Cover
Cover - shares | 3 Months Ended | |
Dec. 31, 2023 | Jan. 31, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 000-23357 | |
Entity Registrant Name | INOTIV, INC. | |
Entity Tax Identification Number | 35-1345024 | |
Entity Address, Address Line One | 2701 KENT AVENUE | |
Entity Address, City or Town | WEST LAFAYETTE | |
Entity Address, Postal Zip Code | 47906 | |
City Area Code | 765 | |
Local Phone Number | 463-4527 | |
Title of 12(b) Security | Common Shares | |
Trading Symbol | NOTV | |
Security Exchange Name | NASDAQ | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,790,680 | |
Entity Central Index Key | 0000720154 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | IN | |
Entity Address, State or Province | IN | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 22,001 | $ 35,492 |
Trade receivables and contract assets, net of allowances for credit losses of $6,313 and $7,446, respectively | 89,849 | 87,383 |
Inventories, net | 50,640 | 56,102 |
Prepaid expenses and other current assets | 26,264 | 33,408 |
Assets held for sale | 1,934 | 1,418 |
Total current assets | 190,688 | 213,803 |
Property and equipment, net | 191,536 | 191,068 |
Operating lease right-of-use assets, net | 48,012 | 38,866 |
Goodwill | 94,286 | 94,286 |
Other intangible assets, net | 300,350 | 308,428 |
Other assets | 10,638 | 10,079 |
Total assets | 835,510 | 856,530 |
Current liabilities: | ||
Accounts payable | 30,716 | 32,564 |
Accrued expenses and other liabilities | 23,436 | 25,776 |
Fees invoiced in advance | 35,821 | 55,622 |
Current portion of long-term operating lease | 11,105 | 10,282 |
Current portion of long-term debt | 8,411 | 7,950 |
Total current liabilities | 109,489 | 132,194 |
Long-term operating leases, net | 38,074 | 29,614 |
Long-term debt, less current portion, net of debt issuance costs | 370,931 | 369,795 |
Other long-term liabilities | 17,967 | 6,373 |
Deferred tax liabilities, net | 44,887 | 50,064 |
Total liabilities | 581,348 | 588,040 |
Contingencies (Note 14) | ||
Shareholders’ equity and noncontrolling interest: | ||
Authorized 74,000,000 shares at December 31, 2023 and at September 30, 2023; 25,790,680 issued and outstanding at December 31, 2023 and 25,777,169 at September 30, 2023 | 6,409 | 6,406 |
Additional paid-in capital | 715,282 | 715,696 |
Accumulated deficit | (469,106) | (453,278) |
Accumulated other comprehensive income | 1,577 | 330 |
Total equity attributable to common shareholders | 254,162 | 269,154 |
Noncontrolling interest | 0 | (664) |
Total shareholders’ equity and noncontrolling interest | 254,162 | 268,490 |
Total liabilities and shareholders’ equity and noncontrolling interest | $ 835,510 | $ 856,530 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for credit losses | $ 6,313 | $ 7,446 |
Common stock authorized (in shares) | 74,000,000 | 74,000,000 |
Common stock issued (in shares) | 25,790,680 | 25,777,169 |
Common stock outstanding (in shares) | 25,790,680 | 25,777,169 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Revenue | $ 135,501 | $ 122,754 |
Costs and expenses: | ||
Selling | 5,348 | 4,501 |
General and administrative | 19,927 | 28,298 |
Depreciation and amortization of intangible assets | 14,250 | 13,263 |
Other operating expense | 3,319 | 3,639 |
Goodwill impairment loss | 0 | 66,367 |
Operating loss | (9,371) | (90,578) |
Other (expense) income: | ||
Interest expense | (11,364) | (10,450) |
Other income (expense) | 1,413 | (1,878) |
Loss before income taxes | (19,322) | (102,906) |
Income tax benefit | 3,494 | 15,974 |
Consolidated net loss | (15,828) | (86,932) |
Less: Net (loss) income attributable to noncontrolling interests | (440) | 391 |
Net loss attributable to common shareholders | $ (15,388) | $ (87,323) |
Earnings Per Share [Abstract] | ||
Net loss attributable to common shareholders, basic (in dollars per share) | $ (0.60) | $ (3.41) |
Net loss attributable to common shareholders, diluted (in dollar per share) | $ (0.60) | $ (3.41) |
Weighted-average number of common shares outstanding: | ||
Basic (in shares) | 25,764 | 25,603 |
Diluted (in shares) | 25,764 | 25,603 |
Service | ||
Revenue | $ 53,863 | $ 50,048 |
Costs and expenses: | ||
Cost of revenue (excluding amortization of intangible assets) | 39,077 | 34,001 |
Product | ||
Revenue | 81,638 | 72,706 |
Costs and expenses: | ||
Cost of revenue (excluding amortization of intangible assets) | $ 62,951 | $ 63,263 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Consolidated net loss | $ (15,828) | $ (86,932) |
Foreign currency translation | 1,164 | 5,107 |
Defined benefit plans: | ||
Pension cost amortization | 46 | (54) |
Foreign currency translation | 37 | 241 |
Other comprehensive income, net of tax | 1,247 | 5,294 |
Consolidated comprehensive loss | (14,581) | (81,638) |
Less: Comprehensive (loss) income attributable to non-controlling interests | (440) | 391 |
Comprehensive loss attributable to common stockholders | $ (14,141) | $ (82,029) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY AND NONCONTROLLING INTEREST - USD ($) $ in Thousands | Total | Common Shares | Additional paid-in capital | Accumulated deficit | Accumulated Other Comprehensive Income | Non- Controlling Interests |
Beginning balance (in shares) at Sep. 30, 2022 | 25,598,289 | |||||
Beginning balance at Sep. 30, 2022 | $ 359,766 | $ 6,362 | $ 707,787 | $ (348,277) | $ (5,500) | $ (606) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss attributable to common shareholders | (87,323) | (86,932) | (391) | |||
Issuance of stock under employee stock plans (in shares) | 8,347 | |||||
Issuance of stock under employee stock plans | 24 | $ 1 | 23 | |||
Stock-based compensation | 2,046 | 2,046 | ||||
Pension cost amortization | (54) | (54) | ||||
Foreign currency translation adjustment | 5,348 | 5,348 | ||||
Ending balance (in shares) at Dec. 31, 2022 | 25,606,636 | |||||
Ending balance at Dec. 31, 2022 | $ 279,807 | $ 6,363 | 709,856 | (435,209) | (206) | (997) |
Beginning balance (in shares) at Sep. 30, 2023 | 25,777,169 | 25,777,169 | ||||
Beginning balance at Sep. 30, 2023 | $ 268,490 | $ 6,406 | 715,696 | (453,278) | 330 | (664) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss attributable to common shareholders | (15,388) | (15,828) | 440 | |||
Change in noncontrolling interest | (2,085) | (2,309) | 224 | |||
Issuance of stock under employee stock plans (in shares) | 13,511 | |||||
Issuance of stock under employee stock plans | 1 | $ 3 | (2) | |||
Stock-based compensation | 1,897 | 1,897 | ||||
Pension cost amortization | 46 | 46 | ||||
Foreign currency translation adjustment | $ 1,201 | 1,201 | ||||
Ending balance (in shares) at Dec. 31, 2023 | 25,790,680 | 25,790,680 | ||||
Ending balance at Dec. 31, 2023 | $ 254,162 | $ 6,409 | $ 715,282 | $ (469,106) | $ 1,577 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating activities: | ||
Consolidated net loss | $ (15,828) | $ (86,932) |
Adjustments to reconcile net loss to net cash used in operating activities, net of acquisitions: | ||
Depreciation and amortization | 14,250 | 13,263 |
Employee stock compensation expense | 1,897 | 2,046 |
Changes in deferred taxes | (5,318) | (20,123) |
Provision for expected credit losses | (438) | 1,078 |
Amortization of debt issuance costs and original issue discount | 846 | 732 |
Non-cash interest and accretion expense | 1,688 | 1,446 |
Other non-cash operating activities | (1,249) | 1,028 |
Goodwill impairment loss | 0 | 66,367 |
Non-cash amortization of inventory fair value step-up | 102 | 244 |
Changes in operating assets and liabilities: | ||
Trade receivables and contract assets | (1,497) | 21,999 |
Inventories | 6,058 | (4,204) |
Prepaid expenses and other current assets | 7,096 | 7,810 |
Operating lease right-of-use assets and liabilities, net | 138 | 266 |
Accounts payable | (2,845) | 1,169 |
Accrued expenses and other liabilities | (2,497) | (5,548) |
Fees invoiced in advance | (20,012) | (7,796) |
Other asset and liabilities, net | 11,064 | (255) |
Net cash used in operating activities | (6,545) | (7,410) |
Investing activities: | ||
Capital expenditures | (5,572) | (8,369) |
Proceeds from sale of property and equipment | 1,529 | 211 |
Net cash used in investing activities | (4,043) | (8,158) |
Financing activities: | ||
Payments on revolving credit facility | 0 | (15,000) |
Payments on senior term notes and delayed draw term loans | (691) | (688) |
Borrowings on delayed draw term loan | 0 | 35,000 |
Other financing activities, net | (2,230) | (928) |
Net cash (used in) provided by financing activities | (2,921) | 18,384 |
Effect of exchange rate changes on cash and cash equivalents | 18 | 593 |
Net (decrease) increase in cash and cash equivalents | (13,491) | 3,409 |
Less: cash, cash equivalents, and restricted cash held for sale | 0 | (1,569) |
Cash, cash equivalents, and restricted cash at beginning of period | 35,492 | 18,980 |
Cash, cash equivalents, and restricted cash at end of period, net of cash, cash equivalents and restricted cash held for sale | 22,001 | 20,820 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 11,068 | 8,491 |
Income taxes paid, net | $ 298 | $ 2,268 |
DESCRIPTION OF THE BUSINESS AND
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 3 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION | 1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION Inotiv, Inc. and its subsidiaries (“we,” “our,” “us,” the “Company,” and “Inotiv”) comprise a leading contract research organization (“CRO”) dedicated to providing nonclinical and analytical drug discovery and development services to the pharmaceutical and medical device industries and selling a range of research-quality animals and diets to the same industries as well as academia and government clients. Its products and services enable the discovery and development of new drugs and medical devices and facilitate better understanding of disease biology, all while focusing on increasing efficiency, improving data, and reducing the cost of discovering and taking new drugs and medical devices to market. Inotiv is committed to supporting discovery and development objectives as well as helping researchers realize the full potential of their critical research and development projects, all while working together to build a healthier and safer world. We are dedicated to practicing high standards of laboratory animal care and welfare. As a result of the strategic acquisition of Envigo RMS Holding Corp. (“Envigo”) in November 2021, which added a complementary research model platform, our full spectrum solutions now span two segments: Discovery and Safety Assessment (“DSA”) and Research Models and Services (“RMS”). Through the DSA segment, Inotiv supports the discovery, nonclinical development and clinical development needs of researchers and clinicians for primarily small molecule drug candidates, as well as biotherapeutics and biomedical devices. The Company's scientists have skills in analytical instrumentation development, chemistry, computer software development, histology, pathology, physiology, surgery, analytical chemistry, drug metabolism, pharmacokinetics, and toxicology to make the services and products we provide increasingly valuable to our current and potential clients. Inotiv's principal clients are companies whose scientists are engaged in analytical chemistry, drug safety evaluation, clinical trials, drug metabolism studies, pharmacokinetics and basic research, from small start-up biotechnology companies to some of the largest global pharmaceutical companies. Through the RMS segment, Inotiv offers access to a wide range of small and large research models for basic research and drug discovery and development, as well as specialized models for specific diseases and therapeutic areas. The Company combines deep animal husbandry expertise and expanded access to scientists across the discovery and preclinical continuum, which reduces nonclinical lead times and provides enhanced project delivery. In conjunction with its CRO business, Inotiv has the ability to run selected nonclinical studies directly on-site at closely located research model facilities and provide access to innovative genetically engineered models and services solutions. Inotiv's principal clients include biopharmaceutical companies, CROs, and academic and government organizations. Operational Update The Company's focus for the business within the RMS segment has continued to include navigating the global non-human primate ("NHP") market and executing on its site optimization plans. The site optimization activities are discussed further in Note 10 - Restructuring and Assets Held for Sale. On November 16, 2022, the Company became aware that the U.S. Attorney’s Office for the Southern District of Florida (“USAO-SDFL”) had criminally charged employees of the principal supplier of NHPs to the Company, along with two Cambodian government officials, with conspiring to illegally import NHPs into the U.S. from December 2017 through January 2022 and in connection with seven specific imports between July 2018 and December 2021 (the “November 16, 2022 event”). The Company has not been directed to refrain from selling the Cambodian NHPs in its possession in the U.S. However, due to the allegations contained in the indictment involving the supplier and the Cambodian government officials, the Company believed that it was prudent, at the time, to refrain from selling or delivering any of its Cambodian NHPs held in the U.S. until the Company’s staff and external experts could evaluate what additionally could be done to satisfy itself that the NHPs in inventory from Cambodia can be reasonably determined to be purpose-bred. Historically, the Company relied on the Convention on International Trade in Endangered Species of Wild Fauna and Flora (“CITES”) documentation and related processes and procedures, including release of each import by U.S. Fish and Wildlife Service. After a thorough review of the documentation the Company has for the Cambodian NHPs in our inventory and their colonies, Inotiv resumed shipping a limited amount of Cambodian NHPs. In addition, the Company completed audits on site at its Cambodian supplier and the Company worked to establish even more robust procedures for future imports. Inotiv has focused on working with our suppliers and developing a long-term solution to establish procedures it can be comfortable assuring ourselves, and our clients, the Company only provides purpose bred NHPs from Cambodia. Inotiv has scientists inside and outside our organization working towards establishing new testing procedures for importing purpose bred Cambodian NHPs and meeting the needs of drug discovery and development in the U.S. In the meantime, the Company continued to import from countries outside of Cambodia to satisfy demand at our DSA business segment and to our RMS clients. The Company believes its existing cash and cash equivalents, together with cash generated from operations, will be sufficient to fund its operations, satisfy its obligations, including cash outflows for planned targeted capital expenditures, and comply with minimum liquidity and financial covenant requirements under its debt covenants pursuant to its Credit Agreement for at least the next twelve months. The forecasted operating cash flows include the shipping of the remainder of the Company's existing Cambodian NHP inventory. See Note 6 - Debt for further information about the Company’s existing credit facilities and requirements under its debt covenants. The Company’s liquidity needs and compliance with covenants depend, among other things, on its ability to source and sell NHPs, its ability to fill its expanded DSA capacity, its ability to generate cash from other operating activities and its ability to manage its forecasted capital expenditures. Basis of Presentation The Company has prepared the accompanying unaudited interim condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”), and therefore should be read in conjunction with the Company’s audited consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023. In the opinion of management, the condensed consolidated financial statements for the three months ended December 31, 2023 and 2022 include all adjustments which are necessary for a fair presentation of the results of the interim periods and of the Company’s financial position at December 31, 2023. The results of operations for the three months ended December 31, 2023 are not necessarily indicative of the results for the fiscal year ending September 30, 2024. Certain prior year amounts have been reclassified within the condensed consolidated statements of operations for consistency with the current year presentation. Specifically, depreciation expense has been combined with amortization of intangible assets. These reclassifications had no effect on the reported results of operations. Further, certain financing activities have been reclassified within the condensed consolidated statements of cash flows for consistency with the current year presentation. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities. These include, but are not limited to, management estimates in the calculation and timing of revenue recognition, pension liabilities, deferred tax assets and liabilities and the related valuation allowance. Although estimates are based upon management’s best estimate using historical experience, current events, and actions, actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. Consolidation The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company, including all subsidiaries and prior to December 23, 2023, a variable interest entity (“VIE”) it previously consolidated in accordance with GAAP. The VIE does not materially impact our net assets or net (loss) income. During December 2023, the Company entered into a transition services agreement with Vanguard Supply Chain Solutions ("VSCS"), one of the Company's transportation providers, to enable the in-house integration of Inotiv’s North American transportation operations. Following this transaction, Inotiv was no longer required to consolidate this entity. Subsequent to December 31, 2023, the Company successfully completed the in-house integration of its North American transportation operations. The Company accounts for noncontrolling interests in accordance with Accounting Standards Codification (“ASC”) 810, “Consolidation” (“ASC 810”). ASC 810 requires companies with noncontrolling interests to disclose such interests as a portion of equity but separate from the parent’s equity. The noncontrolling interests’ portion of net loss is presented on the condensed consolidated statements of operations. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the twelve months ended September 30, 2023, and there have been no material changes to those significant accounting policies. Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade receivables from clients in the biopharmaceutical, contract research, academic, and governmental sectors. The Company believes its exposure to credit risk is minimal, as the majority of the clients are predominantly well established and viable. Additionally, the Company maintains allowances for potential credit losses. The Company’s exposure to credit loss in the event that payment is not received for revenue recognized equals the outstanding trade receivables and contract assets less fees invoiced in advance. During the three months ended December 31, 2023 and 2022, one client accounted for 22.4% and 21.7% of sales, respectively. During the three months ended December 31, 2023 and 2022, no vendors accounted for more than 10% of the sum of cost of services and cost of products. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 3 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | 2. REVENUE FROM CONTRACTS WITH CLIENTS DSA The DSA segment generates service revenue through drug discovery and development services. The DSA segment generates product revenue through internally-manufactured scientific instruments for life sciences research and the related software for use by pharmaceutical companies, universities, government research centers and medical research institutions under the Company’s BASi product line. RMS The RMS segment generates product revenue through the commercial production and sale of research models, diets and bedding and bioproducts. The RMS segment generates service revenue through Genetically Engineered Models and Services ("GEMS"), client-owned animal colony care, and health monitoring and diagnostics services related to research models. Contract Assets and Liabilities from Contracts with Clients The timing of revenue recognition, billings and cash collections results in billed receivables (trade receivables), contract assets (unbilled revenue), and contract liabilities (client deposits and deferred revenue) on the condensed consolidated balance sheets. The following table provides information about contract assets (trade receivables and unbilled revenue, excluding allowances for credit losses), and fees invoiced in advance (client deposits and deferred revenue): Balance at Balance at Contract assets: Trade receivables $ 78,472 $ 77,618 Contract assets: Unbilled revenue 17,690 17,211 Contract liabilities: Client deposits 16,562 36,689 Contract liabilities: Deferred revenue 19,259 18,933 When the Company does not have the unconditional right to advanced billings, both advanced client payments and unpaid advanced client billings are excluded from deferred revenue, with the advanced billings also being excluded from client receivables. The Company excluded approxima tely $18,164 and $10,220 of unpaid advanced client billings from both client receivables and deferred revenue as of December 31, 2023 and September 30, 2023, respectively. Changes in the contract asset and the contract liability balances during the three months ended December 31, 2023 include the following: • Changes in the time frame for a right for consideration to become unconditional – approximately 50.0% of unbilled revenue as of September 30, 2023, was billed during the three months ended December 31, 2023; and • Changes in the time frame for a performance obligation to be satisfied – approximately 51.0% of deferred revenue as of September 30, 2023, was recognized as revenue during the three months ended December 31, 2023. |
SEGMENT AND GEOGRAPHIC INFORMAT
SEGMENT AND GEOGRAPHIC INFORMATION | 3 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC INFORMATION | 3. SEGMENT AND GEOGRAPHIC INFORMATION Segment Information During the three months ended December 31, 2023 and 2022, the RMS segment recognized intersegment revenue of $896 and $1,125, respectively, related to sales to the DSA segment. The following tables present revenue and other financial information by reportable segment: Three Months Ended 2023 2022 Revenue DSA: Service revenue $ 43,563 $ 39,971 Product revenue 1,135 1,122 RMS: Service revenue 10,300 10,077 Product revenue 80,503 71,584 $ 135,501 $ 122,754 Operating Income (Loss) DSA $ 1,593 $ 2,372 RMS 5,078 (71,272) Unallocated Corporate (16,042) (21,678) $ (9,371) $ (90,578) Interest expense (11,364) (10,450) Other income (expense) 1,413 (1,878) Loss before income taxes $ (19,322) $ (102,906) Three Months Ended 2023 2022 Depreciation and amortization: DSA $ 4,409 $ 3,980 RMS 9,737 9,283 Unallocated Corporate 104 — $ 14,250 $ 13,263 Capital expenditures: DSA $ 2,275 3,294 RMS 3,297 5,075 $ 5,572 $ 8,369 Geographic Information The following represents revenue originating in entities physically located in the identified geographic area: Three Months Ended 2023 2022 United States $ 111,769 $ 99,009 Netherlands 18,062 15,222 Other 5,670 8,523 $ 135,501 $ 122,754 Long-lived assets shown below include property and equipment, net. The following represents long-lived assets where they are physically located: December 31, September 30, 2023 2023 United States $ 175,950 $ 178,021 Netherlands 6,873 6,656 Other 8,713 6,391 $ 191,536 $ 191,068 |
BUSINESS COMBINATIONS
BUSINESS COMBINATIONS | 3 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS COMBINATIONS | 4. BUSINESS COMBINATIONS The Company accounts for acquisitions in accordance with ASC 805, Business Combinations. The guidance requires consideration given, including contingent consideration, assets acquired, liabilities assumed and non-controlling interests to be valued at their fair market values at the acquisition date. The guidance further provides that: (1) in-process research and development will be recorded at fair value as an indefinite-lived intangible asset; (2) acquisition costs will generally be expensed as incurred; (3) restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date; and (4) changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income -tax expense (benefit). ASC 805 requires that any excess of the purchase price over the fair value of assets acquired, including identifiable intangibles and liabilities assumed, be recognized as goodwill. Histion Acquisition On April 25, 2022, the Company completed the acquisition of Histion, LLC (“Histion”), which was a strategic element of the Company’s expansion of its specialized pathology services. Consideration for the Histion acquisition consisted of (i) $950 in cash, subject to working capital adjustments, (ii) 17,618 of the Company’s common shares valued at $364 based on the closing stock price of the Company’s common shares as reported by Nasdaq on the closing date and (iii) unsecured subordinated promissory notes payable to the former shareholders of Histion in an aggregate principal amount of $433. Protypia Acquisition On July 7, 2022, the Company entered into a Stock Purchase Agreement with Protypia, Inc. (“Protypia”), which was a strategic element of the Company’s expansion of its mass spectrometry-based bioanalytical offerings, providing for the acquisition by the Company of all of the outstanding stock of Protypia on that date. Consideration for the Protypia stock consisted of (i) $9,460 in cash, subject to certain adjustments, (ii) 74,997 of the Company's common shares valued at $806 based on the opening stock price of the Company’s common shares as reported by Nasdaq on the closing date and (iii) $600 in seller notes. The following table summarizes the final determination and allocation of the fair value of assets acquired and liabilities assumed as of the acquisition date: July 7, 2022 Assets acquired and liabilities assumed: Goodwill 6,002 Intangible assets 5,600 Other liabilities, net (84) Deferred tax liabilities (652) $ 10,866 Intangible assets primarily relate to client relationships and technology associated with the ability to perform specialized protein and peptide mass spectrometry analysis. The acquired definite-lived intangible assets are being amortized over a weighted-average estimated useful life of approximately 8.1 years on a straight-line basis. The estimated fair values of identifiable intangible assets were determined using the "income approach," which is a valuation technique that provides an estimate of the fair value of an asset based on market participant expectations of the cash flows an asset would generate over its remaining useful life. Some of the significant assumptions inherent in the development of these asset valuations include the estimated net cash flows for each year for each asset or product (including revenues and EBITDA), the appropriate discount rate necessary to measure the risk inherent in each future cash flow stream, the life cycle of each asset, the potential regulatory and commercial success risk, and competitive trends impacting the asset and each cash flow stream, as well as other factors. Goodwill, which is derived from the enhanced scientific expertise and our ability to provide broader service solutions through a comprehensive portfolio, is recorded based on the amount by which the purchase price exceeds the fair value of the net assets acquired and none is deductible for tax purposes. Goodwill from this transaction is allocated to the Company’s DSA reportable segment. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | 5. INTANGIBLE ASSETS The following table displays intangible assets, net by major class: December 31, 2023 Carrying Accumulated Carrying Client relationships $ 317,492 $ (61,771) $ 255,722 Intellectual property 56,420 (13,868) 42,552 Other 4,837 (2,761) 2,076 $ 378,749 $ (78,400) $ 300,350 September 30, 2023 Carrying Accumulated Carrying Client relationships $ 316,820 $ (54,711) $ 262,109 Intellectual property 56,337 (12,234) 44,103 Other 4,837 (2,621) 2,216 $ 377,994 $ (69,566) $ 308,428 The decrease in intangible assets, net during the three months ended December 31, 2023 related to amortization over the applicable useful lives, partially offset by the impact of foreign exchange rates. |
DEBT
DEBT | 3 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT | 6. DEBT Long term debt as of December 31, 2023 and September 30, 2023 is detailed in the table below. December 31, 2023 September 30, 2023 Seller Note – Bolder BioPath (Related party) $ 545 $ 602 Seller Note – Preclinical Research Services 522 541 Seller Payable - Orient BioResource Center 3,664 3,649 Seller Note – Histion (Related party) 193 229 Seller Note – Protypia (Related party) 400 400 Economic Injury Disaster Loan — 140 Convertible Senior Notes 112,174 110,651 Term Loan Facility, DDTL and Incremental Term Loans 272,419 272,930 $ 389,917 $ 389,142 Less: Current portion (8,411) (7,950) Less: Debt issuance costs not amortized (10,575) (11,397) Total Long-term debt $ 370,931 $ 369,795 Revolving Credit Facility As of December 31, 2023 and September 30, 2023, the Company had no outstanding balance on the revolving credit facility. Refer to the statements of cash flows for information related to payments on the revolving credit facility during the three months ended December 31, 2022. Significant Transactions On October 12, 2022, the Company drew its $35,000 delayed draw term loan (the “Additional DDTL”) allowed under the First Amendment to the Credit Agreement (“First Amendment”). A portion of the proceeds were used to repay the $15,000 balance on the Company’s revolving credit facility, while the remaining amount was drawn to fund a portion of the Company’s capital expenditures in fiscal year 2022 and those planned for fiscal year 2023. On December 29, 2022 and January 9, 2023, the Company, the lenders party thereto, and Jefferies Finance LLC, as administrative agent (the “Agent”), entered into the Second and Third Amendments, respectively, to the Credit Agreement. Refer below for further information related to those amendments. Term Loan Facility, DDTL and Incremental Term Loans Credit Agreement On November 5, 2021, the Company, certain subsidiaries of the Company (the “Subsidiary Guarantors”), the lenders party thereto, and the Agent, entered into a Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for a term loan facility (the "Term Loan") in the original principal amount of $165,000, a delayed draw term loan facility in the original principal amount of $35,000 (available to be drawn up to 18 months from the date of the Credit Agreement) (the “Initial DDTL” and together with the Additional DDTL, the “DDTL”) and a revolving credit facility in the original principal amount of $15,000. On November 5, 2021, the Company borrowed the full amount of the term loan facility, but did not borrow any amounts on the delayed draw term loan facility or the revolving credit facility. The Company could have elected to borrow on each of the loan facilities at either an adjusted LIBOR rate of interest or an adjusted prime rate of interest. Adjusted LIBOR rate loans accrued interest at an annual rate equal to the LIBOR rate plus a margin of between 6.00% and 6.50%, depending on the Company’s then current Secured Leverage Ratio (as defined in the Credit Agreement). The LIBOR rate had to be a minimum of 1.00%. The initial adjusted LIBOR rate of interest was the LIBOR rate plus 6.25%. Adjusted prime rate loans accrued interest at an annual rate equal to the prime rate plus a margin of between 5.00% and 5.50%, depending on the Company’s then current Secured Leverage Ratio. The initial adjusted prime rate of interest was the