— Fiscal year 2023 revenue up 4.5% to $572.4 million, achieving full year revised guidance
— Achievements in the past fiscal year to expand DSA capacity, develop new services and reduce outsourcing expected to drive continued growth of fiscal 2024 DSA revenues
— Anticipate achieving the balance of expected expense reductions in fiscal 2024
— Conference call begins today at 4:30 pm ET

WEST LAFAYETTE, Ind., Dec. 11, 2023 (GLOBE NEWSWIRE) -- 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 (“Q4 FY 2023”) and twelve months (“FY 2023”) ended September 30, 2023.

Revenue by Segment

(in millions of USD)Three months ended
September 30		 %
change		 Fiscal years ended
September 30, 		 %
change
 2023 2022   2023 2022  
 (unaudited) (unaudited)        
DSA (Discovery & Safety Assessment)$50.2 $44.2 13.6% $185.1 $165.3 12.0%
RMS (Research Models & Services)90.5 106.3 (14.9)% 387.3 382.4 1.3%
Total$140.7 $150.5 (6.5)% $572.4 $547.7 4.5%


Management Commentary

Robert Leasure Jr., President and Chief Executive Officer, commented, “We are pleased to note recent accomplishments including quarter over quarter DSA revenue growth and corresponding margin improvements, completion of several of the site optimization projects, expansion projects, reduction in some of our outsourcing, and growing backlog conversion rates. The cumulative achievements in fiscal 2023 across all our core initiatives to improve profitability, operational efficiencies and to grow sales sets the stage for the next chapter of Inotiv’s story. We remain strongly positioned to continue to grow the DSA business in 2024. With the recent DSA expansions and services added, we can now effectively sell services to multiple sectors and are building the sales and marketing organization to expand our customer base in: Drug Discovery and Translational Science, Drug Development, Chemical Development, and Medical Device Development, including Safety Assessment in these sectors.

Looking ahead, we also expect to close on contracts of assets held for sale, complete validation of new facilities and equipment enabling new capacity, the ramping of new services, the in house transition of our transportation services and completing our facility improvements and consolidation of our UK facilities. In NHPs, we continue to monitor the situations related to Cambodia and China and continue to expand our supply base,” concluded Mr. Leasure.

Financial Highlights

Q4 FY 2023 Highlights

  • Revenue was $140.7 million in Q4 FY 2023 as compared to $150.5 million during the three months ended September 30, 2022 (“Q4 FY 2022”), driven by a reduction of $15.8 million, or 14.9%, in Research Models and Services (“RMS”) revenue partially offset by a $6.0 million, or 13.6%, increase in Discovery and Safety Assessment (“DSA”) revenue.
  • Consolidated net loss for Q4 FY 2023 was $8.7 million, or 6.2% of total revenue, compared to consolidated net loss of $243.6 million, or 161.9% of total revenue, in Q4 FY 2022.
  • Adjusted EBITDA1 was $23.7 million, or 16.8% of total revenue, compared to $18.3 million, or 12.1% of total revenue, in Q4 FY 2022.
  • Net book-to-bill ratio for Q4 FY 2023 was 0.65x for the DSA services business.
  • DSA backlog was $132.1 million at September 30, 2023 down from $147.2 million at September 30, 2022.

FY 2023 Highlights

  • Revenue grew to $572.4 million in FY 2023 from $547.7 million during the twelve months ended September 30, 2022 (“FY 2022”), driven by a $19.8 million, or 12.0%, increase in DSA revenue and a $4.9 million, or 1.3%, increase in RMS revenue.
  • Consolidated net loss for FY 2023 was $104.9 million, or 18.3% of total revenue, compared to consolidated net loss of $337.3 million, or 61.6% of total revenue, in FY 2022. The FY 2023 consolidated net loss included a $66.4 million non-cash goodwill impairment charge related to our RMS segment. The FY 2022 consolidated net loss included a $236.0 million non-cash goodwill impairment charge related to our RMS segment and one-time charges of $56.7 million of fair value remeasurement of the embedded derivative component of the convertible notes issued in September 2021 and $23.0 million of post-combination stock compensation expense relating to the adoption of the Envigo Equity Plan.
  • Adjusted EBITDA1 was $65.8 million, or 11.5% of total revenue, compared to $90.5 million, or 16.5% of total revenue, in FY 2022.
  • Net book-to-bill ratio was 0.92x for the DSA services business.

