Earnings call transcript Q2 2023

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Operator

Good afternoon, and welcome to Inotiv’s Second Quarter Fiscal 2023 Financial Results Conference Call. At this time all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded.

I will now turn the conference over to our host Devin Sullivan of the Equity Group. you. Thank

begin. many You

Devin Sullivan

and fiscal everyone, results XXXX Diego, today conference joining for Inotiv’s second thank you, for you us call. Thank quarter financial

some operating management begin, the statements, call including we I’d projected. the to represent results forward-looking everyone Before company’s about future like are to risks cause considered statements actual could financial make will that that expectations plans. statements on and and this remind be different today’s uncertainties materially and date. Such statements statements are that Any from of as those or management’s subject of achievements such to performance

result should company new or events Please reliance does You update on information, on refer the any otherwise. company’s SEC matter. to undertake guidance statements, a obligation further to and statements undue filings of place not this forward-looking for or future these not revise the forward-looking as whether

measures to information these effort the and measures posted discuss also an which Commission. X-K also most with comparable to non-GAAP are of in Form earnings definition in Investors section A GAAP included additional financial provide non-GAAP website release, to and has available investors. the the Management certain been reconciliation the will measures is and Securities company’s Exchange the filed www.inotivco.com of in company’s the for

Strategy Taylor, the this Beth and from Financial Chief President company’s Officer. Officer; afternoon company Executive Officer; Chief us Sagartz and Joining are Bob Chief Leasure, John the

some the for we’ll with call after begin open present of then analysts. company’s from will Bob and summary Beth our questions opening results, remarks, which will financial a the

Leasure. Bob, the turn to over please pleasure Bob my to now is It go ahead. call

Bob Leasure

appreciate today. and join time Devin, to taking good you Thank afternoon everyone. We you, us

year’s $XXX.X X.X% the and across XX% total at in – and our DSA quarter respectively revenues our XX.X% last million second segments. from last quarter. RMS to X% both for increasing second business The of $XXX.X second year’s with from growth million results quarter Our revenues increased business reflected segments

our is and continue Our are we what clients, we about targeted shareholders. can our made excited business service and for deliver offerings, from benefiting the that investments have industry, our expand we and – progress enhancements these and DSA to make to our the

as growing expect As DSA we filling continue we planned and capacity, the in we progress margins improvements revenue our make to through in year. continue as

the In benefits significantly in the during after were second our their quarter, RMS purpose-bred, business, our second as did NHPs favorable we levels, inventory of some from we quarter. implemented historical we ship origin in NHP the realized although pricing the verifying volumes below

in as and consolidation also to continued various come which efficiencies and our production have implement optimization they footprint, animal and are are completed. We online welfare to activities RMS expected operating improve

EBITDA We the we $XX.X the represented reported period year, second in return to but below $X.X we in last in a reported positive quarter $XX.X million was first million from fiscal quarter, the XXXX. significant which a of improvement the million, adjusted negative achieving same the

million be out party lower we $X.X Based information, current EBITDA. million being the to way of our the same related party By in were pending fees of Adjusted matters, defense Cambodian G&A year. investigation, third legal to G&A $X.X adjusted third period and QX primarily XXXX. QX in to fees, Cumberland, in an fiscal expenses quarter legal These in second last not compared Virginia ongoing to legal $X.X increase quarter of EBITDA on legal of and million. expenses amendment included credit securities the litigation. included third the adjusted are the and party in the agreement third to and third third fees expenses party comparison NHP expect and on

results. over to performance segments. I’ve of move our then in RMS and for DSA Let’s discussion things over on a turn business review to Beth

generated business quarter. quarter of $XX DSA $XX.X year’s up last of second second from XX.X% million million, revenues in revenue Our

is rebounded performance first seasonally a – quarter. as slow what typically seasonally expected from Our

are our and operating brought sales toxicology in see DSA we existing improvement new at to revenue online Rockville, primarily business The genetic beginning increasing facility was within in driven the by customers in Maryland. services plus, structure, increasing we our the

support out substantially genetic facility Rockville both equipment build businesses. Our and assays at and we continuing required the the now and to toxicology is are complete, biotherapeutic validate in to growth

our service second seen Fort Collins quoting The increase The fiscal quarter an book-to-bill expansion of at X.XX in was lines. of be expanded remains discovery also operational related in towards facility on DSA have histopathology recently activity to end and the We XXXX. ratio times. should areas our the and track in

