Inotiv, Inc. Announces Fourth Quarter and Full Year Fiscal 2022 Financial Results Provides Select First Quarter and Full Year Fiscal 2023 Financial Guidance

Announces Fourth Quarter and Full Year

Fiscal 2022 Financial

First Quarter and Full Year Fiscal 2023 Financial Guidance

LAFAYETTE, IN, January 10, 2023- 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 ("Q4 FY 2022") and twelve months ("FY 2022") ended September 30, 2022.

Q4 FY 2022 Highlights

Guidance for First Quarter ("Q1 FY 2023") and Full Fiscal Year 2023 Ending September 30, 2023 ("FY 2023")

The Company's guidance takes into account a number of factors, including

existing DSA backlog, current sales pipeline, trends in cancellations and delays, trends in pricing, the impact of new products and services

and recent cost-cutting initiatives including the announced facility consolidation plans in the U.S. In addition, the guidance

presented below represents the Company's best efforts to estimate the impact of the non-human primate ("NHP") supply

disruption that was identified in Q1 FY 2023. For FY 2023, we are providing guidance of at least $580 million of revenue and at

least $75 million of Adjusted EBITDA.

to the issues related to NHP matters, including the Company's decision to refrain from selling or delivering any of its

Cambodian NHPs held in the U.S. until the Company's staff and external experts can evaluate what additionally could be done to

satisfy itself that the NHPs in inventory from Cambodia can be reasonably determined to be purpose-bred, the guidance of at least $580

million of revenue in FY 2023 includes estimated Q1 FY 2023 revenue of $118 million to $122 million and estimated revenue during Q2-Q4

FY 2023 of approximately $460 million. The guidance of $75 million of Adjusted EBITDA includes an expected negative Adjusted EBITDA

margin in Q1 FY 2023 and an estimated Adjusted EBITDA margin of approximately 17% during the nine-month period of Q2-Q4 FY 2023. With

the significant organic and inorganic investments made in the business over the last twelve months, we expect capital expenditures to

moderate from 2022 and are providing guidance of no more than $25 million of expected capital expenditures during FY 2023.

Robert Leasure Jr., President, and Chief

Executive Officer, commented, "2022 was a milestone year, as we made significant progress, put an excellent team in place,

and continued to improve our services and capacity while integrating and optimizing our facilities. While we have built the business

through acquisitions, we have also seen significant organic growth which has been critical to our success. Organic revenue growth in

2022 was $141.0 million representing incremental revenue growth of approximately 31%. We are very pleased with our achievements and the

progress made in integrating the seven acquisitions completed during the year, highlighted by our entry into the RMS business. Although

we are facing headwinds related to NHP disruption, we have entered fiscal year 2023 with a much stronger organization, and a clear vision

of what we need to focus on to improve earnings, cash flow and overall operations. Over the last four years, we have developed an organization

with a full range of services in place to meet our clients' pre-clinical research and development needs. Over the past nine months,

we have announced and initiated several projects that we believe will streamline our RMS operations. Going into calendar 2023, we are

focused on enhancing efficiencies and improving our gross margins and earnings, while further evolving the Company into a multi-service

discovery and pre-clinical contract research organization."

includes BASi Products

Higher total revenue was driven by a

$75.7 million increase in DSA revenue and $382.4 million of incremental RMS revenue.

Organic growth generated $49.6 million of DSA revenue while acquisitions

added $26.1 million of DSA incremental service revenue in excess of fiscal year 2021 service revenue from acquisitions based on the baseline

revenue prior to the acquisitions. The acquisitions of Envigo RMS Holding Corp. ("Envigo"), Robinson Services, Inc. ("RSI")

and Orient BioResource Center, Inc. ("OBRC") added $291.1 million of incremental revenue based on the baseline revenue prior

to the acquisitions, and internal growth generated $91.3 million of additional revenue in the RMS segment during FY 2022. RMS revenue

in FY 2022 reflected one partial and three full quarters of contribution from Envigo, which was acquired on November 5, 2021, three

full quarters of contribution from RSI, which was acquired on December 29, 2021, and one partial and two full quarters of contribution

from OBRC, which was acquired on January 27, 2022.

