Workflow
Inotiv(NOTV)
icon
Search documents
Inotiv(NOTV) - 2022 Q3 - Earnings Call Transcript
2022-08-11 03:12
Inotiv, Inc. (NASDAQ:NOTV) Q3 2022 Earnings Conference Call August 10, 2022 5:00 PM ET Company Participants Devin Sullivan - The Equity Group Inc. Bob Leasure - President and Chief Executive Officer Beth Taylor - Chief Financial Officer John Sagartz - Chief Strategy Officer Conference Call Participants Frank Takkinen - Lake Street Capital Markets Matthew Hewitt - Craig-Hallum Capital Group David Windley - Jefferies Operator Greetings. Welcome to Inotiv, Inc.'s Third Quarter Fiscal 2022 Financial Results Co ...
Inotiv (NOTV) Investor Presentation - Slideshow
2022-06-15 16:00
WHERE Linsights LEAD IS 》 answers >> Company Presentation June 2022 Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Forward-looking statements can often be identified by words such as: "anticipate," "intend," "plan," "goal," "seek," "believe," "project," "estimate," "expect," "strateg ...
Inotiv(NOTV) - 2022 Q2 - Quarterly Report
2022-05-13 23:16
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ___________ to _____________. Commission File Number 000-23357 INOTIV, INC. (Exact name of the registrant as specified in its charter) INDIA ...
Inotiv(NOTV) - 2022 Q2 - Earnings Call Transcript
2022-05-13 01:30
Inotiv, Inc. (NASDAQ:NOTV) Q2 2022 Earnings Conference Call May 12, 2022 4:30 PM ET Company Participants Bob Leasure - President and Chief Executive Officer Beth Taylor - Chief Financial Officer Kalle Ahl - The Equity Group Conference Call Participants Frank Takkinen - Lake Street Capital Markets Matt Hewitt - Craig-Hallum Capital Group Operator Greetings. Welcome to Inotiv, Incorporated's Second Quarter Fiscal 2022 Financial Results conference call. At this time, all participants are in a listen-only mode. ...
Inotiv(NOTV) - 2022 Q1 - Quarterly Report
2022-02-16 15:54
Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the quarterly period ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ___________ to _____________. Commission File Number 000-23357 INOTIV, INC. (Exact name of the registrant as specified in its charter) IN ...
Inotiv(NOTV) - 2022 Q1 - Earnings Call Transcript
2022-02-11 02:13
Inotiv, Inc. (NASDAQ:NOTV) Q1 2022 Earnings Conference Call February 10, 2022 4:30 PM ET Company Participants Bob Leasure ??? President and Chief Executive Officer Beth Taylor ??? Chief Financial Officer Kalle Ahl ??? The Equity Group Conference Call Participants Kyle Bauser ??? Colliers Securities Matt Hewitt ??? Craig-Hallum Capital Group Frank Takkinen ??? Lake Street Capital Markets Operator Greetings. Welcome to Inotiv, Inc's First Quarter Fiscal 2022 Financial Results conference call. At this time, a ...
Inotiv(NOTV) - 2021 Q4 - Annual Report
2021-12-21 22:21
PART I [Business](index=3&type=section&id=Item%201.%20Business) Inotiv, Inc. provides nonclinical and analytical drug discovery and development services, significantly expanding its scope and market position through strategic acquisitions in fiscal year 2021, notably Envigo * Inotiv operates as a contract research organization (CRO) specializing in nonclinical and analytical drug discovery and development services, also selling analytical instruments to the pharmaceutical and research industries[9](index=9&type=chunk) Fiscal 2021 Segment Revenue | Segment | FY 2021 Revenue (in millions) | | :--- | :--- | | Contract Research Services | $85.8 | | Research Products | $3.8 | * The company pursued an aggressive growth strategy through multiple acquisitions in fiscal 2021, including HistoTox Labs, Bolder BioPATH, BioReliance assets, and Gateway Pharmacology, culminating in the Envigo acquisition closing in November 2021[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) * The transformative acquisition of Envigo, a major provider of research models and services, significantly expanded the company's business scope and market position[21](index=21&type=chunk)[102](index=102&type=chunk) [Acquisition Activity and New Service Offerings](index=5&type=section&id=Acquisition%20Activity%20and%20New%20Service%20Offerings) In fiscal 2021 and early 2022, Inotiv pursued significant growth through multiple acquisitions, including Envigo, to expand service offerings, alongside internal investments in new service development Key Acquisitions in FY2021 and Early FY2022 | Acquired Company/Assets | Date | Specialization | Consideration Highlights | | :--- | :--- | :--- | :--- | | HistoTox Labs, Inc. | Apr 30, 2021 | Histology, pathology, image analysis | ~$22.4 million cash | | Bolder BioPATH, Inc. | May 3, 2021 | In vivo autoimmune/inflammation models | ~$17.5 million cash, 1.59 million shares, $1.5 million seller notes | | BioReliance Corp. (assets) | Jul 9, 2021 | Genetic toxicology services | $175K cash, 10% royalty on net sales | | Gateway Pharmacology Labs | Aug 2, 2021 | DMPK, in vitro pharmacology/toxicology | ~$1.7 million cash, 45,323 shares | | Envigo RMS Holding Corp. | Nov 5, 2021 | Research models, diets, bedding | ~$271 million cash, 9.04 million shares | | Plato BioPharma, Inc. | Oct 4, 2021 | In vivo pharmacology (cardiovascular, renal, etc.) | ~$10 million cash, 57,587 shares, $3 million notes | * The company significantly invested in new internal service offerings, with spending increasing from **$333 thousand in FY2020 to $1,477 thousand in FY2021**, covering areas like clinical pathology and biotherapeutics[23](index=23&type=chunk) [Company Services and Products](index=17&type=section&id=Company%20Services%20and%20Products) Inotiv operates two segments: Contract Research Services, offering nonclinical and analytical services ($85.8 million in FY2021), and Research Products, selling analytical instruments and in vivo sampling systems ($3.8 million in FY2021) * The Contract Research Services segment provides comprehensive drug development support, including analytical method development, DMPK testing, stability testing, in vivo pharmacology, non-clinical toxicology, and archiving services[54](index=54&type=chunk) * The Research Products segment expedites preclinical screening via Analytical Products (liquid chromatography and electrochemical instruments) and In vivo Sampling Products (Culex® automated systems)[56](index=56&type=chunk)[59](index=59&type=chunk) [Competition and Government Regulation](index=22&type=section&id=Competition%20and%20Government%20Regulation) Inotiv competes with other CROs based on quality and expertise, operating under extensive federal, state, and local regulations including FDA GLP/GMP and USDA Animal Welfare Act, where compliance is critical * Key competitors in the CRO services space include large organizations like Covance (LabCorp), Charles River Laboratories, and WuXi Biologics, with competition based on regulatory record, quality, scientific expertise, and price[68](index=68&type=chunk)[69](index=69&type=chunk) * The company's operations are heavily regulated by agencies like the FDA and USDA, requiring adherence to standards such as GLP, GMP, and the Animal Welfare Act to ensure data integrity and humane animal treatment[73](index=73&type=chunk)[77](index=77&type=chunk)[79](index=79&type=chunk) * The company manages controlled and hazardous substances, complying with regulations from the DEA, EPA, and DOT, while also adhering to workplace safety standards from OSHA and patient privacy rules under HIPAA[83](index=83&type=chunk)[84](index=84&type=chunk)[89](index=89&type=chunk) [Envigo Business Overview](index=31&type=section&id=Envigo%20Business%20Overview) Post-acquisition, Envigo operates as a wholly owned subsidiary, providing research models, diets, and services globally, driven by increased R&D spending and demand for specialized models, while adhering to stringent animal welfare regulations * Envigo is a major commercial provider of research models, offering over **130 strains of animals**, Teklad brand diets, and associated services to the global research community[103](index=103&type=chunk)[104](index=104&type=chunk) * Market trends benefiting Envigo include rising biopharmaceutical R&D spending, strong demand for Non-Human Primates (NHPs) for biologics safety testing, and increasing demand for specific, genetically-altered animal models[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) * Envigo's Research Models and Services (RMS) business comprises Research Models (small and large animals), Diets and Bedding (Teklad), and Research Model Services (surgical modifications, contract breeding)[115](index=115&type=chunk)[116](index=116&type=chunk)[123](index=123&type=chunk) * As of September 30, 2021, Envigo had approximately **1,200 employees**, with **65% in North America**, and is committed to animal welfare standards and the '3Rs' (Replacement, Reduction, and Refinement)[139](index=139&type=chunk)[147](index=147&type=chunk) * The COVID-19 pandemic impacted Envigo's operations, notably disrupting the supply of NHPs from China, though alternative sources have been secured[164](index=164&type=chunk)[165](index=165&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous risks including COVID-19 impacts, industry and client dependence, operational challenges, financial vulnerabilities from increased leverage, and significant integration risks from the Envigo acquisition * The **COVID-19 pandemic** has adversely affected and may continue to impact business operations, product demand, and financial condition, with a **$2.0 million** impact from program delays in fiscal 2020[181](index=181&type=chunk)[182](index=182&type=chunk) * The business is highly dependent on R&D spending by pharmaceutical and biotech companies, with **five clients representing 20.5% of total sales in