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

DSA and RMS Highlights

  • The Company previously announced several site optimization initiatives which it was able to complete as planned during FY 2023. The Company continues to execute on its site optimization plan for its Blackthorn, UK site. The relocation of operating activities from Blackthorn into its Hillcrest, UK site is expected to be completed by the end of the second quarter of fiscal 2024.
  • The expansion activities at Fort Collins, CO, were completed by the end of October 2023 and the expanded site is completing the validation of the facility and equipment and plans to be operational early in the second quarter of fiscal 2024.
  • During the three months ended September 30, 2023, the Company closed the sale of its Israeli businesses, as well as its Boyertown, Pennsylvania facility.
  • The Company's facilities in Cumberland, Virginia; Haslett, Michigan; Gannat, France; and Blackthorn, U.K. continued to be held for sale as of September 30, 2023. Additionally, the Company's Spain facility was held for sale as of September 30, 2023 and was subsequently sold.

Fourth Quarter Fiscal 2023 Financial Results (Three Months Ended September 30, 2023)

Revenue decreased 6.5% to $140.7 million in Q4 FY 2023 as compared to $150.5 million in Q4 FY 2022. The lower total revenue in the fourth quarter was driven by a $15.8 million decrease in RMS revenue, partially offset by a $6.0 million increase in DSA revenue.

Operating income was $2.5 million in Q4 FY 2023 as compared to an operating loss of $242.5 million in Q4 FY 2022. Higher total operating income in Q4 FY 2023 was the result of an approximate $7.4 million increase in DSA operating income, an approximate $235.6 million increase in RMS operating income and an approximate decrease in unallocated corporate expenses of $1.9 million. The increase in RMS operating income was primarily due to a $236.0 million non-cash goodwill impairment charge in Q4 FY 2022 that did not recur in Q4 FY 2023.

Cash and cash equivalents as of September 30, 2023, was $35.5 million and there were no borrowings on the Company’s $15.0 million revolving credit facility. Total debt, net of debt issuance costs, as of September 30, 2023, was $377.7 million. The Company was in compliance with its debt covenants as of September 30, 2023.

Full Year Fiscal 2023 Financial Results (Twelve Months Ended September 30, 2023)

Revenue increased 4.5% to $572.4 million in FY 2023 as compared to $547.7 million in FY 2022. The higher total revenue was driven by a $19.8 million increase in DSA revenue and a $4.9 million increase in RMS revenue.

Operating loss was $81.5 million as compared to $263.5 million in FY 2022. The reduction in total operating loss in FY 2023 was the result of an approximate $164.4 million decrease in RMS operating loss, primarily driven by a $169.6 million decrease in non-cash goodwill impairment charge in FY 2023 compared to FY 2022, and an approximate $24.6 million decrease in unallocated corporate expenses, partially offset by an approximate $7.1 million decrease in DSA operating income.

Cash provided by operating activities was $27.9 million for FY 2023, compared to cash used by operating activities of $5.2 million for FY 2022. For FY 2023, capital expenditures totaled $27.5 million compared to $36.3 million for FY 2022.

Subsequent Events

  • Subsequent to September 30, 2023, the Company closed on the sale of its Spain facility and signed a purchase agreement for its Gannat, France facility, to be closed in the next 60 days.
  • Subsequent to September 30, 2023, the Company announced that it will be partnering with Vanguard Supply Chain Solutions LLC, the Company’s current provider of transportation services, to enable the in-house integration of Inotiv’s North American transportation operations.

Fiscal 2024 Outlook

Fiscal 2024 revenues are expected to be in the range of $580 to $590 million. We expect gains in DSA sales and flat to decreasing RMS sales based on the possible reduction in NHP sales.

Adjusted EBITDA guidance is expected to be in the range of $75 to $80 million. The increase in Adjusted EBITDA over fiscal 2023 is expected to be driven by increased margins from the DSA segment and cost reductions we initiated in fiscal 2023, and the projected reduction in future NHP margins.  

We expect to continue to remain in compliance with our financial covenants for the fiscal year. We expect capital expenditures to be approximately 4.5% of revenue in fiscal 2024, as compared to an average of 10.3% over the last five years as we expanded sites and grew service capacity.

