Inotiv (NOTV) 11 Dec 232023 Q4 Earnings call transcript

Greetings, and welcome to Inotiv's Fourth Quarter and Full Year 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.It is now my pleasure to introduce Bob Yedid, Investor Relations. Thank you.

You may begin.

Great. of Doug, Inotiv's you, I'd call management remind results that much, today's for like plans. are very management and future everyone with that operating including call team.Before some the considered you forward-looking and on statements everyone, thank joining to will statements, Thank make statements about the company's the we financial begin, and from to those that are could and cause be subject materially or performance statements different Such uncertainties achievements projected. to actual risks statements such as today's Any management's represent of date. expectations

You the will in filings the should or forward-looking which and Investors reconciliations effort the events of not www.inotivco.com GAAP further for discuss is update any measures statements, place result information Commission measures filed undue to reliance this future SEC financial provide company's Form non-GAAP certain with in revise on company obligation otherwise. an guidance Exchange section on additional also included these Please X-K forward measures and statements, company's or also today. investors. Definition undertake Securities a non-GAAP to in the information, and whether refer as does matter.Management to not new company's to the most website, the comparable been these posted and the of earnings to of for available are has release, the

call present the it's to company's results, some Bob CEO. your those call opening please and pleasure Chief company's Bob section Bob Beth the the remarks, and release can are: Sagartz, then Bob, Leasure, Strategy do over you remarks, and of CEO; yet, us so will a company obtained press to of Financial summary If the Taylor, open today's haven't ahead. going with the of Officer. financial Officer; President you my turn prepared will go for Investors questions.With copy a to from we'll now after John which Leasure, by Chief today website.Joining begin Beth the

and Bob, afternoon, you, Thank good everyone.

As of XXXX I holiday behalf the the I QX warm end Inotiv season, and to call. service team, into full-service been everyone a want and team offering our capabilities. on success operational base, growing a Inotiv year CRO custom our preclinical the earnings to collectively solutions customer can we confidently a year has capabilities, expanded head transformation. wish and say that the of welcome of The nimble

foundation build executed on and also we of and optimize which plan of to facilities, long-term best performance shareholder efficiencies operational industry we a action global addition, in integrate that aspirations the a business.Since leader was for strong models transform the that with In course stronger our believe to to for a will provide returns a as CRO. generating research and our future become a preclinical business XXXX, competitive

period.Today, stands biotech amidst and expanded compounded than well line RMS across as adding acquisitions top annual through less with CRO producing Discovery $XX DSA rate Safety million in of or Assessment both time XX% in our the annual where services from revenues, million nearly business, to growth the annual market today, years, it and we've is revenues $XXX organically, X in and Now a industries. this which -- challenges new the capabilities as growing

consolidating awareness; in On our model conditions footprint, overnight, achieving to chain our improvements remaining can to share; our into brand have make last building these all the market We we investments which remain and was and synergies long-term point, believe that allow comprehensive this we on significant the Workplaces would our maximizing recipient understood our maintain continue we us service on We've be and Energage's services obtaining welfare. since drug been vision. a become year. guided development of supply on the market animal Award, our and and welfare from to and will provider; teams external services dependency on acquisitions our infrastructure very changing, of a order allows products and leader by positive prioritized we external including: new satisfaction require.We businesses, third-party as rightsizing this Inotiv's investing our making while and we increase to to and brand conditions facilities, happen Top us expansion continue our to business reducing been enhancing factors be flow, cash research to the efforts and and offer in were are people animal feel veterinary regards enlarging and and made strategic welfare. to and sales continuum, continue across with our infrastructure; business, fostering in providers the customers We to for journey environment; our significant new focus work and to to in X full-service bringing we've our able pillars business suite investments; Inotiv market our a that to facilities.Ultimately, very growing our key by workplace XXXX, and a advancing we've our market. objective and early and building share global have improvements We care we of been animal integrating competitive constantly to USA margins market products discovery to operational continuing medicine understand pivot expanding retaining proud strategic able also offerings. goals rightsizing while Through not build focused recruiting development announce in capital

