Charles River Laboratories International (CRL) 7 Aug 242024 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to Charles River Laboratories Second Quarter 2024 Earnings Conference Call.

Just a reminder, this call is being recorded. [Operator Instructions] I would now like to turn the conference over to our host, Mr. Todd Spencer, Vice President, Investor Relations. Mr. sir. ahead, go please Spencer,

Executive Good comment morning, XXXX I Laboratories Quarter second XXXX. Financial and Charles joined Vice of Pease, President quarter and our welcome Conference Call results to Chief Chief President Earnings Chair, morning, They Jim River and and Flavia by Executive will Second Officer. Foster, and Officer; on Webcast. am the This for

questions. be There today's Following on is slide the respond presentation, section with will they presentation at Relations remarks, Investor to which website ir.criver.com. posted will the associated our a of

be A call beginning call. webcast through replay be Relations of this can The and our X call accessed the available will replay after of quarter's the be Investor available section next hours conference also on approximately today website. will

our the remind the Reform prospects Securities and safe All to expectations, about indicated. under remarks for Act make materially XXXX. like results you statements that Private future forward-looking harbor. may we I'd differ Actual from plans those of Litigation company constitute of

not superior will call, substitute prepared guidance. a gain to results which measures, believe we our this non-GAAP accordance measures financial in considered a GAAP. of primarily investors During understanding financial are non-GAAP with operating be results help of The to core and or meaningful discuss operations meant for we

the reconciliations In section accordance with Regulation of G, the comparable Investor Relations on website. you measures and can GAAP find our

Jim I will now Foster. turn to over call the

by providing begin of will guidance. performance I morning. revised second Good highlights our quarter and

over The line line outlook in quarter declines. both segment revenue reported X.X% as on the in of and revenue revenue the year. with more of the offset $X.XX top basis XXXX, organic organic RMS reported than billion by a was was our growth second DSA We in Manufacturing performance and decline last

evolving continued more while we trends revenue from segment, the lower I'll details clients from to the provide quarter, global revenue and X shortly. client second midsized increased segments clients modestly. on biotech experience in within client these biopharmaceutical small By

increase higher our The driven the the financial of lower was in On largely operating bonus corporate largest earnings contributor by in year. increase performance-based segment RMS lower The principally basis, was Manufacturing the the XX.X%, year-over-year. in the the points and second operating by of margin These were accruals the a a lower an in outlook in costs margin lower the for outperformance quarter reflecting half second reduction quarter. XX basis offset segment and compensation the DSA segments. were accruals to margins

X.X% $X.XX. outlook and Earnings guidance in by implied prior of year-over-year per exceeded increased the $X.XX our approximately share

We during data are for had previously significantly second reducing global clients. our forward-looking will trend because anticipated, financial fact, year the not demand that will improve year the as guidance of biopharmaceutical for in half the decline we and, suggests DSA

result, reducing to range and earnings a As X% is X% to a organic $X.XX we in per decline a outlook our on this an now year, non-GAAP revenue to are $XX.XX. be expected to of share basis

greater and streamline going softer new forward. of stronger actions demand period as offset will operating impact bottom these optimize from emerge footprint limit the efficiency, cost structure, global capture also leaner this and opportunities. We enable business us believe to taking organization a positioned actions better to partially intend We drive headwinds will to our to aggressive and to the us which enable through our line

through environment. the discuss provide more market I current quarter end on I to the manage are actions performance, these well trends as business will segment we taking second details Before the demand as

our low date, in Our financial performance including to largely organic decline with initial has in revenue single-digit the half, been a first outlook. line

view to as demand global in us growth year. trends more take emerging biopharmaceutical client have prospects biotechnology the in our recovery half the of well negative for recently clients base second a our demand caused for our of as and of a lack the much However, softening

this, half anticipated Demand near is materialize. in These growth not soften will expected fact, second to in biopharmaceutical And Because we the for previously that the global client in revenue to clients to of our the continue broader biopharmaceutical are to consolidated low revenue basis. organic on half to base second mid-single-digit lead for the expected year a trends term. decline of a

and As this restructuring pending reprioritization this both. activities you additional precipitated this announced year. Revenue has biopharmaceutical tighter IRA companies for major undoubtedly or second client likely the base or quarter. are led aware, And the in to expirations have most global patent programs to by budgets continued increase pipeline

notably to bookings clients quarter. began biotech during from However, the activity second proposal decline and diverge and

focused also We further growth now to working we DSA remainder We over these pressures our cost the the the expect to companies position demand back. likely on create clients budgets their rate withstand better when to company are anticipate to cycles reset structures. trends leaner base line so to the XXXX, and our currently are Large biopharmaceutical for both deteriorate the on resetting into cost global impact now bottom of to demand are year. biopharmaceutical to

softening KPIs time. and by clinical of actions will pharma focused on pipelines their on activities, large the to particularly cause demand spending these resulting of at slower drug early-stage because expect more their our are period continue they this We development a

longer-term and compelling to presenting clients refocus inevitably efficiency believe strategic to speed We preclinical market, us for their continue these cost outsourcing solution pipelines. view once a a opportunity on to as they their improve that

rates. somewhat around large for biotech the base half, demand through clients DSA favorable funding have and small this have And companies this to and environment to trended first midsized reflecting improved and DSA our of contrast than and proposals the solid stabilized of pharma, KPIs more half sentiment revenue, favorably interest year. client Biotech XX% client In revenue. largest base more at total net bookings are approximately and

new higher improvement an that levels translate biotech wins. we the experienced booking on have as business second the in quarter quarter to We last in begun commented activity proposal into

and base, sufficient to biotech revenue from previously these will year trends DSA therefore, recovery our the that lead expect anticipated, optimistic they're first to improve half biotech demand not cautiously we future improvement half in are we do the of clients to not also a than revenue to support the levels. second While client we in

laser-focused generate We to costs more protect on contain value. revenue, initiatives and shareholder are

we already earlier I enhance commercial begun this to As efforts. have year, our discussed

We sales our are and selling the focused to being portfolio on selling optimizing our opportunities and across go-to-market sales accelerate focusing force by earlier. and to adjusting for growth on technology identify entire flexible leveraging enhance insights strategies partner revenue a clients,

preserve for to platform access self-service real-time to is To us Our Apollo digital demand drive that line, structure cloud-based with will bottom better capacity we to through continue to count manage strategy current softer clients. our our connect our savings the head provide data and cost also the and tools environment. including aligned helping additional and are clients aggressively to with scientific ensure

