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Inotiv, Inc. (NOTV) Presents at H.C. Wainwright 27th Annual Global Investment Conference - Slideshow (NASDAQ:NOTV)
Seeking Alpha· 2025-09-11 23:12
Group 1 - The company is responsible for the development of transcript-related projects [1] - The company publishes thousands of quarterly earnings calls per quarter and is expanding its coverage [1] - The purpose of the profile is to share new transcript-related developments with readers [1]
Inotiv (NasdaqCM:NOTV) FY Conference Transcript
2025-09-10 18:00
Summary of Inotiv FY Conference Call - September 10, 2025 Company Overview - **Company**: Inotiv (NasdaqCM:NOTV) - **Industry**: Contract Research Organization (CRO) - **Business Focus**: Preclinical market, from drug discovery to first in human through the IND phase - **Current Revenue**: Approximately $500 million, up from $20 million over the past seven to eight years [3][4] Key Market Segments - **Research Models Services (RMS)**: Approximately two-thirds of the business - **Discovery and Safety Assessment (DSA)**: Remaining one-third of the business - **Addressable Market Size**: Estimated at $25 billion, with Inotiv being a small player [4][5] Strategic Developments - **Integration and Optimization**: Focus on integrating services and optimizing operations to enhance customer value and speed of delivery [6][9] - **Facility Optimization**: Reduced facilities by 30-35%, closing 10-11 locations while maintaining capacity [9] - **Transportation System**: Developed a transportation system for animal transport across the U.S. [4] Customer Focus - **Target Market**: Small to mid-sized pharmaceutical companies, addressing their unique needs [7] - **Customer Satisfaction Metrics**: Improved tracking of project timelines and customer complaints to enhance service delivery [10][18] Financial Performance - **Revenue Growth**: - RMS revenue increased by 34% year-over-year - DSA revenue increased by 8.9% year-over-year [23] - DSA business reported 25% year-over-year award growth in recent quarters [17] - **EBITDA Goals**: Aiming to return to $70-100 million in annual EBITDA, with a focus on improving quality and reducing discounting [25][28] Future Outlook - **Growth Strategy**: Continued focus on DSA as a key growth driver, with expectations of 10% volume growth to achieve financial targets [28] - **Market Positioning**: Emphasis on building a full-service DSA organization while primarily focusing on preclinical and early-stage CRO services [30][31] - **Investment in Infrastructure**: Significant investments in IT and compliance to enhance operational efficiency and regulatory adherence [21][22] Additional Insights - **NHP Business**: Noted volatility in the Non-Human Primate (NHP) market, with efforts to diversify customer and supply bases [14][19] - **Regulatory Compliance**: Enhanced compliance measures critical to operations in a heavily regulated industry [21] - **Management Philosophy**: Emphasis on embracing challenges to drive improvement and adaptability within the organization [22] This summary encapsulates the key points discussed during the Inotiv FY Conference Call, highlighting the company's growth trajectory, strategic initiatives, and future outlook in the CRO industry.
Inotiv (NasdaqCM:NOTV) 2025 Conference Transcript
2025-09-09 17:52
Summary of Conference Call Company Overview - The company is a relatively young preclinical Contract Research Organization (CRO) that has grown through the acquisition of 14 companies over the past six to seven years, aiming to provide a full-service suite from discovery to first-in-human testing, primarily focusing on preclinical services [3][4] Key Business Segments - The company operates two main business segments: - **DSA (Discovery Services and Assessment)**: This segment has shown significant growth, with a reported 27% year-over-year increase in awards for Q2 and a further 25% increase in Q3 [5][6] - **RMS (Research Models and Services)**: This segment has stabilized after optimizing sites and reducing costs by 35%, while maintaining capacity [4][5] Financial Performance - The DSA business has seen a notable increase in backlog and sales, with a conversion rate improvement and margin enhancement [5][6] - The company is cautiously optimistic about future trends, although the macro environment remains uncertain [6] Market Dynamics - The NHP (Non-Human Primate) market has undergone significant changes, with the U.S. importing about half of what it did three years ago, primarily due to restrictions from exporting countries [12][14] - The company has diversified its sources for NHPs and is investing in domestic breeding to adapt to market changes [16][17] Regulatory and Political Landscape - The company has observed that regulatory headlines often lead to stock volatility, but actual changes take time to implement [33][34] - NIH funding changes have impacted some contracts, but the overall effect is not expected to be material [35][36] Operational Improvements - The company has focused on enhancing customer service and operational efficiency, including on-time delivery and accurate invoicing, which are critical for maintaining client relationships [21][22] - Investments in veterinary science and a strong scientific team have been made to improve service offerings [19][20] Cybersecurity Incident - The company experienced a significant cyberattack, which has been addressed through backup programs and operational continuity measures [51][55] - Communication with customers regarding the incident has been prioritized to maintain trust [57] Future Outlook - The company does not anticipate needing market growth to increase sales, as it has the capacity to grow independently [42][45] - A $350 million shelf registration has been extended to keep financing options open, with plans to address the balance sheet in the near future [47][49] Conclusion - The company is navigating a complex market environment with a focus on operational improvements, regulatory challenges, and strategic growth in its DSA and RMS segments. The emphasis on customer service and scientific expertise positions the company well for future opportunities despite current market uncertainties [66]
Inotiv, Inc. to Participate in Three Investor Conferences in September 2025
GlobeNewswire News Room· 2025-08-13 11:00
Core Viewpoint - Inotiv, Inc. is actively participating in several upcoming investment conferences, showcasing its commitment to engaging with investors and promoting its services in the drug discovery and development sector [1][2]. Company Overview - Inotiv, Inc. is a leading contract research organization that specializes in nonclinical and analytical drug discovery and development services, as well as research models and related products [3]. - The company focuses on enhancing efficiency, improving data quality, and reducing costs associated with bringing new drugs and medical devices to market [3]. - Inotiv aims to support researchers in achieving their research and development objectives while contributing to a healthier and safer world [3]. Conference Participation - Inotiv's management, including President and CEO Robert Leasure Jr. and CFO Beth Taylor, will participate in the following conferences: - Baird Global Healthcare Conference on September 9, 2025, at 12:50 PM Eastern Time [2]. - H.C. Wainwright 27th Annual Global Investment Conference on September 10, 2025, at 12:30 PM Eastern Time [2]. - Lake Street Capital Markets 9th Annual Best Ideas Growth Conference on September 11, 2025, with a focus on 1-on-1 institutional investor meetings [2].
