CHARLES RIVER LABORATORIES INTERNATIONAL, INC.CRL
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. Income Taxes Disclosure
INCOME TAXES
The components of income from operations before income taxes and the related provision for income taxes are presented below:
| Fiscal Year | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
Income (loss) before income taxes: | |||||||||||||||||
| U.S. | $ | (290,645) | $ | (290,308) | $ | 185,667 | |||||||||||
| Non-U.S. | 191,142 | 383,422 | 395,617 | ||||||||||||||
Total income (loss) before income taxes | $ | (99,503) | $ | 93,114 | $ | 581,284 | |||||||||||
| Income tax provision (benefit): | |||||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 10,872 | $ | 36,349 | $ | 49,090 | |||||||||||
| Foreign | 97,428 | 86,493 | 85,356 | ||||||||||||||
| State | 9,729 | 12,175 | 17,817 | ||||||||||||||
| Total current | 118,029 | 135,017 | 152,263 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Federal | (40,755) | (50,555) | (42,987) | ||||||||||||||
| Foreign | (22,415) | (6,922) | 779 | ||||||||||||||
| State | (12,199) | (9,717) | (9,141) | ||||||||||||||
| Total deferred | (75,369) | (67,194) | (51,349) | ||||||||||||||
| Total provision for income taxes | $ | 42,660 | $ | 67,823 | $ | 100,914 | |||||||||||
Reconciliations of the statutory U.S. federal income tax rate to effective tax rates are as follows:
| Fiscal Year | |||||||||||
| 2025 | |||||||||||
| (in thousands) | |||||||||||
| U.S. federal statutory tax rate | (20,896) | 21.0 | % | ||||||||
State and local income taxes, net of federal income tax effect (1) | (4,653) | 4.7 | % | ||||||||
| Effect of cross-border tax laws | |||||||||||
| Global intangible low-taxed income, net of foreign tax credits | 6,284 | (6.3) | % | ||||||||
| Other | 17 | — | % | ||||||||
| Tax credits | |||||||||||
| Research and development credit | (2,721) | 2.7 | % | ||||||||
| Change in valuation allowance | 2,040 | (2.1) | % | ||||||||
| Nontaxable or nondeductible Items | |||||||||||
| Stock-based compensation | 4,468 | (4.5) | % | ||||||||
| Goodwill impairment | 8,032 | (8.1) | % | ||||||||
| Nondeductible compensation | 4,961 | (5.0) | % | ||||||||
| Impact of acquisition and restructuring | 5,541 | (5.6) | % | ||||||||
| Other | 3,888 | (3.5) | % | ||||||||
| Foreign tax effects | |||||||||||
| Canada | |||||||||||
| Effect of rates different than statutory | (9,790) | 9.8 | % | ||||||||
| Tax on unremitted earnings | 6,946 | (7.0) | % | ||||||||
| Research and development credit | (23,230) | 23.3 | % | ||||||||
| Local income taxes | 22,182 | (22.3) | % | ||||||||
| Other | (31) | — | % | ||||||||
| China | |||||||||||
| Effect of rates different than statutory | (3,212) | 3.2 | % | ||||||||
| Tax on unremitted earnings | 2,320 | (2.3) | % | ||||||||
| Other | 765 | (0.8) | % | ||||||||
| France | |||||||||||
| Effect of rates different than statutory | 4,186 | (4.2) | % | ||||||||
| Research and development credit | (2,785) | 2.8 | % | ||||||||
| Other | 385 | (0.4) | % | ||||||||
| Germany | |||||||||||
| Local income taxes | 2,376 | (2.4) | % | ||||||||
| Other | (118) | 0.1 | % | ||||||||
| Ireland | |||||||||||
| Effect of rates different than statutory | (2,534) | 2.5 | % | ||||||||
| Other | 1,077 | (1.1) | % | ||||||||
| Luxembourg | |||||||||||
| Change in valuation allowance | (13,172) | 13.2 | % | ||||||||
| Enactment of new tax laws | 13,172 | (13.2) | % | ||||||||
| Other | 11 | — | % | ||||||||
| Mauritius | |||||||||||
| Effect of rates different than statutory | (1,875) | 1.9 | % | ||||||||
