- Total Revenue: $105.8 million for Q3 2024, down 33% from $157.5 million in Q3 2023.
- Consolidated Revenue (Nine Months Ended June 30, 2024): $360.3 million, down 16.5% from $431.7 million in the prior year period.
- DSA Revenue (Q3 2024): $44.2 million, a decrease of approximately 6% from $46.8 million in Q3 2023.
- RMS Revenue (Q3 2024): $61.6 million, down 44.4% from $110.7 million in Q3 2023.
- Operating Loss (Q3 2024): $20.8 million compared to operating income of $8.8 million in Q3 2023.
- Net Loss Attributable to Common Shareholders (Q3 2024): $26.1 million or $1 loss per diluted share, compared to net income of $1.8 million or $0.07 earnings per diluted share in Q3 2023.
- Adjusted EBITDA (Q3 2024): $0.1 million, less than 1% of total revenues, compared to $30.5 million or 19.4% of total revenue in Q3 2023.
- Interest Expense (Q3 2024): $12.1 million, up from $10.8 million in Q3 2023.
- Cash and Cash Equivalents (June 30, 2024): $14.4 million, down from $35.5 million on September 30, 2023.
- Total Debt (June 30, 2024): $382.4 million, relatively consistent with $377.7 million on September 30, 2023.
- Net Cash Used by Operations (Nine Months Ended June 30, 2024): $4.4 million, compared to cash provided by operations of $9.1 million in the prior year period.
- Capital Expenditures (Q3 2024): $4.4 million or 4.2% of total revenue.
- Warning! GuruFocus has detected 7 Warning Signs with NOTV.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Inotiv Inc (NASDAQ:NOTV) resolved the Virginia DOJ investigation and related settlement, and the US Attorney's Office for the Southern District of Florida is no longer investigating the company.
- The company completed the UK site construction and consolidation projects, reducing expenses and enhancing revenue potential.
- Inotiv Inc (NASDAQ:NOTV) achieved year-to-date and quarter-over-quarter sales increases and margin improvements in its diet business globally.
- The company saw a 32% year-over-year increase in NHP boarding and breeding service revenues.
- Inotiv Inc (NASDAQ:NOTV) implemented integration initiatives and organizational changes, reducing general and administrative expenses and showing signs of recovery in the NHP market.
Negative Points
- Pricing pressures in the DSA business impacted revenue growth and margins.
- Year-over-year declines in sales in the discovery business due to market softness.
- NHP sales and margins were significantly down, with profits decreasing by approximately $36 million for the first nine months of fiscal year 2024.
- Overall adjusted EBITDA decreased by roughly $29 million year-to-date compared to the same period last year.
- The company faced challenges and volatility in the RMS business segments, particularly in the NHP business, due to industry market dynamics and legal issues.
Q & A Highlights
Q: What impact will the resolution of the Florida DOJ investigation have on legal expenses? A: Beth Taylor, CFO, stated that legal expenses related to the Florida DOJ and Cumberland matters should decrease by about $2 million to $3 million per quarter, as the company has spent approximately $21 million on these cases over the last two years.
Q: When can we expect to see improvements in the NHP business? A: Bob Leasure, CEO, mentioned that there will be an improvement in Q4, with a potential 120%-130% increase in NHP sales compared to Q3. The pricing will align with previous quarters, and margins are expected to improve as higher-cost inventory is sold off.
Q: How is the company addressing industry headwinds, particularly in the biotech and pharma sectors? A: Bob Leasure noted that Inotiv is less exposed to large pharma, with over 95% of sales coming from biotech. The company is focusing on differentiating through service and gaining market share, despite some pricing pressures.
Q: Can you elaborate on the end customer NHP inventory levels and expectations for normalization? A: Bob Leasure explained that many customers had excess inventory last year, but current inquiries and purchase orders suggest a return to more normalized levels. The company is diversifying its customer base, reducing reliance on any single customer.
Q: What are the company's plans for long-term contracts in the NHP business? A: Bob Leasure indicated that long-term contracts, ranging from one to five years, are being pursued with a half dozen to a dozen customers, which could cover over 75% of NHP sales. This strategy aims to provide recurring revenue and stability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on
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