Enzo Biochem, Inc.

First-quarter revenue was $18.3 million, down 31% year over year from $26.5 million, and down 10% sequentially. COVID testing revenue declined from $9.2 million to $0.8 million, which management said explained the full year-over-year revenue decline. Enzo Life Sciences revenue was $7.1 million, up 9% year over year, or 5% organically after FX; Enzo Clinical Services revenue was $11.2 million, down 43% year over year. Blended gross margin was 20% versus 42% last year and 21% in the prior quarter. Adjusted EBITDA was a loss of $7.4 million versus income of $1.0 million a year ago. Cash, cash equivalents, and restricted cash were $13.1 million at quarter end, down $9.5 million from the fourth quarter of 2022. Management did not give formal next-quarter or full-year financial guidance, but said core testing revenue should keep growing while direct COVID testing continues to decline, with margins expected to improve over time as cost savings, higher-margin products, and volume leverage build.

Hamid Erfanian framed the quarter as evidence that the company’s non-COVID businesses are growing despite the difficult comparison to last year’s COVID testing revenue. He emphasized that Life Sciences is growing in a large, healthy market and that Clinical Services is beginning to rebound in routine and specialty testing. His tone was constructive and strategic, highlighting product launches, distribution expansion, operational efficiency efforts, and the ongoing review of strategic alternatives.

Patricia Eckert focused on the financial impact of the COVID revenue decline and the resulting margin compression. She noted ELS gross margin fell from 40% to 35%, while ECL gross margin fell from 43% to 10%; she also said October monthly gross margin returned to 50% in Life Sciences due to better mix and lower investments. She highlighted R&D of $1.0 million, SG&A of $11.5 million including $0.9 million of strategic initiative charges, legal and other expenses down $2.2 million year over year, and cash of $13.1 million with minimal debt. She added that a short-term prepayable credit facility is being evaluated to support growth and profitability initiatives.

There was no analyst Q&A on the call because management said the company would not hold a Q&A period due to the ongoing banking process. Instead, management invited investors to email questions to ir@enzo.com. As a result, the only additional color came from prepared remarks, including the update that strategic alternatives work is progressing with strong support from the banking partner.