FY2021**, posing a material risk if a major client is lost[186](index=186&type=chunk)[188](index=188&type=chunk) * Operational risks include intense competition in the CRO industry, client contracts terminable on short notice (typically **30 days**), and financial exposure from underpricing fixed-price contracts or service errors[191](index=191&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk) * Financial and control risks include significantly increased debt from acquisitions and a material weakness in internal control over financial reporting related to tax accounting for acquisitions, leading to a Q3 2021 financial restatement[198](index=198&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk) * The Envigo acquisition introduces significant integration challenges, increased exposure to animal rights activists, and regulatory scrutiny, with one Envigo facility currently under a formal USDA investigation[235](index=235&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) [Properties](index=70&type=section&id=Item%202.%20Properties) As of September 30, 2021, Inotiv operated from multiple owned and leased facilities across the United States, including key sites for executive offices and contract research services, which are deemed adequate for current operations Key Operating Locations as of September 30, 2021 | Location | Key Operations | Ownership Status | | :--- | :--- | :--- | | West Lafayette, IN | Principal executive offices, CRO services, product manufacturing | Partially owned, partially leased | | Evansville, IN | Nonclinical toxicology testing | Owned | | Maryland Heights, MO | CRO services, animal model testing | Owned (purchased May 2021) | | Gaithersburg, MD | CRO services | Leased | | Fort Collins, CO | CRO services (pharma & medical device) | Owned | | Boulder, CO | CRO services | Leased | [Legal Proceedings](index=72&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine claims and proceedings but does not consider itself a party to any material pending legal proceedings as of the report date * As of the report date, the company is not party to any legal proceedings considered material[263](index=263&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=72&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common shares trade on NASDAQ under 'NOTV', with **476 stockholders of record** as of December 1, 2021, and no cash dividends paid or anticipated in the foreseeable future * The company's common stock is listed on the NASDAQ Capital Market under the ticker symbol **'NOTV'**[265](index=265&type=chunk) * As of December 1, 2021, there were **476 stockholders of record**[266](index=266&type=chunk) * The company did not pay cash dividends in FY2021 or FY2020 and does not plan to in the foreseeable future[267](index=267&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=74&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2021, Inotiv's revenue grew **48.2% to $89.6 million**, driven by organic growth and acquisitions, leading to a **65.4% increase in gross profit** but an operating loss due to higher expenses, while net income was boosted by non-operating gains and cash significantly increased to **$156.9 million** from convertible notes [Results of Operations](index=82&type=section&id=Results%20of%20Operations) In FY2021, total revenue grew **48.2% to $89.6 million**, driven by Services segment growth and acquisitions, leading to a **65.4% increase in gross profit** but a wider operating loss of **$5.6 million** due to higher expenses, while net income reached **$10.9 million** primarily from PPP loan forgiveness and convertible note remeasurement gains Consolidated Statement of Operations Summary (FY2021 vs. FY2020) | Metric (in thousands) | FY 2021 | FY 2020 | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | $89,605 | $60,469 | 48.2% | | Gross Profit | $30,156 | $18,237 | 65.4% | | Operating Expenses | $35,774 | $21,300 | 68.0% | | Operating Loss | ($5,618) | ($3,063) | 83.4% | | Net Income (Loss) | $10,895 | ($4,685) | N/A | Revenue by Segment (FY2021 vs. FY2020) | Segment (in thousands) | FY 2021 | FY 2020 | % Change | | :--- | :--- | :--- | :--- | | Services Revenue | $85,832 | $57,177 | 50.1% | | Products Revenue | $3,773 | $3,292 | 14.6% | * The **78.9% increase** in general and administrative expenses to **$30.4 million** was primarily driven by transaction costs for multiple acquisitions and investments in infrastructure to support growth[308](index=308&type=chunk) * Other income of **$13.4 million** in FY2021 was primarily due to an **$8.36 million** non-cash gain from the fair value remeasurement of convertible senior notes and a **$4.85 million** gain from PPP loan forgiveness[309](index=309&type=chunk) [Liquidity and Capital Resources](index=88&type=section&id=Liquidity%20and%20Capital%20Resources) As of September 30, 2021, the company's