Inotiv, Inc.

Please stand by. Your program is about to begin. If you need assistance during your conference today, please press star zero. Good day, everyone, and welcome to today's Innotive First Quarter Fiscal 2025 Earnings Conference Call. At this time, all participants are in 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 one on your telephone keypad. You may withdraw yourself from the queue by pressing star two. Please note this call may be recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Mr. Stephen Halper. Please go ahead, sir.

Thank you, Jess, and good afternoon, everyone. Thank you for joining today's quarterly call with NSF's management team. Before we begin, I'd like to remind everyone that some of the statements that management will make on this statements about the company's future operating and financial results and plans. Such statements are subject to risks and uncertainties that could cause actual performance or achievements to be materially different from those projected. Any such statements represent management's expectation 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, including risks and uncertainties that could cause results to differ from forward-looking statements. Management will also discuss certain non-GAAP financial measures in an effort to provide additional information for investors. Definitions 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.initiv.com. And it's also available in the form 8K filed with the Securities and Exchange Commission. If you haven't obtained a copy of today's press release yet, you can do so by going to the investor section of Initiv's website. Joining us from the company this afternoon are Bob Leisure, President and Chief Executive Officer, and Beth Taylor, Chief Financial Officer. John Sagar's Chief Strategy Officer will join us for the question and answer portion of the call. Bob will begin with some opening remarks. Afterwards, Beth will present a summary of the company's financial results for our first fiscal quarter of 2025, and then we'll open the call for questions. It is now my pleasure to turn the call over to Bob Lee, our CEO.

Bob, please go ahead. Thank you, Steve, and good afternoon to everyone joining our call today. During the first quarter, we moved forward with many of our objectives, which included improving the company's liquidity position, reducing revenue volatility, continuing to focus on client satisfaction and client relationships, and continued integration efforts as one company. I'll spend a few minutes on our first quarter results and highlights. To enhance liquidity, our recent equity offering provided net proceeds of $27.5 million. We're very pleased with the investor interest in that company that's offering. The additional equity will help reduce liquidity risk going forward, allow us to continue to make long-term strategic decisions, provide additional stability. To reduce RMS volatility, we've expanded our NHB client base for calendar 2025 and pre-sold much of our NHB inventory, which we anticipate should deliver more consistent revenue streams. In addition, we also expect to continue to see an increase in our revenue from colony management services in calendar 2025, as we did in 2024, and we continue to invest in our NHP facilities in order to maintain this momentum. We continue to make progress integrating and improving our North American transportation distribution systems, which we bought in-house about a year ago. We believe this has helped to improve the client experience as well as our efficiency. Last quarter, we announced that we'd continue our site optimization program in North America for the RMS business, which included closing three additional sites, of which two are owned and one is leased, while expanding an existing leased location. We continue to execute on this initiative. This expansion is expected to be an approximately $5 million investment, and we intend to use 10 Improvement dollars along with proceeds from the sale of the two owned facilities to pay for this consolidation project. Once completed, we expect to be, which we expect to be at the end of fiscal 2026, we estimate approximately 4 to 5 million a year in cost savings from reduced repair and maintenance expense on facilities, lower cost of production along with improved service for clients while production capacity is expected to be unchanged. For the first quarter of fiscal 2025, total revenue was 119.9 million compared to 135.5 million in the first quarter of fiscal 2024, representing a decrease of 15.6 million or 11.5%. This decrease was mainly due to a 13.5 million reduction in the NHP revenue, which was driven primarily by pricing. The lower pricing and some lingering high-cost inventory again negatively impacted NHB margins during Q1 of fiscal 2025. In Q2 of fiscal 2025, we expect to see these margins improve compared to Q4 fiscal year 2024 and Q1 fiscal year 2025. DSA revenue decreased slightly. from 44.7 million in Q1 of fiscal 24 to 42.8 million in Q1 of fiscal 2025. While DSA operating margins have remained stable, the decrease in DSA revenue was mainly due to a decline in our discovery services revenue. We had a strong quarter for new DSA awards, which was partially offset by cancellations. We saw a continued trend of strong awards for our new safety assessment services that were added over the last two years. And we saw a 16% increase in discovery service awards in Q1 of fiscal 2025 versus Q1 of fiscal 2024. This was the first quarter of reported growth we saw for discovery service awards in the last two years. For the trailing 12 months, discovery service awards are still down 17% compared to the prior 12-month period. So, it's still too early to say whether this is truly a trend, but it is encouraging, and we believe that some of the changes we've made to our Discovery Services sales team, the marketing team, and their sales approach a year ago are beginning to have an important impact. 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. Going into calendar year 2025, we will continue to focus on process optimization, innovation, exceeding client expectations. We expect to see year-over-year revenue and adjusted EBITDA growth each quarter for the remainder of fiscal 2025, as well as reduced AHP revenue volatility as compared to fiscal 2024. In the DSA business, we are emphasizing growing our existing client base through cross-selling our broad portfolio of products and services and attracting new clients to gain market share. We believe the additional investments we've made in our sales team in 2024 and planned investments for 2025 will continue to benefit us in fiscal 2025 and 26. In the RMS segment, we've added new clients based on our NHP pre-sales, current purchase orders, and demand for quality management services, we are optimistic about our goals for increasing RMS revenue in calendar 2025. Overall, we remain confident going into 2025. We're also preparing for 2026 and 2027. The geopolitical and market condition, risk, and uncertainties will remain with us as they do for all companies. However, we are committed to building a business that will create value for our clients, employees, and our shareholders, and look forward to our future. I'll now turn the call over to Beth, who will provide a more detailed synopsis of NS's results for the quarter.