Inotiv(NOTV) - 2025 Q3 - Quarterly Report
2025-08-07 21:29
PART I FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and related management discussion for the period [Item 1 Unaudited Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements for the three and nine months ended June 30, 2025, show a decrease in total assets and equity, a reduction in net loss, and significant changes in cash flows, particularly from operating and financing activities. The accompanying notes provide detailed insights into the company's business, revenue, segments, debt structure, and contingencies [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20as%20of%20June%2030,%202025%20(Unaudited)%20and%20September%2030,%202024) The balance sheets show a decrease in total assets and equity, alongside changes in cash, inventories, and liabilities - Total assets decreased from **$781,361 thousand** in September 2024 to **$759,737 thousand** in June 2025, while total equity decreased from **$170,504 thousand** to **$143,785 thousand**[10](index=10&type=chunk) Condensed Consolidated Balance Sheets (Amounts in thousands) | Metric | June 30, 2025 (Unaudited) | September 30, 2024 | Change | | :-------------------------------- | :------------------------ | :------------------- | :------- | | Cash and cash equivalents | $6,215 | $21,432 | $(15,217) | | Total current assets | $175,585 | $163,413 | $12,172 | | Inventories, net | $45,074 | $18,173 | $26,901 | | Total assets | $759,737 | $781,361 | $(21,624) | | Total current liabilities | $136,596 | $119,042 | $17,554 | | Total liabilities | $615,952 | $610,857 | $5,095 | | Total equity | $143,785 | $170,504 | $(26,719) | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20and%20Nine%20Months%20Ended%20June%2030,%202025%20and%202024%20(Unaudited)) The statements reflect increased revenue and reduced net losses for both the three and nine months ended June 30, 2025 - For the three months ended June 30, 2025, total revenue increased by **23.5%** year-over-year, leading to a reduced operating loss and consolidated net loss. For the nine months ended June 30, 2025, total revenue increased by **4.0%** year-over-year, also resulting in a significantly reduced operating loss and consolidated net loss[12](index=12&type=chunk) Condensed Consolidated Statements of Operations (Amounts in thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (%) | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | YoY Change (%) | | :------------------------------------ | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Total revenue | $130,683 | $105,786 | 23.5% | $374,882 | $360,322 | 4.0% | | Operating loss | $(5,675) | $(20,752) | 72.7% (improvement) | $(24,120) | $(73,239) | 67.1% (improvement) | | Consolidated net loss | $(17,577) | $(26,087) | 32.7% (reduction) | $(60,073) | $(89,994) | 33.3% (reduction) | | Basic loss per common share | $(0.51) | $(1.00) | 49.0% (reduction) | $(1.89) | $(3.46) | 45.4% (reduction) | [Condensed Consolidated Statements of Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20for%20the%20Three%20and%20Nine%20Months%20Ended%20June%2030,%202025%20and%202024%20(Unaudited)) Comprehensive loss significantly decreased due to reduced net loss and positive foreign currency translation adjustments - The consolidated comprehensive loss significantly decreased for both the three and nine months ended June 30, 2025, compared to the prior year periods, primarily due to a reduction in consolidated net loss and positive foreign currency translation adjustments in the current quarter[14](index=14&type=chunk) Condensed Consolidated Statements of Comprehensive Loss (Amounts in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | YoY Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------------------------- | :--------------------------- | :--------- | | Consolidated net loss | $(17,577) | $(26,087) | $(8,510) | $(60,073) | $(89,994) | $(29,921) | | Foreign currency translation | $2,385 | $(284) | $2,669 | $1,375 | $133 | $1,242 | | Other comprehensive income (loss), net of tax | $2,509 | $(313) | $2,822 | $1,361 | $127 | $1,234 | | Consolidated comprehensive loss | $(15,068) | $(26,400) | $(11,332) | $(58,712) | $(89,867) | $(31,155) | [Condensed Consolidated Statements of Shareholders' Equity and Noncontrolling Interest](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20and%20Noncontrolling%20Interest%20for%20the%20Three%20and%20Nine%20Months%20Ended%20June%2030,%202025%20and%202024%20(Unaudited)) Total shareholders' equity decreased due to net losses, partially offset by common share issuances and stock-based compensation - Total shareholders' equity decreased from **$170,504 thousand** at September 30, 2024, to **$143,785 thousand** at June 30, 2025, primarily due to consolidated net losses, partially offset by common share issuances and stock-based compensation[17](index=17&type=chunk) Condensed Consolidated Statements of Shareholders' Equity and Noncontrolling Interest (Amounts in thousands, except share data) | Metric | September 30, 2024 | June 30, 2025 | Change | | :------------------------------------ | :------------------- | :------------ | :------- | | Common Shares (Number) | 26,015,129 | 34,354,251 | 8,339,122 | | Common Shares (Amount) | $6,466 | $8,550 | $2,084 | | Additional paid-in capital | $724,789 | $754,723 | $29,934 | | Accumulated deficit | $(562,163) | $(622,261) | $(60,098) | | Accumulated other comprehensive income | $1,412 | $2,773 | $1,361 | | Total shareholders' equity | $170,504 | $143,785 | $(26,719) | - Issuance of common shares contributed **$27,524 thousand** to equity during the nine months ended June 30, 2025[17](index=17&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Nine%20Months%20Ended%20June%2030,%202025%20and%202024%20(Unaudited)) Cash flows show a significant increase in cash used in operating activities, offset by substantial cash provided by financing activities - Net cash used in operating activities increased significantly to **$24,760 thousand** for the nine months ended June 30, 2025, from **$4,433 thousand** in the prior year, primarily due to changes in working capital, particularly a large increase in inventory[21](index=21&type=chunk) Condensed Consolidated Statements of Cash Flows (Amounts in thousands) | Metric | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :------- | | Consolidated net loss | $(60,073) | $(89,994) | $29,921 | | Net cash used in operating activities | $(24,760) | $(4,433) | $(20,327) | | Net cash used in investing activities | $(12,416) | $(11,583) | $(833) | | Net cash provided by (used in) financing activities | $22,083 | $(4,889) | $26,972 | | Net decrease in cash and cash equivalents | $(15,217) | $(21,058) | $5,841 | | Cash and cash equivalents at end of period | $6,215 | $14,434 | $(8,219) | - Financing activities provided a substantial net cash inflow of **$22,083 thousand**, mainly from common share issuance and revolving credit facility activities[21](index=21&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed information on the company's business, revenue, segments, debt, and contingencies [1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION](index=10&type=section&id=1.%20DESCRIPTION%20OF%20THE%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) This note outlines Inotiv's business as a CRO, its operating segments, and addresses the going concern uncertainty - Inotiv, Inc. is a contract research organization (CRO) providing nonclinical and analytical drug discovery and development services, and selling research-quality animals and diets[24](index=24&type=chunk) - The company reports its results in two segments: Discovery and Safety Assessment (DSA) and Research Models and Services (RMS)[25](index=25&type=chunk) - The Company had negative operating cash flows, operating losses, and net losses for the nine months ended June 30, 2025, raising substantial doubt about its ability to continue as a going concern[31](index=31&type=chunk)[37](index=37&type=chunk) - Management plans to optimize capital allocation, improve operating results through increased NHP-related revenue and long-term colony management service contracts, and is discussing business conditions with lenders[35](index=35&type=chunk) [2. REVENUE FROM CONTRACTS WITH CLIENTS](index=13&type=section&id=2.%20REVENUE%20FROM%20CONTRACTS%20WITH%20CLIENTS) This note details revenue recognition policies and contract balances for the DSA and RMS segments - The DSA segment generates service revenue through drug discovery and development services and product revenue through internally-manufactured scientific instruments[49](index=49&type=chunk) - The RMS segment generates product revenue through the commercial production and sale of research models, diet, bedding, and enrichment products, and service revenue through Genetically Engineered Models and Services (GEMS) and colony management[50](index=50&type=chunk) Contract Assets and Liabilities (Amounts in thousands) | Metric | June 30, 2025 | September 30, 2024 | Change | | :-------------------------------- | :------------ | :------------------- | :------- | | Contract assets: Trade receivables | $74,576 | $65,867 | $8,709 | | Contract assets: Unbilled revenue | $10,614 | $14,624 | $(4,010) | | Contract liabilities: Client deposits | $21,724 | $24,898 | $(3,174) | | Contract liabilities: Deferred revenue | $18,527 | $17,088 | $1,439 | [3. SEGMENT AND GEOGRAPHIC INFORMATION](index=14&type=section&id=3.