Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Oct. 31, 2018 | Dec. 01, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ENZO BIOCHEM INC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --07-31 | |
Entity Common Stock, Shares Outstanding | 47,192,429 | |
Amendment Flag | false | |
Entity Central Index Key | 316,253 | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Oct. 31, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Oct. 31, 2018 | Jul. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 52,777 | $ 60,041 |
Accounts receivable, net of allowances | 12,836 | 13,147 |
Inventories | 7,588 | 7,278 |
Prepaid expenses and other | 2,307 | 2,734 |
Total current assets | 75,508 | 83,200 |
Property, plant and equipment, net | 7,503 | 7,636 |
Goodwill | 7,452 | 7,452 |
Intangible assets, net | 1,625 | 1,886 |
Other assets | 2,095 | 1,486 |
Total assets | 94,183 | 101,660 |
Current liabilities: | ||
Accounts payable – trade | 7,155 | 9,516 |
Accrued liabilities | 10,848 | 10,054 |
Other current liabilities | 190 | 616 |
Total current liabilities | 18,193 | 20,186 |
Other liabilities | 320 | 353 |
Total liabilities | 18,513 | 20,539 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Preferred Stock, $.01 par value; authorized 25,000,000 shares; no shares issued or outstanding | ||
Common Stock, $.01 par value; authorized 75,000,000 shares; shares issued and outstanding: 47,192,429 at October 31, 2018 and 47,182,254 at July 31, 2018 | 472 | 472 |
Additional paid-in capital | 331,030 | 330,770 |
Accumulated deficit | (258,202) | (252,221) |
Accumulated other comprehensive income | 2,370 | 2,100 |
Total stockholders’ equity | 75,670 | 81,121 |
Total liabilities and stockholders’ equity | $ 94,183 | $ 101,660 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Oct. 31, 2018 | Jul. 31, 2018 |
Preferred Stock, par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred Stock, shares issued | 0 | 0 |
Preferred Stock, shares outstanding | 0 | 0 |
Common Stock, par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 75,000,000 | 75,000,000 |
Common Stock, shares issued | 47,192,429 | 47,182,254 |
Common Stock, shares outstanding | 47,192,429 | 47,182,254 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Revenues | $ 21,260 | $ 26,876 |
Operating costs and expenses: | ||
Cost of Revenues | 14,239 | 15,431 |
Research and development | 728 | 747 |
Selling, general and administrative | 10,970 | 10,905 |
Legal fee expense | 1,301 | 431 |
Total operating costs and expenses | 27,238 | 27,514 |
Operating loss | (5,978) | (638) |
Other income (expense): | ||
Interest | 274 | 157 |
Other | 47 | 36 |
Foreign exchange loss | (324) | (195) |
Loss before income taxes | (5,981) | (640) |
Benefit for income taxes | ||
Net loss | $ (5,981) | $ (640) |
Net loss per common share: | ||
Basic and diluted (in Dollars per share) | $ (0.13) | $ (0.01) |
Weighted average common shares outstanding: | ||
Basic and diluted (in Shares) | 47,186 | 46,914 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Net loss | $ (5,981) | $ (640) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 270 | 83 |
Comprehensive loss | $ (5,711) | $ (557) |
CONSOLIDATED STATEMENT OF STOCK
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Treasury Stock [Member] | Total |
Balance at Jul. 31, 2017 | $ 465 | $ 328,294 | $ (241,900) | $ 2,013 | $ 88,872 | |
Balance (in Shares) at Jul. 31, 2017 | 46,506,176 | |||||
Net loss for the period ended | (640) | (640) | ||||
Purchase of treasury stock | $ (815) | (815) | ||||
Purchase of treasury stock (in Shares) | 80,751 | |||||
Vesting of restricted stock (in Shares) | 1,001 | |||||
Exercise of stock options | $ 5 | 1,472 | 1,477 | |||
Exercise of stock options (in Shares) | 487,106 | |||||
Share-based compensation charges | 205 | 205 | ||||
Foreign currency translation adjustments | 83 | 83 | ||||
Balance at Oct. 31, 2017 | $ 470 | 329,971 | (242,540) | 2,096 | $ (815) | 89,182 |
Balance (in Shares) at Oct. 31, 2017 | 46,994,283 | 80,751 | ||||
Balance at Jul. 31, 2018 | $ 472 | 330,770 | (252,221) | 2,100 | 81,121 | |
Balance (in Shares) at Jul. 31, 2018 | 47,182,254 | |||||
Net loss for the period ended | (5,981) | (5,981) | ||||
Vesting of restricted stock (in Shares) | 175 | |||||
Exercise of stock options | 25 | $ 25 | ||||
Exercise of stock options (in Shares) | 10,000 | 10,000 | ||||
Share-based compensation charges | 235 | $ 235 | ||||
Foreign currency translation adjustments | 270 | 270 | ||||
Balance at Oct. 31, 2018 | $ 472 | $ 331,030 | $ (258,202) | $ 2,370 | $ 75,670 | |
Balance (in Shares) at Oct. 31, 2018 | 47,192,429 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (5,981) | $ (640) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization of property, plant and equipment | 519 | 521 |
Amortization of intangible assets | 247 | 228 |
Share-based compensation charges | 235 | 205 |
Accrual for share-based 401(k) employer match expense | 196 | 177 |
Foreign exchange loss | 302 | 198 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 312 | 713 |
Inventories | (309) | (198) |
Prepaid expenses and other assets | 449 | 207 |
Accounts payable – trade | (2,361) | (819) |
Accrued liabilities, other current liabilities and other liabilities | 187 | 2,003 |
Total adjustments | (223) | 3,235 |
Net cash (used in) provided by operating activities | (6,204) | 2,595 |
Cash flows from investing activities: | ||
Capital expenditures | (406) | (461) |
Security deposits and other | (609) | |
Net cash used in investing activities | (1,015) | (461) |
Cash flows from financing activities: | ||
Installment loan and capital lease obligation payments | (59) | (101) |
Proceeds from exercise of stock options | 25 | 658 |
Net cash (used in) provided by financing activities | (34) | 557 |
Effect of exchange rate changes on cash and cash equivalents | (11) | (9) |
(Decrease) increase in cash and cash equivalents | (7,264) | 2,682 |
Cash and cash equivalents - beginning of period | 60,041 | 64,167 |
Cash and cash equivalents - end of period | $ 52,777 | $ 66,849 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Oct. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Basis of Accounting [Text Block] | Note 1 – Basis of Presentation The accompanying consolidated financial statements include the accounts of Enzo Biochem, Inc. and its wholly-owned subsidiaries, Enzo Life Sciences, Enzo Clinical Labs, Enzo Therapeutics and Enzo Realty LLC, collectively or with one or more of its subsidiaries referred to as the “Company” or “Companies”. The consolidated balance sheet as of October 31, 2018, the consolidated statements of operations and comprehensive income (loss) for the three months ended October 31, 2018 and 2017, the consolidated statements of cash flows for the three months ended October 31, 2018 and 2017 and the consolidated statement of stockholders’ equity for the three months ended October 31, 2018 (the “interim statements”) are unaudited. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position and operating results for the interim periods have been made. Certain information and footnote disclosure, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted. The interim statements should be read in conjunction with the consolidated financial statements for the year ended July 31, 2018 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. The consolidated balance sheet at July 31, 2018 has been derived from the audited financial statements at that date. The results of operations for the three months ended October 31, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2019. Effect of New Accounting Pronouncements Adoption of New Accounting Standards On August 1, 2018, the Company adopted a new accounting standard issued by the Financial Accounting Standards Board (“FASB”) on revenue recognition using the full retrospective method. This new accounting standard outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific revenue recognition guidance from GAAP. The core principle of the revenue recognition standard is to require an entity to recognize as revenue the amount that reflects the consideration which it expects to be entitled to when control of goods or services are