Enzo Biochem Inc. (ENZ, Financial) filed Quarterly Report for the period ended 2010-10-31.
Enzo Biochem Inc. has a market cap of $187.8 million; its shares were traded at around $4.92 with and P/S ratio of 1.9. ENZ is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Selling, general and administrative expenses were approximately $11.0 million during the 2011 period as compared to $11.5 million in the 2010 period, a decrease of $0.5 million or 5%. The decrease was primarily due to the decrease at the Enzo Life Sciences segment of $0.9 million in the 2011 period which included declines of approximately $0.6 million of marketing costs due to the lower planned and refocused spending and $0.2 million in general and administrative and personnel related costs, also part of the 2011 plan to reduce and refocus spending. Offsetting these decreases was an increase at the Clinical Labs segment of $0.3 million primarily due to increased payroll and related benefits, principally health insurance costs.
The Life Sciences segments income before taxes was $3.1 million for the 2011 period as compared to $2.0 million for the 2010 period. Product revenues decreased by $0.6 million in the 2011 period due to a $0.5 million decrease in low margin third party distributed business and the effect of foreign exchange of $0.1 million. Royalty and license fee income decreased by $0.2 million in the 2011 period. The segments gross profit of $8.7 million decreased by $0.3 million in the 2011 period. Gross profit margins increased to 65% from 64% primarily due to reduction of lower margin revenue in the 2011 period. The segments other operating expenses, including selling, general and administrative, legal and research and development, decreased by approximately $1.3 million during the 2011 period primarily due to the lower marketing and selling expenses of $0.6 million attributed to the refocus and timing of spending, lower general and administrative expenses of $0.2 million, and reduced research and development expenses of $0.5 million principally due to the realignment of research and development workforce and activities that occurred in July 2010. Such decreases were offset by higher legal expenses of $0.1 million.
The Other segments loss before taxes for the 2011 period was approximately $2.8 million as compared to $2.4 million in the 2010 period, an increase of $0.4 million. Legal expenses increased by $0.4 million, although after giving effect to the non-recurring reimbursement in the 2010 period of $0.5 million in legal costs under our insurance policy, and to reductions in fees in the 2011 period due to negotiated fee settlements and other adjustments of $0.1 million, legal expense in effect was unchanged in the 2011 period. Consulting fees decreased by $0.3 million partially resulting from the planned expense reductions, offset by increases in payroll related costs including health insurance benefits of $0.3 million. Interest income, arising from short-term investments in U.S. Treasury bills was minimal in the 2011 and 2010 periods.
At October 31, 2010, the Company had cash and cash equivalents of $8.8 million and short-term investments of $22.8 million, or $31.6 million in aggregate as compared to $33.6 million at July 31, 2010. Short term investments are in US Government Treasury bills. The Company had working capital of $42.1 million at October 31, 2010 compared to $42.2 million at July 31, 2010. The decrease in working capital of $0.1 million was primarily the result of funding capital expenditures and the period net loss during the 2011 period offset by changes in net operating assets and liabilities.
Net cash provided by investing activities was approximately $1.7 million compared to $1.9 million in the year ago period, a decrease of $0.2 million. The decrease is primarily due the net maturities of short term investments in US Government instruments of $2.0 million in the 2011 period as compared to $3.0 million in the 2010 period offset by to capital expenditures of $0.2 million in 2011 period as compared to $1.1 million in the 2010 period.
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Enzo Biochem Inc. has a market cap of $187.8 million; its shares were traded at around $4.92 with and P/S ratio of 1.9. ENZ is in the portfolios of Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Royalty and license fee income during the 2011 period was $3.1 million compared to $3.3 million in the 2010 period, a decrease of $0.2 million or 7%. Royalties are primarily earned from the reported net sales of Qiagen products subject to a license agreement and from a license agreement with Abbott. During the 2011 period, the Company recognized royalties of approximately $2.5 million from Qiagen, a decrease of $0.1 million as compared to the 2010 period and royalties and license fees from Abbott of approximately $0.5 million, a decrease of $0.2 million in the 2011 period offset by an increase in other royalties of $0.1 million. There are no direct expenses relating to royalty and license fee income.Selling, general and administrative expenses were approximately $11.0 million during the 2011 period as compared to $11.5 million in the 2010 period, a decrease of $0.5 million or 5%. The decrease was primarily due to the decrease at the Enzo Life Sciences segment of $0.9 million in the 2011 period which included declines of approximately $0.6 million of marketing costs due to the lower planned and refocused spending and $0.2 million in general and administrative and personnel related costs, also part of the 2011 plan to reduce and refocus spending. Offsetting these decreases was an increase at the Clinical Labs segment of $0.3 million primarily due to increased payroll and related benefits, principally health insurance costs.
The Life Sciences segments income before taxes was $3.1 million for the 2011 period as compared to $2.0 million for the 2010 period. Product revenues decreased by $0.6 million in the 2011 period due to a $0.5 million decrease in low margin third party distributed business and the effect of foreign exchange of $0.1 million. Royalty and license fee income decreased by $0.2 million in the 2011 period. The segments gross profit of $8.7 million decreased by $0.3 million in the 2011 period. Gross profit margins increased to 65% from 64% primarily due to reduction of lower margin revenue in the 2011 period. The segments other operating expenses, including selling, general and administrative, legal and research and development, decreased by approximately $1.3 million during the 2011 period primarily due to the lower marketing and selling expenses of $0.6 million attributed to the refocus and timing of spending, lower general and administrative expenses of $0.2 million, and reduced research and development expenses of $0.5 million principally due to the realignment of research and development workforce and activities that occurred in July 2010. Such decreases were offset by higher legal expenses of $0.1 million.
The Other segments loss before taxes for the 2011 period was approximately $2.8 million as compared to $2.4 million in the 2010 period, an increase of $0.4 million. Legal expenses increased by $0.4 million, although after giving effect to the non-recurring reimbursement in the 2010 period of $0.5 million in legal costs under our insurance policy, and to reductions in fees in the 2011 period due to negotiated fee settlements and other adjustments of $0.1 million, legal expense in effect was unchanged in the 2011 period. Consulting fees decreased by $0.3 million partially resulting from the planned expense reductions, offset by increases in payroll related costs including health insurance benefits of $0.3 million. Interest income, arising from short-term investments in U.S. Treasury bills was minimal in the 2011 and 2010 periods.
At October 31, 2010, the Company had cash and cash equivalents of $8.8 million and short-term investments of $22.8 million, or $31.6 million in aggregate as compared to $33.6 million at July 31, 2010. Short term investments are in US Government Treasury bills. The Company had working capital of $42.1 million at October 31, 2010 compared to $42.2 million at July 31, 2010. The decrease in working capital of $0.1 million was primarily the result of funding capital expenditures and the period net loss during the 2011 period offset by changes in net operating assets and liabilities.
Net cash provided by investing activities was approximately $1.7 million compared to $1.9 million in the year ago period, a decrease of $0.2 million. The decrease is primarily due the net maturities of short term investments in US Government instruments of $2.0 million in the 2011 period as compared to $3.0 million in the 2010 period offset by to capital expenditures of $0.2 million in 2011 period as compared to $1.1 million in the 2010 period.
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