These additional have $XXX the We end actions fully implemented be in that actions generate which will quarter levels. realized million cost smaller third of and savings, of XXXX. already staffing will by are consolidated reduced recent sites over annualized be and several the to expected

services We digital are and further on leveraging processes. also driving operating global finalizing our and footprint, strategy, our global further business streamline to greater optimizing platform focusing efficiency our

more end the provide implement including incremental phases November, to that a comprehensive the these this expect this update before the plan and savings year, will in of initial We of deliver. we'll initiatives

repurchase as and we also well of this Board more activity on our Flavia billion. as We totaling stock reinstate release, topic end to earnings reinstate stock repurchase will the morning's program, this an stock a repurchase in before third details capital will quarter. priorities. a new recently approved on $X our authorization intend referenced the provide update As

details decrease on revenue an performance, the second I'd basis, segment businesses. now beginning organic X% segment's on additional like both revenue results. our a million, driven with DSA quarter $XXX.X second by you the of Assessment Safety lower to Services the and DSA with Discovery was in provide quarter in

was volume Assessment diverging mid-tier quarters client of increases. from the global consistent business, small trends trends with recent overall we base by in that our a and benefit biotechs. In the have The price Safety discussed biopharmaceutical demand relatively and with small partially offset exception lower between were business those steady

but with first see consistent second Xx quarter. has above the beginning the similar in activity net back biotech remained biopharma bookings book-to-bill rate proposals its in are was the global to levels, we was and that in ratio earlier, mentioned cancellation targeted but clients, Xx in improvements quarters, resulted slowing As also which was for Gross last the a clients. quarter below to effect to below second still combined is meaningfully for X levels. quarter. not booking but The And peak,

first a As DSA the from end the of of quarter a backlog basis quarter. of $X.XX second sequential these result the $X.XX the the decreased at trends, billion billion at end on to

the we of reduced these Since year. to our spending we impacted for not likely pressures anticipated, will year, previously because incremental full a organic expect have the DSA half we and to trends be biopharmaceutical global during as improve client high the outlook base, decline single-digit revenue by second from our do

aligned the term, expected space level that this In are our we with near staffing demand. capacity will and lower both of ensure

recent to with IND-enabling focus improve demand versus clients beginning to indications both or to focus their to bases. to our monitor across and Looking beyond mid-tier their return speak global their that, we the for post-IND trends will closely for client programs that and stabilize continue are and on studies begin clients

first XXXX. basis Discovery particularly additional sales The point quarter, decrease improved XX.X% decline volume, year-over-year reflected was moderated operating commensurate was accruals of restructuring margin sales the generated operating business. lower the of from Services our a quarter the lower DSA efforts. margin bonus by The The volume second from quarter pricing, and with which cost savings in in the and impact second level, XX the

XXXX. $XXX.X decline second X.X% driven The by revenue organic NHP revenue. million, a of quarter of an basis lower over revenue was on the primarily RMS decrease was RMS

last quarter growth quarter, to timing be the headwind we the meaningful NHP to second we As rate. a mentioned shipments of expected RMS

year-over-year Excluding by revenue was research model offset RMS impact, services. higher NHP essentially small slightly of sales flat revenue as were research for lower models the

will the For the remain we environment overall. believe stable year, full market

growth. our organic of revenue outlook So to single-digit growth RMS we flat are reaffirming low

in all enhances to of particularly continue Revenue for The Research small ability fact the increase our small are geographies, globally. models low-cost that to to business for price which continued Europe. Models models resilience research, increases the and realize also tools China reflects essential in

growth strengthened the rate Our models small gains China. China country the for primarily research as the have pressures geographic business driven by expansions been our associated despite with resilient share within has in macroeconomic

and slight Services GEMS experienced a largely revenue overall biopharma decline demand trends second quarter in the Research in both Insourcing Solutions. environment. These Model the reflect

clients that utilize generated pressures budgetary help and However, their efficiency. solutions driving our GEMS by benefits overcome the can them by IS

particularly to solutions requirements. that in South unaffected looking vivarium are who the while clients with cost-effective consolidation There not CRADL our demand, business space of model, are the for pockets of to by their resonate Francisco CRADL environment, led San demand capacity softer have continues for there.

However, other perform well. to biohubs continue

points the quarter, second from primarily RMS was decline The in by result both margin revenue. NHP NHP XXX the lower The the basis timing to shipments and operating In of Noveprim a XX.X%. these revenue of the of a have on China quarterly impact quite of sales basis. And can RMS meaningful large the the lead quarterly models a are margins fluctuations. can to since shipments profitable, on decreased timing

the the changed segments for year XXXX. expected RMS expansion and view are our However, margin operating Manufacturing to both and in deliver hasn't

the second segment's last on an basis increase businesses to $XXX.X million, X.X% the for Solutions the Revenue Manufacturing contributed the year. of Each compared to of was growth. segment an of revenue quarter organic

because lower was the of than comparison As the first rate anticipated, a level more business. year quarter for challenging the CDMO growth prior Manufacturing

we may second CDMO quarter the recall anniversaried the the recovery business of in that of year. last You

half particularly the projects, second pipeline the rate We reaccelerate the CDMO to current of for of based in expect the new on cell year therapy. growth

and certain to market revenue undergoing geopolitical we new opportunities comprehensive demonstrate also M&A a due landscape the both As single-digit in new to testing a or competitive our should sectors regulation, business. growth expect mid- manufacturing increase win in Manufacturing synergies from portfolio a outlook. to range, prior of offer our transition slight which be the result, The organic high proposed will is of

client and well perform remains strong. to continues interest business CDMO The

who client received in we center clinical Maryland our development. The approval across also regularly last various commercial excellence new the projects and utilizes phases are adding viral third of vector month, of

and improve, CDMO remains this growth track to deliver to solid on continues activity year. Booking business the double-digit

its more Biologics also was the Microbial last year. Control our activities, to manufacturing by including rebounding Biologics viral core Testing continued and Quality banking and environment Testing's from business, clearance. Testing in grow, Solutions challenging testing market performance driven Revenue cell

consumables Microbial reagents demand have and For the have driver growth as Solutions, testing primary of purchases cartridges. Endosafe for revenue resumed their was activity of destocking subsided. Clients our

XX.X%, across was improvement year-over-year sequentially. of margin result operating The basis is quarter sales volume XXX continued second XXX a from largely demonstrated improvement points higher of segment segment's the basis Manufacturing The businesses. of leverage with points increases each to

trend this also of ongoing due the from CDMO and in continue as expect rebounds We XXXX scale the business. the segment will our to increase