transferred to its customers. As a result of the Company’s adoption of this standard, the majority of the amounts that were historically classified as bad debt expense, primarily related to patient responsibility, are now considered an implicit price concession in determining net revenues from clinical services. Accordingly, the Company reports estimated uncollectible balances associated with patient responsibility as a reduction of the transaction price and therefore as a reduction in net revenues, when historically these amounts were classified and separately reported as a provision for uncollectible accounts receivable. The adoption of this standard has no impact on revenues reported for life sciences products. The adoption of this new accounting standard resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. For further details, see Note 3. The impact of the adoption of the standard on consolidated operations and cash flows is presented in the table below: Adoption of the standard impacted the Company’s reported results for the three months ended October 31, 2017 as follows: As Previously Reported Adjustment for New Reclassification of Residual As Restated Consolidated Statements of Operations: Total Revenues $27,676 $(800) — $26,876 Provision for uncollectible accounts receivable 814 (800) $(14) — Selling, general and administrative expenses 10,891 — 14 10,905 Net loss (640) — — $(640) Consolidated Statements of Cash Flows: Provision for uncollectible accounts receivable 814 (814) — — Changes in operating assets and liabilities: Accounts receivable (101) 814 — 713 Balance, July 31, 2018 Consolidated balance sheet: Accounts receivable 15,815 (2,523) — 13,292 Less: Allowance for doubtful accounts 2,668 (2,523) — 145 Accounts receivable, net of allowance for doubtful accounts 13,147 — — 13,147 On August 1, 2018, the Company adopted a new accounting standard issued by FASB which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Adoption of this standard requires amendments in the update applied prospectively to an award modified on or after the adoption date. For the foreseeable future, any excess income tax benefits or deficiencies from stock-based compensation, which would be recognized as discrete items within income tax expense rather than additional paid in capital, will be offset by an equivalent adjustment to the deferred tax valuation allowance. Accordingly, adoption of this standard had no impact on our reported operations. Pronouncements Issued but Not Yet Adopted In February 2016, FASB issued ASU No. 2016-02 – Leases (Topic 842), We believe the adoption of this standard will materially impact our consolidated financial statements by significantly increasing our non-current assets and non-current liabilities on our consolidated balance sheets when we record the right of use assets and related lease liabilities for our existing operating leases. We will recognize expense in the consolidated statement of operations similar to current lease accounting, in the cost of sales and selling, general and administrative. In June 2016, FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses (Topic 326) We reviewed all other recently issued accounting pronouncements and have concluded they are not applicable or not expected to be significant to the accounting for our operations. Concentration Risk Other than the Medicare program, one provider whose programs are included in the “Third-party payers” and “Health Maintenance Organizations” (“HMO’s”) categories represents approximately 41% and 40% of Clinical Services net revenue for the three months ended October 31, 2018 and 2017 respectively. Other than the Medicare program, three providers whose programs are included in either “Third-party payers” and/or “Health Maintenance Organizations” (“HMO’s”) categories represent approximately 37% and 47% of Clinical Services net receivables for the three months ended October 31, 2018 and 2017 respectively. |
Net income (loss) per share
Net income (loss) per share | 3 Months Ended |
Oct. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share [Text Block] | Note 2 – Net income (loss) per share Basic net income (loss) per share represents net income (loss) divided by the weighted average number of common shares outstanding during the period. As a result of the net loss for the three months ended October 31, 2018 and 2017 diluted weighted average shares outstanding are the same as basic weighted average shares outstanding, and do not include the potential common shares from stock options and unvested restricted stock because to do so would be antidilutive. For the three months ended October 31, 2018 and 2017, the number of potential common shares (“in the money options”) and unvested restricted stock excluded from the calculation of diluted earnings per share was 135,000 and 931,000, respectively, because their effect would be antidilutive. For the three months ended October 31, 2018, the effect of approximately 1,330,000 of outstanding “out of the money” options to purchase common shares were excluded from the calculation of diluted net income per share because their effect would be anti-dilutive. For the three months ended October 31, 2017, there were no outstanding “out of the money” options to purchase common shares. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Oct. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contract with Customer [Text Block] | Note 3 – Revenue Recognition Clinical Services Revenue Net revenues in the Company’s clinical services business accounted for 67% and 73% of the Company’s total net revenues for the three months ended October 31, 2018 and 2017, respectively and are primarily comprised of a high volume of relatively low-dollar transactions. The services business, which provides clinical testing services, satisfies its performance obligation and recognizes revenues upon completion of the testing process for a specific patient and reporting to the ordering physician. The Company may also perform clinical testing services for other laboratories and will recognize revenue from those services when reported to the ordering laboratory. The Company estimates the amount of consideration it expects to receive from customer groups using the portfolio approach. These estimates of the expected consideration include the impact of contractual allowances and price concessions on our customer group portfolios consisting of healthcare insurers, government payers, client payers and patients as described below. Contracts with customers in our laboratory services business do not contain a financing component, based on the typically limited period of time between performance of services and collection of consideration. The transaction price includes variable consideration in the form of the contractual allowance and price concessions as well as the collectability of the transaction based on the patient intent and ability to pay. The Company uses the expected value method in estimating the amount of the variability included in the transaction price. The following are descriptions of our laboratory services business portfolios: Third party payers and Health Maintenance Organizations (HMO’s) Reimbursements from third party payers, primarily healthcare insurers, and HMO’s are based on negotiated fee-for-service schedules and on capitated payment rates. Revenues consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payers, which considers historical collection and denial experience and the terms of the Company’s contractual arrangements. Adjustments to the allowances, based on actual receipts from the third-party payers, are recorded upon settlement. Collection of the consideration the Company expects to receive is normally a function of providing complete and correct billing information to these third party payers within the various filing deadlines, and typically occurs within 60 to 90 days of billing. Provided the Company has billed healthcare insurers accurately with complete information prior to the established filing deadline, there has historically been little to no collection risk. If there has been a delay in billing, the Company determines if the amounts in question