liquidity significantly strengthened, with total cash reaching **$156.9 million**, primarily from a **$140 million convertible senior notes issuance** to fund the Envigo acquisition, while operating cash flow improved to **$10.7 million** and investing activities used **$54.1 million** for acquisitions and capital expenditures Cash and Liquidity Position (as of Sept 30) | Metric (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $138,924 | $1,406 | | Restricted cash | $18,000 | $0 | | Total Cash | $156,924 | $1,406 | Cash Flow Summary (Year Ended Sept 30) | Metric (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash from Operating Activities | $10,740 | $1,290 | | Net cash used in Investing Activities | ($54,054) | ($10,131) | | Net cash from Financing Activities | $198,832 | $9,641 | * In September 2021, the company issued **$140 million** in **3.25% Convertible Senior Notes due 2027** to fund a portion of the Envigo acquisition's cash purchase price[329](index=329&type=chunk) * In July 2021, the company received forgiveness for **$4.85 million** of its **$5.05 million** Paycheck Protection Program (PPP) loan[328](index=328&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=93&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) The company's critical accounting policies involve significant judgment, particularly in revenue recognition for fixed-fee services, annual goodwill impairment testing (with goodwill increasing to **$51.9 million** in FY2021), and fair value measurement of financial instruments like convertible senior notes * **Revenue Recognition:** For fixed-fee service contracts, revenue is recognized over time using a cost-to-cost input method, requiring estimation of total direct project costs[336](index=336&type=chunk) * **Goodwill:** Goodwill is tested annually for impairment, with its balance increasing from **$4.4 million in FY2020 to $51.9 million in FY2021** primarily due to acquisitions, and no impairment was found as of September 30, 2021[342](index=342&type=chunk)[344](index=344&type=chunk) * **Fair Value of Financial Instruments:** The conversion feature of the convertible senior notes is treated as an embedded derivative, measured at fair value using a Black-Scholes model, resulting in an **$8.36 million non-cash gain** in Q4 2021[405](index=405&type=chunk)[407](index=407&type=chunk) [Financial Statements and Supplementary Data](index=98&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Inotiv, Inc.'s audited consolidated financial statements for fiscal years 2021 and 2020, including balance sheets, statements of operations, cash flows, and detailed notes covering accounting policies, business combinations, debt, and significant subsequent events like the Envigo acquisition [Consolidated Financial Statements](index=99&type=section&id=Consolidated%20Financial%20Statements) FY2021 consolidated financial statements reflect significant growth, with total assets reaching **$321.9 million** and total liabilities **$216.7 million** due to acquisitions and financing, resulting in a net income of **$10.9 million** compared to a prior year loss Consolidated Balance Sheet Highlights (as of Sept 30) | Metric (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Total Current Assets | $189,019 | $15,300 | | Goodwill | $51,927 | $4,368 | | Total Assets | $321,856 | $61,593 | | Total Current Liabilities | $55,109 | $31,642 | | Long-Term Debt | $154,209 | $18,826 | | Total Liabilities | $216,728 | $53,997 | | Total Shareholders' Equity | $105,128 | $7,596 | Consolidated Statement of Operations Highlights (Year Ended Sept 30) | Metric (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Total Revenue | $89,605 | $60,469 | | Gross Profit | $30,156 | $18,237 | | Operating Loss | ($5,618) | ($3,063) | | Net Income (Loss) | $10,895 | ($4,685) | | Diluted EPS | $0.19 | ($0.43) | [Notes to Consolidated Financial Statements](index=103&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial results, including business combinations in FY2021 that increased goodwill, the **$140 million convertible senior notes** issuance, and significant subsequent events like the transformative Envigo acquisition funded by new debt * **Business Combinations (Note 12):** Several FY2021 acquisitions, including HistoTox Labs, Bolder BioPATH, and Gateway, resulted in significant goodwill recognition (**$9.1 million for HistoTox, $36.2 million for Bolder**) and intangible assets from preliminary purchase price allocations[490](index=490&type=chunk)[500](index=500&type=chunk)[510](index=510&type=chunk) * **Debt (Note 7):** Total long-term debt substantially increased to **$154.2 million** as of September 30, 2021, from **$18.8 million in 2020**, primarily due to the issuance of **$140 million in 3.25% Convertible Senior Notes due 2027**[456](index=456&type=chunk)[467](index=467&type=chunk) * **Subsequent