%20SEGMENT%20AND%20GEOGRAPHIC%20INFORMATION) This note provides a breakdown of revenue and operating income by business segment and geographic region Segment Revenue and Operating Income (Loss) (3 Months Ended June 30, Amounts in thousands) | Segment Revenue (3 Months Ended June 30) | 2025 | 2024 | YoY Change (%) | | :--------------------------------------- | :----- | :----- | :------------- | | DSA Service revenue | $46,895 | $43,086 | 8.8% | | DSA Product revenue | $1,255 | $1,133 | 10.8% | | RMS Service revenue | $12,684 | $11,278 | 12.5% | | RMS Product revenue | $69,849 | $50,289 | 38.9% | | Total Revenue | $130,683 | $105,786 | 23.5% | | Segment Operating Income (Loss) (3 Months Ended June 30) | 2025 | 2024 | YoY Change (%) | | :------------------------------------------------------- | :----- | :------- | :------------- | | DSA | $2,149 | $2,325 | (7.6)% | | RMS | $6,378 | $(7,447) | 185.6% (improvement) | | Unallocated Corporate | $(14,202) | $(15,630) | 9.1% (reduction in loss) | Segment Revenue and Operating Income (Loss) (9 Months Ended June 30, Amounts in thousands) | Segment Revenue (9 Months Ended June 30) | 2025 | 2024 | YoY Change (%) | | :--------------------------------------- | :----- | :----- | :------------- | | DSA Service revenue | $132,834 | $131,951 | 0.7% | | DSA Product revenue | $3,470 | $3,597 | (3.5)% | | RMS Service revenue | $36,430 | $33,237 | 9.6% | | RMS Product revenue | $202,148 | $191,537 | 5.5% | | Total Revenue | $374,882 | $360,322 | 4.0% | | Segment Operating Income (Loss) (9 Months Ended June 30) | 2025 | 2024 | YoY Change (%) | | :------------------------------------------------------- | :----- | :------- | :------------- | | DSA | $4,039 | $6,771 | (40.3)% | | RMS | $16,625 | $(32,973) | 150.4% (improvement) | | Unallocated Corporate | $(44,784) | $(47,037) | 4.8% (reduction in loss) | Geographic Revenue (9 Months Ended June 30, Amounts in thousands) | Geographic Revenue (9 Months Ended June 30) | 2025 | 2024 | YoY Change (%) | | :------------------------------------------ | :----- | :----- | :------------- | | United States | $326,024 | $303,905 | 7.3% | | Netherlands | $26,714 | $36,331 | (26.4)% | | Other | $22,144 | $20,086 | 10.2% | | Total | $374,882 | $360,322 | 4.0% | [4. DEBT](index=16&type=section&id=4.%20DEBT) This note details the company's debt structure, including various notes and term loans, and recent amendments to credit agreements - Total debt before unamortized debt issuance costs increased slightly to **$409,179 thousand** at June 30, 2025, from **$405,289 thousand** at September 30, 2024[59](index=59&type=chunk) Debt (Amounts in thousands) | Debt Type | June 30, 2025 | September 30, 2024 | Change | | :------------------------------------------ | :------------ | :------------------- | :------- | | Seller Note – Bolder BioPath | $207 | $376 | $(169) | | Seller Note – Preclinical Research Services | — | $464 | $(464) | | Seller Payable - Orient BioResource Center | $3,235 | $3,700 | $(465) | | Seller Note – Histion | — | $84 | $(84) | | Second Lien Notes | $21,816 | $17,846 | $3,970 | | Convertible Senior Notes | $114,754 | $109,979 | $4,775 | | Term Loan Facility, DDTL and Incremental Term Loans | $269,167 | $272,840 | $(3,673) | | Total debt before unamortized debt issuance costs | $409,179 | $405,289 | $3,889 | | Total Long-term debt (net of current portion) | $390,336 | $389,801 | $535 | - The Seventh Amendment to the Credit Agreement (September 13, 2024) permitted the incurrence of **$22,550 thousand** in Second Lien Notes, made certain changes to financial covenant definitions, and waived existing financial covenants until June 30, 2025[92](index=92&type=chunk) [5. SUPPLEMENTAL BALANCE SHEET INFORMATION](index=24&type=section&id=5.%20SUPPLEMENTAL%20BALANCE%20SHEET%20INFORMATION) This note provides additional detail on specific balance sheet accounts, including receivables, inventories, and liabilities - Trade receivables and contract assets, net, increased to **$78,745 thousand** at June 30, 2025, from **$73,560 thousand** at September 30, 2024[121](index=121&type=chunk) Supplemental Balance Sheet Information (Amounts in thousands) | Metric | June 30, 2025 | September 30, 2024 | Change | | :------------------------------------------ | :------------ | :------------------- | :------- | | Trade receivables and contract assets, net | $78,745 | $73,560 | $5,185 | | Inventories, net | $45,074 | $18,173 | $26,901 | | Prepaid expenses and other current assets | $43,535 | $50,248 | $(6,713) | | Accrued expenses and other current liabilities | $35,921 | $28,218 | $7,703 | | Fees invoiced in advance | $40,251 | $41,986 | $(1,735) | | Other long-term liabilities | $27,566 | $34,963 | $(7,397) | - Inventories, net, significantly increased to **$45,074 thousand** from **$18,173 thousand**, primarily driven by research model inventory[122](index=122&type=chunk) - A **$10,000 thousand** insurance recovery receivable was booked in connection with ongoing negotiations to settle securities class action and derivative lawsuits[122](index=122&type=chunk) [6. DEFINED BENEFIT PLAN](index=26&type=section&id=6.%20DEFINED%20BENEFIT%20PLAN) This note describes the company's U.K. defined benefit pension plan and its net periodic benefit costs - The Company has a curtailed defined benefit pension plan in the U.K., the Harlan Laboratories UK Limited Occupational Pension Scheme, with a funded status of **$3,126 thousand** as of June 30, 2025[127](index=127&type=chunk)[128](index=128&type=chunk) Net Periodic Benefit Costs (9 Months Ended June 30, Amounts in thousands) | Net Periodic Benefit Costs (9 Months Ended June 30) | 2025 | 2024 | | :------------------------------------------------ | :----- | :----- | | Interest cost | $555 | $551 | | Expected return on assets | $(690) | $(585) | | Amortization of prior gain, net | $(71) | $(106) | | Total Net periodic benefit | $(206) | $(140) | [7. OTHER OPERATING INCOME / EXPENSE](index=27&type=section&id=7.%20OTHER%20OPERATING%20INCOME%20/%20EXPENSE) This note explains the significant decrease in other operating expenses due to a settlement payment and the absence of prior year charges - Other operating expense significantly decreased to **$155 thousand** for the nine months ended June 30, 2025, from **$39,661 thousand** in the prior year[131](index=131&type=chunk) Other Operating Expense (9 Months Ended June 30, Amounts in thousands) | Other Operating Expense (9 Months Ended June 30) | 2025 | 2024 | Change | | :----------------------------------------------- | :----- | :----- | :------- | | Restructuring costs | $1,378 | $2,859 | $(1,481) | | Settlement Agreement | $(7,550) | — | $(7,550) | | Resolution Agreement and Plea Agreement | — | $28,500 | $(28,500) | | Total Other operating expense | $155 | $39,661 | $(39,506) | - The reduction was primarily due to a **$7,550 thousand** settlement payment received and the absence of the **$28,500 thousand** charge related to the Resolution Agreement and Plea Agreement that occurred in the prior year[131](index=131&type=chunk) [8. RESTRUCTURING AND ASSETS HELD FOR SALE](index=27&type=section&id=8.%20RESTRUCTURING%20AND%20ASSETS%20HELD%20FOR%20SALE) This note outlines the company's restructuring and site optimization plans, including completed phases and asset sales - Phase One of the Company's restructuring and site optimization plans was completed by September 30, 2024, achieving an estimated **$17,000 to $19,000 thousand** in net annual cost savings[132](index=132&type=chunk)[182](index=182&type=chunk) - Phase Two, initiated in the nine months ended June 30, 2025, aims to further consolidate RMS facilities in the U.S., with an anticipated capital investment of **$6,500 thousand** and expected annual cost savings of **$6,000 to $7,000 thousand**[133](index=133&type=chunk)[184](index=184&type=chunk) - One U.S. property was sold in June 2025, with proceeds used to repay term loans, and another property remained held for sale as of June 30, 2025[133](index=133&type=chunk)[185](index=185&type=chunk) [9. LEASES](index=28&type=section&id=9.%20LEASES) This note provides information on the company's operating and finance lease assets, liabilities, and associated costs - Operating ROU assets decreased, while finance ROU assets significantly increased from September 2024 to June 2025[136](index=136&type=chunk) Lease Metrics (Amounts in thousands) | Lease Metric | June 30, 2025 | September 30, 2024 | Change | | :-------------------------------- | :------------ | :------------------- | :------- | | Operating ROU assets, net | $44,930 | $49,165 | $(4,235) | | Total operating lease liabilities | $48,930 | $51,784 | $(2,854) | | Finance ROU assets, net | $2,734 | $652 | $2,082 | | Total finance lease liabilities | $2,742 | $644 | $2,098 | - Total operating lease costs for the nine months ended June 30, 2025, were **$8,790 thousand**, an increase from **$7,804 thousand** in the prior year[136](index=136&type=chunk) [10. EQUITY, STOCK-BASED COMPENSATION AND LOSS PER SHARE](index=30&type=section&id=10.%20EQUITY,%20STOCK-BASED%20COMPENSATION%20AND%20LOSS%20PER%20SHARE) This note details changes in equity, stock-based compensation expense, and loss per share metrics - The number of authorized common shares increased from **20,000,000** to **75,000,000** (74,000,000 common shares) in November 2021[140](index=140&type=chunk) - In December 2024, the Company completed a public offering of **6,900,000** common shares, generating net proceeds of **$27,524 thousand**[142](index=142&type=chunk) Equity, Stock-Based Compensation and Loss Per Share (Amounts in thousands, except per share data) | Metric | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :------- | | Stock-based compensation expense | $4,644 | $5,118 | $(474) | | Basic loss per common share | $(1.89) | $(3.46) | $1.57 (improvement) | | Diluted loss per common share | $(1.89) | $(3.46) | $1.57 (improvement) | [11. INCOME TAXES](index=31&type=section&id=11.%20INCOME%20TAXES) This note discusses the company's effective tax rate and the potential impact of new tax legislation - The Company's effective tax rate for the nine months ended June 30, 2025, was **6.9%**, compared to **15.7%** in the prior year, primarily driven by a change in the valuation allowance[150](index=150&type=chunk) Effective Tax Rate | Effective Tax Rate | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | | :----------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Effective tax rate | 6.3% | 20.8% | 6.9% | 15.7% | - The "One Big Beautiful Bill Act" (OBBBA), signed into law on July 4, 2025, is currently being assessed for its tax implications on the current fiscal year's financial statements[151](index=151&type=chunk)[215](index=215&type=chunk) [12. CONTINGENCIES AND COMMITMENTS](index=31&type=section&id=12.