will likely go past the filing deadline, and if so, will reserve accordingly for the billing. Government Payer - Medicare Reimbursements from Medicare are based on fee-for-service schedules set by Medicare, which is funded by the government. Revenues consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from Medicare, which considers historical collection and denial experience and other factors. Adjustments to the allowances, based on actual receipts from the government payers, are recorded upon settlement. Collection of consideration the Company expects to receive is normally a function of providing the complete and correct billing information within the various filing deadlines and typically occurs within 60 days of billing. Provided the Company has billed the government payer accurately with complete information prior to the established filing deadline, there has historically been little to no collection risk. If there has been a delay in billing, the Company determines if the amounts in question will likely go past the filing deadline, and, if so, it will reserve accordingly for the billing. Patient self pay Uninsured patients are billed based on established patient fee schedules or fees negotiated with physicians on behalf of their patients. Coinsurance and deductible responsibilities based on fees negotiated with healthcare insurers are also billed to insured patients and included in this portfolio. Collection of billings from patients is subject to credit risk and ability of the patients to pay. Revenues consist of amounts billed net of discounts provided to uninsured patients in accordance with the Company’s policies and implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration the Company expects to receive from patients, which considers historical collection experience and other factors including current market conditions. Adjustments to the estimated allowances, based on actual receipts from the patients, are recorded upon settlement. Patient billings are generally fully reserved for when the related billing reaches 210 days outstanding. Balances are automatically written off when they are sent to collection agencies. Allowances are further adjusted for estimated recoveries of amounts sent to collection agencies based on historical collection experience, which is regularly monitored. Collection of consideration the Company expects to receive typically occurs within 180 days of billing. The following table represents clinical services net revenues and percentages by type of customer: Three months ended Three months ended Revenue category Third-party payer $ 7,907 55 % $ 10,860 56 % Patient self-pay 1,974 14 2,859 14 Medicare 2,751 19 2,985 15 HMO’s 1,665 12 2,830 15 Total $ 14,297 100 % $ 19,534 100 % For the three months ended October 31, 2018 and 2017, all of the Company’s services were provided within the United States. Products Revenue and royalty income Products revenues consist of the sale of single-use products used in the identification of genomic information and are recognized at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment. Payment terms for shipments to end-user and distributor customers may range from 30 to 90 days. Any claims for credit or return of goods may be made generally within 30 days of receipt. Revenues are reduced to reflect estimated credits and returns, although historically these adjustments have not been material. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products. Royalty income is based on net sales of the Company’s licensed products by a third party. We recognize royalty income in the period the sales occur based on third party evidence received. During the three months ended October 31, 2018 and 2017, royalty income was zero and $261, respectively. Product revenue by geography is as follows: October 31, October 31, United States $ 3,879 $ 3,736 Europe 1,342 1,632 Rest of world 1,742 1,713 Net product revenues $ 6,963 $ 7,081 |
Supplemental disclosure for sta
Supplemental disclosure for statement of cash flows | 3 Months Ended |
Oct. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow, Supplemental Disclosures [Text Block] | Note 4 - Supplemental disclosure for statement of cash flows For the three months ended October 31, 2018 and 2017, income taxes paid by the Company were $0 and $15, respectively . For the three months ended October 31, 2018 and 2017, interest paid by the Company was $12 and $25, respectively. For the three months ended October 31, 2018 and 2017, the Company did not finance any machinery or transportation equipment under installment loans. |
Inventories
Inventories | 3 Months Ended |
Oct. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory Disclosure [Text Block] | Note 5 – Inventories Inventories consist of the following: October 31, July 31, Raw materials $ 797 $ 754 Work in process 2,338 2,174 Finished products 4,453 4,350 $ 7,588 $ 7,278 |
Goodwill and intangible assets
Goodwill and intangible assets | 3 Months Ended |
Oct. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets Disclosure [Text Block] | Note 6 – Goodwill and intangible assets At October 31, 2018 and July 31, 2018, the Company’s carrying amount of goodwill, related to Clinical Services is $7,452. The Company’s change in the carrying amount of intangible assets, all in the Products segment is as follows: Gross Accumulated Amortization Net July 31, 2018 $ 27,347 $ (25,461 ) $ 1,886 Amortization expense — (247 ) (247 ) Foreign currency translation (137 ) 123 (14 ) October 31, 2018 $ 27,210 $ (25,585 ) $ 1,625 Intangible assets, all finite lived, consist of the following: October 31, 2018 July 31, 2018 Gross Accumulated Net Gross Accumulated Net Patents $ 11,027 $ (10,983 ) $ 44 $ 11,027 $ (10,980 ) $ 47 Customer relationships 11,699 (10,118 ) 1,581 11,836 (9,997 ) 1,839 Total $ 27,210 $ (25,585 ) $ 1,625 $ 27,347 $ (25,461 ) $ 1,886 At October 31, 2018, information with respect to intangibles assets acquired is as follows: Useful life assigned Weighted average remaining useful life Customer relationships 8 -15 years 2 years Other intangibles 10 years 4 years At October 31, 2018, the weighted average remaining useful life of intangible assets is approximately two years. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Oct. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Liabilities Disclosure [Text Block] | Note 7 – Accrued Liabilities Accrued liabilities consist of the following: October 31, July 31, Payroll, benefits, and commissions $ 5,919 $ 4,870 Legal fee expense 1,475 2,121 Professional fees 807 811 Other 2,647 2,252 $ 10,848 $ 10,054 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Oct. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Note 8 – Stockholders’ Equity Controlled Equity Offering The Company has a Controlled Equity Offering SM On September 1, 2017, the Company filed with the SEC a “shelf” registration and sales agreement prospectus covering the offering, issuance and sale of our Common Stock that may be issued and sold under the existing Sales Agreement in an aggregate amount of up to $19.15 million. A total of $150 million of securities may be sold under this shelf registration, which was declared effective September 15, 2017. During the three months ended October 31, 2018 and 2017, the Company did not sell any shares of Common Stock under the Sales Agreement. Share-based compensation On January 14, 2011, the Company’s stockholders approved the adoption of the 2011 Incentive Plan (the “2011 Plan”) which provides for the issuance of equity awards, including among others, options, restricted stock and restricted stock units for up to 3,000,000 Common Shares. The exercise price of options granted under the 2011 Plan, and consistent with other Plans, is equal to or greater than fair market value of the Common Stock on the date of grant. Unless terminated earlier by the Board of Directors, the 2011 Plan will terminate at the earliest of; (a) such time as no shares of Common Stock remain available for issuance under the 2011 Plan or (b) tenth anniversary of the effective date of the 2011 Plan. On January 5, 2018, the Company’s stockholders approved the amendment and restatement of the 2011 Plan