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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 5, 2025
INOTIV, INC.
(Exact name of registrant as specified in its charter)
Indiana   0-23357   35-1345024
(State or other jurisdiction of
 incorporation)
  (Commission File Number)   (IRS Employer Identification No.)
2701 KENT AVENUE
WEST LAFAYETTE,INDIANA
 
47906-1382
(Address of principal executive offices)   (Zip Code)
Registrant's telephone number, including area code: (765) 463-4527
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange
 on which registered
Common Shares NOTV The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o The information provided in Item 2.02 and Item 9.01, including Exhibit 99.1, of this Form 8-K is being furnished and shall not be deemed "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference in such a filing.
Item 2.02.    Results of Operations and Financial Condition.
On February 5, 2025, Inotiv, Inc. issued a press release announcing financial results for the three months ended December 31, 2024. The full text of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.
Item 9.01.    Financial Statements and Exhibits.
(d)Exhibits
Exhibit
No.
Description
99.1
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
INOTIV, INC.
Date: February 5, 2025 By: /s/ Beth A. Taylor
Chief Financial Officer,
Senior Vice President—Finance

EX-99.1 2 notv-20240205xex991.htm EX-99.1 Document

Exhibit 99.1

Inotiv Reports First Quarter Financial Results for Fiscal 2025 and Provides Business Update

–Enhanced liquidity by $27.5 million through the issuance of 6.9 million common shares
–First quarter fiscal 2025 revenue declined 11.5% to $119.9 million
–Conference call scheduled for today at 4:30 pm ET

WEST LAFAYETTE, IN, February 5, 2025 – Inotiv, Inc. (Nasdaq: NOTV) (the “Company”), a leading contract research organization specializing in nonclinical and analytical drug discovery and development services and research models and related products and services, today announced financial results for the three months (“Q1 FY 2025”) ended December 31, 2024.

Revenue by Segment (in millions of USD)
Three Months Ended December 31, %
change
2024 2023
(unaudited) (unaudited)
DSA (Discovery & Safety Assessment) $42.8 $44.7 (4.2) %
RMS (Research Models & Services) $77.1 $90.8 (15.1) %
Total $119.9 $135.5 (11.5) %

Management Commentary

Robert Leasure Jr., President and Chief Executive Officer, commented, “We are dedicated to building a stronger, more consistent company that delivers value to our clients, employees, and shareholders. In the first quarter of fiscal 2025, we continued to make progress in our top priorities, such as unifying our operations under one brand and as one company, strengthening our financial stability, and enhancing the client experience. Our recent equity offering generated $27.5 million in net proceeds, which allows us to continue to make thoughtful, strategic decisions, and to drive sustainable growth creating shareholder value.

"To reduce revenue volatility, we have expanded our NHP client base and secured pre-sales for calendar year 2025. Additionally, we expect our colony management services to experience steady growth and increased revenue, building on the momentum from 2024. We are continuing to advance the optimization of our North American transportation and distribution systems for a smoother, more reliable experience for our clients while improving overall efficiency. Finally, once we complete the next phase of our North American RMS site optimization plan, we anticipate annual cost savings of approximately $4.0 to $5.0 million. These efficiencies are expected to help us maintain high-quality service, reduce production costs, and continue being a trusted partner in delivering consistent, reliable service for our clients."

Highlights

Q1 FY 2025 Highlights

•Revenue was $119.9 million in Q1 FY 2025, a decrease of $15.6 million or 11.5%, compared to $135.5 million during the three months ended December 31, 2023 (“Q1 FY 2024”), primarily driven by a decrease of $13.7 million, or 15.1%, in Research Models and Services (“RMS”) revenue and a $1.9 million, or 4.2%, decrease in Discovery and Safety Assessment ("DSA") revenue.
•Consolidated net loss for Q1 FY 2025 was $27.6 million, or 23.0% of total revenue, compared to consolidated net loss of $15.8 million, or 11.7% of total revenue, in Q1 FY 2024.
•Adjusted EBITDA1 in Q1 FY 2025 was $2.6 million, or 2.2% of total revenue, compared to $9.6 million, or 7.1% of total revenue, in Q1 FY 2024.
•Book-to-bill ratio for Q1 FY 2025 was 1.01x for the DSA services business.
•DSA backlog was $130.4 million at December 31, 2024 compared to $129.9 million at September 30, 2024 and $152.3 million at December 31, 2023.