prime rate plus 5.25%. For the term loan facility, interest expense was accrued at an effective rate of 11.53% and 9.84% for the three months ended December 31, 2023 and 2022, respectively. The Company must pay (i) a fee based on a percentage per annum equal to 0.50% on the average daily undrawn portion of the commitments in respect of the revolving credit facility and (ii) a fee based on a percentage per annum equal to 1.00% on the average daily undrawn portion of the commitments in respect of the delayed draw loan facility. In each case, such fee shall be paid quarterly in arrears. Each of the term loan facility and delayed draw term loan facility require annual principal payments in an amount equal to 1.00% of their respective original principal amounts. The Company shall also repay the term loan facility on an annual basis in an amount equal to a percentage of its Excess Cash Flow (as defined in the Credit Agreement), which percentage will be determined by its then current Secured Leverage Ratio. Each of the loan facilities may be repaid at any time. Voluntary prepayments were subject to a 1.00% prepayment premium if made on or prior to November 5, 2023 and other breakage penalties, as defined in the Credit Agreement. Voluntary prepayments made after November 5, 2023 are not subject to any prepayment premium. The Company is required to maintain a Secured Leverage Ratio of not more than 4.25 to 1.00 for the Company's fiscal quarters through the fiscal quarter ended June 30, 2023, 3.75 to 1.00 beginning with the Company’s fiscal quarter ending September 30, 2023, and 3.00 to 1.00 beginning with the Company’s fiscal quarter ending March 31, 2025. The Company is required to maintain a minimum Fixed Charge Coverage Ratio (as defined in the Credit Agreement), which ratio was 1.00 to 1.00 during the first year of the Credit Agreement and is 1.10 to 1.00 from and after the Credit Agreement’s first anniversary. Each of the loan facilities is secured by all assets (other than certain excluded assets) of the Company and each of the Subsidiary Guarantors. Repayment of each of the loan facilities is guaranteed by each of the Subsidiary Guarantors. On January 7, 2022, the Company drew $35,000 on the Initial DDTL. Amounts outstanding under the Initial DDTL accrued interest at an annual rate equal to the LIBOR rate plus a margin of between 6.00% and 6.50%, depending on the Company’s then current Secured Leverage Ratio (as defined in the Credit Agreement). The initial adjusted LIBOR rate of interest was the LIBOR rate plus 6.25%. For the Initial DDTL, interest expense was accrued at an effective rate of 11.51% and 9.91% for the three months ended December 31, 2023 and 2022, respectively. The Term Loan and the Initial DDTL will mature on November 5, 2026. First Amendment to Credit Agreement On January 27, 2022, the Company, Subsidiary Guarantors, the lenders party thereto, and the Agent entered into the First Amendment to the existing Credit Agreement. The First Amendment provides for, among other things, an increase to the existing term loan facility in the amount of $40,000 (the “Incremental Term Loans”) and the Additional DDTL in the original principal amount of $35,000, which amount is available to be drawn up to 24 months from the date of the First Amendment. The Incremental Term Loans and any amounts borrowed under the Additional DDTL are referred to herein as the “Additional Term Loans”. On January 27, 2022, the Company borrowed the full amount of the Incremental Term Loans, and on October 12, 2022, the Company borrowed the full $35,000 under the Additional DDTL. Amounts outstanding under the Additional Term Loans accrued interest at an annual rate equal to the LIBOR rate plus a margin of between 6.00% and 6.50%, depending on the Company’s then current Secured Leverage Ratio (as defined in the Credit Agreement). The initial adjusted LIBOR rate of interest was the LIBOR rate plus 6.25%. For the Additional DDTL, interest expense was accrued at an effective rate of 11.64% and 9.84% for the three months ended December 31, 2023 and 2022, respectively. The Additional Term Loans require annual principal payments in an amount equal to 1.00% of the original principal amount. Voluntary prepayments of the Additional Term Loans were subject to a 1.00% prepayment premium if made on or prior to November 5, 2023 and other breakage penalties, as defined in the Credit Agreement. Voluntary prepayments made after November 5, 2023 are not subject to any prepayment premium. The Company shall also repay the term loans on an annual basis in an amount equal to a percentage of its Excess Cash Flow (as defined in the Credit Agreement), which percentage will be determined by its then current Secured Leverage Ratio. The Additional Term Loans are secured by all assets (other than certain excluded assets) of the Company and each of the Subsidiary Guarantors. Repayment of the Additional Term Loans is guaranteed by each of the Subsidiary Guarantors. The Additional Term Loans will mature on November 5, 2026. Second Amendment to Credit Agreement On December 29, 2022, the Company, the Subsidiary Guarantors, the lenders party thereto, and the Agent, entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement. The Second Amendment provided for, among other things, an extension of the deadline for the Company to provide to the lenders the audited financial statements for the Company’s fiscal year ended September 30, 2022 and an annual budget for 2023; the Company satisfied these requirements by the extended deadline. The Second Amendment added a requirement that the Company provide, within 30 days after the end of each month, an unaudited consolidated balance sheet, statement of income and statement of cash flows as of the end of, and for, such month, as well as a “key performance indicator” report. The Second Amendment also requires that, within 10 business days after the end of each month, the Company will provide a rolling 13-week cash flow forecast prepared on a monthly basis. The Second Amendment further provides that, upon the request of the Required Lenders (as defined in the Credit Agreement), the Company will permit a financial advisor designated by the Required Lenders to meet with management of the Company to discuss the affairs, finances, accounts and condition of the Company during the six-month period following the effective date of the Second Amendment. In addition, the Second Amendment requires the Company to deliver an updated organization chart and certain supplemental information regarding the Company’s subsidiaries in connection with each quarterly report required pursuant to the Credit Agreement. Under the Second Amendment , the Company could have elected to borrow on each of the loan facilities at either an adjusted term secured overnight financing rate (“Term SOFR”) rate of interest or an alternate base rate of interest. Term SOFR loans accrued interest at an annual rate equal to the applicable Term SOFR rate plus (i) an adjustment percentage equal to between 0.11448% and 0.42826%, depending on the term of the loan (“Adjusted Term SOFR”); provided that, Adjusted Term SOFR could never be less than 1.00%, and (ii) a margin of between 6.00% and 6.50%, depending on the Company’s then current Secured Leverage Ratio (as defined in the Credit Agreement). Alternate base rate loans could accrue interest at an annual rate equal to (i) the highest of (a) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50%, (b) the Agent’s prime rate and (c) Adjusted Term SOFR for a one-month tenor plus 1.00% (the “Second Amendment Alternate Base Rate”); provided that, the Second Amendment Alternate Base Rate could never be less than 2.00%, plus (ii) a margin of between 5.00% and 5.50%, depending on the Company’s then current Secured Leverage Ratio. The Second Amendment also provides that the Company may not request any credit extensions under the revolving credit facility under the Credit Agreement, if any of the conditions precedent set forth in Section 4.02 of the Credit Agreement cannot be satisfied, including, without limitation, the making of the representation and warranty that as of the date of the most recent audited financial statements delivered to the Agent, no event, change, circumstance, condition, development or occurrence has had, or would reasonably be expected to result in, either individually or in the aggregate, a Material Adverse Effect (as defined in the Credit Agreement). In addition, the Second Amendment provided that, no later than January 13, 2023 (or such later date as the Required Lenders shall agree in their discretion), the Company shall (i) appoint a financial advisor on terms reasonably acceptable to the Required Lenders and the Company for a term of at least six months, (ii) provide a 13-week budget to the Agent, and (iii) deliver a perfection certificate supplement updating certain information previously provided with respect to each of the Company and the Subsidiary Guarantors, including information regarding certain collateral and other assets owned by such parties. The Company timely satisfied each of these requirements. Third Amendment to Credit Agreement On January 9, 2023, the Company, the Subsidiary Guarantors, the lenders party thereto, and the Agent, entered into a Third Amendment (“Third Amendment”) to the Credit Agreement. The Third Amendment provides that, among other things, during the period beginning on January 9, 2023 and, subject to the terms of the Credit Agreement, ending on the date on which financial statements for the Company’s fiscal quarter ending March 31, 2024 are delivered or are required to be delivered, as long as no event of default has occurred (the “Amendment Relief Period”): • the Cambodian NHP-related matters, to the extent existing and disclosed to the lenders prior to December 29, 2022, shall not constitute a Material Adverse Effect under the Credit Agreement and will not restrict the Company’s ability to request credit extensions under the revolving credit facility; • the use of borrowings under the revolving credit facility is limited to funding operational expenses of the Company in the ordinary course and cannot be used for the making or funding of investments, permitted acquisitions or restricted payments, payments or purchases with respect to any indebtedness, bonuses or executive compensation, or judgments, fines or settlements; and • additional limitations are imposed on the Company under the Credit Agreement, including restrictions on permitted asset sales, a prohibition on making permitted acquisitions, and significant limitations on the ability to incur additional debt, make investments and make restricted payments. The Third Amendment provides that from and after the date thereof, no incremental facilities under the Credit Agreement may be established or incurred. The Third Amendment also provides for additional mandatory prepayments of borrowed amounts following the receipt by the Company of certain cash receipts, including proceeds from certain equity issuances and cash received by the Company not in the ordinary course of business. Under the Third Amendment, after any draw on the revolving credit facility, the Company’s cash and cash equivalents held on hand domestically within the U.S. cannot exceed $10,000. Under the Third Amendment, the Company may elect to borrow on each of the loan facilities accruing interest at either an adjusted Term SOFR or an alternate base rate of interest. Term SOFR loans shall accrue interest at an annual rate equal to the applicable Term SOFR rate plus (i) an adjustment percentage equal to between 0.11448% and 0.42826%, depending on the term of the loan, provided that, the Adjusted Term SOFR shall never be less than 1.00% per annum, plus (ii) an applicable margin of 6.75% per annum for term loans maintained as SOFR loans or 9.50% per annum for revolving loans maintained as SOFR loans. Alternate base rate loans shall accrue interest at an annual rate equal to (i) the highest of (a) the Federal Funds Effective Rate (as defined in the Credit Agreement) plus 0.50%, (b) the Agent’s prime rate and (c) Adjusted Term SOFR for a one-month tenor plus 1.00% (the “Alternate Base Rate”), provided that, the Alternate Base Rate is subject to a floor of 2.00% per annum plus (ii) an applicable margin of 5.75% per annum for term loans maintained as Alternate Base Rate loans or 8.50% per annum for revolving loans maintained as Alternate Base Rate loans. The fee consideration payable by the Company for each consenting lender party to the Third Amendment is: (i) 0.50% of the aggregate outstanding principal amount of the term loans held by each consenting term loan lender, to be paid in-kind and capitalized to the principal amounts of the term loans held by such lender; (ii) 0.50% of the aggregate outstanding principal amount of the term loans held by each consenting term loan lender, to be paid in cash upon the occurrence of certain prepayments of the term loan under the Credit Agreement; and (iii) 7.00% of the aggregate amount of the revolving commitments held by each consenting revolving lender, to be paid in cash upon the occurrence with certain permanent reductions of the revolving loans under the Credit Agreement. Acquisition-related Debt (Seller Notes) In addition to the indebtedness under the Credit Agreement, certain of the Company’s subsidiaries have issued unsecured notes as partial payment of the purchase prices of certain acquisitions as described herein. Each of these notes is subordinated to the indebtedness under the Credit Agreement. As part of the acquisition of Pre-Clinical Research Services, Inc. ("PCRS"), the Company issued an unsecured subordinated promissory note payable to the PCRS seller in the initial principal amount of $800. The promissory note bears interest at a rate of 4.50% per annum with monthly payments of principal and interest and a maturity date of December 1, 2024. As part of the acquisition of Bolder BioPATH, the Company issued unsecured subordinated promissory notes payable to the former shareholders of Bolder BioPATH in an aggregate principal amount of $1,500. As part of the working capital adjustment in March 2022, a reduction of the promissory note of $470 was recorded. The promissory notes bear interest at a rate of 4.50% per annum, with monthly payments of principal and interest and a maturity date of May 1, 2026. As part of the acquisition of Plato BioPharma, Inc. ("Plato"), the Company issued unsecured subordinated promissory notes payable to the former shareholders of Plato in an aggregate principal amount of $3,000. The promissory notes bore interest at a rate of 4.50% per annum, with monthly payments of principal and interest and a maturity date of June 1, 2023. The promissory notes were paid in full as of June 1, 2023. As part of the acquisition of Orient BioResource Center, Inc. ("OBRC"), the Company agreed to leave in place a payable owed by OBRC to Orient Bio, Inc. (the "Seller") in the amount of $3,700, which the Company determined to have a fair value of $3,325 as of January 27, 2022. The payable does not bear interest and was originally required to be paid to the Seller 18 months after the closing date of January 27, 2022. The Company has the right to set off against the payable any amounts that become payable by the Seller on account of indemnification obligations under the purchase agreement. On April 4, 2023, the Company and the Seller entered into a First Amendment to extend the maturity date of the payable to July 27, 2024. This extension did not affect the rights and remedies of any party under the stock purchase agreement, nor alter, modify or amend or in any way affect any of the terms and conditions, obligations, covenants or agreements contained in the stock purchase agreement. As part of the acquisition of Histion, the Company issued unsecured subordinated promissory notes payable to the former shareholders of Histion in an aggregate principal amount of $433. The promissory notes bear interest at a rate of 4.50% per annum, with monthly payments of principal and interest and a maturity