Inotiv (NOTV) 2025 Conference June 04, 2025 03:45 PM ET Speaker0 Okay. Okay. Alright. Hi. Good afternoon. I'm Dave Windley with Jefferies Healthcare Equity Research, CRO coverage. Thanks so much for attending or listening to our twenty twenty five Healthcare Conference here in New York. Our next presenting company is Innative. NOTV is the ticker and the company's CEO is here with us. Bob Leisure, Beth Taylor here in front of me in the audience. The company's CFO is also along with. So Bob, we just said this ...

Investor Presentation This presentation contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, statements regarding our intent, belief or current expectations with respect to (i) our strategic plans; (ii) trends in the demand for our services and products; (iii) trends in the industries that consume our services and products; (iv) market and company-specific impacts of NHP supply and demand matters; (v) compliance with the Resolution Agreement and Plea ...

Forward-Looking Statements This presentation contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, statements regarding our intent, belief or current expectations with respect to (i) our strategic plans; (ii) trends in the demand for our services and products; (iii) trends in the industries that consume our services and products; (iv) market and company-specific impacts of NHP supply and demand matters; (v) compliance with the Resolution Agreement and ...

Company Overview - Inotiv, Inc. is a leading contract research organization specializing in nonclinical and analytical drug discovery and development services, as well as research models and related products [3] - The company's focus is on enhancing efficiency, improving data quality, and reducing costs associated with bringing new drugs and medical devices to market [3] - Inotiv aims to support discovery and development objectives while contributing to a healthier and safer world [3] Upcoming Event - Robert Leasure Jr., President and CEO of Inotiv, will present at the Jefferies Global Healthcare Conference in New York on June 4 at 3:45 p.m. ET [1] - The live webcast of the presentation will be available in the "Investors" section of Inotiv's website and will be archived for approximately 90 days [2]

Revenue Performance - Total revenue for the three months ended March 31, 2025, was $124.3 million, a 4.4% increase compared to $119.0 million for the same period in 2024[12]. - Product revenue increased by 9.5% to $68.2 million for the three months ended March 31, 2025, compared to $62.1 million for the same period in 2024[12]. - Service revenue decreased to $56.1 million for the three months ended March 31, 2025, from $57.0 million in the same period of 2024, reflecting a decline of 3.1%[12]. - Revenue from the United States for the three months ended March 31, 2025, was $112.151 million, an increase from $102.429 million in Q2 2024[54]. - DSA revenue decreased by $1,299, or 2.8%, to $45,332 for the three months ended March 31, 2025, primarily due to a decline in general toxicology services revenue[180]. - RMS revenue increased by $6,587, or 9.1%, to $78,991 for the three months ended March 31, 2025, attributed to higher NHP volumes sold[182]. - Revenue for the six months ended March 31, 2025, was $156,045, a decrease of $7,162 or 4.4% compared to $163,207 for the same period in 2024[192]. Financial Losses and Improvements - The consolidated net loss for the three months ended March 31, 2025, was $14.9 million, compared to a net loss of $48.1 million for the same period in 2024[14]. - Basic loss per common share for the three months ended March 31, 2025, was $(0.44), an improvement from $(1.86) in the same period of 2024[12]. - Consolidated net loss for the six months ended March 31, 2025, was $42,496,000, compared to a loss of $63,907,000 for the same period in 2024, indicating an improvement[19]. - The company reported an operating loss of $2.938 million for the three months ended March 31, 2025, compared to a loss of $43.116 million in the same period of 2024[53]. - The company reported a loss before income taxes of $15.976 million for the three months ended March 31, 2025, compared to a loss of $54.443 million in the same period of 2024[53]. - Consolidated net loss for the three months ended March 31, 2025, was $14,866,000, compared to a loss of $48,079,000 for the same period in 2024[141]. Assets and Liabilities - Total current assets increased to $173.7 million as of March 31, 2025, from $163.4 million as of September 30, 2024, representing a growth of 6.9%[10]. - Total liabilities decreased slightly to $608.3 million as of March 31, 2025, from $610.9 million as of September 30, 2024[10]. - The company reported an increase in inventories to $38.0 million as of March 31, 2025, compared to $18.2 million as of September 30, 2024, indicating a significant rise of 109.9%[10]. - Cash and cash equivalents decreased to $19.3 million as of March 31, 2025, from $21.4 million as of September 30, 2024[10]. - The company’s accumulated deficit increased to $(604.7) million as of March 31, 2025, from $(562.2) million as of September 30, 2024[10]. - Long-term debt as of March 31, 2025, was $392.394 million, slightly up from $389.801 million as of September 30, 2024[57]. Capital Expenditures and Investments - Capital expenditures for the six months ended March 31, 2025, were $9,932,000, down from $12,594,000 in the same period of 2024[19]. - Capital expenditures for DSA were $1.105 million in Q2 2025, up from $929 thousand in Q2 2024, while RMS capital expenditures decreased to $4.368 million from $6.093 million[53]. - The company plans to optimize capital allocation and improve operating results through increased revenue from non-human primate-related products and services[33]. - The company anticipates that Phase Two will require a capital investment of approximately $6,500 and is expected to provide net annual savings of $6,000 to $7,000[172]. Debt and Financial Covenants - The company is at risk of non-compliance with its financial covenants if operational results do not improve in the next twelve months[29]. - The Company entered into a Seventh Amendment to the Credit Agreement, waiving existing financial covenants until June 30, 2025, and establishing new testing ratios for the Fixed Charge Coverage Ratio and Secured Leverage Ratio starting June 30, 2025[31]. - The Company has approximately 55 days after any fiscal quarter to cure noncompliance with financial covenants, and approximately 100 days after fiscal year-end[33]. - The Company does not believe its existing cash and cash equivalents would be sufficient to fund operations if loans under the Credit Agreement were accelerated[30]. Stock and Equity - The company issued 6,900,000 common shares, raising net proceeds of $27,524,000 after deducting underwriting discounts and commissions[27]. - The company raised $27,524,000 in net proceeds from a public offering of 6,000,000 common shares at a price of $4.25 per share[135]. - As of March 31, 2025, there were 903,240 shares available for grants under the 2024 Equity Incentive Plan[138]. - The company has 10,797,000 anti-dilutive common share equivalents as of March 31, 2025, due to stock options and other instruments[141]. Operational Challenges and Future Outlook - Operating cash flows for the six months ended March 31, 2025, were negative, reflecting ongoing operational challenges[19]. - Management's operating plan forecasts compliance with financial covenants under the Credit Agreement for the next twelve months, but substantial doubt about the Company's ability to continue as a going concern exists[35]. - The company anticipates a more consistent revenue stream in calendar 2025 due to expanded NHP client base and pre-sold NHP inventory, compared to fiscal 2024[168]. - The company expects revenue from colony management services to continue increasing in calendar 2025 compared to calendar 2024[168]. - The company achieved approximately $17,000 - $19,000 in net annual cost savings as a result of its restructuring and site optimization plans completed by September 30, 2024[170].