To budgets, cost their reprioritizing clients reassessing clear that their are structures. our conclude, in it their and of is midst managing the pipelines

our order early-stage necessity, continue to to treatments will, and However, over In reinvigorate other investment R&D programs rare seek needs. clients in they for medical by unmet will life-saving their do so, time. diseases

share. To emerge actively to value business, partner an commercial additional and clients' even new innovative and for manage as enhance are initiate ways our we transform to our clients, experience stronger costs, protect our gain our working to shareholder

clients our for and like conclude, thank to exceptional and support. I'd employees and work their our continued their shareholders for To commitment

details guidance. additional quarter on second will provide and Now our financial XXXX performance Flavia

and Thank you, morning. good Jim,

you non-GAAP results, gains primarily primarily to venture Before exclude from and or be items. and costs certain may strategic losses acquisition-related I I begin, amortization and other adjustments, to remind other speaking investments restructuring certain which other I'll that related actions, capital

which of Many also foreign comments organic of my acquisitions, the currency excludes refer and divestitures translation. impact revenue to growth, will

quarter a decline. Second at outlook mid-single-digit our rate, organic the line to with XXXX decreased X.X% a in revenue low for quarter of

of share prior by However, approximately earnings mid-single-digit we $X.XX, exceeded growth outlook $X.XX. per of our earnings delivered non-GAAP which sequential

driven compensation The majority by lower earnings of outperformance the performance-based was expense.

operating in the also segment contributed. in margin growth expansion Continued Manufacturing

to outlook primarily the and light related year. The adjustments our for performance-based in reduced compensation lower expense the accruals of bonus was to

driven As in primarily second global a now outlook and organic basis of lowered a to guidance X% previously and and both biotechnology and of small detail, full for the year in significantly by have the to demand clients. discussed for expect year on basis, anticipated softer on X.X% a our pharmaceutical revenue an Jim we midsized decline the than X.X% reported half X%

compared We organically the be DSA by end to the half. decline the in XX% the expect the change half second DSA year-over-year turn to revenue driver this approximately the first negative expected is to decline softer in by demand. largest of X.X% will pricing but year, of slightly

revenue this help $X.XX all is range the shortfall earnings will at to to not time have Therefore, additional offset the in share We now guidance non-GAAP per of of with point offset bottom savings cost beyond. year. a a restructuring deliver savings the have lower initiatives line, XXXX impact the further which However, are we additional $XX.XX implementing more to meaningful will cost to in partially and revenue preserve and in

drive our annualized million. X% ensure Jim an additional aligns As from generate of of to cost cost nearly costs, million current savings are our in implementing operating savings, referenced, the we initiatives environment. Restructuring is cost to expected that increase approximately representing over initiatives demand to are prior which structure target $XX $XXX our incremental with

those already This updated third target last were year year. includes initiated through this the of quarter planned actions that for

in realized savings be $XXX to XXXX. approximately the expect We of million

finalizing our will our which manage footprint through operating optimize drive further and also and efficiency, a to business we are We environment. challenging believe margins global protect multiyear greater operating ability this to the strategy

of our before option repurchase stock of to intend quarter. new Furthermore, Board manage our a the authorization will stock strategically new add $X billion, to the allow another approved commence the recently us capital which under repurchases allocation. to end We authorization

share the but equity annual offset capital. best goal will awards, to count Our our will we regularly be reevaluate initial dilution of from uses

just to has dynamics in demand has Xx our capital enabled has low moderated As environment. and of the remained current These the slowed, have reassess priorities. capital intensity our us M&A activity leverage at above business

a capital shareholder we repay strategic our enhance debt will service to deployment capital continue to as maximize acquisitions an approach to and believe and maintain offerings help structure also will optimal balanced evaluate We value.

previously expect provide segment environment now largely and at anticipated. items. than on demand now organic I'll DSA outlook a details By nonoperating decline single-digit softer high revenue on to due some our rate the segment, to we an basis,

The organic report high a in expected organic segment RMS mid- low Manufacturing essentially to the generate the RMS segments growth, outlook flat and single-digit revenue single-digit May. to revenue for increase and from to to expected slight with outlook growth are unchanged the Manufacturing

be that consolidated operating bonus level additional year's cost year's at last margin operating below perspective, we nearly expense will revenue as and slightly margin From shortfall an performance-based to the the expect this offset lower margin savings level XXXX. in the

segment a will On basis, Manufacturing expansion offset segments. and in pressure the segment DSA RMS expected in margin both

X.X% quarter X.X% second of to last totaled performance-based revenue corporate of million accruals. Unallocated compensation This or revenue year. compared by driven the costs improvement $XX.X primarily was lower in

percent the expect range we year, corporate a of in costs mid-X% will unallocated revenue. full the as For be

XX.X%, The earnings to mix points second year-over-year. decrease a R&D a higher XXX favorable was quarter The basis was rate due primarily tax decrease of and tax credits. geographic

rate favorability, year. our be tax As for full a the approximately XX% of result now expect we this will

In the both $XX.X sequential a second and year-over-year million, quarter, was decline. net interest expense which represented

we the to our in interest These the of also For primarily interest expect and full expense debt of rate debt million. will lower be geographies $XXX lower shifting million outlook range $XXX total prior year, continued the to result reductions are net repayment. than

a via a rate $XXX end an quarter As fixed November $X.X of the rate, until debt of reminder, interest second swap. XX% million at over that was billion including at is fixed our the

leverage interest ratios repayment quarter. continued In of addition the end in the and resulted lowering our to expense, X.Xx debt gross net second of at

year. million and second cash management. was CapEx $XX.X last This generated remained improvement to flow lower the by quarter strong Free compared capital $XXX.X working in with driven million

on focus to quarter reflected in million Capital which a environment moderation current last disciplined spend our expenditures were $XX.X million of our year, the second capital in investments. the $XX.X ongoing the and compared demand

million is cash flow be will approximately $XXX million. million and the $XXX free CapEx $XXX to the to decline range in of our to For year, expected

can found Slide our guidance be XXXX summary financial XX. on A of

Looking rate restructuring we reported offset in partially low third by impact the initiatives. ahead both to and the double of mid-single-digit will organic of demand is share to expected will at year-over-year. a be as Non-GAAP the expect benefit only decline revenue quarter, the year-over-year per earnings lower decline DSA digits

by The segment from segment. were growth strong year-over-year rebound the quarter, year of prior RMS revenue the NHP the rates in Manufacturing expected the in second timing and comparisons RMS to affected the the which difficult in and Manufacturing are shipments segments in comparison the

is financial continuing at the accomplishing to our to period efficient around In will share to time that softer demand business We believe clients. performance. for scientific conclusion, emerge partner of our the these strategy, our you. actions this critical focus to from execute rightsize turn and market Thank this gain leaner, company the more a position as and

comments. concludes our That

We will now take your questions.