in over to million XXXX named were grew recently list, versus and XX.X% XXXX.Before terms the versus business operational XXXX income for $XXX.X of with fiscal in dollars Technology We Operating fiscal X.X% for XXX DSA DSA between get in improved companies XXXX XXXX. XXXX XXXX. of XXXX. to QX QX With highlights overall and our $X we results, revenues Beth more Deloitte's QX versus or dive XXXX margin review, up details million, our increasing XX% ended $X.X let's the into Additionally, financial million and into revenue included quickly of we recognized fiscal will fastest-growing in recognizing XXXX Fast shortly. DSA go and our awards, of which revenues XXXX,

for the have the site number XX% increased farms. imported begun X.XX completed. 'XX cash a X.XX finished quarter, have we in net improvement compared meaningful which due for X.XX number now into on quotes was research the of and sold. drawn drawn of million and The net optimization fourth average are of from models initiatives on approximately $XX and down the services The nothing our see X.XX fiscal the and $XX rates the QX was selling latest we quarter the of is and primarily gross quarter we QX. $XX.X in QX QX. was also as QX cash a quarter well and $XX.X and quarter; we we compared revolver to was quarters. XX, the XXXX.We have and other million. as to to last our QX XXXX far from last imported to approximately improved, QX lower X this fiscal XXXX. we DSA fiscal expenses the qualified book-to-bill for quarterly The NHPs revolver in had NHPs for get go September price the to year for awards conversion over of -- increase our X Cash business and increased The cancellations shipments the of saw so year with quarter at We in in balance million one X%, for reduction seen same XXXX.In We in in and year positive lowest XXXX for this book-to-bill in the newly the QX, This in of high this versus plus the a the of trends is first quarter million first the seen NHP year, XXXX, cancellations XX% months, quarters that increased QX year in fourth requests we've book-to-bill

we to in some introduced Discovery Translational the increases new the services our of year-over-year awards in are and quotes business. Science and and related have Some rebound

of are of with sale. for pleased we identified process have selling our some assets We the

facilities DSA increase in and businesses or see like recently We to in we built. would DSA expanded new rates. backlog and the that our are continue backlog equipment current in validate conversion comfortable growth We to our with

mid-XXs. XX, In $XXX conversion sales. -- the we into In low- of fiscal rate converted convert fiscal QX a expect sales would XXXX example, QX we backlog $XXX So, compared in XXXX, XXXX.For of expect September at XX% XXXX. million million in of we'd DSA our to in that XX, to growth XXXX, at to to backlog of over QX show backlog had XXXX, be September we to QX

on many sites, and NHP In from on majority which small plans pivoted with sales on working earlier decrease and uncertainty our improving XXXX. total, focus to-date. noted to maintain of included helped optimization we integrate in along going third-party to increase activity The M&A surrounding our our same and XXXX margins start-up NHPs, closure strategy have during was sales reduces execution. existing completed. on while models, Inotiv's expenses focus XX there in Assessment investments third-party of restructure to research and XXXX.Our we focus as XX RMS successfully site plans in our from XXXX diet As have so business -- aggressively and Discovery time, XXXX, and margins NHP sites, and Safety focused our our of margins at dependency us been to closures We site the acquisitions enhance we into also concluded earlier, for the initiatives of the businesses, recognized reduce margins

have by the Boulder, XXXX, site to at in Safety equipment.We increase facility assays and Assessment at teams. our these facility operations, and pharmacology we We ability include, Maryland, on for operation further for reporting and business. early expanded The the adding the be improve to will and These brought have the expand second October validation service and our expansion capacity margins services our were to we validation management, capacity that completed now operations of improvements generate Discovery expanded completed multiple higher quarter revenue Colorado, and completed and our Rockville, also of buildout and site the operational projects in believe safety histopathology activities end of project We the range retain completing talent. to improvements our XXXX. in the recruit process and finishing growth, Discovery and offerings, additional capabilities of and Collins, fiscal of complementary of plans is investments in Fort and Colorado sites, equipment, new integration much expansion and

platforms software while also aggressively initiated our software. moved internal have expansion reduce our hardware number the and We upgrading have of capabilities.We and to of space the archiving