to increase the number of shares available for issuance by 2,000,000 bringing the total number of shares available for award under the 2011 Plan to 5,000,000. Awards outstanding upon expiration of the 2011 Plan shall remain in effect until they have been exercised, terminated, or have expired. The amounts of share-based compensation expense recognized in the periods presented are as follows: Three months ended 2018 2017 Stock options $ 232 $ 202 Restricted stock 3 3 $ 235 $ 205 The following table sets forth the amount of expense related to share-based payment arrangements included in specific line items in the accompanying statements of operations: Three months ended 2018 2017 Selling, general and administrative 235 205 $ 235 $ 205 No excess tax benefits were recognized during the three month periods ended October 31, 2018 and 2017. Stock Option Plans The following table summarizes stock option activity during the three month period ended October 31, 2018: Options Weighted Weighted Aggregate Outstanding at July 31, 2018 1,882,116 $ 4.96 Awarded — $ — Exercised (10,000 ) $ 2.53 $ 41 Cancelled or expired (2,000 ) $ 4.51 Outstanding at end of period 1,870,116 $ 4.97 2.6 years $ 412 Exercisable at end of period 1,139,156 $ 4.29 1.6 years $ 142 As of October 31, 2018, the total future compensation cost related to non-vested options, not yet recognized in the statements of operations, was $0.9 million and the weighted average period over which the remaining expense of these awards is expected to be recognized is twelve months. The intrinsic value of in the money stock option awards at the end of the period represents the Company’s closing stock price on the last trading day of the period in excess of the exercise price multiplied by the number of options. Restricted Stock Awards A summary of the activity pursuant to the Company’s unvested restricted stock awards for the three months ended October 31, 2018 is as follows: Awards Weighted Outstanding at July 31, 2018 2,613 $ 1.74 Awarded — — Vested (175 ) $ (5.62 ) Forfeited — — Unvested at end of period 2,438 $ 1.47 The fair value of a restricted stock award is determined based on the closing stock price on the award date. As of October 31, 2018, there was approximately $0.1 million of unrecognized compensation cost related to unvested restricted stock-based compensation to be recognized over a weighted average remaining period of approximately twenty-seven months. The fair value of the awards that vested during the three months ended October 31, 2018 and 2017 was $1 and $10, respectively. The total number of shares available for grant as equity awards from the 2011 Incentive Plan is approximately 1,933,000 shares as of October 31, 2018. Performance Stock Units To better align the long-term interest of executives with growing U.S. practices, beginning in fiscal 2018, the Company granted long-term incentive awards in the form of time based stock options and performance-based restricted stock units (“Performance Stock Units” or “PSUs”). The PSUs earned will be determined over a three-year performance period. The primary performance metrics will be revenue and Adjusted EBITDA growth. Payouts based on revenue and adjusted EBITDA goals will be modified based on Total Shareholder Return (“TSR”) performance relative to Enzo’s peer group. During fiscal year 2018, the Company awarded a total of 32,000 PSUs to its executive officers, this award provides for the grant of shares of our common stock at the end of a three–year period based on the achievement of average revenue growth and adjusted EBITDA growth over that period. As of October 31, 2018, the Company did not accrue any compensation expense for these PSU’s as the three-year performance period has just begun and achievement of the growth goals is currently not probable. At the grant date, the fair value of this award was $141. |
Segment reporting
Segment reporting | 3 Months Ended |
Oct. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting Disclosure [Text Block] | Note 9 – 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 October 31, 2018 Clinical Products Therapeutics Other Consolidated Revenues 14,297 6,963 — — 21,260 Operating costs and expenses: Cost of revenues 10,968 3,271 — — 14,239 Research and development — 507 $ 221 — 728 Selling, general and administrative 6,060 2,924 — $ 1,986 10,970 Legal fee expense 36 7 — 1,258 1,301 Total operating costs and expenses 17,064 6,709 221 3,244 27,238 Operating income (loss) (2,767 ) 254 (221 ) (3,244 ) (5,978 ) Other income (expense): Interest (18 ) 16 — 276 274 Other 40 4 — 3 47 Foreign exchange loss — (324 ) — — (324 ) Loss before income taxes $ (2,745 ) $ (50 ) $ (221 ) $ (2,965 ) $ (5,981 ) Depreciation and amortization included above $ 403 $ 342 $ — $ 21 $ 766 Share-based compensation included in above: Selling, general and administrative 38 $ 24 — $ 173 235 Total $ 38 $ 24 $ — $ 173 $ 235 Capital expenditures $ 354 $ 52 $ — $ — $ 406 Three months ended October 31, 2017 Clinical Products Therapeutics Other Consolidated Revenues 19,534 7,342 — — 26,876 Operating costs and expenses: Cost of product revenues 12,042 3,389 — — 15,431 Research and development — 523 $ 224 — 747 Selling, general and administrative 6,095 2,628 — $ 2,182 10,905 Legal fee expense 13 3 — 415 431 Total operating costs and expenses 18,150 6,543 224 2,597 27,514 Operating income (loss) 1,384 799 (224 ) (2,597 ) (638 ) Other income (expense): Interest (25 ) 12 — 170 157 Other 14 7 — 15 36 Foreign exchange gain — (195 ) — — (195 ) Income (loss) before income taxes $ 1,373 $ 623 $ (224 ) $ (2,412 ) $ (640 ) Depreciation and amortization included above $ 404 $ 326 $ — $ 19 $ 749 Share-based compensation included in above: Selling, general and administrative 32 $ 23 — $ 150 205 Total $ 32 $ 23 $ — $ 150 $ 205 Capital expenditures $ 418 $ 43 $ — $ — $ 461 |
Contingencies
Contingencies | 3 Months Ended |
Oct. 31, 2018 | |
Loss Contingency [Abstract] | |
Contingencies Disclosure [Text Block] | Note 11 – Contingencies There are seven cases that are either pending or on appeal, which were originally brought by the Company in the United States District Court for the District of Delaware (“the Court”), alleging patent infringement against various companies. On June 28, 2017, the Court issued an opinion in the Gen-Probe case, granting Gen-Probe’s motion for summary judgment that the asserted claims of the ’180 patent are invalid for nonenablement. The Court entered final judgment of invalidity of the asserted claims of the ‘180 patent on July 19, 2017 in the Gen-Probe and Hologic cases. The Court entered partial final judgment of invalidity of the asserted claims of the ‘180 patent and stayed the remainder of the cases in the Becton Dickinson and Roche cases on July 31, 2017 and August 2, 2017, respectively. The Company filed notices of appeal in each of the Gen-Probe, Hologic, Becton Dickinson, and Roche cases, which were docketed by the United States Court of Appeals for the Federal Circuit (“Federal Circuit”). In the Abbott case, the parties agreed that the Court’s summary judgment ruling in the Gen-Probe case invalidated all of the ’180 patent claims asserted against the Abbott Defendants. On August 15, 2017, the Court granted Abbott’s motion for summary judgment that the asserted claims of the ’405 patent are invalid for nonenablement. On September 1, 2017, the Court entered final judgment of invalidity of the asserted claims of the ‘180 and ‘405 patents for nonenablement in the Abbott case. Enzo subsequently filed a notice of appeal in the Abbott case on September 14, 2017. The Federal Circuit docketed the appeal on September 15, 2017. The Federal Circuit consolidated the appeals from the Abbott, Becton Dickinson, Gen-Probe, Hologic, and Roche litigations (“Consolidated Appeals”). We disagree with the Court’s invalidity decisions regarding the ‘180 and ‘405 patents in the pending cases as set forth in our opening brief in the Consolidated Appeals pending in the Federal Circuit filed on November 28, 2017. In the Consolidated Appeals, we have asked the Federal Circuit to reverse the Court’s grants of final and summary judgment of invalidity of the asserted claims of the ‘180 