We'll of Instructions] this Matt Sykes go first Sachs. Goldman [Operator morning to

post on, time on of of give of higher client think that about cost a rationale Maybe demand that. -- really commentary the And a as your thinking what bit post that going biopharma base just QX deceleration global demand? about a think can kind and seems took in now, it level, the of hit sort about for just about on that been you have that for the cuts you increased and they've some been going you

for to the scope just do be them and for come back, you pivot going given to lot take longer it's think it's just that these that going given size quickly? so to difficult And organizations, to of

disproportionately we timing. have a pharma of in and large business. the good deterioration is business. big share pharmaceutical of news to rapid This large work, is unexpected Assessment the difficult certainly for the companies It's pretty a companies' us call Safety particularly The

hand. great the on one that's So

to them that ratchet reduce overall as On the causes they down begin of other their course, structures, to cost demand. their hand,

to go an through sometimes years adequate have infrastructures. try out They The multiple they -- every few lean their pharma processes do sometimes job, don't. companies to

the impending cliff the X with essential, has companies maybe think that IRA the I legislation, the patent have made drug. it with coupled of prominent exception GLP-X

be disproportionate it. pipelines, seem impact So reprioritization through of of companies and the rapid cutbacks, deceleration some to us, on

midst are good longer very get of take tough in of It's a it, may probably sight. the for Some line to others.

with the in have pharma, at we're with the there with some very the We're of sight and don't sort which all a so being or early decisions made contacts in the level us of R&D. C-suite of at and clear dealing or could And of level made not sometimes many drug line line have that these that of profound cuts person it's of the R&D are companies. big head they X still and are work certainly We and working or high-level people have sort the an #X board so sight, of with of necessarily warn been minimally us.

appreciate mean doesn't respect So opportunity these the indications folks be what we we're their We so. that do. to would partners. have and early It of

little a call. bit it's impossible So to

remarks, it we've likely that persist biotech, to But difficult of don't pay seen aggregate. been subject very believe the that a it's -- of pharma market. on it's It said know, that period drugs although our comments would and that, in clinic, my demand clinic, prepared it's recovery is like very reason and that just is for what continue time. we some in trials to and us to seen cutbacks repeat in do recovering, their into get this obviously pharma. for to the And would drugs that somehow for into I'll they in sort I gets clear seem, curtailed logical that's their feels very, slower the get to we've soft the no to seem There's very, into to clinical and to emphasis XXXX. But call logical

this there DSA given you the Got noting to you is then and go-to-market, macro issue in up just market here? share And commercial pressures? shift going made still and restructuring it. on Or chuck overall the on comments a on would and --

biased, unique. that quite we portfolio we have obviously think Yes. we're think fabulous -- a but We that's

footprint, in geographic Discovery. much Safety a have particularly and We larger

we be exquisite appropriate And to, and have cases, deep have science. had in aggressive with We prices. our

that. we'll more half of back we'll have of to do to this I through more think -- -- the year, we'll do have

So share. think losing we're don't certainly we that

is sales of whole and easier, continue use we its -- As its faster Apollo, also better. get we've data IT, which about work and utilizing aggressive one which to words, platforms this digitization lines clients and organization the to can across structure, of which of virtually talked of pricing with some early I and to the In competitors can advantage use clients time some can. allow refine portfolio, our we our the greatest that very which large do our other a our nonclinical competitive do think is and lot, portfolio, none

this think going with a the market pharma, we earlier, kind we're certainly both slowdown the can whatever of demand But And we in we in to gradual is So terms the to and shift operating anything the very. out science. to to we It's possible sudden work that getting want most best of to in our hard of our do have quality effort although respond don't and better. to as a with going said impair forward lean biotech, do facilities infrastructure, G&A midst positive certainly we market the demand. in an margins can of staff so is to job

Coldwell Baird. go next to Eric now We'll at

the of to that majority I I quantification chunk accruals. earnings guidance, you hoping quantify get a was but you big said of could upside the or know it impact amount? implied versus a the was of the bonus

of of all second be to might with tell second the how left this the take second care half half? the earnings help in then protect much Or did in us quarter? you And

quarter one. about It $XX true-up $X.XX. second of And I'll the the was a take or second was the million in approximately for Flavia, It's first year. half quarter the that

the first was half. true-up XQ a for

in what half? So happens the second

come full for as guidance You updated half the can expect also favorability year. second would additional the through we that

following favorability we have So will additional probably through.

this much DSA I in you And opposed basically. Models? think there to as was was how Research -- this perhaps of guidance kept

the all So pretty is Or I'm fair? much assuming at this also corporate level? that DSA, is

correct. and level. You're the corporate at DSA mostly It's

out, you and are performing well The plan. the X other in segments, as with line pointed

at the of majority the So and impact corporate DSA. is

you in numbers second I'm XX% I first toggling was, But think said, And DSA. a X%, I minus of half organic lot know in half, Okay. here. minus

first second ballpark did assuming be XX% in the half? it quarter? the reductions Is the half would for million in more than you So we second a a the accrual year in maybe second half $XX

to to not I specificity. that Yes. of we're level going get

will so I be half. favorability said, because true-up the think, far as half there first I the just was additional that only the did in second we for

Okay. the I last in-house with minus Discovery you've doing and of is And the think organic a around think for both think kind question. XX% a You market, the do talked and overall XH, in then proxy outsourced? But you than Safety during you're better this overall RMS in half? to the your get the market was or sturdier to that? ultimately in worse little what a second much I'm is steadier, know little here trying soft patches What's on historically read and And I here toxicology that Discovery.

reduction models have and you that effects demand this think But to some knock-on in kind to overall like services. you're sounds RMS. already in it a has have of in some impact outperformed have historically to You seeing knock-on