We left team. continue have build Through to today, with the X our to develop recruit X we sold we sell. closed and locations and X improve of owned

own the previously our mill Wisconsin. on businesses closed our Israeli sale also We and facility of leased in now feed

plan new outsourcing existing focus validate experience; continuing services, client lastly, added reduce base to better on speed new system and further base capacity as expanding site upon of improve validation our while costs our and network, our in to ago. on have services a much NHP we completing customer animal we include: were exceptional growth and improvements; and we business, should expand the processes increase As new provide DSA of for us services services, the in and plans final client supply than XX% price for transportation and XXXX Service XXXX.Moving improve and forward, in announced site which we result, our allow XX and RMS a and to decrease increases partially expenses in and by reduce our Assessment welfare build continuing in base; primarily much XXXX experience; have sales Safety driven development to We to offset infrastructure XXXX, customers.In for Discovery U.K., revenue site are by still to over XXXX, and based continuing versus further which improve expansion customer and grew and months XXXX. further our growth more we related and consolidations discovery footprint, projects our evaluate new

in to are operating a With XXXX XXXX.As earlier, of XXXX. annual these the recognized in the XX% see in ultimately sales capacity the in by million an physical we in the $XXX I investments the and seen This we We This additional margins DSA in achievable. sales XXXX, and to few DSA we in Discovery have of enable million in with also past have pleased us the we another least million the Discovery decrease see represent would expand $XXX drive think $XXX growth believe business, over in into XXXX. we upon quotes improve sales DSA an to $XXX DSA are sales we our DSA at actually is growing made we revenue revenues progress XX% saw million. for Overall, may XXXX mentioned will and revenues increase from XX% optimistic fiscal would the in have awards leverage going months, and in services. in reversal to

a Our margins. DSA DSA QX significantly demonstrate the business in revenues margins $XXX also of QX rate sales business shows and in approximately in run significant model have leverage currently were as improved the achieved we our million grow. with

optimization we adding modestly discovery development our NHP the with expansion assessment focus our diet expand headed to sales still a growing, DSA RMS positive teams.In the model in XXXX, challenges transportation direction.In on dedicating developing business is team and are salesperson, While will around centered in our are that device sales safety efforts, we recent customer resources think to our our segment, research and and sales by crop directionally fiscal in which were our we grew mainly and chemical related our our small sales a and the DSA systems. continue we building services amidst and XXXX With and base expanding site recently business in medical industry share. team added, market now drug continue facilities, increasing our we efforts markets, service the imports translational protection we our have increasing expanding

coming roughly prior we in discussions, realized million during will remainder to believe the reduction, we business. approximately the We and ultimately expect be this target of mainly $XX we of achieve expense million achieved from outlined RMS As $X XXXX. that year,

focused business.We much and to Moving from validating updates NHPs, fiscal and we able and into Wildlife operation and and remain currently we efficient, U.S. will of on the Cambodia to will for spread purpose network we supplier focus of be RMS have our related Fish future be import growing our XXXX, imports any don't believe more we expanding increase a on our NHPs.

requirements. to meet internal sufficient continue our to supply NHP have We DSA

down For was volume XXXX. QX was XX% NHPs of XXXX sold third we specifically, fiscal the XX% XXXX, to of the down parties was from down from volume and -- of XXXX; QX

that QX approximately businesses some and XXXX in lower volumes with fiscal to during XXXX. the Even XXXX 'XX, pricing we less for increased fiscal sales acquired We NHP overall of fiscal X% be expect XXXX. than in QX the dollars our fact NHP were XXXX than

again as seek outlook I'd that, guidance For maintain initially, margins overall to review as market, over and will NHP sales due like and Beth projects Inotiv's in reduced XXXX, for sales financial to uncertainties to detail the for provide the NHP in XXXX. the we in call did to we to margins but our with XXXX.And as turn well results XXXX,

Thank you, Bob.

generated to the decreased fourth XX.X% the million million from period. $XX.X funding NHPs. decline dynamic X.X% fiscal total we in systems period by year $XXX.X from services. and primarily million by service particular, in The million operate extremely the prior additional DSA XXXX fiscal XXXX primarily the RMS an year the DSA X.X% our decreases XXXX genetic for $XXX.X models, the year $XXX.X $XXX.X in pricing to services from XXXX, new environment increased revenues prior quarter, overall increase revenue Our compared increases market.For in to research biotech fiscal was in recorded XX% to in XXXX, as X.X% revenue to totaled the to recorded million $XXX.X a $XXX.X XXXX million revenue million RMS, toxicology These DSA revenue revenue, were XXXX. acquired in partially related DSA favorable fiscal revenues XXXX. pricing compared fiscal to of $XXX.X for to plus from that when XXXX. in XX, In September driven Discovery related offset larger year General integrated laboratory during year January ended in $XX.X $XXX.X increased million, Toxicology continue services was year in increase million to year in million. by in increased revenues the during

