Charles River Laboratories International Inc (CRL) 2024 Q1 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to the Charles River Laboratories First Quarter 2024 Earnings Conference Call. This call is being recorded. (Operator Instructions)

女士們，先生們，感謝您的收看，歡迎參加Charles River Laboratories 2024年第一季業績電話會議。本次電話會議正在錄音中。 （接線生指示）

I would now like to turn the conference over to our host, Todd Spencer, Vice President of Investor Relations. Please go ahead.

現在，我想將會議交給主持人、投資者關係副總裁托德·斯賓塞。請開始。

Good morning, and welcome to Charles River Laboratories First Quarter 2024 Earnings Conference Call and Webcast. This morning, I am joined by Jim Foster, Chair, President and Chief Executive Officer; and Flavia Pease, Executive Vice President and Chief Financial Officer. They will provide comments on our first quarter 2024.

早安，歡迎參加Charles River Laboratories 2024年第一季財報電話會議及網路直播。今天上午，我與公司董事長、總裁兼執行長Jim Foster以及執行副總裁兼財務長Flavia Pease一同出席。他們將就我們2024年第一季的業績發表看法。

Following the presentation, they will respond to questions. There is a slide presentation associated with today's remarks, which is posted on the Investor Relations section of our website at ir.criver.com. A webcast replay of this call will be available beginning approximately 2 hours after the call today, and can be accessed on our Investor Relations website. The replay will be available through next quarter's conference call.

演講結束後，他們將回答問題。今天演講的幻燈片已發佈在我們網站 ir.criver.com 的投資者關係板塊。本次電話會議的網路回放將於今天電話會議結束後約兩小時開始提供，您可在我們的投資者關係網站上存取。回放將在下個季度的電話會議上提供。

I'd like to remind you of our safe harbor. All remarks that we make about future expectations, plans and prospects for the company constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated.

我想提醒您注意我們的安全港條款。我們對公司未來預期、計畫和前景的所有評論均構成《1995年私人證券訴訟改革法》規定的前瞻性陳述。實際結果可能與預期結果有重大差異。

During this call, we will primarily discuss non-GAAP financial measures, which we believe help investors gain a meaningful understanding of our core operating results and guidance. The non-GAAP financial measures are not meant to be considered superior to or a substitute for results from operations prepared in accordance with GAAP. In accordance with Regulation G, you can find the comparable GAAP measures and reconciliations on the Investor Relations section of our website. I will now turn the call over to Jim Foster.

在本次電話會議中，我們將主要討論非公認會計準則 (Non-GAAP) 財務指標，我們相信這些指標有助於投資者對我們的核心營運績效和指引有更深入的理解。非公認會計準則 (Non-GAAP) 財務指標並非旨在優於或取代根據公認會計準則 (GAAP) 編制的營運績效。根據 G 條例，您可以在我們網站的「投資者關係」部分找到可比較的公認會計準則 (GAAP) 指標和對帳表。現在，我將電話會議交給 Jim Foster。

Good morning. I'd like to begin by providing an update on the overall market trends. There has been an increasing focus on market sentiment through the first 4 months of this year from clients, investors and other stakeholders. We still believe that the end market trends for our biopharmaceutical clients remain stable with signs that demand will begin to improve later this year, which is consistent with the outlook that we gave in February. One of these signs is an improvement in biotech funding after 2 years of tempered activity.

早安.首先，我想介紹一下整體市場趨勢的最新情況。今年前四個月，客戶、投資者和其他利害關係人越來越關注市場情緒。我們仍然相信，生物製藥客戶的終端市場趨勢保持穩定，有跡象表明需求將在今年稍後開始回暖，這與我們在二月給出的預測一致。其中一個跡像是，在經歷了兩年的低迷之後，生物技術融資活動有所回升。

Biotech funding increased significantly in the first quarter of 2024 to approximately $23 billion, the fourth highest quarter on record. These trends and the improving market sentiment have led to positive discussions with our clients, including at the Annual Society of Toxicology Conference in mid-March, with clients specifically referencing the improving funding environment and optimism that this would lead to additional spending on the early-stage programs this year.

2024年第一季，生技投資大幅成長至約230億美元，創歷史第四高。這些趨勢和不斷改善的市場情緒促使我們與客戶進行了積極的溝通，包括在3月中旬舉行的美國毒理學會年會上。客戶特別提到了資金環境的改善，並樂觀地認為這將在今年為早期項目帶來更多支出。

We saw increased proposal activity in the first quarter. And while this is encouraging, and we have available capacity to start certain types of work relatively quickly, our outlook for the year remains appropriately measured. We expect it will take time for additional funding and proposal activity to translate into new DSA bookings and revenue generation. Therefore, we continue to expect demand will improve later this year, consistent with our initial outlook from February.

我們在第一季看到了提案活動的增加。雖然這令人鼓舞，而且我們擁有相對快速啟動某些類型工作的可用能力，但我們對今年的前景仍保持謹慎。我們預計，額外的資金和提案活動轉化為新的直接服務協議 (DSA) 訂單和收入成長仍需要時間。因此，我們仍然預計今年稍後需求將有所改善，與我們2月份的初步預測一致。

Our first quarter financial results reflect a continuation of the demand trends and client spending patterns that we experienced at the end of last year, resulting in an organic revenue decline of 3.3% in the first quarter, in line with our outlook in February.

我們第一季的財務表現反映了去年年底所經歷的需求趨勢和客戶支出模式的延續，導致第一季有機收入下降 3.3%，與我們 2 月的預測一致。

The Manufacturing and RMS segments, both reported solid quarters, primarily driven by a rebound in order activity in the Microbial Solutions and Biologics Testing businesses as well as the timing of NHP shipments benefiting the RMS segment. As expected, DSA revenue declined at a high single-digit rate organically, due in part to the challenging comparison to the strong organic growth rate with nearly 24% in the first quarter of last year.

製造部門和RMS部門均報告了穩健的季度業績，主要得益於微生物解決方案和生物製劑檢測業務訂單活動的反彈，以及非人靈（NHP）出貨時機的把握，這有利於RMS部門。如預期，DSA營收有機成長率出現高個位數下降，部分原因是與去年第一季近24%的強勁有機成長率相比，這一成長頗具挑戰性。

Demand trends are continuing to stabilize, reflecting the more positive sentiment in our end markets and reinforcing our financial outlook for the year. There has also been an increasing focus on the BIOSECURE Act this year. It is too early to determine the final outcome of this proposed legislation, both the content of the final bill, if passed, and the potential impact on the broader biopharmaceutical industry.

需求趨勢持續穩定，反映出我們終端市場情緒更加積極，並鞏固了我們今年的財務前景。今年，《生物安全法案》(BIOSECURE Act) 也受到越來越多的關注。現在判斷這項擬議立法的最終結果還為時過早，包括最終法案的內容（如果通過）及其對整個生物製藥行業的潛在影響。

With approximately 95% of our revenue base in North America and Europe, we assume that the potential impact on Charles River would likely be a net positive, should the bill be passed, but it's too early to determine the magnitude of the potential impact. The long-term industry fundamentals for drug development also remain firmly intact because the overwhelming demand to find life-saving treatments for rare diseases and many other unmet medical needs is unchanged.

由於我們約95%的收入來自北美和歐洲，我們推測，如果該法案獲得通過，對Charles River的潛在影響很可能是淨利好，但現在判斷其潛在影響的規模還為時過早。藥物開發的長期行業基本面也依然穩固，因為尋找治療罕見疾病和許多其他未滿足醫療需求的救命療法的需求仍然巨大。

Biotechs are beginning to move back into favor in the capital markets and will lead the way while large pharma has consistently adapted to scientific advancements, the regulatory environment and a drive to be more efficient. Therefore, we firmly believe the industry's healthy growth prospects will reaccelerate. It's not a matter of if, but when clients will reinvigorate their investments in early-stage R&D. As the leader in preclinical drug development, Charles River is the logical outsourcing partner to advance our clients' programs and enhance their speed to market.

生技公司正重新受到資本市場的青睞，並將引領產業發展，而大型製藥公司則一直在不斷適應科學進步、監管環境以及提高效率的動力。因此，我們堅信該產業的健康成長前景將再次加速。客戶重新投入早期研發，這並非「是否」的問題，而是「何時」的問題。作為臨床前藥物開發領域的領導者，Charles River 是我們推動客戶專案並加快上市速度的理想外包合作夥伴。

I will now provide highlights of our first quarter performance. We reported revenue of $1.01 billion in the first quarter of 2024, a 1.7% decrease on a reported basis over last year.

現在，我將重點介紹我們第一季的業績。我們報告稱，2024年第一季的營收為10.1億美元，較去年同期下降1.7%。

Organic revenue declined 3.3%, as solid performances from the Manufacturing and RMS segments were offset by the anticipated decline in DSA revenue. By client segment, revenue from small and midsized biotechs declined, partially offset by higher revenue from global biopharmaceutical and academic clients. The operating margin was 18.5%, a decrease of 270 basis points year-over-year. The decline was principally driven by a lower DSA operating margin, reflecting the impact of lower sales volume as well as higher unallocated corporate costs. The restructuring initiatives that we implemented have not yet generated a full quarterly cost savings, which will occur in the second half of 2024.

有機收入下降3.3%，原因是製造和RMS部門的穩健表現被預期的DSA收入下降所抵消。按客戶細分，來自中小型生物技術公司的收入有所下降，但全球生物製藥和學術客戶的收入增加部分抵消了下降。營業利益率為18.5%，較去年同期下降270個基點。下降的主要原因是DSA營業利潤率下降，這反映了銷售下降以及未分配企業成本增加的影響。我們實施的重組計畫尚未產生完整的季度成本節約，該節約將於2024年下半年實現。

Earnings per share were $2.27 in the first quarter, a decrease of 18.3% from the first quarter of last year. The decline reflects the lower revenue and operating margin as well as a higher tax rate. First quarter earnings per share exceeded our initial outlook in February, due in part to a timing shift of NHP shipments, which moved into the first quarter and benefited RMS results.

第一季每股收益為2.27美元，較去年同期下降18.3%。這一下降反映了收入和營業利潤率的下降以及稅率的提高。第一季每股收益超出了我們2月份的初步預期，部分原因是NHP的出貨時間調整至第一季度，這有利於RMS的業績。

For the full year, we are reaffirming our revenue and non-GAAP earnings per share guidance. We continue to expect revenue growth of 1% to 4% on a reported basis and flat to 3% growth on an organic basis. Our non-GAAP earnings per share guidance remains in a range of $10.90 to $11.40. As I mentioned, there were some movements in the forecast between quarters, but our outlook for the year is essentially unchanged.

我們重申全年收入和非公認會計準則每股收益指引。我們繼續預期報告營收成長1%至4%，有機成長持平至3%。我們的非公認會計準則每股收益指引維持在10.90美元至11.40美元之間。正如我之前提到的，季度間的預測有所調整，但我們對全年的展望基本上保持不變。

I'd like to provide you with additional details on our first quarter segment performance, beginning with the DSA segment's results. DSA revenue in the first quarter was $605.5 million, a decrease of 8.7% on an organic basis. Quarterly decline reflected a challenging comparison to the 23.6% growth rate last year as well as lower revenue in both Discovery Services and Safety Assessment businesses. Lower study volume in the Safety Assessment business was partially offset by a small benefit from pricing. We are modestly adjusting price on new proposals, when appropriate, to drive incremental volume.