| Enactment of new tax laws | 3,154 | (3.2) | % | ||||||||
| Foreign local taxes - Qualified domestic minimum top-up tax | 3,514 | (3.5) | % | ||||||||
| Other | (342) | 0.3 | % | ||||||||
| United Kingdom | |||||||||||
| Change in valuation allowance | 9,188 | (9.2) | % | ||||||||
| Effect of rates different than statutory | (5,991) | 6.0 | % | ||||||||
| Goodwill impairment | 31,126 | (31.3) | % | ||||||||
| Impact of acquisition and restructuring | 1,847 | (1.9) | % | ||||||||
| Other | (841) | 0.8 | % | ||||||||
| Other foreign jurisdictions | 33 | — | % | ||||||||
| Changes in unrecognized tax benefits | (2,662) | 2.7 | % | ||||||||
| Income tax expense and effective tax rate | 42,660 | (42.9) | % | ||||||||
(1) State and local taxes in Massachusetts, Maryland, Ashland, Ohio and California made up the majority of the tax effect in this category. | |||||||||||
Reconciliations of the statutory U.S. federal income tax rate to effective tax rates are as follows:
| Fiscal Year | |||||||||||
| 2024 | 2023 | ||||||||||
| U.S. statutory income tax rate | 21.0 | % | 21.0 | % | |||||||
| Foreign tax rate differences | 11.1 | 1.5 | |||||||||
| State income taxes, net of federal tax benefit | (1.2) | 1.7 | |||||||||
Nondeductible compensation | 5.2 | 0.8 | |||||||||
| Research tax credits and enhanced deductions | (29.3) | (5.0) | |||||||||
Stock-based compensation | 2.6 | (0.1) | |||||||||
| Enacted tax rate changes | 3.0 | (0.1) | |||||||||
| Tax on unremitted earnings | 10.7 | 1.7 | |||||||||
| Impact of tax uncertainties | 0.6 | (0.3) | |||||||||
| Impact of acquisitions and restructuring | 1.3 | (4.2) | |||||||||
| Net operating loss deferred tax asset recognition, net of valuation allowance (NOL DTA) | (0.9) | 0.2 | |||||||||
| Global intangible low-taxed income | 6.3 | 1.5 | |||||||||
| Foreign-derived intangible income | (7.6) | (1.4) | |||||||||
| Goodwill impairment | 48.5 | — | |||||||||
| Foreign local tax | 1.6 | 0.7 | |||||||||
| Other | (0.1) | (0.6) | |||||||||
| Effective income tax rate | 72.8 | % | 17.4 | % | |||||||
The components of deferred tax assets and liabilities are as follows:
| December 27, 2025 | December 28, 2024 | ||||||||||
| (in thousands) | |||||||||||
| Deferred tax assets: | |||||||||||
| Compensation | $ | 37,001 | $ | 34,932 | |||||||
| Accruals and reserves | 11,531 | 17,523 | |||||||||
| Net operating loss and credit carryforwards | 369,267 | 348,228 | |||||||||
| Operating lease liability | 121,529 | 132,388 | |||||||||
| Capitalized R&D expenditures | 27,795 | 46,247 | |||||||||
| Other | 34,217 | 25,133 | |||||||||
| Valuation allowance | (323,325) | (286,771) | |||||||||
| Total deferred tax assets | 278,015 | 317,680 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Goodwill and other intangibles | (104,863) | (198,103) | |||||||||
| Depreciation related | (43,454) | (41,481) | |||||||||
| Tax on unremitted earnings | (38,759) | (11,622) | |||||||||
| Right-of-use assets | (99,371) | (113,631) | |||||||||
| Other | (19,437) | (17,624) | |||||||||
| Total deferred tax liabilities | (305,884) | (382,461) | |||||||||
| Net deferred taxes | $ | (27,869) | $ | (64,781) | |||||||
The Company has recognized its deferred tax assets on the belief that it is more likely than not that they will be realized. Exceptions primarily relate to deferred tax assets for net operating losses in Luxembourg, U.K., Sweden, China, state research and development tax credits, certain capital losses, and fixed assets in the U.K. and Ireland.
