Enzo Biochem Inc. (NYSE: ENZ) today reported results for the fourth quarter and year ended July 31, 2012, and announced a Company-wide realignment program to improve profitability and reduce operating expenses. This program will begin to favorably impact financial results in the current quarter. Highlights of the program and fourth quarter results include:
- Integration and streamlining of manufacturing and sales facilities and staff to reduce annualized operating expenses in excess of $6 million; improved product mix at Enzo Life Sciences to increase margins; additional benefits from realignment program to occur over balance of 2013 fiscal year.
- Operating improvements to begin in fiscal 2013 first quarter for period ending October 31, 2012, as the Company expects at least a 70% improvement in EBITDA over prior year to $1.2 million at Enzo Life Sciences. Enzo Clinical Labs also expected to generate revenue growth and improved EBITDA in fiscal first quarter compared to previous year; reduction in corporate SG&A to enhance results.
- Fourth quarter one-time non-cash charge involving goodwill, as a result of a decline in Enzo’s market capitalization, lower Life Sciences revenues and other intangibles, including trademarks, in the amount of $24.5 million (excluding a $2.1 million tax benefit).
- Fourth quarter results reflected double digit revenue growth at Enzo Clinical Labs, and improved gross margins at Enzo Life Sciences, despite reduced revenues stemming from product rationalization.
- For the final three months of fiscal 2012, revenues and the net operating loss, before one-time charges, approximated those in the corresponding year-ago period.
“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,” said Barry Weiner, Enzo President. “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. We have right sized and refocused Life Sciences for the current trends in the market. Enzo Clinical Labs continues to expand its menu of novel molecular and esoteric tests, and is well positioned to continue its double-digit revenue growth, which exceeds industry norms. In addition to reductions at Enzo Life Sciences, annual corporate expenses have also been reduced, further benefitting the Company’s results.”