我想向您詳細介紹我們第一季各部門的業績，首先是直接服務評估 (DSA) 部門的業績。第一季度，DSA 營收為 6.055 億美元，有機下降 8.7%。季度下滑反映了與去年 23.6% 的成長率相比的挑戰性，以及發現服務和安全評估業務收入的下降。安全評估業務研究量的下降被定價帶來的小幅收益部分抵銷。我們正在適時適度調整新方案的價格，以推動增量研究量。

Looking at the broader demand trends, Safety Assessment, proposal activity and cancellations improved on both a year-over-year and sequential basis. This has not yet translated fully into improved bookings, but we are cautiously optimistic that these trends will lead to improved demand during the second half of the year. As we have noted in the past, the study mix routinely shifts back and forth over time. And we believe that new funding will enable our clients to shift their R&D focus back to IND-enabling studies from post-IND work that has been the focus for much of the past year.

從更廣泛的需求趨勢來看，安全評估、提案活動和取消情況年比和季比均有所改善。這尚未完全轉化為訂單量的增加，但我們謹慎樂觀地認為，這些趨勢將在今年下半年帶動需求回升。正如我們過去所指出的，研究組合通常會隨著時間的推移而不斷變化。我們相信，新的資金將使我們的客戶能夠將研發重點從過去一年大部分時間的重點——IND後工作——重新轉向IND賦能研究。

As a reminder, there's a natural lag between the time that a client gets new funding and reaches out for a study proposal to when the client will book and subsequently begin the new work with us. The process can take a few quarters, which is factored into our expectation that demand will improve modestly later in the year. As a result of these trends, the DSA backlog decreased modestly on a sequential basis to $2.35 billion at the end of the first quarter from $2.45 billion at year-end. Gross bookings remained stable at above 1x, while the net book-to-bill ratio remained below 1x, but did improve slightly due to the lower cancellation rate in the first quarter.

需要提醒的是，從客戶獲得新資金、聯繫我們索取研究方案到最終與我們簽訂合約並開始新工作之間存在著自然的時滯。這個過程可能需要幾個季度，這也反映在我們預計今年稍後需求將略有改善的預期中。受這些趨勢的影響，DSA積壓訂單量較上季小幅下降，從去年年底的24.5億美元降至第一季末的23.5億美元。總訂單量維持穩定在1倍以上，而淨訂單出貨比維持在1倍以下，但由於第一季取消率較低，淨訂單出貨比略有改善。

The DSA operating margin was 23.5% in the first quarter, a 550 basis point decrease from the first quarter of 2023. The year-over-year decline reflected the challenging comparison to last year's outstanding operating margin performance. However, the first quarter operating margin was also below our longer-term targeted level in the mid- to high 20% range because lower sales volume and moderating price increases in Discovery and Safety Assessment businesses were unable to cover cost inflation.

第一季DSA營運利潤率為23.5%，較2023年第一季下降550個基點。年比下降反映了與去年出色的營運利潤率表現相比的挑戰性。然而，由於發現和安全評估業務的銷售下降和價格上漲放緩無法彌補成本上漲，第一季的營運利潤率也低於我們20%中高水準的長期目標水準。

We expect the DSA operating margin to move towards targeted levels as demand rebounds in the second half of the year. RMS revenue was $220.9 million, an increase of 3.3% on an organic basis over the first quarter of 2023. The RMS segment benefited primarily from higher NHP revenue as well as from higher sales of small research models in all geographic regions, due primarily to sustained pricing increases and from research model services.

我們預計，隨著下半年需求反彈，DSA 營業利潤率將向目標水準邁進。 RMS 營收為 2.209 億美元，較 2023 年第一季有機成長 3.3%。 RMS 部門主要受益於 NHP 收入的成長，以及所有地區小型研究模型銷售額的成長，這主要得益於持續的價格上漲和研究模型服務。

Revenue for small models increased in North America, Europe and China, due primarily to pricing, with growth in China leading all regions. While the growth rate in China has been compressed by the well-chronicled macroeconomic challenges in the country, we believe RMS demand has been less affected than other life science sector. We believe the resilience of the Research Models business, both in China and the rest of the world, comes from the fact that small models are essential, low-cost tools for research and without which research cannot proceed.

小型模型在北美、歐洲和中國的營收均有所成長，這主要得益於定價，其中中國地區的成長領先所有地區。儘管中國市場的成長率受到國內長期存在的宏觀經濟挑戰的擠壓，但我們認為RMS的需求受到的影響小於其他生命科學領域。我們認為，無論是在中國還是在世界其他地區，研究模型業務的韌性源於這樣一個事實：小型模型是研究必不可少的低成本工具，沒有它們，研究就無法進行。

From a services perspective, revenue increased modestly. Insourcing Solutions, or IS, continued to generate higher revenue led by the CRADL operations. And we also signed new contracts for our legacy IS [Vivarium] management solutions. As we mentioned in February, the CRADL growth rate is expected to accelerate during the year. we are monitoring the occupancy rates and new facility ramp in light of the biotech demand environment, which remains healthy overall.

從服務角度來看，收入小幅成長。內部採購解決方案（IS）在CRADL業務的帶動下持續創造更高的收入。我們也簽署了原有IS（動物飼養室）管理解決方案的新合約。正如我們2月所提到的，預計CRADL的成長速度將在年內加速。鑑於生物技術需求環境整體保持健康，我們正在監測入住率和新設施的建設進度。

We are balancing opening new sites in higher demand bio-hubs like Boston, Cambridge and San Diego, with consolidation of capacity in more saturated regions like South San Francisco. The timing of NHP shipments to third-party clients also benefited first quarter results, both in China and from Noveprim, the Mauritius-based supplier in which we acquired a controlling interest late last year. These shipments accelerate into the first quarter. So although it would not change our RMS revenue outlook this year, it will affect the quarterly gating and pressure the second quarter RMS revenue growth rate.

我們正在平衡在波士頓、劍橋和聖地牙哥等需求較高的生物中心開設新工廠，以及在南舊金山等較為飽和的地區整合產能。 NHP 向第三方客戶發貨的時機也有利於第一季的業績，包括中國客戶以及來自毛里求斯供應商 Noveprim 的業績。 Noveprim 於去年底被我們收購了控股權。這些發貨量在第一季有所加速。因此，雖然這不會改變我們今年 RMS 的營收預期，但會影響季度門控，並對第二季 RMS 營收成長率造成壓力。

In the first quarter, the RMS operating margin increased by 420 basis points to 27.6%. The robust improvement was primarily driven by the benefit from higher NHP revenue in the first quarter, including the contribution from Noveprim. We do not expect the RMS operating margin will be sustained at this level for the full year as the gating of NHP shipments normalized, but continue to expect margin improvement in the RMS and Manufacturing segments will enable us to achieve our outlook for the year. Revenue for the Manufacturing Solutions segment was $185.2 million, an increase of 10.4% on an organic basis compared to the first quarter of last year. Each of these segment's businesses contributed to the revenue growth, led by the CDMO business.

第一季度，RMS 營業利益率成長 420 個基點至 27.6%。強勁成長主要得益於第一季 NHP 營收成長，其中包括 Noveprim 的貢獻。由於 NHP 出貨量限制已恢復正常，我們預計 RMS 營業利潤率全年將無法維持在此水平，但我們仍預期 RMS 和製造部門利潤率的提升將使我們能夠實現全年預期。製造解決方案部門營收為 1.852 億美元，與去年第一季相比有機成長 10.4%。這些部門的業務均對收入成長做出了貢獻，其中 CDMO 業務表現最佳。

We were pleased that, as expected, revenue rebounded in both our Biologics Testing Solutions and Microbial Solutions businesses in the first quarter and Biologics Testing improved fourth quarter proposal volume led to the solid first quarter performance. Proposal and booking activity also increased meaningfully year-over-year in the first quarter, which confirmed the trends that emerged at the end of last year are continuing. Clients appear to be returning to the core testing activities, including cell banking and viral clearance, which were the services that slowed at the beginning of 2023.

我們很高興地看到，正如預期，生物製劑檢測解決方案和微生物解決方案業務在第一季的收入均出現反彈，生物製劑檢測業務第四季度的方案量有所提升，從而帶來了穩健的第一季業績。第一季的方案和預訂活動也較去年同期大幅成長，證實了去年年底出現的趨勢仍在持續。客戶似乎正在回歸核心檢測業務，包括細胞庫和病毒清除，而這些服務在2023年初曾放緩。

In Microbial Solutions, we continue to see signs that destocking activity is winding down and believe it is now largely complete. Clients have resumed their purchases of reagents and consumables, and spending on new instruments was reactivated with an increase of new orders, particularly for the Endosafe MCS endotoxin testing system.

在微生物解決方案領域，我們持續看到庫存去化活動逐漸減少的跡象，並認為目前已基本完成。客戶已恢復試劑和耗材的採購，新儀器的支出也隨著新訂單的增加而恢復，尤其是 Endosafe MCS 內毒素檢測系統。

We believe that our comprehensive manufacturing quality control testing portfolio, which continues to resonate with clients and will help to reinvigorate the Manufacturing segment's growth rate in 2024. Our Biologics Testing and Microbial Solutions businesses are excellent examples of our focus on sustainable practices and the advancement of nonanimal alternative.

我們相信，我們全面的製造品質控制測試組合將繼續引起客戶的共鳴，並將有助於在 2024 年重振製造部門的成長率。我們的生物製劑測試和微生物解決方案業務是我們專注於永續實踐和非動物替代品進步的絕佳例子。

In Biologics Testing, we have launched an initiative with our clients to end the remaining in vivo testing use of viral safety and lot release testing, replacing it with in vitro methodologies. One of the alternative methods is next-generation sequencing testing that we are able to offer to clients through our partnership with PathoQuest.

在生物製劑檢測領域，我們與客戶共同發起了一項倡議，旨在終止病毒安全性和批發檢測中仍在使用的體內檢測方法，並以體外檢測方法終止。其中一種替代方法是新一代定序檢測，我們透過與 PathoQuest 的合作為客戶提供這項技術。

Our Microbial Solutions business also introduced the cartridge technology to our animal-free and Endosafe Trillium Endotoxin Testing platform, which will promote Trillium's adoption to those clients who are looking to implement more sustainable testing practices. These are 2 examples of how we are already responsibly driving progress to reduce animal use and adopt alternative technologies, and I will provide additional details shortly on our new program to advance alternatives.

我們的微生物解決方案業務部門還將墨盒技術引入了我們的無動物和 Endosafe Trillium 內毒素檢測平台，這將推動 Trillium 被那些希望實施更永續檢測實踐的客戶所採用。這兩個例子表明，我們已經在負責任地推動減少動物使用和採用替代技術。我稍後將詳細介紹我們推進替代技術的新計劃。

The CDMO business drove the segment's growth rate in the first quarter as a good for most of last year. generating solid double-digit growth. Client interest continues to be strong with new projects starting almost weekly across the various phases of clinical development. Cell therapy production activities for our 2 commercial clients are beginning to ramp up as well. The second quarter growth comparison will be more challenging for the CDMO business as we anniversary the recovery of the business in the second quarter of last year. But the sales funnel remains robust, and we continue to expect solid double-digit growth this year.

