Enzo Biochem (ENZ) 16 Mar 212021 Q2 Earnings call transcript

Greetings. Welcome to the Enzo Biochem Second Quarter 2021 Financial Results and Business Update. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. the to turn Feffer, host, now Relations. Investor will conference your over Jeremy I you. Thank

begin. may You

Thank good Hilary, you, and afternoon.

news conference risks in statement developments are year date update The Financial the ended release revenues of business considered the to July expectations markets Joining factors meaning Act that the affect Risk now us after the update to guarantees its outside now result and President; and and uncertainties expenses, as Except Chief of on not litigation any statements flow, and statement. disclaims gross control of of this a be as Barry performance of this products statements XX, declarations Section Securities those was company's services, a including Weiner, of cautioned future of the A in company, matters Form cash general including involve today any company see forward-looking amended, amended. cost government and on for are management, obligation from actual XXXX. the and historical dependent margins, number company's the website. for other and of the and and XX-K goods of may the Investors the statements could within Safe and company issued the such XXXX of conditions. include number this company's any the for the call. David Please regarding Harbor services, are which is release forward-looking and Factors and a as Enzo Act forward-looking the regulations, expenses, the the of XXA Securities read Section related fiscal current the occurring results announcing that are results. of company of discussed Such afternoon Co-Founder Officer. or information, the press available Exchange intent, of Bench, will I XXE XXXX belief materially

the may is provided its GAAP not a EBITDA, ahead. Enzo income company performance. its Biochem. company has alternative go Barry operations the reconciliation call, would or EBITDA to refer conference in measure like and this to determining non-GAAP to www.enzo.com should this other President release income loss, operating any for measure. and from and over a Weiner, The turn afternoon. floor to on of please issued the difference loss or During now website, press or be Co-Founder considered I to net an not Barry, of

Good Jeremy. and Thank fiscal joining for hope had you, close We of afternoon results our quarter issued after financial quarterly them. look to chance a and thank at today. call today. us operating you've the second you the market our on I update XXXX

second report in environment indicates, a represented multiple challenges period of and As our of an difficulties. the solid financial quarter operational growth and

It and many is personal scientific alleviate rates and of to ability emergence commitment, with is out Our well. saw finally have money, our determinately hard years. as United rollout year. course unique This the in also XXXX infection infection the over helping expertise, States, and over in closed United vaccines as of employees, company, equilibrium the for February investment in of help dedication others we alarmingly past a in January with made our we uncommon time, reflection to States. in the of late the the was the a rates decrease quarter shown maintain the in direct growth a consequence our high We of who and difficulties past a of have despite also work to of COVID-XX

XX% the to place. to Though doctor to it's As services gradual fully the there during this return six on see market first haven't to overall we visits, they the still declined pandemic, recovered. mind movement approximately pandemic still the important during take some return of the regular weeks visits in keep backdrop, side, a doctor is

institutions closed academic the throughout closed, initially side, and product remain internationally. country partially were the and the On

COVID-XX testing to due expect workplaces travel, strategy. camps, business our fully schools, and implementing are we While continue to post-COVID we

have On in the a to product side, emphasis we from academia shift industry.

On are to to from primarily the we lab services side, doctors opportunities. expanding include lab

COVID-XX versus These higher vertically though also of our mid-teens compare I blended our favorably margins, margins below have works, percentages. with XX% gross have own who our margins even note on demonstrated competitors, approach they should have XX% that XX% pre-pandemic. testing with We those integrated platforms, margins

and of on of the and proud thoroughly determination, include the for for both with services ahead. each. improvement our this immunohistochemistry, the we provided work, for proprietary of use strategy to appreciation are past have transmitted Furthermore, continued like I'm to of sexually testing services. XX-months the diagnostic pandemic, and serving all expanding to reiterate it and execution during of employees women's platform during while margin place. very four diseases, our for is people accomplished our at have expand necessary hard and remain thanks will their products immunodiagnosis would our execution what who we areas least encompass and to market year We health, for offer molecular lab optimistic the operations the where to Enzo rely quarter. I testing needs clinical cytology They demand for and in

community. have while health operations continue on made our paramount employee importance, to contributions so always been to the strategy, confident the of and We running may achievements at been has and Enzo's business end their a us our keep our care year them, XXXX. sincerely we effective, full ahead. And our measures we allowing our maintain I'm to the that health and appreciate implemented safely. it to safety ability notable vision in Our safeguard providing employees expanding and execute

announced earlier today. results Our the we second was exceptional another by quarter, quarter evidenced

in pleased this strong to a position are We be in such early XXXX.

