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]

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 and services [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] Financial Results Announcement - Inotiv will release its financial results for the fiscal 2025 third quarter, which ended on June 30, 2025, on August 6, 2025, after the stock market closes [1] - A conference call will be held on the same day at 4:30 p.m. Eastern Time to discuss the financial results [1] Participation Information - Interested parties can participate in the conference call by dialing the provided numbers or accessing the live webcast through the company's website [2] - An online replay of the conference call will be available for those unable to attend the live broadcast [2]

Summary of Inotiv (NOTV) 2025 Conference Call Company Overview - **Company**: Inotiv (Ticker: NOTV) - **Industry**: Healthcare, specifically focused on preclinical contract research organization (CRO) services Key Points and Arguments Business Performance - **Bookings and Momentum**: The company reported a strong bookings quarter in Q1, with a book-to-bill ratio close to 1.0, indicating a positive trend going into the current quarter [3][4][5] - **Recovery from Previous Weakness**: Inotiv has experienced a recovery after a couple of challenging years, with expectations that the second half of the year will outperform the same period last year [4][5] Segment Performance - **Discovery and Translational Sciences**: The Discovery Translational Sciences business is expected to lead the recovery, with improvements noted in bookings and a new sales approach that emphasizes scientific expertise [9][10][11] - **Safety Assessment and Research Models**: The Safety Assessment business, including GeneTox and biotherapeutics, is also performing well, contributing to overall growth [14][29] Client Cohorts - **Diverse Client Base**: The company serves a mix of small to mid-sized biotech firms and large pharmaceutical companies, with large pharma accounting for less than 5% of DSA sales [27][29] - **Focus on Client Experience**: Inotiv aims to enhance client experience to increase repeat business and expand service offerings to existing clients [21][25][23] Margin Improvement - **DSA Margins**: The company is working on improving margins in the DSA segment through better utilization of fixed costs and potential pricing improvements [12][38] - **RMS Margins**: Recent quarters have shown solid margin improvement in the RMS segment, with expectations for continued growth [35][36] Market Conditions - **Impact of Tariffs**: Tariffs primarily affect the NHP (Non-Human Primate) industry, but their overall impact on study costs is minimal, estimated at less than 1% [43][45] - **NHP Market Dynamics**: The NHP market has contracted, with imports dropping from 30,000 to about 16,000 annually, leading to a stable pricing environment [39][40] Strategic Initiatives - **Customer Experience Investments**: Investments in customer experience are expected to yield better repeat business and win rates, with metrics being tracked to measure success [22][25] - **Capital Structure and Financing**: The company is focused on improving its balance sheet and has been proactive in communicating with lenders regarding upcoming maturities [62][65] Regulatory and Compliance - **SEC Investigation Closure**: The closure of an SEC investigation without enforcement action is seen as a positive development, potentially reducing legal expenses and improving cash flow [59][60] Additional Important Insights - **Sales Strategy**: The company has shifted to a more scientific sales approach, leveraging respected scientists to attract clients [15][16] - **Cross-Selling Opportunities**: There is an increasing trend of cross-selling services between safety assessment and discovery, enhancing client relationships [33][34] - **Future Growth Potential**: The company is optimistic about future growth, contingent on maintaining client satisfaction and market conditions improving [50][51][56]

Company Overview - Inotiv, Inc is a leading contract research organization (CRO) providing drug discovery and development services to the pharmaceutical and medical device industries[7] - The company's market capitalization was approximately $69 million as of April 30, 2025[6] - Inotiv was founded in 1974 and underwent a strategic reinvention in 2017[7] Financial Performance and Growth - Inotiv has a history of integrating acquisitions to enhance organic revenue growth[8] - The company plans for $17 million-$19 million in annual net savings compared to FY2022 through infrastructure right-sizing, strategic capital investments, and supply chain synergies[11] - Capital expenditures (CAPEX) are projected to average less than 40% of annual revenue in FY2025, compared to a 5-year historical average of approximately 8%[31] Business Segments and Services - Services account for 45% of total revenue, followed by Large Animals at 29%, Small Animals at 13%, and Teklad at 11% (trailing 12 months ended March 31, 2025)[13] - The company operates through two segments: Discovery and Safety Assessment (DSA) and Research Models and Services (RMS)[7] - North America accounts for 80% of customer geography, followed by EMEA at 15% and the Pacific Rim at 5%[23]