Webcast and Conference Call

Management will host a conference call on Monday, December 11, 2023, at 4:30 pm ET to discuss fourth quarter and full year results for fiscal year 2023.

Interested parties may participate in the call by dialing:

  • (877) 704-4453 (Domestic)
  • (201) 389-0920 (International)
  • 13742881 (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=1645758&tp_key=9608ec7c56 

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://www.inotivco.com/investors/investor-information/.

Non-GAAP to GAAP Reconciliation

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 twelve months ended September 30, 2023 and 2022 and selected business segment information for those periods. Adjusted EBITDA as reported herein refers to a financial measure that excludes from consolidated net income (loss), statements of operations line items interest expense and income tax (benefit) expense, as well as non-cash charges for depreciation and amortization, stock compensation expense, acquisition and integration costs, startup costs, restructuring costs incurred in connection with the exit of multiple facilities, unrealized foreign exchange gain/loss, loss on debt extinguishment, amortization of inventory step up, loss/gain on disposition of assets, loss on fair value remeasurement of convertible notes, other unusual third-party costs, gain on sale of subsidiary and goodwill impairment loss. The adjusted business segment information excludes from operating income and unallocated corporate G&A these same expenses.

Adjusted EBITDA guidance for fiscal year 2024 is provided on a non-GAAP basis. The Company cannot reconcile this guidance to expected net income/loss without unreasonable effort because certain items that impact net income/loss and net income/loss margin are out of the Company's control and/or cannot be reasonably predicted at this time, which unavailable information could have a significant impact on the Company’s GAAP financial results.

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 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 to market. Inotiv is committed to supporting discovery and development objectives as well as helping researchers realize the full potential of their critical R&D projects, all while working together to build a healthier and safer world. Further information about Inotiv can be found here: https://www.inotivco.com/.

This release contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, discussions 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) our ability to develop new services and products; (v) our ability to source animal research models; (vi) our ability to make capital expenditures, fund our operations and satisfy our obligations; (vii) global economic conditions, especially as they impact our markets; (viii) our cash position; (ix) our ability to successfully integrate the operations and personnel related to acquisitions; (x) our ability to effectively manage current expansion efforts or any future expansion or acquisition initiatives undertaken by us; (xi) our ability to develop and build infrastructure and teams to manage growth and projects; (xii) our ability to continue to retain and hire key talent; (xiii) our ability to market our services and products under our corporate name and relevant brand names; (xiv) our ability to service our outstanding indebtedness and to comply with financial covenants; (xv) our expectations regarding the volume of new bookings, pricing, operating income or losses and liquidity; (xvi) our ability to manage recurring and unusual costs; (xvii) our ability to execute on our restructuring and site optimization plans and to realize the expected benefits related to such actions; and (xviii) the impact of public health emergencies, including COVID-19, on the economy, demand for our services and products and our operations, including the measures taken by governmental authorities to address such public health emergencies, which may precipitate or exacerbate other risks and/or uncertainties, including those detailed in the Company's filings with the U.S. Securities and Exchange Commission.

Company ContactInvestor Relations
Inotiv, Inc.LifeSci Advisors
Beth A. Taylor, Chief Financial OfficerBob Yedid
(765) 497-8381(516) 428-8577
btaylor@inotivco.combob@lifesciadvisors.com


 
INOTIV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
 Three Months Ended
September 30		 Fiscal Years Ended
September 30,
  2023   2022   2023   2022 
Service revenue$58,718  $55,099  $223,813  $202,978 
Product revenue 82,022   95,367   348,612   344,678 
Total revenue 140,740   150,466   572,425   547,656 
Costs and expenses:       
Cost of services provided (excluding amortization of intangible assets) 40,989   38,705   153,677   130,696 
Cost of products sold (excluding amortization of intangible assets) 56,050   69,536   253,305   259,748 
Selling 5,033   4,463   19,091   16,650 
General and administrative 23,653   26,185   108,227   82,436 
Amortization of intangible assets 8,730   12,224   34,681   30,888 
Other operating expense 3,825   5,814   18,537   54,685 
Goodwill impairment loss —   236,005   66,367   236,005 
Operating income (loss)$2,460  $(242,466) $(81,460) $(263,452)
Other (expense) income:       
Interest expense (11,268)  (8,888)  (43,019)  (29,704)
Other income (expense) 1,582   (1,867)  237   (59,293)
Loss before income taxes$(7,226) $(253,221) $(124,242) $(352,449)
Income tax (expense) benefit (1,480)  9,590   19,340   15,187 
Consolidated net loss$(8,706) $(243,631) $(104,902) $(337,262)
Less: Net income (loss) attributable to noncontrolling interests 957   525   238   (244)
Net loss attributable to common shareholders$(9,663) $(244,156) $(105,140) $(337,018)
        