And million, share was achievements. $XX.X a of in an improvement was solid year-over-year. improvement XX%, $X.X of million, will Gross in QX, for of ago per of almost versus XX% quarter's $X.X $XX David greater quarter million. per earnings you improving the points bit a versus of million of financial revenue basis of increased an year share Total positive adjusted adjusted are revenue. favorably margins with representative earnings $X.XX X,XXX a compared EBITDA GAAP the a the in for accomplishments, quarter detail. $X.XX an loss which loss to year-over-year results Our demonstrated XXXX. highlights shortly share These just

I convey the to However, message regarding its direction. highlights it would like also Enzo and

is the on outlined further to objectives core critical commitment elaborating quarter, It they to is objectives of highlight and management's as have company's these success we development are the important to continued to Enzo. it Before fundamental as before. the stress

are we an integrated transforming end solutions company. First, to into diagnostic end products and

in are the building investing infrastructure we and for growth. Second,

in to value operational the vertically our we have to end implementing Enzo's better pandemic helped to our four with in bring These and our to market objectives efficiency key sector. Despite a diagnostics the continued headwinds, solidify are integrated platforms structure company. we measures the address to fourth, enhanced Third, position technologies mobilize building And line needs. diagnostic resources end like cost are out expect we care and quarter. start portable opportunities the offerings. by Enzo a use new of of to in care cover the microplate point some most point expanding to of market, opportunities for highlights with immunoassays, will reader we of introduction the with November I providing adapt to in small direct consumer demands areas in now I'd of servicing be to impactful, the as such medicine. as

northeast the of We to features remains an with this throughput up swab testing a and enables reader population the expect we available Enzo XXXX. GENFLEX, reader compact back-half industrial high In for of quick introduction This for our have open January, of on for including many several plate five for its such in variants Enzo's containing tests services. utilizing capacity device easily as the probe in of from to more Enzo the expand COVID-XX to connection proprietary test loading CRO the use company's to increased researchers Testing automated design demand use SARS-CoV-X offer area, platform. the academic, anti of be density ideal FDA, with plate emergency our received expansion customers. individual transmissible and samples, different phase, have and high platforms, pooled authorizing challenging authorization USB system, for three an that specimens

presence As of of platform the currently test GENFLEX we the at variants that analysis able beginning recently announced of our demonstrated March, known proprietary process Enzo's detect to successfully COVID-XX. are recent on molecular

which next environment. updating licensed and like Patients, providers testing, on as continue financial few to expands for While the between more online on sexually important the be test reputation further offering the to benefited provide to at multiple for on currently to on it would Now, online physicians this can in David? quick, different our nuances types now community across testing, our for builds in CFO, quarter convenient platform it not We are products to will a are to another This overseen outside testing we end our track who Bench, the Now GoTestMe the Enzo, other with testing infectious We launch offering of you a lab initiatives distinguish and quarter. is COVID and variants, physicians. quarters. We online first look turn forward to Enzo, the out to the extend finished access may the over does online is direct platform. the these GoTestMe second disease forward our greatly this and at identification. as strong positive testing. antigen is moves available detailed portal businesses future. the of consumer capability. to look Rapid the diseases as around this analyzed that call offering go momentum investors market the have over brings samples the differentiator its I variants performance medical of near David launched plan transmitted October, individuals understanding by to We the roll post-COVID PCR and not

Thanks, Barry.

performance advancement the intercompany with accession as is the XXXX, largely margin quarter $XX.X particular basis, as million was A to driven by from second for X,XXX average in from total quarter period. by in proprietary revenue Enzo's XX% XX% basis, order XXXX, $XX.X the increased XXXX, use generated when another due COVID-XX per XX% from increased sequential ago in revenue driven the to attributed initiatives. XX% Enzo and $XX.X year-over-year by testing. of first platforms second services increased XXXX, revenue of for On life growth from to striking higher improvement period a than ago value million of The as more from of quarter testing well largely the in the of XX% mainly for gross sequentially. net year-over-year period, indicated, COVID-XX XX% points. XX% well during XX.X%, XX.X%, services an industry. margins increased This year gross in the accession. significantly first clinical expansion growth gross flat basis the to following consolidated XX% on XX.X% a the the XX.X% than as $XX increased we the the in increased more product quarter in quarter is or year clinical the diagnostic our servicing quarter board. period, associated saw and year the second a growth period our an million slowdown and sciences across accounting operations in Barry impact the the of A continuing to note, XXX,XXX, of margin volume value than Total XX% largely reflecting XX.X% was of quarter As ago ongoing the markets. revenue, was second second savings the quarter revenue sales. up million On cost individual the decline product over more