Our backlog $XXX.X of million from was XXXX. $XXX.X in QX million, up

segment, $XXX.X RMS first last revenues nearly million XXXX. from year’s $XX RMS Revenues X.X% the to to quarter. second $XXX.X in from million quarter fiscal rose at increased Turning of million

reminder, Envigo we November the As closed XXXX. a transaction on X,

comparing acquisition, operational So over purposes, time quarter first are the full for comparative we results. since quarter the for

as was lines, favorable driven QX for this including multiple in expenses, quarter offset volumes which The NHPs, Teklad product increased as lower fiscal XXXX. we by which and saw models well and research NHP while increase helped pricing diet, discussed

renovated We is of to of Our activity current in the for completed be in Indianapolis facility process We to Haslett, with Boyertown, in The during completed consolidation and Pennsylvania current this by other operations the by the their consolidation quarter the of quarter. the our and updated plan this that recently to two underway will on of operating France the segment and second end optimization is good newly of our the Denver. third The additional completed site track. facilities have facilities relocation RMS Michigan quarter. plant underway, into to our made respect remains progress facilities RMS XXXX. shutdown facilities end Netherlands now in

the our in third the completed and and fiscal operations consultation quarter our currently facility relocation completed of to the XXXX. UK also in process planning existing relocate have to this other year We to Blackthorne, be UK, expect

third be facility of This in RMS completed and the small During QX with connection relocations, and closing by St. plans, enhance quarter, we of relocating the allow warehousing, distribution closures this Louis announced these our be will Louis to product in facilities are improve existing of efficiencies, margins. route operation process and the including our fiscal end will into this that further year revising and XXXX, customer and us its other and the In delivery we in will service, we St. elevate facilities. quarter.

the conducted in breeding audit future history a to five-member consisted testing practices, With of select parentage diet previous on Cambodia. health sample records, operated Cambodia as February, with a results, Limited. water and Inotiv the sent to demonstrate future by animal select laboratory, of a Vanny at and we facilities owned the of NHP number support exports an The for testing XXXX audit team respect equipment animal indicated findings. and to review a analytical of and audit welfare logs, There treatment NHPs Development was calls, basis for from investment and conduct two Science genetic did an records, were in commitment zero NHPs. to early records, situation, animal supporting They critical aimed composition

review develop in both a inside verify of We’ll concert scientists NHPs testing with to outside and purpose-bred also ensure to suppliers organization the clients to our and acceptance any I will import remind Service. government and develop continue you testing for NHPs. we sell our that our we’ll continue and such origins Fish be U.S. to including only DNA ourselves new work by long-term subject standard and and may and to Wildlife agencies

government questions and NHPs Cambodia internal sell on NHPs to be have any and import to supply in respond therapies. competitors DSA position In to meet other demands life-changing investigations. or we support suppliers ongoing and that identify we our discovery adequate any of any meantime, believe import, to ongoing an life-saving a from are – not sources in identify client the We’ll to suppliers, concerning matters of open continuing than the we our or

eventually increase added approximately to increase DSA and believe the an relates it RMS the being and revenue margin services annualized additional XXs. optimization mid-to-high effective for and outlook, expect compared DSA our revenue fully expansions, allow operational. We year of combined completed from capacity our the XXXX DSA XX% As should could synergies, to margins once integrations, to improvements fiscal earning initiatives in and and site we XX% from gross

synergy also we complete once we cost annualized believe should integration of of approximately million We year initiatives, produce all $XX to optimization XXXX. our fiscal and RMS compared site DSA savings

in expect We fourth more of year to these begin quarter XXXX. benefits of fiscal realizing early the

from EBITDA full the our QX, the incurred fiscal guidance guidance third for $XX at million in we least reiterating year of to of legal We result of at million and as least during million. our party $XX down fees adjusted a and revenue revenue, be XXXX previous updating increased guidance are are $XXX

with will fiscal XXXX. our remain We covenants financial that expect continue compliance to we for year in

from more will and We continue to be XXXX. sales of expect that capital should moderate XXXX than no fiscal during year X% expenditures