Loss per common share       
Net loss attributable to common shareholders:       
Basic$(0.38) $(9.54) $(4.10) $(13.84)
Diluted$(0.38) $(9.54) $(4.10) $(13.84)
Weighted-average number of common shares outstanding:       
Basic 25,738   25,590   25,641   24,354 
Diluted 25,738   25,590   25,641   24,354 


 
INOTIV, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
 
 As of September 30,
  2023   2022 
    
Assets   
Current assets:   
Cash and cash equivalents$35,492  $18,515 
Restricted cash —   465 
Trade receivables and contract assets, net of allowances for credit losses of $7,446 and $6,268, respectively 87,383   100,073 
Inventories, net 56,102   71,441 
Prepaid expenses and other current assets 33,408   42,483 
Assets held for sale 1,418   — 
Total current assets 213,803   232,977 
    
Property and equipment, net 191,068   186,199 
Operating lease right-of-use assets, net 38,866   32,489 
Goodwill 94,286   157,825 
Other intangible assets, net 308,428   345,886 
Other assets 10,079   7,524 
Total assets$856,530  $962,900 
    
Liabilities, shareholders' equity and noncontrolling interest   
Current liabilities:   
Accounts payable$32,564  $28,695 
Accrued expenses and other liabilities 25,776   35,801 
Revolving credit facility —   15,000 
Fees invoiced in advance 55,622   68,642 
Current portion of long-term operating lease 10,282   7,982 
Current portion of long-term debt 7,950   7,979 
Total current liabilities 132,194   164,099 
Long-term operating leases, net 29,614   24,854 
Long-term debt, less current portion, net of debt issuance costs 369,795   330,677 
Other long-term liabilities 6,373   6,477 
Deferred tax liabilities, net 50,064   77,027 
Total liabilities 588,040   603,134 
    
Shareholders’ equity and noncontrolling interest:   
Common shares, no par value:   
Authorized 74,000,000 shares at September 30, 2023 and September 30, 2022; 25,777,169 issued and outstanding at September 30, 2023 and 25,598,289 at September 30, 2022 6,406   6,362 
Additional paid-in capital 715,696   707,787 
Accumulated deficit (453,278)  (348,277)
Accumulated other comprehensive income (loss) 330   (5,500)
Total equity attributable to common shareholders 269,154   360,372 
Noncontrolling interest (664)  (606)
Total shareholders’ equity and noncontrolling interest 268,490   359,766 
Total liabilities and shareholders’ equity and noncontrolling interest$856,530  $962,900 


 
INOTIV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 Fiscal Years Ended September 30
  2023   2022 
Operating activities:   
Consolidated net loss$(104,902) $(337,262)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities, net of acquisitions:   
Depreciation and amortization 54,717   49,324 
Employee stock compensation expense 7,844   24,202 
Changes in deferred taxes (25,810)  (17,835)
Provision for expected credit losses 1,273   1,306 
Amortization of debt issuance costs and original issue discount 3,182   2,257 
Noncash interest and accretion expense 6,284   5,316 
Loss on fair value remeasurement of embedded derivative —   56,714 
Other non-cash operating activities (200)  1,658 
Goodwill impairment loss 66,367   236,005 
Non-cash amortization of inventory fair value step-up 679   10,246 
Non-cash restructuring costs 1,493   3,129 
Changes in operating assets and liabilities:   
Trade receivables and contract assets 9,550   (23,838)
Inventories 14,011   (35,198)
Prepaid expenses and other current assets 11,249   (20,054)
Operating lease right-of-use assets and liabilities, net 884   824 
Accounts payable 5,963   (8,042)
Accrued expenses and other liabilities (8,339)  14,662 
Fees invoiced in advance (12,907)  25,962 
Other asset and liabilities, net (3,455)  5,407 
Net cash provided by (used in) operating activities 27,883   (5,217)
    