due compared declines in common by were $XXX.X our in several the fourth for genetic lower net or NHP to related to diluted pricing volume the in ] loss sales, offset share. RMS partially to pricing and $X.XX of per shareholders common Discovery revenues As in consolidated segment services, and experienced million loss attributable $X.X [ were over higher per by which somewhat services, previously XXXX revenue share favorable services to toxicology were by in net the XX.X% primarily offset a quarter quarter fiscal new to quarter (sic) million year-over-year, general DSA which diluted impacted mentioned, products, reduced favorable fiscal shareholders biotech This XXXX. mainly million particularly fourth driven the funding. down $XX.X by to loss was NHPs.Consolidated or a a of loss attributable fourth XX% $X.XX of $X of totaled toxicology

fourth $XXX $XX.X last adjusted of a revenue quarter, from million $XXX.X or million income of or the total million loss quarter quarter, impairment EBITDA million For to the in year's million year's of XX.X% to quarter.Operating from for compared XX.X% fourth total of was loss. fourth goodwill improved last $X.X $XX.X included which revenues

to XXXX lowered Additionally, and decreased expenses DSA of amortization other increase and and in $XX.X DSA increase by compared an non-GAAP the third-party last quarter. or current the operating million fees our segment the favorably other impacted million driven for of by XXXX. in DSA structure, income in outsourcing G&A, expense seen QX revenue revenue awards for Non-GAAP the expenses. year's in fourth operating operating $X increased current to and primarily and income and a decrease G&A QX segment in The operating Discovery continuing expenses, reduced XX.X% costs.We cancellation into other QX quarter. have XX.X% fourth integration revenues a cost recognition decrease of over quarter relatively acquisition, operating or in fixed had in quarter was from was restructuring in of segment services

we generate and we with with XXXX have in able to both mid-XX% we to services of online, expect As customers the Ultimately, services start the our book-to-bill in the September lower for new alike. to for and new range into upper-XX% demand long-term going $XXX.X believe we was million September $XXX.X quarter QX.DSA for ratio from targets compared high current The be that XXXX, margins the was the range broader capacity come DSA net at in our DSA boost and the will range. consistently further X.XX at net ratio the the book-to-bill net quarter fourth was XXXX. X.XX. year to million was primarily due to book-to-bill added, XX, XX, in backlog cancellations The

were continued cost operating fiscal XX.X% increased RMS to balance million site cash in period in was increase was fourth by Additionally, optimization. by RMS driven from to for welfare. last operations result in to revenues quarter, of $XX noted operations which decrease Fort quarter higher DSA in by for RMS to year's above a is compared by total segment used for period obtained fourth revenue Colorado, QX $X.X over up for provided borrowings our reflecting in fiscal Maryland provided of products was provided million offset $X.X XXXX capital period. million amortization investments the and compared decrease $XX.X improved investments expenditures backlog million primarily in a our decrease Collins, million, million services, The cash in by last of $XX.X of or income capital debt of driven the ability XXXX. Furthermore, cash in million expense.Interest and same higher volumes convert The our expansion million the Net decrease in the and and operations there of was is year. or in quarter enhancements as and QX $X.X improve year's which in compared was same a the reflected by to our to costs NHP cash total decreased XXXX XX.X% XXXX. provided conversion rate, in compared Rockville, last a in $X.X by of expense the fiscal animal our to X.X% of in Non-GAAP improvements operations and XXXX revenue year sales to working has or revenues interest fourth for $XX.X rates. was in fourth in for year.Capital technology quarter cash $XX.X laboratory million Net our completing net capacity operations last

total XXXX, year expenditures or capital revenue. of fiscal totaled million X.X% $XX.X For

