In This Article:
Release Date: December 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Inotiv Inc (NASDAQ:NOTV) reported a 23% increase in quarter-over-quarter revenue for Q4 2024, reaching $130.4 million.
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The company completed significant improvements in its North American transportation and distribution systems and consolidated its RMS sites.
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There was a notable increase in NHP sales, with a 177.9% rise in Q4 2024 compared to Q3 2024.
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Inotiv Inc (NASDAQ:NOTV) has strong commitments for purchases from both existing and new customers for 2025.
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The company has expanded its NHP supply base and continues to audit suppliers for compliance with animal welfare and health standards.
Negative Points
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Total revenue for Q4 2024 decreased by 7.3% compared to Q4 2023, primarily due to a decline in DSA and RMS revenue.
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The average selling price of NHPs in Q4 2024 was down approximately 33.4% compared to the prior year period.
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Inotiv Inc (NASDAQ:NOTV) reported an operating loss of $13.2 million for Q4 2024, compared to an operating income of $2.5 million in Q4 2023.
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The company experienced a consolidated net loss attributable to common shareholders of $18.9 million in Q4 2024.
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Interest expenses increased to $12.3 million in Q4 2024, up from $11.3 million in the previous year's fiscal fourth quarter.
Q & A Highlights
Q: Can you quantify the impact of higher-cost inventory on gross margins for NHPs in the quarter? A: Bob Leisure, CEO: We estimate that our gross margins were about half of what we would normally achieve. It was crucial to move the higher-cost inventory to make room for new, lower-cost inventory due to space constraints.
Q: How does the outlook for the NHP business in 2025 compare to 2024? A: Bob Leisure, CEO: We have pre-sold more NHPs going into 2025 than we did for 2024, including to multiple new customers. Our colony management services have been growing at about 20-25% annually, providing recurring revenue. We expect a more consistent demand cycle in 2025.
Q: Do you still see the adjusted EBITDA margin target of 18-22% as achievable in the mid-term? A: Bob Leisure, CEO: Yes, we believe it's achievable, especially with improvements from site optimizations and cost reductions. However, reaching the higher end of that range would require some recovery in the industry.
Q: Should we expect growth in 2025 compared to 2024? A: Bob Leisure, CEO: Yes, we anticipate growth in 2025, particularly in the NHP business, diet bedding, enrichment, and potentially in discovery services as well.