Business Segment Information

6 Months Ended

Jun. 25, 2011

Business Segment Information

Business Segment Information

13. Business Segment Information

        We report two segments, called Research Models and Services (RMS) and Preclinical Services (PCS). Operating segments are components of an enterprise for which separate financial information is available and is regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

        Our RMS segment includes sales of research models, genetically engineered models and services (GEMS), consulting and staffing services (CSS), research animal diagnostics, discovery services, in vitro and avian vaccine services. Our PCS segment includes services required to take a drug through the development process including toxicology, pathology services, bioanalysis, pharmacokinetics and drug metabolism, discovery support and biopharmaceutical services.

        The following table presents sales and other financial information by business segment. Net sales represent sales originating in entities primarily engaged in either provision of RMS or PCS.

		Three Months Ended				Six Months Ended
		June 25, 2011		June 26, 2010		June 25, 2011		June 26, 2010
Research Models and Services
	Net sales	$	178,163	$	167,140	$	351,534	$	339,345
	Gross margin		78,307		71,346		152,146		145,625
	Operating income		55,691		47,258		107,433		97,242
	Depreciation and amortization		9,318		8,811		18,587		18,532
	Capital expenditures		4,010		6,245		8,413		11,205
Preclinical Services
	Net sales	$	110,100	$	121,452	$	222,572	$	241,534
	Gross margin		28,013		29,418		56,812		54,344
	Operating income		7,875		6,509		17,181		6,938
	Depreciation and amortization		12,498		14,114		24,494		27,973
	Capital expenditures		2,650		2,187		5,037		6,520

        A reconciliation of segment operating income to consolidated operating income is as follows:

	Three Months Ended						Six Months Ended
	June 25, 2011			June 26, 2010			June 25, 2011			June 26, 2010
Total segment operating income	$	63,566		$	53,767		$	124,614		$	104,180
Unallocated corporate overhead		(10,252	)		(23,782	)		(29,049	)		(44,001	)
Consolidated operating income	$	53,314		$	29,985		$	95,565		$	60,179

        Net sales for each significant service area are as follows:

		Three Months Ended				Six Months Ended
		June 25, 2011		June 26, 2010		June 25, 2011		June 26, 2010
Research models		$	90,190	$	88,784	$	183,590	$	183,456
Research model services			55,422		51,807		107,397		102,961
Other products			32,551		26,549		60,547		52,928
	Total research models		178,163		167,140		351,534		339,345
	Total preclinical services		110,100		121,452		222,572		241,534
Total sales		$	288,263	$	288,592	$	574,106	$	580,879

        A summary of unallocated corporate overhead consists of the following:

	Three Months Ended						Six Months Ended
	June 25, 2011			June 26, 2010			June 25, 2011			June 26, 2010
Stock-based compensation expense	$	2,528		$	3,578		$	5,514		$	6,615
U.S. retirement plans		1,055			639			2,112			1,657
Audit, tax and related expenses		505			486			1,260			1,199
Salary and bonus		4,642			4,267			9,335			9,299
Global IT		3,172			3,351			6,534			6,577
Employee health and fringe cost		675			(779	)		2,314			976
Consulting and professional services		2,201			1,937			3,532			4,882
Depreciation		1,593			1,531			3,174			2,641
Transaction (acquisition/disposition) costs		174			7,280			314			7,397
Life insurance death benefit gain		(7,710	)		—			(7,710	)		—
Other general unallocated corporate expenses		1,417			1,492			2,670			2,758
	$	10,252		$	23,782		$	29,049		$	44,001

        Other general unallocated corporate expenses consist of various departmental costs including those associated with departments such as senior executives, corporate accounting, legal, tax, human resources, treasury and investor relations.