Inotiv Inc (NOTV) 2024 Q2 法說會逐字稿

Good afternoon ladies and gentlemen, and welcome to the Inotiv's second quarter 2024 earnings conference call. (Operator Instructions) This call is being recorded on Wednesday May 15, 2024.

女士們先生們下午好，歡迎參加 Inotiv 2024 年第二季財報電話會議。（操作員說明）此通話錄音時間為 2024 年 5 月 15 日星期三。

I would now like to turn the conference over to Bob Yedid. Please go ahead.

我現在想把會議交給鮑伯耶迪德。請繼續。

Thank you, Julie, and good afternoon, everyone. Thank you for joining today's quarterly call with Inotiv's management team. Before we begin, I'd like to remind everyone that some of the statements that management will make on the call are considered forward-looking statements, including statements about the company's future operating and financial results and plans. Such statements are subject to risks and uncertainties that could cause actual performance or achievement to be materially different from those projected.

謝謝朱莉，大家下午好。感謝您參加今天與 Inotiv 管理團隊舉行的季度電話會議。在開始之前，我想提醒大家，管理層將在電話會議上發表的一些聲明被視為前瞻性聲明，包括有關公司未來營運和財務業績及計劃的聲明。此類陳述存在風險與不確定性，可能導致實際績效或成就與預期有重大差異。

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

任何此類聲明均代表管理層截至今日的預期。您不應過度依賴這些前瞻性陳述，且本公司不承擔任何更新或修改前瞻性陳述的義務，無論是由於新資訊、未來事件或其他原因。請參閱該公司向 SEC 提交的文件，以了解有關此事的進一步指導。

Management will also discuss certain non-GAAP financial measures in an effort to provide additional information for investors. Definition of these non-GAAP measures and reconciliations to the most comparable GAAP measures are included in the company's earnings release which has been posted to the Investors section of the company's website, www.inotivco.com, and is also available in the Form 8-K filed with the Securities and Exchange Commission today. If you haven't obtained a copy of today's press release yet, you can do so by going to the Investors section of company's website.

管理階層也將討論某些非公認會計準則財務指標，以便為投資者提供更多資訊。這些非GAAP 衡量標準的定義以及與最具可比性GAAP 衡量標準的調節均包含在公司的收益發布中，該收益發布已發佈在公司網站www.inotivco.com 的投資者部分，也可在表格8 - 中找到。如果您尚未獲得今天新聞稿的副本，您可以訪問公司網站的投資者部分。

Joining us today from the company this afternoon are Bob Leasure, President and Chief Executive Officer; and Beth Taylor, Chief Financial Officer. John Sagartz, Chief Strategy Officer will join us for the Q&A section. Bob will begin with some opening remarks, after which Beth will present a summary of the company's financial results for the second quarter of fiscal 2024, and the six months ended March 31, 2024, and then we'll open the call for your questions.

今天下午，總裁兼執行長 Bob Leasure 從公司加入我們。和財務長貝絲·泰勒。首席策略長 John Sagartz 將參加​​我們的問答部分。Bob 將首先發表一些開場白，隨後 Beth 將介紹公司 2024 財年第二季度以及截至 2024 年 3 月 31 日的六個月的財務業績摘要，然後我們將開始提問。

With that, it's my pleasure to turn the call over to Bob Leasure, CEO. Bob, please go ahead.

至此，我很高興將電話轉給執行長 Bob Leasure。鮑勃，請繼續。

Thank you, Bob, and good afternoon to everyone. Thank you for joining today's call. Let's quickly run through the broad strokes of this quarter's results as we continue to operate in a mixed industry environment.

謝謝你，鮑勃，祝大家下午好。感謝您參加今天的電話會議。由於我們繼續在混合行業環境中運營，讓我們快速瀏覽一下本季業績的大致情況。

Total revenue came in at $119 million for Q2 of fiscal 2024, which is down 21.5% year over year. Segment top-line results consisted of DSA revenues of $46.6 million which was only down $400,000 or less than 1% versus the comparable period a year ago. Revenue from RMS included NHP sales, diets, bedding, small animal models was down $72.4 million in Q2, a decrease of $32 million or 31% from the prior year period. $26.2 million of the $32.1 million decrease was driven by substantially lower NHP revenue. In addition, we have a decrease in revenue of $3.1 million from the sale of our Israel business in August of 2023.

2024 財年第二季總營收為 1.19 億美元，年減 21.5%。該部門的頂線業績包括 DSA 收入 4,660 萬美元，與去年同期相比僅下降了 40 萬美元，不到 1%。RMS 的收入包括 NHP 銷售、飲食、床上用品、小動物模型，第二季下降了 7,240 萬美元，比去年同期減少了 3,200 萬美元，即 31%。減少 3,210 萬美元中的 2,620 萬美元是由於 NHP 收入大幅下降所致。此外，由於 2023 年 8 月出售以色列業務，我們的收入減少了 310 萬美元。

Revenues this past quarter were well below our expectations. The lower revenue came in as a result of many of the potential risks we discussed in our last quarterly call coming to fruition, primarily weak demand for NHPs and slower DSA discovery related sales, which were somewhat offset by the growth in our new safety assessment services.

上個季度的營收遠低於我們的預期。收入下降的原因是我們在上一季度電話會議中討論的許多潛在風險即將實現，主要是對NHP 的需求疲軟和DSA 發現相關銷售放緩，但我們新的安全評估服務的增長在一定程度上抵消了這些風險。

2023 was a challenging funding environment for the biopharma industry and we saw companies reprioritize their use of capital, resulting in product reprioritizations and some cancellations as companies rationalize their R&D spending. In addition, as we have discussed in the past, the industry faced challenges and volatility resulting from US Attorney's Office criminally charging a Cambodian government official on alleged charges of conspiracy to illegally import NHP in the US.

2023 年對生物製藥產業來說是一個充滿挑戰的融資環境，我們看到公司重新調整了資本使用的優先順序，導致產品重新調整優先順序，並隨著公司合理化其研發支出而取消了一些產品。此外，正如我們過去所討論的，該行業面臨著美國檢察官辦公室對一名柬埔寨政府官員涉嫌串謀在美國非法進口 NHP 的刑事指控所帶來的挑戰和波動。

And our considered decision to suspend Cambodian imports and the subsequent effective industry ban on the importation of Cambodian NHPs into the US in late 2022. This ultimately resulted in lower NHP availability in the US and heightened concern among customers regarding the ability to access NHPs to develop their pipeline products, which together drove increased NHP pricing in 2023. The uncertainty and available supply to the US also resulted in some discovery in preclinical studies moving outside the US, which further impacted drug discovery and development and overall demand for NHPs in the US

我們經過深思熟慮後決定暫停柬埔寨進口，並隨後於 2022 年底對美國進口柬埔寨 NHP 實施有效的產業禁令。這最終導致 NHP 在美國的供應量下降，並加劇了客戶對能否獲得 NHP 來開發其管道產品的擔憂，這些因素共同推動了 2023 年 NHP 定價的上漲。美國的不確定性和可用供應也導致臨床前研究中的一些發現轉移到美國境外，這進一步影響了美國的藥物發現和開發以及 NHP 的整體需求

We indicated in our prior quarterly call that we expected this year could be choppy as it relates to NHP sales. We believe the industry continues to reset and refocus pipeline priorities and our second quarter results reflects the after effects and volatility caused by the NHP market dynamics at the end of 2022 through 2023 and the first half of fiscal 2024.

我們在先前的季度電話會議中表示，我們預計今年可能會出現波動，因為這與 NHP 銷售有關。我們認為，該行業將繼續重新調整和重新關注管道優先事項，我們第二季度的業績反映了 2022 年底至 2023 年以及 2024 財年上半年 NHP 市場動態造成的後遺症和波動。

We're currently witnessing some positive signs in this industry, such as marked improvement in the capital markets funding for biotech and small pharma companies during the first quarter of calendar 2024 as compared to the prior two years. While this is a positive sign for these companies and the CRM industry, we expect biopharma companies in the short-term to continue to take a restrained conservative approach to the pipeline products in order to prioritize the use of capital to the most important projects.

目前，我們正在見證該行業的一些積極跡象，例如與前兩年相比，2024 年第一季生物技術和小型製藥公司的資本市場融資顯著改善。雖然這對這些公司和 CRM 行業來說是一個積極的信號，但我們預計生物製藥公司在短期內將繼續對管道產品採取克制保守的態度，以便優先將資金用於最重要的項目。

Accordingly, Inotiv's sales cycle has been slow as customers continue to evaluate and rationalize their product pipelines. This has impacted us predominantly through a further reduction in Q2 discovery sales versus the prior year and in the RMS NHP business. In our research models and services or RMS business some of our major CRO NHP customers have seen delays and slowdowns in their ability to acquire new discovery and safety assessment studies requiring NHPs.