Company Overview - Inotiv, Inc is a leading contract research organization (CRO) providing drug discovery and development services to the pharmaceutical and medical device industries[7] - The company's market capitalization was approximately $69 million as of April 30, 2025[6] - Inotiv was founded in 1974 and underwent a strategic reinvention in 2017[7] Financial Performance and Growth - Inotiv has a history of integrating acquisitions to enhance organic revenue growth[8] - The company plans for $17 million-$19 million in annual net savings compared to FY2022 through infrastructure right-sizing, strategic capital investments, and supply chain synergies[11] - Capital expenditures (CAPEX) are projected to average less than 40% of annual revenue in FY2025, compared to a 5-year historical average of approximately 8%[31] Business Segments and Services - Services account for 45% of total revenue, followed by Large Animals at 29%, Small Animals at 13%, and Teklad at 11% (trailing 12 months ended March 31, 2025)[13] - The company operates through two segments: Discovery and Safety Assessment (DSA) and Research Models and Services (RMS)[7] - North America accounts for 80% of customer geography, followed by EMEA at 15% and the Pacific Rim at 5%[23]

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]

Financial Data and Key Metrics Changes - For Q2 of fiscal 2025, total revenue was $124.3 million, up from $119.0 million in Q2 of fiscal 2024, representing a year-over-year increase of $5.3 million or 4.4% [9][26] - Adjusted EBITDA for Q2 was $8.0 million, or 6.4% of total revenue, compared to $3.1 million, or 2.6% of total revenue in the prior year [28][29] - 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 [28] Business Line Data and Key Metrics Changes - RMS segment revenue increased by $6.6 million or 9.1% year-over-year, primarily due to higher NHP revenue [9][26] - DSA revenue decreased to $45.3 million from $46.6 million in Q2 of fiscal 2024, driven by a decline in general toxicology services revenue [27] - 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 [27][30] Market Data and Key Metrics Changes - The company noted geopolitical and macroeconomic risks affecting the industry, but expects continued year-over-year revenue growth for the next two quarters [9][24] - The company has not seen significant changes in demand due to current tariffs, although there is some cost inflation linked to them [23][24] Company Strategy and Development Direction - The company is focused on client satisfaction, integration of scientific services, and optimizing RMS site operations [8][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 goals of reducing animal testing and is investing in technologies that align with these objectives [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about revenue growth in the upcoming quarters and a potential reversal in declines in discovery business [49] - The company is closely monitoring NIH funding impacts but has not yet seen significant effects on business [52][55] - Management remains confident in the ability to improve DSA margins and overall operational efficiency [62][69] Other Important Information - The company plans to hold an Investor Day on May 29 to discuss its strategic plan and focus on client excellence [90] - The company has settled a litigation case for approximately $7.6 million, which positively impacted its financials [8] Q&A Session Summary Question: Changes in marketing post-FDA announcement - Management has integrated new services into the discovery sales process and is seeing some growth, but not at the expected pace [36][37] Question: Focus areas in 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 and quoting activity - Management reported a positive start to the current quarter with good quoting and closing activity [45][47] Question: Impact of NIH funding on customer mix - No significant impact has been observed yet, although the company is monitoring the situation closely [52][55] Question: DSA margin improvement timeline - Management expects to see benefits from margin improvement efforts sooner rather than later, with some improvements already noted [67][69] Question: Pricing discounting trends - Price discounting has decreased compared to six to twelve months ago, with a more stable pricing environment currently [71][72] Question: Integration of scientific services - The integration involves improving project management systems and enhancing service delivery speed to add value for clients [79][80]

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]