Enzo Biochem Reports Operating Results for Fiscal Second Quarter and Six Months.Business Editors & Science Writers FARMINGDALE, N.Y.--(BW HealthWire)--March 18, 2002 Enzo Biochem, Inc. (NYSE NYSE See: New York Stock Exchange : ENZ), a leading biotechnology company specializing in gene identification and gene regulation technologies for diagnostic and therapeutic applications, today reported operating results for the second fiscal quarter and six months ended January 31, 2002. Results for the second fiscal quarter reflected increased revenues from research product sales, but lower results at Enzo Clinical Labs. The decline at Enzo Clinical Labs was due primarily to reduced reimbursement rates which were being experienced from various managed care agreements and an unprofitable contract which was cancelled effective January 31, 2002. For the three months ended January 31, 2002, operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. amounted to $12.5 million, compared with $13.9 million in the corresponding period a year earlier. Including a $0.5 million reduction in interest income, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the second quarter of 2002 totaled $1.3 million, compared with $2.8 million in the corresponding year ago period. Net income amounted to $0.8 million, compared with $1.6 million a year ago. Per share earnings, fully diluted, adjusted for the recent 5% stock dividend, amounted to $0.03 in the second quarter of fiscal 2002, compared with $0.05 per share in the corresponding year-earlier period. First half operating revenues amounted to $27.4 million, compared with $27.7 million in the corresponding year-earlier period. After a decrease in interest income of $0.9 million, operating income totaled $4.5 million, compared with $5.8 million a year earlier. Net income for the six months amounted to $2.6 million, compared with $3.2 million in the corresponding year-earlier period. Per share earnings, fully diluted, amounted to $0.09 compared with $0.11 per share a year ago. Enzo Life Sciences continued to experience increased research product sales, reflecting strong ongoing demand for labeling and detection reagents for the genomics and sequencing markets. Revenues of research products rose 17.3% in the second fiscal quarter, while operating income increased to $2.5 million or 63% for the period. Enzo Clinical Labs second quarter revenues declined 26.4%, resulting in an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for that segment. Clinical laboratory services are provided to patients covered by various third party payors programs, including Medicare and health maintenance organizations ("HMOs"). Billings for services are included in revenue net of allowances for contractual discounts and allowances paid for differences between the amounts billed and the estimated amount to be paid. Recent trends have indicated a decrease in the collection rates from certain third party payors and HMOs and the effect of such reduced collection rates was reflected in the second quarter. One of these agreements, which was the only per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. arrangement the Company had entered into, determined to be unprofitable, was cancelled effective January 31, 2002. The absence of that contract and other unprofitable business, and associated costs, plus a renewed focus on higher margin specialty diagnostic tests is expected to benefit results going forward. Research and development and general and administrative expenses remained constant in the quarter. Working capital on January 31, 2002, amounted to $88.2 million, and cash and cash equivalents totaled $61.9 million, as compared to $54.4 million for the same time last year. Cash flows from operating activities for the six months increased to $3.8 million from $3.4 million as compared to last year, and the current cash position is in excess of $63 million. "We are pleased with the continuing strong performance of Enzo Life Sciences," said Barry Weiner, President of Enzo. "With the anticipated introduction of our new GeneBeam(TM) line, which will provide us entry to the low density array market, we would expect even further penetration of the growing genomic research market. Also in high gear is our program to use our proprietary diagnostic platforms to enter the clinical diagnostic market, as well as discussions with potential strategic partners to bring this about. We also expect that the performance of Enzo Clinical Labs will begin to reflect its renewed orientation on the Labs' basic core customer constituency, as well as increased focus on higher margin testing. Overall, Enzo continues to enjoy a strong financial position with ample liquidity and no debt, and a promising array of therapeutic and diagnostic products. We remain highly encouraged regarding our Company's outlook." The highly regarded peer review publication "CANCER" of the American Cancer Society American Cancer Society, n.pr established in 1913, this national volunteer-based health organization is committed to the elimination of cancer through prevention and treatment and to diminishing cancer suffering through advocacy, scholarship, research, published in January 2002 a scientific paper authored by an Enzo scientific group relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the use of the Company's proprietary oral immune regulation medicine in suppressing human liver cancer Liver Cancer Definition Liver cancer is a relatively rare form of cancer but has a high mortality rate. Liver cancers can be classified into two types. cell growth in experimental animals. The article reported on the successful induction of oral immune regulation in experimental animals that had been inoculated with human cancer cells cells once believed to be peculiar to cancers, but now know to be epithelial cells differing in no respect from those found elsewhere in the body, and distinguished only by peculiarity of location and grouping. See also: Cancer . In contrast to the process of vaccination, Enzo's oral immune regulation produced an anti-tumor effect without the production of humoral hu·mor·al adj. 1. Relating to body fluids, especially serum. 