As continue based we reasonably year remainder have the to confirmed be assumptions existing Cambodian this NHPs inventory a that from guidance of on purpose-bred been shipping is XXXX. for the reminder, origins that from fiscal our

to discover In our closing, work. our direction operations, response we am head the I our being Despite performance in the our hard optimize innovation, are I to NHP RMS to lingering pleased continuing headed our committed clients with changing want to I’m leadership right with and the develop in therapies. life of our maintaining and that emphasize the helping convinced role investments, employees. business, via situation progress again made remain We how

go turn our With ahead please Taylor, Officer. it Beth, Beth to that, financial Chief over with the I’ll overview. Financial

Beth Taylor

revenue last good million in by our or from X.X% $X.X Total XX.X% and or Thank second for to DSA a revenue driven in quarter, $XXX.X Bob, increase quarter afternoon you, RMS $XXX.X in million million the second increase X% segment. revenue everyone. our million $X.X XXXX and year’s segment, rose

of Rockville, toxicology Higher at structure increasing primarily within increases business new revenue in pricing RMS segment our of to negative revenue but NHP our in our increase offset was current volumes including several models, sales. of the NHPs, was continued of lower at Teklad by our genetic pricing and driven Maryland. favorable also DSA impact The animal facility services diet. helped revenue favorable partially specifically operating due primarily the across The

within DSA segment or from million $XX.X profit revenues for or improved Total total improved million to million, Gross to revenues quarter. our of second of XX.X% $XX.X year’s in $XX.X last gross XX.X% slightly total profit of segment point XXX structure. segment or by higher increase sales million was or quarter. second $XX.X margin revenue driven revenue operating in XX.X% year’s of in XX.X% last current The our basis from

of segment profit $XX.X product quarter current we the XXXX year. duplicate was compared or fiscal the in to total as site The factors including was revenues of our of as by absorption margin million or optimization driven costs $XX.X revenues XX.X% in inflation million, last gross plan, XX% and second in noted. quarter RMS of decrease the mix several implement

seeing expect year We Dublin duplicative and Cumberland pricing QX favorable to these from and XXXX. in of some offset product partially margin begin a and closures was costs The fiscal margin by decline lines the benefit certain decrease our of our facilities. initial for early expansion in

and fiscal quarter reflected legal NHP $X.X agreement XXXX to on of General the $XX quarter. the quarter to third fees on Cambodian XXXX. to year’s in and last information, investigation, $XX.X for be party in current to second lower pending the second million administrative Based from litigation. in legal matters, the in third of fees ongoing defense expenses our second expect G&A third and Virginia million expenses and million primarily fiscal Cumberland, related rose the we party third amendment securities quarter credit

and the the Operating million both reflecting million $X increase $X.X from was in a $X.X expense. last million income of loss down second year’s quarter higher million, in expenses $X.X G&A quarter, for amortization operating

capital quarter, Interest balance expense interest $X.X debt million higher for rates. last up second borrowing higher investments year’s obtained from acquisitions $XX.X the and for reflecting to our increased and in million

second $X.X attributable Consolidated attributable fiscal shareholders common negative consolidated $X.XX per common of in a of share. quarter to quarter net a the million of XXXX per or million diluted shareholders the net to This in XXXX. second loss $X.XX $XX share negative or to totaled loss compared

