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Thursday, 06 February 2014 14:47

Charles River Laboratories to close Portage operations, lay off 84

Written by  Mark Sanchez and Joe Boomgaard
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Charles River Laboratories, a supplier of animal research models for research organizations, says it will close it Portage operations and lay off 84 people. Charles River Laboratories, a supplier of animal research models for research organizations, says it will close it Portage operations and lay off 84 people. Courtesy Charles River Laboratories

A global clinical research service company plans to shut down its operations in Southwest Michigan, citing a challenging market and decreased demand for its animal research models.

Wilmington, Mass.-based Charles River Laboratories Inc. (NYSE: CRL) will close its plant at 9801 Shaver Road in Portage and lay off all 84 workers, according to a filing the company made with the state.

The closure is expected to occur in phases starting May 2 and be completed by the fall of this year, the company stated.

"This decision reflects a challenging marketplace for our research model production business," James C. Foster, chairman, president and chief executive officer of Charles River Laboratories, said in a statement to MiBiz. "The continuing consolidation of the biopharmaceutical industry and the global constraints on funding for biomedical research have caused softened demand for our research models."

To improve operational efficiency, the company decided to close its operations in Portage, its only facility in Michigan, said Foster, noting Charles River Laboratories will support its employees in the "difficult economic environment."

"It's always a disappointment to hear of a consolidation in the state's bio-industry — irrespective of the nature and size of reduction," said Steve Rapundalo, CEO of the Ann Arbor-based life science trade group MichBio. "They all have an economic impact for individuals, community and region. Hopefully, we can retain that talent and skill sets in the Southwest Michigan area and state."

Charles River Laboratories operates 65 facilities in 15 countries and has more than 7,700 employees worldwide, according to a January investor presentation. Sixty-two percent of its sales are in North America.

The contract research organization previously had a molecular imaging operation in Ann Arbor that it closed in 2010, according to reports.

The company conducts contract research for clients from early-stage to pre-clinical development.

In October, the company reported third quarter sales of $292.1 million, a 4.8-percent increase from the same period in 2012. Net income for the quarter totaled $31.3 million, versus $22.4 million a year earlier.

At the time, the company lowered guidance for 2013, reducing expected sales growth to 3.0 percent to 3.5 percent from the previous 3.0 percent to 5.0 percent. Full-year earnings guidance dropped to $2.23 to $2.28 per share from the prior $2.40 to $2.50 per share.

The corporation in 2012 had sales of $1.13 billion, down slightly from 2011, and net income of $102.1 million, down from $115.5 million in 2011.

Charles River reports 2013 results next week. In December, the company said it was making organizational changes to improve operating efficiencies.

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