%20CONTINGENCIES%20AND%20COMMITMENTS) This note covers legal and regulatory contingencies, including lawsuits, settlement agreements, and government investigations - A **$10,000 thousand** liability and a corresponding **$10,000 thousand** insurance recovery receivable were recorded for securities class action and derivative lawsuits as of June 30, 2025, with final terms pending[160](index=160&type=chunk) - The Company received a **$7,550 thousand** settlement payment from Freese and Nichols, Inc. (FNI) in February 2025, resolving a lawsuit related to lagoon design[161](index=161&type=chunk) - The Resolution Agreement and Plea Agreement with the DOJ (June 2024) includes **$22,000 thousand** in fines, **$6,500 thousand** in payments to taskforces/foundations, and at least **$7,000 thousand** for animal welfare improvements, along with a compliance monitor for up to five years[167](index=167&type=chunk) - The SEC's Division of Enforcement concluded its investigation into NHP importations from Asia and does not intend to recommend enforcement action against the Company[169](index=169&type=chunk) [Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a detailed discussion and analysis of Inotiv's financial condition and results of operations, highlighting key business developments, financial performance across segments, liquidity challenges, capital resources, and critical accounting estimates. It also addresses the impact of external factors and ongoing legal and regulatory matters [Business Overview](index=36&type=section&id=Business%20Overview) This section outlines the company's core business as a contract research organization and its strategic objectives - Inotiv is a CRO focused on nonclinical and analytical drug discovery and development services, and research models and services, operating in DSA and RMS segments[174](index=174&type=chunk)[176](index=176&type=chunk) - Strategic objectives include strengthening liquidity, reducing NHP revenue volatility, improving client satisfaction, and continuing integration efforts[179](index=179&type=chunk) - Phase One of restructuring and site optimization is complete, expected to achieve **$17,000 to $19,000 thousand** in net annual cost savings by end of fiscal year 2025[182](index=182&type=chunk) - Phase Two of site optimization is underway, with an anticipated capital investment of **$6,500 thousand** and expected net annual savings of **$6,000 to $7,000 thousand**, to be completed by March 2026[184](index=184&type=chunk) [Financial Highlights During Three Months Ended June 30, 2025](index=38&type=section&id=Financial%20Highlights%20During%20Three%20Months%20Ended%20June%2030,%202025) This section summarizes key financial performance indicators for the three months ended June 30, 2025 - Total revenue increased by **23.5%** year-over-year to **$130,683 thousand**, driven by a **34.1%** increase in RMS revenue and an **8.9%** increase in DSA revenue[196](index=196&type=chunk) Financial Highlights (3 Months Ended June 30, Amounts in thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | YoY Change (%) | | :------------------------------------ | :--------------------------- | :--------------------------- | :------------- | | Total Revenue | $130,683 | $105,786 | 23.5% | | Consolidated Net Loss | $(17,577) | $(26,087) | 32.7% (reduction) | | DSA Services Book-to-Bill Ratio | 1.07x | N/A | N/A | [Financial Highlights During Nine Months Ended June 30, 2025](index=38&type=section&id=Financial%20Highlights%20During%20Nine%20Months%20Ended%20June%2030,%202025) This section summarizes key financial performance indicators for the nine months ended June 30, 2025 - Total revenue increased by **4.0%** year-over-year to **$374,882 thousand**, with RMS revenue up **6.1%** and DSA revenue up **0.6%**[196](index=196&type=chunk) Financial Highlights (9 Months Ended June 30, Amounts in thousands) | Metric | 9 Months Ended June 30, 2025 | 9 Months Ended June 30, 2024 | YoY Change (%) | | :------------------------------------ | :--------------------------- | :--------------------------- | :------------- | | Total Revenue | $374,882 | $360,322 | 4.0% | | Consolidated Net Loss | $(60,073) | $(89,994) | 33.3% (reduction) | | DSA Services Book-to-Bill Ratio | 1.03x | N/A | N/A | - The SEC's Division of Enforcement concluded its investigation into NHP importations and does not intend to recommend enforcement action against the Company[196](index=196&type=chunk) - A **$10,000 thousand** liability and corresponding receivable were recorded for securities class action and derivative lawsuits, with final agreements pending[196](index=196&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, comparing revenue and operating results across different periods and segments [Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024](index=39&type=section&id=Three%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024) This section compares the company's financial performance for the three-month periods, highlighting revenue and operating income changes by segment - Total revenue increased by **23.5%** to **$130,683 thousand**. DSA revenue increased by **8.9%** due to higher general toxicology, biotherapeutic, and medical device services. RMS revenue surged by **34.1%** due to higher NHP volumes and average selling prices[196](index=196&type=chunk)[197](index=197&type=chunk)[199](index=199&type=chunk) Results of Operations (3 Months Ended June 30, Amounts in thousands) | Metric (3 Months Ended June 30) | 2025 | 2024 | $ Change | % Change | | :------------------------------------ | :----- | :----- | :------- | :------- | | DSA Revenue | $48,150 | $44,219 | $3,931 | 8.9% | | DSA Operating Income | $2,149 | $2,325 | $(176) | (7.6)% | | RMS Revenue | $82,533 | $61,567 | $20,966 | 34.1% | | RMS Operating Income (Loss) | $6,378 | $(7,447) | $13,825 | 185.6% | | Unallocated Corporate Operating Loss | $(14,202) | $(15,630) | $(1,428) | (9.1)% | | Consolidated Net Loss | $(17,577) | $(26,087) | $(8,510) | (32.7)% | - RMS operating expenses decreased by **$2,158 thousand**, primarily due to the non-recurrence of a **$2,000 thousand** charge related to the Resolution Agreement and Plea Agreement from the prior year[200](index=200&type=chunk) [Nine Months Ended June 30, 2025 Compared to Nine Months Ended June 30, 2024](index=41&type=section&id=Nine%20Months%20Ended%20June%2030,%202025%20Compared%20to%20Nine%20Months%20Ended%20June%2030,%202024) This section compares the company's financial performance for the nine-month periods, detailing revenue and operating income changes by segment - Total revenue increased by **4.0%** to **$374,882 thousand**. DSA revenue increased slightly by **0.6%**, but operating income decreased by **40.3%** due to higher cost of revenue[196](index=196&type=chunk)[207](index=207&type=chunk) Results of Operations (9 Months Ended June 30, Amounts in thousands) | Metric (9 Months Ended June 30) | 2025 | 2024 | $ Change | % Change | | :------------------------------------ | :----- | :----- | :------- | :------- | | DSA Revenue | $136,304 | $135,548 | $756 | 0.6% | | DSA Operating Income | $4,039 | $6,771 | $(2,732) | (40.3)% | | RMS Revenue | $238,578 | $224,774 | $13,804 | 6.1% | | RMS Operating Income (Loss) | $16,625 | $(32,973) | $49,598 | 150.4% | | Unallocated Corporate Operating Loss | $(44,784) | $(47,037) | $(2,253) | (4.8)% | | Consolidated Net Loss | $(60,073) | $(89,994) | $(29,921) | (33.3)% | - RMS operating income significantly improved from a loss to a gain, primarily due to decreased operating expenses (absence of prior year's Resolution Agreement charge and FNI settlement)[210](index=210&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, funding sources, debt structure, and ability to meet its financial obligations [Liquidity and Going Concern](index=43&type=section&id=Liquidity%20and%20Going%20Concern) This section addresses the company's cash levels, negative operating cash flows, and the assessment of its ability to continue as a going concern - The Company's cash and cash equivalents decreased to **$6,215 thousand** at June 30, 2025, from **$21,432 thousand** at September 30, 2024[220](index=220&type=chunk) - Despite **$27,524 thousand** net proceeds from a December 2024 equity offering, the Company had negative operating cash flows and net losses for the nine months ended June 30, 2025, raising substantial doubt about its ability to continue as a going concern[219](index=219&type=chunk)[220](index=220&type=chunk)[226](index=226&type=chunk) - The Company was in compliance with the First Lien Leverage Ratio test and the Fixed Charge Coverage Ratio test for the testing period ended June 30, 2025, following the Seventh Amendment to the Credit Agreement[222](index=222&type=chunk) [Comparative Cash Flow Analysis](index=44&type=section&id=Comparative%20Cash%20Flow%20Analysis) This section analyzes the changes in cash flows from operating, investing, and financing activities over the nine-month periods - Net cash used in operating activities increased significantly to **$24,760 thousand** for the nine months ended June 30, 2025, from **$4,433 thousand** in the prior year, primarily due to a **$26,846 thousand** increase in inventory[227](index=227&type=chunk)[228](index=228&type=chunk) Cash Flow Activity (9 Months Ended June 30, Amounts in thousands) | Cash Flow Activity (9 Months Ended June 30) | 2025 | 2024 | Change | | :------------------------------------------ | :----- | :----- | :------- | | Net cash used in operating activities | $(24,760) | $(4,433) | $(20,327) | | Net cash used in investing activities | $(12,416) | $(11,583) | $(833) | | Net cash provided by (used in) financing activities | $22,083 | $(4,889) | $26,972 | | Net decrease in cash and cash equivalents | $(15,217) | $(21,058) | $5,841 | - Net cash provided by financing activities was **$22,083 thousand**, driven by **$27,524 thousand** from common share issuance and **$20,000 thousand** in borrowings on the revolving credit facility[233](index=233&type=chunk) [Capital Resources](index=45&type=section&id=Capital%20Resources) This section details the company's debt instruments, including their terms, interest rates, and compliance with financial covenants - Total debt before unamortized debt issuance costs increased to **$409,179 thousand** at June 30, 2025, from **$405,289 thousand** at September 30, 2024[236](index=236&type=chunk) Debt (Amounts in thousands) | Debt Type | June 30, 2025 | September 30, 2024 | Change | | :------------------------------------------ | :------------ | :------------------- | :------- | | Total debt before unamortized debt issuance costs | $409,179 | $405,289 | $3,889 | | Second Lien Notes | $21,816 | $17,846 | $3,970 | | Convertible Senior Notes | $114,754 | $109,979 | $4,775 | | Term Loan Facility, DDTL and Incremental Term Loans | $269,167 | $272,840 | $(3,673) | - The Seventh Amendment to the Credit Agreement (September 13, 2024) permitted the incurrence of **$22,550 thousand** in Second Lien Notes and established new testing ratios for financial covenants[268](index=268&type=chunk) - Second Lien Notes accrue interest at **15.00%** per annum (PIK) and mature on February 4, 2027, while Convertible Senior Notes accrue interest at **3.25%** per annum and mature on October 15, 2027[272](index=272&type=chunk)[283](index=283&type=chunk) [Critical