Inotiv, Inc.

Good day, everyone, and welcome to today's innovative fiscal 2024 fourth quarter financial results. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing star 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star 2. Today's conference is being recorded. I will be standing by if you need any assistance. It is now my pleasure to turn the conference over to Stephen Helper.

Thank you, Marjorie, and good afternoon, everyone. Thank you for joining today's quarterly call with Initiv's management team. Before we begin, I'd like to remind everyone that some of the statements that management will make on this call are considered forward-looking statements, including statements about the company's future operating and financial results and plans. Such statements are subjects to risks and uncertainties that could cause actual performance or achievements to be materially different from those projected. Any such statements represent management's expectations as of today's date. You should not place undue reliance on these forward-looking statements, and the company does not undertake any obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise. Please refer to the company's SEC filings for further guidance on this matter. Management will also discuss certain non-GAAP financial measures in an effort to provide additional information for investors. Definition of these non-GAAP measures and reconciliations to the most comparable GAAP measures are included in the company's earnings release, which has been posted to the investor section of the company's website, www.initive.com, and is also available in the Form 8K filed with the Securities and Exchange Commission. If you haven't obtained the copy of today's press release yet, you can do so by going to the investor section of Initive's website. Joining us from the company this afternoon are Bob Leisure, President and Chief Executive Officer, and Beth Taylor, Chief Financial Officer. John Sagert, Chief Strategy Officer, will join us for the question and answer portion of the call. Bob will begin with some opening remarks, after which Beth will present a summary of the company's financial results for our fiscal fourth quarter and full year ended September 30th, 2024. And then we'll open the call for your questions. It is now my pleasure to turn the call over to Bob Leisure, CEO. Bob, please go ahead.

Thank you, Steve. Good afternoon to everyone joining our call today. Fourth quarter was, again, productive for Initive. We accomplished many of our goals during the quarter and believe we are in good position going into 2025. As you are aware, during 2024, we experienced volatility within our earnings and cash flow. Volatility was mainly related to challenges in our NHP business within the RMS model, business model, but we also saw continued conservative spending within the biotech industry. The initiatives we've put in place over the last year were designed to reduce risk and address volatility, improve the customer experience, and draw new customers to the business, all while enhancing our cash flow model in calendar 2025. I'd like to spend a few minutes on our fourth quarter 24 results and fiscal 24 highlights. For the fiscal 2024 fourth quarter, total revenue was $130.4 million compared to $105.8 million in the third quarter of 2024, representing a 23% increase in quarter-over-quarter revenue, though it was down 7.3% compared to the fourth quarter in fiscal 2023. During the fourth quarter of 2024 in the RMS business, we continue to make progress improving our North American transportation distribution systems. We also completed the RMS site consolidation of facility improvements we announced almost two years ago as we completed the closure of our Blackthorn facility in the UK and the planned investments in our UK Hillcrest facility. We saw a significant increase in HPs sold in Q4 compared to Q3, as we more than doubled the number sold in Q3. During Q4, we sold much of our higher cost in HP inventory, which impacted margins in the quarter and will continue to impact margins in Q1 of fiscal 2025. We also already have strong commitments for purchases from both existing and new customers for calendar 2025. Within the RMS business, we also saw strong performances in the NHP colony management services, the diet bedding and enrichment business line, as well as our European and UK RMS business lines. DSA revenue and operating income decreased in Q4 2024 as compared to Q4 2023 due to safety assessment study mix and lower discovery service revenue. DSA revenue and operating income were relatively consistent in Q4 2024 compared to Q3 2024. From Q3 2024 to Q4 2024, we saw a continued trend of strong revenue for new services at a Rockville facility and a decrease in revenue related to discovery services. On the operational side, we continued to drive efficiency, which allowed us to further reduce our general administrative expenses on a year-over-year basis. While we made some incremental improvements to the balance sheet this quarter, we continue to evaluate opportunities to improve our balance sheet further and enhance our liquidity. In Q4, we still saw some of the same trends experienced in previous quarters, which we monitor closely and continue to navigate through. These include overall general business conditions in the biotech industry impacted and created price pressures in our business. Although biotech funding in the market increased in the first nine months of calendar 2024, we believe that the reduced biotech funding in the market during 2022 and 2023 and the increased cost of capital has continued to influence our clients' spending patterns for early stage research and development. Now let me provide some comments on what we are seeing in the market today and some forward-looking thoughts on our different business segments. We expect biopharma companies in the short term to continue to take a restrained conservative approach to the preclinical pipeline products in order to prioritize the use of capital to their most important projects. We will continue to capitalize on our innovation and scientific expertise to assist our clients in the improvement of speed, of product development and achieve the appropriate economic returns. We are emphasizing our efforts on growing our existing customer base through cross-selling our broad portfolio of products and services and attracting new customers to gain market share. We believe the additional investments we've made in our sales team in 2024 will continue to benefit us in fiscal 2025. For the 12 months ended September 30th, 2024, Net new orders for DSA were ahead of the prior year's pace by approximately 5%. We are pleased we've been able to accomplish this in spite of industry price pressure that we've seen in fiscal 2024 and an approximate 11% decline in revenue and 23% decline in orders in discovery business. In the RMS segment, we're optimistic that we will see reduced volatility in 2025. We have added new customers. and based on our pre-sales of NHPs and demand for colony management services, we are cautiously optimistic about increased NHP-related revenue in calendar 25. We have expanded our NHP supply base and continue to work with our existing and newly qualified NHP suppliers in multiple countries. Critically, we continue to audit them for animal welfare, health standards, and compliance-related matters, and will not source from suppliers who do not or cannot meet those standards. In the RMS non-HP business in 2025, we will initiate the next phase of our site optimization program to further improve and consolidate facilities in the U.S. This next phase is another important program which is projected to eliminate another 4 to 5 million in operating expenses, and further improve our RMS margins when completed. Most of these financial improvements are not expected to be seen until fiscal 2026. We also believe we can achieve another 500 to a million in cost reductions from our continued integration of our North America transportation and distribution system. We're confident going into 2025, but recognize there are geopolitical market conditions, risks, and uncertainties. In 2023 and 24, we encourage several challenges to some of our customers and others in our industry. As a company, I'm proud of our people, our leadership, board, suppliers, customers, and lenders who work together to address these challenges, creating a stronger foundation for our business going into 2025. As we overcome the challenges we've faced over the past two years, we believe our business is well positioned for the future. We have continued to integrate our acquisitions, optimize our facilities, as we have also implemented several initiatives to mitigate these risks and related challenges. We have lowered our cost, improved our service, and our responsiveness to our customers. Innative is well positioned as a mid-size, full-service CRO and provider of research models, diet, bedding, and enrichment products and services. We remain committed to building a business that will create value for our customers, employees, and our shareholders. and look forward to 2025. With that, I'll turn the call over to Beth, who will provide a more detailed synopsis of NHTSA's results for the quarter and full year.