因此，隨著客戶不斷評估和合理化其產品管道，Inotiv 的銷售週期一直很緩慢。這對我們的影響主要是第二季發現銷售額與前一年相比以及 RMS NHP 業務的進一步減少。在我們的研究模式和服務或 RMS 業務中，我們的一些主要 CRO NHP 客戶發現他們獲取需要 NHP 的新發現和安全評估研究的能力出現延遲和放緩。

In other cases, it also became apparent this quarter that certain customers mitigated supply chain risk in 2023 by purchasing NHPs well in advance of their needs and are now able to delay purchasing additional NHPs until they deplete their current inventories. So this year, unlike 2023, we are now seeing customers align their NHP purchases more closely to their immediate project needs. Taking these dynamics collectively, we believe these pressures will normalize later in the year, as customer NHP inventories are depleted and they focus on ordering to meet shorter term needs.

在其他情況下，本季也明顯表明，某些客戶透過提前購買 NHP 來降低 2023 年的供應鏈風險，現在可以推遲購買額外的 NHP，直到耗盡當前庫存。因此，與 2023 年不同的是，今年，我們看到客戶的 NHP 採購更加貼近他們的直接專案需求。綜合考慮這些動態，我們認為這些壓力將在今年稍後正常化，因為客戶 NHP 庫存耗盡，他們專注於訂購以滿足短期需求。

Internally, we remain encouraged by the results and benefits of many of the critical actions we took in 2023 or taking in 2024, such as the integration efforts of our acquisitions. We are seeing lower cost and improved service from our RMS site optimization projects. We anticipate the RMS site optimization and cost reduction initiatives we started last year are going to be completed by the end of July 2024 and the transportation initiatives, which we announced in December of 2023, are currently being implemented to create further cost and customer service benefits.

在內部，我們仍然對 2023 年或 2024 年採取的許多關鍵行動的結果和效益感到鼓舞，例如收購的整合工作。我們看到 RMS 站點優化專案的成本降低了，服務也得到了改善。我們預計我們去年啟動的 RMS 站點優化和成本降低計劃將於 2024 年 7 月底完成，而我們於 2023 年 12 月宣布的運輸計劃目前正在實施，以創造進一步的成本和客戶服務效益。

Additionally, we are pleased to secure new contracts with two research organization customers who wish to occupy space within our UK RMS facilities. In addition to generating reoccurring income from the use of the space infrastructure and services, we are identifying opportunities to provide these customers with additional product and services to support their scientific research.

此外，我們很高興與兩個希望佔用我們英國 RMS 設施內空間的研究組織客戶簽訂新合約。除了透過使用空間基礎設施和服務來產生經常性收入外，我們還在尋找機會為這些客戶提供額外的產品和服務以支持他們的科學研究。

In DSA, new service offerings are now contributing to increases in safety assessment revenues, which have helped offset some of the decreases we have seen in Discovery Services portion of that segment. In discovery, we believe the additional salespeople and the additional salespeople and initiatives we implemented in Q1 of fiscal 2024 will help to increase our market awareness and quoting activity as we go through the remainder of the year.

在 DSA 中，新的服務產品現在正在促進安全評估收入的增加，這有助於抵消我們在該細分市場的發現服務部分看到的一些下降。在發現方面，我們相信增加的銷售人員以及我們在 2024 財年第一季實施的額外銷售人員和舉措將有助於在今年剩餘時間內提高我們的市場意識和報價活動。

With many of our announced projects now completed or nearing completion, we've also been able to reduce our overall operating expense. Further due to current market conditions and certain efficiencies we've been able to achieve, we affected a small reduction in force in April, which will help further reduce expenses in future quarters.

隨著我們宣布的許多項目現已完成或接近完成，我們還能夠減少整體營運費用。此外，由於當前的市場狀況和我們已經實現的某些效率，我們在 4 月小幅減少了人力，這將有助於進一步減少未來幾季的費用。

Overall, net new DSA quarters for this quarter were $35 million versus the $44.6 million last year. For the year-to-date period ending March 31, 2024, we booked net new orders of $98.9 million versus $84.6 million for the six months ended March 31, 2023. The conversion rate this quarter was 30.1% versus 32% in the prior year. The DSA cancellations in Q2 were consistent with prior year period and in the first six months of fiscal 2024 were slightly less than they were the same period in 2023.

總體而言，本季新增 DSA 淨額為 3,500 萬美元，去年為 4,460 萬美元。截至 2024 年 3 月 31 日的年初至今，我們的新訂單淨額為 9,890 萬美元，而截至 2023 年 3 月 31 日的六個月為 8,460 萬美元。本季的轉換率為 30.1%，而前一年為 32%。第二季的 DSA 取消與去年同期一致，2024 財年前六個月的取消數量略少於 2023 年同期。

For the six months ended March 31, 2024, we generated positive cash from operating activities of $10.4 million and completed many of the investments and initiatives started almost 20 months ago. Capital investments were $7 million in the second quarter and $12.6 million in the year-to-date period. We expect these investments will be reduced further in the next two quarters and until we see further recovery in revenue.

截至 2024 年 3 月 31 日的六個月，我們從經營活動中產生了 1,040 萬美元的正現金，並完成了近 20 個月前開始的許多投資和舉措。第二季資本投資為 700 萬美元，今年迄今資本投資為 1,260 萬美元。我們預計這些投資將在未來兩季進一步減少，直到我們看到收入進一步復甦。

In Q2, we completed the sale of Blackthorn, UK and Dublin, Virginia facilities. In April, we completed the sale of our Haslett, Michigan facility. We expect to complete the sale of our Cumberland, Virginia facility in the third quarter and have listed for sale an additional 85 excess acres of land we have in Pennsylvania.

第二季度，我們完成了英國布萊克索恩和維吉尼亞州都柏林工廠的出售。四月，我們完成了密西根州哈斯萊特工廠的出售。我們預計將在第三季完成維吉尼亞州坎伯蘭工廠的出售，並已列出出售我們在賓州擁有的額外 85 英畝土地。

With the investments that we have completed in DSA business, we believe that we have the physical capacity to accommodate increased DSA revenue of 40% over the $185 million recognized in 2023. This capacity still represents a substantial opportunity to improve our DSA sales and margins in the future. For these next two quarters, Inotiv remains on track to further achieve financial benefits from our investments and growth initiatives, increased sales and marketing and the organic addition of new services and our consolidation integration projects with the related efficiency gains.

憑藉我們在 DSA 業務上完成的投資，我們相信我們有能力將 DSA 收入在 2023 年確認的 1.85 億美元基礎上增加 40%。這一產能仍然代表著未來提高我們 DSA 銷售額和利潤率的重大機會。在接下來的兩個季度中，Inotiv 仍有望從我們的投資和成長計劃、銷售和行銷的增加以及新服務的有機增加以及我們的整合整合項目以及相關效率收益中進一步實現財務收益。

I want to update you now briefly on material legal issues we previously disclosed. With respect to the Cambodian government official indicted by the US government, that official was found not guilty on all counts and has now returned to Cambodia. At this time, we do not have any further updates related to the status of potential future imports of NHP into the US from Cambodia. With respect to the investigation by the DOJ and other federal and state law enforcement agencies related to the Cumberland, Virginia facility, which we closed in September of 2022, we have been in discussions to resolve the open matters relating to the investigation.

我現在想向您簡要介紹我們先前披露的重大法律問題的最新情況。至於被美國政府起訴的柬埔寨政府官員，該官員被判無罪，現已返回柬埔寨。目前，我們沒有關於未來可能從柬埔寨進口 NHP 到美國的情況的任何進一步更新。關於司法部以及其他聯邦和州執法機構對維吉尼亞州坎伯蘭設施的調查（我們於 2022 年 9 月關閉該設施），我們一直在討論解決與調查相關的未決事項。

Since we believe this resolution is now probable and estimatable, we have recorded an accrual as of March 31, 2024, of $26.5 million. We would expect to pay $6.5 million of this $26.5 million in fiscal year 2024, and the remaining $20 million would be a non-current liability to be paid over three to five years. This resolution is not finalized and not signed as of today. Until then, we cannot comment further.

由於我們認為該決議現在是可能且可估計的，因此截至 2024 年 3 月 31 日，我們的應計費用為 2,650 萬美元。我們預計在 2024 財年支付這 2,650 萬美元中的 650 萬美元，其餘 2,000 萬美元將作為非流動負債，在三到五年內支付。截至今天，該決議尚未最終確定和簽署。在那之前，我們無法進一步發表評論。

We have determined that in the last two years, we have incurred expenses of approximately $22 million for the investigation related so far to this Cumberland facility that we closed in 2022. The total expenses include third-party fees to comply with subpoena information request, legal fees, and the cost to close the facility. Some of these fees have been added back as restructuring cost and calculated in adjusted EBITDA, but if possible, we would like to resolve this matter and put it behind us.

