Slides
Page 1
September 10, 2025 H.C. Wainwright 27th Annual Global Investment Conference, Lotte New York Palace Hotel Robert Leasure, Jr. Chief Executive Officer, President and Director
Page 2
Forward-Looking Statements This presentation contains forward-looking statements that are subject to risks and uncertainties including, but not limited to, statements regarding our intent, belief or current expectations with respect to (i) our strategic and operational plans and future financial results and goals; (ii) trends in the demand for our services and products and industry and market growth and other expectations; (iii) trends in the industries that consume our services and products; (iv) market and company-specific impacts of NHP supply and demand matters; (v) compliance efforts and results, including compliance with the Resolution Agreement and Plea Agreement and the expected impacts on the Company related to the compliance plan and compliance monitor, and the expected amounts, timing and expense treatment of cash payments and other investments thereunder; (vi) our ability to service our outstanding indebtedness and to comply or regain compliance with financial covenants, including those established by the Seventh Amendment to our Credit Agreement; (vii) our current and forecasted cash position; (viii) our ability to make capital expenditures, fund our operations and satisfy our obligations; (ix) our ability to manage recurring and unusual costs; (x) our ability to execute on and realize the expected benefits related to our restructuring and site optimization plans; (xi) our expectations regarding the volume of new bookings, pre-sales, pricing, cost savings initiatives, expansion of services, operating income or losses and liquidity; (xii) our ability to effectively fill the recent expanded capacity or any future expansion or acquisition initiatives undertaken by us; (xiii) our ability to develop and build infrastructure and teams to manage growth and projects; (xiv) our ability to continue to retain and hire key talent; (xv) our ability to market our services and products under our corporate name and relevant brand names; (xvi) our ability to develop new services and products; (xvii) our ability to negotiate amendments to the Credit Agreement or obtain waivers related to the financial covenants defined within the Credit Agreement; (xviii) the impact of macroeconomic factors, including but not limited to tariffs; (xix) the impact of potential government consolidation efforts or funding cuts; (xx) the anticipated use and impact of new approach methodologies; and (xxi) the addressable market for our products and services. Further discussion of these risks, uncertainties, and other matters can be found in the Risk Factors detailed in our Annual Report on Form 10-K as filed on December 4, 2024, as well as other filings we make with the Securities and Exchange Commission. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Any forward-looking statement made by us is based only on information currently available to us and speaks only as of the date on which it is made. In light of the uncertainties inherent in any forward-looking statement, the inclusion of a forward-looking statement herein should not be regarded as a representation by us that our plans and objectives will be achieved. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. Tradenames, trademarks and service marks of other companies appearing in this presentation are the property of their respective owners. Solely for convenience, the trademarks, trade names and service marks referred to in this presentation may appear without the Ⓡ, or SM symbols, but such references are not intended to indicate, in any way, that the Company will not assert, to the fullest extent under applicable law, its rights, or the right of the applicable licensor, to these trademarks, trade names and service marks. The Company does not intend its use or display of other parties' trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties. 2
Page 3
Investment Highlights • Inotiv is a leading contract research organization (“CRO”) primarily to small and midsized companies (SMIDs) in the biopharma/ medical device industries • High-science, high-service organization • Vertically integrated with two segments: > Discovery and Safety Assessment (DSA) > Research Models and Services (RMS) • Large Addressable Market: ~$25B growing TAM* • Built full suite of products and services through acquisitions and organic investments over a 7-year period • Operationally optimizing sites, logistics and offerings for durable growth 3 * Source: Frost & Sullivan; TAM covers all outsourced discovery and safety assessment CRO spend, as well as associated research model and services
Page 4
Industry Overview • Global Discovery and Preclinical CRO market expected to grow at 9.1% CAGR (2023 – 2033) • Emerging biopharma companies are responsible for 85%(1) of early drug development • SMIDs expected to increase share of overall biopharma R&D spend at a greater pace than large pharma • Continued innovation drives emergence of new companies, particularly small biotechs 4 Sources: Frost & Sullivan, IQVIA Institute, McKinsey Note: (1) 2024 data per IQVIA Institute
