAAP EPS was $1.02, compared to $1.11 in Q1 2019.
First-quarter non-GAAP EPS was $1.84, up from $1.40 in Q1 2019.
Revised 2020 guidance due to COVID-19 impact, expecting revenue reduction of $135 to $215 million.
Revenue by Segment
Forward Guidance
Charles River revised its financial guidance for 2020 due to the global COVID-19 pandemic and its expected impact on the Company’s operations, client demand, and its financial results.
Positive Outlook
- Revenue growth, reported: 4.5% – 8.0%
- Revenue growth, organic: 1.5% – 4.5%
- GAAP EPS estimate: $4.25 – $4.60
- Non-GAAP EPS estimate: $6.75 – $7.10
- Free cash flow: $325 – $350 million
Challenges Ahead
- Contribution from acquisitions: ~(4.0%)
- Unfavorable/(favorable) impact of foreign exchange: 0.5% – 1.0%
- Acquisition-related amortization: $1.75 – $1.80
- Charges related to global efficiency initiatives: ~$0.05
- Other items: $0.25 – $0.32
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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