and ‘405 patents and to remand the cases against Abbott, Becton Dickinson, Gen-Probe, Hologic, and Roche to the Court. Briefing is now complete in the Consolidated Appeals. The Federal Circuit has scheduled an oral argument in the Consolidated Appeals for January 7, 2019. In the other two cases involving Hologic, one of the cases is stayed (Hologic II), while the other case (Hologic III) that involves U.S. Patent No. 6,221,581 (“the ‘581 patent”) is on appeal to the Federal Circuit. The Court issued a claim construction order on October 15, 2018. On October 31, 2018, Enzo and Hologic entered a stipulation that the asserted claims of the ‘581 Patent are not infringed under the Court’s claim construction for certain of the claim terms. The Court entered final judgment of non-infringement on November 5, 2018. Enzo filed a notice of appeal on November 28, 2018. The Federal Circuit docketed the appeal and issued a schedule on December 3, 2018. The schedule is as follows: (1) Entry of Appearance is due on 12/17/2018; (2) Certificate of Service is due on 12/17/2018; (3) Docketing Statement is due on 12/17/2018; and (4) Enzo’s opening brief is due on 2/1/2019. Regarding Hologic’s petition requesting institution of an inter partes review proceeding of the ‘581 patent filed with the United States Patent and Trademark Office (“PTO”), the Patent Trial and Appeals Board (“the Board”) denied institution of Hologic’s petition on April 18, 2018. On May 18, 2018, Hologic filed with the Board, a request for rehearing of the order denying institution of inter partes review of the ‘581 patent. The Board denied Hologic’s request for rehearing on November 28, 2018. The Company and Enzo Life Sciences are engaged in litigation in the United States District Court for the Southern District of New York against Roche Diagnostic GmbH and its related company Roche Molecular Systems, Inc. (“Roche”), as declaratory judgment defendants. This case was commenced in May 2004. Roche seeks a declaratory judgment of non-breach of contract and patent invalidity against the Company and Enzo Life Sciences. Roche has also asserted tort claims against the Company and Enzo Life Sciences. The Company and Enzo Life Sciences have asserted breach of contract and patent infringement causes of action against Roche. There has been extensive discovery. In 2011, Roche moved for summary judgment of non-infringement regarding the Company’s patent claims. In 2012, the motion was granted in part and denied in part. In December 2012, Roche moved for summary judgment on the Company’s non-patent claims. Additional discovery was taken and the Company responded to the motions in May 2013. In December 2013, the Court granted in part and denied in part Roche’s summary judgment motion. In October 2014, the Court ordered that damages discovery concerning the Company’s remaining contract and patent claims and Roche’s claims should be completed by the end of January 2015, and expert discovery should be completed following the Court’s claim construction ruling concerning the Company’s patent infringement claim against Roche. Roche dropped its tort claims during damages discovery. On October 2, 2017, the Court issued its claim construction ruling. On September 8, 2018, the Court issued an order (i) directing that motions for summary judgment should be filed on October 10, 2018 and a proposed pretrial order by February 22, 2019, and (ii) scheduling an April 8, 2019 trial. On October 10, 2018, the parties filed their motions for summary judgment and also filed motions to preclude. Those motions are now fully briefed. The Company and Enzo Life Sciences intend to vigorously press their remaining claims and contest the claims against them. There can be no assurance that the Company will be successful in these litigations. Even if the Company is not successful, management does not believe that there will be a significant adverse monetary impact on the Company. The Company is party to other claims, legal actions, complaints, and contractual disputes that arise in the ordinary course of business. The Company believes that any liability that may ultimately result from the resolution of these matters will not, individually or in the aggregate, have a material adverse effect on its financial position or results of operations |
Subsequent Event
Subsequent Event | 3 Months Ended |
Oct. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Note 12 – Subsequent Event As part of implementing our growth strategy, on November 27, 2018, we closed on the $6 million purchase of a new facility with nearly 36,000 square feet adjacent to our current campus in Farmingdale, NY to be used for manufacturing and distributing our low cost, diagnostic platform products and related services. This facility extends Enzo’s New York campus to nearly 101,000 square feet, complementing our existing sites in Michigan, Switzerland, France and Belgium. In connection with the purchase, we entered into a fee mortgage security agreement with Citibank, N.A., the mortgagee in the amount of $4.5 million. The mortgage is for a term of 10 years, bears a fixed interest rate of 5.09% per annum, and requires monthly principal and interest payments of $30,106. The mortgage includes financial covenants requiring adherence to certain financial ratios. We have Town of Babylon Industrial Development Agency (IDA) commitments that will provide significant multi-year tax abatements and additional incentives with respect to our entire Farmingdale campus We assumed an operating lease for the facility from the seller. The current tenant may occupy the facility until December 2019, unless it is given or gives notice to vacate prior to that date. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Oct. 31, 2018 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements, Policy [Policy Text Block] | Adoption of New Accounting Standards On August 1, 2018, the Company adopted a new accounting standard issued by the Financial Accounting Standards Board (“FASB”) on revenue recognition using the full retrospective method. This new accounting standard outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific revenue recognition guidance from GAAP. The core principle of the revenue recognition standard is to require an entity to recognize as revenue the amount that reflects the consideration which it expects to be entitled to when control of goods or services are transferred to its customers. As a result of the Company’s adoption of this standard, the majority of the amounts that were historically classified as bad debt expense, primarily related to patient responsibility, are now considered an implicit price concession in determining net revenues from clinical services. Accordingly, the Company reports estimated uncollectible balances associated with patient responsibility as a reduction of the transaction price and therefore as a reduction in net revenues, when historically these amounts were classified and separately reported as a provision for uncollectible accounts receivable. The adoption of this standard has no impact on revenues reported for life sciences products. The adoption of this new accounting standard resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. For further details, see Note 3. The impact of the adoption of the standard on consolidated operations and cash flows is presented in the table below: Adoption of the standard impacted the Company’s reported results for the three months ended October 31, 2017 as follows: As Previously Reported Adjustment for New Reclassification of Residual As Restated Consolidated Statements of Operations: Total Revenues $27,676 $(800) — $26,876 Provision for uncollectible accounts receivable 814 (800) $(14) — Selling, general and administrative expenses 10,891 — 14 10,905 Net loss (640) — — $(640) Consolidated Statements of Cash Flows: Provision for uncollectible accounts receivable 814 (814) — — Changes in operating assets and liabilities: Accounts receivable (101) 814 — 713 Balance, July 31, 2018 Consolidated balance sheet: Accounts receivable 15,815 (2,523) — 13,292 Less: Allowance for doubtful accounts 2,668 (2,523) — 145 Accounts receivable, net of allowance for doubtful accounts 13,147 — — 13,147 On August 1, 2018, the Company adopted a new accounting standard issued by FASB which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Adoption of this standard requires amendments in the update applied prospectively to an award modified on or after the adoption date. For the foreseeable future, any excess income tax benefits or deficiencies from stock-based compensation, which would be recognized as discrete items within income tax expense rather than additional paid in capital, will be offset by an equivalent adjustment to the deferred tax valuation allowance. Accordingly, adoption of this standard had no impact on our reported operations |