我們確定，在過去兩年中，我們已為與 2022 年關閉的坎伯蘭工廠相關的調查產生了約 2,200 萬美元的費用。總費用包括遵守傳票資訊請求的第三方費用、法律費用以及關閉設施的費用。其中一些費用已作為重組成本加回，並在調整後的 EBITDA 中計算，但如果可能的話，我們希望解決這個問題並將其拋在腦後。

With that, I'll turn the call over to Beth, who will provide detailed synopsis of Inotiv's results for the quarter.

接下來，我會將電話轉給 Beth，她將提供 Inotiv 本季業績的詳細摘要。

Thank you, Bob, and good afternoon, everyone. Before I start, we have one correction to note. The incurred expenses for the investigation related to the Cumberland facility were $19 million, not $22 million. Now for the current financial results for the 2024 second quarter, total revenue was $119 million compared to $151.5 million during the prior year period, a decrease of 21.5% primarily due to a decrease in the number of NHP sold in the current quarter.

謝謝鮑勃，大家下午好。在開始之前，我們需要注意一處更正。與坎伯蘭設施相關的調查所產生的費用為 1,900 萬美元，而不是 2,200 萬美元。現在就 2024 年第二季的當前財務業績而言，總收入為 1.19 億美元，而上年同期為 1.515 億美元，下降了 21.5%，主要是由於本季度銷售的 NHP 數量減少。

For the six months ended March 31, 2024, consolidated revenue was $254.5 million, down 7.2% compared to $274.2 million for the same period last year due to the decrease in NHP sold, which was primarily offset by a 3.6% increase in DSA revenue. DSA revenues in the 2024 second quarter decreased by less than 1% to $46.6 million when compared to the prior year period of $47 million. The decrease in the DSA revenue was primarily driven by our discovery services as a result of the decline in overall biotech funding and separately a decrease in medical device surgical services due to cancellations we experienced in the fourth quarter of fiscal '23 and Q1 of 2024 and also delayed projects.

截至 2024 年 3 月 31 日的六個月，合併收入為 2.545 億美元，較去年同期的 2.742 億美元下降 7.2%，原因是 NHP 銷量減少，但主要被 DSA 收入增長 3.6% 的增長所抵消。2024 年第二季 DSA 營收為 4,660 萬美元，較上年同期的 4,700 萬美元下降了不到 1%。DSA 收入的下降主要是由於我們的發現服務造成的，這是由於整體生物技術資金的下降，以及由於我們在23 財年第四季度和2024 年第一季經歷的取消而導致的醫療器械手術服務的減少。

Partially offsetting this, we continue to see increased revenue from our new service offerings in genetic toxicology and biotherapeutic analysis in connection with new business at our Rockville facility, plus the timing of general toxicology services.

我們繼續看到與羅克維爾工廠的新業務相關的遺傳毒理學和生物治療分析新服務以及一般毒理學服務的時間安排帶來的收入增加，部分抵消了這一影響。

DSA revenue for the six months ended March 31, 2024, were $91.3 million or 3.6% higher compared to the prior year of $88.1 million. The increase in DSA revenue primarily driven by the mix of general toxicology services and continued increases from value added services in connection with new business at our Rockville facility, partially offset by a decrease in revenue related to our discovery services as a result of the decline in overall biotech funding and a decrease in medical device surgical services due to cancellations we experienced in the fourth quarter of '23 and the first quarter of '24 and delayed projects.

截至 2024 年 3 月 31 日的六個月，DSA 收入為 9,130​​ 萬美元，比上一年的 8,810 萬美元增長 3.6%。DSA 收入的成長主要是由一般毒理學服務以及與我們羅克維爾工廠新業務相關的增值服務的持續增長推動的，但部分被與我們的發現服務相關的收入下降所抵消，這是由於由於我們在23 年第四季和24 年第一季經歷了取消和專案延遲，生物技術總體資金和醫療器械手術服務減少。

RMS revenue for the fiscal second quarter was down 30.7% to $72.4 million compared to $104.5 million the same quarter last year, due primarily to the lower NHP related product and service revenue. In addition, there was a decrease in revenue of $3.1 million as a result of the sale of our Israeli business in fiscal 2023 and a decrease in sales of small research models which was partially offset by an increase in sales in diets and bedding.

第二財季 RMS 營收下降 30.7%，至 7,240 萬美元，而去年同期為 1.045 億美元，這主要是由於 NHP 相關產品和服務收入下降。此外，由於 2023 財年出售以色列業務以及小型研究模型銷售額的減少，收入減少了 310 萬美元，但飲食和床上用品銷售額的增加部分抵消了收入的減少。

RMS revenue for the six months ended March 31, 2024, was down 12.3% to $163.2 million compared to $186.1 million in the same period last year. The decrease was due to the negative impact of lower volume of NHP sales, lower revenue as a result of the sale of our Israeli businesses in fiscal 2023, and lower sales of small research models. Partially offsetting these decreases in revenue, there were higher sales in diets and bedding.

截至 2024 年 3 月 31 日的六個月，RMS 營收下降 12.3% 至 1.632 億美元，去年同期為 1.861 億美元。下降的原因是 NHP 銷量下降、2023 財年出售以色列業務導致收入下降以及小型研究模型銷量下降的負面影響。飲食和床上用品銷售額的增加部分抵消了收入的下降。

Regarding NHP pricing, we indicated on our last conference call that NHP prices were expected to come down from the highest we saw in Q4 of fiscal 2023. We did see NHP pricing in Q2 of fiscal 2024 on average come down roughly 2% from Q1 2024. This compared to the decrease in pricing in Q1 fiscal '24 of 18% compared to Q4 of fiscal 2023.

關於 NHP 定價，我們在上次電話會議上表示，NHP 價格預計將低於 2023 財年第四季的最高價格。我們確實看到 2024 財年第二季的 NHP 定價平均比 2024 年第一季下降了約 2%。相比之下，24 財年第一季的定價較 2023 財年第四季下降了 18%。

Operating loss for the second quarter of fiscal 2024 was $43.1 million compared to a loss of $2.1 million from last year's second quarter, primarily due to lower margins relating to the decrease in revenue. The $26.5 million charge related to the agreement in principle with the DOJ and the impact of lower margins from the sale of our Israeli businesses. These items were partially offset by decreases in third-party fees and restructuring costs and favorable cost reductions related to the site closures and optimizations compared to the prior year period.

2024 財年第二季的營運虧損為 4,310 萬美元，而去年第二季的營運虧損為 210 萬美元，主要是由於收入下降導致利潤率下降。2,650 萬美元的費用與與司法部達成的原則協議以及出售以色列業務利潤率下降的影響有關。與去年同期相比，這些項目被第三方費用和重組成本的減少以及與站點關閉和優化相關的有利成本降低所部分抵消。

In addition, gross margins for the new DSA services are still creating a headwind for overall margins. However, as we see these services revenues increase, we expect to see an associated margin improvement.

此外，新 DSA 服務的毛利率仍對整體利潤構成阻力。然而，當我們看到這些服務收入增加時，我們預計會看到相關的利潤率改善。

Consolidated net loss attributable to common shareholders in the second quarter of fiscal 2024 totaled $48.1 million or a $1.86 loss per diluted share. This compared to consolidated net loss attributable to common shareholders of $10 million or a $0.39 loss per diluted share in the second quarter of 2023. For the quarter, adjusted EBITDA was $3.1 million or 2.6% of total revenues compared to $17.1 million or 11.3% of total revenue for last year's second quarter.

2024 財年第二季歸屬於普通股股東的合併淨虧損總計 4,810 萬美元，即稀釋後每股虧損 1.86 美元。相較之下，2023 年第二季歸屬於普通股股東的合併淨虧損為 1,000 萬美元，或攤薄後每股虧損 0.39 美元。本季調整後 EBITDA 為 310 萬美元，佔總營收的 2.6%，而去年第二季為 1,710 萬美元，佔總營收的 11.3%。

For the six months ended March 31, 2024, adjusted EBITDA improved by $1.1 million compared to the prior year period to $12.7 million or 5% of total revenues from $11.6 million or 4.2% of revenue in the same period last year.

截至2024 年3 月31 日的六個月，調整後EBITDA 較上年同期增加110 萬美元，從去年同期的1,160 萬美元（佔總營收的4.2%）增至1,270 萬美元（佔總營收的5 %）。

Non-GAAP operating income for our DSA segment in the second quarter increased to $8.2 million or 17.6% of segment revenue from $7.9 million or 16.8% of segment revenue in last year's second quarter. As our new DSA services are fully online and we began to fill newly added capacity, we continue to believe we will be able to boost our DSA operating margins.