CDMO業務在去年大部分時間都推動了該部門第一季的成長率，實現了穩健的兩位數成長。客戶興趣持續高漲，幾乎每週都有新計畫啟動，涵蓋各個臨床開發階段。我們為兩位商業客戶進行的細胞療法生產活動也開始加速。由於我們已紀念去年第二季業務的復甦，因此與第二季度相比，CDMO業務的成長將更具挑戰性。但銷售通路依然強勁，我們預計今年仍將實現穩健的兩位數成長。

Manufacturing segment's first quarter operating margin was 25.3%, significant improvement from 13.7% in the first quarter of last year. The increase was driven primarily by higher sales volume as each of the Manufacturing segment's businesses are regaining traction as well as the comparison to last year's lease impairment in the CDMO business.

製造部門第一季營業利益率為25.3%，較去年同期的13.7%顯著提升。這一成長主要得益於製造部門各項業務復甦帶來的銷售成長，以及與去年同期相比，CDMO業務的租賃減損有所改善。

Before turning the call over to Flavia, I'd like to provide an update on new initiatives that we are implementing to maintain our leadership position in nonclinical drug development. Last quarter, I discussed client-facing initiatives that we have implemented to become an even stronger scientific partner to our clients as well as actions to drive greater operational efficiencies.

在將電話轉給Flavia之前，我想先介紹我們正在實施的新舉措，以保持我們在非臨床藥物開發領域的領先地位。上個季度，我討論了我們為成為客戶更強大的科學合作夥伴而實施的面向客戶的舉措，以及為提高營運效率而採取的措施。

In April, we launched our AMAP, or AMAP program, to drive positive change and better position the company for the future state of the industry. AMAP, or the Alternative Message Advancement Project, is aimed at initiatives dedicated to developing alternatives to reduce animal testing.

今年四月，我們啟動了AMAP（替代資訊推進計畫），旨在推動積極的變革，使公司更好地適應產業的未來發展。 AMAP，即“替代資訊推進計畫”，旨在推動致力於開發替代資訊以減少動物試驗的措施。

We intend to remain at the forefront of evaluating and implementing new and innovative technologies, including alternative technologies, to enhance the role that we play in helping our clients bring their life-saving therapies to market more efficiently. We anticipate these technologies will have greater impact on drug discovery as they already have begun with screening for lead compounds rather than a regulated safety testing process. Change will take time, which is why we intend to engage key stakeholders, including clients, partner organizations, thought leaders, policymakers and NGOs, in the pursuit of scientific and technological innovation focused on advancing animal alternatives.

我們致力於繼續站在評估和實施新興創新技術（包括替代技術）的前沿，以增強我們在幫助客戶更有效率地將拯救生命的療法推向市場方面所發揮的作用。我們預計這些技術將對藥物研發產生更大的影響，因為它們已經開始篩選先導化合物，而不是遵循受監管的安全測試流程。變革需要時間，因此我們計劃與主要利害關係人（包括客戶、合作夥伴組織、思想領袖、政策制定者和非政府組織）合作，共同致力於推動以動物替代療法為重點的科技創新。

We had already been exploring alternatives to reduce animal testing through our initial investment of $200 million over the past 4 years. A portion of that investment enabled us to acquire a partner and internally develop more sustainable technologies, including the animal-free Endosafe Trillium Endotoxin test, and our partnership with PathoQuest for next-gen sequencing that I just mentioned.

過去四年，我們已通過2億美元的初步投資，探索減少動物測試的替代方案。其中一部分投資使我們得以獲得合作夥伴，並在內部開發更具可持續性的技術，包括無動物實驗的Endosafe Trillium內毒素檢測，以及我剛才提到的與PathoQuest合作開展的新一代定序技術。

Over the next 5 years, our goal is to invest an additional $300 million to fund similar initiatives under AMAP to enhance the development and utilization of alternative technologies. We intend to continue to lead the way in driving our industry to its next frontier.

未來五年，我們的目標是額外投資3億美元，用於資助高通（AMAP）旗下的類似項目，以促進替代技術的開發和利用。我們致力於繼續引領業界邁向新的前沿。

To conclude, I'd like to thank our employees for their exceptional work and commitment and our clients and shareholders for their continued support. Now Flavia will provide additional details on our first quarter financial performance and 2024 guidance.

最後，我要感謝員工的出色工作和奉獻，以及客戶和股東的持續支持。接下來，Flavia 將詳細介紹我們第一季的財務表現和 2024 年的業績指引。

Thank you, Jim, and good morning. Before I begin, may I remind you that I'll be speaking primarily to non-GAAP results, which exclude amortization and other acquisition-related adjustments, costs related primarily to restructuring actions, gains or losses from certain venture capital and other strategic investments and certain other items. Many of my comments will also refer to organic revenue growth, which excludes the impact of acquisitions, divestitures and foreign currency translation.

謝謝，吉姆，早安。在開始之前，我想提醒大家，我將主要討論非公認會計準則 (Non-GAAP) 業績，這些業績不包括攤銷和其他收購相關的調整、主要與重組行動相關的成本、某些風險投資和其他策略投資的損益以及某些其他項目。我的許多評論也會提到有機收入成長，這不包括收購、資產剝離和外幣折算的影響。

First quarter 2024 organic revenue decreased at a 3.3% rate, in line with the February outlook. However, we delivered non-GAAP earnings per share of $2.27, which exceeded the outlook that we provided in February of at least $2. The primary drivers of the earnings outperformance were the acceleration of NHP shipments into the first quarter and a strong performance from the Manufacturing segment, which delivered organic revenue growth of 10.4%.

2024年第一季有機收入下降3.3%，與2月的預期一致。然而，我們實現了非公認會計準則每股收益2.27美元，超過了我們2月份給出的至少2美元的預期。獲利表現優異的主要驅動力是第一季非公認會計準則（NHP）出貨量的加速成長，以及製造部門的強勁表現，該部門實現了10.4%的有機收入成長。

As Jim mentioned, we continue to expect full year reported revenue growth of 1% to 4% and organic revenue growth of flat to a 3% increase as well as non-GAAP earnings per share in a range of $10.90 to $11.40. We reaffirmed our annual revenue and non-GAAP earnings per share guidance because the first quarter outperformance was largely driven by the timing of NHP shipments, which only affects the quarterly gating in 2024 and not our full year outlook.

正如Jim所提到的，我們繼續預期全年報告收入將成長1%至4%，有機收入成長持平至3%，非公認會計準則每股收益在10.90美元至11.40美元之間。我們重申年度收入和非公認會計準則每股收益指引，因為第一季的優異表現主要受NHP出貨時間的影響，這僅影響2024年的季度門控，而非我們的全年展望。

Our segment outlook for 2024 revenue growth remains essentially unchanged as noted on Slide 30. We also continue to expect consolidated operating margin expansion of at least 50 basis points in 2024. We are diligently managing the cost structure and our focus on driving efficiency, with restructuring initiatives expected to generate approximately $70 million of annualized cost savings or the upper end of our prior range. As anticipated, unallocated corporate costs were just above 6% of revenue at 6.2% compared to 4.3% of revenue in the first quarter of last year, contributing to the operating margin headwind in the first quarter. For the full year, we continue to expect unallocated corporate costs will moderate from first quarter levels to just above 5% of revenue.

如投影片30所示，我們對2024年該部門營收成長的預期基本上保持不變。我們預計2024年的合併營業利潤率將至少成長50個基點。我們正在努力管理成本結構，並專注於提高效率，預計重組措施將帶來約7,000萬美元的年度化成本節約，或達到我們先前預期的上限。如預期，未分配企業成本略高於營收的6%，達到6.2%，而去年第一季為4.3%，這導致第一季營業利潤率下滑。就全年而言，我們預計未分配企業成本將較第一季的水準略微下降，略高於營收的5%。

The first quarter tax rate was 23.3%, an increase of 160 basis points year-over-year. The increase was primarily due to the impact from stock-based compensation. This was slightly better than our February outlook of a mid-20% tax rate because stock-based compensation was favorable due to a higher stock price during the quarter.

第一季稅率為23.3%，較去年同期成長160個基點。這一增長主要源自於股票薪酬的影響。這略好於我們2月預測的20%左右的稅率，因為本季股價上漲對股票薪資產生了正面影響。

We continue to expect our full year tax rate will be in the range of 23% to 24%, which is unchanged from our previous outlook. Net interest expense of $32.8 million in the first quarter was similar to both the prior year and fourth quarter levels as floating interest rates and debt balances were relatively stable.

我們預計全年稅率將在23%至24%之間，與先前的預測持平。第一季淨利息支出為3,280萬美元，與去年同期和第四季水準持平，原因是浮動利率和債務餘額相對穩定。

For the year, we expect net interest expense to trend slightly favorable, which would put us at the low end of our prior outlook of $125 million to $130 million. As a reminder, nearly 3/4 of our $2.7 billion debt at the end of the first quarter was at a fixed rate. At the end of the first quarter, our gross leverage ratio was 2.4x, and our net leverage ratio was 2.3x. Free cash flow was $50.7 million in the first quarter compared to $2.5 million last year with a $28 million decrease in capital expenditures, driving much of the improvement.

我們預計今年的淨利息支出將略有好轉，這將使我們處於先前預測的1.25億美元至1.3億美元區間的低端。需要提醒的是，截至第一季末，我們27億美元的債務中近四分之三是固定利率債務。第一季末，我們的總槓桿率為2.4倍，淨槓桿率為2.3倍。第一季自由現金流為5,070萬美元，而去年同期為250萬美元，資本支出減少了2,800萬美元，這在很大程度上推動了業績的改善。

Capital expenditures were $79.1 million in the first quarter compared to $106.9 million last year, due primarily to moderating capacity expansions to match current demand. For the year, we continue to expect free cash flow to be in a range of $400 million to $440 million and CapEx is expected to be approximately $300 million. A summary of our 2024 financial guidance can be found on Slide 35.

第一季資本支出為 7,910 萬美元，而去年同期為 1.069 億美元，主要原因是為滿足當前需求而放緩了產能擴張。我們預計全年自由現金流將在 4 億至 4.4 億美元之間，資本支出預計約為 3 億美元。 2024 年財務指引摘要請參閱第 35 頁投影片。

Looking ahead to the second quarter. We expect reported and organic revenue will decline at a low to mid-single-digit rate year-over-year. Our second quarter expectations include a modest sequential increase in DSA revenue as trends begin to improve. The second quarter revenue growth rates for both the RMS and Manufacturing segments are expected to be constrained by the timing of NHP shipments in RMS and the anniversary of last year's CDMO growth rebound in the Manufacturing segment. Earnings per share are expected to improve from the first quarter level with an outlook of mid-single-digit sequential earnings growth over the $2.27 reported in the first quarter.

展望第二季。我們預計報告收入和有機收入將年減低至中個位數。隨著趨勢開始好轉，我們對第二季的預期包括DSA營收將環比小幅成長。預計RMS和製造部門第二季的營收成長率將受到RMS部門非處方藥（NHP）出貨時間以及製造部門去年CDMO成長反彈週年的影響。預計每股收益將較第一季有所改善，並預計在第一季報告的2.27美元的基礎上實現中等個位數的環比增長。

We expect the tax rate and interest expense will remain relatively stable from the first quarter levels, and the operating margin will remain somewhat constrained until the second half of the year when we recognize the full benefit from the cost savings and the revenue growth rate reaccelerates to cover more of the annual cost inflation.