Investing activities:   
Capital expenditures (27,503)  (36,300)
Proceeds from sale of equipment 1,115   290 
Cash paid for other investing activities (2,367)  — 
Cash paid for acquisitions —   (297,712)
Net cash used in investing activities (28,755)  (333,722)
    
Financing activities:   
Payments of long-term debt —   (36,777)
Payments of debt issuance costs (77)  (10,067)
Payments on promissory notes (2,091)  (2,166)
Payments on revolving credit facility (21,000)  (19,000)
Payments on senior term notes and delayed draw term loans (2,070)  (1,800)
Borrowings on revolving loan facility 6,000   34,000 
Borrowings on senior term notes and delayed draw term loans 35,000   240,000 
Proceeds from exercise of stock options 110   118 
Other, net —   (1,157)
Net cash provided by financing activities 15,872   203,151 
    
Effect of exchange rate changes on cash and cash equivalents 1,512   (2,156)
    
Net increase (decrease) in cash and cash equivalents 16,512   (137,944)
Cash, cash equivalents, and restricted cash at beginning of period 18,980   156,924 
Cash, cash equivalents, and restricted cash at end of period$35,492  $18,980 
    
Noncash financing activity:   
Paid in kind debt issuance costs$1,363  $— 
Seller financed acquisition$—  $6,888 
    
Supplemental disclosure of cash flow information:   
Cash paid for interest$35,459  $17,063 
Income taxes paid, net$7,146  $479 


 
INOTIV, INC.
RECONCILIATION OF GAAP TO NON-GAAP
SELECT BUSINESS SEGMENT INFORMATION
(In thousands)
(Unaudited)
 
 Three Months Ended
September 30		 Fiscal Years Ended
September 30,
 2023  2022  2023  2022 
DSA       
Revenue50,216  44,186  185,090  165,289 
Operating income (loss)6,768  (635) 15,246  22,330 
Operating income (loss) as a % of total revenue4.8% (0.4%) 2.7% 4.1%
Add back:       
Depreciation and amortization4,545  4,157  16,371  13,553 
Restructuring costs—  —  97  — 
Startup costs1,291  1,525  6,858  5,687 
Total non-GAAP adjustments to operating income5,836  5,682  23,326  19,240 
Non-GAAP operating income12,604  5,047  38,572  41,570 
Non-GAAP operating income as a % of DSA revenue25.1% 11.4% 20.8% 25.1%
Non-GAAP operating income as a % of total revenue9.0% 3.4% 6.7% 7.6%
        
RMS       
Revenue90,524  106,280  387,335  382,367 
Operating income (loss)11,757  (223,890) (24,904) (189,346)
Operating income (loss) as a % of total revenue8.4% (148.8%) (4.4)% (34.6%)
Add back:       
Depreciation and amortization9,997  13,300  38,288  35,771 
Restructuring costs1,317  3,703  4,529  8,564 
Amortization of inventory step up116  207  679  10,246 
Other unusual, third party costs806  (1,099) 3,958  211 
Goodwill impairment loss—  236,005  66,367  236,005 
Total non-GAAP adjustments to operating income (loss)12,236  252,116  113,821  290,797 
Non-GAAP operating income23,993  28,226  88,917  101,451 
Non-GAAP operating income as a % of RMS revenue26.5% 26.6% 23.0% 26.5%
Non-GAAP operating income as a % of total revenue17.0% 18.8% 15.5% 18.5%
        
Unallocated Corporate Operating Expenses(16,065) (17,941) (71,802) (96,436)
Unallocated corporate operating expenses as a % of total revenue(11.4)% (11.9)% (12.5)% (17.6)%
Add back:       
Depreciation and amortization58  —  58  — 
Stock option expense1,988  1,917  7,844  28,974 
Acquisition and integration costs35  1,544  1,228  16,119 
Other unusual, third party costs—  —  572  — 
Total non-GAAP adjustments to operating loss2,081  3,461  9,702  45,093 
Non-GAAP operating loss(13,984) (14,480) (62,100) (51,343)
Non-GAAP operating loss as a % of total revenue(9.9)% (9.6)% (10.8)% (9.4)%
        