第二季 DSA 部門的非 GAAP 營業收入從去年第二季的 790 萬美元（佔部門收入的 16.8%）增至 820 萬美元（佔部門收入的 17.6%）。隨著我們新的 DSA 服務全面上線，並且我們開始填補新增產能，我們仍然相信我們將能夠提高 DSA 營運利潤率。

The book-to-bill ratio for DSA in the second quarter was 0.77 to 1, coming off the strong net awards in Q1 fiscal 2024. So our six-month year-to-date fiscal 2024 book-to-bill is 1.11 to 1, and our trailing 12-month net book-to-bill is 0.98 to 1. As we stated last quarter, we believe it is more meaningful to use book-to-bill ratios for six months or longer as better indicators of our DSA performance. Year-to-date March 31, 2024, we have booked net new orders of $98.9 million versus $84.6 million for the six months ended March 31, 2023.

DSA 第二季的訂單出貨比為 0.77 比 1，遠低於 2024 財年第一季的強勁淨獎勵。因此，我們 2024 財年迄今 6 個月的訂單出貨比為 1.11 比 1，我們過去 12 個月的淨訂單出貨比為 0.98 比 1。正如我們上季度所說，我們認為使用六個月或更長時間的訂單出貨比作為我們 DSA 績效的更好指標更有意義。截至 2024 年 3 月 31 日，我們已預訂淨新訂單 9,890 萬美元，而截至 2023 年 3 月 31 日的六個月為 8,460 萬美元。

The DSA cancellations in the second quarter were consistent with prior year period and year-to-date for the last six months were slightly less than the same period in the prior year. DSA backlog was $142.1 million at March 31, 2024, compared to $145.7 million at March 31, 2023. In our RMS segment, non-GAAP operating income in the second quarter of fiscal 2024 was $8.2 million or 11.3% of segment revenues compared to $24.4 million or 23.4% of segment revenues in last year's period.

第二季的 DSA 取消量與去年同期一致，今年迄今最後六個月的取消量略低於去年同期。截至 2024 年 3 月 31 日，DSA 積壓金額為 1.421 億美元，而 2023 年 3 月 31 日為 1.457 億美元。在我們的 RMS 部門，2024 財年第二季的非 GAAP 營業收入為 820 萬美元，佔部門收入的 11.3%，而去年同期為 2,440 萬美元，佔部門收入的 23.4%。

The lower operating income in Q2 fiscal 2024 was primarily the result of a decrease in RMS revenue and the $26.5 million charge related to the agreement and principal discussed above, partially offset by favorable cost reductions related to the site closures and optimizations compared to the prior year period and decreased third-party fees and restructuring costs.

2024 財年第二季營業收入較低，主要是由於RMS 收入減少以及與上述協議和本金相關的2,650 萬美元費用減少，但與前一年相比，與站點關閉和優化相關的有利成本降低部分抵銷了期並減少了第三方費用和重組成本。

Interest expense in Q2 2024 increased by $11.1 million, up from $10.5 million in last year's second quarter due to higher interest rates. Our balance sheet as of March 31, 2024, included $32.7 million in cash and cash equivalents as compared to $35.5 million at September 30, 2023. Total debt -- net of debt issuance costs as of March 31, 2024, was $380.6 million consistent with the $377.7 million at September 30, 2023.

由於利率上升，2024 年第二季的利息支出增加了 1,110 萬美元，高於去年第二季的 1,050 萬美元。截至 2024 年 3 月 31 日，我們的資產負債表包括 3,270 萬美元的現金和現金等價物，而 2023 年 9 月 30 日為 3,550 萬美元。截至 2024 年 3 月 31 日，債務總額（扣除債務發行成本）為 3.806 億美元，與 2023 年 9 月 30 日的 3.777 億美元一致。

Net cash provided by operations for the six months ended March 31, 2024, was $10.4 million compared to cash provided by operations of $5.4 million in the same period last year. Cash provided by operations for the trailing 12 months was $32.8 million. Capital expenditures in the second quarter were $7 million or 5.9% of total revenue and $12.6 million or 5% of total revenue for the six months ended March 31, 2024 as compared to $16.8 million or 6.1% for the year-to-date period for 2023.

截至 2024 年 3 月 31 日的六個月，營運提供的現金淨額為 1,040 萬美元，而去年同期營運提供的現金為 540 萬美元。過去 12 個月營運提供的現金為 3,280 萬美元。第二季的資本支出為700 萬美元，佔總收入的5.9%；截至2024 年3 月31 日的六個月，資本支出為1,260 萬美元，佔總收入的5%；而截至2024 年3 月31 日止六個月，資本支出為1,680 萬美元，佔總收入的6.1%。

The capital expenditures reflect investments in completing our DSA capacity expansions, infrastructure improvements in NHP facilities and renovations in the UK in order to complete the expansion of Hillcrest for the new customer contract and the consolidation of Blackthorn and enhancements in laboratory technology and improvements for animal welfare.

資本支出反映了完成我們的 DSA 產能擴張、NHP 設施基礎設施改善和英國翻新的投資，以便完成新客戶合約的 Hillcrest 擴張、Blackthorn 的整合以及實驗室技術的增強和動物福利的改善。

Now let's turn to our guidance. With the significant impact that NHPs have on our revenue and margins and the current uncertainty in demand for NHPs, we are withdrawing financial guidance for fiscal year 2024. We expect to provide guidance once we have greater clarity on the NHP market and customer demand.

現在讓我們轉向我們的指引。鑑於 NHP 對我們的收入和利潤率產生重大影響，以及當前 NHP 需求的不確定性，我們將撤回 2024 財年的財務指導。一旦我們對 NHP 市場和客戶需求有了更清晰的了解，我們預計將提供指導。

We still believe in our long-term plan and our ability to achieve our financial goals. In the DSA segment, we are focusing to optimize our market share and increasing awards to utilize new services and additional capacity to grow DSA segment revenue. We believe that our strategic initiatives to increase our sales force and optimize sales territory coverage and focus on sales and discovery services puts us in an advantageous position to gain market share and increase awards as biopharma companies begin to increase their level of investment in preclinical studies.

我們仍然相信我們的長期計劃和實現財務目標的能力。在 DSA 細分市場，我們致力於優化我們的市場份額，並增加獎勵，以利用新服務和額外容量來增加 DSA 細分市場收入。我們相信，隨著生物製藥公司開始增加對臨床前研究的投資水平，我們增加銷售隊伍、優化銷售區域覆蓋範圍以及專注於銷售和發現服務的戰略舉措使我們處於獲得市場份額和增加獎項的有利地位。

We will continue to stay focused on client satisfaction through innovation and the development of nimble solutions and custom offerings. As the industry continues to face headwinds, we remain focused on executing our plan for long-term growth and sustainable margins. If revenue and margins do not improve in Q3 fiscal 2024, we could be in noncompliance with our covenants at June 30, 2024, and we will have approximately 55 days after the end of the quarter to cure. We have plans to remedy any non-compliance with our lenders through a credit agreement amendment.

我們將繼續透過創新和開發靈活的解決方案和客製化產品來專注於客戶滿意度。隨著行業繼續面臨逆風，我們仍然專注於執行長期成長和可持續利潤的計劃。如果 2024 財年第三季的營收和利潤率沒有改善，我們可能會在 2024 年 6 月 30 日不遵守我們的契約，並且我們將在該季度結束後大約 55 天的時間內進行糾正。我們計劃透過修訂信貸協議來糾正貸方的任何違規行為。

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

有了財務概覽後，我們會將電話轉給我們的接線生詢問問題。

(Operator Instructions) Dave Windley, Jefferies.

（操作員說明）Dave Windley，Jefferies。

Hi. Thanks for taking my questions. I wanted to start on NHPs. I heard you say that pricing in 2Q was just 2% lower than 1Q. Could you maybe put -- help us with some numbers around that? Where was pricing at the -- I think you referenced peak of 3Q of your last fiscal year. Where was that? Where is the -- kind of down 2% in 2Q put you? And then given the low volume that you're highlighting, where is that price moving as we sit here today? Thanks.

你好。感謝您回答我的問題。我想從 NHP 開始。我聽你說第二季的定價只比第一季低2%。您能否幫我們提供一些相關的數字？我認為您提到了上一財年第三季的峰值。那是哪裡？第二季下跌 2% 的情況在哪裡？然後考慮到您所強調的低成交量，我們今天坐在這裡的價格將走向何方？謝謝。

I think the peak was Q4 of last year and Q1 was down 18%. I think we said Q2 is down 2%. So I mean, we'd be down 20% from where it was Q4 of last year. More recently, I've not seen it slip since Q2, but it could. And one of the things that's keeping up is our cost are still high. So you've got to look on the world market to see where the pricing is, where's China, where's Cambodia, where's Vietnam, they're still selling across the world and some of those prices are staying a little bit stronger.