我們預計稅率和利息支出將與第一季的水平保持相對穩定，營業利潤率將在一定程度上受到限制，直到下半年我們才能充分認識到成本節約帶來的好處，並且收入增長率將重新加速，以彌補更多的年度成本通膨。

In conclusion, we are pleased with our first quarter performance and are confident in our outlook for the year. Demand for our unique nonclinical portfolio is resilient, and we remain focused on executing our strategy, driving efficiency and gaining market share. Thank you.

總而言之，我們對第一季的業績感到滿意，並對全年前景充滿信心。我們獨特的非臨床產品組合需求強勁，我們將繼續專注於執行策略、提高效率並擴大市場份額。謝謝。

That concludes our prepared remarks. We will now take your questions.

我們的準備演講到此結束。現在我們將回答大家的提問。

(Operator Instructions) We'll take our first question from Michael Ryskin with Bank of America Securities.

（操作員指示）我們將回答來自美國銀行證券公司的 Michael Ryskin 提出的第一個問題。

This is [Wolf] on for Mike. I guess the first one would be on how should we think about pacing RMS revenues given the accelerated NHP shipment that we saw? The cadence through the back of the rest of the year would be great. We have a related follow-up.

我是[Wolf]，Mike。我想第一個問題是，鑑於我們看到的NHP出貨量加速成長，我們該如何考慮RMS的營收節奏？今年剩餘時間的節奏會很好。我們接下來會進行相關的跟進。

What was the beginning of the question?

這個問題的開頭是什麼？

I think he was just saying he was stepping in for Mike. And the question is about timing of NHP shipments in RMS. Maybe I can take that. I think we have commented that our quarters are not linear, and I actually added when we provided guidance for this year that the -- adding the Noveprim business into the (inaudible) would result in additional nonlinearity in our quarters because those shipments are not timed in a way that they always happen at the same time in every year.

我想他只是說他要接替麥克。問題是關於RMS中NHP發貨時間的。也許我可以回答。我想我們已經說過，我們的季度業績並非線性，實際上，我在提供今年的業績指引時就提到過，將Noveprim業務納入（聽不清）會導致我們季度業績的非線性，因為這些發貨時間並非每年都在同一時間。

So it is going to introduce a little bit of lumpiness, if you will, quarter-by-quarter. But as we spoke in our prepared remarks, this was a shift between the second quarter and first quarter. And within the year, we feel very comfortable and confident with the guidance. So it's going to make your guys' lives a little bit more challenging to pinpoint the segment within the quarters, but that's just the nature of that part of the business.

所以，如果你們願意的話，每季都會出現一些波動。但正如我們在準備好的發言稿中所說，這是第二季和第一季之間的轉變。在年內，我們對業績指引感到非常滿意和有信心。因此，在季度內精準定位細分市場會為你們的工作帶來一些挑戰，但這正是該業務的本質所在。

Okay. Wonderful. And hopefully, you can hear me a bit better now. Then I would just like to ask on kind of your confidence in the ramp through the year, given your book-to-bill is still trending below one. I know you noted some improvements there, but just anything to make us more comfortable there would be great.

好的，太好了。希望您現在能聽清楚我的意思。然後我想問一下，鑑於您的訂單出貨比仍然低於1，您對全年業績成長的信心如何。我知道您提到了一些改進，但只要能讓我們更安心就更好了。

I mean our confidence in the back half of the year ramp is premised on a multiplicity of things. Inflows to the VCs, wonderful funding in the capital markets, fourth best in the history of biotech last quarter, the increase in proposal volume, modest reduction in cancellations and just the general dialogue with our clients, a; b, the comps of last year; and c, the fact that we can see pent-up demand on the part of our clients.

我的意思是，我們對下半年成長的信心是基於多種因素。創投的流入、資本市場的出色融資、上季度生物技術行業歷史上第四好的業績、項目提案數量的增加、取消項目數量的適度減少，以及與客戶的總體溝通：a、去年同期業績；b、我們看到客戶被壓抑的需求。

And it seems like there were a fair number of (inaudible) across the board with our clients that drugs were developed, lead compounds were developed and for funding reason and prioritization reasons, sort of paused. We talked a lot in the last quarter and the quarter before that, about post-IND work being focused on. We think clients need to and will get back to actual IND filing work because that's the most critical thing that they do to get drugs into the clinic.

似乎我們與客戶之間有相當多（聽不清楚）的合作，他們開發了藥物，開發了先導化合物，但由於資金和優先級原因，這些工作都暫停了。我們在上一季和上一季多次討論如何專注於IND後工作。我們認為客戶需要並且將會重新開始實際的IND申報工作，因為這是他們讓藥物進入臨床的最關鍵步驟。

So as the funding is improving and their feelings about continued access to funding is more positive, we're pretty confident. We've had a very similar situation in the last 2 years that I know we're -- I don't know about concerning, but we're a bit maybe surprising to our shareholder base that things -- we had 1 year where things were much stronger in the first quarter and other year, the second, and this is a similar phenomenon.

因此，隨著融資狀況的改善以及他們對持續獲得融資的信心更加積極，我們非常有信心。過去兩年我們也遇到過非常類似的情況，我知道我們——我不知道是否令人擔憂，但可能讓我們的股東們有點驚訝——有一年第一季的業績表現強勁得多，另一年，也就是第二季度，也出現了類似的現象。

We've talked often about the fact that we have no control or when studies start and stop. And as Flavia just said, we don't have linearity in our business and never will. So given from whence we've come and the change in the funding environment and our constant conversations on a daily basis with literally thousands of clients, we have a high degree of confidence that things will accelerate meaningfully in the back half of the year.

我們經常談到，我們無法控制研究的開始和結束。正如弗拉維亞剛才所說，我們的業務沒有線性規律，也永遠不會有。因此，考慮到我們的發展歷程、融資環境的變化，以及我們每天與數千名客戶的持續溝通，我們非常有信心，下半年業務將顯著加速發展。

And we'll take our next question from Max Smock with William Blair.

我們將回答 William Blair 的 Max Smock 提出的下一個問題。

Starting with DSA, you had the comment in the deck about modestly adjusting price on new proposals, when appropriate, to drive incremental volume. Just wanted to follow up and get a little bit more color around the rationale behind that decision and specifically how NHP pricing is playing into pricing for these proposals in the DSA segment more broadly.

從DSA開始，您在演講中提到，在適當的時候適度調整新提案的價格，以推動增量。我只是想跟進一下，進一步了解這個決定背後的理由，特別是NHP的定價在DSA領域對這些提案的定價是如何影響的。

So the principal way our competitors compete with Charles River is with regard to price. So competition has prices pretty much across the board, a bit slower than ours. I certainly don't think the workers is good or the science is a substantive or the infrastructure is as significant. But it's a fact. And so in challenging financial times and people are sort of worried about access to capital, I think pricing is more important.

所以，我們的競爭對手與Charles River競爭的主要方式是價格。價格競爭幾乎全面，比我們慢一點。我當然不認為他們的員工素質高，科學研究水準不高，基礎建設也不像我們那麼重要。但這是事實。在經濟困難時期，人們有點擔心資金獲取，我認為定價更重要。

So we have thoughtfully and strategically utilize price as necessary to preserve and more importantly, to win work. We haven't done this in a wholesale fashion because the studies are very complicated, and we feel that we need to be paid well.

因此，我們深思熟慮地、策略性地利用價格來保住工作，更重要的是，贏得工作。我們並沒有大規模地這樣做，因為研究非常複雜，我們覺得需要獲得豐厚的報酬。

So we'll continue to use the strategy as long as it's necessary. We've, obviously, had -- historically where we had more pricing power, and we didn't have to do that. On the NHP pricing side, I would say that it's a meaningful part of what we do. Competition's prices have been higher. And so on the NHP work and on what they pay for the NHPs, and so I think that actually is -- has been somewhat beneficial to us in the whole pricing paradigm. So not the first time we've used price as an important strategic tool.

所以，只要有必要，我們就會繼續使用這個策略。顯然，我們過去擁有更大的定價權，但我們不必這樣做。就NHP定價而言，我認為這是我們工作中一個重要組成部分。競爭對手的價格一直更高。因此，對於NHP的工作以及他們為NHP支付的費用而言，我認為這實際上——在整個定價模式中對我們有利。所以，這並非我們第一次將價格作為重要的策略工具。

Got it. And just following up on that. Were you anticipating having to cut prices so much coming into the year? Or has this been more of a reaction to how competitive dynamics have changed over the last few months? And then in regard to the price cuts, is there any detail you can give us around just how dramatically you've been cutting prices on some of this work? And what it means for gross margin, specifically gross margin on services, which is down, I think, nearly 350 basis points year-over-year and the lowest number that we've seen in over 5 years here.

明白了。接下來我想問一下。您是否預料到今年會大幅降價？還是說這更多的是對過去幾個月競爭格局變化的反應？關於降價，您能否詳細介紹部分業務降價幅度？這對毛利率，特別是服務毛利率意味著什麼？我認為，服務毛利率年減了近350個基點，是五年多來的最低水準。

I mean that's one of our volume. I wouldn't say we've been dramatically cutting prices. I would say that we've been cutting prices very modestly, to be more competitive, to have clients that are on the edge, to say that Charles River's science is better. I want to work with that. But I need better price and are concerned about access to capital. So as I said, we feel that we're doing it responsive, responsibly and thoughtfully.

我的意思是，這只是我們的業務量之一。我不會說我們一直在大幅降價。我會說我們一直在非常溫和地降價，以提高競爭力，服務那些處於領先地位的客戶，也是為了證明Charles River的科技更勝一籌。我想利用這一點。但我需要更優惠的價格，而且我擔心資金的取得。所以，正如我所說，我們覺得我們的做法是積極回應、負責任且經過深思熟慮的。

Yes. And I would comment on the margin, I think Jim started alluding to that. It's really more the volume that is putting pressure on margins given the ability to cover cost inflation. There's a little bit of restructuring costs that are impacting on a GAAP basis, the gross margin as well. We talked about our $70 million of savings that we're going to get on an annualized basis. So that impacts gross margin as well. But I think we also talked about how this will evolve throughout the year, and we expect that as volume comes back stronger in the second half and our restructuring initiatives fully implemented that, that will have a positive impact on margin -- gross margin as well as operating margin.

是的。我想談談利潤率，我想吉姆剛才提到了這一點。考慮到成本上漲帶來的成本壓力，實際上更多的是銷售量。根據美國通用會計準則 (GAAP)，有一些重組成本也影響了毛利率。我們之前提到過，以年率計算，我們將節省 7000 萬美元。所以這也會影響毛利率。但我想我們也討論了這種情況在全年將如何發展，我們預計，隨著下半年銷量回升以及重組計劃的全面實施，這將對利潤率——毛利率和營業利潤率——產生積極影響。

We'll take our next question from Dave Windley with Jefferies.