Research better down what in growth demand just sense of the XX%. zip get I'm of on to The and is trying code into XXXX. going Models a So and is tox Services the safety read

own, in a We meaningful declines across say, for view, would of across holding had like from I view. volume long our the RMS, modest feel entire certainly, declines we've of And we're a point pricing portfolio. time, a the services competitive product both point world. and relatively Certainly like from with

slowdown a been now business is bases, we for will the -- how pharma Europe biotech. in is And little than So quite would there. the have maybe long, some I softer of strong is notwithstanding like services Eric, issues strong. The political China because quite that know of strong, GEMS just don't both persist. and client a decade.

in, think of them. that's research. But times really of lot is a definitely in for And CRADL our critical that's think a in a are doing solution our stress, I economic clients we which initiative good element basic

So we in have capacity capacity other have overlap, maybe much locales, a bit locales. little too some to in bit opportunities of more facility a little

principal Definitely, were be business of parked up before up that by in the our amount business at portion lot look is have that, Manufacturing INDs well. will a you hold of SA or DSA. drugs parked So or clients if definitely of But been should well. should hold filed. just pressure were parked

So of they certain and cash they will get spend a have back to they like, to they they that have a prioritize, those next. drug amount

And significant classic when are emphasis work. of they some get at post-IND back lot so to will spending on to we're the feel that more work point, then in that will seeing shift coffers And discovery. stable, a core IND

there obviously, There we no thing. But improve be recovers. difficult we as There should is to so And little clinical is a that all Time without that no is well. last no think know, future. will discovery, bit business is call. the frame, of as course, that preclinical.

go now Evercore Elizabeth with next ISI. to We'll Anderson

to a the worse? quarter about you time we revenue to still thought XQ progressed? have trying I'm what third particularly you're think you and relative Is of about bit DSA, in stable of in the organic in to how sort sort you how say quarter, you flow-through frame? mid-single-digit just flowing this seen of a through, If how sort things understand July decline are sort getting generally? Would of the saw the how that little

last because than on a for work time as call pharma I continue of so that was the of fabulously fair I year, amount for big just we liked. slowly studying strong unusually want everybody But us safety last the just few things. biotech volume have year call biotech. saw work, very the been more last strong two, trend strong terms we or anticipated to because we I bookings, on a said of several that do preponderance to Number has one, months the solid really proposal We growth of definitely improve earlier, of growth first that better. our Number and think in slowly, this driven for pharma. the pharma growth I had over half year. particularly remind is companies just big much by and pharma that We this spent

of decline. And see sort rapid then this we

seeing certainly understand it taken It's And what a persist into so to to it. was behind July. us it's to We're clients while really tied study.

of are companies, look said of course, As few funds phases it and, moments a that does I are and time. is a same of them if doing while it, at in the in absolutely infrastructure industry pipeline, although pharma it -- ago, seem they back you of the an big this different most cutting phenomenon

C that some percentage is in important. the the and hope of our developing they'll point, find cost put a quite drug, future work of level they'll as IND extremely progresses a And At the find The more into they clinic. will of that work. which IND those And we there post-IND drugs, trivial. and are obviously spending

that think future. that they'll do the and some we have So important that's money the for do at to point,

given just the and moment the this of Following with at nature murky, and nature specificity meaningful bit any a pullback. unexpected is that the suddenness the

consider range? that Flavia, Got one you Or we agreement. maybe share there it. And some should be about any repo repurchase the for clarification you. doing Is know into to guidance just I built new share separate? question potentially talked

that Elizabeth. be consider to would this separate at point, I

As de remarks, be going in the in start be we'll is the still. on impact minimis QX, I said to looking it but in this prepared executing year to

numbers. not the it's So in

Correct.

Thank you. We'll go Dave Windley next at Jefferies. now to

of One, this this distance to you're restructuring in like Jim, outcomes couple taking, range on a I'm vectors. wondering, those rapid optionality the year of guess sounds how pharma's in about you're relative outcomes? that hard I that into from out wondering decline And talking next are up. range you're much and actions I'm see about thinking of how you thinking late time, I'm short year. plays a to ramping and of large period

et And year beginning the fading cetera, has been economy, of to if may and given improved able in And not politics, through a the peaked that recovery it of at then that continue to funding how year-over-year, might of year kind and to the has way you to small of while kind improve. be be were the as that truncate well? react biotech, soft biotech

can and in that at then well. Flavia take me as jump shot Let a

you strong. quarter. As was been strong in funding said, biotech It the particularly has first

great. wasn't was Second quarter July okay.

So be you right Dave, think us know, a I cooling but bit. of don't off that any may it's

and Having bookings proliferation said proposals improvement well. a had of as we've in some that,

though. is it of psychology, much So

to of conservative. given in our work about be terms the nervous it patent So the think continue impending client they cash. consistency do availability of pharma the their And I want is be, going base Obviously, trying think to to they're lot infrastructure to of of a get to I where has cliff.

So look, isn't -- even all I well. can and we always, always this us and we think say long though it's a this for do time,

physical XX and in demand. XX to capacity. get that, always expectations to advance. it, have know, I our capacity call in mean, with to for And We human our months capacity, I and have growth don't line by We

of least down our CapEx in our continue will costs Half growth a half So down -- in bunch and at cost to. dramatically, dramatically of of staff. will obviously, is investments has areas, slowed our slow

already some larger this year. are we've we'll small look at and we'll appropriate. we've year consolidations, cutbacks ones and do to through starting more next end see facility made at some of to perhaps So those And had look the whether

capacity really We've know, last all decade good impairing And able really margins. add you without well as utilized done the to having our our businesses. over operating been a of space indeed, of job across

call, So it's portion the persist next that is. a midst some commensurate scale of ago, back with said the we, tough and demand to and continue believe bit to to won't a in of year. them think, pharma as continue few little what are 'XX, to the but both of I moments I will pullbacks hard

first see year. try a the of you a to pretty be was we to that good of we're right which are careful half off calling actually Dave, it cooling with because If beginning trends, biotech,

will what will the do. do. know know don't the I don't I those wars any So what I of know don't do. things will election what

do and any it's lot doesn't volume of and companies just a work of But still capacity work a the VCs that assuming that year that worse, biotech internal and get with us of to every minted don't hundreds stable we think I for lot improve have and new because there's continue companies. could those portfolio

watch very of it year. And We've of year. do this a We've call we lot it to need $XXX and a called that will the we of it next sure, we then and need already million carefully. $XXX bunch more we'll hit will, in Obviously, which implemented today. savings, continue for million, to to. So have called

don't else have anything And to jim, I add.