Pronouncements Issued but Not Yet Adopted [Policy Text Block] | Pronouncements Issued but Not Yet Adopted In February 2016, FASB issued ASU No. 2016-02 – Leases (Topic 842), We believe the adoption of this standard will materially impact our consolidated financial statements by significantly increasing our non-current assets and non-current liabilities on our consolidated balance sheets when we record the right of use assets and related lease liabilities for our existing operating leases. We will recognize expense in the consolidated statement of operations similar to current lease accounting, in the cost of sales and selling, general and administrative. In June 2016, FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses (Topic 326) |
Concentration Risk, Credit Risk, Policy [Policy Text Block] | Concentration Risk Other than the Medicare program, one provider whose programs are included in the “Third-party payers” and “Health Maintenance Organizations” (“HMO’s”) categories represents approximately 41% and 40% of Clinical Services net revenue for the three months ended October 31, 2018 and 2017 respectively. Other than the Medicare program, three providers whose programs are included in either “Third-party payers” and/or “Health Maintenance Organizations” (“HMO’s”) categories represent approximately 37% and 47% of Clinical Services net receivables for the three months ended October 31, 2018 and 2017 respectively. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block] | Adoption of the standard impacted the Company’s reported results for the three months ended October 31, 2017 as follows: As Previously Reported Adjustment for New Reclassification of Residual As Restated Consolidated Statements of Operations: Total Revenues $27,676 $(800) — $26,876 Provision for uncollectible accounts receivable 814 (800) $(14) — Selling, general and administrative expenses 10,891 — 14 10,905 Net loss (640) — — $(640) Consolidated Statements of Cash Flows: Provision for uncollectible accounts receivable 814 (814) — — Changes in operating assets and liabilities: Accounts receivable (101) 814 — 713 Balance, July 31, 2018 Consolidated balance sheet: Accounts receivable 15,815 (2,523) — 13,292 Less: Allowance for doubtful accounts 2,668 (2,523) — 145 Accounts receivable, net of allowance for doubtful accounts 13,147 — — 13,147 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule Of Segment Revenue And Revenue Percentage [Table Text Block] | The following table represents clinical services net revenues and percentages by type of customer: Three months ended Three months ended Revenue category Third-party payer $ 7,907 55 % $ 10,860 56 % Patient self-pay 1,974 14 2,859 14 Medicare 2,751 19 2,985 15 HMO’s 1,665 12 2,830 15 Total $ 14,297 100 % $ 19,534 100 % |
Schedule of Segment Revenue By Geographical [Table Text Block] | Product revenue by geography is as follows: October 31, October 31, United States $ 3,879 $ 3,736 Europe 1,342 1,632 Rest of world 1,742 1,713 Net product revenues $ 6,963 $ 7,081 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current [Table Text Block] | Inventories consist of the following: October 31, July 31, Raw materials $ 797 $ 754 Work in process 2,338 2,174 Finished products 4,453 4,350 $ 7,588 $ 7,278 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived Intangible Assets [Table Text Block] | The Company’s change in the carrying amount of intangible assets, all in the Products segment is as follows: Gross Accumulated Amortization Net July 31, 2018 $ 27,347 $ (25,461 ) $ 1,886 Amortization expense — (247 ) (247 ) Foreign currency translation (137 ) 123 (14 ) October 31, 2018 $ 27,210 $ (25,585 ) $ 1,625 |
Schedule of Intangible Assets [Table Text Block] | Intangible assets, all finite lived, consist of the following: October 31, 2018 July 31, 2018 Gross Accumulated Net Gross Accumulated Net Patents $ 11,027 $ (10,983 ) $ 44 $ 11,027 $ (10,980 ) $ 47 Customer relationships 11,699 (10,118 ) 1,581 11,836 (9,997 ) 1,839 Total $ 27,210 $ (25,585 ) $ 1,625 $ 27,347 $ (25,461 ) $ 1,886 |
Schedule of Useful Lives For Acquisitions [Table Text Block] | At October 31, 2018, information with respect to intangibles assets acquired is as follows: Useful life assigned Weighted average remaining useful life Customer relationships 8 -15 years 2 years Other intangibles 10 years 4 years |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities [Table Text Block] | Accrued liabilities consist of the following: October 31, July 31, Payroll, benefits, and commissions $ 5,919 $ 4,870 Legal fee expense 1,475 2,121 Professional fees 807 811 Other 2,647 2,252 $ 10,848 $ 10,054 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan [Table Text Block] | The amounts of share-based compensation expense recognized in the periods presented are as follows: Three months ended 2018 2017 Stock options $ 232 $ 202 Restricted stock 3 3 $ 235 $ 205 |
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | The following table sets forth the amount of expense related to share-based payment arrangements included in specific line items in the accompanying statements of operations: Three months ended 2018 2017 Selling, general and administrative 235 205 $ 235 $ 205 |
Share-based Compensation, Stock Options, Activity [Table Text Block] | The following table summarizes stock option activity during the three month period ended October 31, 2018: Options Weighted Weighted Aggregate Outstanding at July 31, 2018 1,882,116 $ 4.96 Awarded — $ — Exercised (10,000 ) $ 2.53 $ 41 Cancelled or expired (2,000 ) $ 4.51 Outstanding at end of period 1,870,116 $ 4.97 2.6 years $ 412 Exercisable at end of period 1,139,156 $ 4.29 1.6 years $ 142 |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | A summary of the activity pursuant to the Company’s unvested restricted stock awards for the three months ended October 31, 2018 is as follows: Awards Weighted Outstanding at July 31, 2018 2,613 $ 1.74 Awarded — — Vested (175 ) $ (5.62 ) Forfeited — — Unvested at end of period 2,438 $ 1.47 |
Segment reporting (Tables)
Segment reporting (Tables) | 3 Months Ended |
Oct. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | The following financial information represents the operating results of the reportable segments of the Company: Three months ended October 31, 2018 Clinical Products Therapeutics Other Consolidated Revenues 14,297 6,963 — — 21,260 Operating costs and expenses: Cost of revenues 10,968 3,271 — — 14,239 Research and development — 507 $ 221 — 728 Selling, general and administrative 6,060 2,924 — $ 1,986 10,970 Legal fee expense 36 7 — 1,258 1,301 Total operating costs and expenses 17,064 6,709 221 3,244 27,238 Operating income (loss) (2,767 ) 254 (221 ) (3,244 ) (5,978 ) Other income (expense): Interest (18 ) 16 — 276 274 Other 40 4 — 3 47 Foreign exchange loss — (324 ) — — (324 ) Loss before income taxes $ (2,745 ) $ (50 ) $ (221 ) $ (2,965 ) $ (5,981 ) Depreciation and amortization included above $ 403 $ 342 $ — $ 21 $ 766 Share-based compensation included in above: Selling, general and administrative 38 $ 24 — $ 173 235 Total $ 38 $ 24 $ — $ 173 $ 235 Capital expenditures $ 354 $ 52 $ — $ — $ 406 Three months ended October 31, 2017 Clinical Products Therapeutics Other Consolidated Revenues 19,534 7,342 — — 26,876 Operating costs and expenses: Cost of product revenues 12,042 3,389 — — 15,431 Research and development — 523 $ 224 — 747 Selling, general and administrative 6,095 2,628 — $ 2,182 10,905 Legal fee expense 13 3 — 415 431 Total operating costs and expenses 18,150 6,543 224 2,597 27,514 Operating income (loss) 1,384 799 (224 ) (2,597 ) (638 ) Other income (expense): Interest (25 ) 12 — 170 157 Other 14 7 — 15 36 Foreign exchange gain — (195 ) — — (195 ) Income (loss) before income taxes $ 1,373 $ 623 $ (224 ) $ (2,412 ) $ (640 ) Depreciation and amortization included above $ 404 $ 326 $ — $ 19 $ 749 Share-based compensation included in above: Selling, general and administrative 32 $ 23 — $ 150 205 Total $ 32 $ 23 $ — $ 150 $ 205 Capital expenditures $ 418 $ 43 $ — $ — $ 461 |