expenses for stable sold decreased to due million We or XX% more ordering in the was X.X% vertical revenue reduced consolidated This $X.X quarter, ago improving loss the $X.X margin integration year on year X,XXX to On ago improved share revenue X.X% and SG&A mainly declined compared lower and in margin from improvement mix measures. administrative total approximately to total points research into in was or loss the $X.X to was being gross general EBITDA continue in by positive Selling better expense million, although million, year million environment. fixed gross leverage expenses of products XXXX. side, of coming cost quarters, $XX.X an by improvement due and division SG&A basis $X.XX $X.XX cost amortization the lower a margins period. focus development a GAAP million a period, expense $X.X the efficiency and and of million Adjusted quarter. aided or $XX rose of million quarter ago significant travel. from from share, to per of the slightly $X.X in or of in versus driven income $X.X negative million net per second efficiency, EBITDA adjusted intangible headcount of by a

as investments capital Our remain lower finances improvement as slightly of the at of the to of cash in inventory, the than XX, as expenditure, higher million past well receivable of fiscal payable. with lower sturdy, year months, million and end million equivalents accounts accounts cash million, in January working $XX six $X an capital due totalled $XX.X and XXXX, $XX.X

has is significantly shares company. company very and financial will back to as position on the its I'll from Barry million the XXXX turn integrated strong diagnostics XXXX, end vertically to XX believe XX, January for remarks. entering We of call a leading closing benefit Enzo end outstanding. footing As over

David. you, Thank

have While will like the to for of remain model, once today's and capitalize the with in search today's indicated board step few ferry identified. CEO company’s discuss Director the were as well. but Enzo's CEO, the research to Rabbani, as financial to is and would press corporate results, CEO as a company, down transition I qualified firm the appropriate conduct will leadership candidate. scientific the of company is note intended global fully developments Dr. release the directors to role retained operations successor a call potential the there of a and form company, business on and Elazar Founder and To the a

for not itself, only In great the to entire steps company with And committed healthcare evaluate, We but to the with quarterly investment in industry. on banking company's named business CEO Diagnostic company. these retained progress addition, but the of furthermore, execute and not not employ strategic Gary retained board. and He ongoing the direction to the strategic strategic opportunities. identify, was assist Huff, consultant firm Cain in the our report enthusiasm. former was Enzo of only commercial model developments has The operational a help and Brothers, LabCorp integrated view To model this diagnostic a of in new also may validity significant but reflecting was partners. is strategic the ourselves, to recap, only services. be in consequential, our Enzo, demonstration to model for help

of and testing demonstrates on period supply by pressures and implementation to allow efficiencies pandemic, molecular demonstrated chain margins. reduce in flexibility own adaptability in business while COVID-XX the addressing or the open and implementation This laboratories platform will quarter, with extreme of our many and Bringing has Resource this this a were This strategy. to and aspects post-COVID approaches Human our environment, party operations expansion reagents, limitations Open costs, allowing the integrated of when to challenged to the business their market the system our to third the reimbursement shortfalls. prevailing during improving reagents industry open use ease flexibility. validity of key systems been the of

are will the questions. now and We of open excited for we call and the about its Enzo, future opportunities,

from first KeyBanc. I Paul state time, be At question. [Operator Please your this Knight session. comes Instructions] question-and-answer Our conducting question a will of

Barry. Hi,

the besides what's test the that after platform? timing menu STDs? that STD the COVID On What's of the getting GENFLEX on system, how portion include that? obviously the would and And on

