Inotiv, Inc. Announces Third Quarter Fiscal 2022 Financial Results Increases Select Fiscal Year 2022 Financial Guidance

Inotiv, Inc. Announces Third Quarter Fiscal

2022 Financial Results

Increases Select Fiscal Year 2022 Financial

LAFAYETTE, IN, August 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 ("Q3

FY 2022") and nine months ("YTD FY 2022") ended June 30, 2022.

Financial Highlights

Q3 FY 2022 Highlights

YTD FY 2022 Highlights

Updated Select Financial Guidance for Fiscal

Year 2022 Ending September 30, 2022 ("FY 2022")

Based on current conditions and outlook, the Company has updated its

annual guidance as follows:

Management Commentary

Leasure, Jr., President and Chief Executive Officer, commented, "Our results for the third quarter were above our expectations.

Driven by a combination of organic growth, acquisitions and favorable pricing, we reported record revenues, Adjusted EBITDA, and backlog.

We continued to expand our portfolio of services, including genetic toxicology and protein/peptide bioanalysis. We progressed our capacity

expansion initiatives, and continued our investments in our information technology infrastructure. We also continued our integration

of prior acquisitions and site optimization plans for recently acquired RMS businesses. We remain steadfast in our commitment to develop,

enhance, and tailor Inotiv's programs and services to help support our clients in developing safe and effective medicines."

may not foot due to rounding

includes BASi Products

The increase in total revenue in Q3 FY 2022 was

driven by a $26.3 million rise in DSA revenue and $123.4 million of incremental RMS revenue.

The acquisitions of HistoTox Labs, Inc. ("HistoTox

Labs"), Bolder BioPATH, Inc. ("Bolder BioPATH"), BioReliance Corporation ("BioReliance"), Gateway Pharmacology

Laboratories LLC ("Gateway Pharmacology"), Plato BioPharma, Inc. ("Plato BioPharma") and Integrated Laboratory

Systems, LLC ("ILS"), along with a full quarter's revenue from the acquisitions of Histion LLC ("Histion"),

added $5.4 million of incremental service revenue, and internal growth generated $20.9 million of additional service revenue in our DSA

segment during Q3 FY 2022. The acquisitions of Envigo RMS Holding Corp. ("Envigo"), Robinson Services, Inc. ("RSI")

and Orient BioResource Center, Inc. ("OBRC") added $81.4 million of incremental revenue based upon the baseline revenue prior

to the acquisitions, and internal growth generated $42.0 million of additional revenue in our RMS segment during Q3 FY 2022.

Profit1 (in millions)

excludes amortization of intangible assets

Higher total gross profit in Q3 FY 2022 was the

result of a $14.2 million increase in DSA gross profit from the comparable prior year period and $29.1 million of RMS gross profit as

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

due to higher revenues as a result of favorable pricing and our investments in the DSA business designed to increase margins and capacity

to enhance our ability to meet growing customer demand. RMS gross profit included $3.8 million of non-cash inventory step-up amortization

in Q3 FY 2022, which negatively impacted the RMS gross profit percentage by approximately 3.1%.

Operating expenses increased by 393.6%, or $36.8

million, in Q3 FY 2022 compared to Q3 FY2021. The higher operating expenses reflected various acquisitions, including the addition of

the RMS business, as well as strategic investments in unallocated corporate G&A expense to support additional future revenue growth,

which included additional headcount, recruiting and relocation expense, higher compensation expense, acquisition and integration costs,

including change in control charges, primarily related to the acquisitions of Envigo, ILS, OBRC, Histion and Protypia, and an increase

in startup costs for internal investments in new service offerings. Furthermore, there were restructuring costs incurred during the three

months ended June 30, 2022, primarily related to the closure of our Dublin and Cumberland sites. 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 Q3 FY 2022, we continued investing in internal capabilities to provide

additional service offerings such as laboratory solutions, pathology services, biotherapeutics and genetic toxicology.

Consolidated net loss of $(3.6) million for Q3

FY 2022 included income tax expense of $(0.3) million. Consolidated net income of $2.6 million for Q3 FY 2021 included an income tax

benefit of $4.8 million.

includes BASi Products

Higher total revenue was driven by a $61.6 million

increase in DSA revenue and $276.1 million of incremental RMS revenue.

The acquisitions of HistoTox Labs, Bolder BioPATH,

Gateway Pharmacology, Plato BioPharma, ILS and Histion added $24.0 million of incremental service revenue and internal growth generated

$37.6 million of additional service revenue in the DSA segment during YTD FY 2022. The acquisitions of Envigo, RSI and OBRC added $209.6

million of incremental revenue based upon the baseline revenue prior to the acquisitions, and internal growth generated $66.5 million

of additional revenue in the RMS segment during YTD FY 2022. RMS revenue in YTD FY 2022 reflected one partial and two full quarter contributions

from Envigo, which was acquired on November 5, 2021, and one partial and one full quarter of contribution from OBRC, which was acquired

on January 27, 2022.

Profit1 (in millions)

excludes amortization of intangible assets

Higher total gross profit in YTD FY 2022 was

the result of a $26.6 million increase in DSA gross profit from the comparable prior year period, and $68.6 million of RMS gross profit

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

due to higher revenues as a result of favorable pricing and our investments in the DSA business designed to increase margins and capacity

to enhance our ability to meet growing customer demand. The decline in gross profit as a percent of total revenue for YTD 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 services. RMS gross

profit included improved margins on a favorable mix of sales of research models, but were partially offset by $10.0 million of non-cash

inventory step-up amortization in YTD FY 2022, which negatively impacted the RMS gross profit percentage by 3.7%.

Operating expenses increased by 516.4%, or $113.9

million, in YTD FY 2022 compared to YTD FY 2021. The higher operating expenses were due to acquisitions, including 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. Increased operating expense in YTD FY 2022 also reflected many of the same factors that impacted Q3 FY 2022.

Consolidated net loss of $(93.6) million for

YTD FY 2022 included the above-referenced $23.0 million 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. Consolidated net income for YTD FY 2021 was $1.5 million.

Cash Provided by Operating Activities and Financial Condition

of June 30, 2022, the Company had $21.2 million in cash and cash equivalents, a $0 balance on a $15.0 million revolving credit facility,

and a $0 balance on a $35 million delayed draw term loan. Total debt as of June 30, 2022, was $338.8 million. We were in compliance

with our debt covenants as of June 30, 2022.

Cash used by operating activities was $5.4 million

for the nine months ended June 30, 2022, compared to cash provided by operating activities of $8.0 million for the same period last year.

Management will host a conference call on Wednesday,

August 10, 2022, at 5:00 pm ET to discuss third quarter reported results for fiscal year 2022.

Interested parties may participate in the call by dialing:

conference call webcast will be accessible in the Investors section of the Company's web site 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