Group 1 - Inotiv, Inc. reported a quarterly loss of $0.18 per share, better than the Zacks Consensus Estimate of a loss of $0.24, and an improvement from a loss of $0.29 per share a year ago, representing an earnings surprise of 25% [1] - The company posted revenues of $124.32 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.41%, compared to year-ago revenues of $119.04 million [2] - Inotiv shares have declined approximately 57.5% since the beginning of the year, contrasting with the S&P 500's decline of 4.7% [3] Group 2 - The earnings outlook for Inotiv is uncertain, with current consensus EPS estimates of -$0.14 on revenues of $124.08 million for the upcoming quarter and -$0.83 on revenues of $494.63 million for the current fiscal year [7] - The estimate revisions trend for Inotiv is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The Medical - Drugs industry, to which Inotiv belongs, is currently in the top 26% of Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]

Inotiv (NOTV) Q2 2025 Earnings Call May 07, 2025 04:30 PM ET Company Participants Steven Halper - Managing DirectorRobert Leasure - CEO, President & DirectorBeth Taylor - SVP of Finance & CFOJohn Sagartz - Chief Strategy Officer & DirectorNelson Cox - Equity Research AssociateDavid Windley - Managing Director Conference Call Participants Matt Hewitt - Senior Research Analyst Operator Good day, everyone, and welcome to today's Innotiv Second Quarter Fiscal twenty twenty five Earnings Call. At this time, all ...