我們將回答 Jefferies 的 Dave Windley 提出的下一個問題。

I wanted to follow up on Max's question on price and maybe ask a slightly different way. So in your deck, you talked about moderating price increases and Flavia, the point you just made about inflation and then this discussion of adjusting prices down. I guess what I'm wondering is, does price, over the course of this year, based on what you're pricing into the backlog, does price move from what has been a pretty good contributor to a moderate contributor in the first quarter to a headwind as we move through the year? Is that kind of the way we should think about price contribution?

我想跟進Max關於價格的問題，或許可以換個角度問。所以，在你的演講稿中，你談到了緩和價格上漲，Flavia，你剛才提到了通貨膨脹，然後又討論了下調價格。我想知道的是，根據你對積壓訂單的定價，今年的價格是否會從第一季相當不錯的貢獻，變成中等貢獻，再變成全年的逆風？我們應該這樣看待價格貢獻嗎？

Yes, Dave, what I would say is price is definitely not going to be as much of a tailwind as it had been in the past few years. And I think we are, as Jim said, appropriately, pricing given the market conditions and the domain environment. In our guidance for the year, we still contemplate positive pricing. And at the top end of our guidance, we are also contemplating some flat to slightly up volume. And so I think what will be critical in the margin impact is seeing that rebound in volume as Jim said, the strength in biotech funding starts translating into not only proposals for bookings and then revenue, which we fully expect will happen. I think as we said, it's not a matter of this but when. And that will be the key contributor to the margin accelerating throughout the year.

是的，戴夫，我想說的是，價格肯定不會像過去幾年那樣帶來如此大的推動力。正如吉姆所說，我認為，考慮到市場狀況和域名環境，我們的定價是合理的。在我們的年度指引中，我們仍然考慮積極的定價。在我們指引的上限，我們也考慮了交易量持平或略有上升。因此，我認為對利潤率影響至關重要的是看到交易量的反彈，正如吉姆所說，生物技術融資的強勁勢頭不僅開始轉化為訂單，進而轉化為收入，我們完全預計這會發生。我認為，正如我們所說，問題不在於何時，而在於何時。這將是全年利潤率加速成長的關鍵因素。

Got it. And then from this first quarter level, to get to your segment guidance in -- for DSA, you're looking at a pretty significant intra-year increase, I guess, how much of that -- your backlog is still fairly substantial versus historical pre-pandemic standards. How much of that growth can you see in backlog versus the point that you just made and seeing volume improve? And then as an additional part to this question, is there anything built into those expectations relative to BIOSECURE? Or is that kind of left on the side, would be upside if the bill passes?

明白了。然後從第一季的水平來看，要了解您的分部指引——對於直接銷售業務（DSA），您預計年內會有相當顯著的增長，我想，其中有多少——您的積壓訂單與疫情前的歷史標準相比仍然相當可觀。與您剛才提到的銷售成長相比，積壓訂單的成長幅度是多少？然後，作為這個問題的補充，這些預期中是否包含了與BIOSECURE相關的因素？或者說，如果法案通過，這些因素是否被擱置，是否會有上漲空間？

So a significant amount of revenue we can't see, we see not all of it. But as I said, proposal volume has been increasing nicely, and we anticipate that bookings will follow. There's usually a lag. So we're going to need a couple of quarters to see this, but we're confident given the dialogue with the clients that we will. BIOSECURE Act is an interesting one. Not legislation yet, but dialogue opportunity seems positive. So no, there's nothing built into our guidance that assumes anything about the BIOSECURE Act because it would be premature to do that.

所以，我們無法預見到很大一部分收入，甚至無法全部看到。但正如我所說，提案數量一直在穩步增長，我們預計訂單量也會隨之增長。這通常會有一定的滯後性。所以我們需要幾個季度才能看到結果，但我們相信，鑑於與客戶的對話，我們一定會看到結果。 《BIOSEURE法案》是一個值得關注的法案。雖然尚未立法，但對話機會似乎很積極。所以，我們的指導方針中沒有任何內容對《BIOSEURE法案》做出任何假設，因為現在就下結論還為時過早。

Having said that, we would be surprised if there isn't some benefit to us. There's a fair amount of conversation with clients and a trivial amount of work that we've got specifically as a result of that. You understand that our facilities are principally in the U.S. and Europe. So we are an alternative for folks that either can't or don't want to continue to do their work in China. So I think directionally, it's something positive to watch. As I said, we would be surprised, if it doesn't have a benefit to us. But we're certainly not assuming that there's anything that's imminent and it's certainly (inaudible) .

話雖如此，如果這對我們來說沒有任何好處，我們才會感到驚訝。我們與客戶進行了大量的溝通，並因此獲得了一些微不足道的工作。您知道，我們的設施主要位於美國和歐洲。因此，對於那些無法或不願意繼續在中國開展業務的人來說，我們是一個替代方案。所以我認為從方向上看，這是一件值得關注的正面事情。正如我所說，如果它對我們沒有任何好處，我們會感到驚訝。但我們當然不會假設有什麼事情即將發生，而且肯定（聽不清楚）。

Got it. If I could just sneak one last one in on the price relative to inflation comments. So Flavia, you talked about inflation that impacting margin. I guess, my assumption would have been that inflation would have been moderating along with price. Maybe you could put those in relation as to what is kind of still propping up the inflation cost side of the equation there, in terms of price to cost.

明白了。我最後想補充一點關於價格與通膨關係的評論。 Flavia，您剛才提到了通膨對利潤率的影響。我猜，我的假設是通膨會隨著價格而緩和。或許您可以結合價格與成本比率，看看通膨成本方面仍支撐著什麼因素。

Yes. What I would say, Dave, is over the last several -- couple of years when inflation definitely escalated beyond historical levels. I talked about we were actually recouping that and plus some more, right? And so price is very strong, but also the costs have increased more meaningfully than historically. Obviously, inflation is now coming down a bit. And so obviously, our price is coming down as a result of that as well. But what I'm just saying is the relationship between those 2 maybe was a bit more favorable in the last couple of years than obviously, it is right now. And because we don't have as much of the volume, especially in the earlier part of the year, sales are still down in the first quarter. That's putting pressure on the ability to fully absorb inflation in the fixed cost that we have.

是的。戴夫，我想說的是，過去幾年，通貨膨脹率確實超過了歷史最高水準。我之前說過，我們實際上已經收回了通貨膨脹率，甚至還超過了歷史最高水平，對吧？所以價格非常堅挺，但成本也比歷史上成長得更顯著。顯然，通貨膨脹現在正在下降。因此，我們的價格顯然也因此下降了。但我想說的是，過去幾年，這兩者之間的關係可能​​比現在好一些。而且由於我們的銷量沒有那麼多，尤其是在今年年初，第一季的銷售額仍然下降。這給我們完全吸收固定成本中通貨膨脹的能力帶來了壓力。

We'll take our next question from Elizabeth Anderson with Evercore ISI.

我們將回答 Evercore ISI 的伊麗莎白·安德森提出的下一個問題。

I was curious, Jim, if you could expand on your comment about sort of ability to start work right away. Can you sort of talk to capacity levels in the industry? Where are you guys on space utilization? And sort of what have you sort of doing, in terms of it's probably hard to titrate with the demand now versus what you're expecting in the back half of the year? So any further commentary there would be helpful.

吉姆，我很好奇，您能否進一步闡述關於立即開工能力的評論。您能談談產業的產能水準嗎？你們的空間利用率如何？目前的情況可能很難根據現在的需求和您對下半年的期望進行調整，您目前在做什麼？所以，任何進一步的評論都會很有幫助。

So general proposition is that we try to utilize our space as fully and efficiently as possible. So we don't have huge amounts of empty space in any of our businesses. And as you know, depending on the demand, we're always adding to our capacity. Having said that, we have some incremental capacity in some of our businesses across the board. So we do have the ability to accommodate increased work in the back half of the year across multiple businesses and particularly in Safety Assessment.

所以，我們總的建議是盡可能充分且有效率地利用我們的空間。因此，我們所有業務部門都沒有大量的閒置空間。而且如您所知，我們會根據需求不斷增加產能。話雖如此，我們部分業務部門的產能整體上有所提升。因此，我們有能力在下半年應對多個業務部門，尤其是安全評估部門增加的工作量。

And if it's better than we anticipate, we would have the capacity to do that as well. The potential rate-limiting factor is availability of staff. So as we see things improving, we'll have to add incremental staff and because there's some training time associated with that. So physical capacity, I think, fine. Access to clients is very good, in terms of our ability to get out there with the sales force. Staffing generally, in a very good place now, from an efficiency and margin point of view given the current demand but will require some incremental adds as business intensifies.

如果情況比我們預期的要好，我們也有能力做到這一點。潛在的限制因素是員工的可用性。因此，隨著情況好轉，我們必須逐步增加員工，因為這需要一些培訓時間。所以我認為，實際能力還不錯。就我們與銷售團隊合作的能力而言，客戶訪問量非常大。從效率和利潤的角度來看，考慮到目前的需求，目前的人員配置總體上處於非常好的狀態，但隨著業務的增加，我們仍需要逐步增加人員。

Got it. That's very helpful. And then if we just think about like the incrementals in terms of DSA margins as we move through the year. What -- so the key focus is volumes and then the cost savings, any other like potential positives and then potential -- like any other major like pluses or minuses to call out as we think about that progression specifically in DSA?

明白了。這很有幫助。然後，如果我們只考慮DSA利潤率在一年中的增量。那麼，重點是銷量，然後是成本節約，還有其他潛在的正面因素，以及在我們思考DSA的進展時，還有其他主要的優點或缺點嗎？

No. It was a bit -- I -- Flavia -- I think it's really what you just highlighted. We are expecting sequential improvement in DSA revenue on a dollar basis, obviously, on a percentage basis as well. But with that bigger size of business, it would obviously drive margins. There's some fixed costs in our business. And in addition to that, to your point as I said, when we provided guidance, the restructuring actions that we have put in place will be fully executed in the second half. And so that also will be the additional tailwind to drive margins.

不，這有點……我——弗拉維亞——我認為這就是你剛才強調的。我們預期DSA營收在美元基礎上，當然在百分比基礎上也會較上季成長。但隨著業務規模的擴大，這顯然會推動利潤率的提升。我們的業務中有一些固定成本。除此之外，正如我在提供業績指引時所說，我們已經實施的重組措施將在下半年全面實施。因此，這也將成為推動利潤率的額外助力。

We'll take our next question from Dan Leonard with UBS.

我們將回答瑞銀的 Dan Leonard 提出的下一個問題。

My first question, is it possible you could quantify that increase in proposal activity you talked about in Safety Assessment?

我的第一個問題是，您是否可以量化您在安全評估中談到的提案活動的增加？

Yes. We're -- I don't think we're going to quantify the dollar proposal activity increase. I think we talked about it being sequentially up both year-over-year at being up both sequentially and year-over-year. And I think you also saw us talk about the impact -- the net impact into the backlog of bookings and cancellations. Cancellations also went improved sequentially in the first quarter. And so our adjustment to the backlog, the decrease was smaller than the decrease on Q4 versus Q3. but I don't think it will talk specifics in terms of what percentage of the increase we saw in proposals.