我認為高峰是去年第四季度，第一季下降了 18%。我想我們說過第二季下降了 2%。所以我的意思是，我們的業績將比去年第四季下降 20%。最近，自第二季以來我還沒有看到它下滑，但也有可能。持續存在的問題之一是我們的成本仍然很高。因此，你必須看看世界市場，看看定價在哪裡，中國在哪裡，柬埔寨在哪裡，越南在哪裡，它們仍在世界各地銷售，其中一些價格仍然保持在高水準。

But I expect we could see those come down in this quarter and next quarter, depending on what happens in Cambodia specifically. And so we'll just have to see how that goes.

但我預計我們可以看到這些在本季和下季有所下降，具體取決於柬埔寨具體發生的情況。所以我們只需要看看事情進展如何。

Okay. Bob, so in terms of the revenue in the quarter, I just want to understand your calculus around supply demand. Your revenue was down $26 million. I forget the exact percentage, maybe 30% or something like that. Only 2% of that is price, so volume is down a lot. You mentioned costs. I mean the customer --

好的。鮑勃，就本季的收入而言，我只想了解您對供應需求的計算。您的收入減少了 2600 萬美元。我忘記了具體的百分比，也許是 30% 或類似的數字。其中價格僅佔 2%，因此成交量大幅下降。你提到了成本。我的意思是客戶--

Our average cost would be higher than last year's average cost and the supply is down significantly and our inventory is also down. But we do have plenty of inventory right now to meet our customers' needs.

我們的平均成本將高於去年的平均成本，供應量大幅下降，庫存也下降。但我們現在確實有充足的庫存來滿足客戶的需求。

And I guess so (multiple speakers) -- sorry, go ahead. Sorry.

我想是的（多個發言者）——抱歉，請繼續。對不起。

So we did see a very weak second quarter in terms of the units, the number of NHP sold.

因此，我們確實看到第二季的 NHP 銷售量非常疲軟。

And so that's a provocative question. I guess, why not drop price to sell more volume?

所以這是一個具有挑釁性的問題。我想，為什麼不降價來增加銷售量呢？

I'm not sure that would do it. The challenge is they don't need the volume right now. So could price become an issue? It could. It's not been an issue. The issue has been people have inventory. And so, some that have reoccurring monthly or quarterly shipments did not need any or needed very few just in the last quarter. I believe that we do have some visibility on some of the inventory and the levels. I think they are coming down and I think we're starting to see some of that rebound in some customers, not all customers yet. We also see some customers that have lower demand probably because they have lower orders.

我不確定這樣做是否可行。挑戰是他們現在不需要這個量。那麼價格會成為一個問題嗎？它可以。這不是問題。問題是人們有庫存。因此，一些每月或每季重複出貨的公司在上個季度不需要或只需要很少的貨物。我相信我們確實對某些庫存和水準有一定的了解。我認為它們正在下降，我認為我們開始看到一些客戶（而不是所有客戶）出現了一些反彈。我們也看到一些需求較低的客戶可能是因為訂單較少。

Okay. And on the stocking point, these animals have an age window in which they are applicable. They're usable for research studies. So they can't -- they being the client can't stock them indefinitely. Help us understand a little bit. I know you talked about selling and then contract boarding for some clients, but in those cases, you would know what you have on property. Help us to understand a little bit how this advance buying and inventory stockpiling of live animals works or worked?

好的。在放養點上，這些動物有一個適用的年齡窗口。它們可用於研究。所以他們不能——他們作為客戶不能無限期地庫存。幫助我們理解一點。我知道您談到出售然後為某些客戶簽訂寄宿合同，但在這些情況下，您會知道自己擁有什麼財產。請幫助我們了解一點活體動物的提前購買和庫存儲存是如何運作或運作的？

Well, they would -- they can always take first in inventory be the first out of inventory. So they're quite adaptive managing the age limits that they need. And also remember some animals need mature -- or some studies need mature animals and some need more immature animals. So there are different ages that may be needed at different times. But that is a customer-by-customer decision. And we've been able to manage our inventory accordingly.

好吧，他們總是可以先入庫，然後先出庫。所以他們非常適應管理他們需要的年齡限制。也要記住，有些動物需要成熟——或者有些研究需要成熟的動物，有些則需要更不成熟的動物。所以不同時期可能需要不同的年齡。但這是每個客戶的決定。我們已經能夠相應地管理我們的庫存。

Got it. One more question on NHP and I'll yield. In your press release this afternoon, you disclosed the NHP-related revenue decline and then the cost of revenue in the $7.2 million range. So that works out to about a 72% gross margin. Is that the right gross margin to be thinking about on NHP-related revenue? Thank you.

知道了。還有一個關於 NHP 的問題，我會屈服。在今天下午的新聞稿中，您揭露了與 NHP 相關的收入下降以及 720 萬美元範圍內的收入成本。因此，毛利率約為 72%。對於 NHP 相關收入來說，這是正確的毛利率嗎？謝謝。

No. I think that is not -- that just shows the -- some of those indications of -- that cost didn't go down as much because the average cost per NHP sold went up was higher.

不。我認為這並不是——這只是表明——其中一些跡象——成本沒有下降那麼多，因為每售出 NHP 的平均成本上升了。

Okay. So the year-over-year change is not a congruent of pro-rata change?

好的。那麼同比變化不是按比例變化嗎？

I noticed that also yesterday when we were looking at this. That can be misleading. That's not the margin, it's just indicative that the price that you would think it did, the average price was going up.

昨天我們在看這個的時候我也注意到了這一點。這可能會產生誤導。這不是利潤，它只是顯示你認為的價格，平均價格正在上漲。

Got it. Okay. I'll yield the floor. Thank you.

知道了。好的。我讓出發言權。謝謝。

Matt Hewitt, Craig-Hallum.

馬特·休伊特，克雷格·哈勒姆。

Good afternoon. Thank you for taking the questions. Maybe just a couple more on the NHPs. Regarding Cambodia, it's still unknown what's going to happen there, but let's assume for sake of argument that that market opens back up to US importation. What does that do to the supply demand dynamics and ultimately the pricing?

午安.感謝您提出問題。也許還有一些關於 NHP 的內容。至於柬埔寨，目前尚不清楚那裡會發生什麼，但為了論證起見，我們假設該市場重新向美國進口開放。這對供需動態以及最終的定價有何影響？

Well, we don't know when and if that will open. And two, I'm not going to sit here and try to predict the future of commodities. I think anything is possible. Again, it's a world market. Remember, Cambodians have been used everywhere but the US, still are -- could that help decrease the price of the cost? Yes. But second of all, will that impact margin dollars? It could. I think it -- but right now, I don't think we can sit here and predict commodity pricing.

好吧，我們不知道什麼時候以及是否會開放。第二，我不會坐在這裡嘗試預測大宗商品的未來。我認為一切皆有可能。再說一次，這是一個世界市場。請記住，柬埔寨人已經在任何地方使用，但美國仍然如此 - 這是否有助於降低成本？是的。但其次，這會影響保證金嗎？它可以。我認為是的，但現在，我認為我們不能坐在這裡預測商品定價。

What's important to us is that we need we really need to make this and we have been making it more of a service business than just selling NHP. And we continue to do that with boarding and with breeding. And at some point, yes, we're selling a significantly less amount of NHPs than we did in the past. So it's a matter of margin dollar per NHP, but it's also obviously, you can see it's very dependent on the number of NHPs that we sold.

對我們來說重要的是，我們確實需要做到這一點，並且我們一直在使其更像是一項服務業務，而不僅僅是銷售 NHP。我們繼續在寄養和繁殖方面這樣做。是的，在某個時候，我們銷售的 NHP 數量比過去明顯減少。所以這是每個 NHP 的保證金問題，但很明顯，你可以看到它非常依賴我們銷售的 NHP 的數量。

Got it. And then transitioning from there. So I guess and you just touched on it a little bit, but as you transition more customers to the contracts versus the prior year and a half of buying at the spot market, have you had success with that? When do you start to see that materialize from a margin perspective? And I guess maybe that has something to do with inventory, but when does that start to help on the margin front having a more consistent or better visibility via the contracts into the costs associated with those?

知道了。然後從那裡過渡。所以我想你只是稍微提到了一點，但是隨著你將更多的客戶轉移到合約上，而不是前一年半在現貨市場上購買，你在這方面取得了成功嗎？您什麼時候開始從利潤角度看到這一點？我想這可能與庫存有關，但是這什麼時候開始有助於在利潤方面透過合約更一致或更好地了解與這些相關的成本？

Yes. We have had some success and we're working on calendar 2025 contracts. Importantly, right now, we're also working on what is going to be needed at the back half of the year as the inventories start to deplete. Some people have more inventory than others. So I think we will see some of that change also. So the longer term -- and I've said this before is that we want to make sure that we had a business two years ago that was fairly dependent on these NHPs and NHP margins. And I think what we're building right now is a business is going to be much less dependent on our NHP margins going forward.

