Enzo Biochem, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment reporting

Segment reporting

9 Months Ended

Apr. 30, 2017

Segment Reporting Disclosure [Text Block]

Note 11 – Segment reporting

The Company has three reportable segments: Clinical Labs, Life Sciences, and Therapeutics. The Clinical Labs segment provides diagnostic services to the health care community. The Life Sciences segment develops, manufactures, and markets products to research and pharmaceutical customers. The Therapeutic segment conducts research and development activities for therapeutic drug candidates.

The Company evaluates segment performance based on segment income (loss) before taxes. Costs excluded from segment income (loss) before taxes and reported as “Other” consist of corporate general and administrative costs which are not allocable to the three reportable segments.

Legal fee expense incurred to defend the Company’s intellectual property and other general corporate matters is considered a component of the Other segment. Legal fee expense specific to other segments’ activities has been allocated to those segments. Legal settlements, net represent activities for which royalties would have been received by the Company’s Life Sciences segment had the Company had agreements in place with plaintiffs for the patents or products covered by the settlements.

Management of the Company assesses assets on a consolidated basis only and, therefore, assets by reportable segment have not been included in the reportable segments below. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended July 31, 2016.

The following financial information represents the operating results of the reportable segments of the Company:

Three months ended April 30, 2017

	Clinical Labs			Life Sciences			Therapeutics			Other			Consolidated
Revenues:
Clinical laboratory services	$	19,584			—			—			—		$	19,584
Product revenues		—		$	7,312			—			—			7,312
Royalty and license fee income		—			193			—			—			193
		19,584			7,505			—			—			27,089
Operating costs and expenses:
Cost of clinical laboratory services		11,334			—			—			—			11,334
Cost of product revenues		—			3,582			—			—			3,582
Research and development		—			552		$	214			—			766
Selling, general and administrative		6,118			2,745			—		$	1,639			10,502
Provision for uncollectible accounts receivable		650			(30	)		—			—			620
Legal fee expense		4			42			—			466			512
Total operating costs and expenses		18,106			6,891			214			2,105			27,316

Operating income (loss)		1,478			614			(214	)		(2,105	)		(227	)

Other income (expense):
Interest		(28	)		12			—			131			115
Other		7			(98	)		—			17			(74	)
Foreign exchange loss		—			147			—			—			147
Income (loss) before income taxes	$	1,457		$	675		$	(214	)	$	(1,957	)	$	(39	)

Depreciation and amortization included above	$	390		$	423		$	—		$	37		$	850

Share-based compensation included in above:
Cost of clinical laboratory services	$	2			—			—			—		$	2
Selling, general and administrative		38		$	23			—		$	146			207
Total	$	40		$	23		$	—		$	146		$	209

Capital expenditures	$	483		$	252		$	—		$	—		$	735

Three months ended April 30, 2016

	Clinical Labs			Life Sciences			Therapeutics			Other			Consolidated
Revenues:
Clinical laboratory services	$	18,162			—			—			—		$	18,162
Product revenues		—		$	8,001			—			—			8,001
Royalty and license fee income		—			270			—			—			270
		18,162			8,271			—			—			26,433
Operating costs and expenses:
Cost of clinical laboratory services		11,142			—			—			—			11,142
Cost of product revenues		—			3,846			—			—			3,846
Research and development		—			674		$	208			—			882
Selling, general and administrative		6,008			2,877			—		$	1,984			10,869
Provision for uncollectible accounts receivable		612			(36	)		—			—			576
Legal fee expense		54			11			—			1,567			1,632
Legal settlements, net		—			—			—			—			—
Total operating costs and expenses		17,816			7,372			208			3,551			28,947

Operating income (loss)		346			899			(208	)		(3,551	)		(2,514	)

Other income (expense)
Interest		(33	)		7			—			(14	)		(40	)
Other		2			4			—			16			22
Foreign exchange loss		—			419			—			—			419
Income (loss) before income taxes	$	315		$	1,329		$	(208	)	$	(3,549	)	$	(2,113	)

Depreciation and amortization included above	$	418		$	514		$	—		$	28		$	960

Share-based compensation included in above:
Cost of clinical laboratory services	$	2			—			—			—		$	2
Selling, general and administrative		14		$	9			—		$	124			147
Total	$	16		$	9		$	—		$	124		$	149

Capital expenditures	$	331		$	115		$	—		$	—		$	446

Nine months ended April 30, 2017

	Clinical Labs			Life Sciences			Therapeutics			Other			Consolidated
Revenues:
Clinical laboratory services	$	56,979			—			—			—		$	56,979
Product revenues		—		$	21,721			—			—			21,721
Royalty and license fee income		—			933			—			—			933
		56,979			22,654			—			—			79,633
Operating costs and expenses:
Cost of clinical laboratory services		33,282			—			—			—			33,282
Cost of product revenues		—			10,411			—			—			10,411
Research and development		—			1,695		$	376			—			2,071
Selling, general and administrative		17,967			8,596			—		$	6,578			33,141
Provision for uncollectible accounts receivable		1,910			58			—			—			1,968
Legal fee expense		105			70			—			1,079			1,254
Total operating costs and expenses		53,264			20,830			376			7,657			82,127

Operating income (loss)		3,715			1,824			(376	)		(7,657	)		(2,494	)

Other income (expense):
Interest		(85	)		34			—			291			240
Other		126			(98	)		—			41			69
Foreign exchange loss		—			(308	)		—			—			(308	)
Income (loss) before income taxes	$	3,756		$	1,452		$	(376	)	$	(7,325	)	$	(2,493	)

Depreciation and amortization included above	$	1,185		$	1,432		$	—		$	75		$	2,692

Share-based compensation included in above:
Cost of clinical laboratory services	$	5			—			—			—		$	5
Selling, general and administrative		74		$	49			—		$	473			596
Total	$	79		$	49		$	—		$	473		$	601

Capital expenditures	$	1,070		$	354		$	—		$	—		$	1,424

Nine months ended April 30, 2016

	Clinical Labs			Life Sciences			Therapeutics			Other			Consolidated
Revenues:
Clinical laboratory services	$	52,775			—			—			—		$	52,775
Product revenues		—		$	22,266			—			—			22,266
Royalty and license fee income		—			1,129			—			—			1,129
		52,775			23,395			—			—			76,170
Operating costs, expenses and legal settlements, net:
Cost of clinical laboratory services		32,009			—			—			—			32,009
Cost of product revenues		—			10,663			—			—			10,663
Research and development		—			2,002		$	608			—			2,610
Selling, general and administrative		16,943			8,709			—		$	6,722			32,374
Provision for uncollectible accounts receivable		1,787			(48	)		—			—			1,739
Legal fee expense		120			(6	)		—			5,530			5,644
Legal settlements, net		1,500			(19,950	)		—			—			(18,450	)
Total operating costs, expenses and legal settlements, net		52,359			1,370			608			12,252			66,589

Operating income (loss)		416			22,025			(608	)		(12,252	)		9,581

Other income (expense)
Interest		(75	)		38			—			(85	)		(122	)
Other		5			35			—			47			87
Foreign exchange loss		—			(99	)		—			—			(99	)
Income (loss) before income taxes	$	346		$	21,999		$	(608	)	$	(12,290	)	$	9,447

Depreciation and amortization included above	$	1,226		$	1,568		$	—		$	68		$	2,862

Share-based compensation included in above:
Cost of clinical laboratory services	$	5			—			—			—		$	5
Selling, general and administrative		33		$	19			—		$	313			365
Total	$	38		$	19		$	—		$	313		$	370

Capital expenditures	$	1,122		$	267		$	—		$	—		$	1,389