是的。我不認為我們會量化提案活動金額的成長。我們之前討論過，提案活動金額較上季和年比都有所成長。我想您也看到我們討論了其影響——對積壓訂單和取消訂單的淨影響。第一季的取消訂單情況也較上季有所改善。因此，我們對積壓訂單的調整顯示，降幅小於第四季與第三季的降幅。但我認為我們不會具體說明提案活動金額增加了多少。

And the combination of increased proposals and reduced cancellations portends increased bookings. And as I said earlier, we always have a lag on that. Clients have to be confident that the funding improvement is sustainable. And I think we all believe that it is sustainable. April was a very good funding month, by the way, for biotech as well. So we're quite confident that we'll see it. It's built into our guidance. And those are the 3 metrics that we watch cancellations, proposal volume and ultimately, bookings. So I think we're on a track to achieve second half improved performance.

提案數量增加和取消數量減少預示著預訂量也會增加。正如我之前所說，我們在這方面總是存在滯後。客戶必須相信資金改善是可持續的。我認為我們都相信這是可持續的。順便說一句，四月對生物技術產業來說也是一個非常好的融資月份。所以我們非常有信心會看到它。這已經納入了我們的預期。我們關注的三個指標是取消量、提案數量以及最終的預訂量。所以我認為我們有望在下半年實現業績的提升。

Understood. And Jim, you talked a lot about the leading indicators in biotech. Can you speak to what leading indicators you're seeing on the large pharma front as well?

明白了。吉姆，你之前談了很多關於生物技術領域的領先指標。你能不能也談談你在大型製藥業看到的領先指標是什麼？

Yes. They're not fundamentally different. Pharma has been aggressively and continuously outsourcing loss of the type of work that we do, particularly Safety Assessment and some lesser extent, discovery to us for a period of years. We can and do, do the work faster at a lower price point and usually with better science than that. So it's a small number of pharma companies that are holding on to those. It's interesting since they have very rich balance sheets that there's still been hesitancy on their part to book work. And that's just a function of trying to make budgets like any public companies do and also the necessity to prioritize.

是的，它們並沒有本質上的差異。多年來，製藥公司一直在積極且持續地將我們所做的工作外包給我們，尤其是安全評估，以及程度較輕的藥物發現。我們能夠而且確實做到了以更低的價格更快地完成工作，而且通常科學性也更高。所以，只有少數藥廠還在堅持這些工作。有趣的是，儘管他們的資產負債表非常充裕，但他們仍然不願意接受這些工作。這只是因為他們像其他上市公司一樣，試圖制定預算，同時也需要確定優先事項。

So we -- surprisingly, I wouldn't say we've seen a fundamental difference in the activity between pharma and biotech. Obviously, there's some fragile biotech companies that are worried about getting to proof of concept or getting the drugs at the clinics that are very -- perhaps more careful about spending and working on a smaller number of assets. Having said that, historically and actually currently, our volume is much higher with biotech. So it's an important client base for us.

所以，令人驚訝的是，我認為我們並沒有看到製藥和生物科技領域活動有根本差異。顯然，有些實力較弱的生物科技公司擔心概念驗證或藥物在臨床上的應用，它們可能對支出和在少數資產上投入更加謹慎。話雖如此，從歷史上看，實際上目前來看，我們在生技領域的業務量要大得多。因此，這對我們來說是一個重要的客戶群。

So you probably have a greater impact on spending with the biotech companies than pharma but again, it won't be overnight. I do think they're going to have to continue to see month-after-month improvement, and we have a high level of confidence, subject to the caveat that control over this. And there's a lot of factors going on in this world that could affect people's viewpoint, but it feels like the IPO market has opened up nicely. VC inflows have been dramatic actually. M&A activity has been positive as well.

因此，你對生技公司支出的影響可能比製藥公司更大，但這不會一蹴可幾。我確實認為，它們必須持續看到逐月的改善，我們對此充滿信心，但也要考慮到對此的控制。世界上有很多因素可能會影響人們的觀點，但感覺IPO市場已經開放得很好。創投流入其實非常強勁。併購活動也表現正面。

And I think as you all know, our client base, whether it's large or small, really has very strong assets right now molecules for unmet medical needs, that they absolutely want to get back to developing and getting those drugs into the clinic. So I think the overall environment is quite positive.

我想，正如大家所知，我們的客戶群，無論規模大小，目前都擁有非常強大的資產，可以滿足尚未滿足的醫療需求，他們非常希望重新開始開發這些藥物並將其投入臨床。所以我認為整體環境相當正面。

We'll take our next question from Casey Woodring with JPMorgan.

我們將回答摩根大通的 Casey Woodring 提出的下一個問題。

I guess a two-parter here. First is, did you give how many months of backlog you have? I think at the end of 4Q, you had 12 months, and you talked about your normalized ranges kind of 6 to 9 months time frame. So can you walk us through that? And then you talked a lot about safety in the prepared when talking about DSA, but can you just elaborate on how Discovery fared in the quarter relative to your expectations?

我想這個問題可以分成兩個部分。首先，您有沒有透露一下目前有多少個月的積壓訂單？我記得在第四季末，積壓訂單是12個月，您之前提到過正常化範圍大概是6到9個月。能具體解釋一下嗎？然後，在談到DSA時，您談了很多關於「準備充分」的話題，您能詳細說說Discovery在本季的表現與預期相比如何嗎？

Yes. I'll just take the question on the backlog and then Jim can talk about Discovery. So the backlog is at 10 months. So to your point, Casey, I think, for 2 or 3 quarters of last year, kind of hovered around 12, trickling down a little bit. But I think we've been saying that to your point, historical norms were 6 to 9. So what we're hearing from clients is actually that kind of reversed to the norm of they are booking 2 to 3 quarters in advance. So I think that tends -- feels consistent with what we're hearing from clients terms of what they're working on and what they want to book ahead.

是的。我先回答一下關於積壓訂單的問題，然後Jim可以談談Discovery的情況。積壓訂單是10個月。 Casey，正如你所說，我認為去年有兩三個季度，積壓訂單大概在12個月左右，略有下降。但我想我們一直在說，正如你所說，歷史標準是6到9個月。所以我們從客戶那裡聽到的，實際上與他們提前2到3個季度預訂的常規情況相反。所以我認為這與我們從客戶那裡聽到的關於他們正在進行的工作以及他們希望提前預訂的內容的信息一致。

So Discovery is an interesting one. So no question that's been the hardest hit of all of our businesses by overall economy. And there's a lot of dialogue around as funding continues to improve, how quickly will that come back? And it certainly will come back. Studies, to some extent, shorter. But unlikely to come back first. A lot of our pharma clients still do that work internally. And as I said earlier, what we think will come back first are pre-IND work for drugs that have already been developed but haven't been filed yet as opposed to post-IND work.

所以，藥物發現業務是一個很有趣的業務。毫無疑問，它是我們所有業務中受整體經濟影響最嚴重的。隨著資金不斷增加，人們對此有許多討論，資金恢復的速度有多快？答案是肯定的。在某種程度上，研究週期會縮短。但不太可能首先恢復。我們的許多製藥客戶仍在內部進行這項工作。正如我之前所說，我們認為首先恢復的是那些已經開發但尚未提交申請的藥物的IND前工作，而不是IND後工作。

We feel strongly they're going to get back to funding that more quickly. Discovery is a relatively small percentage of our DSA portfolio. So we're focused primarily on Safety Assessment business in terms of our growth rate. And it's unlikely to be the canary in the coal mine that we talked about so often, just because as you look at the whole drug development process, going to be much more important for them to get stuff into regulated safety trials.

我們堅信他們會更快恢復資金。藥物發現在我們的DSA組合中只佔很小的比例。因此，就成長率而言，我們主要專注於安全評估業務。這不太可能像我們經常說的那樣，是“煤礦裡的金絲雀”，因為縱觀整個藥物開發過程，對他們來說，讓產品進入受監管的安全試驗將變得更加重要。

So we like our discovery franchise. We have important assets that clients, large and small, continue to use but have used in larger measure historically. As funding becomes more sufficient and they're funding the assets that have already been developed, obviously, the long-term health of our client base is premised on their ability to do appropriate and impactful discovery spending.

所以我們看好我們的發現業務。我們擁有重要的資產，客戶，無論大小，都在持續使用，而且過去使用量更大。隨著資金更加充足，他們正在為已經開發的資產提供資金，顯然，我們客戶群的長期健康取決於他們是否能進行適當且有效的發現支出。

So still slow, still impacted, still small. We'll let you know as soon as that changes, but clearly has had the greatest adverse impact from the overall economic situation in the country. And I think our competition across discovery is in exactly the same place.

所以速度仍然緩慢，仍然受到影響，規模仍然很小。一旦情況發生變化，我們會立即通知您，但顯然，它受到了全國整體經濟狀況的最大負面影響。我認為我們在發現領域的競爭也處於同樣的境地。

That's helpful. And maybe just if I can sneak one more in, just because we haven't touched on it, is on the manufacturing rebound in the quarter. It looks like each business there is seeing nice growth, and the segment came in above Street expectations. Curious if you think there was upside to the guide in manufacturing this year just in terms of how quickly that business has began to turn to start the year?

這很有幫助。或許我可以再補充一點，因為我們之前還沒談到，關於本季製造業的反彈。看起來製造業的各項業務都實現了良好的成長，而且製造業部門的業績超出了華爾街的預期。您是否認為，就製造業在年初復甦的速度而言，今年的製造業指引存在上漲空間？

Well, that would be nice. That would be nice. We certainly hope so. We certainly don't have that in our guide. It certainly would anticipate, necessarily anticipate that, but we're very pleased that we've had strong growth across the entire segment in the first quarter. You see that people are back to business in biologics, and we have a very strong franchise there. You see that folks that had big inventories of disposables. I have worked through those in our microbial business and the CDMO business to a distinct pleasure as a double-digit grower that we're getting a lot of traction as people recognize the quality of our assets, and we have some commercial drugs that we're working on and the facilities are -- have been expanded nicely.

嗯，那就太好了。那太好了。我們當然希望如此。我們的業績指南中當然沒有提到這一點。這當然是可以預料到的，必然會預料到，但我們非常高興，第一季整個細分市場都實現了強勁成長。你會看到，人們已經重返生物製劑業務，我們在那裡擁有非常強大的特許經營權。你會看到，那些擁有大量一次性用品庫存的人。作為一個兩位數成長的企業，我已經在我們的微生物業務和CDMO業務中取得了顯著進展，我很高興看到，隨著人們認識到我們資產的質量，我們正在獲得很大的發展動力。我們正在研發一些商業藥物，而且我們的設施也得到了很好的擴展。

So at a minimum, we would expect that business to continue to be a strong one with -- I think we're saying now mid-single-digit growth for the year with significantly better operating margins, although those are relatively easy comps on the CDMO side. But all 3 of those businesses will continue to improve. We would have to stop short, particularly at this point in the year saying that there's upside to those numbers.

因此，我們至少預計該業務將繼續保持強勁增長——我認為我們現在預計今年將實現中等個位數增長，營業利潤率也將顯著提高，儘管這些在CDMO業務方面相對容易比較。但這三項業務都將持續改善。我們必須適時止步，尤其是在今年這個時候，就斷言這些數字還有上漲空間。

Yes. And I think to Jim's point, we've modestly adjusted, right? I think the guidance in the beginning of the year was low to mid-single digit, and I think we're now saying mid-single digits. So we raised a little bit the bottom end there. But I think that's a reflection of the strength of the first quarter, but we don't want to get ahead of our skis, as Jim said, to say that there is upside to the guidance that we just provided you today.