是的。我們已經取得了一些成功，並且正在製定 2025 年日曆合約。重要的是，現在，隨著庫存開始耗盡，我們還在研究今年下半年所需的產品。有些人的庫存比其他人多。所以我認為我們也會看到一些改變。因此，從長遠來看，我之前說過，我們希望確保我們兩年前的業務相當依賴這些 NHP 和 NHP 利潤。我認為我們現在正在建立的業務將大大減少對 NHP 利潤的依賴。

So we're not -- we probably, will continue focusing on growing margins in our small animal tech lab and DSA business. We're not going to probably see, I don't think, at least we're not going to put in our projections a bit on it, margins ever coming back to what we saw the last two years. If it does, that's great. But I don't think that's not the business model we're going to build.

因此，我們可能會繼續專注於提高小動物技術實驗室和 DSA 業務的利潤率。我認為，我們可能不會看到，至少我們不會對此做出任何預測，利潤率會回到過去兩年的水平。如果是這樣，那就太好了。但我認為這不是我們要建立的商業模式。

In addition, as I said before, we'd like to see DSA be over 50%, closer to 70% of our business versus 30%, 70%. So we'll continue to work that direction and continue to build our services segment and decrease the dependency on NHP margins. And if they happen, that's great. But I don't think that once -- that's not going to be the business model that we count on for the next five years. The other margins have to continue to grow.

此外，正如我之前所說，我們希望 DSA 占我們業務的比例超過 50%，接近 70%，而不是 30%、70%。因此，我們將繼續朝著這個方向努力，繼續建立我們的服務部門，並減少對 NHP 利潤的依賴。如果它們發生了，那就太好了。但我不認為這一次——這不會成為我們未來五年所指望的商業模式。其他利潤必須持續成長。

(multiple speakers) If this might have look what we've done. That's why it's important. We can grow that DSA business because I think we'll get with that next $60 million I think we'll see over $30 million of that go to the bottom line. I think with the RMS costs we're taking out, we'll see over $20 million of costs coming out. We see the SG&A costs coming out. You start looking at that and you add up to that $40 million, $50 million, $60 million that's why it's important to get those dollars out. So we're not really as dependent on those NHP margins going forward and that's what we're setting up.

（多個發言者）如果這可以看看我們所做的事情。這就是為什麼它很重要。我們可以發展 DSA 業務，因為我認為我們將獲得接下來的 6000 萬美元，我認為我們將看到其中超過 3000 萬美元進入盈利。我認為，隨著我們削減的 RMS 成本，我們將看到超過 2000 萬美元的成本。我們看到 SG&A 成本即將顯現。你開始考慮這一點，然後加起來就是 4000 萬美元、5000 萬美元、6000 萬美元，這就是為什麼把這些錢拿出來很重要。因此，我們實際上並不那麼依賴未來的 NHP 利潤，而這就是我們正在建立的。

Got it. And then maybe last one for me and I'll hop back into the queue. But regarding the early-stage discovery work, the delay that you saw this quarter, you're not alone, others have talked about how the funding environment improved or has improved yet these companies are a little bit slower to deploy that capital. We're now into the third quarter for month and a half into the quarter. Are you starting to see some of those dollars flow at this point or anything that you can provide from a color perspective for how Q3 is shaping up?

知道了。然後也許是我的最後一個，我會跳回隊列。但關於早期發現工作，您在本季度看到的延遲，您並不孤單，其他人也談到了融資環境如何改善或已經改善，但這些公司部署資金的速度有點慢。我們現在進入第三季度，該季度已經過去一個半月了。現在您開始看到其中一些資金流動，或者您可以從色彩角度提供有關第三季度情況的任何資訊？

Yeah. I think we've seen safety assessment for ourselves stay relatively strong. I think we sell safety assessment actually has increased probably 8% or 9% year-over-year. It's the discovery that's down 10% plus year-over-year that's really hurting us. And that we saw and we were down from weak comparisons from a year ago. So the discovery is the area where I think where we're seeing the greatest impact in our business and to our margins and our top lines.

是的。我認為我們已經看到對自己的安全評估仍然相對較強。我認為我們銷售的安全評估實際上比去年同期增加了大約8%或9%。年比下降 10% 以上的發現才真正傷害了我們。我們看到，與一年前相比，我們的表現較弱。因此，我認為這項發現對我們的業務、利潤和營收影響最大。

And so we started making those sales changes and how we operate six months ago. Now, I think what we are seeing now is an increase in the amount of customers who are starting to work with us, and then we should hopefully, we'll start seeing an increase in the amount of awards and the size of the awards. But I'm pleased with the progress that the sales team is making.

因此，我們在六個月前就開始改變銷售和營運方式。現在，我認為我們現在看到的是開始與我們合作的客戶數量增加，然後我們應該希望我們將開始看到獎項數量和獎項規模的增加。但我對銷售團隊所取得的進展感到滿意。

It's not going to happen overnight but they've been very focused. They've done a great job. We are seeing incremental new customers. We're starting to see some of the size increase. Will that happen overnight? Will we see that next quarter or two quarters out? That's hard for us. That's why we're not giving that guidance right now. But we are seeing some momentum.

這不會在一夜之間發生，但他們一直非常專注。他們做得很好。我們看到新客戶不斷增加。我們開始看到一些尺寸的增加。這會在一夜之間發生嗎？我們會在下一個季度或兩個季度看到這一點嗎？這對我們來說很難。這就是為什麼我們現在不提供該指導的原因。但我們看到了一些勢頭。

Got it. All right, thank you.

知道了。好吧。

(Operator Instructions) Frank Takkinen, Lake Street Capital Markets.

（操作員指示）Frank Takkinen，湖街資本市場。

All right. Thanks for taking the questions. I'll also start with one on the NHP business. Maybe just from a higher level Bob, trying to understand the market. Obviously, supply is constrained and some heard the comments about some of the business moving overseas. If we're thinking about just the US market, what's the quantity change of NHP is being used in the US last year versus maybe thinking about projections for this year? And I know it's going to be tough to track exactly, but maybe a percentage reduction estimate would be a good way to be thinking about it.

好的。感謝您提出問題。我也將從 NHP 業務開始。也許只是來自更高層次的鮑勃，試圖了解市場。顯然，供應受到限制，有些人聽到了有關部分業務轉移到海外的評論。如果我們只考慮美國市場，與考慮今年的預測相比，去年美國使用的 NHP 數量變化是多少？我知道準確追蹤會很困難，但也許減少百分比估計是考慮這個問題的好方法。

Frank, the information I have that we look at is coming from the USDA. And I think if you look at it in broad terms and I believe was it in the 30,000 plus NHPs imported in '22. And I think it dipped down to, like, 19,000 in '23, into the US. And so that's a pretty substantial I think reduction. And then we found, I think, some of the inventories did not really go down and some of our customers' inventories may have actually increased.

弗蘭克，我所看到的資訊來自美國農業部。我認為，如果你從廣義上看，我相信它是在 22 年進口的 30,000 多個 NHP 中。我認為 23 年美國的數量下降到了 19,000 人。所以我認為這是一個相當大的減少。然後我們發現，我認為一些庫存並沒有真正下降，而我們的一些客戶的庫存實際上可能增加了。

So I think it's a function of what moved overseas. It's a function of people getting smarter, redesigning studies, maybe use less NHPs and less studies overall. So I don't have any exact numbers. I'd say our safety assessment business internally has stayed very full and we've stayed it's been one of the positive and very pleased with is our ability to maintain our same level in use of NHPs.

所以我認為這是移居海外的一個功能。這是人們變得更聰明、重新設計研究、可能使用更少的 NHP 和整體研究更少的結果。所以我沒有任何確切的數字。我想說的是，我們內部的安全評估業務一直非常充分，我們一直保持著積極的態度之一，並且非常滿意的是我們有能力保持 NHP 的使用相同水平。

But we're a very small user compared to some of the -- compared to the overall market and some of the other CROs. So that it's -- but I think the reduction -- the numbers I gave you are substantial. And so a slight recovery there will be substantial.

但與整個市場和其他一些 CRO 相比，我們的用戶規模非常小。所以我給你的數字——但我認為減少了——是相當可觀的。因此，輕微的復甦將會是實質的。

Got it. That makes sense. And I know you pulled the guide and are reluctant to comment forward, but is it -- how are we thinking about where we are in the destocking process? I think I heard some comments that maybe some of your customers are getting ready to reorder, but do we feel like the worst of the destocking is over? Or is there still a decent slug of customers that have good inventory and we should expect kind of this level or this run rate from the RMS business for the next couple of quarters?

