Charles River Laboratories International (CRL) Risk Factor Changes

Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition, including laws and policies in areas such as trade, manufacturing, governme…

During the fourth quarter ended December 28, 2024, a triggering event was identified for the CDMO Cell Therapy asset group within the Biologics Solutions business, part of the Manufacturing reportable segment, as ther…

results.

Our results of operations in any quarter may vary from quarter to quarter and are influenced by the risks discussed above, as well as: changes in the general global economy; changes in the mix of our products and serv…

If the future growth and operating results of our business are not as strong as anticipated, overall macroeconomic or industry conditions deteriorate and/or our market capitalization declines, this could impact the as…

impact of the potential loss of existing employees by having an established organizational talent review process that identifies successors and potential talent needs.

forum provision will not apply to suits brought under the federal securities laws for which the federal courts have exclusive jurisdiction.

Unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the Company, (2) any action asserting a claim of bre…

As a global company, we are subject to taxation in numerous countries, states, and other jurisdictions.

We have made changes to, and investments in, our business practices and will continue to monitor developments and make appropriate changes to help attain compliance with these evolving and complex laws, rules, regulat…

US Data Privacy Framework (DPF).

We continue to seek opportunities to develop and market new services and products that complement or expand our existing business or service offerings.

The scientific community continues to develop NAMs, which do not involve working with animal models and are designed to increase the translation from findings in early-stage discovery and pre-clinical studies to human…

The CDMO services we offer can be highly complex, due in part to strict regulatory requirements and the inherent technical complexity of the services provided.

While it is not possible to predict whether and when any such changes will occur, updates at the local, state or federal level, or to laws and regulations in foreign jurisdictions where we operate or maintain business…

Implementation of healthcare reform legislation, including certain provisions of the Inflation Reduction Act, may offer some benefits, but may also introduce costs or changes that affect the potential financial return…

Although we believe we are currently in compliance in all material respects with applicable national, regional and local laws, as well as other accepted guidance used by oversight bodies (including the USDA, the stand…

For example, in December 2022, the FDA Modernization Act 2.0 was passed, which clarified the methods manufacturers and sponsors may use to investigate the safety and efficacy of a drug.

Governmental agencies throughout the world strictly regulate the drug development process.

A portion of revenue, predominantly in our RMS segment, is derived from clients at academic institutions and basic research laboratories whose funding is partially dependent on both the level and timing of funding fro…

Furthermore, in general, third-party suppliers may fail to provide us with raw materials and other items that meet the qualifications and specifications required by us or our customers.

Portions of our Cell Solutions business depends on the availability of appropriate donors.

While we continue to take steps to find alternative supply channels (and other global sources) and lock in supply (both for non-human primates and with respect to other limited supply products) with preferred sources…

As with other industry participants, certain of our activities rely on a sufficient supply of large research models, which has seen increasing demand as compared to supply in recent years due to a variety of factors.

We depend on a limited international source of supply for certain products, such as large research models, including NHPs.

We depend on our customers continued demand and solvency at our facilities for the continued operation of our business.

As discussed in the section above entitled “Our Strategy,” we are taking decisive action to manage the Company through the current demand environment, including appropriately right-sizing our infrastructure, driving e…

Furthermore, our strategy assumes a certain degree of capital and capacity growth development.

Our strategy is to deliver a comprehensive and integrated portfolio of drug discovery and non-clinical development products, services and solutions to support our clients’ discovery, preclinical, early clinical and ea…

Acquisitions or alliances realizing these risks could increase the likelihood of our results of operations being adversely affected.

Our counterparties (including our clients who are competitors) may elect to terminate their agreements with us for various reasons including: the invocation of force majeure clauses, or the legal doctrines of impossib…

Set forth below, elsewhere in this Form 10-K, and in other documents we file with the SEC are risks and uncertainties that could cause actual results to differ materially from the results contemplated by the forward-l…

Our success depends to a significant extent on the continued services of our senior management and other members of management who have skills and industry experience aligned with our strategic objectives.

actions), government investigation or inquiries, enforcement actions, claims, proceedings, judgements, awards, penalties, sanctions or other adverse impacts that could have a material adverse effect on our business.