是的。我認為正如吉姆所說，我們已經進行了適度調整，對嗎？我認為年初的業績指引是低至中位數個位數，而現在我們給的指引是中個位數。所以我們稍微提高了下限。但我認為這反映了第一季的強勁表現，但正如吉姆所說，我們不想操之過急，說我們今天剛提供的業績指引還有上漲空間。

And we'll take our next question from Tejas Savant with Morgan Stanley.

我們將回答摩根士丹利的 Tejas Savant 提出的下一個問題。

Jim, one quick one for you on NHP pricing actually. I know you talked about pricing more broadly here, but I think last time, you guys have called out about a modest $15 million to $35 million benefit in the guide for your ability to reach pricing in light of competitors being higher. Is that still the right view? Or is that now essentially off the table in light of those strategic, selective pricing adjustments you alluded to?

Jim，關於NHP的定價，我想問您一個問題。我知道您在這裡更廣泛地討論了定價問題，但我記得上次你們在指南中提到，考慮到競爭對手的定價更高，你們能夠達成定價，這將帶來1500萬到3500萬美元的適度收益。這種觀點仍然正確嗎？還是說，考慮到您提到的那些策略性、選擇性的價格調整，現在基本上已經不再考慮這種觀點了？

We would say that that's still the view. Competition had prices significantly higher than we. So they had to come. They've had to bring their prices down. I think it gives us a little bit of pricing power actually. So we're also really pleased with our sourcing of NHPs, particularly given the acquisition that we recently made.

我們的觀點依然如此。競爭對手的價格比我們高很多。所以他們不得不來。他們不得不降價。我認為這實際上給了我們一些定價權。因此，我們對NHP的採購也非常滿意，尤其是考慮到我們最近完成的收購。

Yes. And I'll just add. I think NHP pricing is still positive in the first quarter. We are seeing it come down from the peak, if you will. And I think as I've been saying for the last couple of quarters, I think some competitors are signaling to significant decreases. I think it's more because they're coming down to our level. So we still experienced year-over-year, a modest increase in NHP pricing, although as I said in Q1, it is modestly down from peak levels.

是的。我再補充一點。我認為第一季NHP的價格仍保持正成長。我們正看到它從峰值回落。正如我過去幾季一直在說的那樣，一些競爭對手正在發出大幅降價的信號。我認為這更多的是因為他們的價格正在下降到我們的水平。因此，我們的NHP價格同比仍然略有上漲，儘管正如我在第一季所說，它比高峰略有下降。

Got it. That's helpful. And then a couple of unrelated follow-ups. One on the CDMO piece, Jim, where is capacity utilization today? And what's embedded in the guide in terms of where you finish the year just in light of the ramping backlog of work are? And then on your comments on China. Are you seeing any sort of widening in that price disparity versus the Chinese CROs, particularly outside of China as we look to defense share at all? And any early sort of green shoots from the stimulus that just went -- I mean, that was put out there in March, in terms of how that could benefit local demand in China into your end or perhaps '25?

明白了。這很有幫助。然後是幾個無關的後續問題。一個是關於CDMO的部分，Jim，現在產能利用率如何？考慮到積壓工作不斷增加，指引中是如何預測你們今年的表現的？然後是關於您對中國市場的評論。您是否看到與中國CRO（尤其是在中國以外地區）的價格差距擴大，因為我們關注的是國防市場份額？剛推出的刺激方案——我的意思是，這項計畫是在3月推出的——是否帶來了一些初步的復甦跡象，這是否會在2025年或2026年底前促進中國本土需求的成長？

So we've added an appropriate amount of space. I guess, I would say that the CDMO manufacturing facility in that is lots of audits by clients and regulatory agencies. So we're in very good shape to accommodate the client base where we have already a couple of commercial clients. Hopefully, we'll have more. And we're also getting additional clinical clients I'm dealing with some of those clients myself. The feedback on the facilities has been positive. So obviously, we'll work hard to stay ahead of that, so we have sufficient capacity.

所以，我們增加了適量的空間。我想說，CDMO生產設施已經接受了很多客戶和監管機構的審核。因此，我們目前的狀態非常好，可以很好地容納客戶群，目前我們已經有一些商業客戶。希望未來能有更多客戶。此外，我們還在獲得更多臨床客戶，我自己也在與其中一些客戶打交道。這些設施的回饋一直很正面。顯然，我們會努力保持領先地位，以確保我們擁有足夠的產能。

But just had a call this week, in fact, that -- and the feedback from the audit team that had gone there was really positive. The disparity with Chinese prices for some things has been an issue and has been beneficial to the Chinese marketplace given some of the impending legislation that's likely to change. And folks will look for different places to do the work, and they'll have to get it, too, for they'll have to get quality work, but lowest price point. So we're working hard to have our portfolio be have appropriate options for them.

但實際上，本週剛接到電話，審計團隊的回饋非常正面。某些產品與中國的價格差異一直是個問題，考慮到一些即將出台的立法可能會發生變化，這對中國市場有利。客戶會尋找不同的公司來做這項工作，他們也必須找到合適的公司，因為他們需要獲得高品質的工作，但價格要最低。因此，我們正在努力讓我們的產品組合能夠為他們提供合適的選擇。

Our Chinese business, which is relatively small and not entirely, but principally small animals, has done well given the infusions of capital there. Unlikely to be impacted by any sort of U.S. legislation since we do work in China for China, and anticipate continuing to do that. So China is -- continues to be a good place for us from a growth and margin point of view.

我們的中國業務規模相對較小，並非全部，但主要專注於小型動物，由於資本注入，我們的業務表現良好。由於我們在中國為中國市場開展業務，並且預計會繼續這樣做，因此不太可能受到任何美國立法的影響。因此，從成長和利潤的角度來看，中國對我們來說仍然是一個有利的市場。

We'll take our next question from Patrick Donnelly with Citi.

我們將回答花旗銀行的 Patrick Donnelly 提出的下一個問題。

Jim, maybe one more on the DSA side, just in terms of the pace of cancellations. I think in 3Q, they got a little bit better, 4Q they stepped back down, 1Q got better. How are you thinking about just the trends there? And I guess the million-dollar question is, when do you think we can get back to that kind of 1.0 book-to-bill? What's the visibility? What did cancellations trend like in the quarter? Certainly, if you have any April thoughts, that would be welcome.

Jim，關於DSA方面，我再問一個問題，關於訂單取消的速度。我認為第三季情況略有好轉，第四季有所回落，第一季有所好轉。您如何看待這些趨勢？我想，最重要的問題是，您認為我們什麼時候才能回到1.0的訂單出貨比？可見性如何？本季的訂單取消趨勢如何？當然，如果您對四月的情況有什麼看法，歡迎隨時分享。

Yes. So everything that happened in April is embedded in our guidance. So I don't want to cut it month-by-month. We're pleased with what's been happening, the moderation and decline of cancellations. By the way, as you know, we always have cancellations. I mean all we can say is what we said, which is that we have to see a reduction in cancellations for some sustained period of time to have confidence that it's meaningful and will continue. We believe that, that's the trajectory that we're on, but we have to. We have to experience that for that to be beneficial and in terms of our backlog.

是的。四月發生的所有事情都已納入我們的預期。所以我不想逐月削減。我們對目前的情況感到滿意，取消訂單的數量正在減少。順便說一句，正如你所知，我們總是會遇到取消訂單的情況。我的意思是，我們只能說，我們必須看到取消訂單在一段時間內持續減少，才能確信這種趨勢是有意義的，並且會持續下去。我們相信，這就是我們目前的軌跡，但我們必須這樣做。我們必須經歷這樣的過程，才能從中受益，並減少我們的積壓訂單。

So it's an almost impossible trend to comment on what's happened historically is not necessarily relevant. You get different market conditions right now and different economic conditions and totally different competitive scenario, particularly on the Safety Assessment business. We're so much larger and I think so much more critical to the marketplace that, again, we're confident that as if and as the cancellations continue to decline, given the proposal volume, the booking should intensify.

因此，對歷史上發生的事情進行評論幾乎是不可能的，而且不一定具有現實意義。現在的市場狀況、經濟狀況和競爭格局都截然不同，尤其是在安全評估業務方面。我們的規模要大得多，而且我認為對市場也至關重要，因此，我們再次確信，如果取消量持續下降，考慮到投標量，預訂量應該會上升。

That supports our notion for the back half of the year. One would imagine that as funding continues to improve, that cancellations wouldn't suddenly crank up again. So that's definitely a function of the economy we've been dealing with for the last 1.5 years.

這支持了我們對下半年的預測。我們可以想像，隨著資金狀況的持續改善，取消預訂的數量不會突然再次激增。所以，這肯定是過去一年半以來我們一直在應對的經濟狀況的影響。

Okay. That's helpful. And then maybe just on kind of the broad demand environment. I think in the slides around the cash flow piece, you talked about moderating capacity expansions to match current demand. You talked, obviously, a lot of questions about the pricing piece. It seems like maybe softening a little bit given the demand environment yet you sound very good in terms of kind of these conversations and the expectations of demand improvement as we go through this year. Can you just kind of marry that up and just frame up the right way to think about the demand, given again the capacity and price piece, along with your positive commentary on demand? Just want to make sure we're thinking about that right.

好的。這很有幫助。然後，我們來談談整體需求環境。我記得在關於現金流部分的幻燈片中，您談到了適度擴張產能以滿足當前需求。顯然，您也談到了很多關於定價的問題。考慮到當前的市場需求，定價似乎有所緩和。但就這些討論以及我們對今年需求改善的預期而言，您的回答聽起來非常樂觀。您能否結合這些因素，結合產能和價格因素，以及您對需求的正面評價，闡述如何正確看待需求？我只是想確保我們對此的思考是正確的。

We work really hard, and I think we've done this quite successfully -- I don't know, for at least, 1.5 decades. The marry capacity with anticipated demand. It's not just current demand because we have to build space a year or 2 in advance. And we've lived through a period -- a long time ago, but it was painful where we and everybody else in the industry just built too much space. And that has a deleterious impact on your margins, and it's tough to manage that when you're swimming in space. So we never want to get back to that. We have worked really hard, and I think successfully and not having an adequate amount of space. That's the risk, of course. You get the (inaudible) work and you don't have capacity. So we never want to get there.

我們非常努力，而且我認為我們做得相當成功——至少有15年了。我們將產能與預期需求結合。這不僅僅是當前的需求，因為我們必須提前一兩年建造空間。我們經歷過一個時期——很久以前，但那段時期很痛苦，我們和業內其他人都建造了太多空間。這會對利潤產生有害影響，而且當你在空間中游弋時，很難管理好這一點。所以我們永遠不想再回到那個狀態。我們已經非常努力，我認為也取得了成功，但仍然沒有足夠的空間。當然，這就是風險所在。你得到了（聽不清楚）工作，卻沒有足夠的產能。所以我們永遠不想陷入那種境地。

So all I can say is we work hard to titrate our demand and anticipated demand and the competitive dynamic with building out new space at multiple sites. You have to titrate that against what the current demand is and how your current space is filling up. So I think we're doing that appropriately. We have to be really careful with the shareholders' money. And from a CapEx point of view, I don't think we're in any way under capitalizing this business, both from a maintenance and a growth point of view. I think we're spending exactly where we need to be. And as I said, we need to call that right in advance. So we give it a great deal of thought.