date of April 1, 2025. As part of the acquisition of Protypia, the Company issued unsecured subordinated promissory notes payable to the former shareholders of Protypia in an aggregate principal amount of $600. The promissory notes bear interest at a rate of 4.50% per annum, with monthly interest payments and principal payments on July 7, 2023, and on the maturity date, January 7, 2024. These notes were paid in full on January 7, 2024. Convertible Senior Notes On September 27, 2021, the Company issued $140,000,000 principal amount of its 3.25% Convertible Senior Notes due 2027 (the “Notes”). The Notes were issued pursuant to, and are governed by, an indenture, dated as of September 27, 2021, among the Company, the Company’s wholly-owned subsidiary, BAS Evansville, Inc., as guarantor (the “Guarantor”), and U.S. Bank National Association, as trustee (the “Indenture”). Pursuant to the purchase agreement between the Company and the initial purchaser of the Notes, the Company granted the initial purchaser an option to purchase, for settlement within a period of 13 days from, and including, the date the Notes were first issued, up to an additional $15,000 principal amount of the Notes. The Notes issued on September 27, 2021 included $15,000 principal amount of the Notes issued pursuant to the full exercise by the initial purchaser of such option. The Company used the net proceeds from the offering of the Notes, together with borrowings under a new senior secured term loan facility, to fund the cash portion of the purchase price of the Envigo acquisition and related fees and expenses. The Notes are the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s non-guarantor subsidiaries. The Notes are fully and unconditionally guaranteed, on a senior, unsecured basis, by the Guarantor. The Notes accrue interest at a rate of 3.25% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, beginning on April 15, 2022. The Notes will mature on October 15, 2027, unless earlier repurchased, redeemed or converted. Before April 15, 2027, noteholders have the right to convert their Notes only upon the occurrence of certain events. From and after April 15, 2027, noteholders may convert their Notes at any time at their election until the close of business on the scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, its common shares or a combination of cash and its common shares, at the Company’s election. The initial conversion rate is 21.7162 common shares per $1 principal amount of Notes, which represents an initial conversion price of approximately $46.05 per common share. The conversion rate and conversion price are subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. As of December 31, 2023 and September 30, 2023, there were $3,939 and $4,172, respectively, in unamortized debt issuance costs related to the Notes. For the three months ended December 31, 2023, the total interest expense was $2,900, including coupon interest expense of $1,144, accretion expense of $1,523, and the amortization of debt discount and issuance costs of $233. During the three months ended December 31, 2022, the total interest expense was $2,765, including coupon interest expense of $1,163, accretion expense of $1,381, and the amortization of debt discount and issuance costs of $221. The Notes are redeemable, in whole and not in part, at the Company’s option at any time on or after October 15, 2024 and on or before the 40th scheduled trading day immediately before the maturity date, but only if the last reported sale price per common share of the Company exceeds 130.00% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. The redemption price is a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling the Notes for redemption pursuant to the provisions described in this paragraph will constitute a Make-Whole Fundamental Change, which will result in an increase to the conversion rate in certain circumstances for a specified period of time. If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then noteholders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the Fundamental Change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common shares. The Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the Notes (which, in the case of a default in the payment of interest on the Notes, are subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the failure by the Company or the Guarantor to comply with certain covenants in the Indenture relating to the ability of the Company or the Guarantor to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company or the Guarantor, as applicable, and its subsidiaries, taken as a whole, to another person; (iv) a default by the Company or the Guarantor in its other obligations or agreements under the Indenture or the Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (v) certain defaults by the Company, the Guarantor or any of their respective subsidiaries with respect to indebtedness for borrowed money of at least $20,000; (vi) the rendering of certain judgments against the Company, the Guarantor or any of their respective subsidiaries for the payment of at least $20,000, where such judgments are not discharged or stayed within 60 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished; (vii) certain events of bankruptcy, insolvency and reorganization involving the Company, the Guarantor or any of their respective significant subsidiaries; and (viii) the guarantee of the Notes ceases to be in full force and effect (except as permitted by the Indenture) or the Guarantor denies or disaffirms its obligations under its guarantee of the Notes. If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company or the Guarantor (and not solely with respect to a significant subsidiary of the Company or the Guarantor) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any other Event of Default occurs and is continuing, then the trustee, by notice to the Company, or noteholders of at least 25.00% of the aggregate principal amount of Notes then outstanding, by notice to the Company and the trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right of the noteholders to receive special interest on the Notes for up to 180 days at a specified rate per annum not exceeding 0.50% on the principal amount of the Notes. In accordance with ASC 815, at issuance, the Company evaluated the convertible feature of the Notes and determined it was required to be bifurcated as an embedded derivative and did not qualify for equity classification. The convertible feature of the Notes is subject to fair value remeasurement as of each balance sheet date or until it meets equity classification requirements and is valued utilizing Level 3 inputs under the fair value measurement hierarchy. The discount resulting from the initial fair value of the embedded derivative will be amortized to interest expense using the effective interest method. Non-cash interest expense during the period primarily related to this discount. |
SUPPLEMENTAL BALANCE SHEET INFO
SUPPLEMENTAL BALANCE SHEET INFORMATION | 3 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL BALANCE SHEET INFORMATION | 7. SUPPLEMENTAL BALANCE SHEET INFORMATION Trade receivables and contract assets, net consisted of the following: December 31, September 30, 2023 2023 Trade receivables $ 78,472 $ 77,618 Unbilled revenue 17,690 17,211 Total 96,162 94,829 Less: Allowance for credit losses (6,313) (7,446) Trade receivables and contract assets, net of allowances for credit losses $ 89,849 $ 87,383 Inventories, net consisted of the following: December 31, September 30, 2023 2023 Raw materials $ 2,184 $ 2,259 Work in progress 73 124 Finished goods 4,069 4,439 Research Model Inventory 47,634 52,524 Total 53,960 59,346 Less: Obsolescence reserve (3,320) (3,244) Inventories, net $ 50,640 $ 56,102 Prepaid expenses and other current assets consisted of the following: December 31, September 30, 2023 2023 Advances to suppliers $ 13,773 $ 19,247 Prepaid research models 2,571 4,300 Tax-related receivables 2,375 1,813 Note receivable 1,447 1,226 Other 6,098 6,822 Prepaid expenses and other current assets $ 26,264 $ 33,408 The composition of other assets is as follows: December 31, September 30, 2023 2023 Long-term advances to suppliers $ 3,711 $ 3,681 Funded status of defined benefit plan 3,172 3,036 Other 3,756 3,362 Other assets $ 10,638 $ 10,079 Accrued expenses consisted of the following: December 31, September 30, 2023 2023 Accrued compensation $ 10,567 $ 12,966 Non-income taxes 5,149 4,596 Accrued interest 991 2,975 Other 6,729 5,239 Accrued expenses and other liabilities $ 23,436 $ 25,776 The composition of fees invoiced in advance is as follows: December 31, September 30, 2023 2023 Client deposits $ 16,562 $ 36,689 Deferred revenue 19,259 18,933 Fees invoiced in advance $ 35,821 $ 55,622 The composition of other liabilities is as follows: December 31, September 30, 2023 2023 Long-term client deposits $ 17,000 $ 5,250 Other 967 1,123 Other liabilities $ 17,967 $ 6,373 |
DEFINED BENEFIT PLAN
DEFINED BENEFIT PLAN | 3 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
DEFINED BENEFIT PLAN | 8. DEFINED BENEFIT PLAN The Company has a defined benefit plan in the U.K., the Harlan Laboratories UK Limited Occupational Pension Scheme (the "Pension Plan"), which operated through April 2012. As of April 30, 2012, the accumulation of plan benefits of employees in the Pension Plan was permanently suspended and therefore the Pension Plan was curtailed. During the year ending September 30, 2024, the Company expects to contribute $0 to the Pension Plan. As of December 31, 2023, the funded status of the defined benefit plan obligation of $3,172 is included in other assets (non-current) in the condensed consolidated balance sheets. The following table provides the components of net periodic benefit costs for the Pension Plan, which is included in general and administrative expenses in the condensed consolidated statements of operations. Three Months Ended 2023 2022 Components of net periodic costs: Interest cost $ 181 $ 182 Expected return on assets (192) (198) Amortization of prior gain (35) (38) Net periodic benefit costs $ (46) $ (54) |
OTHER OPERATING EXPENSE
OTHER OPERATING EXPENSE | 3 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
OTHER OPERATING EXPENSE | 9. OTHER OPERATING EXPENSE Other operating expense consisted of the following: Three Months Ended 2023 2022 Acquisition and integration costs $ 70 $ 983 Restructuring costs 1 1,034 266 Startup costs 830 1,505 Remediation costs 283 585 Other costs 1,102 300 $ 3,319 $ 3,639 1 Restructuring costs represent costs incurred in connection with the Company's site closures, site optimization strategy and the in-house integration of Inotiv’s North American transportation operations as discussed in Note 10 – Restructuring and Assets Held for Sale and Note 1 - Description of Business and Basis of Presentation, respectively. |
RESTRUCTURING AND ASSETS HELD F
RESTRUCTURING AND ASSETS HELD FOR SALE | 3 Months Ended |
Dec. 31, 2023 | |
Restructuring And Assets Held For Sale [Abstract] | |
RESTRUCTURING AND ASSETS HELD FOR SALE | 10. RESTRUCTURING AND ASSETS HELD FOR SALE During June 2022, the Company approved and announced a plan to close its facility in Cumberland, Virginia. Further, the Company’s restructuring and site optimization plan includes the following sites, which were identified for relocation of operations: Dublin, Virginia, Gannat, France, Blackthorn, U.K., RMS St. Louis, Missouri, Spain, Boyertown, Pennsylvania, and Haslett, Michigan. For the three months ended December 31, 2023 and 2022, the Company incurred immaterial expenses that qualify as exit and disposal costs under GAAP, and does not expect further material charges as a result of the closures and planned site consolidations. Exit and disposal costs were charged to other operating expense. Further, as of December 31, 2023 and 2022, the liability balance for exit and disposal costs that qualify as employee-related exit and disposal costs was $615 and $571, respectively. As of December 31, 2023, the property and equipment related to the facilities at Haslett, Cumberland, Dublin and Blackthorn were presented within assets held for sale. Cumberland and Dublin During June 2022, the Company approved and announced a plan to close its facility in Cumberland, Virginia (“Cumberland facility”) and to close and relocate its operations in Dublin, Virginia (“Dublin facility”) into its other existing facilities, as a part of the Company’s restructuring and site optimization plan. The Cumberland facility exit was also a part of the settlement, as further described in Note 14 – Contingencies. The Cumberland facility exit was completed in September 2022 and the Dublin facility transition was completed in November 2022. The real property of the Cumberland facility initially met the criteria for assets held for sale as of March 31, 2023 and continued to meet the criteria for assets held for sale as of December 31, 2023. The real property of the Dublin facility met the criteria for assets held for sale as of December 31, 2023. The operations at both the Cumberland facility and the Dublin facility were within the RMS reporting segment. Gannat, Blackthorn, Spain and RMS St. Louis As of March 31, 2023, the Company completed its consultation with employee representatives at the Gannat and Blackthorn facilities and the closures of both facilities were approved. The consolidation of operations at Gannat with the operations in Horst, the Netherlands was completed in June 2023 and initially met the criteria for assets held for sale as of June 30, 2023. The Gannat facility was sold in December 2023. As of June 30, 2023, the real property of the Blackthorn facility initially met the criteria for assets held for sale and continued to meet the criteria for assets held for sale as of December 31, 2023. The consolidation of the operations at the Blackthorn facility with the operations in Hillcrest, U.K. is expected to be complete by the end of September 2024. In July 2023, the Company decided to close its Spain facility. The exit of the facility in Spain was completed in September 2023 and initially met the criteria for assets held for sale as of September 30, 2023. The facility in Spain was sold in November 2023. The RMS St. Louis facility closed in June 2023 and the GEMS operations at the RMS St. Louis facility were relocated to the DSA St. Louis facility and other operational facilities. The operations at the Gannat, Blackthorn, Spain and RMS St. Louis facilities were within the RMS reportable segment. Boyertown and Haslett Prior to the acquisition of Envigo, the Boyertown and Haslett facilities were identified for relocation of operations to the Denver, Pennsylvania facility. The exits of the Boyertown and Haslett facilities were completed in March 2023. The Boyertown facility was sold in September 2023. The real property of the Haslett facility initially met the criteria for assets held for sale as of March 31, 2023 and continued to meet the criteria for assets held for sale as of December 31, 2023. Israel |
LEASES
