Charles River Laboratories International, Inc. released its business outlook, highlighting its portfolio and its plan to focus on four key initiatives in an effort to drive shareholder value.
The initiatives include:
1) Improving the consolidated operating margin by managing its cost structure and driving operating efficiencies, with the goal of 20% within three to five years, depending on the demand for preclinical services,
2) Pursuing strategic alternatives for non-strategic or under-performing Preclinical Services assets, including the U.S. Phase I clinic and the China preclinical facility, resulting in the elimination of approximately $10 million in combined operating losses from the two facilities in 2011
3) Improving free cash flow generation; investing in growing businesses, such as Discovery Services, In Vitro products and Biopharmaceutical Services, and
4) Initiating a $750 million stock repurchase program to drive immediate shareholder value and earnings per share, completing an initial $500 million by the end of 2011.
James C. Foster, CRL’s chairman, president and chief executive officer, said, “Over the last two years, Charles River has taken decisive action to address the accelerating changes in the biopharmaceutical industry. We have aligned our infrastructure to current demand, rigorously managed operating costs and increased our stock repurchases, all of which were implemented to drive shareholder value. The four initiatives that we outlined today will allow us to further intensify our disciplined focus on driving profitable growth and maximizing value for our shareholders.”