Events (Note 16):** Post-fiscal year-end, the company acquired Plato BioPharma (Oct 2021) and Envigo (Nov 2021), with the Envigo acquisition involving approximately **$218 million in cash** and **8.25 million Inotiv common shares**, financed partly by a new **$165 million term loan facility**[536](index=536&type=chunk)[542](index=542&type=chunk)[549](index=549&type=chunk) [Controls and Procedures](index=161&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were ineffective as of September 30, 2021, due to a material weakness in tax accounting for acquisitions, leading to a Q3 2021 restatement, with a remediation plan outlined * Management determined that disclosure controls and procedures were not effective as of September 30, 2021[574](index=574&type=chunk) * A material weakness in internal control over financial reporting existed due to an error in accounting for tax attributes of an acquisition, leading to the restatement of Q3 2021 financial statements[575](index=575&type=chunk) * Management plans to remediate the material weakness by enhancing processes, improving access to accounting literature, increasing communication with third-party professionals, and re-assessing external tax advisors[576](index=576&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=163&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section details the company's executive officers and board of directors, noting the board's expansion and new appointments following the Envigo acquisition, governed by a Shareholders Agreement, and the adoption of a Code of Business Conduct and Ethics * Executive officers include Robert W. Leasure, Jr. (President & CEO), John E. Sagartz (Chief Strategy Officer), and Beth A. Taylor (CFO)[167](index=167&type=chunk)[168](index=168&type=chunk)[170](index=170&type=chunk) * A Shareholders Agreement, established with the Envigo acquisition, grants certain former Envigo shareholders the right to designate two board nominees, leading to the appointments of Nigel Brown and Scott Cragg[590](index=590&type=chunk)[591](index=591&type=chunk)[593](index=593&type=chunk) * The company maintains a Code of Business Conduct and Ethics applicable to all directors, officers, and employees, available on its website[598](index=598&type=chunk) [Executive Compensation](index=171&type=section&id=Item%2011.%20Executive%20Compensation) Fiscal 2021 executive compensation for Named Executive Officers included base salary, non-equity incentives, and stock awards, with CEO Robert W. Leasure, Jr.'s total compensation at **$1.31 million**, while non-employee directors received cash retainers and stock awards Fiscal 2021 Summary Compensation Table for Named Executive Officers | Name | Position | Salary ($) | Bonus ($) | Nonequity Incentive ($) | Stock Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Robert W. Leasure, Jr. | President & CEO | 450,751 | 100,000 | 240,000 | 508,836 | 1,306,233 | | John E. Sagartz | Chief Strategy Officer | 322,674 | 56,000 | - | 88,006 | 474,907 | | Beth A. Taylor | CFO | 273,635 | 56,000 | - | 63,753 | 401,586 | * CEO Robert Leasure's 2021 employment agreement provides for an annual base salary of **$480,000** and an annual incentive opportunity of up to **50% of his base salary**[621](index=621&type=chunk) * Non-employee directors receive an annual retainer of **$55,000** for board membership, with additional retainers for serving as Chairman or on committees[606](index=606&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=183&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of December 1, 2021, the company's directors and executive officers collectively owned **10.1%** of common shares, with key beneficial owners including P2 Capital Partners, LLC (**12.1%**), Andrew H. Baker (**9.5%**), and Peter T. Kissinger, Ph.D., and Candice B. Kissinger (each **5.3%**) Security Ownership as of December 1, 2021 | Owner | Percent of Class | | :--- | :--- | | P2 Capital Partners, LLC | 12.1% | | Andrew H. Baker | 9.5% | | Peter T. Kissinger, Ph.D. | 5.3% | | Candice B. Kissinger | 5.3% | | Directors and Officers as a Group (15 persons) | 10.1% | [Certain Relationships and Related Transactions, and Director Independence](index=187&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The Board has determined **five directors are independent**, and the company disclosed related-party transactions including consulting fees paid to a firm managed by the CEO and a facility purchase from an entity owned by executives * The Board of Directors has determined that Gregory C. Davis, R. Matthew Neff, Richard A. Johnson, Nigel Brown, and Scott Cragg are independent directors[649](index=649&type=chunk) * The company paid consulting fees of **$86,000** in fiscal 2021 to LS Associates LLC, a firm partially owned by CEO Robert W. Leasure Jr[651](index=651&type=chunk) * In