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

Operational and Capital Resources Highlights

•On October 24, 2024, the Company and Orient BioResource Center entered into a Third Amendment to extend the maturity date of the Seller Payable to January 27, 2026.
•In closings on December 19, 2024 and December 30, 2024, the Company raised approximately $27.5 million in net proceeds from its underwritten public offering of a total of 6.9 million common shares at a price to the public of $4.25 per share.

First Quarter Fiscal 2025 Financial Results (Three Months Ended December 31, 2024)

Revenue decreased 11.5% to $119.9 million in Q1 FY 2025 as compared to $135.5 million in Q1 FY 2024. The lower total revenue in the first quarter was driven by a $13.7 million decrease in RMS revenue and a $1.9 million decrease in DSA revenue. The decrease in RMS revenue was due to lower non-human primate ("NHP") related product and service revenue of $13.5 million mainly as a result of lower pricing for NHPs. DSA revenues decreased primarily due to a decrease in discovery service revenue.

Operating loss was $15.5 million in Q1 FY 2025 as compared to an operating loss of $9.4 million in Q1 FY 2024. The increase in operating loss was primarily driven by a decrease in RMS operating income of $6.3 million, or 123.3%. The decrease in RMS operating income was driven by the decrease in revenue discussed above, partially offset by a $6.4 million decrease in cost of revenue. The decrease in RMS cost of revenue was primarily driven by decreases in costs associated with NHP-related product and service revenue of $3.9 million, as well as decreases in restructuring costs, transportation costs and costs related to sites closed in connection with our optimization plan.

Cash and cash equivalents of $38.0 million at December 31, 2024, compares to $21.4 million at September 30, 2024. Cash used in operating activities was $4.5 million for Q1 FY 2025 compared to $6.5 million for Q1 FY 2024. For Q1 FY 2025, capital expenditures totaled $4.5 million compared to $5.6 million for Q1 FY 2024. Total debt, net of debt issuance costs, as of December 31, 2024, was $396.0 million. As of December 31, 2024, 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, February 5, 2025, at 4:30 pm ET to discuss first quarter fiscal 2025 results.
Interested parties may participate in the call by dialing:
•(800) 579-2543 (Domestic)
•(785) 424-1789 (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=1703666&tp_key=aaee0f56f1

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 months ended December 31, 2024 and 2023 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/provision, 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, (gain) loss on disposition of assets and other unusual, third party costs. 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, 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.

Company Contact Investor Relations
Inotiv, Inc. LifeSci Advisors
Beth A. Taylor, Chief Financial Officer Steve Halper
(765) 497-8381 (646) 876-6455
beth.taylor@inotiv.com shalper@lifesciadvisors.com



INOTIV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended
December 31,
2024 2023
Service revenue $ 53,557  $ 53,863 
Product revenue 66,319  81,638 
Total revenue $ 119,876  $ 135,501 
Costs and expenses:
Cost of services provided (excluding depreciation and amortization of intangible assets) 39,244  39,077 
Cost of products sold (excluding depreciation and amortization of intangible assets) 55,594  62,951 
Selling 5,137  5,348 
General and administrative 19,152  19,927 
Depreciation and amortization of intangible assets 14,179  14,250 
Other operating expense 2,077  3,319 
Operating loss $ (15,507) $ (9,371)
Other (expense) income:
Interest expense (13,838) (11,364)
Other (expense) income (463) 1,413 
Loss before income taxes $ (29,808) $ (19,322)
Income tax benefit 2,178  3,494 
Consolidated net loss $ (27,630) $ (15,828)
Less: Net loss attributable to noncontrolling interests —  (440)
Net loss attributable to common shareholders $ (27,630) $ (15,388)
Loss per common share
Net loss attributable to common shareholders:
Basic $ (1.02) $ (0.60)
Diluted $ (1.02) $ (0.60)
Weighted-average number of common shares outstanding:
Basic 27,160 25,764
Diluted 27,160 25,764



