Inotiv, Inc. Announces First Quarter Fiscal 2022 Financial Results

Inotiv, Inc. Announces First Quarter Fiscal

2022 Financial Results

LAFAYETTE, IN, February 10, 2022 - Inotiv, Inc. (NASDAQ: NOTV) (the "Company", "We", "Our"

or "Inotiv"), "), a leading contract research organization specializing in nonclinical and analytical drug

discovery and development services and research models and related products and services, today announced financial results for the three

months ended December 31, 2021 ("Q1 FY 2022").

Q1 FY 2022 Highlights

Significant Events during Q1 FY 2022

Robert Leasure, Jr., the Company's President

and Chief Executive Officer, commented, "Since the start of fiscal 2022, we have continued our momentum building Inotiv into a

comprehensive provider of preclinical drug discovery and safety assessment services through our strategic acquisitions of Plato BioPharma

and ILS and our collaboration with Synexa Life Sciences. Plato BioPharma brings us important new in vivo pharmacology capabilities,

ILS complements our BioReliance assets and accelerates the buildout of our genetic toxicology offerings, and the partnership with

Synexa Life Sciences enhances our biomarker platform. Over the last few years, we've significantly broadened and scaled our DSA

business, enabling one-stop-shop preclinical programs and quicker speed to market, positioning Inotiv as the primary contract research

provider for our growing client base."

Mr. Leasure continued, "The transformative

acquisition of Envigo, which closed in the first quarter of fiscal 2022, established the foundation of our new Research Models and Services

business, or RMS. Through Envigo, we secured access to critical research models essential for our clients' success, further differentiating

Inotiv from many of our peers. Following the Envigo acquisition, we took steps to leverage our existing RMS capacity with the acquisition

of RSI's rabbit breeding business and the acquisition of OBRC's non-human primate facilities, which neighbor our Alice, Texas

location. In an environment during which global research model demand outstrips supply, these moves mitigate potential supply bottlenecks

as we pursue a multitude of cross-selling and growth opportunities across our integrated services. Finally, this quarter we augmented

inorganic growth with another period of strong internal growth, reflecting our focus on delivering superior client experiences and investing

in G&A to support new services and expansion. Our quarter-end DSA backlog of $104.6 million reinforces our optimism for continuing

robust near-term revenue growth, and over the long-term we believe our strategy will deliver meaningfully higher operating margins as

Total revenue increased 370.4% to $84.2 million

from $17.9 million in Q1 FY 2021, driven by a $14.9 million increase in DSA revenue and $51.4 million of incremental RMS revenue.

includes BASi Products

The acquisitions of HistoTox Labs, Bolder BioPATH,

Gateway Pharmacology and Plato BioPharma added $10.0 million of service revenue and internal growth generated $4.9 million of service

revenue in our DSA segment during Q1 FY 2022. Our acquisition of Envigo contributed $45.1 million of product revenue and $6.3 million

of service revenue to our RMS segment during Q1 FY 2022. RMS revenue in Q1 FY 2022 reflected a partial quarter contribution from Envigo,

which was acquired on November 5, 2021. We did not have any RMS revenue in the comparable prior year period.

Total gross profit increased to $19.3 million,

or 22.9% of revenue, from $5.9 million, or 33.0% of revenue, in Q1 FY 2021. The decrease in the gross profit as a percent of revenue

is due to RMS products that have a lower gross profit as a percent of revenue compared to DSA services. There was $3.7 million of non-cash

amortization which negatively impacted the gross profit percentage by 4.4%.

1 excludes amortization of intangible

2 includes BASi Products

DSA gross profit for Q1 FY 2022 was $12.2 million,

or 37.2% of DSA revenue, compared to $5.9 million, or 33.0% of DSA revenue, in Q1 FY 2021. The year over year increase in gross profit

percentage was primarily driven by higher margins on acquisitions of HistoTox Labs, Bolder BioPATH and Gateway Pharmacology and greater

utilization of recently expanded capacity.

RMS gross profit for Q1 FY 2022 was $7.1 million

or 13.8% of RMS revenue. There was $3.7 million of non-cash amortization which negatively impacted the gross profit percentage by 4.4%.

We did not have any RMS gross profit in the comparable period.