May 2021, the company purchased a building for **$4.7 million** from SWL Properties, LLC, an entity owned by executives including Dr. John E. Sagartz, having previously paid **$260,000** in rent to SWL in fiscal 2021[652](index=652&type=chunk) [Principal Accounting Fees and Services](index=189&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) The company's independent registered public accounting firm is RSM US LLP, to whom total fees of **$929,994** were paid in fiscal year 2021 for audit, audit-related, and tax services, all pre-approved by the Audit Committee Fees Paid to Independent Registered Public Accounting Firm (RSM US LLP) | Fee Type | FY 2021 ($) | FY 2020 ($) | | :--- | :--- | :--- | | Audit Fees | 372,000 | 415,000 | | Audit-Related Fees | 514,589 | 131,000 | | Tax Fees | 43,405 | 0 | | **Total Fees** | **$929,994** | **$546,000** | PART IV [Exhibits, Financial Statement Schedules](index=190&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Form 10-K report, including financial statements and an index of all exhibits such as asset purchase agreements, articles of incorporation, and debt agreements * This section contains the index to the consolidated financial statements and a list of all exhibits filed with the annual report[660](index=660&type=chunk)[661](index=661&type=chunk)
Inotiv(NOTV) - 2021 Q4 - Earnings Call Transcript
2021-12-17 17:29
Inotiv, Inc. (NASDAQ:NOTV) Q4 2021 Results Conference Call December 16, 2021 4:30 PM ET Company Participants Devin Sullivan - SVP, The Equity Group Bob Leasure - President and CEO Beth Taylor - CFO Conference Call Participants Kyle Bauser - Colliers Securities Matt Hewitt - Craig-Hallum Capital Group Dave Windley - Jefferies Operator Greetings. Welcome to Inotiv, Inc.???s Fourth Quarter Fiscal 2021 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-an ...
Inotiv(NOTV) - 2021 Q3 - Quarterly Report
2021-08-13 19:55
[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201%20Condensed%20Consolidated%20Financial%20Statements) The unaudited condensed consolidated financial statements for the periods ended June 30, 2021, and 2020, detail the company's financial position, operations, and cash flows Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2021 (In thousands) | September 30, 2020 (In thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $48,062 | $15,300 | | **Total Assets** | **$171,873** | **$61,593** | | **Total Current Liabilities** | $47,062 | $31,642 | | **Total Liabilities** | $82,979 | $53,997 | | **Total Shareholders' Equity** | $88,894 | $7,596 | | **Total Liabilities and Shareholders' Equity** | **$171,873** | **$61,593** | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric (In thousands) | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Nine Months Ended June 30, 2021 | Nine Months Ended June 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $22,892 | $15,765 | $59,529 | $44,695 | | **Gross Profit** | $7,646 | $5,064 | $19,848 | $13,846 | | **Operating Loss** | $(1,703) | $(477) | $(2,210) | $(1,692) | | **Net Loss** | **$(2,265)** | **$(879)** | **$(3,354)** | **$(2,893)** | | **Diluted Net Loss Per Share** | $(0.15) | $(0.08) | $(0.27) | $(0.27) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity (In thousands) | Nine Months Ended June 30, 2021 | Nine Months Ended June 30, 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $8,049 | $1,586 | | **Net cash used in investing activities** | $(49,054) | $(9,094) | | **Net cash provided by financing activities** | $64,259 | $9,850 | | **Net increase in cash and cash equivalents** | $23,254 | $2,342 | | **Cash and cash equivalents at end of period** | $24,660 | $2,948 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial data, highlighting a corporate name change, a significant equity offering, major acquisitions, and new debt facilities - On March 18, 2021, the company changed its corporate name from Bioanalytical Systems, Inc, to **Inotiv, Inc**[16](index=16&type=chunk) - On April 23, 2021, the company closed a public offering of 3,044,117 common shares at $17,00 per share, generating net proceeds of approximately **$49.0 million**[20](index=20&type=chunk) - The company operates in two principal segments: **Services (contract research)** and **Products (scientific instruments)**, with the Services segment being the primary driver of revenue[30](index=30&type=chunk)[32](index=32&type=chunk) - On July 16, 2021, the company received notice that its Paycheck Protection Program (PPP) loan of **$4,851 thousand was fully forgiven** by the SBA[100](index=100&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses significant revenue growth driven by internal expansion and acquisitions, covering operating results, liquidity, capital resources, and recent financing activities [Recent Developments and Executive