ENZO BIOCHEM REPORTS FOURTH QUARTER AND FISCAL YEAR 2023 RESULTS AND PROVIDES BUSINESS UPDATE
FARMINGDALE, NY, Nov. 06, 2023 (GLOBE NEWSWIRE) -- Enzo Biochem, Inc. (NYSE:ENZ) ("Enzo" or the "Company") today announced financial results for the fourth quarter ended July 31, 2023, and the fiscal year ended July 31, 2023, and also provided a general business update.
Fourth Quarter Highlights
- In July 2023, Enzo Biochem closed on the sale of assets used in the operation of Enzo Clinical Labs for a cash purchase price of $113,250,000, resulting in the full divestment of Enzo's clinical laboratory operations.
- Enzo Life Sciences' fourth quarter revenue improved sequentially by 20%, and year over year by 13%, driven by increased demand in multiple product areas and certain key customers. The Industrial market increased 48% compared to the prior year's fourth quarter driven by the increased focus of our experienced sales team.
- Enzo Life Sciences' fourth quarter gross margin was 35.1%. Excluding a one-time inventory provision for finished goods, it was 53.3%, and improved sequentially from 40.2% and year over year from 36.4%. This favorable result was driven by revenue increases in the majority of our product segments and cost control on supplies and headcount.
- Enzo ended the fourth quarter with aggregate cash and cash equivalents and restricted cash of $83.4 million. The increase of $60.8 million compared to the prior year end was principally due to the completed sale of the clinical lab assets in July 2023, partially offset by cash used in operations and the repayment of debt. Our working capital was $58.5 million and $29.8 million as of July 31, 2023 and 2022, respectively.
Additional Full-Year Highlights
- Enzo Life Sciences' revenues in the 2022 period included a $2.8 million bulk sale of a GMP reagent to a large industrial customer in the US. Excluding the bulk sale, in the 2023 period, there was an approximate $1.6 million increase in revenues in the US market, partially offset by a $0.4 million decrease in revenues in the European and Asia Pacific markets.
- Enzo Life Sciences' margin in the 2023 period was 37.2%. Excluding a one-time inventory provision for finished goods, it improved to 42.5% compared to 41.1% in the 2022 period primarily as a result of a more profitable mix of products sold. The quarterly margin sequentially increased each quarter during the fiscal year starting at 35.4% in Q1 FY23 and ending at 53.3% (excluding the one-time inventory provision) in Q4 FY23.
- Corporate SG&A expenses increased $4.3 million during the 2023 period due to professional fees related to strategic initiatives, severance provisions related to former officers, and greater share-based compensation expenses. Enzo Life Sciences' SG&A expenses in the 2023 period decreased $0.2 million compared to 2022.
- Net income, including the results of continuing and discontinued operations for FY23 was $20.3 million, or $0.41 per common share, compared to a net loss in the prior year of $18.3 million, or $(0.38) per common share. The weighted average basic common shares outstanding as of 7/31/23 was 49.16 million.
Discontinued Operations
- As a consequence of the clinical lab asset sale, in the Company's Form 10-K for the fiscal year ended July 31, 2023, we have classified as discontinued operations all income and expenses attributable to the clinical services business, the gain from the sale of the clinical services assets, and the income tax expense attributed to the sale of the clinical services assets.
- For fiscal years ended July 31, 2023 and 2022, we allocated $2.1 million and $1.2 million, respectively, of selling, general and administrative expenses from the discontinued operations to the continuing operations for required Form 10-K presentation purposes.
- The gain from the sale, net of tax, was approximately $82.6 million.
Other Recent Events
- In October 2023, Steven J. Pully was appointed to the Company's Board of Directors and will serve as Chairman of the Board and Chairman of the Audit Committee. Mr. Pully has extensive experience in financial, legal, and corporate governance matters.
- In September 2023, Enzo appointed seasoned healthcare executive Kara Cannon as Interim CEO. She has over thirty years of experience in strategic and tactical marketing, sales, manufacturing, and general operations management, including thirteen years of experience at Enzo.
"The successful divestment of our Laboratory Services business has provided Enzo with the opportunity to open up an exciting new chapter in the ongoing story of our Life Sciences division," said Kara Cannon, Enzo's Interim CEO. "Our technical expertise and culture rooted in a deep understanding of customers' needs has driven consistent revenue performance and margin improvement in Life Sciences. I couldn't be more excited about the opportunities we see ahead to stabilize our infrastructure, return to consistent revenue growth, and improve margin performance through market expansion, channel focus, and cost containment. New product platforms, including our Life Science Validation service and our AMPIVIEW™ RNA probes, demonstrate our ability to provide technically relevant products to satisfy our drug development client demands, and we are committed to developing and delivering an innovative product portfolio that achieves greater results for our customers," continued Ms. Cannon.
Enzo Biochem, a pioneer in molecular diagnostics, contributes to advancing healthcare with its comprehensive portfolio of technical platforms and reagent sets supporting a diverse range of biomedical research and translational science needs. A leader in innovation and product development for over 45 years, scientists have trusted Enzo Biochem to manufacture and supply a comprehensive portfolio of thousands of high-quality products, including antibodies, genomic probes, assays, biochemicals, and proteins. The Company's proprietary products and technologies play central roles in all translational research and drug development areas, including cell biology, genomics, assays, immunohistochemistry, and small molecule chemistry. Enzo Biochem, Inc.'s Life Science division supports the work of research centers and industry partners, shaping the future of healthcare worldwide. Enzo Biochem, Inc. has a broad and deep intellectual property portfolio, with patent coverage across many vital enabling technologies. For more information, please visit Enzo.com or follow Enzo Biochem on X and LinkedIn.
Forward-Looking Statements
Except for historical information, the matters discussed in this release may be considered "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include declarations regarding the intent, belief or current expectations of the Company and its management, including those related to cash flow, gross margins, revenues, and expenses which are dependent on a number of factors outside of the control of the Company including, inter alia, the markets for the Company's products and services, costs of goods and services, other expenses, government regulations, litigation, and general business conditions. See Risk Factors in the Company's Form 10-K for the fiscal year ended July 31, 2023. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results. The Company disclaims any obligations to update any forward-looking statement as a result of developments occurring after the date of this release.
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| Enzo Biochem Contacts | ||
| For Enzo Biochem: | For Investors: | |
| Patricia Eckert, Interim CFO Enzo Biochem 631-755-5500 peckert@enzo.com | Chris Calabrese LifeSci Advisors, LLC 917-680-5608 [email protected] |