think covered comprehensively. you I it

Great.

my in price I follow-up around So about modest believe expect pricing, to impact that then but your negatively. XQ, flip commentary is positive talking

know versus kind about price talked and heard chase of feel I'm that the have wondering aggressive understand some about as I I have this help maybe And down your where I'm fairly by is we've to discounting what to in at in And down. you softness you've wondering peers. of -- DSA some just year. your to the balance half certainly you got but -- you bookings Eric you chase and of maybe out kind in balance for that you back extent think like could think assumptions there how and that price and refusing us pressure to the of margin included you your the plays

part of especially the the question. latter take I'll Yes.

and experienced be as in with as margin. decline what the pricing so been second -- to the in said, pricing considered I the the half well dynamics exiting DSA trends first the far price So in slight year anticipate that the Dave, the half, as we of we've through have

depending the additional work, those of of work. don't incentives. those feel like dynamics I'll selective. that we do nature on first There's the we on makes of said earnings the not being call, in color work the providing we and spaces, add some comments sense, have on we where And additional depending we are by Jim. to need competitors the start in a capabilities. And pockets welcome it of it we some pricing the lot where But as price discounts provide are

pockets as appropriate, being that There and are certain do we ensuring that, we and certain business. lose selective are not other are volume

in So a XXXX -- positive, last coming still DSA. into of as to the historical in the year and But we XXXX, it trend think seeing shift QX. in was and this in a slight I plan it macro to trend slightly started up said, it's year, are year decline with higher last couple and extremely levels than particularly we modulate price from pricing with years, exit was

want you anything if know don't to add I Jim, else?

Dave, our price no lever. competitors the There's question, principally that as use

so don't And We not try like to. to it. chase we

gain access by of we pretty the and As share. year to half the of in to concern of pullback pronounced to I we big sparingly our just think feels clients and it's said of the reduced be by capital. sudden in price more the it to the year, like maybe half certainly pharma first some sort about back given biotech going share preserve sort pretty

less of become or So maybe and became an year price, years which more for for of last the so, an it's issue issue.

in that's pronounced should half the that, As Flavia our in said, back become more We're of the year. embedded guidance. anticipating

now next Donnelly of to Patrick go We'll Citi.

you. Jim, I guess one for maybe

hard suggesting of would know Just into like kind you as 'XX. them pharma these pullbacks, sounds into some said you about will 'XX. to headwinds, you're linger it be a it of believe linger think I those few of don't that

headwinds may cancellation as you where look backlog, think guess, head expect just guess, what concern we the year? of these several quarters visibility you of rates, when at to feeling areas be of into you you okay real 'XX the for you high when don't I at at So have are maybe are start persist and of which kind things I improve least where that level, to the And the start into year? next improving,

going dialed We internal and they we're Again, have continue tale to capacity. this of definitely into to X biotech have no cities.

we've of phase into historically high been as for very have So if preclinical a that big price pharma. moving meaningful little they work. you we it, than a in time, amount some And a probability of get to have said sensitive or period to they're less

true. but a it's that's comment, know surprising I

marketplace. think So I we're much that in with touch very

earlier, said access the about psychology to much As it's of I very capital.

So how markets unfold. capital the we have to just see

maybe is little call right them. summer very very pharma a a all it. to close to bit time The mean, now. of I also rocky difficult dozen There's We're companies left. a

the internally. don't We have them relationships. the work a very high-level majority say do of I'd

them, of a They dependent we long-term us. lot and also have pricing on with quite So adjust, arrangements. they're

will back some it's more price, on their cut as preserve while structure. to going try -- cost and pressure to be volume that's about So there just be they

more faster big make as I major because -- way to them think structural positive, I persist. So they that pharma going some make than improvements going imagine major overnight. look becomes can help biotech make to to us them. to we it we're see no said, to them there's who would has restructure They're

be segment do I And think them. will important. Safety be our Manufacturing more of be will definitely, to will all to increasingly CRADL continue So important. important

a the the we're individually for and time aggregate. we a bit scientifically not this the little don't for think as in assuming we have dramatically, out strong that us very that both superior But We So us, we're to have tied would reason to for frame, change not just infrastructure softer XXXX, just given think. lean gored. longer We the to again, of competitors, it's so all it's portfolio. we it's see any why than that for

on mean, terms a more customers. are it's just of few -- softness That's sounds helpful. there. the And in I of your it on versus broad-based maybe few the following like it a up points you seeing pharma side, on concentrated

your customers, in the seeing pharma preclinical? it conversations spend? on Or kind where is with in also you then play more view, in are across your it discovery this And softening you broad-based of

seeing dollar the of virtually all them that with it very I market time. shares are as going And we increasingly volumes. all staff, at -- and pharma. companies large large big for cutbacks and same before, are portfolio and of substantial exception us, the the of X very making through facilities GLP-Xs, We're broad-based. definitely across it's every have huge said with So client, of

that to don't work. Having said safety tools definitely the and impacts, are companies probably, know, it that, folks clinical playing adversely some disproportionately the discovery there's I benefit question that of of in no

So a all it's big portion.

all drugs the and clinic the been into the so new By behind to spent year. far have push money most get prior where but a it's is meaningfully the many get It's that try the drugs as that's to into way, market. to of that drugs for anyway, approved possible is

with I also that's So problem another them. think

just get the to they a really more hard legislation much and similar around So they do. market. They're make working types fight into That's the see lot bit They've got sort similar IRA to targets, a off and too molecules a have of to complex, of the clinic definitely easy patent more competition now. right that not to cliff. drugs of into

won't difficult be So on to again, know there disproportionate we will predict, say focus be clinic. know know, to I But a the it's how or even long can't there forever it that We discovery pharmaceutical ultimately, hopefully, and successfully then on work they to IND more industry. have market know drugs that get phase, to no is use, to more start. to the fund

are spending we're before. seen similar of we 'XX, of and typically watching broad cycles pretty period don't client gauge do this merely times reflections. this -- stress, look, there XXXX, think we've 'XX, But -- sort all but base saw personally So on is we I as 'XX, bad, we in and basis a is in a don't in business. much the where economic can carefully our I think had situation

of big work are merely do, what molecules. a any We pharma biotech of and data. our amount we right? aggregate have We don't reflection that's of Obviously, own the of

the And an around and have services in increasing while we that's of so amount clinic, good.

