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Highlights

Q2 FY 2025 Highlights

• Revenue was $124.3 million in Q2 FY 2025, an increase of $5.3 million or 4.4%, compared to $119.0 million during the three months ended March 31, 2024 (“Q2 FY 2024”), driven by an increase of $6.6 million, or 9.1%, in Research Models and Services ("RMS") revenue and a $1.3 million, or 2.8%, decrease in Discovery and Safety Assessment ("DSA") revenue.

• Consolidated net loss for Q2 FY 2025 was $14.9 million, or 12.0% of total revenue, compared to consolidated net loss of $48.1 million, or 40.4% of total revenue, in Q2 FY 2024.

• Adjusted EBITDA¹ in Q2 FY 2025 was $8.0 million, or 6.4% of total revenue, compared to $3.1 million, or 2.6% of total revenue, in Q2 FY 2024.

• Book-to-bill ratio for Q2 FY 2025 was 1.01x for the DSA services business.

• DSA backlog was $130.8 million at March 31, 2025 compared to $142.1 million at March 31, 2024 and $130.4 million at December 31, 2024.
  

^{1 This is a non-GAAP financial measure. Refer to “Note on Non-GAAP Financial Measures” in this release for further information.}

YTD FY 2025 Highlights

• Revenue was $244.2 million in YTD FY 2025, a decrease of $10.3 million or 4.1%, compared to $254.5 million during the six months ended March 31, 2024 (“YTD FY 2024”), driven by a decrease of $7.2 million, or 4.4%, in RMS revenue and a $3.2 million, or 3.5%, decrease in DSA revenue.

• Consolidated net loss for YTD FY 2025 was $42.5 million, or 17.4% of total revenue, compared to consolidated net loss of $63.9 million, or 25.1% of total revenue, in YTD FY 2024.

• Adjusted EBITDA¹ in YTD FY 2025 was $10.6 million, or 4.3% of total revenue, compared to $12.7 million, or 5.0% of total revenue, in YTD FY 2024.

• Book-to-bill ratio for YTD FY 2025 was 1.01x for the DSA services business.

Recent Developments

• Two properties are under contract to be sold and are held for sale as of March 31, 2025 in connection with our U.S. optimization plans.

• As we have continued to work through our optimization plans, we now expect the U.S. optimization plans to be complete by the end of the second quarter of fiscal 2026.

• On February 14, 2025, the Company (through two of its subsidiaries) entered into a Settlement Agreement with Freese and Nichols, Inc. ("FNI") to settle a lawsuit that the Company had filed against FNI, which provides that the parties fully resolve all claims set forth in such lawsuit, without any admission of liability. The Company received the $7.6 million settlement payment in full prior to March 31, 2025.
  

Second Quarter Fiscal 2025 Financial Results (Three Months Ended March 31, 2025)

Revenue increased 4.4% to $124.3 million in Q2 FY 2025 as compared to $119.0 million in Q2 FY 2024. The higher total revenue in Q2 FY 2025 was driven by a $6.6 million increase in RMS revenue, partially offset by a $1.3 million decrease in DSA revenue. The increase in RMS revenue was due primarily to increased non-human primate ("NHP") related product and service revenue. DSA revenues decreased primarily due to a decrease in general toxicology services revenue.

Operating loss was $2.9 million in Q2 FY 2025 as compared to $43.1 million in Q2 FY 2024. The decrease in operating loss was primarily driven by a change from RMS operating loss of $30.6 million in Q2 FY 2024 to RMS operating income of $11.4 million in Q2 FY 2025, a change of 137.4%. The change in RMS operating income (loss) was driven by decreased operating expenses and the increase in revenue discussed above. The decrease in RMS operating expenses was primarily due to the $26.5 million charge related to an agreement in principle with the U.S. Department of Justice (the "DOJ") (subsequently replaced by the Resolution Agreement and Plea Agreement) that was incurred during Q2 FY 2024, which did not repeat during Q2 FY 2025, and the $7.6 million settlement payment we received during Q2 FY 2025 from FNI.

Fiscal 2025 Financial Results (Six Months Ended March 31, 2025)

Revenue decreased 4.1% to $244.2 million in YTD FY 2025 as compared to $254.5 million in YTD FY 2024. The lower total revenue was driven by a $7.2 million decrease in RMS revenue and a $3.2 million decrease in DSA revenue. The decrease in RMS revenue was primarily due to lower NHP product and service revenue, mainly as a result of lower pricing in connection with the sale of NHPs. DSA revenues decreased primarily due to a decrease in discovery services revenue and general toxicology services revenue.

Operating loss was $18.4 million in YTD FY 2025 as compared to $52.5 million in YTD FY 2024. The decrease in operating loss was primarily driven by a change from RMS operating loss of $25.5 million in YTD FY 2024 to RMS operating income of $10.2 million in YTD FY 2025, a change of 140.1%. The change in RMS operating income (loss) was primarily due to the $26.5 million charge related to an agreement in principle with the DOJ (subsequently replaced by the Resolution Agreement and Plea Agreement) that was incurred during YTD FY 2024, which did not repeat during YTD FY 2025 and the $7.6 million settlement payment we received from FNI during YTD FY 2025.

