Enzo Biochem Reports Third Quarter Fiscal 2024 Results and Provides Business Update
FARMINGDALE, N.Y., June 13, 2024 (GLOBE NEWSWIRE) -- Enzo Biochem, Inc. (NYSE:ENZ) ("Enzo" or the "Company") today announced financial results for the fiscal third quarter ended April 30, 2024.
Third Quarter Highlights
- The Company's Life Science division's third-quarter revenue of $8.0 million improved year-over-year by 7%, marking four consecutive quarters of revenue growth compared to the prior year quarterly periods. Revenue for the nine months ended April 30, 2024 of $24.4 million improved 10% compared to the same year-to-date period in the prior year. Focus on the Company's drug development tools segment is a key driver of the year-to-date growth.
- The Life Science division's third-quarter gross margin was 47%, which improved by 700 basis points year-over-year from 40%. The nine-month YTD margin was 47%, representing a 900 basis point improvement compared to the prior year. This favorable result was driven by the reported revenue increase, mix of products sold, and ongoing cost containment initiatives, including removing over 20% of non-performing SKUs from its product portfolio.
- The Life Science division reported third-quarter operating income of $0.3 million, compared to a $1.0 million operating loss in the prior year period. The Life Science division reported a third-quarter net loss of $0.3 million, impacted by unfavorable foreign exchange, compared to a net loss of $0.6 million in the prior year period. The net loss in the Corporate & Other segment decreased year-over-year by $5.5 million.
- Enzo ended the third quarter with aggregate cash and cash equivalents of $57.2 million, a reduction of $3.1 million in the quarter. The $25.2 million cash usage from July 31, 2023 is primarily due to the significant paydown of accounts payable and accrued liabilities post the clinical lab asset sale in July 2023. The Company's current ratio was 3.5 as of April 30, 2024.
- Net loss from continuing operations for Q3 FY24 was $2.1 million or ($0.04) per common share, compared to a net loss in the prior year's third quarter of $7.9 million or ($0.16) per common share.
- Net loss, representing the results of continuing and discontinued operations for Q3 FY24, was $3.0 million, or ($0.06) per common share, compared to a net loss in the prior year's third quarter of $15.2 million, or ($0.31) per common share. The weighted average basic common shares outstanding as of April 30, 2024, was 51.2 million.
Recent Events
- The outstanding principal of the Company's debentures of $3.6 million was paid in full, plus interest, on May 20, 2024, the date the Debentures matured.
- Brian Fisher joined the Company as its General Counsel in May 2024. Before joining the Company, Mr. Fisher served in a variety of roles within the legal department of Tenerity, Inc., including as its general counsel for the last ten years. Prior to that, Mr. Fisher was a corporate attorney for Akin, Gump, Strauss, Hauer & Feld, LLP and Sidley Austin LLP. Mr. Fisher holds a Juris Doctor from New York University School of Law and an A.B. degree in Economics from Harvard University.
- In May 2024, the Company launched an enhanced website with e-commerce functionality and an optimized user experience which we expect will provide our customers better access to the products and support they need.
"The Company's transition to a focused manufacturer of a broad portfolio of Life Science tools, aligned in high-growth market segments with products used consistently by drug developers, is progressing favorably," said Kara Cannon, Enzo's Chief Executive Officer. "We continue to report significant revenue growth and the expansion of margins compared to the prior year, and the Company's significant debt and the associated covenants have been eliminated. Further, with the launch of the enhanced enzo.com, we are driving increased customer communication, interaction and market visibility. We hope that these financial and operational achievements will provide our shareholders with confidence in the Company's positive outlook."
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, cost of goods sold, 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.
| Enzo Biochem Contacts |
| For Enzo Biochem: |
| Patricia Eckert, Chief Financial Officer |
| Enzo Biochem |
| 631-755-5500 |
| [email protected] |
Use of Non-GAAP Financial Measures by Enzo
The non-GAAP financial measures contained in this press release (including, without limitation, Adjusted net income (loss), EBITDA, and Adjusted EBITDA), are not GAAP measures of the Company's financial performance or liquidity and should not be considered as alternatives to net income (loss) as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. A reconciliation of such non-GAAP measures is included in the presentation of the Company's financial results for the third quarter ended April 30, 2024 contained herein and is also available in the investor relations section of the Company's website (https://www.enzo.com).
The Company believes the presentation of these non-GAAP measures provides useful additional information to investors because they provide information consistent with that on which management evaluates the financial performance of the Company. The Company manages its business based on its operating cash flows. It refers to EBITDA as its primary indicator of performance, and refers to Adjusted EBITDA to further exclude items of a non-recurring nature. It is reasonable to expect that one or more excluded items will occur in future periods, though the amounts recognized can vary significantly from period to period. You are encouraged to evaluate each adjustment used to determine a non-GAAP financial measure and the reasons management considers it appropriate for supplemental analysis. Our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
We refer you to the tables attached to this press release, which includes reconciliation tables of GAAP net income (loss) to Adjusted net income (loss) and GAAP net income (loss) to EBITDA and Adjusted EBITDA.
ENZO BIOCHEM, INC.
