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, 2018

Segment Reporting Disclosure [Text Block]

Note 10 – 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 April 30, 2018
	Clinical Labs			Life Sciences			Therapeutics			Other			Consolidated
Revenues:
Clinical laboratory services	$	18,137			—			—			—		$	18,137
Product revenues		—		$	7,415			—			—			7,415
Royalty and license fee income		—			78			—			—			78
		18,137			7,493			—			—			25,630
Operating costs and expenses:
Cost of clinical laboratory services		10,995			—			—			—			10,995
Cost of product revenues		—			3,562			—			—			3,562
Research and development		—			576		$	223			—			799
Selling, general and administrative		6,252			2,974			—		$	1,799			11,025
Provision for uncollectible accounts receivable		400			(4	)		—			—			396
Legal fee expense		25			19			—			1,607			1,651
Total operating costs and expenses		17,672			7,127			223			3,406			28,428

Operating income (loss)		465			366			(223	)		(3,406	)		(2,798	)

Other income (expense):
Interest		(22	)		12			—			237			227
Other		15			2			—			—			17
Foreign exchange loss		—			(462	)		—			—			(462	)
Income (loss) before income taxes	$	458		$	(82	)	$	(223	)	$	(3,169	)	$	(3,016	)

Depreciation and amortization included above	$	437		$	358		$	—		$	20		$	815

Share-based compensation included in above:
Selling, general and administrative		26		$	17			—		$	161			204
Total	$	26		$	17		$	—		$	161		$	204

Capital expenditures	$	465		$	96		$	—		$	—		$	561

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			—		$	1,671			10,534
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			2,137			27,348

Operating income (loss)		1,478			614			(214	)		(2,137	)		(259	)

Other income (expense):
Interest		(28	)		12			—			131			115
Other		7			(98	)		—			17			(74	)
Foreign exchange gain		—			147			—			—			147
Income (loss) before income taxes	$	1,457		$	675		$	(214	)	$	(1,989	)	$	(71	)

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

Nine months ended April 30, 2018
	Clinical Labs			Life Sciences			Therapeutics			Other			Consolidated
Revenues:
Clinical laboratory services	$	58,001			—			—			—		$	58,001
Product revenues		—		$	21,618			—			—			21,618
Royalty and license fee income		—			639			—			—			639
		58,001			22,257			—			—			80,258
Operating costs and expenses:
Cost of clinical laboratory services		34,767			—			—			—			34,767
Cost of product revenues		—			10,828			—			—			10,828
Research and development		—			1,690		$	668			—			2,358
Selling, general and administrative		18,454			8,487			—		$	6,045			32,986
Provision for uncollectible accounts receivable		2,000			(11	)		—			—			1,989
Legal fee expense		46			47			—			3,689			3,782
Total operating costs and expenses		55,267			21,041			668			9,734			86,710

Operating income (loss)		2,734			1,216			(668	)		(9,734	)		(6,452	)

Other income (expense):
Interest		(70	)		35			—			604			569
Other		32			10			—			44			86
Foreign exchange gain		—			143			—			—			143
Income (loss) before income taxes	$	2,696		$	1,404		$	(668	)	$	(9,086	)	$	(5,654	)

Depreciation and amortization included above	$	1,254		$	1,039		$	—		$	57		$	2,350

Share-based compensation included in above:
Selling, general and administrative		86		$	61			—		$	470			617
Total	$	86		$	61		$	—		$	470		$	617

Capital expenditures	$	1,459		$	167		$	—		$	—		$	1,626

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			—		$	6,683			33,246
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			7,762			82,232

Operating income (loss)		3,715			1,824			(376	)		(7,657	)		(2,599	)

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	)	$	(7,430	)	$	(2,598	)

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