Enzo Biochem Reports Strong Gains in Fourth Quarter and Fiscal 2001 Operating Results.Business Editors FARMINGDALE, N.Y.--(BUSINESS WIRE)--Oct. 29, 2001 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 strong gains in revenues and sharply increased pre-tax income for the fiscal fourth quarter and 12 months ended July 31, 2001. For the fourth quarter, total revenues increased 8.4%, to $15.5 million, compared with $14.3 million in the corresponding year-earlier period. Income before interest and taxes increased 50.2%, to $2.5 million, and 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. advanced 27.1%, to $3.1 million. Despite a higher tax rate, the result of the Company utilizing tax loss carryforwards tax loss carryforward See carryforward. , net income for the period amounted to $1.7 million, compared with $1.6 million in the corresponding year-earlier period, a gain of 6.3%. Per share net income equaled $0.06 in both the fiscal 2001 and 2000 fourth quarters. For all of fiscal 2001, total revenues increased 16.7%, to $58.4 million, a gain of $8.4 million. Income before interest and taxes rose 81.6%, to $9.2 million, and operating income for the full year advanced 59.5%, to $12.2 million. Fiscal 2001 net income amounted to $6.8 million, compared with $6.6 million the prior year, up 2.8%. Per share net income rose to $0.24, on 28.1 million diluted weighted average shares outstanding, compared with $0.23, on 28.3 million diluted weighted average shares outstanding in the previous year. The effective tax rate in fiscal 2001 was 44.3%, compared to 13.6% in the previous year. A Year of Solid Growth "Fiscal 2001 was another year of solid growth for Enzo Biochem," said Barry Weiner, President. "Results benefited from a strong performance in research product sales, which continue to demonstrate increased unit growth. We continued to achieve significant advances in therapeutics and life sciences, while revenues and profits maintained their upward momentum. We launched several new life sciences products for the genomics market and we were awarded an important new pioneering patent in the realm of nucleic acid nucleic acid, any of a group of organic substances found in the chromosomes of living cells and viruses that play a central role in the storage and replication of hereditary information and in the expression of this information through protein synthesis. diagnostics. In therapeutics we initiated a new Phase II clinical study 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 virus infection (HBV HBV hepatitis B virus. HBV abbr. hepatitis B virus ), we began a Phase I trial of our proprietary immune regulation medicine for hepatitis C virus
abbr. hepatitis C virus HCV 1 Hepatitis C virus, see there 2. Human coronavirus. See Coronavirus. ) and we began the initiation phase of a Phase I clinical study for individuals suffering from Crohn's disease Crohn's disease: see colitis. . We reported outstanding accomplishments in the 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 HGTV HGTV Home and Garden Television 43, our proprietary gene medicine for HIV-1 infection, in which all subjects treated with HGTV43 experienced extended engraftment engraftment /en·graft·ment/ (en-graft´ment) incorporation of grafted tissue into the body of the host. Engraftment The process of transplanted stem cells reproducing new cells. of the transduced cells, a dramatic achievement for Enzo and gene therapy generally." Life Sciences and Enzo Labs Post Gains Revenues in Life Sciences increased 25% in fiscal 2001, benefiting especially from sales of a growing roster of BioArray(TM) products, particularly for the genomics field. Gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. for Life Sciences rose to 70% from 59% last year. Clinical laboratory services revenues advanced 11.9% this year, reflecting the addition of new patient service centers and a larger customer roster among physicians. Expenditures for research and development in fiscal 2001 totaled $6.1 million, a 12% increase over the prior year. With continuing strong cash flow, working capital at the end of fiscal 2001 amounted to $85 million, including cash and cash equivalents of $59 million, up from $51 million 12 months earlier. Equity capital amounted to $98 million. There was no debt. During the year, Enzo was awarded U.S. Patent No. 6,221,581 directed to innovative nucleic acid formatting applicable to diagnostics and genetic analyses. The Company noted at the time that "this far-reaching patent adds yet another component to the Company's vast technological capabilities and intellectual property estate." The Japanese Patent Office also upheld, in an opposition proceeding An opposition proceeding is an administrative process available under the patent and trademark law of most jurisdictions which allows third parties to dispute the validity of a granted patent or trademark. , Enzo's patent covering a key segment of the Company's gene identification program. Widening Roster of Clinical Trials We began a Phase I clinical study 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 our proprietary immune regulation medicine for hepatitis C virus infection and we began the initiation process of a Phase I clinical study for individuals suffering from Crohn's disease. A Phase II clinical study of 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, Enzo's immune regulation medicine for treatment of HBV infection, with an estimated 350 million people worldwide at risk of death from inflammatory liver disease Liver Disease Definition Liver disease is a general term for any damage that reduces the functioning of the liver. Description The liver is a large, solid organ located in the upper right-hand side of the abdomen. resulting from HBV, is continuing. Approximately 75% of the study subjects have shown favorable results in one or more of the key indicators used to measure progress in treating HBV. These clinical trials are based on continued extensive preclinical research in animal model systems. Results of some of the research - for treatment of colitis and of hepatocellular carcinoma hep·a·to·cel·lu·lar carcinoma n. A carcinoma derived from parenchymal cells of the liver. Also called hepatocarcinoma, malignant hepatoma. - using Enzo's immune regulation medicines were reported at several scientific meetings during the past year. HGTV43, 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, is expected to begin expanded Phase I-II studies at multiple sites. The Company has reported that all five of the HIV-1 infected individuals who were treated with HGTV43 in the Phase 1 trial at the University of California The University of California has a combined student body of more than 191,000 students, over 1,340,000 living alumni, and a combined systemwide and campus endowment of just over $7.3 billion (8th largest in the United States). San Francisco and are now in the follow-up phase of the trial continue to tolerate the procedure well and demonstrate extended engraftment of the transduced cells, at least two of them for over 22 months. This is believed to be a first in the field of gene therapy involving unablated adult patients. 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 and hepatitis C viruses. 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. 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 October 30, 2001 at 8:30 A.M. (ET). It can be accessed by dialing 800-921-9431. You may also listen over the Internet through Investor Broadcast Networks' 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 5, 2001, shortly following the live call. For replay, dial 973-341-3080. You will be prompted for PIN number 2922859. (tables to follow)
ENZO BIOCHEM, INC.
SELECTED STATEMENT OF OPERATIONS DATA
Fiscal Year Ended Three Months Ended
July 31, July 31,
2001 2000 2001 2000
unaudited
(in thousands)
Operating revenues $58,406 $50,029 $15,470 $14,274
Income before
provision for
income taxes $12,231 $7,668 $3,108 $2,446
Provision for
income taxes $5,418 $1,043 $1,394 $861
------ ------- ------ ----
Net income $6,813 $6,625 $1,714 $1,585
====== ====== ====== ======
Net income per
common share - Basic $0.25 $0.25 $0.06 $0.06
===== ===== ===== =====
Net income per
common share - Diluted $0.24 $0.23 $0.06 $0.06
----- ----- ----- -----
Common Share - Basic 26,999 26,597 27,026 26,576
Common Share - Diluted 28,126 28,335 28,105 28,294
ENZO BIOCHEM, INC.
SELECTED BALANCE SHEET DATA
July 31, 2001 July 31, 2000
(In Thousands) (In Thousands)
Cash and Cash
Equivalents $58,671 $51,027
Working Capital $85,094 $74,094
Stockholders' Equity $97,517 $87,176
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