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

6 Months Ended

Jan. 31, 2018

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. When recognized, legal settlements, net represents 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, 2017.

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

Three months ended January 31, 2018	Clinical Labs			Life Sciences			Therapeutics			Other			Consolidated
Revenues:
Clinical laboratory services	$	19,530			—			—			—		$	19,530
Product revenues		—		$	7,122			—			—			7,122
Royalty and license fee income		—			300			—			—			300
		19,530			7,422			—			—			26,952
Operating costs and expenses:
Cost of clinical laboratory services		11,730			—			—			—			11,730
Cost of product revenues		—			3,877			—			—			3,877
Research and development		—			591		$	221			—			812
Selling, general and administrative		6,107			2,899			—		$	2,064			11,070
Provision for uncollectible accounts receivable		800			(21	)		—			—			779
Legal fee expense		8			25			—			1,667			1,700
Total operating costs and expenses		18,645			7,371			221			3,731			29,968

Operating income (loss)		885			51			(221	)		(3,731	)		(3,016	)

Other income (expense):
Interest		(23	)		11			—			197			185
Other		3			1			—			29			33
Foreign exchange gain		—			800			—			—			800
Income (loss) before income taxes	$	865		$	863		$	(221	)	$	(3,505	)	$	(1,998	)

Depreciation and amortization included above	$	413		$	355		$	—		$	18		$	786

Share-based compensation included in above:
Selling, general and administrative		28		$	21			—		$	159			208
Total	$	28		$	21		$	—		$	159		$	208

Capital expenditures	$	576		$	28		$	—		$	—		$	604

Three months ended January 31, 2017	Clinical Labs			Life Sciences			Therapeutics			Other			Consolidated
Revenues:
Clinical laboratory services	$	18,837			—			—			—		$	18,837
Product revenues		—		$	6,983			—			—			6,983
Royalty and license fee income		—			440			—			—			440
		18,837			7,423			—			—			26,260
Operating costs and expenses:
Cost of clinical laboratory services		11,052			—			—			—			11,052
Cost of product revenues		—			3,520			—			—			3,520
Research and development		—			516		$	(33	)		—			483
Selling, general and administrative		5,897			2,905			—		$	2,416			11,218
Provision for uncollectible accounts receivable		594			85			—			—			679
Legal fee expense		49			16			—			305			370
Total operating costs and expenses		17,592			7,042			(33	)		2,721			27,322

Operating income (loss)		1,245			381			33			(2,721	)		(1,062	)

Other income (expense):
Interest		(28	)		12			—			95			79
Other		17			—			—			7			24
Foreign exchange loss		—			(94	)		—			—			(94	)
Income (loss) before income taxes	$	1,234		$	299		$	33		$	(2,619	)	$	(1,053	)

Depreciation and amortization included above	$	394		$	501		$	—		$	20		$	915

Share-based compensation included in above:
Cost of clinical laboratory services	$	1			—			—			—		$	1
Selling, general and administrative		23		$	15			—		$	202			240
Total	$	24		$	15		$	—		$	202		$	241

Capital expenditures	$	175		$	—		$	—		$	—		$	175

Six months ended January 31, 2018	Clinical Labs			Life Sciences			Therapeutics			Other			Consolidated
Revenues:
Clinical laboratory services	$	39,864			—			—			—		$	39,864
Product revenues		—		$	14,203			—			—			14,203
Royalty and license fee income		—			561			—			—			561
		39,864			14,764			—			—			54,628
Operating costs and expenses:
Cost of clinical laboratory services		23,772			—			—			—			23,772
Cost of product revenues		—			7,266			—			—			7,266
Research and development		—			1,114		$	445			—			1,559
Selling, general and administrative		12,202			5,513			—		$	4,246			21,961
Provision for uncollectible accounts receivable		1,600			(7	)		—			—			1,593
Legal fee expense		21			28			—			2,082			2,131
Total operating costs and expenses		37,595			13,914			445			6,328			58,282

Operating income (loss)		2,269			850			(445	)		(6,328	)		(3,654	)

Other income (expense):
Interest		(48	)		23			—			367			342
Other		17			8			—			44			69
Foreign exchange gain		—			605			—			—			605
Income (loss) before income taxes	$	2,238		$	1,486		$	(445	)	$	(5,917	)	$	(2,638	)

Depreciation and amortization included above	$	817		$	681		$	—		$	37		$	1,535

Share-based compensation included in above:
Selling, general and administrative		60		$	44			—		$	309			413
Total	$	60		$	44		$	—		$	309		$	413

Capital expenditures	$	994		$	72		$	—		$	—		$	1,066

Six months ended January 31, 2017	Clinical Labs			Life Sciences			Therapeutics			Other			Consolidated
Revenues:
Clinical laboratory services	$	37,395			—			—			—		$	37,395
Product revenues		—		$	14,409			—			—			14,409
Royalty and license fee income		—			740			—			—			740
		37,395			15,149			—			—			52,544
Operating costs and expenses:
Cost of clinical laboratory services		21,948			—			—			—			21,948
Cost of product revenues		—			6,829			—			—			6,829
Research and development		—			1,143		$	162			—			1,305
Selling, general and administrative		11,849			5,851			—		$	5,012			22,712
Provision for uncollectible accounts receivable		1,260			88			—			—			1,348
Legal fee expense		101			28			—			613			742
Total operating costs and expenses		35,158			13,939			162			5,625			54,884

Operating income (loss)		2,237			1,210			(162	)		(5,625	)		(2,340	)

Other income (expense):
Interest		(57	)		22			—			160			125
Other		119			—			—			24			143
Foreign exchange loss		—			(455	)		—			—			(455	)
Income (loss) before income taxes	$	2,299		$	777		$	(162	)	$	(5,441	)	$	(2,527	)

Depreciation and amortization included above	$	795		$	1,009		$	—		$	38		$	1,842

Share-based compensation included in above:
Cost of clinical laboratory services	$	3			—			—			—		$	3
Selling, general and administrative		40		$	26			—		$	323			389
Total	$	43		$	26		$	—		$	323		$	392

Capital expenditures	$	587		$	102		$	—		$	—		$	689