Page 5
Strategic Evolution of Inotiv • Phase I: Acquisition and Growth (2018-2023) > M&A activity drove development of a full-service drug discovery and development CRO, and access to critical supply chains > Initiated organic investments to create capacity for growth • Phase II: Optimization & Integration (2023-2025) > Integrate acquired entities to present a unified One Inotiv experience to market > Consolidate operating footprint to drive efficiencies > Enhance client satisfaction • Phase III: Expansion (2025 →) > Pursue margin expansion through operating leverage and cost management > Continued organic growth and opportunistic M&A strategy 5 Phase I: Acquisition and Growth Building a Full-Service CRO Phase II: Optimization & Integration Building One Inotiv Phase III: Expansion Building on the Platform
Page 6
Historic Acquisition Strategy (14 in 5 years) $26.3 $43.6 $60.5 $89.6 $547.7 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Capabilities Added: • Medical Device Assessment • Surgical Specialty Revenue ($millions) Capabilities Added: • Genetic Toxicology • Specialty Histology and Pathology • Drug Discovery Pharmacology – Rheumatoid Arthritis, Osteoarthritis, IBD, CNS, Inflammation, Pain, Cardiovascular, Renal Capabilities Added: • Research Models & Services • Proteomics • Specialty Histology and Pathology • Drug Discovery Pharmacology – Cardiovascular, Renal, Pulmonary, Hepatic • Genetic Toxicology • Computational Toxicology • In Vitro Toxicology BioReliance® Inotiv has a strong track record integrating accretive acquisitions to enhance revenue growth Capabilities Added: • In vivo Toxicology and Pharmacology • GLP in vivo Services • GLP and non-GLP Bioanalysis • Histopathology / Histochemistry Capabilities Added: • Reproductive Toxicology
Page 7
Integration & Optimization: Building One Inotiv 7 • Created dedicated Discovery sales team with scientific advisory focus; plan to expand to Safety Assessment • Consolidated multiple RMS small animal facilities and invested in modernizing footprint designed to increase operating efficiency and drive higher revenues per facility; current footprint designed to accommodate future growth • Customized project management tool and SOPs have enabled integration of sites and workflow for study management and client visibility • Insourced North American transportation infrastructure, consolidating / optimizing distribution sites and equipment, improving on-time delivery and customer satisfaction • Enhanced colony management services (boarding and breeding) to diversify revenue mix and supplier base; also made investments to improve infrastructure and enhance animal welfare • Retired significant number of systems and brought on new systems to enhance integrated operations and to promote cross-selling, including a CRM and real-time business intelligence tools, further upgrades in process • Meaningful policies and systems improvements to enhance compliance efforts, particularly in animal welfare and environmental requirements Strengthening Commercial Organization Enterprise Study Management Compliance Enhancements Investments in Strategic IT & Back Office Optimization NHP Business Evolution Insourcing Transportation Site Optimization & Capacity Utilization C t d b A if H i t C t d b F di M l di Ri i C t d b D idik D t RMS DSAWholeCo
Page 8
DSA Growth and Margin Drivers • Created dedicated Discovery sales team with consultative sale approach; planned expansion of approach to Safety Assessment • Expanded Safety Assessment sales team to increase territory coverage in bicoastal biotech hotspots • Scientific advisory sales strategy helps position Inotiv as partner, rather than a vendor • Deep therapeutic area expertise in areas such as cardiometabolic and immunology • Multiple initiatives to promote use of multiple sites / capabilities for client studies: > Assembled and integrated people, processes and systems (including IT and instruments) to deliver seamless client experience > Professional program management team providing oversight for complex projects > Sophisticated project management tools developed to provide a common platform and visibility across disciplines and locations > Industry-standard tools for data collection and regulatory requirements • Growing multi-site study trend has enabled reduction of third-party spend in favor of in- house capabilities • Has resulted in improved capacity management in tandem with maturation of newer sites / capabilities 8 STRENGTHENING COMMERCIAL ORGANIZATION ENTERPRISE-WIDE STUDY MANAGEMENT 86% Revenue generated from multi-site studies since Oct. 2022 45% 52% 55% FY 2023 FY 2024 FY 2025 YTD Apr 3.4% 2.8% 2.3% 2.0% FY 2022 FY 2023 FY 2024 FY 2025E Spend ($) Spend (% of DSA Rev.) Outsourced 3rd Party Spend Percentage of DSA Projects Executed at Multiple Inotiv Sites Enterprise Study Management Strengthening Commercial Organization FY Q1 FY Q2 FY Q3 FY Q4 2024A 2025A DSA Quarterly Net Awards Growth Discovery YoY growth started in Q1 FY’25 and in Q2 FY’25 for Safety Assessment. Discovery up 27% over same three quarters in FY’24 and Safety Assessment up 26% over last two quarters.