$X.X was EBITDA compared revenue negative total EBITDA adjusted to of QX as fiscal million Adjusted million million XX.X% XXXX. revenue XX% of last a $XX.X of $XX.X in second in year’s or quarter, or year total of and

year. cash operations XXXX. was to by same operations provided provided cash $XXX.X backlog in million million March cash was last working driven million at The to by of XX, year. $X in million to operations primarily $X.X from Net compared $XXX.X DSA period the compared increase the period net same improved by was last capital compared provided

laboratory reflected and for was Boulder, in Colorado, Fort in Collins, capacity welfare. investments million and quarter total expansions improvements of Colorado, second animal X.X% Maryland, the in enhancements CapEx or $X.X completing revenue Rockville, technology our in and DSA

months we CapEx six the exceed our XXXX, of that fiscal capital expenditures For to year XXXX revenue. million; first $XX.X expect of continued totaled projected not fiscal X% will

balance March we of million maintained Our on revolving from as our and $XX.X December cash credit million from XX, cash $X up XXXX, in $XX borrowing sheet and million a included facility. $X equivalents XX,

debt cost net XXXX stock XX, unsecured Bio, $XXX.X agreement December was now XXXX issuance is maturity Inc. on million was of XXXX. $XXX.X one which compared $X.X extended July by debt at pursuant million of originally Orient the XX, The Total a March million seller XX, of The purchase with to June the payable XX, due due as XXXX. company payable, year to

revenue in market. capacity are seeing to in significant XXXX, we to the we we remain that pleased year performance in debt and with compliance grow with capture DSA financial our progress the and a our XX, remain compliance and our in portion from of remain We optimistic were will segment, covenants opportunities for continue the we higher in and continued March fiscal as additional that investments of expect XXXX. as We our

over And to we with financial call will that overview, questions. operator, for the Diego, turn our

Operator

[Operator your from Please question. Craig-Hallum. comes first Matt with question Thank you. Hewitt state Instructions] Our

Matt Hewitt

once can you have place, Good thank from NHP once importing, up you but in can up afternoon you questions. situation, many sure period how I’m revenues test I’m can’t from test how geared realize one in what record get exact the place, I you you’re turned to Maybe that answer quickly taking regarding around get quickly and quarantine the starting is, curious the not that market? of but you questions, about, for is the things kind things where first

Bob Leasure

to being we’ve our able for testing progress made in import. great Well, and platform

they’ll be I once from we could that be imports time from the Cambodia think Cambodia, would, that, lead move imports may if bottleneck I consider it But to Fish us. allowing could and unknown think very Wildlife, that and have longer U.S. when will again allowing consider is quickly. a we

relationships, and there’s we to available. bring available have quarantined NHPs available not in, transportation have they’re We space

the normal can begin somebody a time importing. really we quarantine needs table, time, I that there allow November there do there’s a to focused large be they say you move XX, forward when, have to have Now on NHPs says and Ever to – Cambodian be time, import us. think goals normal but a, don’t we between for us be lung won’t two we time since NHPs. is may One ready to to if and import

those. progress imported business ready on The of others a we we’ve have which make both to NHPs sure model, Cambodia. from will not dependent made great is event. either We’ll And for be

Matt Hewitt

are but elevated were has lot customers? hearing cancellations And little obviously questions I you couple maybe you. thank historical maybe levels, know the relative and a customers? small companies, great, pharma from what biotech come of environment, last general a the Thank That’s quarter’s then What seeing bit you to you. business are but that about health down? of the from regarding

Bob Leasure

quarter, quarter, up awards last one-to-one, Overall, book-to-bill, our and they were I best continue result, been to is money. choose were them. we very sales as to what cautious customers look a Well, cancel have a over but XX% to close will think continue in And be XX%. orders the to as and for up our prior spending see they grew and had our may their we

Our XX%. orders new were up

even than new that. over has because been activity, higher quoting much up services Our

compared the be we’re what during limited whatever I increase we’re we’re the increase, trying size to industry. we’re percent market of the have small what to our we’re it’s share to is. the a to – continue to again do increase, to market a small at time. XX, increase And is – looking – don’t XX, to we we’re business our share. when to of think XX, macro And this a concise very trying So trying it’s, But

added added added try and then one services and they customers we’ve So change and and new as customers, those we’ve us marketing sales, result bring again, those new in expand to multiple we’ve to that, a services. new service,

seeing us share. work. the with without aggressive not I’m I’m we’re market be to very So, increasing But will given I and what underestimating expecting and think be pleased to they’re be to our customers the and, cautious need in do this hard not continue