Summary](index=34&type=section&id=Recent%20Developments%20and%20Executive%20Summary) The company pursued growth through acquisitions, facility expansions, and new services, funded by a $49.0 million public stock offering and additional debt financing - Key growth initiatives include the acquisitions of **HistoTox Labs** and **Bolder BioPATH**, expansion of the St, Louis facility, and new service offerings[106](index=106&type=chunk)[112](index=112&type=chunk) - Completed an underwritten public offering of common stock, resulting in net proceeds of approximately **$49.0 million** to support growth initiatives[106](index=106&type=chunk)[112](index=112&type=chunk) - Subsequent to the quarter end, the company acquired assets from MilliporeSigma's BioReliance portfolio and Gateway Pharmacology Laboratories to expand its offerings[111](index=111&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Financial performance showed significant revenue growth and improved gross margins, though increased operating expenses related to investments and acquisitions led to a higher net loss Q3 FY2021 vs Q3 FY2020 Revenue Comparison | Metric | Q3 2021 (In thousands) | Q3 2020 (In thousands) | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$22,892** | **$15,765** | **45.2%** | | Service Revenue | $21,924 | $14,852 | 47.6% | | Product Revenue | $968 | $913 | 6.1% | Nine Months FY2021 vs FY2020 Revenue Comparison | Metric | Nine Months 2021 (In thousands) | Nine Months 2020 (In thousands) | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$59,529** | **$44,695** | **33.2%** | | Service Revenue | $56,858 | $42,185 | 34.8% | | Product Revenue | $2,671 | $2,510 | 6.4% | - Gross profit margin improved from **31.4% to 33.4%** for the third quarter and from **30.5% to 33.3%** for the nine-month period, reflecting greater capacity utilization[123](index=123&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk) - Operating expenses increased significantly, with General & Administrative expenses rising **69.0% in Q3** and **52.3% in the nine-month period** due to investments and acquisition costs[133](index=133&type=chunk)[147](index=147&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity strengthened significantly due to a public stock offering and new debt, which funded acquisitions and capital expenditures - Cash and cash equivalents increased to **$24,660 thousand** at June 30, 2021, from $1,406 thousand at September 30, 2020[151](index=151&type=chunk) - Net cash from financing activities was **$64.3 million** for the nine months ended June 30, 2021, primarily from a **$49.0 million** public stock offering and **$17.1 million** in new long-term loans[157](index=157&type=chunk)[173](index=173&type=chunk) - The company entered into an Amended and Restated Credit Agreement with First Internet Bank, which includes multiple term loans and a **$5.0 million** revolving line of credit[158](index=158&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - The company's PPP loan of **$4,851 thousand** was fully forgiven in July 2021, subsequent to the quarter's end[171](index=171&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=53&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Inotiv, Inc, is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide the information required by this Item[177](index=177&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204%20Controls%20and%20Procedures) Management evaluated and concluded that the company's disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - Management concluded that the company's disclosure controls and procedures were **effective** as of June 30, 2021[179](index=179&type=chunk) - There were **no material changes** in internal control over financial reporting during the third quarter of fiscal 2021[180](index=180&type=chunk) [PART II OTHER INFORMATION](index=53&type=section&id=PART%20II%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=53&type=section&id=Item%201%20Legal%20Proceedings) No material changes to the company's legal proceedings were reported during the third quarter of fiscal 2021 - **No material changes** to legal proceedings were reported for the third quarter of fiscal 2021[181](index=181&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A%20Risk%20Factors) Key risks include challenges in integrating recent acquisitions, potential share price dilution from future stock sales, and constraints from increased indebtedness - The company faces risks in integrating the **HistoTox Labs** and **Bolder BioPATH** acquisitions, including retaining key personnel and realizing anticipated synergies[184](index=184&type=chunk)[188](index=188&type=chunk) - Future sales of a substantial number of common shares, including the **1,588,235 shares** issued in the Bolder BioPATH merger, could cause the stock price to decline[184](index=184&type=chunk)[185](index=185&type=chunk) - The