Enzo Biochem Reports Record Fiscal 2002 Operating Results.Business Editors & Health Writers FARMINGDALE, N.Y.--(BUSINESS WIRE)--Oct. 29, 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 record revenues and net income for the fiscal year ended July 31, 2002. "Fiscal 2002 was a milestone year for Enzo," said Barry W. Weiner, President. "Research product sales, particularly to the genomics and sequencing markets, were especially strong, and the clinical laboratory services unit was positioned for enhanced gross margins, while it continued to have positive cash flow." For all of fiscal 2002, with research product sales increasing 52%, revenues totaled $54.0 million, compared with $52.3 million in fiscal 2001. Net income amounted to $6.9 million, compared with $6.8 million in the previous year. Fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. earnings equaled $0.24 per share, compared with $0.23 per share in the previous year. In the fourth quarter ending July 31, 2002, revenues totaled $13.8 million, compared with $13.7 million in the corresponding period a year ago. Net income totaled $1.7 million in both periods, and fully diluted earnings for both periods amounted to $0.06 per share. Sharply higher sales of research products of labeling and detection reagents at Enzo Life Sciences reflected continuing, and growing, vigorous demand from the genomics and sequencing markets. The Company said this favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. trend continued in the beginning of fiscal 2003. Operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. at the research and development division increased by over 100% from fiscal 2001. Enzo Clinical Labs' revenues for the year declined 20%. As reported previously, an unprofitable contract with a managed care organization was cancelled in January 2002, although final costs associated with that contract continued to be absorbed through the end of Fiscal 2002. In addition, the Company experienced reduced reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. and collection rates from various third party payors, including Medicare, which resulted in an increase for the year of $2.2 million in the provision for uncollectible receivables. This non-cash provision for additional reserves had no impact on the laboratory's cash flow, which continues to remain positive. In addition, during the past year costs associated with the cancelled contract were sharply reduced, resulting in an approximately 15% cutback cut·back n. 1. A decrease; a curtailment: "The political effects of food cutbacks could be devastating" New York Times. 2. in personnel costs at Enzo Clinical Labs. The laboratory's core diagnostic testing Diagnostic testing Testing performed to determine if someone is affected with a particular disease. Mentioned in: Von Willebrand Disease business has remained strong, and the number of accounts serviced has increased. As a result, the laboratory is now well positioned to achieve more favorable results. Enzo completed fiscal 2002 in strong financial position. Internally generated cash flow increased to $9.6 million, compared with $7.9 million the previous year. Cash and equivalents at year-end totaled $67.1 million, compared with $58.7 million the previous year. Currently, the cash position exceeds $72 million. Working capital on July 31, 2002 totaled $93 million, and shareholders equity amounted to $104.7 million, for the first time exceeding $100 million. There is no debt. General and administrative expenses for the year declined 3.5%, and as a percentage of revenues improved to17.5%, compared with 18.8% the prior year, while selling expenses as a percentage of revenues increased slightly, to 8% from 7.4%. Research and development expenses amounted to $6.2 million, up 1.6% for the year. In the fourth quarter 2002, the tax provision was favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by certain tax credits. "Enzo entered fiscal 2003 in an exceptionally strong position, I am pleased to report, said Mr. Weiner. "Having reduced costs, put the unprofitable HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, contract finally behind us and with a more solid book of business, Enzo Clinical Labs is expected to produce stronger, more profitable results. And Enzo Life Sciences continues to be especially well situated with a proprietary product line that remains in strong demand from the genomics and sequencing markets, and a solid reception for its line of new low density array products. Our efforts at Enzo Therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. also continue to move ahead with three products in pre-clinical study and four promising products in human clinical trials. With sufficient capital to reach our goals, we remain highly optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op regarding the outlook." At Enzo Therapeutics, preparations are proceeding for bringing the manufacture of Enzo's EHT EHT Egg Harbor Township (New Jersey) EHT Extra High Tension (spectrometry) EHT Essential Hypertension EHT Ek Hasina Thi (movie, India) EHT Electrothermal Hydrazine Thruster 899 medicine for 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 in-house, prior to launch of a planned multi-nation double blind study. A prior Phase II study of EHT899 at Hadassah Hospital in Israel showed improvement of subjects treated in that phase of the clinical investigation. While data is still being collected and analyzed, indications are that the Phase I studies of Enzo's proprietary products for treatment of persons suffering from both hepatitis C Hepatitis C Definition Hepatitis C is a form of liver inflammation that causes primarily a long-lasting (chronic) disease. Acute (newly developed) hepatitis C is rarely observed as the early disease is generally quite mild. and Crohn's disease Crohn's disease: see colitis. appear to have met their design end points. And, as has been noted, data from the subjects in the follow-up phase I of Enzo's HGTV HGTV Home and Garden Television 43(TM) gene medicine trial for management of HIV HIV (Human Immunodeficiency Virus), either of two closely related retroviruses that invade T-helper lymphocytes and are responsible for AIDS. There are two types of HIV: HIV-1 and HIV-2. HIV-1 is responsible for the vast majority of AIDS in the United States. infection shows that all tolerated the procedure and that the engineered cells continue to express anti-HIV-1 RNA RNA: see nucleic acid. RNA in full ribonucleic acid One of the two main types of nucleic acid (the other being DNA), which functions in cellular protein synthesis in all living cells and replaces DNA as the carrier of genetic . Next step is institution of a multi-site Phase I/II study, which is nearing the final stages. 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 of its proprietary gene medicine for HIV-1 infection and clinical trials of its proprietary immune regulation medicines for hepatitis B and hepatitis C infection and for Crohn's Disease. The Company also holds a patent covering a method and materials for correcting point mutations point mutation n. A mutation that involves a single nucleotide and may consist of loss of a nucleotide, substitution of one nucleotide for another, or the insertion of an additional nucleotide. or small insertions or deletions of genetic material that would allow for editing and correcting certain abnormalities in genes. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 October 29, 2002 at 8:30 A.M. (ET). It can be accessed by dialing 1- 800-231-5571. International callers can dial 1-973-935-8504. 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 November 10, 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 3551409.
ENZO BIOCHEM, INC.
SELECTED STATEMENT OF OPERATIONS DATA
Fiscal Year Ended Three Months Ended
July 31 July 31
2002 2001 2002 2001
Unaudited
(In thousands except per share data)
Operating revenues $54,015 $52,266 $13,781 $13,701
Income before
(provision) benefit
for income taxes $10,340 $12,231 $1,599 $3,108
(Provision) benefit
for income taxes ($3,417) ($5,418) $126 ($1,394)
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Net income $6,923 $6,813 $1,725 $1,714
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Net income per common
share - basic $0.24 $0.24 $0.06 $0.06
Net income per common
share - diluted $0.24 $0.23 $0.06 $0.06
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Common share - basic 28,444 28,349 28,448 28,456
Common share - diluted 29,322 29,532 29,389 29,161
SELECTED BALANCE SHEET DATA
July 31, 2002 July 31, 2001
(in thousands)
Cash and Cash Equivalents $67,135 $58,671
Working Capital $92,967 $85,093
Stockholders' Equity $104,733 $97,517
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