Matt Hewitt

hop I’ll queue. one one back last Maybe into Understood. then

as far out you the the you’re from a level new are at perspective some consolidate do locations, and right headcount course feel different of are these has hiring year? of continue expectations to As some as staffing what – the the over services concerned, a sites you your of your from perspective like in roll

Bob Leasure

Last hire I lot we in of and year, think much we’re people. we to better had shape. XXX people on-boarded a

I We’re And year of the growth fine forward. headcount increase we all we’ve headcount significant end going a the think think the lot tuning increased net since year. a our I of probably without see our can in last organization fiscal our don’t time.

I good the good the board, – think we’ve bringing good and and progress. on done us their a develop in I validate people helping assist making assays, we’re think training equipment of job

$XX already of of for increased million. $X.XX $XX we notable the is line. last on sell the probably go prepared we million, million, the we fees, people, our almost sales, bottom Because in in quarter that legal go of were the to that increase things brought some had those back And if that. you one $XX dollar, line, to bottom what And we that, maybe out in

add that a projecting. we’re by I and a significantly that performance for great the don’t great growth got team that our need people we a was I it place have see think think I in to So, and

Matt Hewitt

thank helpful, very you. That’s

Operator

question Thank with your from [Operator Instructions] Windley you. Jefferies. Our Please state next Dave question. comes

Dave Windley

differences or could relatively that’d afternoon. Okay, great. in to breakdown sure I I’m down was my could the you Dave. questions. so if was the parts, was maybe I an and guess terms us just volume it’s in moving or more price probably wasn’t trying RMS good. smaller for in price? contributors queue. there, tone, the the know I not that, and on I but if I the confirmation wondering but specifically you I numbers of Hi, understand if up, put volume be for overall taking was Good hearing the Thanks growth

Bob Leasure

try would quarter, and significantly volume can, less we of the sold in less than actually best numbers do numbers, to last in I than sold QX I in we this year. NHPs the the the the actually of sold of NHPs was the amount QX in QX than we

Dave Windley

Okay.

Bob Leasure

indicate, fairly in our that think I So, model. significant business change

Dave Windley

right. Right,

so of you quarter you increased had environment that price that. I were your small to talked in the some some And included availability had NHPs On, in try NHP, to price last in take animal. were to price the going or, appreciate also taking of strategies you mitigate limited think but

you make that. to increase mention I think, sure I I hear is animal price how the but sticking? wanted heard right. didn’t that, Beth small Bob, I mention I heard And that

Bob Leasure

terms increase animal in I flat. volumes our did is and And remain, say We it in pricing January sticking. the small numbers, fairly of would

significantly number footprint doing terms our we’ve able we can and number have, the we we’re in the of also, but are are been of have. we prices which I and are transportation those flat means sales the you people have, volumes or some overall to holding reducing facilities of fine. maybe When we in we imagine, our fairly as Teklad see think increase volumes and

now. that’s So focus really right our

and and to come right start the how these on, sales have that capacity, changes starting increasing and can ahead have We’re back made we and volume? now we go now we now our also focus

start then continued on starting quarter. we the coming we’re NHP they that increase prices those and And implement and to in the focusing back did then are through But also. and we’ll January held prices,

and – March. our in prices January again again the increased selling then So and increased we February were average for in that in

and third some So, our to party but of expenses expenses. as

Dave Windley

Right.

quantify those you’ve in the the, like representative getting sounds the new of quarter you traction. DSA you’re bookings talks building the How you’re in that, and invested mentioned couple the of in, business of that? genetic a So the much your Mentioned new businesses out, segment? toxicology biotherapeutics and are genetic Can to some opportunities times. you

Bob Leasure

in a I’m activities, progress mean, I had up I late because so March, say increase in We And seeing built ramping quoting wouldn’t February, continuing this and this, up. the it’s started is it’s wouldn’t up. ramping in – say all of probably booking both Yes. we build I we things, that. quarter January, the to December, XX% those

or probably come be, where service. So did than from million bookings DSA increase say, that have but you $X million the It if in to would $X XX% from? less

Dave Windley

I’m sorry, less of? than XX%

Bob Leasure

XX% from than bookings of QX. to the Less of QX our increase

Dave Windley

Understood. Okay.