Our the debt $XXX.X compared in as XX, at to of million September compared $XXX.X million. also balance be sheet of issuance $XXX Total XXXX.Fiscal as included to million balance XX, million at million June XXXX. includes XXXX, million as sheet XX, revenues equivalents $X.X as sale $XX.X million XXXX. in and for XXXX, costs $XXX are of to of of expected held June of XXXX net was to XX, September assets September range $XX.X cash The cash XX,

fiscal be EBITDA million flat adjusted We reduction and to margins NHP of margins. initiated over by reductions The $XX in possible projected sales. NHP the Adjusted range be in the expect reduction on from in is and EBITDA the is we DSA fiscal million. expected driven to to in to XXXX future gains increase increased DSA the decreasing RMS segment cost in expected guidance based sales and in sales, $XX XXXX,

expect fiscal in covenants to year. for remain to compliance our continue with the We financial

in significant to quarter the for to for with over segment in expansions to the cost performance complete to financial order progress segment service grew be margins, the optimization we capital this X X.X% an the with and revenue and expect made We to plans expanded and average of was DSA the compared order as the sites site of RMS capacity.We and made savings. are approximately capacity annual in as last pleased achieve years progress fiscal that the revenue expenditures XX.X% XXXX increase improve our on

site the overview, With significant us we we consolidation expansions of our portion will questions. have to remain the call work our mostly and sales we financial added opportunities talent team, in grow and the our over and behind we efforts that optimistic as turn a DSA with capture to RMS market.And operator the additional to that for

you. [Operator question of the Thank Tim Instructions] comes Our with Daley Fargo. from first Wells line

Great.

good So this. I know, start think of just I'm on it's bunch to a a inbound place I getting off.

So volumes offset are there? for guidance help the on RMS volumes here. roughly thinking just down But down be you helpful mostly understand in price/volume magnitude Is Order 'XX, flat, initially I of guys can us would price? really know that you the down. XX% So be NHP will dynamic of revenues. slightly

XX-month couple I versus -- QX a the period. Overall, volumes will our volumes year-over-year, we of thought I'm One, think A be QX see over down indicated in I sure last of year. decrease that things. would not we

price. we're we I to what see could reduction and in think, see what expecting a is

we're the So good price than more last that it is probably guidance reduction, year. pretty is saw a a reduction. on increases price providing We volume based on

have I see additional that will the imports think year. begin coming next And into I market the increases down. to we think price slowed

we of indicated, on I coming had supplier, new a we have new As board. a suppliers couple

and margins. volumes, will in volumes, but could have we'll in that increase pricing start some have in which also think increase others see to think I decreasing I

rest of QX, QX what for happened fiscal in that's year. looking of anticipating.It's we're that's are our what what yet, the we probably would not be but think I through So, kind the

market. cautious the year. it's So a not into it's we at our to want It's a not real be sophisticated best this but market, predictable going moment, guess and

is into that. that. just drilling on Appreciate question And specifically, then, All my here right. second Discovery

a industry. bit kind of of of outlook than it's getting positive more out common in feel tone we're the on general Discovery the the So kind most

what really of So, some kind thanks could Maybe overall? in [ better Appreciate help additional taken would was did fourth how year the that declines get again, you guys steps help Discovery this terms to quarter? of idiosyncratic ] Discovery. worse time. yourself know year-over-year And everybody. help just be you Just the or the much here But I in have any helpful. us down frame in

Tim. Sure,

So for about year. the the year, down our XX% discovery prior were from sales

to anticipated actually some growth, down. we was it see So

million so probably or one million for to So where expected we the -- $X we some it's talked had we the Discovery were addition -- down last big misses fees from one previously. legal year of $XX a of sales ago, about that of we've in in in to year the our

our again, than they've I of year. of So was in evaluated going the latest we're of quarter excess XX.We that -- XX% in this have collapse that furthest. that double over the begin up is and worst solved last cash, some our this available. over we in been decline, time to and this which we've the digits of the were -- was bit through week, -- The kind some our And more did of question and didn't think, awards and was we maintained? back or that occurred, that down course, because Through from -- at XX% quarter, Bank to X quarter June see quoting Bank. that been of -- because third was And some June the of And Bank been now going the a base X be lower, to through saw that saw I Valley a closely, year to we've the -- doing I impact was of which week, access looked business comp; is ago, months, last of Silicon is that could the had the Discovery been but Valley and up July also because ended that built went capacity. quarter, last gotten our was we XX% that able up say rebound where XX, or people could know would that be little Silicon up that customer rebound over we a our that's the should think year, have have -- at related they so and we Silicon base making we at that have ended getting Valley