LEASES | 3 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | 11. LEASES The Company records a right-of-use (“ROU”) asset and lease liability for substantially all leases for which it is a lessee, in accordance with ASC 842. Leases with an initial term of 12 months or less are not recorded on the condensed consolidated balance sheets. The Company recognizes lease expense for the leases on a straight-line basis over the lease term. At inception of a contract, the Company considers all relevant facts and circumstances to assess whether or not the contract represents a lease by determining whether or not the contract conveys the right to control the use of an identified asset, either explicit or implicit, for a period of time in exchange for consideration. The Company has various operating and finance leases for facilities and equipment. Facilities leases provide office, laboratory, warehouse, or land that the Company uses to conduct its operations. Facilities leases range in duration from one to 21 years, with either renewal options for additional terms as the initial lease term expires, or purchase options. Facilities leases are considered as either operating or financing leases. Equipment leases provide for office equipment, laboratory equipment or services the Company uses to conduct its operations. Equipment leases range in duration from 21 to 84 months, with either subsequent annual renewals, additional terms as the initial lease term expires, or purchase options. ROU lease assets and lease liabilities that are reported in the Company’s condensed consolidated balance sheets are as follows: December 31, 2023 September 30, 2023 Operating ROU assets, net $ 48,012 $ 38,866 Current portion of operating lease liabilities 11,105 10,282 Long-term operating lease liabilities 38,074 29,614 Total operating lease liabilities $ 49,179 $ 39,896 During the three months ended December 31, 2023 and 2022, the Company had operating lease amortization of $2,147 and $1,936, respectively. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The components of lease expense related to the Company’s leases for the three months ended December 31, 2023 and 2022were: Three Months Ended 2023 2022 Operating lease costs: Fixed operating lease costs $ 3,103 $ 2,592 Short-term lease costs — 12 Lease income (764) (674) Total operating lease cost $ 2,339 $ 1,930 The Company serves as lessor to a lessee in six facilities. The gross rental income and underlying lease expense are presented net in the Company’s condensed consolidated statements of operations. The gross rent receivables and underlying lease liabilities are presented gross in the Company’s condensed consolidated balance sheets. Supplemental cash flow information related to leases was as follows: Three Months Ended 2023 2022 Cash flows included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,966 $ 2,351 Non-cash lease activity: ROU assets obtained in exchange for new operating lease liabilities $ 11,392 $ 3,567 The weighted average remaining lease term and discount rate for the Company’s operating leases as of December 31, 2023 and 2022 were: December 31, 2023 December 31, 2022 Weighted-average remaining lease term (in years) Operating lease 8.96 5.97 Weighted-average discount rate (in percentages) Operating lease 11.75 % 6.97 % Lease duration was determined utilizing renewal options that the Company is reasonably certain to execute. As of December 31, 2023, maturities of operating lease liabilities for each of the following five fiscal years and a total thereafter were as follows: Operating Leases 2024 (remainder of fiscal year) $ 8,854 2025 9,391 2026 10,035 2027 8,093 2028 6,611 Thereafter 47,809 Total minimum future lease payments 90,793 Less interest (41,614) Total lease liability 49,179 |
EQUITY, STOCK-BASED COMPENSATIO
EQUITY, STOCK-BASED COMPENSATION AND EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Dec. 31, 2023 | |
Equity, Stock-Based Compensation, And Earnings Per Share | |
EQUITY, STOCK-BASED COMPENSATION AND EARNINGS (LOSS) PER SHARE | 12. EQUITY, STOCK-BASED COMPENSATION AND LOSS PER SHARE Increase in Authorized Shares and Equity Plan Reserve On November 4, 2021, the Company’s shareholders approved an amendment to the Company’s Second Amended and Restated Articles of Incorporation to increase the number of authorized shares from 20,000,000 shares, consisting of 19,000,000 common shares and 1,000,000 preferred shares, to 75,000,000 shares, consisting of 74,000,000 common shares and 1,000,000 preferred shares. Approval of this matter by the Inotiv shareholders was a condition to the closing of the Envigo acquisition. The amendment was effective on November 4, 2021. On November 4, 2021, the Company’s shareholders approved an amendment to the Company’s 2018 Equity Incentive Plan (the “Equity Plan”) to increase the number of shares available for awards thereunder by 1,500,000 shares and to make certain corresponding changes to certain limitations in the Equity Plan. At December 31, 2023, 176,983 shares remained available for grants under the Equity Plan. Stock-Based Compensation The Company expenses the estimated fair value of stock options, restricted stock and restricted stock units over the vesting periods of the grants. The Company recognizes expense for awards subject to graded vesting using the straight-line attribution method and forfeitures, as they are incurred. Stock based compensation expense for the three months ended December 31, 2023 and 2022, was $1,897 and $2,046, respectively. Loss per Share The Company computes basic loss per share using the weighted average number of common shares outstanding. The Company computes diluted loss per share using the if-converted method for preferred shares and convertible debt, if any, and the treasury stock method for stock options and restricted stock units. The following table reconciles the numerator and denominator in the computations of basic and diluted loss per share: (in thousands) Three Months Ended 2023 2022 Numerator: Consolidated net loss $ (15,828) $ (86,932) Less: Net (loss) income attributable to noncontrolling interests (440) 391 Net loss attributable to common shareholders (15,388) (87,323) Denominator: Weighted-average shares outstanding - Basic and diluted 25,764 25,603 Anti-dilutive common share equivalents (1) 5,796 5,369 (1) Anti-dilutive common share equivalents are comprised of stock options, restricted stock units, restricted stock awards and 3,040,268 shares of common stock issuable upon conversion in connection with the convertible debt entered into on September 27, 2021.These common share equivalents were outstanding for the periods presented, but were not included in the computation of diluted loss per share for those periods because their inclusion would have had an anti-dilutive effect. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 13. INCOME TAXES The Company uses the asset and liability method of accounting for income taxes. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The Company recognizes the effect on deferred tax assets and liabilities of a change in tax rates in income in the period that includes the enactment date. The Company records valuation allowances based on a determination of the expected realization of tax assets. The Company’s effective tax rates for the three months ended December 31, 2023 and 2022 were 18.1% and 15.5%, respectively. For the three months ended December 31, 2023, the Company’s effective tax rate was primarily driven by nondeductible expenses. For the three months ended December 31, 2022, the Company’s effective tax rate was primarily related to the impact on tax expense of certain book to tax differences on the deductibility of goodwill impairment and other permanent items. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The Company measures the amount of the accrual for which an exposure exists as the largest amount of benefit determined on a cumulative probability basis that it believes is more likely than not to be realized upon settlement of the position. As of December 31, 2023, the Company had no material liability for uncertain tax positions. The Company records interest and penalties accrued in relation to the uncertain income tax position as a component of income tax expense (benefit). Any changes in the liability for the uncertain tax position would impact the effective tax rate. The Company does not expect the total amount of unrecognized tax benefits to significantly change in the next twelve months. The Company is subject to income taxes in the U.S. federal jurisdiction, and the various states and foreign jurisdictions in which it operates. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations and require significant judgment to apply. In the normal course of business, the Company is subject to examination by federal, state, local and foreign taxing authorities. State and other income tax returns are generally subject to examination for a period of three to five years after the filing of the respective returns. The Company is no longer subject to U.S. federal tax examinations for years before 2018 or state and local tax examinations for years before 2017, with limited exceptions. For federal purposes, the tax attributes carried forward could be adjusted through the examination process and are subject to examination three years from the date of utilization. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | 14. CONTINGENCIES Litigation Envigo RMS, LLC (“Envigo RMS”) is a defendant in a purported class action and a related action under California’s Private Attorney General Act of 2004 (“PAGA”) brought by Jacob Greenwell, a former non-exempt employee of Envigo RMS, on June 25, 2021 in the Superior Court of California, Alameda County. The complaints allege that Envigo RMS violated certain wage and hour requirements under the California Labor Code. PAGA authorizes private attorneys to bring claims on behalf of the State of California and aggrieved employees for violations of California’s wage and hour laws. The class action complaint seeks certification of a class of similarly situated employees and the award of actual, consequential and incidental losses and damages for the alleged violations. The PAGA complaint seeks civil penalties pursuant to the California Labor Code and attorney’s fees. On June 2, 2023, Envigo RMS and the plaintiff signed a Memorandum of Understanding (“MOU”) that sets forth the parties’ intent to settle these matters for $795 which includes attorneys’ fees. The MOU provides that the parties will negotiate and enter into a definitive settlement agreement, which will be subject to court approval. The MOU contains no admission of liability or wrongdoing by Envigo RMS. The MOU provides that, if the settlement is approved by the court, the settlement amount would be paid in four quarterly installments, with the first one to be funded after the court’s final approval of the settlement, and the following ones in the three subsequent quarters. While the timeline for final court approval is not yet determined, the Company took a reserve equal to the proposed settlement amount, which is included in accrued expenses and other liabilities. On June 23, 2022, a putative securities class action lawsuit was filed in the United States District Court for the Northern District of Indiana, naming the Company and Robert W. Leasure and Beth A. Taylor as defendants, captioned Grobler v. Inotiv, Inc., et al., Case No. 4:22-cv-00045 (N.D. Ind.). The complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, and Rule 10b-5 promulgated thereunder, based on alleged false and misleading statements and material omissions regarding the Company’s acquisition of Envigo RMS and its regulatory compliance. On September 12, 2022, Oklahoma Police Pension and Retirement System was appointed by the Court as lead plaintiff. Thereafter, on November 14, 2022, the lead plaintiff filed an amended complaint against the same defendants, in addition to John E. Sagartz and Carmen Wilbourn, that asserted the same claims along with a claim under Section 14(a) of the Exchange Act. On November 23, 2022, the lead plaintiff filed a further amended complaint against the aforementioned defendants asserting the same claims as the amended complaint and further alleging that false and misleading statements and material omissions were made concerning the Company’s non-human primate business. The purported class in the operative complaint includes all persons who purchased or otherwise acquired the Company’s common stock between September 21, 2021 and November 16, 2022, and the complaint seeks an unspecified amount of monetary damages, interest, fees and expenses of attorneys and experts, and other relief. On January 27, 2023, the defendants filed a motion to dismiss the amended complaint. That motion has been fully briefed since April 28, 2023, and is currently pending. While the Company cannot predict the outcome of this matter, the Company believes the class action to be without merit and plans to vigorously defend itself. We cannot reasonably estimate the maximum potential exposure or the range of possible loss in excess of amounts accrued for this matter. On September 9, 2022, a purported shareholder derivative lawsuit was filed in the United States District Court for the Northern District of Indiana, naming Robert W. Leasure, Beth A. Taylor, Gregory C. Davis, R. Matthew Neff, Richard A. Johnson, John E. Sagartz, Nigel Brown, and Scott Cragg as defendants, and the Company as a nominal defendant, captioned Grobler v. Robert W. Leasure, et al., Case No. 4:22-cv-00064 (N.D. Ind.). The derivative action asserts claims for breach of fiduciary duty, abuse of control, gross mismanagement, and waste of corporate assets, as well as violations of Section 14(a) of the Securities Exchange Act of 1934 arising out of the Company’s acquisition of Envigo and its regulatory compliance. On November 15, 2022, the Court entered an order staying the derivative action pending a resolution of a motion to dismiss in the securities class action. On January 4, 2023, an additional shareholder derivative lawsuit was filed in the United States District Court for the Northern District of Indiana, naming Robert W. Leasure, Beth A. Taylor, Gregory C. Davis, R. Matthew Neff, Richard A. Johnson, John E. Sagartz, Nigel Brown, and Scott Cragg as defendants, and the Company as a nominal defendant, captioned Burkhart v. Robert W. Leasure, et al., Case No 4:23-cv-00003 (N.D. Ind.). The derivative action asserts claims for breach of fiduciary duty, abuse of control, gross mismanagement, and waste of corporate assets, as well as violations of Section 10(b), 21D and 14(a) of the Securities Exchange Act of 1934 arising out of the Company’s acquisition of Envigo and its regulatory compliance. On May 8, 2023, the Court entered an order staying the derivative action pending a resolution of a motion to dismiss in the securities class action. On April 20, 2023, an additional shareholder derivative lawsuit was filed in the State of Indiana Tippecanoe County Circuit Court, naming Robert W. Leasure, Beth A. Taylor, Gregory C. Davis, R. Matthew Neff, Richard A. Johnson, John E. Sagartz, Nigel Brown, and Scott Cragg as defendants, and the Company as a nominal defendant, captioned Whitfield v. Gregory C. Davis, et al., Case No. 79C01-2304-PL-000048 (Tippecanoe Circuit Court). The derivative action asserts claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and waste of corporate assets arising out of the Company’s acquisition of Envigo and its regulatory compliance, and the Company’s non-human primate business. On June 20, 2023, the Court entered an order staying the derivative action pending resolution of a motion to dismiss in the securities class action. On June 2, 2023, an additional shareholder derivative lawsuit was filed in the Indiana Commercial Court of Marion County, naming Robert W. Leasure, Beth A. Taylor, Carmen Wilbourn, Gregory C. Davis, R. Matthew Neff, Richard A. Johnson, John E. Sagartz, Nigel Brown, and Scott Cragg as defendants, and the Company as a nominal defendant, captioned Castro v. Robert W. Leasure, et al., Case No. 49D01-2306-PL-022213 (Marion Superior Court 1). The derivative action asserts claims for breach of fiduciary duty, unjust enrichment, and waste of corporate assets arising out of the Company’s acquisition of Envigo and its regulatory compliance, and the Company’s NHP business. On August 24, 2023, this derivative action was transferred to the Tippecanoe County Circuit Court and consolidated with the derivative action captioned Whitfield v. Gregory C. Davis, et al., Case No. 79C01-2304-PL-000048 (Tippecanoe Circuit Court). The consolidated action remains stayed pending resolution of a motion to dismiss in the securities class action. While the Company cannot predict the outcome of these matters, the Company believes the derivative actions to be without merit and plans to vigorously defend itself. We cannot reasonably estimate the maximum potential exposure or the range of possible loss in excess of amounts accrued for any of these