Charles River Laboratories International : at J.P. Morgan Healthcare Conference Presentation

JP Morgan 39th Annual Healthcare Conference

January 12, 2021

Charles River Laboratories

James C. Foster

Chairman, President & Chief Executive Officer

EVERY STEP OF THE WAY

© 2021 Charles River Laboratories International, Inc.

Safe Harbor Statement

Caution Concerning Forward-Looking Statements. This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate," "believe," "expect," "intend," "will," "may," "estimate," "plan," "outlook," and "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements also include statements about the impact of the COVID-19 pandemic for our business, financial condition and results of operations, including the long- term growth prospects and as compared to other companies, and the prospects for recovery therefrom; the effectiveness of our capital deployment strategy, including the pace of our M&A activity and re-evaluation of capital projects, in light of the COVID-19 pandemic and our ability to reduce capex, preserve jobs, support client research programs and sustain our financial position; our compliance with the maintenance covenants under our credit agreement; our projected 2020 and other future financial performance whether reported, constant currency, organic, and/or factoring acquisitions, with respect to Charles River as a whole and/or any of our reporting or operating segments or business units; our annual guidance and two-year targets; the assumptions surrounding the COVID-19 pandemic that form the basis for our revised annual guidance; the expected performance of our venture capital and other strategic investments; the future demand for drug discovery and development products and services, and our intentions to expand those businesses, including our investments in our portfolio; the impact of foreign exchange; our expectations regarding stock repurchases and debt repayment; the development and performance of our services and products; market and industry conditions, including industry consolidation, outsourcing of services and identification of spending trends by our clients and funding available to them; our business strategy, including with respect to capital deployment and leverage; our success in identifying, consummating, and integrating, and the impact of, our acquisitions, on the Company, our service offerings, client perception, strategic relationships, revenue, revenue growth rates, earnings, and synergies; our expectations regarding HemaCare's, Cellero's and Distributed Bio's financial performance and the markets in which they operate; our strategic agreements with our clients and opportunities for future similar arrangements; our ability to obtain new clients in targeted market segments and/or to predict which client segments will be future growth drivers; the impact of our investments in specified business lines, products, sites and geographies; and Charles River's future performance as otherwise delineated in our forward-looking guidance.

Forward-looking statements are based on Charles River's current expectations and beliefs, and involve a number of risks and uncertainties that are difficult to predict and that could cause actual results to differ materially from those stated or implied by the forward-looking statements. Those risks and uncertainties include, but are not limited to: the COVID-19 pandemic, its duration, its impact on our business, results of operations, financial condition, liquidity, business practices, operations, suppliers, third party service providers, customers, employees, industry, ability to meet future performance obligations, ability to efficiently implement advisable safety precautions, and internal controls over financial reporting; the COVID-19 pandemic's impact on demand, the global economy and financial markets; the ability to successfully integrate businesses we acquire; the ability to execute our cost-savings actions and the steps to optimize returns to shareholders on an effective and timely basis; the timing and magnitude of our share repurchases; negative trends in research and development spending, negative trends in the level of outsourced services, or other cost reduction actions by our clients; the ability to convert backlog to revenue; special interest groups; contaminations; industry trends; new displacement technologies; continued availability of products and supplies; loss of key personnel; interest rate and foreign currency exchange rate fluctuations; changes in regulations by the FDA, USDA, or other global regulatory agencies; changes in law; changes in tax regulation and laws; changes in generally accepted accounting principles; and any changes in business, political, or economic conditions due to the threat of future terrorist activity in the U.S. and other parts of the world, and related U.S. military action overseas. A further description of these risks, uncertainties, and other matters can be found in the Risk Factors detailed in Charles River's Annual Report on Form 10-K as filed on February 11, 2020 and the Quarterly Report on Form 10-Q as filed on October 29, 2020, as well as other filings we make with the Securities and Exchange Commission. Because forward-looking statements involve risks and uncertainties, actual results and events may differ materially from results and events currently expected by Charles River, and Charles River assumes no obligation and expressly disclaims any duty to update information contained in this presentation except as required by law.

Regulation G

This presentation includes discussion of non-GAAP financial measures. We believe that the inclusion of these non-GAAP financial measures provides useful information to allow investors to gain a meaningful understanding of our core operating results and future prospects, without the effect of often one-time charges, consistent with the manner in which management measures and forecasts the Company's performance. The non-GAAP financial measures included in this presentation are not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. The company intends to continue to assess the potential value of reporting non-GAAP results consistent with applicable rules and regulations. In accordance with Regulation G, you can find the comparable GAAP measures and reconciliations to those GAAP measures on our website at ir.criver.com.

Quiet Period Disclaimer

The Company is presently in quiet period pending its fourth-quarter and full-year 2020 earnings and 2021 guidance release in February 2020. As a result, the Company will not comment on financial performance for the fourth quarter of 2020 or guidance for 2021.

2 EVERY STEP OF THE WAY

The Leading, Early-Stage Contract Research Organization

CRL Worked

on

>80%

of FDA-

approved

drugs over last 3 years

Doubled

revenue and

non-GAAP EPS in last 5 years(1)

#1

Market position in Research Models, Safety Assessment & Microbial Solutions

>$15B

Outsourced

addressable market

High-

Single-Digit

CRL organic

revenue growth(2)

85

Novel

molecules

originated for clients since 1999

~$2.5B

Invested in

M&A(3)

>10%

ROIC on M&A

since 2016(4)

		(1) Revenue and non-GAAP EPS increases from FY 2015 to LTM September 2020.
		(2) Represents average of FY 2016-LTM September 2020, and 2-year organic revenue growth target.
3	EVERY STEP OF THE WAY	(3) Cumulative purchase prices for acquisitions from 2016-2020, including Distributed Bio.
		(4) ROIC on acquisitions since 2016 excludes recent acquisitions of HemaCare, Cellero, and Distributed Bio (2020).

Charles River Overview

• A leading, full-service drug discovery and early-stage development company
• • Revenue of $2.82B (LTM September 2020)
• Ability to work with clients to discover new drugs and move downstream with them throughout early-stage development and to support their safe manufacture
• No single commercial client accounts for >2.5% of total revenue
• A multinational company with ~18,000 employees worldwide
• Facilities strategically located in ~20 countries, proximate to our major client hubs

Client Base(1)		Geographic Revenue(1)

	Academic/	Asia-
	Pac
	Gov't
	5%
	11%
Biotech	Globals
41%	North
26%
	America
		67%
	Other (2)
	22%

		See ir.criver.com for reconciliations of GAAP to non-GAAP results.
4	EVERY STEP OF THE WAY	(1) Based on CRL's LTM September 2020 revenue.
(2) Other clients include agricultural & industrial chemical, CRO, animal health, life science, CMO, consumer product,

and medical device companies.

Europe

28%