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EQUITY AND NONCONTROLLING INTERESTS | 9 Months Ended
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Sep. 28, 2024
Equity [Abstract] |
EQUITY AND NONCONTROLLING INTERESTS | EQUITY AND NONCONTROLLING INTERESTS Earnings Per Share The following table reconciles the numerator and denominator in the computations of basic and diluted earnings per share:
| Three Months Ended |  | Nine Months Ended
| September 28, 2024 |  | September 30, 2023 |  | September 28, 2024 |  | September 30, 2023
| (in thousands)
Numerator: |  |  |  |  |  |  |
Net income | $ | 70,295 |  |  | $ | 88,021 |  |  | $ | 239,038 |  |  | $ | 291,418 |
Less: Net income attributable to noncontrolling interests | 638 |  |  | 632 |  |  | 2,340 |  |  | 3,878 |
Net income attributable to Charles River Laboratories International Inc. | 69,657 |  |  | 87,389 |  |  | 236,698 |  |  | 287,540 |
Calculation of net income per share attributable to Charles River Laboratories International Inc. common shareholders |  |  |  |  |  |  |
Net income attributable to Charles River Laboratories International Inc. | $ | 69,657 |  |  | $ | 87,389 |  |  | $ | 236,698 |  |  | $ | 287,540 |
Less: Adjustment of redeemable noncontrolling interest (1) | 379 |  |  | — |  |  | 1,081 |  |  | — |
Less: Incremental dividends attributable to noncontrolling interest holders (2) | 599 |  |  | — |  |  | 9,621 |  |  | — |
Net income available to Charles River Laboratories International Inc. common shareholders | $ | 68,679 |  |  | $ | 87,389 |  |  | $ | 225,996 |  |  | $ | 287,540 |
Denominator: |  |  |  |  |  |  |
Weighted-average shares outstanding - Basic | 51,394 |  |  | 51,283 |  |  | 51,461 |  |  | 51,199 |
Effect of dilutive securities: |  |  |  |  |  |  |
Stock options, restricted stock units and performance share units | 189 |  |  | 324 |  |  | 252 |  |  | 294 |
Weighted-average shares outstanding - Diluted | 51,583 |  |  | 51,607 |  |  | 51,713 |  |  | 51,493 |
Anti-dilutive common stock equivalents (3) | 746 |  |  | 588 |  |  | 505 |  |  | 514 |
(1) Represents adjustments of redeemable noncontrolling interest that impact retained earnings.
(2) Represents incremental declared and undeclared dividends attributable to Noveprim noncontrolling interest holders who are entitled to preferential dividends for fiscal year 2024.
(3) These common stock equivalents were outstanding for the periods presented, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.
Treasury Shares On August 2, 2024, the Company’s Board of Directors approved a stock repurchase authorization of $1.0 billion. This authorization fully replaces a prior stock repurchase authorization of $1.3 billion that had $129.1 million remaining when it was terminated. During the three and nine months ended September 28, 2024, the Company repurchased 0.5 million shares of common stock for $100.7 million under the new stock repurchase program. As of September 28, 2024, the Company had $899.3 million remaining on the current authorized stock repurchase program. The Company’s stock-based compensation plans permit the netting of common stock upon vesting of RSUs and PSUs in order to satisfy individual statutory tax withholding requirements. The Company acquired shares of approximately 0.1 million in the nine months ended September 28, 2024 and nine months ended September 30, 2023, for $18.4 million and $24.0 million, respectively, from such netting. Accumulated Other Comprehensive Income (Loss) Changes to each component of accumulated other comprehensive income (loss), net of income taxes, are as follows:
| Foreign Currency Translation Adjustment and Other |  | Pension and Other Post-Retirement Benefit Plans |  | Net Unrealized (Loss) Gain on Cash Flow Hedge |  | Total
| (in thousands)
December 30, 2023 | $ | (149,999) |  |  | $ | (47,167) |  |  | $ | 739 |  |  | $ | (196,427) |
Other comprehensive income (loss) before reclassifications | 4,054 |  |  | 1,038 |  |  | (688) |  |  | 4,404 |
Net current period other comprehensive income (loss) | 4,054 |  |  | 1,038 |  |  | (688) |  |  | 4,404 |
Income tax expense (benefit) | 757 |  |  | 256 |  |  | (165) |  |  | 848 |
September 28, 2024 | $ | (146,702) |  |  | $ | (46,385) |  |  | $ | 216 |  |  | $ | (192,871) |