所以我能說的是，我們努力衡量我們的需求、預期需求以及在多個地點擴大新空間的競爭態勢。我們必須根據當前需求和現有空間的填滿情況來衡量。所以我認為我們做得很到位。我們必須非常謹慎地使用股東的資金。從資本支出的角度來看，我認為我們完全沒有低估這項業務，無論是從維護角度還是成長角度來看。我認為我們的支出恰到好處。正如我所說，我們需要提前意識到這一點。所以我們對此進行了深思熟慮。

So I think it's -- we come through such an aggressive period of demand and aggressive building that it's just irresponsible to continue to spend at the same level given the current demand curve. Having said that, we obviously anticipate that demand will be better next year and the year after than it is today. We have 3-year guidance out there. And so we're building to that at least.

所以我認為——我們正經歷著如此強勁的需求和建設時期，考慮到當前的需求曲線，繼續維持同樣的支出水準是不負責任的。話雖如此，我們顯然預計明年和後年的需求會比現在更好。我們已經制定了三年的指導方針。因此，我們至少正在為此而努力。

Yes. And maybe if I can just add, I think to Jim's point, we lived through a couple of years of unprecedented demand. And at some point, we said we were going to increase our CapEx to almost 9% of revenue. And historically, we'd be more in the 5%. That was both a combination of historically, we added some capacity through M&A, and now we were doing organically as well as fueling that unprecedented demand. I think demand has normalized now. And our guidance for the 3-year horizon is 7% to 8% of capital as a percent of sales. And this year, our guidance contemplates kind of the low end of that at 7%. And so I think as Jim pointed out, we are being appropriately thoughtful in matching up the capital investment with the main environment that we're seeing.

是的。我想補充一下，正如Jim所說，我們經歷了幾年前所未有的需求。我們一度表示要將資本支出提高到收入的近9%。而從歷史上看，我們的這一比例通常會在5%以上。這既包括我們過去透過併購增加了一些產能，也包括現在我們實現了內生成長，同時滿足了前所未有的需求。我認為現在需求已經恢復正常了。我們對未來三年的預期是資本支出佔銷售額的比例達到7%到8%。而今年，我們的預期是7%左右，處於這個區間的低端。所以，正如Jim指出的那樣，我們在將資本投資與我們所看到的主要環境相匹配方面是經過深思熟慮的。

We'll take our next question from Josh Waldman with Cleveland Research.

我們將回答克利夫蘭研究公司的喬希·沃爾德曼提出的下一個問題。

Jim, 2 for you, I think, if I may. First, you've talked about seeing better proposal activity in DSA. Can you comment on what you are seeing from a conversion standpoint, the timing from when you receive proposal? The proposal to booking the study and then recognizing rev? I guess have you seen the time line and conversion rate return to normal would be great to hear how you're contemplating this, and your outlook and if you've had to tweak that piece of the forecasting assumption at all.

Jim，如果可以的話，我想給你兩個問題。首先，你提到了DSA的提案活動有所改善。你能從轉換率的角度談談你觀察到的情況嗎？從收到提案到預訂研究，再到確認收入，這段時間是怎麼樣的？我想問一下，你看到時間表和轉換率恢復正常了嗎？如果能了解你對此有何看法，以及你的展望，以及你是否需要調整這部分預測假設，那就太好了。

Not sure what normal is. But I'd say it's reasonably normal. As I said before, except maybe for some periods where the demand was overwhelming, there is a lag between proposals and bookings. And particularly in this period where people are trying to ensure that they have confidence in accessibility of capital. So the conversions are pretty much as we would have expected. And hopefully, that will improve, but there's going to be kind of 2 or 3 quarters necessary to get this to be more robust. We're heartened to see the proposal volume as is. People feel -- seem to be coming out of their shells, acknowledging access to capital, obviously, desirous of developing the rest of their portfolios. And that's underlying our anticipation at the back half of the year will be much stronger. So I think it's pretty much as anticipated.

不確定正常情況是怎樣的。但我認為這相當正常。正如我之前所說，除了某些需求旺盛的時期外，專案申請和實際訂單之間存在滯後。尤其是在人們試圖確保對資金可近性的信心的時期。因此，轉換率基本上符合我們的預期。希望這種情況會有所改善，但還需要大約兩到三個季度才能變得更加強勁。我們很高興看到計畫申請量維持現狀。人們似乎正在走出困境，承認可以獲得資金，顯然，他們渴望拓展其他投資組合。這構成了我們對下半年業績將更加強勁的預期的基礎。所以我認為情況基本上符合預期。

Got it. Okay. And then the follow-up on that. Just wondering if you could provide more context on how DSA performed versus your expectation in the quarter? And then curious whether there's been any change to your assumption for Q2 or the slope of organic recovery in that business for the second half.

明白了。好的。接下來是後續問題。我想知道您能否提供更多關於本季DSA表現與預期之間的對比情況？您對第二季的預測，或是下半年該業務有機復甦的斜率，是否有任何變化？

Maybe I'll take that. I think as we said in our prepared remarks, I think what was different and drove the beat in the first quarter and is also impacting how we guided the second quarter is, obviously, RMS. There was a timing shift with NHP shipments that accelerated into the first quarter. So that was a tailwind in the first quarter and will be a headwind in the second. And then we talked about the strength of manufacturing in the first quarter, which was encouraging. I think we were silent in DSA in the sense that it performed according to our expectations, both in the first quarter and the impact of that is contemplated on the guidance for the second quarter. So I think we spoke about what was different than our expectations of the other 2 businesses.

也許我會接受這一點。正如我們在準備好的演講中所說，我認為第一季業績不同、推動成長並影響我們對第二季業績指引的因素顯然是RMS。 NHP出貨量在第一季加速成長，這在第一季是一個順風，但在第二季將成為逆風。然後我們談到了第一季製造業的強勁表現，這令人鼓舞。我認為我們之所以沒有談到DSA，是因為它在第一季的表現符合我們的預期，影響已納入第二季業績指引。所以我認為我們談到了其他兩項業務與預期的不同之處。

Thank you. We'll take our last question from Jack Wallace with Guggenheim Securities.

謝謝。最後一個問題來自古根漢證券公司的傑克華萊士。

Just quickly on the CapEx commentary. It looks like you reiterated the guide, there's the moderating of capacity expansions. You comment in the deck and just reiterate a couple questions ago. Can you just help us kind of bridge the rate or guide against those comments? And should we think about that as being more CapEx in the back half of the year? Or is the dollars being spent differently than capacity expansions?

簡單談談關於資本支出的評論。您似乎重申了指引，產能擴張正在放緩。您在簡報中評論過，並在之前的幾個問題中重申。您能否幫助我們根據這些評論來調整利率或指引？我們是否應該將其視為下半年的更多資本支出？還是這些資金的支出與產能擴張不同？

Yes. I think I'll take that one. The guidance for the year is the same for -- I think everything we reaffirmed the guidance, right? And so the timing of our capital projects tends to kind of progress throughout the year. Obviously, our free cash flow was quite strong in the first quarter. You saw a decline of CapEx spend year-over-year. So we started the year with capital expenditures being a tailwind to cash flow, and we're going to continue to progress some of our projects as the year progresses. But there's no update, I guess, is the point.

是的，我想我會接受這個。今年的指引是一樣的——我想我們重申了所有指引，對吧？因此，我們的資本項目的時間安排往往會在全年有所進展。顯然，我們第一季的自由現金流相當強勁。你看到資本支出較去年同期下降。所以，我們年初的資本支出對現金流起到了推動作用，隨著時間的推移，我們將繼續推進一些專案。但我想，重點是沒有更新。

Got it. And then in your prepared remarks, I think you mentioned some timing element in the first quarter for manufacturing as well as RMS. Was there any kind of snapback demand that was (inaudible) surprising that might not continue in the second quarter? Or did I misinterpret that comment?

明白了。然後，在您準備好的演講中，我記得您提到了第一季製造業和RMS的一些時間因素。是否存在某種令人驚訝的（聽不清楚）反彈需求，而這種反彈可能不會在第二季度持續下去？還是我誤解了您的意思？

Again, I'll maybe take that. So 2 things. The timing impact was really in RMS. In manufacturing, what we saw, which was encouraging and positive is we have seen strength of proposals in the fourth quarter, especially in our testing business and that did translated improved business and stronger performance in the first quarter. What we said in the second quarter for the manufacturing business is that last year, the second quarter was one of the strongest quarters that we've had. So from a comp perspective, it's a little bit of a headwind year-over-year when we get into the second year -- second quarter.

我再說一遍，我可能會接受這一點。所以有兩點。時間影響其實體現在RMS上。在製造業，我們看到令人鼓舞和積極的方面是，我們在第四季度看到了提案的強勁增長，尤其是在我們的測試業務中，這確實轉化為第一季業務的改善和更強勁的業績。我們在第二季談到製造業時說，去年第二季是我們表現最強勁的季度之一。因此，從同行業的角度來看，進入第二年——也就是第二季度，與去年同期相比，情況略有不利。

Got it. So there's no -- so basically, the reason why we wouldn't necessarily want to raise the guidance here based on the stronger demand in the first quarter just has to deal with the tougher comps, not because that there's an expectation that the level of the strength in the first quarter wouldn't necessarily repeat in the upcoming quarters. Is that right?

明白了。所以，基本上，我們之所以不一定會因為第一季需求強勁而上調業績指引，只是為了應對更嚴峻的可比市場，而不是因為預期第一季的強勁表現不一定會在接下來的幾季中重現。對嗎？

Correct. And I would say for the year, when you think about guidance, it's still pretty early. I think there was a question earlier around whether we think there's upside to our manufacturing guidance. And as I mentioned, we slightly improved it, given that the guidance in the beginning of the year was low to mid and now, we are mid. So we reflected a little bit of that straight already, but it would be premature to say that there's upside to the guidance that we just updated now. I think that's the point. Thank you.

沒錯。我想說，對於今年的業績指引，現在下達還為時過早。我想之前有人質疑我們是否認為製造業指引還有上漲空間。正如我之前提到的，我們略微調整了指引，因為年初的指引是中低水平，而現在我們處於中高水平。我們已經在某種程度上反映了這一點，但現在就斷言我們剛剛更新的指引有上漲空間還為時過早。我想這就是關鍵。謝謝。

Thank you. We have no further questions in queue. I will turn the conference back to Todd Spencer for closing remarks.

謝謝。我們沒有其他問題了。接下來，請托德·斯賓塞致閉幕詞。

Great. Thank you for joining us on the conference call this morning. We look forward to seeing many of you at some upcoming investor conferences. This concludes the conference call. Thanks again.

太好了！感謝您今天上午參加我們的電話會議。我們期待在即將舉行的投資者會議上再次見到大家。電話會議到此結束。再次感謝。

Thank you. That does conclude today's Charles River Laboratories First Quarter 2024 Earnings Call. Thank you for your participation, and you may now disconnect.

謝謝。今天的Charles River Laboratories 2024年第一季財報電話會議到此結束。感謝您的參與，現在可以斷開連接了。