Monday, Charles River Laboratories International, Inc. (CRL) reported a profit for the fourth quarter, compared with a loss a year-ago despite a decline in revenue. The profit is attributable primarily to the absence of a non-cash goodwill impairment charge which led to a loss in the year-ago quarter as well as cost reduction measures implemented by the company during the year.
On a GAAP basis, net income for the fourth quarter of 2009 was $17.6 million or $0.27 per share, compared with a net loss of $663.2 million or $9.93 per share, for the fourth quarter of 2008.
The prior-year results included a non-cash goodwill impairment of $700.0 million, or $10.43 per diluted share, in connection with management's annual assessment of goodwill on its balance sheet.
On a non-GAAP basis, the net income for the quarter declined to $31.98 million or $0.49 per share, compared with a net income of $39.66 million or $0.59 per share in the year-ago period.
On average, 15 analysts polled by Thomson Reuters expected the company to earn $0.44 per share. Analysts' estimates typically exclude special items.
The Wilmington, Massachusetts-based company said that GAAP and non-GAAP results in the fourth quarter were impacted primarily by lower sales volume, offset in part by cost-savings actions implemented throughout the year.
For the quarter, net sales decreased by 5.2% to $295.4 million from $311.4 million in the fourth quarter of 2008. Thirteen Wall Street analysts estimated a revenue of $291.16 million for the quarter.
According to the company, the cost of products sold and services provided during the quarter declined to $195.26 million from $311.44 million a year-ago. Selling, general and administrative expenses rose to $61.10 million from $55.37 million in the year-ago period. The amortization of intangibles declined to $7.09 million from $7.53 million in the year-ago period. There was a goodwill impairment charge of $700 thousand during the fourth quarter of 2008.
Segment-wise, sales for the Research Models and Services segment increased by 10.9% to $169.4 million from $152.8 million in the fourth quarter a year-ago. Foreign currency translation contributed 5.0% to the sales growth rate. Growth was driven by higher sales of research models in all geographic locales, as well as the acquisitions of Piedmont and Cerebricon, which were completed on May 1 and July 31, 2009, respectively.
Net sales for the Preclinical Services segment declined by 20.6% to $125.9 million from $158.6 million in the fourth quarter of 2008. The PCS sales decline was due primarily to lower market demand from pharmaceutical and biotechnology companies, partially offset by the positive effect of foreign currency translation, which increased the growth rate by 2.6%.
For the year 2010, the company expects GAAP earnings per share in the range of $1.57-$1.77, and non-GAAP earnings per share to be in the range of $2.20-$2.40. Net sales growth is expected to be in low single digits.
The street estimates earnings of $2.38 per share for the entire year 2010.
The year-to-date net income attributable to share holders was $114.44 million or $1.74 per share, compared with a net loss of $524.50 million or $7.80 per share a year-ago. Year-to-date net income excluding specified charges declined to $155.92 million or $2.38 per share from $199.76 million or $2.89 per share a year-ago.
The year-to-date total net sales declined to $1.20 billion from $1.34 billion a year-ago.The street estimated earnings of $2.33 per share on a revenue of $1.20 billion for the entire fiscal year.
CRL closed Monday's last trade at $35.69, up $0.04 or 0.11%, on a volume of 1.21 million shares on the New York Stock Exchange.
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