On March 18, 2025 Enzo Biochem, Inc. (NYSE: ENZ) ("Enzo" or the "Company") reported financial results for the fiscal second quarter ended January 31, 2025, with sequential quarter improvement in revenue, gross margin and operating profit / loss (Press release, Enzo Biochem, MAR 18, 2025, View Source [SID1234651217]).
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Financial Highlights
● The Company’s second-quarter gross margin percentage of 52% increased sequentially from 37% during Q1 2025 and increased from 49% during the second quarter of the prior year. These improvements were driven by change in revenues, cost efficiency actions completed, and mix of products sold.
● The Enzo Life Sciences Products segment, which excludes discontinued operations and Corporate overhead, achieved a $0.5 million operating profit during Q2 FY25, a $2M sequential improvement compared to a $1.5 operating loss during Q1 FY25, and a $0.2 million improvement compared to the second quarter of the prior year. These improvements were driven by change in revenues, cost efficiency actions completed, and mix of products sold.
● The operating loss results for the first half of FY25 for the Company’s continuing operations improved by $2.4 million. Through cost containment, the company reduced cost of revenues by 14%. In addition, spend in SG&A and R&D decreased by 22% and 27%, respectively. Product launches continue, despite the reduction in R&D.
● The Company’s second-quarter revenue of $7.3 million increased sequentially by $1.1 million from $6.2 million. This is an improvement of 18%. Year-over-year quarterly period revenue declined by 14% primarily from the timing of large order fulfillment and the market slowdown in the US.
● Enzo ended the second quarter with aggregate cash and cash equivalents of $40.3 million. The Board of Directors and management continue to be focused on conserving cash.
● Product Life Cycle maintenance continues with an increasing number of SKU launches. Enzo increased product launches to bolster the base business within the first half of the fiscal year, doubling the count of new products compared to the prior full year.
Recent Events
● As previously disclosed, the Company and plaintiffs have reached a class-wide settlement agreement pertaining to the April 2023 cyber incident and filed an unopposed motion for preliminary approval with the Court. The Court granted the motion and set a final fairness hearing on June 10, 2025. The settlement value of $7.5 million had been accrued for in our prior year financial statements and an initial payment was made subsequent to January 31, 2025 in an amount of $0.8 million.
● We continue to explore all strategic alternatives to maximize value for the Company’s stockholders, including without limitation, improving the market position and profitability of our services in the marketplace, and enhancing our valuation. We may pursue our goals through organic growth and strategic initiatives. Additionally, we will continue to review information regarding potential acquisitions or joint ventures, and provide information to third parties regarding potential dispositions of assets or business lines, including a potential sale of the Company, from time to time.
● The Company submitted a plan on February 21, 2025 to cure the market capitalization, stockholder’s equity and average closing stock price deficiencies and to return to compliance with the NYSE’s continued listing standards. The plan considers all available alternatives to cure the deficiencies identified by the NYSE, which plan is being reviewed by the NYSE. The Common Stock continues to be listed and trade on the NYSE, subject to the Company’s ongoing compliance with the NYSE’s other continued listing standards and the acceptance by the NYSE of this plan.