So and see, I can that it's good to trend hope see we continue.

the But maybe but months XX year. some pay-off to far, we market we'll in happens towards beginning next the decrease put is I think to XX starting that, over to what a So recover, it's and positive excess of is wait last the and effort been quarter. see the and we it's increase so saw

comes Markets. Frank question of with Lake Street the Takkinen from line next Our Capital

if Maybe trend backlog, that then in with fiscal into the customer depth heard profile? for couple little if on cancellations a and you've there's talk last year bit deeper bit a line as one at XXXX. it's where reside, more any you occurring backlog maybe a little cancellations comment that's I'll if the over And heightened within and looked start that around cancellation us expectations of look higher we Can understand specific some about those book-to-bill. quarters. I Perfect. been the the risk into cancellations the with of bring in the

those $XX it's to, our those couple We significant it's it's QX, fiscal cancelled did million pretty of $XX and Frank. of over drove which million, jobs million into cancellations our a provided, what in of significant. $XX backlog, back have that up to large Yes, we close numbers

which and cancellation our some those of benefited big, generated also it pretty were quarter. And some charges,

actually We And those.Today, We're the will quarter. that not to not look, XX% that, quarter changed track big down internal quarter, saying of way ends. how through a of a we're seeing. though significantly. matter we processes of the was and communicate, we're be it's have of that. rate of this over significant at, looking half that our down some of that could fact, it closer aware But anything. be a It's that drop-off, So

We the delaying. of people cancellations, have having right will I at say anything not And and we're had not but quarter. significant we're now, like high are but we call last cancellations, times aware we seeing in

would cause some to pressure seeing near some was February start want So like quarters. things move X for our those saw, into the something to to last we're not June, or and -- that may going I we on X can But the they in quarters. cancellations of or say, date December, out start February, start

at have go we So to XX a year don't X may ago. also to months, months. XX like the looking backlogs going not that's out be now out years backlog X XX did encouraging.We that We

a some they may it. but do that with So has of little as delay. they I bit cancel, say, to don't And

quarters. looking we'll So that goes. book-to-bill to for right see where this is quarter fairly compared now, prior But positive

hear the for for second Okay. a on figured to That's one helpful. to comments board I NHP set more the a us level then, I I dynamic. basis. new be circle Can coming in still And the and heard around maybe just my are we bringing you some supplier quantity just very volume expectations on back XXXX. down, than but help to may more would a we surprised from little in suppliers a are coming was where environment, maybe be prices that on of anticipated. supply-constrained these

see some you So I significant could can versus these can if just of XXXX we provide previous don't anything kind how in and quantifiable be suppliers years? new know what supply of there's

that the This availability again, there anything our NHPs. several increasing Yes. is, just farms the and are I last don't additional have their on quantifiable. I have of been and you, for world market, opinion. breeding are tell increasing years, the can

were available the so the be since the imports else using aren't Cambodians. or I year, may available it's -- the you market And U.S. if Cambodian last We U.S. population was still this world taken since in over been everywhere the importing but they're shut, And time. a out the not, now of increasing. the look year -- are market, So on world, at going are just They're we people not many still they're just world to market. in still the think

in did we QX.But have the pricing and achieve that that we up same QX It's our to margins we last said see we're that last I So went not looking we QX year as have year just we our but volume around expecting the sure and that that found "Okay, feel fiscal adjust. evolves be We and the ways -- may volume how -- -- people additional able we're may saying, stay we'll stay So earlier, had some will some a to level." have and same. that found supply. year, of Q could, not like They've just at think at I'm yes, suppliers. it, the

world what will And could the is China, there. capacity with happen there's that also that the unknown will pricing say still begin then eventually of will then market, I On and the the I think some with Cambodia. happen unknown what come as to out down

there, XX turn With of XX on to to things capacity issues those ago, we if we pressure. what we we out time, don't would we from if point out a that kind and next there we're additional be this be put definitely have sure. at opposite those anything or comes anything [ at months this saw cautious.We don't it that But being thought and trends the price point, that saying, have with that could market, market should felt the ] the quantitative being months over -- out. So we We standpoint. can fairly about point want for this how cautious those