Financial Data and Key Metrics Changes - For Q2 of fiscal 2025, total revenue was $124.3 million, a 4.4% increase from $119 million in Q2 of fiscal 2024, primarily driven by an increase in RMS segment revenue [8][25] - Adjusted EBITDA for Q2 was $8 million, or 6.4% of total revenue, compared to $3.1 million, or 2.6% of total revenue in the same quarter last year [27][28] - Consolidated net loss attributable to common shareholders was $14.9 million, or a loss of $0.44 per diluted share, compared to a loss of $48.1 million, or $1.86 per diluted share in Q2 of fiscal 2024 [27] Business Line Data and Key Metrics Changes - RMS segment revenue increased by $6.6 million, or 9.1%, compared to Q2 of fiscal 2024, mainly due to higher NHP volumes sold [25][26] - DSA revenue decreased to $45.3 million from $46.6 million in Q2 of fiscal 2024, primarily due to a decline in general toxicology services revenue [26] - DSA net new orders were $44.5 million, a 27% increase over Q2 of fiscal 2024, with a book to bill ratio of 1.01:1 [26][28] Market Data and Key Metrics Changes - The company noted geopolitical and macroeconomic risks affecting the industry, but expects continued year-over-year revenue and adjusted EBITDA growth for the next two quarters [9][23] - The company has not seen material changes in demand due to current tariffs, although there is some cost inflation linked to tariffs [22][23] Company Strategy and Development Direction - The company is focused on client satisfaction, integration of scientific services, and site optimization plans to improve operational efficiency and margins [7][10] - A revised RMS site optimization plan is expected to yield annual cost savings of $6 million to $7 million, with completion anticipated by March 2026 [11][12] - The company is adapting to FDA announcements regarding drug development and animal testing, positioning itself to leverage new methodologies [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the level of quoting and awards in the DSA segment, expecting improvements in margins starting in Q3 of fiscal 2025 [49][86] - The company is monitoring NIH funding impacts but has not seen significant changes in business yet [52][54] - Management remains confident in the company's ability to navigate geopolitical and macroeconomic uncertainties while creating value for clients and shareholders [23][24] Other Important Information - The company plans to hold an Investor Day on May 29 to further discuss its strategic plan and focus on client excellence [87] - The company has made significant investments in acquisitions and site optimizations to prepare for future growth [7][10] Q&A Session Summary Question: Changes in marketing strategies post-FDA announcement - Management has integrated new services into their discovery sales process and is seeing some growth, though not as rapid as expected [35][36] Question: Focus areas in the revised RMS optimization plan - The revised plan aims to improve efficiencies and reduce costs, with a focus on maximizing existing resources rather than expanding capacity [40][41] Question: Current demand trends and quoting activity - Management reported a positive start to the current quarter, with strong quoting and closing activity [46][49] Question: Impact of NIH funding on customer mix - There has been no dramatic impact from NIH funding yet, with some customers increasing orders while others have reduced them [52][54] Question: DSA margin improvement timeline - Management expects to see benefits from identified margin improvement areas sooner rather than later, with some improvements already noted [66][68]