Bob Leasure

acquisitions is Why us that we We right for. been is this the just customer thing helpful. They’re And been base it a which is, so for lead for that we’re is really looking that’s brings the have now this important not our had. new waiting since has time I up. great offer starting really important exciting think service. we customers we all can they’ve are in is that bringing it And our reliance buyer of – old board, the

people We customer have with experience quality, knows, the them. that base great they great because have

reduces this pharmacology some how bringing they we’re significantly and for outsourcing, board, And things with then looking to also us why we’re customers, the when speed control the that helps market forward they on our seeing with thing on other our at and service board. customers. develops. same us, us And the safety this aspect start it once of generally services. our that bring across new And looking other working we That’s and to start those helps

Dave Windley

the back queue. I’ll drop Thanks for Great. answers. the in

Bob Leasure

Dave. you, Thank

Operator

with Street state Takkinen question. comes Please question Capital from next Markets. your Lake Our Frank

Frank Takkinen

been? through start in you for with how taking cancellations Yep. How the if gross has came questions. know on the touch then past, And could I have net hoping and to bookings note demand quarter. Thanks to that trended? around of the was walk plus/minus? the have just bookings the cancellations of the one Could the if maybe in anything so area in on change there’s up you I plus/minus

Bob Leasure

cancellations, would to, in QX assume and less I’m going continue. don’t in QX. Could but not say cancellations less smoothly that future I I to exist the and than that here won’t Plus/minus, trend actually, be probably want were sit will

think people very need be they of I and satisfaction, and very marketing spend are very sure going money. reoccurring impact their that we efforts of which base. be need cautious make customer customer of be to not I sales what may have, a We to underestimate now, aware how that our we in to is right and aggressive high why have degree

but think, I hope that here it and sit to not to continues, continue. So we’ll expect I’m going

I that think of their dollars, so work very people a, sure to midst careful making with we’ll we’re them. of in the are continue with

Sometimes with. they to can people with try want be to delay work company projects; them a we so work that we there,

Frank Takkinen

Okay. Fair enough.

to profile between more get end year and we calculations generate covenant and to expect continue really to cash trend we where on continue you’re statement for little you back the me the is do of income was just statement, we about bit on putting guess free income well, how could year. the flow beyond us what half cash I’m of hoping the for one the And are push thinking are? Second kind in bridge those the of looking a I through to where can at

Bob Leasure

a not backs Yes. we EBITDA. be our may of I covenant that calculations, an have ad for lot mean, remember adjusted

I purposes. covenant So add example, outlined, the some fees of are backs legal for for

So, do –as think think we also from that growth QX. a and that will that I these fairly we’ve outlook these and QX think would projects generate good looking – optimization I in cash additional can of positive projects, and the cash. shape are given, guidance the some I now for wind to help and you right I’m projects down, as – tell, We generate significant we’re forward site the and a

done the things have years, welfare of and for animal wanted process to in two that margins we integration been address. site really what part improve this since of growth of really part address address be opposition it’s we’ve So, it’s needed to the to

those to come be I’d an excited see to So, end.

We’re parts. think concerned variables, I months about XX% moving that, we also at three many I just that plus had even six of many too people much ago, I doing had months ago, too once. done. were the Too

think that confidence we these of in according now everybody down hopefully not left now plan And we fact – time. end really time, can in on what actually that I focus these ahead the things have some things should customer. we’re some optimizing get to we where of of So, on to the brought and have if delighting

it So, I next and yes, the think couple be look to positive. very months forward I do should

Frank Takkinen

questions. Okay, taking the perfect. Thanks for

Operator

comes Dave state with question next Our from Windley Please Jefferies. your question.

