Charles River Laboratories International (CRL) risk factors, FY2025 10-K

Business and Operational Risks

1. 01We bear financial risk for contracts that may be terminated or reduced in scope, underpriced, subject to cost overruns or delays30% rewritten
2. 02CHARLES RIVER LABORATORIES INTERNATIONAL, INC58% rewritten
3. 03Upgrading and integrating our business systems could result in implementation issues and business disruptions
4. 04We have in the past experienced and in the future could experience unauthorized access into our information systems53% rewritten
5. 05We are at risk of being targeted, and we have in the past been victim to, business email compromise fraud, which results in payments being made to illegitimate bank accounts. Although these instances have not resulted in our incurring material losses, if similar instances occur in the future, we may incur such lossesNew
6. 06If we are not successful in selecting and integrating the businesses and technologies we acquire or partner with, or if we do not manage our current and future site closures and divestitures, our business may be adversely impacted
7. 07Failure to execute our business strategy could adversely impact our growth and profitability25% rewritten
8. 08Failure to successfully realize cost savings from our restructuring initiatives would adversely impact our growth and profitability24% rewritten
9. 09A significant part of our revenue is derived from operations outside the U.S. We expect that international revenue will continue to account for a significant percentage of our total revenue for the foreseeable future
10. 10Our operations might be affected by the occurrence of a natural disaster or other catastrophic event
11. 11Negative attention from special interest groups may impair our business
12. 12Our 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 adversely affect our businessNew
13. 13Several of our product and service offerings, including our non-human primate supply, are dependent on a limited source of supply that, when interrupted, adversely affects our business32% rewritten
14. 14Demand volatility and risk of credit losses from clients may adversely affect our business45% rewritten
15. 15For additional discussion of the factors that we believe have recently been influencing R&D budgets at our clients, please see the sections entitled “Our Strategy” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Form 10-KNew
16. 16A reduction or delay in government funding of R&D may adversely affect our business35% rewritten
17. 17Changes in government regulation or in practices relating to the pharmaceutical or biotechnology industries, including potential healthcare reform, could decrease the need for the services we provide43% rewritten
18. 18Our Biologics Solutions business, financial condition and results of operations may be adversely affected if the products we manufacture and/or test for our customers do not gain market acceptance
19. 19CDMO services are highly complex and failure to provide quality and timely services to our CDMO customers, could adversely impact our business
20. 20Contaminations in our animal populations can damage our inventory, harm our reputation for contaminant-free production, result in decreased sales and cause us to incur additional costs
21. 21The outsourcing trend in non-clinical and clinical stages of drug discovery and development may decrease, which could impair our growth
22. 22The industries in which we operate are highly competitive
23. 23New technologies may be developed, validated and increasingly used in biomedical research, which could reduce demand for some of our products and services31% rewritten
24. 24We may not be able to successfully develop and market new services and products
25. 25Costs increasing more rapidly than market prices in certain of our businesses could reduce profitability
26. 26Any failure by us to comply with applicable regulations and related guidance could harm our reputation and operating results, and compliance with new regulations and guidance may result in additional costs
27. 27We are required to comply with stringent, complex and evolving laws, rules, regulations and standards in many jurisdictions, as well as contractual obligations, relating to data privacy and security. Any actual or perceived failure to comply with these requirements could have a material adverse effect on our business
28. 28Changes in U.S. and International Tax Law, results of tax audits, or material changes in our stock price could have a material adverse impact on our effective tax rate and financial results
29. 29Non-clinical and clinical contract research services create a risk of liability
30. 30The failure to successfully obtain, maintain and enforce intellectual property rights and defend against assertions of third parties to intellectual property rights could adversely affect us
31. 31We are involved in legal proceedings that could adversely affect our business, financial condition, and results of operations
32. 32Significant 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 statementsNew
33. 33We depend on key personnel and may not be able to retain these employees, which could harm our business69% rewritten
34. 34If we are unable to attract, hire or retain key team members or a highly skilled global workforce with various backgrounds and experiences, it could have a negative impact on our business, financial condition or results of operations
35. 35We depend on the availability of, and good relations with, our team members
36. 36Our debt level could adversely affect our business and growth prospects
37. 37Impairment of long-lived tangible assets and intangible assets (such as goodwill and other intangible assets) may adversely impact future results of operations57% rewritten
38. 38Excluding 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 unitsNew
39. 39Since we do not expect to pay any cash dividends for the foreseeable future, our shareholders will benefit from an investment in our common stock only if it appreciates in value
40. 40Our quarterly operating results may vary, which could negatively affect the market price of our common stock42% rewritten
41. 41Increasing focus on environmental, social and governance (ESG) matters, including climate-related issues, may impact our business, financial results or stock price