2. Relating to or arising from any of the bodily humors. Humoral Pertaining to or derived from a body fluid. antibody, the usual response of vaccination, thus drawing a clear distinction between the two in the management of human cancer. Oral immune regulation, the study suggested, thus may enable the body to more effectively manage the growth and spread of cancers using medicine that will not have the undesirable side effects Side effects Effects of a proposed project on other parts of the firm. of traditional chemotherapeutic agents This is a list of specific pharmacologic agents that are known to be of use in the treatment of cancer, otherwise known as chemotherapeutic agents. This list is organized by "type" of agent, though the subsections are not necessarily definitive and are subject to revision. . At Enzo Therapeutics, enrollments have begun in the Company's Phase I clinical trial Noun 1. phase I clinical trial - a clinical trial on a few persons to determine the safety of a new drug or invasive medical device; for drugs, dosage or toxicity limits should be obtained phase I of persons with Crohn's Disease Crohn's disease: see colitis. . In addition, negotiations are proceeding for at least two and possibly three sites to conduct a double blind Phase II study involving the Company's proprietary oral immune regulation therapy for chronic hepatitis Chronic hepatitis Long lasting inflammation of the liver due to viruses or other causes. Mentioned in: Tube Compression of the Esophagus and Stomach chronic hepatitis B. Efforts also are progressing looking towards the expanded multiple site Phase I-II studies of HGTV HGTV Home and Garden Television 43, Enzo's HIV-1 gene HIV-1 gene Any of the genes present in the human immunodeficiency virus See AIDS HIV genes art/trs gene rev gene, see there env† gene medicine product for HIV-1 infected individuals. The effort of late has been largely focused on meeting stringent regulations regarding gene medicine therapeutics, while aggressively moving forward on preparations for the expanded multi-site studies. Enzo has under current review Issue 00-25, entitled "Vendor Statement Characterization of Consideration Paid by Vendors to Retailers," on which the Financial Accounting Standards Board's ("FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). ") Emerging Issues Task Force has reached a consensus. The consensus addresses whether consideration paid by vendors to retailers should be classified as a reduction of sales or as a cost or expense. This consensus is effective for fiscal quarters beginning after December 15, 2001 (the Company's April 2002 quarter). The Company has certain non-exclusive distribution agreements that provide for consideration to be paid to the distributors for the manufacture of certain products, included in cost of research product revenues. The Company said that if the consensus is adopted it would be reflected in revenues, but is expected to have little or no impact on stated net income. In addition, Enzo is in the process of assessing the adoption of FASB Statement FASB Statement A standard set by the Financial Accounting Standards Board regarding a financial accounting and reporting method. Essentially, FASB statements determine the acceptable accounting practices that Certified Public Accountants use in reporting No. 142, relating to discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of amortization of goodwill and intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. with indefinite useful lives. Based upon current level of goodwill and qualifying intangible assets, Statement No. 142, if adopted, is estimated to reduce fiscal 2003 annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. amortization expense by approximately $370,000. About Enzo Enzo Biochem is engaged in the research, development and manufacture of innovative health care products based on molecular biology molecular biology, scientific study of the molecular basis of life processes, including cellular respiration, excretion, and reproduction. The term molecular biology was coined in 1938 by Warren Weaver, then director of the natural sciences program at the Rockefeller and genetic engineering techniques, and in providing diagnostic services diagnostic services, n.pl the imaging and laboratory capabilities available for determining the cause of an illness. to the medical community. The Company's proprietary labeling and detection products for gene sequencing and genetic analysis, with approximately 200 patents worldwide, are sold to the life sciences market throughout the world. The Company's therapeutic division is conducting clinical trials for HIV-1-infected patients and for patients infected with hepatitis B Hepatitis B Definition Hepatitis B is a potentially serious form of liver inflammation due to infection by the hepatitis B virus (HBV). It occurs in both rapidly developing (acute) and long-lasting (chronic) forms, and is one of the most common chronic and hepatitis C viruses
Except for historical information, the matters discussed in this news 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. 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 press release. A conference call conducted by Enzo Biochem, Inc. management will take place on March 18, 2002 at 8:30 A.M. (ET). It can be accessed by dialing 1- 800-921-9431. International callers can dial 1-973-628-9554. You may also listen over the Internet through World Investor Links' Vcall website, located at www.vcall.com. To listen to the live call on the Internet, please go to the web site at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available through midnight March 31, 2002, shortly following the live call. For replay, dial 1-877-519-4471 (1-973-341-3080, internationally). You will be prompted for PIN number 3170651.
ENZO BIOCHEM, INC.
SELECTED STATEMENT OF OPERATIONS DATA
Six Months Ended Three Months Ended
January 31, January 31,
2002 2001 2002 2001
Unaudited Unaudited
(in thousands except (in thousands except
per share data) per share data)
Operating revenues $ 27,375 $ 27,735 $ 12,502 $ 13,876
Income before provision
for income taxes $ 4,450 $ 5,788 $ 1,307 $ 2,801
Provision for
income taxes ($ 1,803) ($ 2,550) ($ 485) ($ 1,236)
Net income $ 2,647 $ 3,238 $ 822 $ 1,565
Net income per common
share Basic $ 0.09 $ 0.11 $ 0.03 $ 0.06
Net income per common
share Diluted $ 0.09 $ 0.11 $ 0.03 $ 0.05
Common Share
- Basic 28,439 28,321 28,442 28,302
Common Share
- Diluted 29,377 29,493 29,448 29,577
ENZO BIOCHEM, INC.
SELECTED BALANCE SHEET DATA
January 31, 2002 July 31, 2001
(in thousands) (in thousands)
Unaudited
Cash and cash equivalents $ 61,883 $ 58,671
Working capital $ 88,204 $ 85,093
Stockholders' equity $100,231 $ 97,517
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