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Enzo Biochem Posts Decline in Q4 Revenues; Company Realignment

NEW YORK (GenomeWeb News) – Enzo Biochem announced after the close of the market Monday that its fourth-quarter revenues declined a little more than 1 percent year over year as the firm began a realignment of its operations aimed at reducing its cash burn.

The New York-based firm reported total fourth-quarter revenues of $26.4 million compared to $26.8 million for the fourth quarter of 2011. Its clinical lab business, however, had 11 percent revenue growth to $15.9 million, while its product revenue dropped 15 percent to $8.9 million, and its royalties and license fee income dropped 20 percent to $1.7 million.

Its net loss for the quarter was $27.1 million, or $.69 per share, which included the effects of a $24.5 million one-time, non-cash charge related to the realignment. Its net loss for Q4 2011 was $4 million, or $.11 per share. On an adjusted basis, EBITDA was nearly flat year over year at a loss of $3 million.

The realignment includes the integration and streamlining of manufacturing and sales facilities and staff aimed at reducing the firm's annualized operating expenses by more than $6 million. Enzo also said that the realignment is expected to generate increased opportunities in the molecular and esoteric testing areas, provide synergies between its life sciences and clinical labs businesses, and improve the development capabilities of its life sciences business due to a more efficient organization and centralized laboratory and manufacturing.

"The actions we announced today, which commenced over the previous three months, are designed to deliver significantly improved operating results and to generate cash flow this fiscal year," Enzo Biochem President Barry Weiner said in a statement. "The realignment is expected to result in a Life Sciences division that is more profitable, as it selectively delivers higher-margin products to its customers and positions itself to better capitalize on its synergies with Enzo Clinical Labs."

One of the changes made as part of the realignment of the Life Sciences division was centering production in Ann Arbor, Mich., while focusing development activities in New York, and consolidating sales offices. The firm noted that staff levels for the division have declined 50 percent over the past three years.

For Fiscal Year 2012, Enzo reported total revenues of $103.1 million, up around 1 percent from $102 million for FY 2011. Its net loss for the year was $39.3 million, or $1.01 per share, compared to a net loss of $102 million, or $.34 per share, for FY 2011.

Enzo finished its fiscal year on June 30 with cash, cash equivalents, and short-term investments of $15.1 million.