Charles River Laboratories International, Inc. (NYSE:CRL) Q4 2018 Earnings Conference Call Transcript

Feb 13, 2019 • 08:30 am ET


Charles River Laboratories International, Inc. (NYSE:CRL) Q4 2018 Earnings Conference Call Transcript


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Ladies and gentlemen, thank you for standing by and welcome to the Charles River Laboratories' Fourth Quarter 2018 Earnings and 2019 Guidance Call. (Operator Instructions). As a reminder, today's conference is being recorded.

I would now like to turn the conference over to your host, Corporate Vice President of Investor Relations Mr. Todd Spencer.

Please go ahead.

Todd Spencer

Thank you. Good morning and welcome to Charles River Laboratories' Fourth Quarter 2018 Earnings and 2019 Guidance Conference Call and Webcast. This morning, Jim Foster, Chairman President and Chief Executive Officer; and David Smith, Executive Vice President and Chief Financial Officer will comment on our results for the fourth quarter of 2018 and our guidance for 2019, as well as the proposed acquisition of Citoxlab.

Following the presentation, they will respond to questions. There is a slide presentation associated with today's remarks, which is posted on the Investor Relations section of the website at

A replay of this call will be available, beginning at noon today, and can be accessed by calling 800-475-6701. The international access number is 320-365-3844. The access code in either case is 462521. The replay will be available through February 27. You can also access an archived version of the webcast on our Investor Relations website. I'd like to remind you of our safe harbor. Any remarks that we make about future expectations, plans and prospects for the company constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by any forward-looking statements. During this call, we will primarily discuss results from continuing operations and non-GAAP financial measures which we believe help investors gain a meaningful understanding of our core operating results and future prospects. The non-GAAP financial measures are not meant to be considered superior to or a substitute for results from operations prepared in accordance with GAAP. In accordance with Regulation G, you can find the comparable GAAP measures and reconciliations on the Investor Relations section of our website through the financial information link.

Now, I will turn the call over to Jim Foster.

Jim Foster

Good morning. I'm very pleased to speak with you today about the conclusion of an excellent year for Charles River and our expectations for 2019 and the continued expansion of our leading early-stage portfolio to support our long-term growth objectives. We are extremely pleased to report a second consecutive quarter with organic revenue growth above 10%, and also we have achieved an operating margin consistent with our long-term target above 20% in the fourth quarter.

As we previously mentioned, we believe that the pace of demand of our essential products and services accelerated during the second half of the year, which positions us extremely well for 2019. We believe that our strong financial performance in 2018 was driven by two factors; robust industry fundamentals and the actions we've taken to enhance our position as the leading early-stage CRO. Let me begin with an overview of our industry.

We continue to operate in a