知道了。這就說得通了。我知道你撤回了指南並且不願意發表評論，但我們是如何考慮去庫存過程中的進展的呢？我想我聽到了一些評論，也許你們的一些客戶正準備重新訂購，但我們是否覺得最糟糕的去庫存已經過去了？或者是否仍然有大量客戶擁有良好的庫存，我們應該預期 RMS 業務在接下來的幾個季度會達到這樣的水平或運行率？

Well, Frank, if I had that specific answer, we wouldn't withdraw it. We would have put out new guidance. I think it's, so I'm going to be careful. I don't have a really good feel for that right now. We can see some customers coming back and ordering, but we're meeting with them and on-site at their facilities. Hopefully, we get a better feel for them. And as we do and we have a better feel for it. Then I think we'll come back and be able to do something with guidance again.

好吧，弗蘭克，如果我有具體的答案，我們就不會撤回它。我們本來會發布新的指導意見。我想是的，所以我要小心。我現在對此感覺不太好。我們可以看到一些客戶回來訂購，但我們正在他們的工廠與他們會面。希望我們能對他們有更好的感覺。當我們這樣做時，我們對此有了更好的感覺。然後我想我們會回來並能夠在指導下再次做一些事情。

But right now, that's one of the things that has concerned us. Where are we in that process overall. But I think last quarter was fairly weak. I'd hope that we don't have a -- I'd hope we don't get any weaker than that.

但現在，這是我們關心的事情之一。總體而言，我們在這個過程中處於什麼位置。但我認為上個季度相當疲軟。我希望我們不會有比這更弱的情況。

Right. Okay And then last one for me. In relation to the DOJ matters, if the agreement in principle is signed in its current form. Just a clarifying question, does this resolve all outstanding DOJ matters? Or is there still pending investigation ongoing beyond what's in that agreement in principle?

正確的。好的，然後是我的最後一個。就司法部事宜而言，原則上協議是否以現行形式簽署。只是一個澄清問題，這是否可以解決司法部所有懸而未決的問題？還是仍有超出該協議原則範圍的未決調查？

Well, as far as I know I think we had this was the Virginia matter. The last time we received a subpoena from the NHP matters, which we've talked about, I think, was in June of 2021. So I don't know that we ever find out and we have a resolution from that. Could they ask more questions? I guess they could. But the last time we received a subpoena related to the NHP matter, which was in Miami, Florida was June of '21.

嗯，據我所知，我認為我們遇到的是弗吉尼亞問題。我認為我們上次收到 NHP 事務的傳票是在 2021 年 6 月。所以我不知道我們是否能找到答案並從中得出解決方案。他們可以問更多問題嗎？我想他們可以。但我們上次收到與 NHP 事件相關的傳票是在 21 年 6 月，地點是佛羅裡達州邁阿密。

This was the only active one that we currently had subpoenas. I believe we've referred to other cases like SEC inquiries, which we've been cooperating with, but I'm not aware of any other DOJ matters as we speak of today.

這是我們目前收到傳票的唯一有效傳票。我相信我們已經提到了其他案件，例如我們一直在配合的 SEC 調查，但我不知道我們今天談到的任何其他司法部問題。

(multiple speakers) We've had really three substantial overhangs in the past three years. One was the DOJ Virginia matter, which has been massive for us. Also the DOJ NHP matter, which we've also spent several million dollars on the last two years following and looking into that, and then we have the downturn of the biotech funding market.

（多名發言者）在過去三年中，我們確實遇到了三個重大懸而未決的問題。其中之一是司法部維吉尼亞州事件，這對我們來說意義重大。還有 DOJ NHP 問題，我們在過去兩年中也花費了數百萬美元進行追蹤和調查，然後我們遇到了生物技術融資市場的低迷。

What I'm looking forward to is, seeing the conclusion of all three of these; quantifying what it's going to cost us and move forward. And -- I give their sales a little bit of -- it's been difficult. Those were, first of all, very expensive matters. I outlined $20 million or $19 million I think that said in legal fees, I think the $22 million includes actually the cost of closure of the facility in the $22 million. $19 million is just the third-party fees. Is that right, Beth?

我期待的是看到這三者的結論；量化我們將付出什麼代價並繼續前進。而且 - 我給他們的銷售額一點點 - 這很困難。首先，這些都是非常昂貴的事情。我概述了 2000 萬美元或 1900 萬美元，我認為在法律費用中，我認為 2200 萬美元實際上包括 2200 萬美元中的設施關閉成本。 1900萬美元只是第三方費用。是這樣嗎，貝絲？

No, I think the total is $19 million.

不，我認為總數是 1900 萬美元。

Okay. So if you look at that money spent and you look at where we are unless on our sales margins being less than we expected due to this reduction in our industry later, we're behind where we'd like to be with cash right now in liquidity. But I would say, I'll give ourselves on managing the balance sheet. As outlined, we've generated $32 million in cash. The team has done a good job of managing the balance sheet, continue to make all the cost cutting and integration side optimization projects come to fruition. We're about done with those now, so that that should be significantly reduced.

好的。因此，如果你看看所花的錢，看看我們的處境，除非我們的銷售利潤率低於我們的預期，因為我們行業後來的減少，我們落後於我們現在想要的現金水平。但我想說，我會全力以赴管理資產負債表。如上所述，我們已經產生了 3200 萬美元的現金。團隊很好地管理了資產負債表，繼續使所有成本削減和整合側優化專案取得成果。我們現在已經完成了這些工作，因此應該會大大減少。

We invested over $22 million in infrastructure and animal welfare improvements in the facilities we purchased, significant. Those are coming to -- most of those that we wanted to do. So we've done a good job, I think of managing our balance sheet. We sold some assets, did a little bit better than we thought on the sale of the assets. And we've maintained very good lender support.

我們在購買的設施中投資了超過 2,200 萬美元用於基礎設施和動物福利改善，意義重大。這些即將實現——其中大部分是我們想做的。所以我們做得很好，我認為管理我們的資產負債表。我們賣了一些資產，在出售資產方面做得比我們想像的要好一些。我們一直保持著非常良好的貸方支援。

So I'm really pleased that even though last week we found that we may have this event that is probable and estimatable that with -- being able to work with our lenders in a very short period to get the amendment we did yesterday, I think shows fabulous cooperation. Really appreciative of them being attentive to our needs and continuing to work with us.

因此，我真的很高興，儘管上週我們發現我們可能會發生這一事件，這是可能的和可估計的，因為能夠在很短的時間內與我們的貸方合作以獲得我們昨天所做的修正案，我認為顯示出美妙的合作。非常感謝他們關注我們的需求並繼續與我們合作。

So I think we have some positives, but, yeah, we've had a couple tough things go against us. We've managed through it. We continue to stay focused on the long-term. And, yeah, I'm pleased that we've also had some pretty good wins throughout. So we'll get through this and then we'll figure out how to manage forward.

所以我認為我們有一些積極的一面，但是，是的，我們也遇到了一些困難。我們已經度過了難關。我們繼續著眼於長期。是的，我很高興我們在整個過程中也取得了一些不錯的勝利。所以我們會解決這個問題，然後我們會找出如何繼續前進。

Okay.

好的。

(Operator Instructions) Matt Hewitt, Craig-Hallum.

（操作員說明）Matt Hewitt，Craig-Hallum。

Quick question regarding the BIOSECURE Act. It's been front of mind for a lot of investors here over the past couple of months. And with it moving through the house today, I'm just curious what, if any impact you could see on your business if [Fuji Eptek] is ultimately blocked from the US market? I assume that would be a positive, but what are you hearing from customers and how are you thinking about that?

關於 BIOSECURE 法案的快速問題。在過去的幾個月裡，這是許多投資人最關心的問題。今天它穿過房子，我只是好奇如果 [Fuji Eptek] 最終被禁止進入美國市場，您會對您的業務產生什麼影響（如果有的話）？我認為這將是積極的，但您從客戶那裡聽到了什麼以及您對此有何看法？

Well, first of all, I said, I don't -- I've not followed what came out today. So if something just happened today, I'm not familiar with it. I might have an update. We have followed it. Fuji Eptek is a large player in our market and discovery, and to take the assessment. I'm not consider until we're going to build a business plan based on our competitor having something negative happen to them nor we're going to bet on it.

嗯，首先，我說，我不——我沒有關註今天發布的內容。所以如果今天發生了什麼事情，我並不熟悉。我可能有更新。我們已經遵循了它。Fuji Eptek 是我們市場和發現的重要參與者，並接受了評估。我不會考慮，直到我們要根據我們的競爭對手發生了一些負面的事情來製定商業計劃，我們也不會押注它。

The things that they moved to China would probably be a significant -- takes some significant capacity out of the US and, yes, get ourselves and the other CROs in the US benefit from that. Well, that's not lost upon us. There could be some head -- some wind to our back with that, actually, and that and that may help us out. But I'm not going to sit here and tell you we're going to bet our business on somebody having a bad day and what the government's going to do, and I don't want to wish anybody bad luck. I've dealt with my own DOJ government issues and I know it can be challenging.