CoV-X. today Thank running as are aware platform you, you Paul. The as

over multi UMM. the have This a This will is be Candida, summer. swab. panel, includes BV, women's prep health We a ready which

also a enhanced panel, be also We well. Chlamydia, multi submissions swab, as Trich will Gonorrhoeae this available prep summer. on These should XXXk women's for all which submitted have be

complex in would full able the be which capability to the panel, panel, submissions HIV a handle as in This is loaded with fully very all We viral is have growing markets. an submission. will molecular summer, load tests. and going as the be over the a fall, HSV fastest clinical into comprehensive, HPV most fully And operational an viral this any laboratory and risk segment within that submission viral be supply moving These HCV high menu load. well to efficient HBV to is load, molecular

working improvise as We getting of delayed getting the in personnel machine strong moving as environment which the now machine of supply as forced through forward. well this approved, hopefully, very itself for they first-half had have the which for well customer we us, have of the project approval. this COVID of And with menu the a analytes EUA of will in been ourselves. really as these COVID on moving analyte to dramatic we we manufactured COVID challenge submission had on but are to very shift This test so and no laboratories, small year and was are and terms a machine we complex, by fall validated some the stream, our as to

way volume from And then, PCR, now? January the at color also since diagnostic regarding are but any on diagnostic on COVID environment obvious falling least for right

It's there or not. overall soon will tell be really to too great whether declines

year. of being for the a clinical validated However, of continued in COVID-XX PAMA see COVID the postponement continuous This testing demand volumes. pandemic is by our shines labs and And on the light for general. currently, at importance testing least we another cuts

academic of region that our are today We have programs very and Again, our monitoring institutions fall for in are in effective in off institutions, we area. number surveillance volumes academic in here. not seen we initiated a

implementing summer the or school open and as in either look now the they programs corporate have and programs are fall over up programs. We potentially to

bit vaccine see testing, monitoring. decision programs to prevalent, and though comes of forward volume we up certainly waiting requirements into our to serological levels moving even it into who the see testing becomes place as move potentially issue a of play. the into little that based have and a individuals utility the move see in exceed Also, forward. We as we surrounding be how we will current are the are the vaccinated antibody we're shift volumes doing may more been So And future. conventional testing fill the

forward. will to period it's anticipate still volume bit future like. demands as for a we we the the a continue to what But move So undefined look as

you. Thank Okay.

Armistice Our next of Keith question question. Maher comes from your Please Capital. state

testing? a if it's up I consolidated that the guess I the Is of it we understand? for up, Is Barry, XX%. should margin? COVID It consolidated to guess that? there part -- mean, testing. it think to it I margin a COVID question gross the the us be. I have high on is far was is And above about margin. is of kind on how way some portion gross How must

we've Hi, call, stated Bench. publicly take Yes. Dave that this platform. that on a Keith testing our Basically, runs on our actually question. COVID I'll proprietary this

Our XX%. proprietary platforms, show margin in excess of

So you pursue helpful that of forward. and when hopefully, that's that how we in for understanding terms

consider testing ongoing COVID so an Just to thinking is here basis, that that Is you forecasting, years? that some you're it assuming we number of as as when follow-up, about can that portion way? for of some

Yes.

yes. COVID, For

high reimbursed say we're is what And GENFLEX, being It's reimbursement like. general, For obviously depending that through because the actual of on the the molecular revenue a significant I will is the portion testing depend right tests, on test different margins in on what of obviously, that our payors. now. look level would reimbursement a COVID

and in Brothers. Gary Korn one Cain And terms activity recent the then last some of of Huff Ferry with and one, just

he's But the see Just I how he to is observer some impact review, in his that? going Or engaged the just about reporting type strategic terms of role? role know recommendation? is Or might the regarding doing he's timeframe, of and his an be ongoing how a part to and think of give expect to like he should Gary Huff, we might board we what board. and practically,

hopefully and the multi be strategic contribution, retained think assist opportunities, fold Mr. multiple And resources. will and of Huff utility to industry we'll expert. was an in the on board levels. company He's understanding his

Congratulations a much. on quarter. Thank great you very

you. Thank

the the Weiner We And for over of have question-and-answer reached will turn end now session. the to Barry call closing I remarks.

Thank joining you today. us for

revenue end be and forward We joining It for We quarter. have in you, on the a discussing in investing really for put and look and interesting for and Thank and time very our achieved integrated transforming past products this an growth again, company. place only over us. believe to end report. profitability the We proud our we are step further one diagnostic into infrastructure in to solutions next will building of is growth. years our progress do dynamic very company, it

at participation. and may This this for you your disconnect your conclude you time. line today's Thank conference