INOTIV, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
December 31, September 30,
2024 2024
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 38,043  $ 21,432 
Trade receivables and contract assets, net of allowances for credit losses of $6,421 and $6,931, respectively 70,140  73,560 
Inventories, net 31,557  18,173 
Prepaid expenses and other current assets 29,661  50,248 
Assets held for sale 2,016  — 
Total current assets 171,417  163,413 
Property and equipment, net 182,279  188,328 
Operating lease right-of-use assets, net 48,827  49,165 
Goodwill 94,286  94,286 
Other intangible assets, net 264,767  274,396 
Other assets 11,331  11,773 
Total assets $ 772,907  $ 781,361 
Liabilities and shareholders' equity
Current liabilities:
Accounts payable $ 24,954  $ 33,526 
Accrued expenses and other current liabilities 25,500  28,218 
Fees invoiced in advance 46,129  41,986 
Current portion of long-term operating lease 9,505  11,774 
Current portion of long-term debt 3,037  3,538 
Total current liabilities 109,125  119,042 
Long-term operating leases, net 41,588  40,010 
Long-term debt, less current portion, net of debt issuance costs 392,978  389,801 
Other long-term liabilities 35,360  34,963 
Deferred tax liabilities, net 24,024  27,041 
Total liabilities 603,075  610,857 
Shareholders’ equity:
Common shares, no par value:
Authorized 74,000,000 shares at December 31, 2024 and at September 30, 2024; 33,717,662 issued and outstanding at December 31, 2024 and 26,015,129 at September 30, 2024 8,391  6,466 
Additional paid-in capital 752,136  724,789 
Accumulated deficit (589,794) (562,163)
Accumulated other comprehensive (loss) income (901) 1,412 
Total equity 169,832  170,504 
Total liabilities and shareholders’ equity $ 772,907  $ 781,361 



INOTIV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Three Months Ended
December 31,
2024 2023
Operating activities:
Consolidated net loss $ (27,630) $ (15,828)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 14,179  14,250 
Employee stock compensation expense 1,770  1,897 
Changes in deferred taxes (2,802) (5,318)
Provision for expected credit losses (453) (438)
Amortization of debt issuance costs and original issue discount 1,288  846 
Non-cash interest and accretion expense 3,076  1,688 
Other non-cash operating activities 643  (1,147)
Changes in operating assets and liabilities:
Trade receivables and contract assets 3,391  (1,497)
Inventories (13,632) 6,058 
Prepaid expenses and other current assets 19,606  7,096 
Operating lease right-of-use assets and liabilities, net (353) 138 
Accounts payable (7,240) (2,845)
Accrued expenses and other current liabilities (2,343) (2,497)
Fees invoiced in advance 5,071  (20,012)
Other asset and liabilities, net 932  11,064 
Net cash used in operating activities (4,497) (6,545)
Investing activities:
Capital expenditures (4,459) (5,572)
Proceeds from sale of property and equipment —  1,529 
Net cash used in investing activities (4,459) (4,043)
Financing activities:
Payments on revolving credit facility (20,000) — 
Payments on senior term notes and delayed draw term loans (691) (691)
Borrowings on revolving credit facility 20,000  — 
Issuance of common shares 27,524  — 
Other financing activities, net (708) (2,230)
Net cash provided by (used in) financing activities 26,125  (2,921)
Effect of exchange rate changes on cash and cash equivalents (558) 18 
Net increase (decrease) in cash and cash equivalents 16,611  (13,491)
Cash and cash equivalents at beginning of period 21,432  35,492 
Cash and cash equivalents at end of period $ 38,043  $ 22,001 
Supplemental disclosure of cash flow information:
Cash paid for interest $ 10,888  $ 11,068 
Income taxes paid, net $ 271  $ 298 



INOTIV, INC.
RECONCILIATION OF GAAP TO NON-GAAP
SELECT BUSINESS SEGMENT INFORMATION
(In thousands)
(Unaudited)
  Three Months Ended
December 31,
  2024 2023
DSA
Revenue 42,822  44,698 
Operating income
1,946  1,593 
Operating income as a % of total revenue 1.6  % 1.2  %
Add back:
Depreciation and amortization 4,583  4,409 
Restructuring costs (1) —  113 
Startup costs (2) 559  830 
Total non-GAAP adjustments to operating income 5,142  5,352 
Non-GAAP operating income 7,088  6,945 
Non-GAAP operating income as a % of DSA revenue 16.6  % 15.5  %
Non-GAAP operating income as a % of total revenue 5.9  % 5.1  %
 