Accounting Estimates](index=53&type=section&id=Critical%20Accounting%20Estimates) This section outlines the key accounting judgments and estimates that significantly impact the company's financial statements - No material changes to the application of critical accounting estimates were made during the nine months ended June 30, 2025[295](index=295&type=chunk)[298](index=298&type=chunk) - Critical accounting estimates include revenue recognition, income taxes, goodwill and intangible assets, long-lived tangible assets, fair value of financial instruments, and pension costs[297](index=297&type=chunk) - Management continues to evaluate the impact of macroeconomic and external factors (e.g., tariffs, government R&D funding) on critical accounting estimates[296](index=296&type=chunk) [Recent Accounting Pronouncements](index=54&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses the adoption of new accounting standards and the evaluation of future pronouncements - The Company did not adopt any new accounting pronouncements during the nine months ended June 30, 2025, that significantly affected its unaudited condensed consolidated financial statements[302](index=302&type=chunk) - The Company is evaluating the impact of recently issued ASUs, including ASU 2023-07 (Segment Disclosures), ASU 2023-09 (Income Tax Disclosures), and ASU 2024-03 (Expense Disaggregation Disclosures), which are effective for future periods[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) [Item 3 Quantitative and Qualitative Disclosures about Market Risk](index=54&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The Company is exposed to interest rate risk and foreign currency exchange rate risk. A one-percentage-point increase in interest rates would increase loss before income taxes by an estimated $2.7 million over a year. Foreign currency fluctuations, particularly for the Euro and British Pound, affect financial results; a hypothetical 10% change in exchange rates would impact cash by $0.4 million and revenue by $4.9 million for the nine months ended June 30, 2025 - A one-percentage-point increase in interest rates would result in an estimated **$2.7 million** increase in loss before income taxes over a one-year period[303](index=303&type=chunk) - The Company's principal functional currencies of foreign subsidiaries are the Euro and British Pound[304](index=304&type=chunk) - A hypothetical **10%** change in foreign exchange rates would change the June 30, 2025 cash balance by approximately **$0.4 million** and revenue by approximately **$4.9 million** for the nine months ended June 30, 2025[306](index=306&type=chunk) [Item 4 Controls and Procedures](index=54&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2025, due to previously identified material weaknesses in internal control over financial reporting. These weaknesses relate to ineffective information technology general controls (ITGCs) and an inadequate process for designing and testing the operating effectiveness of internal controls over financial reporting. Remediation efforts are ongoing, but the material weaknesses are not yet considered remediated - Disclosure controls and procedures were not effective as of June 30, 2025, due to material weaknesses in internal control over financial reporting[308](index=308&type=chunk) - Material weaknesses include ineffective ITGCs (user access, program change management) and an inadequate process for designing and testing the operating effectiveness of internal control over financial reporting[312](index=312&type=chunk) - Remediation efforts are ongoing, involving hiring accounting and IT personnel, utilizing an internal oversight team, improving ITGC consistency, and enhancing control environment design, but the weaknesses are not yet remediated[310](index=310&type=chunk)[313](index=313&type=chunk)[314](index=314&type=chunk) PART II OTHER INFORMATION This section includes legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1 Legal Proceedings](index=56&type=section&id=Item%201%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 12 to the unaudited condensed consolidated financial statements, covering various lawsuits and government investigations - Legal proceedings information is detailed in Note 12 of the financial statements[315](index=315&type=chunk) [Item 1A Risk Factors](index=56&type=section&id=Item%201A%20Risk%20Factors) The Company's business is significantly affected by its dependence on imported Non-Human Primates (NHPs), particularly from Southeast Asia and Africa, and related legal issues and increased costs (e.g., tariffs). Supply constraints and rising NHP prices, along with potential additional tariffs (15%-20% expected), pose material adverse risks. Additionally, reliance on government funding for R&D and regulatory changes like the FDA Modernization Act 2.0, which encourages alternatives to animal testing, could reduce demand for services and products - Dependence on imported NHPs from outside the U.S., especially from Southeast Asia and Africa, and related legal issues (e.g., Cambodian NHP supply) significantly impact the business[318](index=318&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk) - Increased costs due to tariffs (**10%** in Q3 fiscal 2025, **15%-20%** expected for future imports) negatively impact cash flows and pose a material adverse risk[324](index=324&type=chunk) - Reliance on government funding for R&D and regulatory changes like the FDA Modernization Act 2.0 (encouraging alternatives to animal testing) could reduce demand for the Company's services and products[325](index=325&type=chunk)[326](index=326&type=chunk) [Item 2 Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable to the current report - Not applicable[327](index=327&type=chunk) [Item 3 Defaults Upon Senior Securities](index=57&type=section&id=Item%203%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the current report - Not applicable[328](index=328&type=chunk) [Item 4 Mine Safety Disclosures](index=58&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This item is not applicable to the current report - Not applicable[329](index=329&type=chunk) [Item 5 Other Information](index=58&type=section&id=Item%205%20Other%20Information) This section details recent amendments to the Company's Bylaws and confirms no new Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during the quarter [Bylaw Amendments](index=58&type=section&id=Bylaw%20Amendments) This section details recent amendments to the company's bylaws, including changes to corporate governance procedures - On August 6, 2025, the Board of Directors approved amendments to the Company's Bylaws, resulting in the Fourth Amended and Restated Bylaws[331](index=331&type=chunk) - Key changes include requirements for shareholder proxy solicitations, clarification of uncertificated share transfers, director resignation procedures, and revisions to officer authorities and document execution[333](index=333&type=chunk) [Trading Arrangements](index=58&type=section&id=Trading%20Arrangements) This section confirms that no new or terminated Rule 10b5-1 trading arrangements were reported by insiders - During the three months ended June 30, 2025, no directors or officers adopted or terminated any Rule 10b5-1(c) trading arrangements or non-Rule 10b5-1 trading arrangements[332](index=332&type=chunk) [Item 6 Exhibits](index=59&type=section&id=Item%206%20Exhibits) This section lists various exhibits filed with the Form 10-Q, including stock purchase agreements, articles of incorporation, bylaws, and certifications from executive and financial officers - The section lists various exhibits, including stock purchase agreements, articles of incorporation, bylaws, and certifications from executive and financial officers[334](index=334&type=chunk) [Signatures](index=61&type=section&id=Signatures) The report is signed by Robert W. Leasure (President and CEO), Beth A. Taylor (CFO and Executive VP), and Brennan Freeman (VP of Finance and Corporate Controller) on August 7, 2025, certifying its accuracy - The report was signed by Robert W. Leasure (President and CEO), Beth A. Taylor (CFO and Executive VP), and Brennan Freeman (VP of Finance and Corporate Controller) on August 7, 2025[335](index=335&type=chunk)
CORRECTING and REPLACING - Inotiv Reports Third Quarter Financial Results for Fiscal 2025 and Provides Business Update
Globenewswire· 2025-08-07 01:16
Core Viewpoint - Inotiv, Inc. reported a significant increase in revenue for the third quarter of fiscal 2025, driven by growth in its Research Models and Services segment, while also showing improvements in operating loss and adjusted EBITDA compared to the previous year [1][9][11]. Financial Performance - Q3 FY 2025 revenue increased by 23.5% to $130.7 million compared to $105.8 million in Q3 FY 2024, with Research Models and Services (RMS) revenue rising by 34.1% and Discovery and Safety Assessment (DSA) revenue increasing by 8.9% [2][6][9]. - Year-to-date revenue for FY 2025 reached $374.9 million, a 4.0% increase from $360.3 million in FY 2024, primarily due to a $13.8 million increase in RMS revenue [12][11]. - The consolidated net loss for Q3 FY 2025 was $17.6 million, or 13.5% of total revenue, compared to a net loss of $26.1 million, or 24.7% of total revenue, in Q3 FY 2024 [11][9]. - Adjusted EBITDA for Q3 FY 2025 was $11.6 million, or 8.9% of total revenue, compared to $0.1 million, or 0.1% of total revenue, in Q3 FY 2024 [11][9]. Segment Performance - DSA revenue for Q3 FY 2025 was $48.2 million, up from $44.2 million in Q3 FY 2024, while RMS revenue was $82.5 million, compared to $61.6 million in the same period last year [2][6]. - The DSA net awards increased by 25% year-over-year in Q3 FY 2025, following a 27% increase in the previous quarter, indicating strong growth in quoting and awards [4][3]. Operational Insights - The company experienced a significant improvement in operating loss, reducing it from $20.8 million in Q3 FY 2024 to $5.7 million in Q3 FY 2025, largely due to increased revenue and decreased operating expenses [10][11]. - The book-to-bill ratio for DSA services was 1.07x for Q3 FY 2025, indicating a healthy demand for services [11]. Recent Developments - The SEC concluded its investigation related to non-human primate importations without recommending enforcement action against the company [11]. - The company recorded a $10.0 million accrual for ongoing securities class action lawsuits, expecting to recover the full amount under existing insurance policies [11].