company has incurred **significant additional debt**, which may impair its ability to raise further capital or service its existing debt obligations[187](index=187&type=chunk)[189](index=189&type=chunk) - The company may need to raise additional capital, which may not be available on reasonable terms, potentially hindering growth[190](index=190&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) [Item 6. Exhibits](index=58&type=section&id=Item%206%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including key agreements and required officer certifications - Exhibits filed include the Amended and Restated Credit Agreement, acquisition agreements for HistoTox Labs and Bolder BioPATH, and required officer certifications[194](index=194&type=chunk)
Inotiv(NOTV) - 2021 Q3 - Earnings Call Transcript
2021-08-12 00:34
Financial Data and Key Metrics Changes - Inotiv's revenue grew by approximately 45% year-over-year to $22.9 million, driven by internal growth of $2.9 million and $4.3 million from acquisitions [27][34] - Gross profit increased approximately 51% year-over-year to $7.6 million due to higher revenue [27] - Adjusted EBITDA increased approximately 148% to $2.2 million from $894,000 in the prior year quarter [28][39] - The book-to-bill ratio for the third quarter was 1.3 times, with a backlog of $62 million, up 15% from $53.9 million in March 2021 [29][40] Business Line Data and Key Metrics Changes - Service segment revenue increased 47.6% to $21.9 million from $14.9 million in the prior year period, with service gross margin rising to 33% from 31.9% [34] - Product segment revenue increased 6% to $968,000, with product gross margin increasing to 43.7% from 35.6% [35] Market Data and Key Metrics Changes - The company reported a significant increase in demand across all service lines, with a notable improvement in the ability to handle larger programs due to expanded service offerings [75] Company Strategy and Development Direction - The company is focused on building a complete suite of contract research services, supported by three strategic growth pillars: acquisitions, expansion of existing operations, and new service startups [9][25] - Recent acquisitions of HistoTox Labs and Bolder BioPATH are expected to enhance service offerings and client base, particularly in cell and gene therapy [10][11] - The company is actively pursuing additional acquisitions and expanding facilities to meet growing demand [12][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's growth trajectory, highlighting a strong demand for services and a robust backlog [29][32] - The company aims to achieve a long-term adjusted corporate G&A of 6% to 7% of revenue as it scales [48] - Management noted challenges in the labor market but emphasized efforts to maintain a low turnover rate and improve company culture [71] Other Important Information - The company completed equity and debt financings in April 2021, providing net proceeds of approximately $49 million and $17 million, respectively [26] - The PPP loan of $4.9 million has been forgiven, improving the company's financial position [26][44] Q&A Session Summary Question: Margin contribution from Bolder and HistoTox acquisitions - Management indicated that the EBITDA contribution from both acquisitions is about 32%, exceeding expectations [47] Question: G&A expenses and future leverage - Management expects unallocated corporate G&A to decrease to 6% to 7% as the company grows, despite current increases due to acquisitions and new business initiatives [48][49] Question: Targeting organic and inorganic growth rates - Management noted a historical organic growth rate of over 35% and indicated that they expect to maintain this pace [51][52] Question: M&A strategy and prioritization - Corporate culture alignment is critical in M&A decisions, with a focus on companies that share similar service-oriented values [53][54] Question: Sustainability of the book-to-bill ratio - Management expressed uncertainty about the sustainability of the current high book-to-bill ratio but noted strong demand and increasing backlog [56][57] Question: St. Louis facility build-out timeline - The St. Louis facility is expected to be operational by early 2022, with potential phased openings starting in October [59] Question: Capacity and revenue potential without acquisitions - Management indicated that there is potential for additional revenue growth from existing facilities, with ongoing efforts to expand capacity [64][66] Question: Labor market challenges - The company has successfully increased headcount but continues to face challenges in recruiting scientific talent [70][71] Question: Demand across service areas - Demand remains strong and balanced across all service lines, with an increase in larger programs due to expanded service capabilities [75]