(in thousands, except per share data)
| Three months ended | Nine months ended | |||||||||||||||
| Selected operations data: | April 30, | April 30, | ||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenues | $ | 8,022 | $ | 7,485 | $ | 24,381 | $ | 22,102 | ||||||||
| Gross profit | 3,733 | 3,009 | 11,412 | 8,421 | ||||||||||||
| Gross profit % | 47 | % | 40 | % | 47 | % | 38 | % | ||||||||
| Operating loss | (2,043 | ) | (8,352 | ) | (9,700 | ) | (17,525 | ) | ||||||||
| Net loss from continuing operations | (2,131 | ) | (7,897 | ) | (8,669 | ) | (16,142 | ) | ||||||||
| Net loss from discontinued operations | (889 | ) | (7,290 | ) | (4,028 | ) | (21,000 | ) | ||||||||
| Net loss | $ | (3,020 | ) | $ | (15,187 | ) | $ | (12,697 | ) | $ | (37,142 | ) | ||||
| Net loss per common share- basic and diluted- Continuing Operations | $ | (0.04 | ) | $ | (0.16 | ) | $ | (0.17 | ) | $ | (0.33 | ) | ||||
| Net loss per common share- basic and diluted- Discontinued Operations | $ | (0.02 | ) | $ | (0.15 | ) | $ | (0.08 | ) | $ | (0.43 | ) | ||||
| Total net loss per basic and diluted common share | $ | (0.06 | ) | $ | (0.31 | ) | $ | (0.25 | ) | $ | (0.76 | ) | ||||
| Weighted average common shares outstanding - basic and diluted | 51,214 | 49,384 | 50,629 | 48,944 | ||||||||||||
| Selected balance sheet data: | 4/30/2024 (unaudited) | 7/31/2023 (unaudited) | ||||||
| Cash and cash equivalents (includes restricted cash of $1,000 at 7/31/23) | $ | 57,156 | $ | 83,373 | ||||
| Working capital | 54,073 | 58,467 | ||||||
| Stockholders' equity | 69,031 | 78,462 | ||||||
| Total assets | 93,469 | 121,880 | ||||||
The following table presents a reconciliation of reported net loss and basic and diluted net loss per share to Adjusted net loss and Adjusted basic and diluted net loss per share for the three and nine months ended April 30, 2024 and 2023:
ENZO BIOCHEM, INC.
Non-GAAP Reconciliation Table
(Unaudited, in thousands, except per share data)
| Three months ended | Nine months ended | |||||||||||||||
| April 30, | April 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Reported GAAP net loss | $ | (3,020 | ) | $ | (15,187 | ) | $ | (12,697 | ) | $ | (37,142 | ) | ||||
| Adjusted for: | ||||||||||||||||
| Discrete legal matters | 374 | - | 1,850 | 196 | ||||||||||||
| Fair value adjustment | 384 | - | 1,095 | - | ||||||||||||
| Discrete separation expenses | - | 649 | 1,742 | 2,457 | ||||||||||||
| Strategic initiative expenses | - | 3,693 | - | 6,143 | ||||||||||||
| Net loss from discontinued operations | 889 | 7,290 | 4,028 | 21,000 | ||||||||||||
| Adjusted net loss | $ | (1,373 | ) | $ | (3,555 | ) | $ | (3,982 | ) | $ | (7,346 | ) | ||||
| Weighted Shares Outstanding: | ||||||||||||||||
| Basic and diluted | 51,214 | 49,384 | 50,629 | 48,944 | ||||||||||||
| Basic and diluted earnings per share: | ||||||||||||||||
| Basic and diluted net loss per share GAAP | $ | (0.06 | ) | $ | (0.31 | ) | $ | (0.25 | ) | $ | (0.76 | ) | ||||
| Basic and diluted net loss per share non-GAAP | $ | (0.03 | ) | $ | (0.07 | ) | $ | (0.08 | ) | $ | (0.15 | ) | ||||
The following table presents a reconciliation of reported GAAP net loss for the three and nine months ended April 30, 2024 and 2023, respectively to EBITDA and Adjusted EBITDA:
ENZO BIOCHEM, INC.
EBITDA & Adjusted EBITDA Reconciliation Table
(Unaudited, in thousands)
| Three months ended | Nine months ended | |||||||||||||||
| April 30, | April 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| GAAP net loss | $ | (3,020 | ) | $ | (15,187 | ) | $ | (12,697 | ) | $ | (37,142 | ) | ||||
| Plus (minus): | ||||||||||||||||
| Depreciation and amortization | 337 | 275 | 874 | 785 | ||||||||||||
| Interest (income) expense, net | (726 | ) | 36 | (2,595 | ) | 99 | ||||||||||
| Income tax benefit- discontinued operations | (390 | ) | (390 | ) | ||||||||||||
| EBITDA | (3,799 | ) | (14,876 | ) | (14,808 | ) | (36,258 | ) | ||||||||
| Adjusted for: | ||||||||||||||||
| Discrete legal matters | 374 | - | 1,850 | 196 | ||||||||||||
| Fair value adjustment | 384 | - | 1,095 | - | ||||||||||||
| Discrete separation expenses | - | 649 | 1,742 | 2,457 | ||||||||||||
| Strategic initiative expenses | - | 3,693 | - | 6,143 | ||||||||||||
| Net loss from discontinued operations before income tax benefit | 1,279 | 7,290 | 4,418 | 21,000 | ||||||||||||
| Foreign exchange (gain) loss | 524 | (347 | ) | 842 | (1,022 | ) | ||||||||||
| Adjusted EBITDA | $ | (1,238 | ) | $ | (3,591 | ) | $ | (4,861 | ) | $ | (7,484 | ) | ||||