matters. The Company is party to certain other legal actions arising out of the normal course of its business. In management's opinion, none of these actions will have a material effect on the Company's operations, financial condition or liquidity. Government Investigations and Actions The Company is subject to and/or involved in various government investigations, inquiries and actions, including those described below. Given their inherent uncertainty, the Company cannot predict the duration or outcome of the pending matters described below. An adverse outcome of any of the following matters could have a material adverse impact on the Company’s operations, financial condition, operating results and cash flows. During the period from July 2021 through March 2022, Envigo RMS’s Cumberland facility was inspected on several occasions by the U.S. Department of Agriculture (“USDA”). USDA issued inspection reports with findings of non-compliance with certain USDA laws and regulations. Envigo RMS formally appealed certain of the findings, and made multiple remediations and improvements at the Cumberland facility, of which it kept USDA apprised. On May 18, 2022, the U.S. Department of Justice (“DOJ”), together with federal and state law enforcement agents, executed a search and seizure warrant on the Cumberland facility. The warrant was issued by the U.S. District Court for the Western District of Virginia on May 13, 2022. In 2022, EGSI and Inotiv received grand jury subpoenas and other requests from the U.S. Attorney’s Office for the Western District of Virginia (“USAO-WDVA”) for documents and information related to the companies’ compliance with the Animal Welfare Act (“AWA”), the Clean Water Act (“CWA”), the Virginia State Water Control Law and local pretreatment requirements from January 2017 to present. On July 23, 2023, EGSI and Inotiv received a grand jury subpoena from USAO-WDVA for documents related to the Cumberland facility’s compliance with the Clean Air Act, Virginia Air Pollution Control Laws and Regulations, and local requirements from January 1, 2017 to present. Also on July 23, 2023, Inotiv received a grand jury subpoena from USAO-WDVA for documents and information related to the Company’s Alice, Texas facilities’ compliance with the CWA, the Texas State Water Control Law, and local pretreatment requirements from January 1, 2020 to present. Certain current and former employees have also received subpoenas for testimony and documents related to these matters. The Company is continuing to cooperate with USAO-WDVA and other involved authorities, and is evaluating the potential to resolve the matter. While an unfavorable outcome is probable, the Company cannot predict whether or when it will be able to resolve the matter or reasonably estimate the range of loss. As previously disclosed, on May 19, 2022, a civil complaint was filed by DOJ against Envigo RMS in the U.S. District Court for the Western District of Virginia alleging violations of the AWA at the Cumberland facility. On July 15, 2022, the court approved a settlement entered into by Envigo RMS, DOJ and the USDA in this civil case, which also comprised USDA’s administrative claims against Envigo RMS for the Cumberland facility, and the civil and administrative complaints were dismissed with prejudice on September 14, 2022. This matter is now fully resolved. On June 15, 2021, EGSI, a subsidiary of the Company acquired in the Envigo acquisition, received a grand jury subpoena requested by the U.S. Attorney’s Office for the Southern District of Florida (“USAO-SDFL”) for the production of documents related to the procurement of NHPs from foreign suppliers for the period January 1, 2018 through June 1, 2021. The subpoena relates to an earlier grand jury subpoena requested by the USAO-SDFL and received by EGSI’s predecessor entity, Covance Research Products, in April 2019. Envigo acquired EGSI from Covance, Inc., a subsidiary of Laboratory Corporation of America Holdings, in June 2019. As of the filing date of this report, the Company has not received any additional subpoenas related to this matter. On January 27, 2022, EGSI acquired OBRC, which owns and operates a primate quarantine and holding facility located near Alice, Texas. In 2019, OBRC received grand jury subpoenas requested by the USAO-SDFL requiring the production of documents and information related to its importation of NHPs into the United States. On June 16, 2021, OBRC received a grand jury subpoena requested by the USAO-SDFL requiring the production of documents related to the procurement of NHPs from foreign suppliers for the period January 1, 2018 through June 1, 2021. The OBRC purchase agreement provides for indemnification of EGSI and its officers, directors and affiliates by the Seller, Orient Bio, Inc., for liabilities resulting from actions, inactions, errors or omissions of Orient Bio, Inc. or OBRC related to any period prior to the closing date. As of the filing date of this report, the Company has not received any additional subpoenas related to this matter. On November 16, 2022 the Company disclosed that employees of the principal supplier of NHPs to the Company, along with two Cambodian government officials, have been criminally charged by the USAO-SDFL with conspiring to illegally import NHPs into the United States from December 2017 through January 2022 and in connection with seven specific imports between July 2018 and December 2021. Consistent with Company policy, the Company is cooperating with USAO-SDFL in connection with the matters described herein. On May 23, 2023, Inotiv received a voluntary request from the U.S. Securities and Exchange Commission (“SEC”) seeking documents and information for the period December 1, 2017 to the present regarding the Company, EGSI, and OBRC’s importation of NHPs from Asia, including information relating to whether their importation practices complied with the U.S. Foreign Corrupt Practices Act. The Company is cooperating with the SEC. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net loss attributable to common shareholders | $ (15,388) | $ (87,323) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
DESCRIPTION OF THE BUSINESS A_2
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Company has prepared the accompanying unaudited interim condensed consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles (“GAAP”), and therefore should be read in conjunction with the Company’s audited consolidated financial statements, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023. In the opinion of management, the condensed consolidated financial statements for the three months ended December 31, 2023 and 2022 include all adjustments which are necessary for a fair presentation of the results of the interim periods and of the Company’s financial position at December 31, 2023. The results of operations for the three months ended December 31, 2023 are not necessarily indicative of the results for the fiscal year ending September 30, 2024. Certain prior year amounts have been reclassified within the condensed consolidated statements of operations for consistency with the current year presentation. Specifically, depreciation expense has been combined with amortization of intangible assets. These reclassifications had no effect on the reported results of operations. Further, certain financing activities have been reclassified within the condensed consolidated statements of cash flows for consistency with the current year presentation. |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities. These include, but are not limited to, management estimates in the calculation and timing of revenue recognition, pension liabilities, deferred tax assets and liabilities and the related valuation allowance. Although estimates are based upon management’s best estimate using historical experience, current events, and actions, actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. |
Consolidation | Consolidation The accompanying condensed consolidated financial statements are unaudited and have been prepared by the Company, including all subsidiaries and prior to December 23, 2023, a variable interest entity (“VIE”) it previously consolidated in accordance with GAAP. The VIE does not materially impact our net assets or net (loss) income. During December 2023, the Company entered into a transition services agreement with Vanguard Supply Chain Solutions ("VSCS"), one of the Company's transportation providers, to enable the in-house integration of Inotiv’s North American transportation operations. Following this transaction, Inotiv was no longer required to consolidate this entity. Subsequent to December 31, 2023, the Company successfully completed the in-house integration of its North American transportation operations. The Company accounts for noncontrolling interests in accordance with Accounting Standards Codification (“ASC”) 810, “Consolidation” (“ASC 810”). ASC 810 requires companies with noncontrolling interests to disclose such interests as a portion of equity but separate from the parent’s equity. The noncontrolling interests’ portion of net loss is presented on the condensed consolidated statements of operations. |
Concentration of Risk | Concentration of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade receivables from clients in the biopharmaceutical, contract research, academic, and governmental sectors. The Company believes its exposure to credit risk is minimal, as the majority of the clients are predominantly well established and viable. Additionally, the Company maintains allowances for potential credit losses. The Company’s exposure to credit loss in the event that payment is not received for revenue recognized equals the outstanding trade receivables and contract assets less fees invoiced in advance. |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Contract Assets and Liabilities | The following table provides information about contract assets (trade receivables and unbilled revenue, excluding allowances for credit losses), and fees invoiced in advance (client deposits and deferred revenue): Balance at Balance at Contract assets: Trade receivables $ 78,472 $ 77,618 Contract assets: Unbilled revenue 17,690 17,211 Contract liabilities: Client deposits 16,562 36,689 Contract liabilities: Deferred revenue 19,259 18,933 Trade receivables and contract assets, net consisted of the following: December 31, September 30, 2023 2023 Trade receivables $ 78,472 $ 77,618 Unbilled revenue 17,690 17,211 Total 96,162 94,829 Less: Allowance for credit losses (6,313) (7,446) Trade receivables and contract assets, net of allowances for credit losses $ 89,849 $ 87,383 The composition of fees invoiced in advance is as follows: December 31, September 30, 2023 2023 Client deposits $ 16,562 $ 36,689 Deferred revenue 19,259 18,933 Fees invoiced in advance $ 35,821 $ 55,622 |
SEGMENT AND GEOGRAPHIC INFORM_2
SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Operating Segments | Three Months Ended 2023 2022 Revenue DSA: Service revenue $ 43,563 $ 39,971 Product revenue 1,135 1,122 RMS: Service revenue 10,300 10,077 Product revenue 80,503 71,584 $ 135,501 $ 122,754 Operating Income (Loss) DSA $ 1,593 $ 2,372 RMS 5,078 (71,272) Unallocated Corporate (16,042) (21,678) $ (9,371) $ (90,578) Interest expense (11,364) (10,450) Other income (expense) 1,413 (1,878) Loss before income taxes $ (19,322) $ (102,906) Three Months Ended 2023 2022 Depreciation and amortization: DSA $ 4,409 $ 3,980 RMS 9,737 9,283 Unallocated Corporate 104 — $ 14,250 $ 13,263 Capital expenditures: DSA $ 2,275 3,294 RMS 3,297 5,075 $ 5,572 $ 8,369 |
Schedule of Revenue by Geographical Information | The following represents revenue originating in entities physically located in the identified geographic area: Three Months Ended 2023 2022 United States $ 111,769 $ 99,009 Netherlands 18,062 15,222 Other 5,670 8,523 $ 135,501 $ 122,754 |
Schedule of Long-lived Assets by Geographic Area | Long-lived assets shown below include property and equipment, net. The following represents long-lived assets where they are physically located: December 31, September 30, 2023 2023 United States $ 175,950 $ 178,021 Netherlands 6,873 6,656 Other 8,713 6,391 $ 191,536 $ 191,068 |
BUSINESS COMBINATIONS (Tables)
BUSINESS COMBINATIONS (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Purchase Price Allocation | The following table summarizes the final determination and allocation of the fair value of assets acquired and liabilities assumed as of the acquisition date: July 7, 2022 Assets acquired and liabilities assumed: Goodwill 6,002 Intangible assets 5,600 Other liabilities, net (84) Deferred tax liabilities (652) $ 10,866 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The following table displays intangible assets, net by major class: December 31, 2023 Carrying Accumulated Carrying Client relationships $ 317,492 $ (61,771) $ 255,722 Intellectual property 56,420 (13,868) 42,552 Other 4,837 (2,761) 2,076 $ 378,749 $ (78,400) $ 300,350 September 30, 2023 Carrying Accumulated Carrying Client relationships $ 316,820 $ (54,711) $ 262,109 Intellectual property 56,337 (12,234) 44,103 Other 4,837 (2,621) 2,216 $ 377,994 $ (69,566) $ 308,428 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long term debt as of December 31, 2023 and September 30, 2023 is detailed in the table below. December 31, 2023 September 30, 2023 Seller Note – Bolder BioPath (Related party) $ 545 $ 602 Seller Note – Preclinical Research Services 522 541 Seller Payable - Orient BioResource Center 3,664 3,649 Seller Note – Histion (Related party) 193 229 Seller Note – Protypia (Related party) 400 400 Economic Injury Disaster Loan — 140 Convertible Senior Notes 112,174 110,651 Term Loan Facility, DDTL and Incremental Term Loans 272,419 272,930 $ 389,917 $ 389,142 Less: Current portion (8,411) (7,950) Less: Debt issuance costs not amortized (10,575) (11,397) Total Long-term debt $ 370,931 $ 369,795 |
SUPPLEMENTAL BALANCE SHEET IN_2
SUPPLEMENTAL BALANCE SHEET INFORMATION (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Contract Assets and Liabilities | The following table provides information about contract assets (trade receivables and unbilled revenue, excluding allowances for credit losses), and fees invoiced in advance (client deposits and deferred revenue): Balance at Balance at Contract assets: Trade receivables $ 78,472 $ 77,618 Contract assets: Unbilled revenue 17,690 17,211 Contract liabilities: Client deposits 16,562 36,689 Contract liabilities: Deferred revenue 19,259 18,933 Trade receivables and contract assets, net consisted of the following: December 31, September 30, 2023 2023 Trade receivables $ 78,472 $ 77,618 Unbilled revenue 17,690 17,211 Total 96,162 94,829 Less: Allowance for credit losses (6,313) (7,446) Trade receivables and contract assets, net of allowances for credit losses $ 89,849 $ 87,383 The composition of fees invoiced in advance is as follows: December 31, September 30, 2023 2023 Client deposits $ 16,562 $ 36,689 Deferred revenue 19,259 18,933 Fees invoiced in advance $ 35,821 $ 55,622 |
Schedule of Inventory | Inventories, net consisted of the following: December 31, September 30, 2023 2023 Raw materials $ 2,184 $ 2,259 Work in progress 73 124 Finished goods 4,069 4,439 Research Model Inventory 47,634 52,524 Total 53,960 59,346 Less: Obsolescence reserve (3,320) (3,244) Inventories, net $ 50,640 $ 56,102 |
Schedule of Other Current Assets | Prepaid expenses and other current assets consisted of the following: December 31, September 30, 2023 2023 Advances to suppliers $ 13,773 $ 19,247 Prepaid research models 2,571 4,300 Tax-related receivables 2,375 1,813 Note receivable 1,447 1,226 Other 6,098 6,822 Prepaid expenses and other current assets $ 26,264 $ 33,408 |
Schedule of Supplemental Balance Sheet information Related to Other Assets | The composition of other assets is as follows: December 31, September 30, 2023 2023 Long-term advances to suppliers $ 3,711 $ 3,681 Funded status of defined benefit plan 3,172 3,036 Other 3,756 3,362 Other assets $ 10,638 $ 10,079 |
