Clinical Labs Records Sixth Straight Quarterly Revenue Gain on Growing Molecular Diagnostics Volume
New York State Approvals of New Molecular Diagnostic Assays Highlight R&D Activity
NEW YORK--(BUSINESS WIRE)--Enzo Biochem Inc. (NYSE:ENZ) today announced growth in operating results for the third fiscal quarter and nine months ended April 30, 2017.
Third Quarter Highlights
- Total revenues increased to $27.1 million, a 2% increase from $26.4 million in the prior year period.
- Clinical Labs revenues totaled $19.6 million, an 8% increase over the prior year period and the sixth straight quarterly increase, reflecting continued growth in volume of high margin molecular diagnostic tests (MDx). Gross margins advanced 300 basis points, to 42%.
- Consolidated gross margin was 45%, a 200 basis points improvement over the prior year period.
- With operating expenses lower, including legal costs, Enzo recorded a GAAP loss of $71,000, or $0.00 per share. EBITDA, a non-GAAP measure, was $0.7 million, a $1.8 million improvement over the prior year period.
- Enzo Life Sciences’ revenue was $7.5 million, an 9% decline from $8.3 million in the prior year period. This was due to timing of product shipments, continued reduction in the product mix to emphasize higher margins, and industrywide weakness in the academic and governmental markets. Despite reduced revenues, the segment remained profitable and cash flow positive.
- Consolidated cash flows from operations in the quarter were $0.9 million. After investing $0.7 million in capital expenditures related to expansion in the Clinical Labs, total cash and cash equivalents increased $0.2 million over the second fiscal quarter 2017. Working capital at April 30, 2017 was in excess of $70.5 million.
- As previously announced, New York State Department of Health’s recent conditional approval of three new diagnostics for the company’s cost efficient AmpiProbe® PCR platform paves the way for their additions to Enzo’s expected specialized 14-analyte panel, anticipated to be available by fall, that will further establish Enzo’s strong MDx position in women’s health.
Barry Weiner, President, Comments:
“This was another excellent quarter of operational performance, one of sustained growth, technological advances and market inroads. Our transformative strategy to a fully integrated molecular diagnostic company is being recognized in the marketplace. The quarter was notable for the steadily increasing performance of our clinical services. It reflected the addition of new clients, growing interest in our molecular diagnostic development capabilities, and expanding national reference services giving recognition of our leading position as a provider of comprehensive women’s health diagnostics. Enzo Life Sciences was affected by timing of certain U.S. shipments, and tightening of academic and government spending, while the segment focuses on product development and approvals. In a relatively short time, we have streamlined its product mix to concentrate on higher margin products and have reduced products by over one-third to free capacity for molecular diagnostics manufacturing and distribution. At the same time, Enzo Life Science’s research capabilities, uniquely integrated with our Clinical Labs, continues to turn out advanced genomic diagnostic products built around our proprietary technology platforms. This has enabled gross margin expansion at Enzo and broadens our MDx test menu that offers greater efficiency and reduced costs to independent laboratory customers.