Dave Windley

questions. that case I there Hi. to I that wasn’t list guess long. people was to ask in the were other mic wanted trying drop out, the not hog

ask quantify winding half of through those? back business, So, Is second presume a end of those operating costs year. of could I possible come this I duplicative out if it quarter the quantify all did will, want lot the to I the and you’ve to think you and of described maybe the the that

Bob Leasure

are I that there It’s have not It’s hidden a quantified on bringing lot people transporting costs those. all, of training. in new duplicate severance hard. and

we to color were give March I them kind and that important important our of and have And that expecting are of that, that as not able seen about the guidance cost we’re and do concerned kind is think seeing these were don’t increase this to coming do give could out I of now a you. quantifying idea did time, to expect very people for significant to what this. sales result good how us. we’re tell out little of been coming of know, We I be it, the the and And that we’ve kind we an why have guidance. a achieve I try think did, of so to to And so job what I I I to believe more tried, think, and a improvements costs investments share

Dave Windley

that was netted $XX Or the bigger to Bob, million is than by part, related legal million, down something in that So $XX number strictly now is that EBITDA change million guidance and third-party? $X so last else? increased

Bob Leasure

future, we No, it’s, a expenses of million close gave today, to third hopefully go things specifically to when out it and we pretty Based those expected the that we on for some address much what so legal is and really is see as there. guidance and address are we’ll else we will we’ve these, change to I to and done party but the some $X expected. that is to of incurred, down think that Everything call we what higher than overhangs guidance. we’ve lot that related is know

Dave Windley

is Okay. $X amount to amount? the clarify, the year guidance year-to-date not And full million

Bob Leasure

I what and to the QX plus, not, was was expenses have No, about, QX in third legal seen have party so what far we adding talk been. what

Dave Windley

Okay.

So that just the through half. first

Okay…

Bob Leasure

Right.

than for So but some that we as that be said, again, previously backed could higher think out of purposes. was I covenant asked that,

that, adjusted it’s is, put have that EBITDA. that our not, not we I and so think So, in

Dave Windley

it. Got

comfortable detect, audit do assure how are improving DOJs animals those if happening to catching have how kind or stiffening guess on the allegations to so So the me, you, you previous of and procedures audits, How been correct, and NHPs, about for last have periods, completed to think the you that Vanny the I alleged question light do while two-part, of slipped by activity yourself, maybe close said animals entities. be would differently, when in but with you purpose-bred when, by in, by of that do that that? acquired would are better get the able predecessors fire to the the too audits been during

Bob Leasure

purpose-bred what do what wild DOJ approved, Well, exactly and and has is know, I what is the they’ve that not not shared card us. what with

So, are we and Cambodia, I can from to anywhere from importing and what, if months November and tell on the going you six stop and months nine either going immediately XX. not import we’re right did last to anywhere forward over that, we nor

what from we’re we there. focused worked there, forward, audited go on. had them, So, about that’s how anything not we’ve We’ve would with talked and we’ve we’ve

else world from. As as we’re the far anywhere in importing that

several farms out comes bit locations other have over. comfortable, may auditing in quite done a anything a of with. we’ve and working touch what we people, many to determine be We with go the bit veterinarians in multiple we’ve quite been If learned comfortable what farms farms about work our before

the I going forward. now doing do think right best that’s So, what we’re on really we we’re focusing can what and

Dave Windley

Got appreciate lot. I evening. it. great a Thanks answers. Have the a

Bob Leasure

you. Thank

Operator

hand there over for you. remarks. time. this further Bob Leasure the Thank questions And floor no at to I’ll are back closing

Bob Leasure

and attention. Thank remain, you making All much our right. challenges although time And headway in we’re your for do transforming excellent organization. very

much. and have, Thank New in Conference anybody follow-up York Healthcare hope everybody may forward I Healthcare investor of a up Virtual very June Jefferies June look City, XX on X, X. you any day. to and questions number coming we’ll Benchmark We May to in Minneapolis, conferences this a May have with investors at We forward Conference beginning later Craig-Hallum be good calls on We engaging has month. look Conference XX. or

Operator

may that Have And All today’s evening. a parties great you. Thank concludes call. disconnect.

Inotiv (NOTV) 11 May 232023 Q2 Earnings call transcript