Basis of Presentation (Details)
Basis of Presentation (Details) - Third Party Payer And Health Maintenance Organizations [Member] - Clinical Services [Member] | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Sales Revenue, Net [Member] | ||
Basis of Presentation (Details) [Line Items] | ||
Concentration Risk, Percentage | 41.00% | 40.00% |
Accounts Receivable [Member] | ||
Basis of Presentation (Details) [Line Items] | ||
Concentration Risk, Percentage | 37.00% | 47.00% |
Basis of Presentation (Detail_2
Basis of Presentation (Details) - Impact to consolidate statements of operations due to adoption of ASU - USD ($) $ in Thousands | 3 Months Ended | ||
Oct. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2018 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total Revenues | $ 21,260 | $ 26,876 | |
Selling, general and administrative expenses | 10,970 | 10,905 | |
Net loss | (5,981) | (640) | |
Consolidated Statements of Cash Flows: | |||
Changes in operating assets and liabilities: Accounts receivable | 312 | 713 | |
Accounts receivable | $ 13,292 | ||
Less: Allowance for doubtful accounts | 145 | ||
Accounts receivable, net of allowance for doubtful accounts | $ 12,836 | 13,147 | |
Previously Reported [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total Revenues | 27,676 | ||
Provision for uncollectible accounts receivable | 814 | ||
Selling, general and administrative expenses | 10,891 | ||
Net loss | (640) | ||
Consolidated Statements of Cash Flows: | |||
Provision for uncollectible accounts receivable | 814 | ||
Changes in operating assets and liabilities: Accounts receivable | (101) | ||
Accounts receivable | 15,815 | ||
Less: Allowance for doubtful accounts | 2,668 | ||
Accounts receivable, net of allowance for doubtful accounts | 13,147 | ||
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Total Revenues | (800) | ||
Provision for uncollectible accounts receivable | (800) | ||
Consolidated Statements of Cash Flows: | |||
Provision for uncollectible accounts receivable | (814) | ||
Changes in operating assets and liabilities: Accounts receivable | 814 | ||
Accounts receivable | (2,523) | ||
Less: Allowance for doubtful accounts | $ (2,523) | ||
Accounting Standards Update 2014-09 [Member] | Reclassification Of Residual [Member] | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Provision for uncollectible accounts receivable | (14) | ||
Selling, general and administrative expenses | $ 14 |
Net income (loss) per share (De
Net income (loss) per share (Details) - shares | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Unvested Restricted Stock [Member] | In the Money Stock Options [Member] | ||
Net income (loss) per share (Details) [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 135,000 | 931,000 |
Outstanding Options [Member] | Out of the Money Stock Options [Member] | ||
Net income (loss) per share (Details) [Line Items] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,330,000 | 0 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Sales Revenue, Net [Member] | ||
Revenue Recognition (Details) [Line Items] | ||
Concentration Risk, Percentage | 67.00% | 73.00% |
Third Party Payer And Health Maintenance Organizations [Member] | Minimum [Member] | ||
Revenue Recognition (Details) [Line Items] | ||
Billing Information Filing Deadline Period | 60 days | |
Third Party Payer And Health Maintenance Organizations [Member] | Maximum [Member] | ||
Revenue Recognition (Details) [Line Items] | ||
Billing Information Filing Deadline Period | 90 days | |
Government Payer Medicare [Member] | ||
Revenue Recognition (Details) [Line Items] | ||
Billing Information Filing Deadline Period | 60 days | |
Patient self-pay [Member] | ||
Revenue Recognition (Details) [Line Items] | ||
Billing Period | 210 days | |
Receivable Collection Period | 180 days | |
Products Revenue And Royalty Income [Member] | ||
Revenue Recognition (Details) [Line Items] | ||
Claim Period For Return Of Goods | 30 days | |
Royalty Income, Nonoperating (in Dollars) | $ 0 | $ 261 |
Products Revenue And Royalty Income [Member] | Minimum [Member] | ||
Revenue Recognition (Details) [Line Items] | ||
Receivable Collection Period | 30 days | |
Products Revenue And Royalty Income [Member] | Maximum [Member] | ||
Revenue Recognition (Details) [Line Items] | ||
Receivable Collection Period | 90 days |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Segment's net revenues and percentages - Service [Member] - Clinical Labs [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Revenue Recognition (Details) - Segment's net revenues and percentages [Line Items] | ||
Revenue Services Net | $ 14,297 | $ 19,534 |
Revenue Services Net Percentage | 100.00% | 100.00% |
Third-Party Payer [Member] | ||
Revenue Recognition (Details) - Segment's net revenues and percentages [Line Items] | ||
Revenue Services Net | $ 7,907 | $ 10,860 |
Revenue Services Net Percentage | 55.00% | 56.00% |
Patient self-pay [Member] | ||
Revenue Recognition (Details) - Segment's net revenues and percentages [Line Items] | ||
Revenue Services Net | $ 1,974 | $ 2,859 |
Revenue Services Net Percentage | 14.00% | 14.00% |
Medicare [Member] | ||
Revenue Recognition (Details) - Segment's net revenues and percentages [Line Items] | ||
Revenue Services Net | $ 2,751 | $ 2,985 |
Revenue Services Net Percentage | 19.00% | 15.00% |
HMO’s [Member] | ||
Revenue Recognition (Details) - Segment's net revenues and percentages [Line Items] | ||
Revenue Services Net | $ 1,665 | $ 2,830 |
Revenue Services Net Percentage | 12.00% | 15.00% |
Revenue Recognition (Details)_2
Revenue Recognition (Details) - Schedule Product revenue by geography - Life Sciences [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Revenue Recognition (Details) - Schedule Product revenue by geography [Line Items] | ||
Net product revenues | $ 6,963 | $ 7,081 |
UNITED STATES | ||
Revenue Recognition (Details) - Schedule Product revenue by geography [Line Items] | ||
Net product revenues | 3,879 | 3,736 |
Europe [Member] | ||
Revenue Recognition (Details) - Schedule Product revenue by geography [Line Items] | ||
Net product revenues | 1,342 | 1,632 |
Rest of world [Member] | ||
Revenue Recognition (Details) - Schedule Product revenue by geography [Line Items] | ||
Net product revenues | $ 1,742 | $ 1,713 |
Supplemental disclosure for s_2
Supplemental disclosure for statement of cash flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Supplemental Cash Flow Elements [Abstract] | ||
Income Taxes Paid | $ 0 | $ 15 |
Interest Paid | 12 | 25 |
Installment Loans Financed Amount | $ 0 | $ 0 |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventory, current - USD ($) $ in Thousands | Oct. 31, 2018 | Jul. 31, 2018 |
Schedule of inventory, current [Abstract] | ||
Raw materials | $ 797 | $ 754 |
Work in process | 2,338 | 2,174 |
Finished products | 4,453 | 4,350 |
$ 7,588 | $ 7,278 |
Goodwill and intangible asset_2
Goodwill and intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Jul. 31, 2018 | |
Goodwill and intangible assets (Details) [Line Items] | ||
Goodwill | $ 7,452 | $ 7,452 |
Intangible Assets, Amortization Period [Member] | ||
Goodwill and intangible assets (Details) [Line Items] | ||
Finite-Lived Intangible Asset, Useful Life | 2 years | |
Clinical Services [Member] | ||
Goodwill and intangible assets (Details) [Line Items] | ||
Goodwill | $ 7,452 | $ 7,452 |
Goodwill and intangible asset_3
Goodwill and intangible assets (Details) - Schedule of indefinite-lived intangible assets - Products [Member] $ in Thousands | 3 Months Ended |
Oct. 31, 2018USD ($) | |
Indefinite-lived Intangible Assets [Line Items] | |