Operating expenses increased by 698.3%, or $47.1

million, due to acquisitions and cost increases as the Company continued to build the infrastructure for growth, which included additional

headcount, recruiting, relocation expense, post combination non-cash stock compensation expense relating to the adoption of the Envigo

Equity Plan recognized in connection with the Envigo acquisition of $23.0 million and investments in building out new service offerings.

Additionally, there was an increase in selling expenses due to an increase in travel cost as our sales and marketing teams have traveled

more as the COVID-19 pandemic eases and an increase in commissions due to higher sales awards. During Q1 FY 2022, we continued investing

in internal capabilities to provide additional service offerings such as laboratory solutions, medical device pathology, biotherapeutics

and genetic toxicology.

Net loss attributable to common shareholders was $(83.0) million,

or $(3.93) per basic and diluted share, compared to a net loss of $(366,000), or $(0.03) per basic and diluted share, in Q1 FY 2021.

Net loss for Q1 FY 2022 includes post combination non-cash stock compensation expense relating to the adoption of the Envigo Equity Plan

recognized in connection with the Envigo acquisition of $23.0 million and $56.7 million of fair value remeasurement of the embedded derivative

component of the convertible notes issued in September 2021.

Adjusted EBITDA increased 621.4% to $10.1 million

or 12.0% of total revenue, from $1.4 million or 7.8% of total revenue in Q1 FY 2021.

Cash Provided by Operating Activities and

As of December 31, 2021, the Company had $42.4

million in cash and cash equivalents, a $0 balance on a $15.0 million revolving credit facility, and a delayed draw term loan facility

(the "DDTL") in the amount of $35.0 million available to be drawn down up to 18 months from the date of the credit agreement

which was November 5, 2021. Total debt as of December 31, 2021 was $260.6 million.

January 10, 2022, the Company borrowed the full amount of its DDTL to fund the purchase of ILS. Amounts outstanding under the DDTL will

accrue interest at an annual rate equal to the LIBOR rate plus a margin of between 6.00% and 6.50%, depending on the Company's

then current secured leverage ratio (as defined in the credit agreement). The initial adjusted LIBOR rate of interest is the LIBOR

rate of 1.00% plus 6.25% for a total rate of 7.25%.

27, 2022, the Company entered into a first amendment to its existing credit agreement. The amendment provides for, among other things,

an increase to the existing term loan facility in the amount of $40.0 million ("Incremental Term Loans") and a new delayed

draw term loan in the amount of $35.0 million, which amount is available to be drawn up to 24 months from the date of the amendment.

On January 27, 2022, the Company borrowed the full amount of the Incremental Term Loans, but did not borrow any amounts under the

new delayed draw term loan.

Management will host a conference call on Thursday,

February 10, 2022, at 4:30 pm ET to discuss first quarter reported results for fiscal year 2022.

Interested parties may participate in the call

The live conference call webcast also will be

accessible in the Investors section of the Company's website, and directly via the following link:

For those who cannot listen to the

live broadcast, an online replay will be available in the Investors section of Inotiv's web site at: https://www.inotivco.com/investors/investor-information/.

Non-GAAP to GAAP Reconciliation

This press release contains financial measures

that are not calculated in accordance with generally accepted accounting principles in the United States (GAAP), including Adjusted EBITDA

for the three months ended December 31, 2021 and 2020 and selected business segment information for those periods. Adjusted EBITDA as

reported herein refers to a financial performance measure that excludes from net income (loss) income statement line items interest expense

and income taxes (benefit) expense, as well as non-cash charges for depreciation and amortization, stock option expense, non-recurring

acquisition and integration costs, startup costs, foreign exchange losses, loss on debt extinguishment, amortization of inventory step

up, gain on disposition of assets, loss on fair value remeasurement of convertible notes and other non-recurring third-party costs. The

adjusted business segment information excludes from operating income and unallocated corporate G&A these same expenses.

The Company believes that these non-GAAP measures

provide useful information to investors. Among other things, they may help investors evaluate the Company's ongoing operations.

They can assist in making meaningful period-over-period comparisons and in identifying operating trends that would otherwise be masked

or distorted by the items subject to the adjustments. Management uses these non-GAAP measures internally to evaluate the performance

of the business, including to allocate resources. Investors should consider these non-GAAP measures as supplemental and in addition to,