Cash and cash equivalents of $19.3 million at March 31, 2025, compared to $21.4 million at September 30, 2024. Cash used in operating activities was $17.3 million for YTD FY 2025 compared to $10.4 million of cash provided by operating activities for YTD FY 2024. For YTD FY 2025, capital expenditures totaled $9.9 million compared to $12.6 million for YTD FY 2024. Total debt, net of debt issuance costs, as of March 31, 2025, was $399.5 million. As of March 31, 2025, there were no borrowings on the Company’s $15.0 million revolving credit facility.

Webcast and Conference Call
Management will host a conference call on Wednesday, May 7, 2025, at 4:30 pm ET to discuss first quarter fiscal 2025 results.
Interested parties may participate in the call by dialing:

• (800) 245-3047 (Domestic)

• (203) 518-9765(International)

• "Inotiv" (Conference ID)
  

The live conference call webcast will be accessible in the Investors section of the Company’s web site and directly via the following link:

https://viavid.webcasts.com/starthere.jsp?ei=1712184&tp_key=c93d44f12f

For those who cannot listen to the live broadcast, an online replay will be available in the Investors section of Inotiv’s web site at: https://ir.inotiv.com/events-and-presentations/default.aspx.

Note on Non-GAAP Financial Measures

This press release contains financial measures that are not calculated in accordance with generally accepted accounting principles in the United States (GAAP), including Adjusted EBITDA and Adjusted EBITDA as a percentage of total revenue for the three and six months ended March 31, 2025 and 2024 and selected business segment information for those periods. Adjusted EBITDA as reported herein refers to a financial measure that excludes from consolidated net loss, statements of operations line items interest expense and income tax benefit, as well as non-cash charges for depreciation and amortization, stock compensation expense, acquisition and integration costs, startup costs, restructuring costs, unrealized foreign exchange (gain) loss, amortization of inventory step up, loss (gain) on disposition of assets, the settlement we received from FNI, other unusual, third party costs and the charge in connection with the Resolution Agreement and Plea Agreement. The adjusted business segment information excludes from operating loss and unallocated corporate operating expenses for these same expenses. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in this press release.

The Company believes that these non-GAAP measures provide useful information to investors. Among other things, they may help investors evaluate the Company’s ongoing operations. They can assist in making meaningful period-over-period comparisons and in identifying operating trends that would otherwise be masked or distorted by the items subject to the adjustments. Management uses these non-GAAP measures internally to evaluate the performance of the business, including to allocate resources. 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.

Management has chosen to provide this supplemental information to investors, analysts, and other interested parties to enable them to perform additional analyses of our results and to illustrate our results giving effect to the non-GAAP adjustments. Management strongly encourages investors to review the Company's condensed consolidated financial statements and publicly filed reports in their entirety and cautions investors that the non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures.

About the Company

Inotiv, Inc. 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. The Company’s products and services focus on bringing new drugs and medical devices through the discovery and preclinical phases of development, all while increasing efficiency, improving data, and reducing the cost of taking new drugs and medical devices to market. Inotiv is committed to supporting discovery and development objectives as well as helping researchers realize the full potential of their critical research and development projects, all while working together to build a healthier and safer world. Further information about Inotiv can be found here: https://www.inotiv.com/.

This release contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, statements regarding our intent, belief or current expectations with respect to (i) our strategic plans; (ii) trends in the demand for our services and products; (iii) trends in the industries that consume our services and products; (iv) market and company-specific impacts of NHP supply and demand matters; (v) compliance with the Resolution Agreement and Plea Agreement and the expected impacts on the Company related to the compliance plan and compliance monitor, and the expected amounts, timing and expense treatment of cash payments and other investments thereunder; (vi) our ability to service our outstanding indebtedness and to comply or regain compliance with financial covenants, including those established by the Seventh Amendment to our Credit Agreement; (vii) our current and forecasted cash position; (viii) our ability to make capital expenditures, fund our operations and satisfy our obligations; (ix) our ability to manage recurring and unusual costs; (x) our ability to execute on and realize the expected benefits related to our restructuring and site optimization plans; (xi) our expectations regarding the volume of new bookings, pre-sales, pricing, cost savings initiatives, expansion of services, operating income or losses and liquidity; (xii) our ability to effectively fill the recent expanded capacity or any future expansion or acquisition initiatives undertaken by us; (xiii) our ability to develop and build infrastructure and teams to manage growth and projects; (xiv) our ability to continue to retain and hire key talent; (xv) our ability to market our services and products under our corporate name and relevant brand names; (xvi) our ability to develop new services and products; (xvii) our ability to negotiate amendments to the Credit Agreement or obtain waivers related to the financial covenants defined within the Credit Agreement; and (xviii) the impact of macroeconomic factors, including but not limited to tariffs, including those detailed in the Company's filings with the U.S. Securities and Exchange Commission. Further discussion of these risks, uncertainties, and other matters can be found in the Risk Factors detailed in our Annual Report on Form 10-K as filed on December 4, 2024, as well as other filings we make with the Securities and Exchange Commission.