Revenue Performance - Q2 FY 2025 revenue increased 4.4% to $124.3 million compared to $119.0 million in Q2 FY 2024, driven by a $6.6 million increase in RMS revenue[6] - Year-to-date FY 2025 revenue declined 4.1% to $244.2 million from $254.5 million in YTD FY 2024, with a $7.2 million decrease in RMS revenue and a $3.2 million decrease in DSA revenue[12] - Total revenue for the three months ended March 31, 2025, was $124.323 million, a 4.4% increase compared to $119.035 million for the same period in 2024[25] - Total revenue for the three months ended March 31, 2025, was $124.323 million, an increase from $119.035 million in the same period of 2024, representing a growth of 2.4%[32] - Product revenue increased to $68.195 million for the three months ended March 31, 2025, up 9.5% from $62.074 million in the same period last year[25] Profitability and Loss - Consolidated net loss for Q2 FY 2025 was $14.9 million, or 12.0% of total revenue, an improvement from a net loss of $48.1 million, or 40.4% of total revenue, in Q2 FY 2024[6] - Consolidated net loss for the six months ended March 31, 2025, was $42.496 million, an improvement from a net loss of $63.907 million for the same period in 2024[29] - GAAP consolidated net loss for the three months ended March 31, 2025, was $14.866 million, which is an improvement from a loss of $48.079 million in the same period of 2024[36] - The company reported a basic loss per common share of $0.44 for the three months ended March 31, 2025, an improvement from a loss of $1.86 per share in the same period of 2024[25] Operating Performance - Adjusted EBITDA for Q2 FY 2025 was $8.0 million, or 6.4% of total revenue, compared to $3.1 million, or 2.6% of total revenue, in Q2 FY 2024[6] - Adjusted EBITDA for the three months ended March 31, 2025, was $7.957 million, compared to $3.076 million in 2024, indicating an increase of 159.3%[36] - Operating loss for Q2 FY 2025 was $2.9 million, significantly improved from an operating loss of $43.1 million in Q2 FY 2024[11] - Operating loss for the three months ended March 31, 2025, was $2.938 million, significantly reduced from an operating loss of $43.116 million in the same quarter of 2024[25] - Non-GAAP operating income for the RMS segment was $15.558 million for the three months ended March 31, 2025, compared to $8.214 million in the same period last year, representing an increase of 89.5%[31] - Non-GAAP operating income for the three months ended March 31, 2025, was $7.855 million, compared to $3.088 million in 2024, reflecting a significant increase of 154.5%[32] - Unallocated corporate operating loss decreased to $(14.314) million for the three months ended March 31, 2025, from $(15.365) million in 2024, improving as a percentage of total revenue from (12.9)% to (11.5)%[32] Cash and Debt Management - Cash and cash equivalents were $19.3 million at March 31, 2025, down from $21.4 million at September 30, 2024[14] - Cash and cash equivalents at the end of the period were $19.299 million, down from $21.432 million at the beginning of the period[29] - Total debt as of March 31, 2025, was $399.5 million, with no borrowings on the $15.0 million revolving credit facility[15] - Total current assets increased to $173.658 million as of March 31, 2025, compared to $163.413 million as of September 30, 2024[27] - Total liabilities decreased slightly to $608.274 million as of March 31, 2025, from $610.857 million as of September 30, 2024[27] - The company issued common shares resulting in $27.524 million in financing activities during the six months ended March 31, 2025[29] Backlog and Future Expectations - DSA backlog was $130.8 million at March 31, 2025, down from $142.1 million at March 31, 2024[6] - The book-to-bill ratio for Q2 FY 2025 was 1.01x for the DSA services business[6] - The company expects U.S. optimization plans to be completed by the end of Q2 FY 2026[14] Restructuring and Legal Costs - The company incurred restructuring costs of $1.009 million for the three months ended March 31, 2025, down from $1.368 million in the same period of 2024[36] - Legal settlement costs for the three months ended March 31, 2025, were $(7.550) million, reflecting a significant charge related to a settlement payment received from FNI[36] Non-GAAP Adjustments - Total non-GAAP adjustments to operating loss for the three months ended March 31, 2025, amounted to $10.793 million, significantly lower than $46.204 million in 2024[32] - Non-GAAP operating loss as a percentage of total revenue improved to (10.2)% for the three months ended March 31, 2025, from (11.2)% in 2024[32]

Core Viewpoint - Inotiv, Inc. reported a revenue increase of 4.4% in Q2 FY 2025 compared to the same period last year, driven primarily by growth in Research Models and Services (RMS) revenue, despite a decline in Discovery and Safety Assessment (DSA) revenue [1][6][8]. Financial Performance - Q2 FY 2025 revenue was $124.3 million, up from $119.0 million in Q2 FY 2024, with RMS revenue increasing by $6.6 million (9.1%) and DSA revenue decreasing by $1.3 million (2.8%) [2][6][8]. - Year-to-date (YTD) FY 2025 revenue decreased by 4.1% to $244.2 million compared to $254.5 million in YTD FY 2024, attributed to a $7.2 million (4.4%) decline in RMS revenue and a $3.2 million (3.5%) decline in DSA revenue [10][13]. - The consolidated net loss for Q2 FY 2025 was $14.9 million (12.0% of total revenue), significantly improved from a net loss of $48.1 million (40.4% of total revenue) in Q2 FY 2024 [6][13]. - Adjusted EBITDA for Q2 FY 2025 was $8.0 million (6.4% of total revenue), compared to $3.1 million (2.6% of total revenue) in Q2 FY 2024 [6][13]. Segment Performance - DSA revenue for Q2 FY 2025 was $45.3 million, down from $46.6 million in Q2 FY 2024, while RMS revenue was $79.0 million, up from $72.4 million [2][33]. - The operating loss for Q2 FY 2025 was $2.9 million, a significant reduction from an operating loss of $43.1 million in Q2 FY 2024, primarily due to improved RMS performance [9][11]. Operational Insights - The company is focusing on optimizing its RMS sites in North America to align better with client needs and enhance client satisfaction [3]. - Management is attentive to external factors such as tariffs and R&D funding levels, with proactive strategies in place to mitigate current tariff impacts [3]. Cash Flow and Debt - Cash and cash equivalents stood at $19.3 million as of March 31, 2025, down from $21.4 million at the end of September 2024 [12]. - Total debt as of March 31, 2025, was $399.5 million, with no borrowings on the company's $15.0 million revolving credit facility [12].