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Charles River to Cut Headcount by 3% Due to Slow Q4

Wednesday, February 11, 2009 07:00 AM

Wilmington, Mass.-based Charles River Laboratories reported another quarter of slower than expected sales growth in its Preclinical Services Segment (PCS), prompting the company to announce cost-saving measures including a 3% reduction in headcount for the first quarter 2009.

Net sales for Q4 2008 decreased 2.1% to $311.4 million from $318 million in the fourth quarter of 2007. On a non-GAAP basis, net income was down 13.6% to $39.7 million for the fourth quarter of 2008, compared with $45.9 million for the same period in 2007. Fourth quarter diluted earnings per share on a non-GAAP basis were $0.59, a decrease of 9.2% compared with $0.65 per share in the fourth quarter of 2007.

“Our 2008 results reflect the impact of the global economic crisis and the challenges our pharmaceutical and biotechnology clients are facing, especially in the PCS segment,” said chairman, president and CEO James Foster in a company statement.

Net sales for the full year 2008 increased by 9.2% to $1.34 billion, from $1.23 billion in 2007. Net income for 2008 on a non-GAAP basis was $199.8 million, or $2.89 per diluted share, compared to $180.2 million, or $2.62 per diluted share, for 2007.

The also company released its guidance for 2009, predicting a 2% to 7% decrease in net sales due to a slow first quarter. The guidance assumes non-GAAP EPS for the first quarter of 2009 will be below the fourth quarter of 2008, but the company expects to see a stronger second half of the year. The non-GAAP EPS estimate for 2009 is $2.30 to $2.60.

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