Schedule of Accrued Liabilities | Accrued expenses consisted of the following: December 31, September 30, 2023 2023 Accrued compensation $ 10,567 $ 12,966 Non-income taxes 5,149 4,596 Accrued interest 991 2,975 Other 6,729 5,239 Accrued expenses and other liabilities $ 23,436 $ 25,776 |
Schedule of Other Noncurrent Liabilities | The composition of other liabilities is as follows: December 31, September 30, 2023 2023 Long-term client deposits $ 17,000 $ 5,250 Other 967 1,123 Other liabilities $ 17,967 $ 6,373 |
DEFINED BENEFIT PLAN (Tables)
DEFINED BENEFIT PLAN (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Components of Net Periodic Benefit Costs | The following table provides the components of net periodic benefit costs for the Pension Plan, which is included in general and administrative expenses in the condensed consolidated statements of operations. Three Months Ended 2023 2022 Components of net periodic costs: Interest cost $ 181 $ 182 Expected return on assets (192) (198) Amortization of prior gain (35) (38) Net periodic benefit costs $ (46) $ (54) |
OTHER OPERATING EXPENSE (Tables
OTHER OPERATING EXPENSE (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Operating Expense | Other operating expense consisted of the following: Three Months Ended 2023 2022 Acquisition and integration costs $ 70 $ 983 Restructuring costs 1 1,034 266 Startup costs 830 1,505 Remediation costs 283 585 Other costs 1,102 300 $ 3,319 $ 3,639 1 Restructuring costs represent costs incurred in connection with the Company's site closures, site optimization strategy and the in-house integration of Inotiv’s North American transportation operations as discussed in Note 10 – Restructuring and Assets Held for Sale and Note 1 - Description of Business and Basis of Presentation, respectively. |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Supplemental Balance Sheet Information and Other Information Related to Leases | ROU lease assets and lease liabilities that are reported in the Company’s condensed consolidated balance sheets are as follows: December 31, 2023 September 30, 2023 Operating ROU assets, net $ 48,012 $ 38,866 Current portion of operating lease liabilities 11,105 10,282 Long-term operating lease liabilities 38,074 29,614 Total operating lease liabilities $ 49,179 $ 39,896 |
Schedule of Supplemental Cash Flow and Other Information Related to Leases | The components of lease expense related to the Company’s leases for the three months ended December 31, 2023 and 2022were: Three Months Ended 2023 2022 Operating lease costs: Fixed operating lease costs $ 3,103 $ 2,592 Short-term lease costs — 12 Lease income (764) (674) Total operating lease cost $ 2,339 $ 1,930 Supplemental cash flow information related to leases was as follows: Three Months Ended 2023 2022 Cash flows included in the measurement of lease liabilities: Operating cash flows from operating leases $ 2,966 $ 2,351 Non-cash lease activity: ROU assets obtained in exchange for new operating lease liabilities $ 11,392 $ 3,567 The weighted average remaining lease term and discount rate for the Company’s operating leases as of December 31, 2023 and 2022 were: December 31, 2023 December 31, 2022 Weighted-average remaining lease term (in years) Operating lease 8.96 5.97 Weighted-average discount rate (in percentages) Operating lease 11.75 % 6.97 % |
Operating Lease Maturity | As of December 31, 2023, maturities of operating lease liabilities for each of the following five fiscal years and a total thereafter were as follows: Operating Leases 2024 (remainder of fiscal year) $ 8,854 2025 9,391 2026 10,035 2027 8,093 2028 6,611 Thereafter 47,809 Total minimum future lease payments 90,793 Less interest (41,614) Total lease liability 49,179 |
EQUITY, STOCK-BASED COMPENSAT_2
EQUITY, STOCK-BASED COMPENSATION AND EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Dec. 31, 2023 | |
Equity, Stock-Based Compensation, And Earnings Per Share | |
Schedule of Computation of Basic and Diluted Net (Loss) Income Per Share | The following table reconciles the numerator and denominator in the computations of basic and diluted loss per share: (in thousands) Three Months Ended 2023 2022 Numerator: Consolidated net loss $ (15,828) $ (86,932) Less: Net (loss) income attributable to noncontrolling interests (440) 391 Net loss attributable to common shareholders (15,388) (87,323) Denominator: Weighted-average shares outstanding - Basic and diluted 25,764 25,603 Anti-dilutive common share equivalents (1) 5,796 5,369 (1) Anti-dilutive common share equivalents are comprised of stock options, restricted stock units, restricted stock awards and 3,040,268 shares of common stock issuable upon conversion in connection with the convertible debt entered into on September 27, 2021.These common share equivalents were outstanding for the periods presented, but were not included in the computation of diluted loss per share for those periods because their inclusion would have had an anti-dilutive effect. |
DESCRIPTION OF THE BUSINESS A_3
DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION - Narrative (Details) $ in Thousands | 3 Months Ended | 42 Months Ended | 50 Months Ended | |||||
Jan. 09, 2023 | Dec. 29, 2022 | Nov. 05, 2021 | Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | Dec. 31, 2021 import | Jan. 31, 2022 governmentOfficial | Sep. 30, 2023 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||
Number of segments | segment | 2 | |||||||
Number of government officials | governmentOfficial | 2 | |||||||
Number of imports | import | 7 | |||||||
REVENUE RECOGNITION | ||||||||
Revenue | $ 135,501 | $ 122,754 | ||||||
Cash and cash equivalents | $ 22,001 | $ 35,492 | ||||||
Credit Agreement | ||||||||
REVENUE RECOGNITION | ||||||||
Basis points adjustments (as percentage) | 0.50% | 0.50% | ||||||
Credit Agreement | Base Rate | ||||||||
REVENUE RECOGNITION | ||||||||
Basis points adjustments (as percentage) | 1% | 1% | ||||||
Minimum | Secured Overnight Financing Rate (SOFR) | ||||||||
REVENUE RECOGNITION | ||||||||
Variable interest rate (as a percent) | 1% | 1% | ||||||
Minimum | Credit Agreement | ||||||||
REVENUE RECOGNITION | ||||||||
Variable interest rate (as a percent) | 1% | |||||||
Minimum | Credit Agreement | Secured Overnight Financing Rate (SOFR) | ||||||||
REVENUE RECOGNITION | ||||||||
Debt instrument, adjustment rate | 0.0011448 | |||||||
Variable interest rate (as a percent) | 0.11448% | |||||||
Basis points adjustments (as percentage) | 6.75% | 6% | ||||||
Minimum | Credit Agreement | Base Rate | ||||||||
REVENUE RECOGNITION | ||||||||
Variable interest rate (as a percent) | 2% | 2% | ||||||
Basis points adjustments (as percentage) | 5.75% | 5% | ||||||
Maximum | Secured Overnight Financing Rate (SOFR) | ||||||||
REVENUE RECOGNITION | ||||||||
Debt instrument, adjustment rate | 0.0042826 | |||||||
Maximum | Credit Agreement | Secured Overnight Financing Rate (SOFR) | ||||||||
REVENUE RECOGNITION | ||||||||
Variable interest rate (as a percent) | 0.42826% | |||||||
Basis points adjustments (as percentage) | 9.50% | 6.50% | ||||||
Maximum | Credit Agreement | Base Rate | ||||||||
REVENUE RECOGNITION | ||||||||
Basis points adjustments (as percentage) | 8.50% | 5.50% | ||||||
One customer | Revenue from Contract with Customer | Customer Concentration Risk | ||||||||
REVENUE RECOGNITION | ||||||||
Concentration risk percentage | 22.40% | 21.70% |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2023 | Sep. 30, 2023 | |
Contract assets | ||
Contract assets: Trade receivables | $ 78,472 | $ 77,618 |
Contract assets: Unbilled revenue | 17,690 | 17,211 |
Contract liabilities | ||
Client deposits | 16,562 | 36,689 |
Deferred revenue | 19,259 | 18,933 |
Uncollectible invoices written off | $ 18,164 | $ 10,220 |
Percentage of revenue billed from unbilled revenue | 50% | |
Percentage of contract liabilities recognized as revenue | 51% |
SEGMENT AND GEOGRAPHIC INFORM_3
SEGMENT AND GEOGRAPHIC INFORMATION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
SEGMENT INFORMATION | ||
Revenue | $ 135,501 | $ 122,754 |
Intersegment Eliminations | ||
SEGMENT INFORMATION | ||
Revenue | $ 896 | $ 1,125 |
SEGMENT AND GEOGRAPHIC INFORM_4
SEGMENT AND GEOGRAPHIC INFORMATION - Operating Segments Revenue and Operating Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
SEGMENT INFORMATION | ||
Revenue | $ 135,501 | $ 122,754 |
Operating Income (Loss) | (9,371) | (90,578) |
Interest expense | (11,364) | (10,450) |
Other income (expense) | 1,413 | (1,878) |
Loss before income taxes | (19,322) | (102,906) |
Depreciation and amortization | 14,250 | 13,263 |
Capital expenditures | 5,572 | 8,369 |
Unallocated Corporate | ||
SEGMENT INFORMATION | ||
Operating Income (Loss) | (16,042) | (21,678) |
Depreciation and amortization | 104 | 0 |
Service | ||
SEGMENT INFORMATION | ||
Revenue | 53,863 | 50,048 |
Product | ||
SEGMENT INFORMATION | ||
Revenue | 81,638 | 72,706 |
Discovery and Safety Assessment Segment | ||
SEGMENT INFORMATION | ||
Capital expenditures | 2,275 | 3,294 |
Discovery and Safety Assessment Segment | Operating Segments | ||
SEGMENT INFORMATION | ||
Operating Income (Loss) | 1,593 | 2,372 |
Depreciation and amortization | 4,409 | 3,980 |
Discovery and Safety Assessment Segment | Service | ||
SEGMENT INFORMATION | ||
Revenue | 43,563 | 39,971 |
Discovery and Safety Assessment Segment | Product | ||
SEGMENT INFORMATION | ||
Revenue | 1,135 | 1,122 |
Research Models And Services Segment | ||
SEGMENT INFORMATION | ||
Capital expenditures | 3,297 | 5,075 |
Research Models And Services Segment | Operating Segments | ||
SEGMENT INFORMATION | ||
Operating Income (Loss) | 5,078 | (71,272) |
Depreciation and amortization | 9,737 | 9,283 |
Research Models And Services Segment | Service | ||
SEGMENT INFORMATION | ||
Revenue | 10,300 | 10,077 |
Research Models And Services Segment | Product | ||
SEGMENT INFORMATION | ||
Revenue | $ 80,503 | $ 71,584 |
SEGMENT AND GEOGRAPHIC INFORM_5
SEGMENT AND GEOGRAPHIC INFORMATION - Geographic Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | |
SEGMENT INFORMATION | |||
Revenue | $ 135,501 | $ 122,754 | |
Long-lived assets | 191,536 | $ 191,068 | |
United States | |||
SEGMENT INFORMATION | |||
Revenue | 111,769 | 99,009 | |
Long-lived assets | 175,950 | 178,021 | |
Netherlands | |||
SEGMENT INFORMATION | |||
Revenue | 18,062 | 15,222 | |
Long-lived assets | 6,873 | 6,656 | |
Other | |||
SEGMENT INFORMATION | |||
Revenue | 5,670 | $ 8,523 | |
Long-lived assets | $ 8,713 | $ 6,391 |
BUSINESS COMBINATIONS - Narrati
BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 07, 2022 | Apr. 25, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
BUSINESS COMBINATIONS | ||||
Net loss attributable to common shareholders | $ (15,388) | $ (87,323) | ||
Histion LLC Acquisition | ||||
BUSINESS COMBINATIONS | ||||
Consideration in cash | $ 950 | |||
Shares issued (in shares) | 17,618 | |||
Common shares value | $ 364 | |||
Principal amount | $ 433 | |||
Protypia, Inc. | ||||
BUSINESS COMBINATIONS | ||||
Consideration in cash | $ 9,460 | |||
Shares issued (in shares) | 74,997 | |||
Common shares value | $ 806 | |||
Principal amount | $ 600 | |||
Weighted-average estimated useful life | 8 years 1 month 6 days | |||
Goodwill deductible for tax purposes | $ 0 |
BUSINESS COMBINATIONS - Fair va
BUSINESS COMBINATIONS - Fair value of assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 | Jul. 07, 2022 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 94,286 | $ 94,286 | |
Protypia, Inc. | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 6,002 | ||
Intangible assets | 5,600 | ||
Other liabilities, net | (84) | ||
Deferred tax liabilities | (652) | ||
Total | $ 10,866 |
INTANGIBLE ASSETS - Intangible
INTANGIBLE ASSETS - Intangible Assets, net by major class (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Finite-Lived intangible assets | ||
Carrying Amount, Gross | $ 378,749 | $ 377,994 |
Accumulated Amortization | (78,400) | (69,566) |
Carrying Amount, Net | 300,350 | 308,428 |
Client relationships | ||
Finite-Lived intangible assets | ||
Carrying Amount, Gross | 317,492 | 316,820 |
Accumulated Amortization | (61,771) | (54,711) |
Carrying Amount, Net | 255,722 | 262,109 |
Intellectual property | ||
Finite-Lived intangible assets | ||
Carrying Amount, Gross | 56,420 | 56,337 |
Accumulated Amortization | (13,868) | (12,234) |
Carrying Amount, Net | 42,552 | 44,103 |
Other | ||
Finite-Lived intangible assets | ||
Carrying Amount, Gross | 4,837 | 4,837 |
Accumulated Amortization | (2,761) | (2,621) |
Carrying Amount, Net | $ 2,076 | $ 2,216 |
DEBT - Schedule of long-term de
DEBT - Schedule of long-term debt (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
DEBT | ||
Long-term debt | $ 389,917 | $ 389,142 |
Less: Current portion | (8,411) | (7,950) |
Less: Debt issuance costs not amortized | (10,575) | (11,397) |
Total Long-term debt | 370,931 | 369,795 |
Seller Note – Bolder BioPath (Related party) | ||
DEBT | ||
Long-term debt | 545 | 602 |
Seller Note – Preclinical Research Services | ||
DEBT | ||
Long-term debt | 522 | 541 |
Seller Payable - Orient BioResource Center | ||
DEBT | ||
Long-term debt | 3,664 | 3,649 |
Seller Note – Histion (Related party) | ||
DEBT | ||
Long-term debt | 193 | 229 |
Seller Note – Protypia (Related party) | ||
DEBT | ||
Long-term debt | 400 | 400 |
Economic Injury Disaster Loan | ||
DEBT | ||
Long-term debt | 0 | 140 |
Convertible Senior Notes | ||
DEBT | ||
Long-term debt | 112,174 | 110,651 |
Term Loan Facility, DDTL and Incremental Term Loans | ||
DEBT | ||
Long-term debt | $ 272,419 | $ 272,930 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||||||||||||
Jan. 09, 2023 USD ($) | Dec. 29, 2022 day | Oct. 12, 2022 USD ($) | Jan. 27, 2022 USD ($) | Jan. 07, 2022 USD ($) | Nov. 27, 2021 USD ($) day $ / shares | Nov. 05, 2021 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2023 USD ($) | Jul. 07, 2022 USD ($) | Oct. 04, 2021 USD ($) | May 03, 2021 USD ($) | |
DEBT | ||||||||||||||
Borrowings on delayed draw term loan | $ 0 | $ 35,000 | ||||||||||||
Repayment of revolving credit facility | 0 | 15,000 | ||||||||||||
Volunteer principal prepayments (as percentage) | 0.0100 | |||||||||||||
Cash and cash equivalents held on hand domestically | $ 10,000 | |||||||||||||
Consideration to be paid-in-kind (as a percent) | 0.50% | |||||||||||||
Consideration to be paid in cash upon prepayments (as a percent) | 0.50% | |||||||||||||
Consideration to be paid in cash upon permanent reductions (as a percent) | 7% | |||||||||||||
Unamortized debt issuance costs | 3,939 | $ 4,172 | ||||||||||||
Interest expense | 2,900 | 2,765 | ||||||||||||
Coupon interest expense | 1,144 | 1,163 | ||||||||||||
Accretion expense | 1,523 | 1,381 | ||||||||||||
Amortization of debt discount and issuance costs | $ 233 | $ 221 | ||||||||||||
Maximum | Secured Overnight Financing Rate (SOFR) | ||||||||||||||
DEBT | ||||||||||||||
Debt instrument, adjustment rate | 0.0042826 | |||||||||||||
Minimum | Secured Overnight Financing Rate (SOFR) | ||||||||||||||
DEBT | ||||||||||||||
Variable interest rate (as a percent) | 1% | 1% | ||||||||||||
Credit Agreement | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 0.50% | 0.50% | ||||||||||||
Effective rate (as percentage) | 11.53% | 9.84% | ||||||||||||
Debt instrument, financial statement threshold | day | 30 | |||||||||||||
Debt instrument, financial statement threshold to provide cash flow forecast | day | 10 | |||||||||||||
Debt instrument, financial statement threshold to meet under the amended credit agreement | 6 months | |||||||||||||
Credit Agreement | Line Of Credit Facility, Initial Leverage Ratio | ||||||||||||||
DEBT | ||||||||||||||
Threshold secured leverage ratio | 4.25 | |||||||||||||
Credit Agreement | Line Of Credit Facility, Leverage Ratio To Be Maintained Beginning Quarter Ending September 30, 2023 | ||||||||||||||
DEBT | ||||||||||||||
Threshold secured leverage ratio | 3.75 | |||||||||||||
Credit Agreement | Line Of Credit Facility, Leverage Ratio To Be Maintained Beginning Quarter Ending March 31, 2025 | ||||||||||||||
DEBT | ||||||||||||||
Threshold secured leverage ratio | 3 | |||||||||||||
