Enzo Biochem Inc (ENZB)

Enzo Biochem Inc Q3 2025 Financial Analysis

Report Date: 2025-06-30
Period Covered: Quarter ended April 2025

Executive Summary

Enzo Biochem reported revenues of $6.402 million, down 20.2% from $8.022 million in Q3 2024, primarily due to headwinds in the life science tools space, reduced government grants and delayed large order fulfillment. Operating loss widened to $3.389 million vs. a loss of $2.043 million a year ago. Net loss from continuing operations was $2.374 million compared with $2.131 million in the prior-year period.

Profit and Loss Analysis

• Revenue decline driven by U.S. demand drop and timing of shipments.
• Gross margin contraction despite cost‐containment initiatives; inventory reserve of $163,000 fully covered.
• R&D expense reduced to $504,000 from $605,000 YoY under cost‐saving measures.
• SG&A rose 9.5% due to increased IT costs, strategic consulting and insurance accruals.
• Foreign exchange gains of $508,000 partially offset losses.
• Absence of convertible debenture fair-value charge (Q3 2024: $384,000) improved non-operating result.

Debt and Liquidity

• Non-current long-term debt at $129,000, down 31.7% from $189,000 in July 2024.
• Operating lease liabilities totaled $2.801 million.
• Cash and equivalents reduced to $36.7 million from $52.4 million due to working capital outflows and a $5.324 million dividend payment.
• Working capital remains positive at $31.3 million, covering more than 12 months of projected needs.

Reasons for Loss

• Revenue shortfall could not fully absorb fixed manufacturing overhead.
• Higher corporate IT and consulting expenses.
• One-time dividend of $0.10/share (Dec 2024) reduced cash but reflects disciplined capital return policy.

Pros and Cons

Pros:

• Strong cash position to fund operations.
• Active strategic review process may yield value‐enhancing transaction.
• Proprietary platform with diverse product pipeline.

Cons:

• Continued revenue headwinds in core markets.
• Regulatory and legal overhang from 2023 ransomware/data breach and multiple class actions.
• Risk of further delisting actions or stock price volatility.

Three months ended April 2025 statutory segment and geographic breakdown:

• Total revenue: $6.402 million
• By geography:
  • United States: $4.054 M (63.4%)
  • Europe: $1.706 M (26.7%)
  • Asia-Pacific: $0.642 M (10.0%)
• R&D expense: $0.504 M (7.9% of revenue)
• SG&A expense: $4.904 M (76.6%)
• Operating loss: $3.389 M
• Net interest expense: $0.384 M
• Foreign exchange gain: $0.508 M

Enzo’s near‐term trajectory will hinge on stabilizing revenue in the life science tools market and advancing its strategic review. The company’s robust liquidity and reduced debt burden provide a cushion, but recurring legal and regulatory costs, plus potential dilutive financing, remain pressure points. Management’s cost-containment measures and focus on higher-margin products could restore profitability. Securing new distribution partnerships, leveraging proprietary assay platforms, and defending intellectual property are key catalysts. Investors should monitor developments in segment revenue, recovery in government grant funding, and progress on the board’s strategic alternatives process.