Early-stage CRO Charles River Laboratories has seen a healthy jump in revenue but says it will take a $20 million hit in the fourth quarter after selling off parts of its business.
For the third quarter, revenue hit $896 million, a 20.5% jump from last year’s third quarter, which was hit by the pandemic. (Though, given the nature of its business, Charles River weathered this better than most CROs.)
Revenue for the research, models and services (RMS) segment was $171.3 million, a healthy 12.7% jump from a year ago, with organic revenue, outside of currency fluctuations, up 10.7%.
This was primarily driven by “robust demand” for research models, particularly in China, as well as higher revenue for research model services, particularly the genetically engineered models and services business.
But part of that RMS unit has gone, namely its Japan operations, as well as its Swedish CDMO, both of which were swept out of the business a month back.
This will hit revenue to the tune of around $20 million and non-GAAP diluted earnings per share by less than $0.10 in the fourth quarter.
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“Our strong third-quarter results demonstrate the effectiveness of our strategy, the sustained strength of industry fundamentals, and the success we have had in becoming our clients’ partner of choice from concept, to nonclinical development, to the safe manufacture of their life-saving therapeutics,” said James Foster, chairman, president and CEO of Charles River.
“We continue to add people and capacity to accommodate growing client demand and to build a scalable operating model; to enhance our scientifically distinguished portfolio; and to work with clients to devise outsourcing solutions which enable them to increase productivity and speed to market. We believe these efforts will enable us to achieve our strategic and financial goals, both in 2021 and over the longer term.”