We continue to seek opportunities to develop and market new services and products that complement or expand our existing business or service offerings.

when interrupted, adversely affects our business”, and “Item 3.

significantly reducing the availability of research products upon which we rely.

could interfere with the successful execution of our strategy and our ability to timely build infrastructure to satisfy capacity needs and support business growth.

•difficulties in achieving business and financial success (due to unplanned events such as ongoing geopolitical conflicts, such as between the Russian Federation and Ukraine, and between Israel and Hamas, as well as t…

and the risks described below should be carefully considered together with the other information set forth in this report and in future documents we file with the SEC.

For additional information regarding this topic, please see Note 10.

During the fourth quarter ended December 27, 2025, prior to the annual Goodwill Impairment Assessment, a triggering event was identified for the Cell Solutions, CDMO Cell Therapy, and CDMO Gene Therapy asset groups du…

During the fourth quarter ended December 28, 2024, a triggering event was identified for the Biologics Solutions reporting unit after the annual impairment assessment.

Excluding the impairment charge associated with the Biologics Solutions reporting unit, our 2025 annual impairment test indicated that goodwill was not impaired for any other reporting units.

determine the fair value of the Biologics Solutions reporting unit reflected significant assumptions related to future revenue, a long term growth rate, operating income margins, and a discount rate based on a weighte…

CHARLES RIVER LABORATORIES INTERNATIONAL, INC.

During the fourth quarter 2025, we performed the quantitative goodwill impairment test for our reporting units and upon completion, it was determined that the fair value of the Biologics Solutions reporting unit did n…

Because of the specialized scientific nature of our business, we are highly dependent upon attracting and retaining qualified scientific, technical and managerial personnel.

Our success depends to a significant extent on the continued services of our senior management and other members of management who have skills and industry experience aligned with our strategic objectives.

Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition can have an adverse effect on our business and financial statements.

The EU GDPR also imposes specific restrictions on the transfer of personal data to countries outside of the EU and EEA, including the use of appropriate safeguards to enable such transfers, such as Standard Contractua…

order cancellations and loss of customers.

or economic instability, severe weather conditions, increased competition among suppliers for models, disruptions to the air travel system, activist campaigns, commercial disputes, supplier insolvency, geopolitical di…

Any potential transaction or other strategic alternative, including, without limitation the acquisitions of the assets of K.F.

The process of reviewing potential strategic and operational alternatives is time consuming and costly and may divert management’s attention.

On May 6, 2025, in connection with a Cooperation Agreement entered into with a large shareholder of the Company, we agreed, among other things, to have the Strategic Planning and Capital Allocation Committee of our Bo…

Our review of potential strategic alternatives may not result in an executed or consummated transaction or other strategic alternative, and the process of reviewing strategic alternatives or the outcome could adversel…

services and, ultimately, result in the loss of revenue and clients.

•changes in trade relationships, including new tariffs, trade protection measures, import or export licensing requirements, trade embargoes and sanctions, and other trade barriers;

manner.

•difficulties in achieving business and financial success (due to unplanned events such as ongoing geopolitical conflicts or economic factors such as fluctuations in interest and foreign exchange rates, as well as tax…

We, along with many businesses in the biopharmaceutical industry, are adopting and exploring the use of artificial intelligence (AI) in our business, and as an emerging and rapidly evolving technology, our use of AI i…

Uncertainties with respect to the development, deployment, and use of artificial intelligence present new risks and challenges and could adversely affect our business and reputation.

We leverage software and hardware solutions from technology and services providers, including software-as-a-service and public cloud infrastructure, who have been subject to cybersecurity incidents in the past and may…

terminates a contract with us, we are typically entitled under the terms of the contract to receive revenue earned to date as well as certain other costs and, in some cases, termination fees; however, in many cases we…

•Significant developments or changes in national laws or policies to protect or promote domestic interests and/or address foreign competition can have an adverse effect on our business and financial statements.

•Our review of potential strategic alternatives may not result in an executed or consummated transaction or other strategic alternative, and the process of reviewing strategic alternatives or the outcome could adverse…

•Uncertainties with respect to the development, deployment, and use of artificial intelligence present new risks and challenges and could adversely affect our business and reputation.