Inotiv(US:NOTV)2026-02-09 21:23Financial Performance - Total revenue for the three months ended December 31, 2025, was $120.879 million, a slight increase of 0.8% compared to $119.876 million in the same period of 2024[12] - Service revenue increased to $59.721 million, up 11.9% from $53.557 million year-over-year[12] - Consolidated net loss for the quarter was $28.378 million, compared to a net loss of $27.630 million in the prior year, reflecting a 2.7% increase in losses[12] - Basic and diluted loss per common share was $0.83, an improvement from a loss of $1.02 per share in the same quarter of 2024[12] - The company reported an operating loss of $16.330 million for the quarter, compared to an operating loss of $15.507 million in the same quarter of 2024[12] - Consolidated net loss for the three months ended December 31, 2025, was $28,378,000, compared to a loss of $27,630,000 for the same period in 2024[19] - The Company reported total segment operating income of $15,285 for the three months ended December 31, 2025, compared to $16,526 in 2024[52] - The RMS segment's operating income decreased to $7,059 for the three months ended December 31, 2025, from $9,438 in 2024[52] Assets and Liabilities - Total assets decreased to $734.336 million as of December 31, 2025, down from $771.114 million at September 30, 2025, representing a decline of 4.8%[10] - Total liabilities were $625.312 million, a decrease of 1.5% from $635.086 million in the previous quarter[10] - Cash and cash equivalents decreased to $12.732 million from $21.741 million, a decline of 41.5%[10] - Inventories decreased slightly to $44.320 million from $45.738 million, a reduction of 3.1%[10] - The Company had a balance of $6,000,000 outstanding on its $15,000,000 revolving credit facility as of December 31, 2025[26] - The Company has trade receivables of $58,650 and unbilled revenue of $11,011 as of December 31, 2025, totaling $69,661, with a net amount of $63,176 after accounting for an allowance for credit losses of $6,485[116] Cash Flow and Capital Expenditures - Net cash used in operating activities was $5,433,000 for the three months ended December 31, 2025, compared to $4,497,000 for the same period in 2024[19] - Cash and cash equivalents at the end of the period were $12,732,000, down from $38,043,000 at the end of the same period in 2024[19] - Capital expenditures for the three months ended December 31, 2025, were $5,180,000, compared to $4,459,000 for the same period in 2024[19] - Cash paid for interest during the three months ended December 31, 2025, was $9,685,000, compared to $10,888,000 for the same period in 2024[19] Revenue Recognition and Deferred Revenue - The company expects approximately 77% of deferred revenue as of December 31, 2025, to be recognized as revenue within the next twelve months[48] - Deferred revenue includes client deposits of $17,288,000 and deferred revenue of $19,740,000 as of December 31, 2025[46] - One client accounted for 14.1% of revenue during the three months ended December 31, 2025, down from 20.5% in the same period of 2024[43] Debt and Financing - The Company is exploring potential debt refinancing alternatives to address liquidity needs and compliance with covenants[31] - The Company has a Term Loan Facility with an original principal amount of $165 million, a delayed draw term loan facility of $35 million, and a revolving credit facility of $15 million[61] - The effective interest rates for the Term Loan and Initial DDTL are 11.57% and 11.56% respectively for the three months ended December 31, 2025[60] - The Company issued $22,000 in Second Lien Notes and Warrants, with $17,000 in cash and cancellation of $8,333 of existing Notes[93] - The Company issued $140,000 principal amount of Convertible Senior Notes, with an option for an additional $15,000[103] Legal and Regulatory Matters - The Company recorded a settlement accrual of $11,000 as of December 31, 2025, related to ongoing negotiations for a securities class action lawsuit[122] - The Company is involved in three putative class actions related to a cybersecurity incident in August 2025, which have been consolidated under one caption[158] - The Company is subject to a Resolution Agreement and Plea Agreement with the DOJ, involving payments totaling $22,000 in fines, with specific payment schedules[164] - The Company has taken a reserve equal to the proposed settlement amount of $795 for the PAGA Settlement Agreement, which is subject to court approval[159] Corporate Governance and Compliance - The Company agreed to implement corporate governance measures for at least five years, including having a separate CEO and Board Chairperson[156] - Management's fiscal 2026 annual operating plan forecasts noncompliance with financial covenants for the remainder of fiscal 2026[27] Other Financial Metrics - The effective tax rate for the Company was 5.5% for the three months ended December 31, 2025, down from 7.3% in the same period of 2024[144] - Stock-based compensation expense for the three months ended December 31, 2025, was $1,382 million, down from $1,770 million in the same period of 2024[140] - The Company’s accrued expenses and other current liabilities total $41,148 as of December 31, 2025, down from $44,722 as of September 30, 2025[121]