Credit Agreement | Line Of Credit Facility, Minimum Fixed Charge Coverage Ratio To Be Maintained During First Anniversary | ||||||||||||||
DEBT | ||||||||||||||
Threshold secured leverage ratio | 1 | |||||||||||||
Credit Agreement | Line Of Credit Facility, Minimum Fixed Charge Coverage Ratio To Be Maintained From And After First Anniversary | ||||||||||||||
DEBT | ||||||||||||||
Threshold secured leverage ratio | 1.10 | |||||||||||||
Credit Agreement | Base Rate | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 1% | 1% | ||||||||||||
Credit Agreement | London Interbank Offered Rate (LIBOR) | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 6.25% | |||||||||||||
Credit Agreement | Prime Rate | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 5.25% | |||||||||||||
Credit Agreement | Maximum | Base Rate | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 8.50% | 5.50% | ||||||||||||
Credit Agreement | Maximum | Secured Overnight Financing Rate (SOFR) | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 9.50% | 6.50% | ||||||||||||
Variable interest rate (as a percent) | 0.42826% | |||||||||||||
Credit Agreement | Maximum | Prime Rate | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 5.50% | |||||||||||||
Credit Agreement | Minimum | ||||||||||||||
DEBT | ||||||||||||||
Variable interest rate (as a percent) | 1% | |||||||||||||
Credit Agreement | Minimum | Base Rate | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 5.75% | 5% | ||||||||||||
Variable interest rate (as a percent) | 2% | 2% | ||||||||||||
Credit Agreement | Minimum | Secured Overnight Financing Rate (SOFR) | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 6.75% | 6% | ||||||||||||
Variable interest rate (as a percent) | 0.11448% | |||||||||||||
Debt instrument, adjustment rate | 0.0011448 | |||||||||||||
Credit Agreement | Minimum | Prime Rate | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 5% | |||||||||||||
Term Loan | ||||||||||||||
DEBT | ||||||||||||||
Maximum amount of line of credit | $ 35,000 | $ 40,000 | $ 165,000 | |||||||||||
Maximum term for drawing loan facility | 24 months | |||||||||||||
Effective rate (as percentage) | 11.64% | 9.84% | ||||||||||||
Volunteer principal prepayments (as percentage) | 0.0100 | |||||||||||||
Term Loan | London Interbank Offered Rate (LIBOR) | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 6.25% | |||||||||||||
Term Loan | Maximum | London Interbank Offered Rate (LIBOR) | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 6.50% | |||||||||||||
Term Loan | Minimum | London Interbank Offered Rate (LIBOR) | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 6% | |||||||||||||
Delayed Draw Term Loan | ||||||||||||||
DEBT | ||||||||||||||
Borrowings on delayed draw term loan | $ 35,000 | |||||||||||||
Maximum amount of line of credit | $ 35,000 | |||||||||||||
Maximum term for drawing loan facility | 18 months | |||||||||||||
Effective rate (as percentage) | 11.51% | 9.91% | ||||||||||||
Commitment fee (as percentage) | 1% | |||||||||||||
Delayed Draw Term Loan | London Interbank Offered Rate (LIBOR) | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 6.25% | |||||||||||||
Delayed Draw Term Loan | Maximum | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 6.50% | |||||||||||||
Delayed Draw Term Loan | Maximum | London Interbank Offered Rate (LIBOR) | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 6.50% | |||||||||||||
Delayed Draw Term Loan | Minimum | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 6% | |||||||||||||
Delayed Draw Term Loan | Minimum | London Interbank Offered Rate (LIBOR) | ||||||||||||||
DEBT | ||||||||||||||
Basis points adjustments (as percentage) | 6% | |||||||||||||
Credit Facility Term Loan and Delayed Draw Term Loan | ||||||||||||||
DEBT | ||||||||||||||
Annual principal payments (as percentage) | 1% | |||||||||||||
Revolving Credit Facility | ||||||||||||||
DEBT | ||||||||||||||
Line of Credit, Current | $ 0 | $ 0 | ||||||||||||
Repayment of revolving credit facility | 15,000 | |||||||||||||
Principal amount of revolving loan facility | $ 15,000 | |||||||||||||
Commitment fee (as percentage) | 0.50% | |||||||||||||
New Delayed Draw Term Loan | ||||||||||||||
DEBT | ||||||||||||||
Borrowings on delayed draw term loan | $ 35,000 | |||||||||||||
Additional Term Loans | ||||||||||||||
DEBT | ||||||||||||||
Annual principal payments (as percentage) | 1% | |||||||||||||
Seller Note - Plato BioPharma | Unsecured Debt | ||||||||||||||
DEBT | ||||||||||||||
Principal amount | $ 3,000 | |||||||||||||
Interest Rate (as a percent) | 4.50% | |||||||||||||
Seller Payable - Orient BioResource Center | Unsecured Debt | ||||||||||||||
DEBT | ||||||||||||||
Principal amount | $ 3,700 | |||||||||||||
Fair value of debt | $ 3,325 | |||||||||||||
Period for payment of consideration | 18 months | |||||||||||||
Seller Note – Histion (Related party) | Unsecured Debt | ||||||||||||||
DEBT | ||||||||||||||
Principal amount | $ 433 | |||||||||||||
Interest Rate (as a percent) | 4.50% | |||||||||||||
Seller Note – Protypia (Related party) | Unsecured Debt | ||||||||||||||
DEBT | ||||||||||||||
Principal amount | $ 600 | |||||||||||||
Interest Rate (as a percent) | 4.50% | |||||||||||||
Convertible Senior Notes | ||||||||||||||
DEBT | ||||||||||||||
Principal amount | $ 140,000 | |||||||||||||
Interest Rate (as a percent) | 3.25% | |||||||||||||
Settlement period | 13 days | |||||||||||||
Additional principal amount | $ 15,000 | |||||||||||||
Initial conversion rate | 21.7162 | |||||||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 46.05 | |||||||||||||
Number of scheduled trading days | day | 40 | |||||||||||||
Conversion price | 130% | |||||||||||||
Number of trading days | day | 20 | |||||||||||||
Number of consecutive trading days | day | 30 | |||||||||||||
Cure period | 30 days | |||||||||||||
Cure or waiver period | 60 days | |||||||||||||
Guarantor or subsidiaries for the payment | $ 20,000 | |||||||||||||
Period for discharge or stay | 60 days | |||||||||||||
Percentage of noteholders | 25% | |||||||||||||
Right to receive special interest maximum term | 180 days | |||||||||||||
Right to receive special interest maximum rate | 0.50% | |||||||||||||
Seller Note – Preclinical Research Services | Unsecured Debt | ||||||||||||||
DEBT | ||||||||||||||
Principal amount | $ 800 | |||||||||||||
Interest Rate (as a percent) | 4.50% | |||||||||||||
Seller Note – Bolder BioPath (Related party) | Unsecured Debt | ||||||||||||||
DEBT | ||||||||||||||
Principal amount | $ 1,500 | |||||||||||||
Interest Rate (as a percent) | 4.50% | |||||||||||||
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Long-Term Debt | $ 470 |
SUPPLEMENTAL BALANCE SHEET IN_3
SUPPLEMENTAL BALANCE SHEET INFORMATION - Trade Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Trade receivables and contract assets | ||
Trade receivables | $ 78,472 | $ 77,618 |
Unbilled revenue | 17,690 | 17,211 |
Total | 96,162 | 94,829 |
Less: Allowance for credit losses | (6,313) | (7,446) |
Trade receivables and contract assets, net of allowances for credit losses | $ 89,849 | $ 87,383 |
SUPPLEMENTAL BALANCE SHEET IN_4
SUPPLEMENTAL BALANCE SHEET INFORMATION - Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Inventories | ||
Raw materials | $ 2,184 | $ 2,259 |
Work in progress | 73 | 124 |
Finished goods | 4,069 | 4,439 |
Research Model Inventory | 47,634 | 52,524 |
Total | 53,960 | 59,346 |
Less: Obsolescence reserve | (3,320) | (3,244) |
Inventories, net | $ 50,640 | $ 56,102 |
SUPPLEMENTAL BALANCE SHEET IN_5
SUPPLEMENTAL BALANCE SHEET INFORMATION - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Advances to suppliers | $ 13,773 | $ 19,247 |
Prepaid research models | 2,571 | 4,300 |
Tax-related receivables | 2,375 | 1,813 |
Note receivable | 1,447 | 1,226 |
Other | 6,098 | 6,822 |
Prepaid expenses and other current assets | $ 26,264 | $ 33,408 |
SUPPLEMENTAL BALANCE SHEET IN_6
SUPPLEMENTAL BALANCE SHEET INFORMATION - Composition of Other Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Other Assets, Noncurrent [Abstract] | ||
Long-term advances to suppliers | $ 3,711 | $ 3,681 |
Funded status of defined benefit plan | 3,172 | 3,036 |
Other | 3,756 | 3,362 |
Other assets | $ 10,638 | $ 10,079 |
SUPPLEMENTAL BALANCE SHEET IN_7
SUPPLEMENTAL BALANCE SHEET INFORMATION - Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Accrued compensation | $ 10,567 | $ 12,966 |
Non-income taxes | 5,149 | 4,596 |
Accrued interest | 991 | 2,975 |
Other | 6,729 | 5,239 |
Accrued expenses and other liabilities | $ 23,436 | $ 25,776 |
SUPPLEMENTAL BALANCE SHEET IN_8
SUPPLEMENTAL BALANCE SHEET INFORMATION - Fees Invoiced in Advance (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Fees invoiced in advance | ||
Client deposits | $ 16,562 | $ 36,689 |
Deferred revenue | 19,259 | 18,933 |
Fees invoiced in advance | $ 35,821 | $ 55,622 |
SUPPLEMENTAL BALANCE SHEET IN_9
SUPPLEMENTAL BALANCE SHEET INFORMATION - Noncurrent Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Receivables [Abstract] | ||
Long-term client deposits | $ 17,000 | $ 5,250 |
Other | 967 | 1,123 |
Other long-term liabilities | $ 17,967 | $ 6,373 |
DEFINED BENEFIT PLAN - Narrativ
DEFINED BENEFIT PLAN - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Retirement Benefits [Abstract] | ||
Contributions to the plan | $ 0 | |
Funded status of defined benefit plan | $ 3,172 | $ 3,036 |
DEFINED BENEFIT PLAN - Net peri
DEFINED BENEFIT PLAN - Net periodic benefit costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Components of net periodic costs: | ||
Interest cost | $ 181 | $ 182 |
Expected return on assets | (192) | (198) |
Amortization of prior gain | (35) | (38) |
Net periodic benefit costs | $ (46) | $ (54) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) Excluding Service Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | General and Administrative Expense | General and Administrative Expense |
OTHER OPERATING EXPENSE (Detail
OTHER OPERATING EXPENSE (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Other Income and Expenses [Abstract] | ||
Acquisition and integration costs | $ 70 | $ 983 |
Restructuring costs | 1,034 | 266 |
Startup costs | 830 | 1,505 |
Remediation costs | 283 | 585 |
Other costs | 1,102 | 300 |
Total | $ 3,319 | $ 3,639 |
RESTRUCTURING AND ASSETS HELD_2
RESTRUCTURING AND ASSETS HELD FOR SALE - Narrative (Details) $ in Thousands | 1 Months Ended | ||||
Oct. 06, 2021 | Aug. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Aug. 01, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
RESTRUCTURING | |||||
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal | $ 1,377 | ||||
Assets held for sale | Israeli Businesses | |||||
RESTRUCTURING | |||||
Percentage of interest sold | 100% | ||||
Assets held for sale | Israeli Businesses | Israel CRS | |||||
RESTRUCTURING | |||||
Percentage of interest held | 37.50% | ||||
Assets held for sale | Israeli Businesses | Israel RMS | |||||
RESTRUCTURING | |||||
Percentage of interest sold | 62.50% | ||||
Discontinued Operations, Disposed of by Sale | Israeli Businesses | |||||
RESTRUCTURING | |||||
Disposal Group, Including Discontinued Operation, Consideration, Cash | $ 1,000 | ||||
Disposal Group, Including Discontinued Operation, Consideration, Cash Adjustment | 316 | ||||
Disposal Group, Including Discontinued Operation, Consideration, Real Property | 3,700 | ||||
Disposal Group, Including Discontinued Operation, Consideration, Promissory Note Receivable | $ 2,453 | ||||
Disposal Group, Including Discontinued Operation, Note Receivable, Stated Interest Rate | 0.0500 | ||||
Site Optimization Plan | |||||
RESTRUCTURING | |||||
Liability balance for restructuring costs | $ 615 | $ 571 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 USD ($) facility | Dec. 31, 2022 USD ($) | |
LEASES | ||
Amortization of operating leases | $ | $ 2,147 | $ 1,936 |
Number of facilities the Company serves as a lessor to a lessee | facility | 6 | |
Facilities leases | Minimum | ||
LEASES | ||
Lease term, operating lease | 1 year | |
Lease term, finance lease | 1 year | |
Facilities leases | Maximum | ||
LEASES | ||
Lease term, operating lease | 21 years | |
Lease term, finance lease | 21 years | |
Equipment leases | Minimum | ||
LEASES | ||
Lease term, operating lease | 21 months | |
Lease term, finance lease | 21 months | |
Equipment leases | Maximum | ||
LEASES | ||
Lease term, operating lease | 84 months | |
Lease term, finance lease | 84 months |
LEASES - Right-of-use lease ass
LEASES - Right-of-use lease assets and lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Right-of-use lease assets and lease liabilities | ||
Operating ROU assets, net | $ 48,012 | $ 38,866 |
Current portion of operating lease liabilities | 11,105 | 10,282 |
Long-term operating lease liabilities | 38,074 | 29,614 |
Total lease liability | $ 49,179 | $ 39,896 |
LEASES - Components of lease ex
LEASES - Components of lease expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating lease costs: | ||
Fixed operating lease costs | $ 3,103 | $ 2,592 |
Short-term lease costs | 0 | 12 |
Lease income | (764) | (674) |
Total operating lease cost | $ 2,339 | $ 1,930 |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 2,966 | $ 2,351 |
Non-cash lease activity: | ||
ROU assets obtained in exchange for new operating lease liabilities | $ 11,392 | $ 3,567 |
LEASES - Weighted average remai
LEASES - Weighted average remaining lease term and discount rate (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Weighted-average remaining lease term (in years) | ||
Operating lease | 8 years 11 months 15 days | 5 years 11 months 19 days |
Weighted-average discount rate (in percentages) | ||
Operating lease | 11.75% | 6.97% |
LEASES - Maturities of operatin
LEASES - Maturities of operating and finance lease (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Sep. 30, 2023 |
Operating Leases | ||
2024 (remainder of fiscal year) | $ 8,854 | |
2025 | 9,391 | |
2026 | 10,035 | |
2027 | 8,093 | |
2028 | 6,611 | |
Thereafter | 47,809 | |
Total minimum future lease payments | 90,793 | |
Less interest | (41,614) | |
Total lease liability | $ 49,179 | $ 39,896 |
EQUITY, STOCK-BASED COMPENSAT_3
EQUITY, STOCK-BASED COMPENSATION AND EARNINGS (LOSS) PER SHARE - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Nov. 04, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2023 | Nov. 03, 2021 | |
Equity, Stock-Based Compensation, And Earnings Per Share | |||||
Common and preferred stock authorized (in shares) | 75,000,000 | 20,000,000 | |||
Common stock authorized (in shares) | 74,000,000 | 74,000,000 | 74,000,000 | 19,000,000 | |
Preferred stock authorized (in shares) | 1,000,000 | 1,000,000 | |||
Shares added under amended and restated plan (in shares) | 1,500,000 | ||||
Number of shares remained available for grants (in shares) | 176,983 | ||||
Stock based compensation expense | $ 1,897 | $ 2,046 |
EQUITY, STOCK-BASED COMPENSAT_4
EQUITY, STOCK-BASED COMPENSATION AND EARNINGS (LOSS) PER SHARE - Basic and diluted net loss per share (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 27, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Numerator: | |||
Consolidated net loss | $ (15,828) | $ (86,932) | |
Less: Net (loss) income attributable to noncontrolling interests | (440) | 391 | |
Net loss attributable to common shareholders | $ (15,388) | $ (87,323) | |
Denominator: | |||
Weighted-average shares outstanding - Basic (in shares) | 25,764,000 | 25,603,000 | |
Shares excluded in computing of earnings (in shares) | 5,796,000 | 5,369,000 | |
Shares issuable upon conversion (in shares) | 3,040,268 |
INCOME TAXES - (Details)
INCOME TAXES - (Details) | 3 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate (as a percent) | 18.10% | 15.50% |
CONTINGENCIES (Details)
CONTINGENCIES (Details) $ in Thousands | 42 Months Ended | 50 Months Ended | |
Dec. 31, 2021 import | Jan. 31, 2022 governmentOfficial | Jun. 02, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |||
Loss contingency, estimate of possible loss | $ | $ 795 | ||
Number of government officials | governmentOfficial | 2 | ||
Number of imports | import | 7 |