is and guidance and preclinical, Our to continue the well in our Manufacturing less around in we right big by business is clinic. drug discovery emphasized as certainly because companies. the should that's do work our in said now, of preponderance The which

at Stanley. now next Savant Morgan to Tejas go We

you to little mean, unpack comb want past, ] that a bit, the made in same I a to right? just generally, sorry remarks sort Jim, this patent to guess, R&D I down be the that couple I concerns, we've of of sort There's [ to on gets time. It had pharma of seems pipelines filled. cliff that when double have or wanted those so revenue different theme. hole companies almost

that? any So on sort color of

in optimistic okay who with the have what sort were most making from months through the process like it of out seems outcome. in outcomes feeling changed drug couple IRA, this here. the nervous? actually Because it a went election they on the to reasonably then on larger companies negotiation last come of reversing fallout entirely them court? companies, Is that >Pharma view of And of has drug

you can aspects. elaborate just And I maybe then follow-up. X on those So a have

I there's was source our of mean who this been we've clients right and revenue and source principal servicing activity revenue of pharma meaningful forever, a is obviously for obviously our that unusual now.

I on except IRA more think surprised we're accurate it that comments we're about your lately. are hearing

have restarted the more. clients sort But mentioned the that. even patent I So They're all know that. don't mentioning of what almost lifts

at R&D they longer of doing structurally just you to just, to makes it now. the depart takes we it -- for early So Strategically into would least the that them a an on try down sense. lot don't the our and longer drugs and which it to market to them actually and get a or offset that, organizationally, It's on costs clinic. more. notion know, takes as to lot see It right get double

So the coming some drugs they off. them, impending just have so to a smaller work on many of impact offset of patents number many of to from the

in unusual the clinical of provider, be and to also word be just so activity. said, every a ago. ways, we're to with used internal to folks unusually you doing day watch to they and facilities. we're profound service for going you. we work It an tell emphasize to them to prepare And less their said want to like we many yet it's you like and work with these feels extension feels close we're the preclinical that, need detriment not we'll year I going unexpected own sudden. -- So of and because we're really And their deal we as

sort warning So that dialogue. get or we didn't of

I

Think with them. We of we're on sitting side same table increasingly we're that the closer feel to our clients. the

lot to think and yet. probably been of more taken a and come been I haven't decisions taken have relatively these recently

Got the sort for benefit it. the from BIOSECURE of potential one Helpful. on then And ACT.

I the context think of business. it the in to CDMO you alluded

Services think solutions, of share any potential there? sort gains or dimensioning of testing even biologics just the sort potential But color about as you within Discovery upside on

a Flavia. for interest quick then expense And net cleanup on

that cuts, but actually might how the the essentially benefit go XX% well, won't just So is fourth you quarter thinking sort as income down are from the you about rate of XXXX? that right? given interest So into interest your dynamic fixed, into and debt potentially

across the to some of biologics, BIOSECURE I what lots it's positive CDMO believe safety, us a we won't hard have the think demand do, right, for to ACT some sure, for benefit discovery. curve that pretty on with who compete quite there's competitors in good us it's been price, and happy them. with very mean profound, I have but space clients of and our that Chinese have lot principally a scale

or it's have while that had and there's quite tiny has been conversations a last positive us. the both that And of conversation clear amount and said, at with very I interim to that, work a some come conferences, of we've us investor our as should think, small call we a on the interest amount benefit, of

not there be we So want a to careful we think to the is overstate over we don't -- although potential, potential time.

is clients severity see and very We prefer watch how their inter was the did thought unusually we we a do whether you you in what of work what portfolio capital use portfolio don't these we of to. of with with see call, They the would China." last who didn't say want that to rolls not on sort do. language had firms China. had, said have we "Instructed They they just see with venture we it work out, don't was And companies said, think is, to we that whom our interference So strong what companies an -- and follow. meetings couple see say, it ultimate big I

don't start that So and VCs new quite interesting. gave be These something from that creating that might us that want are an companies fact they that indication to scratch that, the with are even China, expands.

lot steam, it it right greater doesn't have like a seem to should So head have talk much now. A feels of of it. about

whether not So saying And changes obviously, built anything expense let take we're any we'll Flavia there's and post-election on the it's this. question. I'll year, for that interest see into this

-- the Sure. the end Fed these year, the of by also we the will reductions impact change rates any is the on debt interest timing outlook. meaningful in that the not end -- have the $XXX will XX% mention have swap November likely to And until of our given tail at be fixed on of our any million when really Not expire. the Tejas,

cash, also income. down talked very our you know keep objective could interest debt. pay put that But on pressure we to that I little about your to given obviously, try is

minimis as So well. that would de be

will in fix year, And interest have given rates because obviously terms outlook of us for bit swap will next expire. positive the in Fed of be does the a terms for less anything we that little bringing will that down

floating of of rates come positive our increase. And interest be amount will if debt so down, And actually that for the would us.

We'll now JPMorgan. Woodring go to next Casey at

one. the one first in year? quick of comments on of I follow-up. assumption on the pricing just I half back made quick And What's the today DSA guess your you NHP in pricing pressure context have the

I can take that one, Casey.

is RMS the a it the we pricing it NHP third NHP that which because in on bit business, parties, commentary to some sell is focused pricing separate I'll I'll in and your I'm -- business. more when but DSA question assuming So also on provide reflected little

it's of as peak I the still will So pricing but positive. for the levels year. quarter the DSA as the business, follow pattern was tail decline overall off second this in modulate slightly probably to of last DSA, NHP probably same the we, for pricing indicated. still from think, in year, positive end so slightly And It

of have have Noveprim. we NHP Shifting we pricing RMS. as parts acquired I the now since Obviously, we to commented within business, that think, X

sales through China the And We now we Noveprim for have acquisition. the in China. NHP have NHP then sales

to reflected in and that and levels have be continue been the them we'll experiencing to we're year, down expect them come they in prices results this at our So have far today. China, so

relationships in pressure half and haven't we the expect year are of then do of second -- case there And to agreements it these year. and are Noveprim, the price experienced prices in happen not They this long-term the stable.

target And quarter. was not this helpful. book-to-bill below cancellations you still to levels mentioned Got then it. again and are net That's back X

really driving from now the was the what's from pharma impression the booked large the year? pay how Just they that versus And couldn't cancellation been number work here? of the in curious biotechs called far that's a of in that is The been out cancellations for in have the much the that the expectation if restructuring large moving through have here, quarter with cancellations past just biotech? But pharma rest the too had for of heightened cancellations you advance. wondering lot

for you're QX. of correct, biotech, well, companies, improvement mid-tier sort take Jim. actually slight No one the was Casey, a that small cancellations and problem. And I'll as sequential from

cancellations. has picked less So and global And up actually between QX QX.

was you global sequentially, cancellations for So it an improvement deterioration, for in had QX as more and a mid-tiers guessed.

