CHARLES RIVER LABORATORIES INTERNATIONAL, INC.CRL
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Fair Value Disclosure
FAIR VALUE
Assets and liabilities measured at fair value on a recurring basis are summarized below:
| December 27, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Current assets measured at fair value: | (in thousands) | ||||||||||||||||||||||
| Other assets: | |||||||||||||||||||||||
| Life insurance policies | — | 58,427 | — | 58,427 | |||||||||||||||||||
| Total assets measured at fair value | $ | — | $ | 58,427 | $ | — | $ | 58,427 | |||||||||||||||
| Accrued liabilities measured at fair value: | |||||||||||||||||||||||
| Contingent consideration | $ | — | $ | — | $ | 30,000 | $ | 30,000 | |||||||||||||||
| Total liabilities measured at fair value | $ | — | $ | — | $ | 30,000 | $ | 30,000 | |||||||||||||||
| December 28, 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Current assets measured at fair value: | (in thousands) | ||||||||||||||||||||||
| Cash equivalents | $ | — | $ | 30 | $ | — | $ | 30 | |||||||||||||||
| Other assets: | |||||||||||||||||||||||
| Life insurance policies | — | 48,152 | — | 48,152 | |||||||||||||||||||
| Total assets measured at fair value | $ | — | $ | 48,182 | $ | — | $ | 48,182 | |||||||||||||||
| Accrued liabilities measured at fair value: | |||||||||||||||||||||||
| Contingent consideration | $ | — | $ | — | $ | 25,000 | $ | 25,000 | |||||||||||||||
| Other long-term liabilities measured at fair value: | |||||||||||||||||||||||
| Contingent consideration | — | — | 24,311 | 24,311 | |||||||||||||||||||
| Total liabilities measured at fair value | $ | — | $ | — | $ | 49,311 | $ | 49,311 | |||||||||||||||
During fiscal years 2025 and 2024, there were no transfers between fair value levels.
Contingent Consideration
The following table provides a rollforward of the contingent consideration related to the Company’s acquisitions.
| Fiscal Year | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Beginning balance | $ | 49,311 | $ | 33,265 | $ | 13,431 | |||||||||||
| Additions | — | — | 33,265 | ||||||||||||||
| Payments | (25,000) | — | (15,130) | ||||||||||||||
| Total gains or losses (realized/unrealized): | |||||||||||||||||
| Adjustment of previously recorded contingent liability | 5,689 | 16,046 | 1,810 | ||||||||||||||
| Foreign currency translation | — | — | (111) | ||||||||||||||
| Ending balance | $ | 30,000 | $ | 49,311 | $ | 33,265 | |||||||||||
The Company estimates the fair value of contingent consideration obligations through valuation models, such as probability-weighted and option pricing models, that incorporate probability adjusted assumptions and simulations related to the achievement of the milestones and the likelihood of making related payments. The unobservable inputs used in the fair value measurements include the probabilities of successful achievement of certain financial targets, forecasted results or targets, volatility, and discount rates. The remaining maximum potential payments are approximately $30 million, the full value of which is accrued as of December 27, 2025. As of December 27, 2025 the weighted average probability of achieving the maximum target is approximately 100%. The average volatility and weighted average cost of capital is approximately 20% and 8%, respectively.
Cash Flow Hedge
The Company is exposed to market fluctuations in interest rates as well as variability in foreign exchange rates. The Company had an interest rate swap with a notional amount of $500 million that matured in fiscal 2024 and was utilized to manage interest rate fluctuation related to floating rate borrowings under the revolving credit facility, at a fixed rate of 4.65%.
Debt Instruments
The book value of the Company’s revolving loans are variable rate loans carried at amortized cost which approximates the fair value. The fair value is based on significant other observable inputs, including current interest and foreign currency exchange rates, it is deemed to be Level 2 within the fair value hierarchy.
The book value of the Company’s Senior Notes are fixed rate obligations carried at amortized cost. Fair value is based on quoted market prices as well as borrowing rates available to the Company. As the fair value is based on significant other observable outputs, it is deemed to be Level 2 within the fair value hierarchy. The book value, excluding issuance costs, and fair value of the Company’s Senior Notes is summarized below:
| December 27, 2025 | December 28, 2024 | ||||||||||||||||||||||
| Book Value | Fair Value | Book Value | Fair Value | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
4.25% Senior Notes due 2028 | $ | 500,000 | $ | 493,800 | $ | 500,000 | $ | 473,750 | |||||||||||||||
3.75% Senior Notes due 2029 | 500,000 | 483,550 | 500,000 | 456,250 | |||||||||||||||||||
4.00% Senior Notes due 2031 | 500,000 | 474,050 | 500,000 | 441,250 | |||||||||||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 18, 2026 | Showing above |
| 2024 | Feb 19, 2025 | |
| 2023 | Feb 14, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 16, 2022 | |
| 2020 | Feb 17, 2021 | |
| 2019 | Feb 11, 2020 | |
| 2018 | Feb 13, 2019 | |
| 2017 | Feb 13, 2018 | |
| 2016 | Feb 14, 2017 | |
| 2015 | Feb 12, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.