Inotiv, Inc. (NOTV) Reports Q3 Loss, Tops Revenue Estimates
ZACKS· 2025-08-06 22:51
Company Performance - Inotiv, Inc. reported a quarterly loss of $0.12 per share, better than the Zacks Consensus Estimate of a loss of $0.15, and an improvement from a loss of $0.20 per share a year ago, resulting in an earnings surprise of +20.00% [1] - The company posted revenues of $130.68 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.94% and showing an increase from year-ago revenues of $105.79 million [2] - Over the last four quarters, Inotiv has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Inotiv shares have declined approximately 49.9% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] - The current consensus EPS estimate for the coming quarter is -$0.08 on revenues of $130.9 million, and for the current fiscal year, it is -$0.86 on revenues of $499.62 million [7] Industry Outlook - The Medical - Drugs industry, to which Inotiv belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Inotiv's stock performance [5]
Inotiv(NOTV) - 2025 Q3 - Earnings Call Transcript
2025-08-06 21:30
Financial Data and Key Metrics Changes - For Q3 2025, total revenue increased by 23.5% year over year, reaching $130.7 million compared to $105.8 million in Q3 2024 [8][21] - Consolidated net loss for the quarter was $17.6 million, an improvement from a net loss of $26.1 million in Q3 2024 [9][23] - Adjusted EBITDA for the quarter was $11.6 million, representing 8.9% of total revenue, compared to $100,000 or 0.1% of total revenue in Q3 2024 [24] Business Line Data and Key Metrics Changes - RMS segment revenue increased by $21 million or 34.1% year over year, primarily due to higher NHP volumes and average selling prices [9][23] - DSA segment revenue rose by $3.9 million or 8.9% year over year, driven by increases in general toxicology and biotherapeutic services [9][21] - DSA operating margins improved by 4.6% over Q2 2025 but were still 0.8% lower compared to Q3 2024 [10] Market Data and Key Metrics Changes - Overall net new DSA awards for the quarter were $50.4 million, a 25% increase over Q3 2024 [22] - The backlog conversion rate improved to 35.5%, up from 31% in the prior year period [22] - DSA backlog stood at $134.3 million as of June 30, 2025, compared to $139.4 million a year earlier [25] Company Strategy and Development Direction - The company is focused on improving cash flow and margins while continuing to integrate and optimize its operations [4][10] - A strategic review of the balance sheet and capital structure is prioritized, with plans to hire a third party for assistance [19][71] - The company aims to enhance client satisfaction metrics and improve service delivery speed [14][66] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future growth, acknowledging ongoing geopolitical and macroeconomic risks [19][20] - The company is committed to building a business that creates value for clients, employees, and shareholders [20] - Management noted that while significant progress has been made, further improvements are still planned for the future [72] Other Important Information - The company recorded a $10 million accrual related to ongoing securities class action lawsuits, with expectations to recover the full amount under existing insurance policies [5] - Recent AAALAC accreditation for NHP facilities in Texas was highlighted as a testament to the company's commitment to animal welfare [6] Q&A Session Summary Question: Expectations on cancellations and change orders - Management acknowledged elevated cancellations but indicated that they are planning for this to be the new normal and are adjusting their sales strategies accordingly [31][33] Question: Next steps for site optimization - The focus will be on fine-tuning existing facilities rather than significant brick-and-mortar changes, aiming to improve capacity and service delivery [36][38] Question: Mix of bookings and new services - Bookings in new service areas like biotherapeutics and medical devices are increasing, with discovery services showing significant growth [41][42] Question: Freedom to import NHPs and market pricing - Management confirmed that there are no prohibitions on importing from Cambodia, but emphasized that pricing remains stable without significant changes expected in the near term [46][54] Question: Cash flow expectations - The company plans to maintain a higher level of NHP inventory to ensure stability in meeting customer demands, which may impact cash flow positively as inventory converts to revenue [67][68]
Inotiv(NOTV) - 2025 Q3 - Quarterly Results
2025-08-06 20:13
Introduction and Highlights [Company Overview](index=1&type=section&id=Company%20Overview) Inotiv, Inc. is a CRO for nonclinical and analytical drug discovery and research models, reporting Q3 and YTD FY2025 results - Inotiv, Inc. is a leading contract research organization specializing in nonclinical and analytical drug discovery and development services and research models and related products and services[1](index=1&type=chunk) - The company announced financial results for the three months ('Q3 FY 2025') and nine months ('YTD FY 2025') ended June 30, 2025[1](index=1&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management reported improved Q3 FY2025 revenue and margins, with **25% DSA net awards growth** from integration and optimization - Revenue and margins improved over the second quarter, and the year-over-year quarterly revenue increase of **23.5%** was in line with expectations[3](index=3&type=chunk) - DSA net awards for Q3 FY2025 increased **25%** versus the same period last year, following a **27%** year-over-year improvement in the second quarter[4](index=4&type=chunk) - Growth was driven by benefits of integration, optimization, and startup investments, particularly in Discovery, Medical Device, Biotherapeutics, and Genetic Toxicology businesses[4](index=4&type=chunk) [Q3 FY2025 Highlights](index=1&type=section&id=Q3%20FY2025%20Highlights) Q3 FY2025 saw **23.5% revenue growth to $130.7 million** (driven by RMS), reduced net loss, and significantly improved Adjusted EBITDA Q3 FY2025 Key Financial Highlights | Metric | Q3 FY2025 | Q3 FY2024 | Change ($) | Change (%) | | :-------------------------------- | :-------- | :-------- | :--------- | :--------- | | Revenue | $130.7 million | $105.8 million | $24.9 million | 23.5% | | Consolidated Net Loss | $(17.6) million | $(26.1) million | $8.5 million | (32.6%) | | Adjusted EBITDA | $11.6 million | $0.1 million | $11.5 million | 11,500% | | DSA Book-to-bill ratio | 1.07x | N/A | N/A | N/A | | DSA Backlog (as of June 30) | $134.3 million | $139.4 million | $(5.1) million | (3.7%) | - The increase in Q3 FY2025 revenue was driven by a **$21.0 million (34.1%) increase** in Research Models and Services (RMS) revenue and a **$3.9 million (8.9%) increase** in Discovery and Safety Assessment (DSA) revenue[8](index=8&type=chunk) [YTD FY2025 Highlights](index=2&type=section&id=YTD%20FY2025%20Highlights) YTD FY2025 total revenue grew **4.0% to $374.9 million**, significantly reducing net loss and improving Adjusted EBITDA YTD FY2025 Key Financial Highlights | Metric | YTD FY2025 | YTD FY2024 | Change ($) | Change (%) | | :-------------------------------- | :--------- | :--------- | :--------- | :--------- | | Revenue | $374.9 million | $360.3 million | $14.6 million | 4.0% | | Consolidated Net Loss | $(60.1) million | $(90.0) million | $29.9 million | (33.2%) | | Adjusted EBITDA | $22.1 million | $12.8 million | $9.3 million | 72.7% | | DSA Book-to-bill ratio | 1.03x | N/A | N/A | N/A | - The YTD FY2025 revenue increase was primarily driven by a **$13.8 million (6.1%) increase** in RMS revenue and a **$0.8 million (0.6%) increase** in DSA revenue[15](index=15&type=chunk) Detailed Financial Results [Three Months Ended June 30, 2025 (Q3 FY2025)](index=1&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20%28Q3%20FY2025%29) Q3 FY2025 revenue grew **23.5%** from RMS and DSA services; operating loss significantly decreased due to RMS improvement and no prior year DOJ charge Q3 FY2025 Revenue by Segment | Segment | Q3 FY2025 Revenue | Q3 FY2024 Revenue | Change ($) | Change (%) | | :------ | :---------------- | :---------------- | :--------- | :--------- | | DSA | $48.2 million | $44.2 million | $3.9 million | 8.9% | | RMS | $82.5 million | $61.6 million | $21.0 million | 34.1% | | Total | $130.7 million | $105.8 million | $24.9 million | 23.5% | - Increase in RMS revenue was primarily due to increased **NHP-related product and service revenue**[13](index=13&type=chunk) - DSA revenue increased primarily due to an increase in **general toxicology services revenue**, as well as **biotherapeutic and medical device services revenue**[13](index=13&type=chunk) Q3 FY2025 Operating Loss | Metric | Q3 FY2025 | Q3 FY2024 | Change ($) | | :------------- | :-------- | :-------- | :--------- | | Operating Loss | $(5.7) million | $(20.8) million | $15.1 million | - The decrease in operating loss was primarily driven by RMS segment's improvement from an operating loss of **$7.4 million** in Q3 FY2024 to an operating income of **$6.4 million** in Q3 FY2025, an improvement of **$13.8 million**[14](index=14&type=chunk) - The decrease in operating expenses was primarily due to the **$2.0 million charge** related to the DOJ Resolution Agreement and Plea Agreement that was incurred during Q3 FY2024, which did not repeat during Q3 FY2025[14](index=14&type=chunk) [Nine Months Ended June 30, 2025 (YTD FY2025)](index=2&type=section&id=Nine%20Months%20Ended%20June%2030%2C%202025%20%28YTD%20FY2025%29) YTD FY2025 revenue grew **4.0%** (RMS NHP-related products); operating loss narrowed significantly from RMS income, no DOJ charge, and a legal settlement YTD FY2025 Revenue by Segment | Segment | YTD FY2025 Revenue | YTD FY2024 Revenue | Change ($) | Change (%) | | :------ | :----------------- | :----------------- | :--------- | :--------- | | DSA | $136.3 million | $135.5 million | $0.8 million | 0.6% | | RMS | $238.6 million | $224.8 million | $13.8 million | 6.1% | | Total | $374.9 million | $360.3 million | $14.6 million | 4.0% | - The increase in RMS revenue was primarily due to **higher NHP-related product and service revenue**[16](index=16&type=chunk) YTD FY2025 Operating Loss | Metric | YTD FY2025 | YTD FY2024 | Change ($) | | :------------- | :--------- | :--------- | :--------- | | Operating Loss | $(24.1) million | $(73.2) million | $49.1 million | - The decrease in operating loss was primarily driven by RMS segment's improvement from an operating loss of **$33.0 million** in YTD FY2024 to an operating income of **$16.6 million** in YTD FY2025, an improvement of **$49.6 million**[17](index=17&type=chunk) - Key drivers for the RMS improvement include the non-recurrence of a **$28.5 million charge** related to the Resolution Agreement and Plea Agreement from YTD FY2024, increased RMS revenue, and a **$7.6 million settlement payment** received from Freese and Nichols Inc (FNI)[17](index=17&type=chunk) Cash and Debt Position Cash and Debt Position (as of June 30, 2025) | Metric | June 30, 2025 | September 30, 2024 | Change ($) | | :-------------------------------- | :-------------- | :----------------- | :--------- | | Cash and cash equivalents | $6.2 million | $21.4 million | $(15.2) million | | Cash used in operating activities (YTD) | $24.8 million | $4.4 million | $20.4 million | | Capital expenditures (YTD) | $13.9 million | $17.0 million | $(3.1) million | | Total debt, net of debt issuance costs | $396.5 million | $393.3 million | $3.2 million | - As of June 30, 2025, there were **no borrowings** on the Company's **$15.0 million revolving credit facility**, though a draw of **$3,000** was recently requested[18](index=18&type=chunk) Recent Developments [SEC Investigation Related to NHP Importations](index=2&type=section&id=SEC%20Investigation%20Related%20to%20NHP%20Importations) SEC's Division of Enforcement concluded its NHP importations investigation and will not recommend enforcement action against Inotiv - On June 2, 2025, the SEC's Division of Enforcement concluded its previously disclosed investigation related to **non-human primate (NHP) importations from Asia**[15](index=15&type=chunk) - Based on the information available, the Division does not intend to recommend an enforcement action by the SEC against the Company[15](index=15&type=chunk) [Property Optimization and Sales](index=2&type=section&id=Property%20Optimization%20and%20Sales) Inotiv sold one property in Q3 FY2025 as part of its U.S. optimization plan, with another remaining under contract - During Q3 FY2025, **one property** previously reported as held for sale was sold[15](index=15&type=chunk) - **One property** remains under contract to be sold and is held for sale as of June 30, 2025, in connection with the U.S. optimization plan[15](index=15&type=chunk) [Shareholder Lawsuits and Accrual](index=2&type=section&id=Shareholder%20Lawsuits%20and%20Accrual) Inotiv accrued **$10.0 million** for shareholder lawsuits, expecting full insurance recovery, with final terms subject to negotiation - The Company and certain of its current and former directors and officers have been named as defendants in a **putative securities class action lawsuit** and **two consolidated shareholder derivative lawsuits**[15](index=15&type=chunk) - The Company has recorded a **$10.0 million accrual** for these lawsuits as of June 30, 2025, and expects to recover the full amount under its existing insurance policies[15](index=15&type=chunk) - There can be no assurance that final agreements will be reached, and final amounts payable or recoverable may be materially different than the amounts recorded[15](index=15&type=chunk) Non-GAAP Financial Measures [Note on Non-GAAP Financial Measures](index=2&type=section&id=Note%20on%20Non-GAAP%20Financial%20Measures) Inotiv uses non-GAAP measures like Adjusted EBITDA to provide supplemental investor information, aiding in evaluating operations and trends by excluding non-cash and unusual charges - Non-GAAP measures, including Adjusted EBITDA, exclude items such as interest expense, income tax benefit, depreciation and amortization, stock compensation, startup costs, restructuring costs, unrealized foreign exchange, amortization of inventory step up, loss/gain on disposition of assets, legal settlement amounts, other unusual costs, and charges related to the Resolution Agreement and Plea Agreement[20](index=20&type=chunk) - These measures provide useful information to investors for evaluating ongoing operations, making meaningful period-over-period comparisons, and identifying operating trends[21](index=21&type=chunk) - Investors should consider these non-GAAP measures as supplemental and in addition to, not as a substitute for or superior to, measures of financial performance prepared in accordance with GAAP[21](index=21&type=chunk) [Reconciliation of GAAP to Non-GAAP Select Business Segment Information](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Select%20Business%20Segment%20Information) Non-GAAP reconciliation shows significant operating income improvements for DSA and RMS, with RMS moving from GAAP loss to positive non-GAAP income after adjustments Non-GAAP Operating Income by Segment | Segment | Q3 FY2025 Non-GAAP Op Income | Q3 FY2024 Non-GAAP Op Income | YTD FY2025 Non-GAAP Op Income | YTD FY2024 Non-GAAP Op Income | | :------ | :---------------------------- | :---------------------------- | :---------------------------- | :---------------------------- | | DSA | $7.18 million (14.9% of DSA Rev) | $7.79 million (17.6% of DSA Rev) | $19.29 million (14.2% of DSA Rev) | $22.94 million (16.9% of DSA Rev) | | RMS | $16.85 million (20.4% of RMS Rev) | $6.53 million (10.6% of RMS Rev) | $41.85 million (17.5% of RMS Rev) | $31.66 million (14.1% of RMS Rev) | | Total | $11.45 million (8.8% of Total Rev) | $0.25 million (0.2% of Total Rev) | $21.49 million (5.7% of Total Rev) | $13.24 million (3.7% of Total Rev) | - Adjustments for Q3 and YTD FY2025 include depreciation and amortization, stock compensation, restructuring costs (primarily non-cash impairment charges), startup costs for new service offerings, and for YTD FY2025, a legal settlement payment from FNI[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - For YTD FY2024, significant adjustments included a **$28.5 million charge** related to the Resolution Agreement and Plea Agreement, which did not repeat in YTD FY2025, contributing