Page 9
RMS Growth and Margin Drivers • Multi-year program to consolidate the number of RMS small animal production facilities • In 2023 we had 23 locations and project to have 11 locations by Spring of 2026 • Designed to increase operating efficiency and drive higher revenues per facility • Optimize capital expenditures to enhance quality and animal welfare in reduced number of facilities • Route optimization and client satisfaction improvements initiated in 2022 with previously outsourced provider • In 2024, insourced majority of North American transportation infrastructure for further improvements • Internal logistics experts focus on route optimization > Improved logistics requiring less vehicles in leased fleet and fewer miles for deliveries > Upgrading fleet to enhance animal welfare; will also realize cost savings through more fuel efficient vehicles and reduction in environmental impact 9 FACILITY FOOTPRINT OPTIMIZATION INSOURCING TRANSPORTATION • Increased service revenue through colony management (boarding and breeding) • Diversification of client base and introduction of long-term reoccurring contracts • Diversification of supplier base (including through in-house breeding) • Improved infrastructure and enhanced animal welfare EVOLUTION OF NHP BUSINESS North America Current Locations Future Locations EMEA Current Locations Future Locations NHP Business EvolutionInsourcing Transportation Site Optimization & Capacity Utilization 17.6 21.5 26.4 31.7 FY 2022 FY 2023 FY 2024 FY 2025E Revenue CAGR 18% (22-25E) NA NHP Colony Management Revenue FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 Client-Owned Inotiv-owned Ownership of NHPs at Inotiv Sites North America Small Animal & Teklad Transportation Costs Customer Delivery Complaints Future locations represent 36% reduction FY 2025E 0 200 400 600 FY 22 FY 23 FY 24 FY 25 E Complaint reduction ~65%
Page 10
Key Infrastructure Investments • Appointed a Chief Compliance Officer and Compliance Committee responsible for overseeing the Company’s compliance, particularly with respect to animal welfare and environmental requirements • Developed and implemented a Nationwide Compliance Plan to reinforce Inotiv’s commitment to complying with animal welfare and environmental laws, regulations, and policy requirements and standards applicable to its business operations • Created and/or revised policies and procedures governing speaking up, investigations, and specific subject areas including animal welfare, environmental, health and safety, among others • Developing with a third-party expert a detailed guidebook to better memorialize and unify Institutional Animal Care and Use Committee procedures across U.S. business operations • Modernizing and automating certain data, such as health, medical, management, and breeding, to provide real time care and trend analysis for NHPs and small animals 10 ENABLING INTEGRATION WITH STRATEGIC IT INVESTMENTS ENHANCED COMPLIANCE PROGRAM Compliance Enhancements Investments in Strategic IT & Back Office Optimization • Enhancing Client Relationships • Operating Efficiency • Improved Support Functions
Page 11
Q3 2025 Financial Results Overview 11 Q3 2025 Revenue 63% RMS 37% DSA Total Rev: $130.7M +23.5% yoy RMS • NHP client base expanded to support more consistent revenue stream • Colony management sales expected to ↑ for FY2025 • Next phase of site optimization with an expected $6M-$7M net annual cost savings on track Revenue +34.1% yoy DSA • DSA Book-to-bill ratio 1.07x • DSA Backlog: $134.3M • DSA awards were +25% in Q3 over same period a year ago period Revenue +8.9% yoy Recent Developments $48.2M $82.5M •Focusing on improvement to DSA margins; increase in discovery services revenue and increase in utilization of added capacity expected to improve margins through operating leverage •Next phase of site optimization plans anticipated to be complete by the end of the second quarter of fiscal 2026 •One property sold in Q3 and one additional contracted to be sold in connection with our U.S. optimization plans •$7.6 million legal settlement, of which a portion of proceeds has been used to help fund capex
Page 12
AEBITDA Goals and Bridge 12 Note: Adjusted EBITDA and Adjusted EBITDA margin goals are provided on a non-GAAP basis. The calculation of Adjusted EBITDA is consistent with the Adjusted EBITDA reported in our quarterly earnings. The Company cannot reconcile this guidance to expected net income or expected net income margin without unreasonable effort because certain items that impact net income and net income margin are out of the Company's control and/or cannot be reasonably predicted at this time, which unavailable information could have a significant impact on the Company’s GAAP financial results. Revenue between $590 to $610 million Adjusted EBITDA margin between 16.5 % - 18.5 % Long-term Goals Bridge to Long-term Goals AEBITDA Revenue Margin % (in millions) (in millions) Annualized Q3 FY25 AEBITDA 46.3$ 522.7$ 8.9% Additional RMS site and transportation optimization 6.5$ -$ 100.0% in 2025 and 2026 RMS Services Revenue Growth 3.0$ 4.0$ 75.0% DSA Pricing Improvement (4%) 7.5$ 7.5$ 100.0% DSA Revenue Growth (volume) (10%) 10.5$ 19.0$ 55.0% Net potential additional expense and wage increases (3.4)$ -$ 100.0% $70M AEBITDA 70.4$ 553.3$ 12.7% RMS Product Revenue Growth (volume) 5.9$ 13.0$ 45.0% RMS Services Revenue Growth 5.0$ 10.0$ 50.0% DSA Revenue Growth (volume) 12.0$ 20.0$ 60.0% DSA Pricing Improvement (4%) 8.6$ 8.6$ 100.0% $100M AEBITDA 101.8$ 604.9$ 16.8%
Page 13
Strategic Focus to Drive Shareholder Value Drive organic revenue growth with enhancements in commercial execution and client satisfaction Exceed client expectations with high scientific touch and speed of project execution creating up/cross-selling opportunities to expand share of wallet Increase margins through operating efficiency, leveraging capacity, pricing opportunity and cost management Reduce corporate overhead (as a % of revenue) through proactive reductions in operating & third-party expenses Evaluate opportunities to improve balance sheet Effective capital deployment including acquisition strategy to evaluate opportunities 13
Page 14
Company Contact: Inotiv, Inc. Beth A. Taylor, CFO investors@inotiv.com Investor Contact: LifeSci Advisors Steven Halper 646-876-6455 SHalper@lifesciadvisors.com For more information, please visit us at https://www.inotiv.com/