Enzo Biochem Reports Strong First Quarter Operating Results; Profitability Improves At Enzo Clinical Labs and Enzo Life Sciences.Business Editors & Health/Medical Writers FARMINGDALE, N.Y.--(BUSINESS WIRE)--Dec. 16, 2002 Enzo Biochem, Inc. (NYSE NYSE See: New York Stock Exchange : ENZ), a leading biotechnology company specializing in gene regulation and immune regulation technologies for diagnostic and therapeutic applications, today reported strong gains in operating results for the fiscal first quarter ended October 31, 2002. For the first fiscal quarter, total revenues amounted to $17.4 million, compared with $13.4 million in the corresponding year-ago period, an increase of 29.9%. Gross profits for the first fiscal quarter amounted to approximately $14.0 million, compared with $10.6 million a year ago. 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. amounted to $5.8 million, compared with $2.6 million in the fiscal first quarter a year ago, an increase of 123%. Net income rose to $3.7 million, compared with $1.8 million in the corresponding year-ago period, a 105% gain. Basic and fully diluted per share profits in the first fiscal quarter this year equaled $0.13 per share, compared with $0.06 per share a year earlier, a 116% increase. Research and development expenses for the quarter increased 33.9%, to $1.8 million, reflecting ongoing and expanded development programs. Selling expense increased to $1.5 million, compared with $0.9 million a year ago. General and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. totaled $2.7 million, compared with $2.2 million in the corresponding year ago period, and as a percentage of revenues improved in this year's first fiscal quarter to 15.8%, from 16.6% a year ago. As of October 31, 2002, working capital amounted to $96.8 million. Cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for the first fiscal quarter totaled $6.4 million. Cash and cash equivalents amounted to $73.2 million, an increase of approximately $12 million from the corresponding period a year ago. With no debt outstanding, shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. on October 31, 2002 totaled $108.4 million. "This has been a quarter of growth for Enzo, with both Enzo Life Sciences and Enzo Clinical Labs contributing to our profit gains," said Barry W. Weiner, President. "The quarter benefited especially from an unusually strong order flow at Enzo Life Sciences. Although the outlook remains favorable, the level of results achieved in the first quarter should not be construed as indicative of what successive future quarters will look like." For the first fiscal quarter, research product revenues amounted to $10.4 million, a gain of 126% over a year ago. This segment's 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. increased to $6.3 million, from $3.1 million in the corresponding year ago period. Manufacturing capacity has been increased at our main facility in Farmingdale, NY, which will enable Enzo to meet anticipated demand. Work is continuing on the Company's technology platforms for improving clinical diagnosis as well as on the development of new products to expand Enzo's portfolio of offerings to the genomics research market. At Enzo Clinical Labs, fiscal first quarter revenues amounted to $6.9 million, exceeding revenues in each of the preceding three quarters. Lower first quarter fiscal 2003 revenues as compared to the year ago $8.8 million reflect reduced reimbursement fees by various third party payors and the absence of an 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 that proved unprofitable and which was terminated in January 2002. Reflecting elimination of that unprofitable activity, as well as reductions in staff and other costs, the Labs' operating profits increased to $0.8 million, compared with $0.3 million a year ago, with the operating profit margin Operating profit margin The ratio of operating profit to net sales. increasing to 11.4%, from 3.7%. "The Company's financial performance in the first quarter was very satisfactory, and we are pleased with the progress both Enzo Clinical Labs and Enzo Life Sciences continue to make," said Mr. Weiner. "With four products in clinical testing, Enzo Therapeutics continues to move forward. As previously noted, preliminary data from the Phase 1 clinical trial phase 1 clinical trial Phase 1 study. See Phase study. of Enzo's immune regulation product for managing Crohn's Disease Crohn's disease: see colitis. indicate that the trial has met all end points of safety and toxicity and the therapy has the potential to provide a treatment for individuals suffering from this disease. Plans are underway for expanding the trial to the next phase. Preliminary analysis of the data from the Phase 1 trial of EHC EHC Environmental Health Criteria EHC Environmental Health Center (NSC) EHC Eishockeyclub (German) EHC Extended Health Care (Plan) EHC Emory and Henry College 18, the Company's medicine for treating C-associated chronic active hepatitis chronic active hepatitis 1. Obsolete term. See Chronic hepatitis2. Chronic viral hepatitis , also indicate that the trial has met its design endpoints and plans for further study are being developed. The double blind Phase 2 trial 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-associated 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 is in development. Because of the encouraging results of the open label Phase 2 study of EHT899, the Company is bringing the manufacturing of the medicine in house. Planning is complete for the Phase 1-2 trial for HGTV HGTV Home and Garden Television 43(TM), Enzo's gene medicine for HIV-1 and we are looking forward to its initiation. Results of preclinical laboratory studies were recently presented at the annual meeting of the American Association American Association refers to one of the following professional baseball leagues:
n. A carcinoma derived from parenchymal cells of the liver. Also called hepatocarcinoma, malignant hepatoma. in the animals. Additional studies were presented in which immune regulation was shown to alleviate the symptoms of experimental colitis ion modalities Modalities The factors and circumstances that cause a patient's symptoms to improve or worsen, including weather, time of day, effects of food, and similar factors. that could alleviate colitis in animals, a model system for treating humans. The outlook for all the Company's activities remains encouraging." Enzo also announced that it has launched a new comprehensive website, www.enzobiochem.com, which provides enhanced information abut To reach; to touch. To touch at the end; be contiguous; join at a border or boundary; terminate on; end at; border on; reach or touch with an end. The term abutting implies a closer proximity than the term adjacent. the Company and investor relations Investor relations The process by which the corporation communicates with its investors. , and facilitates ordering of the Company's Life Sciences products and presents a detailed description of Enzo Clinical Labs' extensive test menu. 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 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 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. infection and for Crohn's Disease. The Company also holds a patent covering a method and materials for correcting point mutations or small insertions or deletions of genetic material that would allow for editing and correcting certain abnormalities in genes. For more information visit our website www.enzobiochem.com. 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 December 16, 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 December 29, 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 3643255.
ENZO BIOCHEM, INC.
SELECTED STATEMENT OF OPERATIONS DATA
Three Months Ended
October 31,
2002 2001
---- ----
(In thousands, except per
share data)
(Unaudited)
Operating revenues $17,356 $13,386
Income before provision for income taxes $6,047 $3,143
(Provision) for income taxes ($2,359) ($1,318)
-------- --------
Net income $3,688 $1,825
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Net income per common share - Basic $0.13 $0.06
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Net income per common share - Diluted $0.13 $0.06
----- -----
Common Share - Basic 28,462 28,442
Common Share - Diluted 29,040 29,351
SELECTED BALANCE SHEET DATA
October 31, July 31,
2002 2002
(Unaudited) (audited)
(in thousands)
Cash and Cash Equivalents $73,248 $67,135
Working Capital $96,827 $92,967
Stockholders' Equity $108,444 $104,733
Total Assets $113,424 109,291
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