Redeemable Noncontrolling Interests Through September 28, 2024, the Company holds several redeemable noncontrolling interests. Since the Company has the right to purchase, and the noncontrolling interest holders have the right to require the Company to purchase the remaining interest, which represents a derivative embedded within the equity instrument, the noncontrolling interest is classified in the mezzanine section of the unaudited condensed consolidated balance sheets, which is presented above the equity section and below liabilities. The redeemable noncontrolling interests are measured at the greater of (i) the redemption amount or (ii) the historical value resulting from the original acquisition date fair value, increased or decreased for the noncontrolling interest’s share of net income (loss), equity capital contributions and distributions. The fair value of the redeemable noncontrolling interest is determined using the income approach, with key assumptions being projected cash flows and discount rates based on market participant’s weighted average cost of capital. To the extent redemption value exceeds carrying value, adjustments are recorded to additional paid-in capital, with any cumulative excess of redemption value over fair value recorded in retained earnings, which impacts net income available to common shareholders used in the calculation of earnings per common share. Noveprim The Company holds a 90% ownership interest in Noveprim. The Company has the right to purchase, and the noncontrolling interest holders have the right to sell, the remaining 10% equity interest at a fixed redemption value that ranges from $47.0 million to $54.0 million depending on when exercised. The Company has the call option right to purchase the remaining 10% equity up until one month after the sixth anniversary of closing the 41% equity stake (December 2029). On the first anniversary of the expiration of the call option (December 2030), a 12-month put option will be triggered giving the seller the right to require the Company to acquire the remaining shares of the seller for $54.0 million. Additionally, during fiscal year 2024 the 10% noncontrolling interest holders have and may continue to receive a dividend disproportionate to their equity ownership, of which the fair value of $8.0 million as of the acquisition date was recorded within the redeemable noncontrolling interest. Through September 28, 2024, incremental dividends based on Noveprim statutory net income attributed to the redeemable noncontrolling interest holders of $9.6 million reduced net income available to common shareholders used in the calculation of earnings per common share. The redemption value is accreted to the put purchase price of $54.0 million using the interest method through December 2030. As of September 28, 2024, the redemption value of $40.6 million exceeded both the carrying value and fair value, resulting in both an adjustment to additional paid in capital of $7.2 million and an adjustment to retained earnings of $1.1 million, respectively, for the nine months ended September 28, 2024. Other redeemable noncontrolling interest In 2019, the Company acquired an 80% equity interest in a subsidiary, which included a 20% redeemable noncontrolling interest. In June 2022, the Company purchased an additional 10% interest in the subsidiary for $15.0 million, resulting in a remaining noncontrolling interest of 10%. Beginning in 2024, the Company had the right to purchase, and the noncontrolling interest holders had the right to sell, the remaining 10% equity interest at its appraised value. The redemption value was measured at the greater of the appraised value or a predetermined floor. The amount that the Company could be required to pay to purchase the remaining 10% equity interest was not limited. As of March 30, 2024, the redemption value of $12.0 million exceeded the carrying value, resulting in an adjustment to additional paid in capital of $2.8 million. During the second quarter of fiscal 2024, the Company acquired the remaining 10% for $12.0 million. Vital River The Company held a 92% ownership interest in Vital River, a commercial provider of research models and related services in China as of December 31, 2022. The Company had the right to purchase, and the noncontrolling interest holders had the right to sell, the remaining 8% equity interest at a contractually defined redemption value, subject to a redemption floor. The amount that the Company could be required to pay to purchase the remaining 8% equity interest was not limited. During 2023, the Company acquired the remaining 8% and paid $4.8 million of the total $24.4 million due. The remaining purchase price payable was included in Accrued liabilities within the Company’s unaudited condensed consolidated balance sheet as of September 28, 2024 and December 30, 2023 and is expected to be paid during fiscal year 2024. Nonredeemable Noncontrolling Interest The Company has an investment in an entity whose financial results are consolidated in the Company’s unaudited condensed consolidated financial statements, as it has the ability to exercise control over this entity. The interest of the noncontrolling party in this entity has been recorded as nonredeemable noncontrolling interest within Equity in the accompanying unaudited condensed consolidated balance sheets. The activity within the nonredeemable noncontrolling interest was not material during the three and nine months ended September 28, 2024 and September 30, 2023.

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