Barclays. to Sergott go next We now at Luke

wanted out the So I with to guys are you just costs demand. taking know talk about costs and the I the aligning --

real again? starts quarter guys as of Or you quickly just But -- back will demand happen trying that coming And spin in kind is in it a to have? it the how can is happen timing, have that to you DSA, it the resources up think like as time? visibility about those the ahead given

labor this X to good have a time train months even hire quarter X direct kind We It's background work. have to that's people of no ahead, probably to in frame. that a

So time, the long people day. to start contribute next but not period the a can't of really

So without and with staff. we in Can't that sufficient take been of new try I have think successful staying ahead work curve. on

it as to people things back to senior and directors were like Obviously, [indiscernible] refine or people our those straightforward we we people or think hire those to -- people. more relatively going So it's that, much hire should those hold them be hire to infrastructure. to get scientific continue complicated on and

I been for mean, about tail this goes a And kind on those part Matt has was of end the continuing this -- this discovery prioritization. of guess, I Great. market to tight. All budgets then while Sykes keep the work right. soft on, asking pharma this with been business and has rationalize of

or that long they the how maintain think work? environment later-phase cut there impact to you without can do budgetary to it tight continue Like this starting

accessed. pharma the is mean good are to externally drugs a I XX% XX% of question. It's

to M&A medium and of large So of lot to continue companies. a going you're biotech see small, pharma do

between think to M&A much don't companies. going I pharma be there's So

that's So positive them. for

Much the in currently particularly they're the of work doing, work, are that that outsourced. areas we being

but to going the growth they As or buy continue companies, to obviously they would are they biotech work, startup companies. buy those

as a or ours So company is of we if should as that company the client that particularly well. pharma from benefit buys well, biotech

this We a of haven't years level it when long seen pullback another severe in patent this time, but ago there cliff. saw we was

So as hole to that's they that Hence, on deny, quickly clinic. the emphasis and the fill have as that just they fact the can't possible.

But to As we essential terms spending to times continuing than they'll discovery the it's bit few would fuel a strength pure come imponderable of their IND to spending. sooner the today, when said it's And in all of pipeline. IND or a figure an reinvigorate spending of out try discovery.

to are have They look their look where which done at look it point a at So think, it pharmaceutical own not at facilities, some have therapeutic from level, them on to they're something, some now on They but well, of at to infrastructure, industry have that areas. to the the has I historically infrastructure have G&A. back all. really -- it's they at they really necessity. is their refine cutting to do They had

like when cetera, science, do of to us with et since much them proximity, do we so have So so can cost, is, been a et that whenever for clears, much smoke be work -- years. we this lower significant the cetera, for benefit with this that should closer -- work deeper

try take So possible that there, of we as hang to so view share from minimally and hold to on have structure responsive new sales in watch our and get of maximally to point be work. a share lean, cost as we

to now of Ryskin at go next We'll Bank Michael America.

Great.

year this pharma protracted worried in not year the and significant surprised your pullback I to keep bleed-through I as commentary one and next RMS little exposures. some But went well. see bit different if going slightly you're to and changing and guide your some hear for time, at is the at the on that's everything yet you view least the impact you're businesses there, potentially it question. a on I'm realize as possibly DSA wouldn't Given this just about on least that different maintaining I'm RMS.

curious in you that just segment? So gives what confidence

I think all biotech use America, a we're and bit has probably seeing your bit of slower, just already of in where of a course, that's bleed-through, little most which to language, a North resides. been

and has which going China has of lots of solid. life sciences. been still Europe, capital into function is pharma, ironically a Conversely, growing nicely. That's less really biotech

and some our Just of we new the operation scale the the scale of built country because facilities.

the clients And pretty is we there. while slow own animals forever. it's about solution So good relatively watching good price RMS substantial. gotten of produce at the cost None for margins. the in operating structure. their We've service are feel small. always we still feel our and of -- guidance They've pretty good RMS of bit competition parts a the quite are And part the got they our moment, the clients

So we would imagine as well. will that, that stabilize work

thing. we as its RMS to will think do I So said, continue

to X Our digits. only single guidance is low

deliver So just that X confident to we gave the you. for quite I ability certainly feel our about reasons X or

we for morning. this gentlemen, take question Blair. and William ladies And that now Smock We'll more have one time of from Max

market well. on I'll follow some of week. just with out from around is as the a bit keep last given to we what one to questions prior of up line share, your of your commentary competitors wanted heard it one question I

you how hoping detail more your some just out XXXX call to has seen DSA up off drop or any and trended whether was far I you've could there's rate hold here? so win in proposals of around give if for sort in recently that new

Our win period and has long quite pretty a high rate of consistent over time. Safety in been

a depth we'll when worried the with that's quality. think, then open, our on they out more a to almost client of go are there's I conversation win until the of running about the our just compromise price And given portfolio, given geography, overall cash. science, So given serious always we head-to-head about

competitors that some on work. think even price. when issue we don't small There's and who on entirely compete often I don't bid really big -- that's a very

quite So volume invigorate at substantial. market prepared been the the good. our we bookings improve growing remarks, still have significant. to rates to proposal have our quite is improve, year. would our just of as in been the has not to half that them begun rate the we back need And win said really been has It share The

we pulling positive So less the be exacerbated time. same back think at that's and going to than by we thought pharma

our I biotech. of the market view from point we but think well a with hold really to particularly continue own, do base, entire share client But certainly

I I one Max, in it's if add, worse quarter more performance the their I ours. their saw just it of piece compete of think but to reported you competitors think correctly, week, alluded piece last a business, that can directly, was and if we that And our than I smaller the

we to think as a more competitive I dynamic this opposed dynamic forecasting. negative Jim's to believe we so more outlook a point, And market is the driving are of that

was you the was and seeing the thank say, conference will I forward you. just if get questions. to I this for some conferences up, some to of We of at apologize morning. look to long. call. everyone, the investor this September, follow you, joining call Thank I going we in didn't running concludes the and It

that Charles Call. Again, thanks for Earnings XXXX participation. Thank you, your and River today's again, Second Mr. Laboratories Spencer. does conclude Quarter gentlemen, Ladies

You may disconnect. now