Income taxes paid (net of refunds received) in fiscal 2025 are as follows:
| Fiscal Year | |||||
| 2025 | |||||
| (in thousands) | |||||
| Federal | $ | 42,288 | |||
| State and local | |||||
| Massachusetts | 8,084 | ||||
| All other states | 9,989 | ||||
| Foreign | |||||
| Canada | 22,958 | ||||
| Netherlands | 6,950 | ||||
| China | 8,420 | ||||
| All other | 20,955 | ||||
| Total income taxes paid (net of refunds received) | $ | 119,644 | |||
Income taxes paid (net of refunds received) in fiscal 2024 and fiscal 2023 were $126.1 million and $90.4 million, respectively.
A reconciliation of the Company’s beginning and ending valuation allowance are as follows:
| Fiscal Year | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Beginning balance | $ | 286,771 | $ | 304,248 | $ | 294,753 | |||||||||||
| Additions (reductions) charged to income tax provision, net | 13,106 | 965 | 963 | ||||||||||||||
| Reductions due to divestitures, restructuring | — | (1,877) | — | ||||||||||||||
Enacted tax law changes | (12,937) | — | — | ||||||||||||||
| Currency translation and other | 36,385 | (16,565) | 8,532 | ||||||||||||||
| Ending balance | $ | 323,325 | $ | 286,771 | $ | 304,248 | |||||||||||
As of December 27, 2025, the Company had tax-effected deferred tax assets for net operating loss carryforwards of $332.5 million, as compared to $311.7 million as of December 28, 2024. Of this amount, $29.7 million are definite-lived and begin to expire in 2027, and the remainder of $302.8 million can be carried forward indefinitely. The Company has deferred tax assets for tax credit carryforwards of $36.6 million. The entire $36.6 million are definite-lived and begin to expire after 2039. Additionally, the Company records a benefit to operating income for research and development and other credits in Quebec, France, the Netherlands, and the U.K. related to its DSA facilities.
A reconciliation of the Company’s beginning and ending unrecognized income tax benefits is as follows:
| Fiscal Year | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (in thousands) | |||||||||||||||||
| Beginning balance | $ | 25,040 | $ | 22,702 | $ | 23,242 | |||||||||||
| Additions to tax positions for current year | 2,342 | 2,649 | 3,093 | ||||||||||||||
| Additions to tax positions for prior years | 3,887 | 852 | 721 | ||||||||||||||
| Reductions to tax positions for prior years | (1,352) | (801) | (4,058) | ||||||||||||||
| Expiration of statute of limitations | (3,400) | (362) | (296) | ||||||||||||||
| Ending balance | $ | 26,517 | $ | 25,040 | $ | 22,702 | |||||||||||
The $1.5 million increase in unrecognized income tax benefits during fiscal year 2025 as compared to the corresponding period in fiscal year 2024 is primarily attributable to an additional year of Canadian Scientific Research and Experimental Development (SR&ED) credit additions and unfavorable foreign exchange movement, offset by statute of limitations lapse on tax group termination and R&D credits. The amount of unrecognized income tax benefits that, if recognized, would favorably impact the effective tax rate was $21.8 million as of December 27, 2025 and $22.0 million as of December 28, 2024. The Company continues to recognize interest and penalties related to unrecognized income tax benefits in income tax expense. The total amount of cumulative accrued interest related to unrecognized income tax benefits as of December 27, 2025 and
December 28, 2024 was $2.2 million and $2.0 million, respectively. Interest expense recorded as a component of income taxes was immaterial for all periods. There were no accrued penalties related to unrecognized income tax benefits as of December 27, 2025 or as of December 28, 2024.
The Company conducts business in a number of tax jurisdictions. As a result, it is subject to tax audits on a regular basis including, but not limited to, such major jurisdictions as the U.S., the U.K., China, France, Germany, and Canada. With few exceptions, the Company is no longer subject to U.S. and international income tax examinations for years before 2020.
The Company and certain of its subsidiaries have ongoing tax controversies in the U.S., Canada, France, Israel, Ireland, Singapore, and India. The Company does not anticipate resolution of these audits will have a material impact on its consolidated financial statements.
Prepaid income tax of $119.9 million and $83.0 million has been presented within Other current assets in the accompanying consolidated balance sheets as of December 27, 2025 and December 28, 2024, respectively. Accrued income taxes of $39.0 million and $31.9 million have been presented within Other current liabilities in the accompanying consolidated balance sheets as of December 27, 2025 and December 28, 2024, respectively.
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 Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.