Profit1 (in millions)

excludes amortization of intangible assets

2includes BASi Products

Higher total gross profit in FY 2022

was the result of a $29.2 million increase in DSA gross profit from FY 2021, and $97.8 million of RMS gross profit as compared to no

such contribution in FY 2021. The increase in DSA gross profit as a percent of DSA revenue was due to operating expense leverage seen

in the first three quarters of FY 2022 in connection with the revenue expansion. The decline in total gross profit as a percent

of consolidated revenue for FY 2022 was primarily due to the inclusion of RMS products that have a lower gross profit as a percent of

revenue compared to DSA. RMS gross profit included $10.2 million of non-cash inventory step-up amortization in FY 2022, which negatively

impacted the RMS gross profit percentage by approximately 2.6%.

Consolidated net loss for FY 2022 was $(337.3) million compared to

consolidated net income of $10.9 million in FY 2021. Consolidated net loss of $(337.3) million for FY 2022 included the $236.0 million

non-cash goodwill impairment charge, as well as $8.6 million of restructuring charges and legal fees related to the previously announced

closures of our facilities in Cumberland and Dublin, VA; $16.1 million of acquisition and integration costs, which included due diligence

for opportunities we explored during the year; a non-cash charge for amortization of inventory step up of $10.2 million; a one-time charge

of $0.5 million for the write off of deferred legal and accounting fees for our S-1 registration statement that was withdrawn; $23.0 million

of post combination non-cash stock compensation expense relating to the adoption of the Envigo Equity Plan; and $56.7 million of fair

value remeasurement of the embedded derivative component of the convertible notes issued in September 2021.

may not foot due to rounding

includes BASi Products

total revenue in Q4 FY 2022 was driven by a $14.1 million rise in DSA revenue and $106.3 million of incremental RMS revenue.

During Q4 FY 2022, organic growth of DSA revenue

was $12.0 million and acquisitions added $2.1 million of incremental service revenue in excess of Q4 FY 2021 service revenue from acquisitions

based upon the baseline revenue prior to the acquisitions. The acquisitions of Envigo, RSI and OBRC added $81.4 million of incremental

revenue based on the baseline revenue prior to the acquisitions, and internal growth generated $24.9 million of additional revenue in

our RMS segment during Q4 FY 2022.

Profit1 (in millions)

excludes amortization of intangible assets

2includes BASi Products

Higher total gross profit in Q4 FY 2022

was the result of a $2.7 million increase in DSA gross profit from the comparable prior year period and $29.2 million of RMS gross profit

as compared to no such contribution in the prior year period. The decline in DSA gross profit as a percent of DSA revenue was primarily

due to laboratory capacity investments and costs associated with the successful recruitment of scientists, to begin adding services and

capacity which we expect to have available in Q2 and Q3 of FY 2023. RMS gross profit included $0.2 million of non-cash inventory step-up

amortization in Q4 FY 2022, which negatively impacted the RMS gross profit percentage by approximately 0.8%.

loss for Q4 FY 2022 was $(243.6) million compared to consolidated net income of $9.4 million in Q4 FY 2021. Consolidated net

loss for Q4 FY 2022 included a non-cash goodwill impairment charge of $236.0 million related to our RMS segment. The

sustained reduction in our stock price caused the Company to evaluate the carrying value of our goodwill as of fiscal year end. As

a result of our impairment assessment, the Company determined that the carrying amount of goodwill attributed to our RMS segment was

in excess of its fair value. Additionally, consolidated net loss for Q4 FY 2022 included $5.9 million of expenses and non-cash charges

that consisted of: $3.7 million of restructuring charges and legal fees related to the previously announced closures of our facilities

in Cumberland and Dublin, VA; $1.5 million of acquisition and integration costs, which included due diligence for opportunities we explored

during the quarter; a one-time charge of $0.5 million for the write off of deferred legal and accounting fees for our S-1 registration

statement that was withdrawn; and a non-cash charge for amortization of inventory step up of $0.2 million.

Cash Provided by Operating Activities

and Financial Condition

As of September 30, 2022,

the Company had $18.5 million in cash and cash equivalents, a $15.0 million balance on a $15.0 million revolving credit facility, and

a $0 balance on a $35 million delayed draw term loan ("DDTL"). The $35 million DDTL was drawn on October 12, 2022, and a portion

of the proceeds were used to repay the $15.0 million balance on the revolving credit facility while the remaining was drawn to fund