Total       
Revenue140,740  150,466  572,425  547,656 
Operating income (loss)2,460  (242,466) (81,460) (263,452)
Operating income (loss) as a % of total revenue1.7% (161.1%) (14.2)% (48.1)%
Add back:       
Depreciation and amortization14,600  17,457  54,717  49,324 
Stock compensation expense1,988  1,917  7,844  28,974 
Restructuring costs1,317  3,703  4,626  8,564 
Acquisition and integration costs35  1,544  1,228  16,119 
Amortization of inventory step up116  207  679  10,246 
Startup costs1,291  1,525  6,858  5,687 
Other unusual, third party costs806  (1,099) 4,530  211 
Goodwill impairment loss-  236,005  66,367  236,005 
Total non-GAAP adjustments to operating income/(loss)20,153  261,259  146,849  355,130 
Non-GAAP operating income22,613  18,793  65,389  91,678 
Non-GAAP operating income as a % of total revenue16.1% 12.5% 11.4% 16.7%


 
INOTIV, INC.
RECONCILIATION OF GAAP NET INCOME (LOSS) TO NON-GAAP ADJUSTED EBITDA
(In thousands)
(Unaudited)
 
 Three Months Ended
September 30		 Fiscal Years Ended
September 30,
  2023   2022   2023   2022 
GAAP Consolidated net loss$(8,706) $(243,631) $(104,902) $(337,262)
Adjustments (a):       
Interest expense 11,268   8,888   43,019   29,704 
Income tax expense (benefit) 1,480   (9,590)  (19,340)  (15,187)
Depreciation and amortization 14,600   17,457   54,717   49,324 
Stock compensation expense (1) 1,988   1,917   7,844   28,974 
Acquisition and integration costs (2) (145)  1,544   1,449   16,119 
Startup costs 1,291   1,525   6,858   5,687 
Restructuring costs (3) 1,317   3,703   4,626   8,564 
Unrealized foreign exchange loss 956   1,335   950   754 
Loss on debt extinguishment —   —   —   877 
Amortization of inventory step up 116   207   679   10,246 
Loss (gain) on disposition of assets 84   (3)  403   (234)
Loss on fair value remeasurement of convertible notes (4) —   —   —   56,714 
Other unusual, third party costs 806   (1,099)  4,530   211 
Gain on sale of subsidiary (1,377)  -   (1,377)  - 
Goodwill impairment loss (5) -   236,005   66,367   236,005 
Adjusted EBITDA (b)$23,678  $18,258  $65,823  $90,496 
GAAP Consolidated net loss as a percent of total revenue(6.2)% (161.9)% (18.3)% (61.6)%
Adjustments as a percent of total revenue 23.0%  174.1%  29.8%  78.1%
Adjusted EBITDA as a percent of total revenue 16.8%  12.1%  11.5%  16.5%


(a)Adjustments to certain GAAP reported measures for the three and twelve months ended September 30, 2023 and 2022 include, but are not limited to, the following:
 (1)For the twelve months ended September 30, 2022, $23.0 million relates to post combination non-cash stock compensation expense relating to the adoption of the Envigo Equity Plan recognized in connection with the Envigo acquisition.
 (2)For the three and twelve months ended September 30, 2023 and 2022, represents charges for legal services, accounting services, travel and other related activities in connection with various acquisitions and the related integration of those acquisitions.
 (3)For the three and twelve months ended September 30, 2023 and 2022, represents costs incurred in connection with the exit of multiple sites as previously disclosed.
 (4)For the twelve months ended September 30, 2022, represents loss of $56.7 million resulting from the fair value remeasurement of the embedded derivative component of the convertible notes.
 (5)For the twelve months ended September 30, 2023, represents a non-cash goodwill impairment charge of $66.4 million related to the RMS segment. For the three and twelve months ended September 30, 2022, represents a non-cash goodwill impairment charge of $236.0 million related to the RMS segment.
(b)Adjusted EBITDA - Consolidated net income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, stock compensation expense, acquisition and integration costs, startup costs, restructuring costs, unrealized foreign exchange gain/loss, loss on debt extinguishment, amortization of inventory step up, gain/loss on disposition of assets, loss on fair value remeasurement of the embedded derivative component of the convertible notes, other unusual third party costs, gain on sale of subsidiary and goodwill impairment loss.

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Source: Inotiv, Inc.

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