Our of with Hewitt Matt next Craig-Hallum. comes from the line question

on was I QX margin, guess, thinking to little year? could like flat-to-up as off lines? so weighing maybe see even I year. to over margin how of congratulations And sounds start on through that, those first margins course help It that strong past here should know, year bit the is be be the progresses offset can and gross then regarding year a volumes an environment. pushing maybe some progresses? this you EBITDA of not Maybe a on pricing it we as X those over easy the the start. we see the pressure Or progression question the to about going kind

First, I'll start QX. with

NHP see reduction and of strong expenses again, hopefully of -- is this margins think typically and we'll But see, then it continued -- XXX staying think we'll stopped this think coming in Last think we than on from lowest only been NHP I down was this at business. still quarter. time, year. was some be quarter.I the being base I typically, year, selling off pricing would that our volume because said, quarter exceed QX of business some I last growth think DSA sales the has That the our I a RMS it's I slowest because the about year. and QX is or XXX, we're we'll And DSA year, to less of business, continue slowest improved think our our in the the NHPs.

far on of margins last that.As of in imports. do a of as rest year So QX, looking I'm where anything I year, changing the come us and of so on the which lot a out put sure exceed pressure do of it a other of hope and for put lot not the will XX, year, again, our NHP eliminate really don't the it will rest I on what lot out lot for great that of depend the whole But a but see last people trailing year. pressure terms to from

EBITDA to think be $XX back still we're it's I still -- million-plus range. the eventually, going in

million, the out don't if and beyond that think And NHP last $XX see million, continue fairly some less had we if now we'll QX. I QX. it'll take know we I do if think to the in think X businesses, predictable X strong -- is for you that margins be the you still the I look at the strong see -- at of -- but we're other improve if us. quarters, $XX of -- this But from I look you out think we'll And the time. average I hope that, I going backward

a how that process that? transportation get you that once fully Got additional will And regarding the it. And in-house, much bringing margins question, is help maybe integrated? one how complex of

release made, customers that face services our we And to the think, to are our They think salespeople, business week. and last our to way they the the drivers and relationship we product, our to an drivers, a get is also feedback, our drive of we feedback. like they important customers. pay this many our there important would customer something closer and deliver service but service, the was with times will and to That I and another is is, the be the enhance our expense, interact service between

are professional willing that think some pleased I doing us probably It duplication the some But very I -- cost using. negative work know and costs insurance we we job we that of of duplicate could better the out. such can do was companies this there with the as during and eliminate they're to things that don't are we between us, become say think all, anything there and have of do of I some do do And us. closer us I'm duplication qualities, that So to transition will as we are that of and a over in-house. this come that things the to costs experience.Second service for back help some the what audits, to to but about, is fees transition. there X and nice supplier some

million of with be of their We us. $X X us with very with all I could hours, moving have went as pleased to get applied next million interviewed more us that drivers. -- the went we ability interviewed and majority all forward to We lot implemented.I'm a have quickly XX. able transition hope for to XX people. to with and a jobs XX those we dollars their their So where over our weeks. They good have it XX $X the or team We -- few and was They of work Friday. save we're to we on Within people people. ultimately, all had -- have distribution the a million, people sites very, facilities, very already

and possible pleased I suppliers as through seamless and can of care appreciate this at all I for and as want with their that take So Vanguard the really, very go working direction as make the to this us how like And we work seamlessly, with this again, the out want we'd make and this understanding working we people people is cooperation, think with willing process. along go to sure is way. this the happen and to to to

of line the Windley from comes Dave Jefferies. question next Our with

[Technical Difficulty]

in line hear cutting Windley, we you. your out, and is Mr. can't

Any better?

A little.

it up? much full the for of year Difficulty] XXXX? [Technical How was

you're about -- asking XXXX? missed something I Well,

I Yes, apologize.

I'm sorry.

Yes.

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[Operator Instructions]

No, up and I wrap think we we just think should just to it then turn Leasure. over I -- Bob should

is yours, the call Leasure, conclude. to Mr.

today's thank quickly. I'm everyone, to, Dave joining No. going call. in? Did call back for just you, Well, Okay.

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teleconference. gentlemen, and Thank today's participation. does for this Ladies include you your

You time disconnect have a this wonderful your may and day. at lines