to the improved operating income[38](index=38&type=chunk) [Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20GAAP%20Net%20Loss%20to%20Non-GAAP%20Adjusted%20EBITDA) Adjusted EBITDA for Q3 FY2025 significantly increased to **$11.6 million (8.9%)** and YTD FY2025 to **$22.1 million (5.9%)**, reflecting non-GAAP adjustments Adjusted EBITDA Performance | Metric | Q3 FY2025 (in thousands) | Q3 FY2024 (in thousands) | YTD FY2025 (in thousands) | YTD FY2024 (in thousands) | | :-------------------------------- | :----------------------- | :----------------------- | :------------------------ | :------------------------ | | GAAP Consolidated Net Loss | $(17,577) | $(26,087) | $(60,073) | $(89,994) | | Adjusted EBITDA | $11,576 | $124 | $22,143 | $12,816 | | Adjusted EBITDA as % of total revenue | 8.9% | 0.1% | 5.9% | 3.6% | - Key adjustments contributing to Adjusted EBITDA include interest expense, income tax benefit, depreciation and amortization, stock compensation, startup costs, restructuring costs, and the non-recurrence of the Resolution Agreement and Plea Agreement charge from the prior year[40](index=40&type=chunk) Additional Company Information [About the Company](index=4&type=section&id=About%20the%20Company) Inotiv, Inc. is a CRO for nonclinical and analytical drug discovery and research models, aiming to accelerate new drugs and medical devices to market - Inotiv is a leading contract research organization dedicated to providing **nonclinical and analytical drug discovery and development services** and **research models and related products and services**[24](index=24&type=chunk) - The Company's products and services focus on bringing new drugs and medical devices through the discovery and preclinical phases of development, increasing efficiency, improving data, and reducing costs[24](index=24&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) Forward-looking statements are subject to risks and uncertainties including strategic plans, demand, NHP supply, debt, costs, and litigation outcomes - Forward-looking statements are subject to risks and uncertainties including strategic plans, demand for services and products, NHP supply and demand, and compliance with agreements[25](index=25&type=chunk) - Other risks include the ability to service indebtedness, manage costs, execute restructuring plans, fill expanded capacity, retain key talent, develop new services, negotiate credit agreement amendments, and the potential outcome of litigation[25](index=25&type=chunk) - Further discussion of these risks, uncertainties, and other matters can be found in the Risk Factors detailed in the Annual Report on Form 10-K and other SEC filings[25](index=25&type=chunk) [Webcast and Conference Call](index=3&type=section&id=Webcast%20and%20Conference%20Call) Management hosted a conference call on August 6, 2025, at 4:30 pm ET to discuss Q3 FY2025 results, with an online replay available - Management hosted a conference call on Wednesday, August 6, 2025, at 4:30 pm ET to discuss **third fiscal quarter of 2025 results**[19](index=19&type=chunk) - Interested parties could participate by dialing domestic or international numbers with the conference ID **'INOTIV'**[22](index=22&type=chunk) - An online replay will be available in the Investors section of Inotiv's web site[19](index=19&type=chunk) [Company Contact / Investor Relations](index=4&type=section&id=Company%20Contact%20%2F%20Investor%20Relations) Contact information for Inotiv's CFO, Beth A. Taylor, and Investor Relations (LifeSci Advisors, Steve Halper) is provided - Company Contact: **Beth A. Taylor, Chief Financial Officer**, (765) 497-8381, beth.taylor@inotiv.com[26](index=26&type=chunk) - Investor Relations Contact: **Steve Halper, LifeSci Advisors**, (646) 876-6455, shalper@lifesciadvisors.com[26](index=26&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenue was **$130.7 million** (Q3 FY2025) and **$374.9 million** (YTD FY2025), with consolidated net losses of **$17.6 million** and **$60.1 million** respectively Condensed Consolidated Statements of Operations (Key Figures) | Metric | Q3 FY2025 (in thousands) | Q3 FY2024 (in thousands) | YTD FY2025 (in thousands) | YTD FY2024 (in thousands) | | :-------------------------------- | :----------------------- | :----------------------- | :------------------------ | :------------------------ | | Total revenue | $130,683 | $105,786 | $374,882 | $360,322 | | Operating loss | $(5,675) | $(20,752) | $(24,120) | $(73,239) | | Consolidated net loss | $(17,577) | $(26,087) | $(60,073) | $(89,994) | | Basic loss per common share | $(0.51) | $(1.00) | $(1.89) | $(3.46) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$759.7 million** (down from Sep 2024), with cash down, inventories up, and total liabilities at **$616.0 million** Condensed Consolidated Balance Sheets (Key Figures) | Metric | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :-------------------------------- | | Total assets | $759,737 | $781,361 | | Cash and cash equivalents | $6,215 | $21,432 | | Inventories, net | $45,074 | $18,173 | | Total liabilities | $615,952 | $610,857 | | Total equity | $143,785 | $170,504 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) YTD FY2025 net cash used in operating activities increased to **$24.8 million**, with **$12.4 million** in investing and **$22.1 million** from financing Condensed Consolidated Statements of Cash Flows (Key Figures) | Metric | YTD FY2025 (in thousands) | YTD FY2024 (in thousands) | | :-------------------------------- | :------------------------ | :------------------------ | | Net cash used in operating activities | $(24,760) | $(4,433) | | Net cash used in investing activities | $(12,416) | $(11,583) | | Net cash provided by (used in) financing activities | $22,083 | $(4,889) | | Net decrease in cash and cash equivalents | $(15,217) | $(21,058) | | Cash and cash equivalents at end of period | $6,215 | $14,434 | - Financing activities for YTD FY2025 included **$20.0 million in borrowings and payments** on the revolving credit facility, and **$27.5 million from the issuance of common shares**[32](index=32&type=chunk)
Inotiv Reports Third Quarter Financial Results for Fiscal 2025 and Provides Business Update
Globenewswire· 2025-08-06 20:05
Core Insights - Inotiv, Inc. reported a 23.5% increase in revenue for Q3 FY 2025, reaching $130.7 million compared to $105.8 million in Q3 FY 2024, driven by significant growth in Research Models and Services (RMS) and Discovery and Safety Assessment (DSA) segments [1][7][11] - Year-to-date revenue for FY 2025 increased by 4.0% to $374.9 million from $360.3 million in FY 2024, primarily due to higher RMS revenue [1][13][14] - The company experienced a consolidated net loss of $17.6 million in Q3 FY 2025, an improvement from a net loss of $26.1 million in Q3 FY 2024 [1][7][11] Financial Performance - Q3 FY 2025 revenue breakdown: RMS revenue increased by $21.0 million (34.1%) and DSA revenue increased by $3.9 million (8.9%) [3][11] - Adjusted EBITDA for Q3 FY 2025 was $11.6 million, or 8.9% of total revenue, compared to $0.1 million (0.1%) in Q3 FY 2024 [7][11][43] - The book-to-bill ratio for DSA services was 1.07x in Q3 FY 2025, indicating a healthy demand for services [7][11] Segment Analysis - DSA segment revenue for Q3 FY 2025 was $48.2 million, up from $44.2 million in Q3 FY 2024, while RMS segment revenue was $82.5 million, up from $61.6 million [3][34] - Year-to-date RMS revenue increased by 6.1% to $238.6 million, while DSA revenue saw a modest increase of 0.6% to $136.3 million [3][14] Management Commentary - The CEO highlighted progress towards financial goals set during the investor day in May, noting improved revenue and margins compared to the previous quarter [4][6] - The company remains focused on client satisfaction and the delivery of high-quality products and services, with a strong emphasis on operational data monitoring [5][6] Recent Developments - The SEC concluded its investigation related to non-human primate importations without recommending enforcement action against the company [14] - The company recorded a $10.0 million accrual for ongoing securities class action lawsuits, expecting to recover this amount under existing insurance policies [14]