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, 2019

Segment Reporting Disclosure [Text Block]

Note 10 – Segment reporting

The Company has three reportable segments: Products, Clinical Services and Therapeutics. The Company’s Products segment develops, manufactures, and markets products to research and pharmaceutical customers. The Clinical Services segment provides diagnostic services to the health care community. The Company’s Therapeutics 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, which may result in settlements recognized in another segment and other general corporate matters are considered a component of the Other segment. Legal fee expense specific to other segments’ activities have been allocated to those segments.

Legal settlements, net, represent activities for which royalties would have been received in the Company’s Products segment and expenses related to an investigation within the Clinical Services segment. 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.

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

Three months ended January 31, 2019	Clinical Services			Products			Therapeutics			Other			Consolidated
Revenues	$	12,000		$	7,327			—			—		$	19,327

Operating costs and expenses:
Cost of revenues		11,025			3,723			—			—			14,748
Research and development		—			611		$	222			—			833
Selling, general and administrative		6,200			2,981			—		$	2,316			11,497
Legal fee expense		38			1			—			1,103			1,142
Total operating costs and expenses		17,263			7,316			222			3,419			28,220

Operating income (loss)		(5,263	)		11			(222	)		(3,419	)		(8,893	)

Other income (expense):
Interest		(15	)		14			—			228			227
Other		(29	)		(4	)		—			165			132
Foreign exchange loss		—			126			—			—			126
(Loss) income before income taxes	$	(5,307	)	$	147		$	(222	)	$	(3,026	)	$	(8,408	)

Depreciation and amortization included above	$	374		$	343		$	—		$	51		$	768

Share-based compensation included in above:
Selling, general and administrative	$	40		$	26		$	—		$	225		$	291
Total	$	40		$	26		$	—		$	225		$	291

Capital expenditures	$	409		$	26		$	—		$	6,147		$	6,582

Three months ended January 31, 2018	Clinical Services			Products		Therapeutics			Other			Consolidated
Revenues	$	18,730		$	7,422		—			—		$	26,152

Operating costs and expenses:
Cost of revenues		11,730			3,877		—			—			15,607
Research and development		—			591	$	221			—			812
Selling, general and administrative		6,107			2,878		—		$	2,064			11,049
Legal fee expense		8			25		—			1,667			1,700
Total operating costs and expenses		17,845			7,371		221			3,731			29,168

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 loss		—			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

Six months ended January 31, 2019	Clinical Services			Products			Therapeutics			Other			Consolidated
Revenues	$	26,297		$	14,290			—			—		$	40,587

Operating costs and expenses:
Cost of revenues		21,993			6,994			—			—			28,987
Research and development		—			1,118		$	443			—			1,561
Selling, general and administrative		12,260			5,905			—		$	4,302			22,467
Legal fee expense		74			8			—			2,361			2,443
Total operating costs and expenses		34,327			14,025			443			6,663			55,458

Operating income (loss)		(8,030	)		265			(443	)		(6,663	)		(14,871	)

Other income (expense):
Interest		(33	)		30			—			504			501
Other		11			—			—			168			179
Foreign exchange loss (gain)		—			(198	)		—			—			(198	)
(Loss) income before income taxes	$	(8,052	)	$	97		$	(443	)	$	(5,991	)	$	(14,389	)

Depreciation and amortization included above	$	777		$	685		$	—		$	72		$	1,534

Share-based compensation included in above:
Selling, general and administrative		78		$	50			—		$	398			526
Total	$	78		$	50		$	—		$	398		$	526

Capital expenditures	$	763		$	78		$	—		$	6,147		$	6,988

Six months ended January 31, 2018	Clinical Services			Products		Therapeutics			Other			Consolidated
Revenues	$	38,264		$	14,764		—			—		$	53,028

Operating costs and expenses:
Cost of revenues		23,772			7,266		—			—			31,038
Research and development		—			1,114	$	445			—			1,559
Selling, general and administrative		12,202			5,506		—		$	4,246			21,954
Legal fee expense		21			28		—			2,082			2,131
Total operating costs and expenses		35,995			13,914		445			6,328			56,682

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 loss		—			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