RMS
Revenue 77,054  90,803 
Operating (loss) income (1,185) 5,078 
Operating (loss) income as a % of total revenue (1.0  %) 3.7  %
Add back:    
Depreciation and amortization 9,438  9,737 
Restructuring costs (1) 224  921 
Amortization of inventory step up —  102 
 Other unusual, third party costs (3) 961  1,086 
Total non-GAAP adjustments to operating (loss) income
10,623  11,846 
Non-GAAP operating income 9,438  16,924 
Non-GAAP operating income as a % of RMS revenue 12.2  % 18.6  %
Non-GAAP operating income as a % of total revenue 7.9  % 12.5  %



  Three Months Ended
December 31,
  2024 2023
Unallocated Corporate Operating Loss (16,268) (16,042)
Unallocated corporate operating loss as a % of total revenue (13.6) % (11.8) %
Add back:
Depreciation and amortization 158  104 
Stock compensation expense 1,770  1,897 
Acquisition and integration costs —  70 
Total non-GAAP adjustments to operating loss 1,928  2,071 
Non-GAAP operating loss (14,340) (13,971)
Non-GAAP operating loss as a % of total revenue (12.0) % (10.3) %
Total
Revenue 119,876  135,501 
Operating loss (15,507) (9,371)
Operating loss as a % of total revenue (12.9) % (6.9  %)
Add back:
Depreciation and amortization 14,179  14,250 
Stock compensation expense 1,770  1,897 
Restructuring costs (1) 224  1,034 
Acquisition and integration costs —  70 
Amortization of inventory step up —  102 
Startup costs (2) 559  830 
Other unusual, third party costs (3) 961  1,086 
Total non-GAAP adjustments to operating loss 17,693  19,269 
Non-GAAP operating income 2,186  9,898 
Non-GAAP operating income as a % of total revenue 1.8  % 7.3  %
(a)Adjustments to certain GAAP reported measures for the three months ended December 31, 2024 and 2023 include, but are not limited to, the following:
(1)For the three months ended December 31, 2024 and 2023, primarily represents costs incurred in connection with the exit of multiple sites and the enablement of the in-house integration of Inotiv’s North American transportation operations as previously disclosed.
(2)For the three months ended December 31, 2024 and 2023, primarily represents costs related to the development and initiation of new service offerings that are not yet revenue generating for the respective periods.
(3)For the three months ended December 31, 2024, primarily represents third party legal costs incurred in connection with the Department of Justice and certain other legal matters. For the three months ended December 31, 2023, primarily represents third party legal costs incurred in connection with the Department of Justice and certain remediation costs.



INOTIV, INC.
RECONCILIATION OF GAAP NET LOSS TO NON-GAAP ADJUSTED EBITDA
(In thousands)
(Unaudited)
  Three Months Ended
December 31,
  2024 2023
GAAP Consolidated Net Loss $ (27,630) $ (15,828)
Adjustments (a)
Interest expense 13,838 11,364
Income tax benefit (2,178) (3,494)
Depreciation and amortization 14,179 14,250
Stock compensation expense 1,770 1,897
Acquisition and integration costs 70
Startup costs (1)
559 830
Restructuring costs (2)
224 1,034
Unrealized foreign exchange (gain) loss 825 (1,029)
Amortization of inventory step up 102
(Gain) loss on disposition of assets 62 (666)
Other unusual, third party costs (3)
961 1,086
Adjusted EBITDA
$ 2,610 $ 9,616
GAAP consolidated net loss as a percent of total revenue (23.0) % (11.7) %
Adjustments as a percent of total revenue 25.2  % 18.8  %
Adjusted EBITDA as a percent of total revenue 2.2  % 7.1  %
(a)Adjustments to certain GAAP reported measures for the three months ended December 31, 2024 and 2023 include, but are not limited to, the following:
(1)For the three months ended December 31, 2024 and 2023, primarily represents costs related to the development and initiation of new service offerings that are not yet revenue generating for the respective periods.
(2)For the three months ended December 31, 2024 and 2023, primarily represents costs incurred in connection with the exit of multiple sites and the enablement of the in-house integration of Inotiv’s North American transportation operations as previously disclosed.
(3)For the three months ended December 31, 2024, primarily represents third party legal costs incurred in connection with the Department of Justice and certain other legal matters. For the three months ended December 31, 2023, primarily represents third party legal costs incurred in connection with the Department of Justice and certain remediation costs.