他們轉移到中國的東西可能會很重要——從美國帶走一些重要的產能，是的，讓我們自己和美國的其他 CRO 從中受益。好吧，我們並沒有忽視這一點。事實上，可能會有一些頭腦——一些風吹到我們的背上，這可能會幫助我們擺脫困境。但我不會坐在這裡告訴你們，我們要把我們的生意押在某人心情不好以及政府將採取什麼行動上，我不想祝任何人運氣不好。我已經處理過自己的司法部政府問題，我知道這可能具有挑戰性。

Got it. All right. Thank you.

知道了。好的。謝謝。

Dave Windley, Jefferies.

戴夫·溫德利，杰弗里斯。

Hi, thanks for taking the follow-ups. Just a couple. Bob, you talked about the geographic mix of studies that some studies moved out of the US. I think you mentioned Europe; Canada, I think was also a net recipient. In terms of your supply of NHP is emphasizing the point that you don't do a lot of the of SA study conduct in NHP. So most of your NHPs are selling to others that are doing that. Are you not able -- is it not part of your business to supply NHPs to users outside the United States?

您好，感謝您的關注。只是一對。鮑勃，您談到了一些研究從美國轉移出來的地理組合。我想你提到了歐洲；我認為加拿大也是一個淨接收者。就 NHP 的供應而言，強調的是您沒有在 NHP 中進行大量 SA 研究。因此，您的大多數 NHP 都在向其他這樣做的人出售。您是否不能－向美國以外的用戶提供 NHP 不是您業務的一部分嗎？

We do sell NHPs in Europe, but we do not sell them anywhere else. But we quarantine and distribute in Europe and US.

我們確實在歐洲銷售 NHP，但我們不在其他地方銷售。但我們在歐洲和美國進行隔離和分發。

So for those studies that moved to Europe, you would be able to continue or you would see customers continue to buy from you for that or would have over the last year or so?

那麼，對於那些轉移到歐洲的研究，您將能夠繼續，或者您會看到客戶繼續向您購買產品，或者在過去一年左右會這樣做嗎？

We would. I don't think the European safety assessment business is big enough to make it -- that big to make a big dent. We don't see that big of a change over there in what we can sell.

我們會。我認為歐洲安全評估業務還沒有大到足以產生重大影響。我們沒有看到我們可以銷售的產品有那麼大的變化。

Got it. Okay. And then on the cash flow, several parts that I wanted to is to understand if the benefits of which may still be in the future for you. So like proceeds from the sale of Blackthorn, proceeds from the Haslett, Michigan facility, proceeds from sale of Cumberland -- are those all -- have you received those yet or would those all add to your cash balance post March 31? And how much would that be?

知道了。好的。然後在現金流方面，我想了解的幾個部分是了解您未來是否仍然可以從中受益。那麼，就像出售Blackthorn 的收益、密西根州哈斯萊特工廠的收益、出售Cumberland 的收益一樣——這些都是——你已經收到這些收益了嗎？到你的現金餘額嗎？那是多少？

At March 31, they were not all closed yet. Well, Cumberland's not closed. That'll close this quarter. And that's what closed after March 31. When did Dublin and UK closed? Do you know?

截至3月31日，它們尚未全部關閉。嗯，坎伯蘭還沒關門。這將在本季結束。這就是 3 月 31 日之後關閉的地方。都柏林和英國什麼時候關閉？你知道嗎？

Dublin closed in Q2 and Haslett closed in April. (multiple speakers) So we'll have two -- and Blackstone was in April -- no, in Q2.

都柏林在第二季度關閉，哈斯萊特在四月關閉。（多個發言者）所以我們將有兩個 - 黑石是在四月份 - 不，在第二季度。

In Q2.

在第二季。

So we'll have two closures in Q3.

因此，我們將在第三季關閉兩次。

Okay.

好的。

Can you give approximate net proceeds from those in Q3?

您能否給出第三季的大致淨收益？

(multiple speakers) Haslett is like $150,000 immaterial. And what we get for Cumberland will pretty much offset the expenses to prepare the site for closure.

（多個發言者）哈斯萊特的價值 15 萬美元並不重要。我們在坎伯蘭得到的收入幾乎可以抵消關閉該地點的準備費用。

Okay. So just a last question then. On the cash flow, you had $10.4 million in positive cash flow in the quarter, a couple of fairly significant moving parts there year-to-date. Are there items that are, say, timing of payments, timing of accruals that you would expect to reverse in the next quarter that would cause the delta between operating losses and positive cash flow to narrow significantly?

好的。那麼最後一個問題。在現金流方面，本季有 1,040 萬美元的正現金流，這是今年迄今為止的一些相當重要的變動因素。是否有一些項目，例如付款時間、應計費用時間，您預計會在下個季度扭轉，從而導致營運虧損和正現金流之間的差值顯著縮小？

I don't think so. Yeah, I don't see any significant prepaid in the next quarter. And inventory will probably -- it will go down significantly from whatever NHP we settle. (multiple speakers) So no significant. Yeah.

我不這麼認為。是的，我認為下個季度不會有任何重大的預付費用。與我們解決的任何 NHP 相比，庫存可能會大幅下降。（多位發言者）所以沒有什麼意義。是的。

The most significant would be if we settle with the DOJ and make a payment, that $6.5 million we talked about. Other than that, as we look out over the next 12 months, we look at our cash flows and our different models in the next 12 months, we do not see that we have a liquidity problem.

最重要的是，如果我們與司法部達成和解並支付我們談到的 650 萬美元。除此之外，當我們展望未來 12 個月時，我們會審視未來 12 個月的現金流量和不同模型，我們不認為有流動性問題。

Okay. All right. That's what I'm getting at. Thank you. Appreciate it.

好的。好的。這就是我的意思。謝謝。欣賞它。

We have sensitized that, looked at it. I'd like not to be that tight, but, no, we will not have a liquidity issue. But what we talk about is working with our lenders if we have covenant issues, but we have time to address that.

我們已經意識到這一點，並對此進行了研究。我不想那麼緊張，但是，不，我們不會遇到流動性問題。但我們談論的是，如果我們遇到契約問題，我們會與貸方合作，但我們有時間解決這個問題。

Sounds great. Thank you for the answers.

聽起來很棒。謝謝您的回答。

Thank you.

謝謝。

And there are no further questions at this time. I will turn the call back over to Bob Leasure for closing remarks.

目前沒有其他問題。我會將電話轉回鮑勃·利蘇爾 (Bob Leasure) 進行結束語。

Well, thank you everyone, for joining today's call. And I want to close today by reiterating our thinking on the long-term future for our industry, our company, the investments we've made to position ourselves for the future. The new spending on research and development for new medicines historically ebb and flow based on either the industry specific factors such as timing of patent expirations or macroeconomic or geopolitical factors.

好的，謝謝大家參加今天的電話會議。在今天結束時，我想重申我們對我們行業、我們公司的長期未來以及我們為未來定位而進行的投資的思考。從歷史上看，新藥研發的新支出會根據產業特定因素（例如專利到期時間）或宏觀經濟或地緣政治因素而波動。

But over any long-term analysis, the trend has always been robustly up over time. Our global population is getting older and people are looking for higher quality of life as they age, and there's still a multitude of largely unmet medical needs. The companies that work in this space, our customers are committed to providing that and have historically reinvested more strongly after every down cycle.

但從任何長期分析來看，這種趨勢總是隨著時間的推移而強勁上升。全球人口正在老化，隨著年齡的增長，人們正在尋求更高的生活質量，但仍有大量醫療需求未被滿足。在這個領域工作的公司，我們的客戶致力於提供這項服務，並且歷來在每次下行週期後都會加強進行再投資。

Within the broader industry context, we believe we're building ourselves a high touch flexible provider that is really attractive to biotech customers who appreciate personal service and attention to detail they can get from Inotiv. We've done a lot of work over the last couple of years in an effort to both drive our top line for the long-term with investments and additional capacity, new service lines and stronger sales and marketing efforts, and drive our bottom line through operating leverage gained from optimizing our site footprint, transportation, and logistics.

在更廣泛的行業背景下，我們相信我們正在將自己打造為高度接觸的靈活供應商，這對於那些欣賞Inotiv 提供的個性化服務和對細節的關注的生物技術客戶來說確實很有吸引力。在過去的幾年裡，我們做了很多工作，努力透過投資和額外產能、新的服務線以及更強大的銷售和行銷努力來長期推動我們的營收，並透過優化我們的場地佔地面積、運輸和物流而獲得的營運槓桿。

I feel very positive about our team, what we've accomplished, our ability to navigate through our current challenges, and how the next 12 months look for our industry and our company. And thank you for your time today.

我對我們的團隊、我們所取得的成就、我們應對當前挑戰的能力以及未來 12 個月我們的行業和公司的前景非常樂觀。感謝您今天抽出時間。

Ladies and gentlemen, this concludes today's conference call. You may now disconnect. Thank you.

女士們、先生們，今天的電話會議到此結束。您現在可以斷開連線。謝謝。