Gross, Beginning Balance | $ 27,347 |
Accumulated Amortization, Beginning Balance | (25,461) |
Net, Beginning Balance | 1,886 |
Amortization expense, Accumulated Amortization | (247) |
Amortization expense, Net | (247) |
Foreign currency translation, Gross | (137) |
Foreign currency translation, Accumulated Amortization | 123 |
Foreign currency translation, Net | (14) |
Gross, Ending Balance | 27,210 |
Accumulated Amortization, Ending Balance | (25,585) |
Net, Ending Balance | $ 1,625 |
Goodwill and intangible asset_4
Goodwill and intangible assets (Details) - Schedule of intangible assets - USD ($) $ in Thousands | Oct. 31, 2018 | Jul. 31, 2018 |
Goodwill and intangible assets (Details) - Schedule of intangible assets [Line Items] | ||
Finite-lived intangible assets, Gross | $ 27,210 | $ 27,347 |
Finite-lived intangible assets, Accumulated Amortization | (25,585) | (25,461) |
Finite-lived intangible assets, Net | 1,625 | 1,886 |
Patents [Member] | ||
Goodwill and intangible assets (Details) - Schedule of intangible assets [Line Items] | ||
Finite-lived intangible assets, Gross | 11,027 | 11,027 |
Finite-lived intangible assets, Accumulated Amortization | (10,983) | (10,980) |
Finite-lived intangible assets, Net | 44 | 47 |
Customer Relationships [Member] | ||
Goodwill and intangible assets (Details) - Schedule of intangible assets [Line Items] | ||
Finite-lived intangible assets, Gross | 11,699 | 11,836 |
Finite-lived intangible assets, Accumulated Amortization | (10,118) | (9,997) |
Finite-lived intangible assets, Net | $ 1,581 | $ 1,839 |
Goodwill and intangible asset_5
Goodwill and intangible assets (Details) - Schedule of useful lives for acquisitions | 3 Months Ended |
Oct. 31, 2018 | |
Customer Relationships [Member] | |
Goodwill and intangible assets (Details) - Schedule of useful lives for acquisitions [Line Items] | |
Weighted average remaining useful life | 2 years |
Customer Relationships [Member] | Minimum [Member] | |
Goodwill and intangible assets (Details) - Schedule of useful lives for acquisitions [Line Items] | |
Useful life assigned | 8 years |
Customer Relationships [Member] | Maximum [Member] | |
Goodwill and intangible assets (Details) - Schedule of useful lives for acquisitions [Line Items] | |
Useful life assigned | 15 years |
Other Intangible Assets [Member] | |
Goodwill and intangible assets (Details) - Schedule of useful lives for acquisitions [Line Items] | |
Useful life assigned | 10 years |
Weighted average remaining useful life | 4 years |
Accrued Liabilities (Details) -
Accrued Liabilities (Details) - Schedule of Accrued liabilities - USD ($) $ in Thousands | Oct. 31, 2018 | Jul. 31, 2018 |
Schedule of Accrued liabilities [Abstract] | ||
Payroll, benefits, and commissions | $ 5,919 | $ 4,870 |
Legal fee expense | 1,475 | 2,121 |
Professional fees | 807 | 811 |
Other | 2,647 | 2,252 |
$ 10,848 | $ 10,054 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jan. 05, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2018 | Dec. 31, 2014 | Jan. 14, 2011 |
Stockholders' Equity (Details) [Line Items] | ||||||
Common Stock, Par or Stated Value Per Share (in Dollars per share) | $ 0.01 | $ 0.01 | ||||
Percentage of Commission Payable on Equity Offering | 3.00% | |||||
Maximum Offering Price Under Sales Agreement | $ 20,000,000 | $ 20,000,000 | ||||
Excess Tax Benefit from Share-based Compensation, Financing Activities | 0 | $ 0 | ||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options | $ 900,000 | |||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 12 months | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 1,000 | $ 10,000 | ||||
Restricted Stock [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ 100,000 | |||||
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Outstanding Weighted Average Remaining Contractual Terms | 27 months | |||||
Performance Shares [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||
2011 Plan [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares) | 5,000,000 | 3,000,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized (in Shares) | 2,000,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares) | 1,933,000 | |||||
Common Stock [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Authorized Common Stock That May Be Issued And Sold Under Sales Agreement | $ 19,150,000 | |||||
Securities That May Be Sold Under The Agreement | 150,000,000 | |||||
Executive Officers [Member] | Performance Shares [Member] | ||||||
Stockholders' Equity (Details) [Line Items] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 141,000 | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 3 years | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period (in Shares) | 32,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of share-based compensation expense - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Stockholders' Equity (Details) - Schedule of share-based compensation expense [Line Items] | ||
Stock Based Compensation Expense | $ 235 | $ 205 |
Options [Member] | ||
Stockholders' Equity (Details) - Schedule of share-based compensation expense [Line Items] | ||
Stock Based Compensation Expense | 232 | 202 |
Restricted Stocks [Member] | ||
Stockholders' Equity (Details) - Schedule of share-based compensation expense [Line Items] | ||
Stock Based Compensation Expense | $ 3 | $ 3 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of share-based compensation expense by line item - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based Payment Arrangement | $ 235 | $ 205 |
Selling, General and Administrative Expenses [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Share-based Payment Arrangement | $ 235 | $ 205 |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of stock option plans $ / shares in Units, $ in Thousands | 3 Months Ended |
Oct. 31, 2018USD ($)$ / sharesshares | |
Schedule of stock option plans [Abstract] | |
Outstanding at July 31, 2018 | shares | 1,882,116 |
Outstanding at July 31, 2018 | $ / shares | $ 4.96 |
Exercised | shares | (10,000) |
Exercised | $ / shares | $ 2.53 |
Exercised | $ | $ 41 |
Cancelled or expired | shares | (2,000) |
Cancelled or expired | $ / shares | $ 4.51 |
Outstanding at end of period | shares | 1,870,116 |
Outstanding at end of period | $ / shares | $ 4.97 |
Outstanding at end of period | 2 years 219 days |
Outstanding at end of period | $ | $ 412 |
Exercisable at end of period | shares | 1,139,156 |
Exercisable at end of period | $ / shares | $ 4.29 |
Exercisable at end of period | 1 year 219 days |
Exercisable at end of period | $ | $ 142 |
Stockholders' Equity (Details_4
Stockholders' Equity (Details) - Schedule of restricted stock awards | 3 Months Ended |
Oct. 31, 2018$ / sharesshares | |
Schedule of restricted stock awards [Abstract] | |
Outstanding at July 31, 2018 | shares | 2,613 |
Outstanding at July 31, 2018 | $ / shares | $ 1.74 |
Vested | shares | (175) |
Vested | $ / shares | $ (5.62) |
Unvested at end of period | shares | 2,438 |
Unvested at end of period | $ / shares | $ 1.47 |
Segment reporting (Details)
Segment reporting (Details) | 3 Months Ended |
Oct. 31, 2018 | |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 3 |
Segment reporting (Details) - S
Segment reporting (Details) - Schedule of segment reporting information, by segment - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2018 | Oct. 31, 2017 | |
Clinical Services [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 14,297 | $ 19,534 |
Cost of revenues | 10,968 | 12,042 |
Selling, general and administrative | 6,060 | 6,095 |
Legal fee expense | 36 | 13 |
Total operating costs and expenses | 17,064 | 18,150 |
Operating income (loss) | (2,767) | 1,384 |
Interest | (18) | (25) |
Other | 40 | 14 |
Income (loss) before income taxes | (2,745) | 1,373 |
Depreciation and amortization included above | 403 | 404 |
Capital expenditures | 354 | 418 |
Clinical Services [Member] | Selling, General and Administrative Expenses [Member] | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation | 38 | 32 |
Clinical Services [Member] | Total [Member] | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation | 38 | 32 |
Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 6,963 | 7,342 |
Cost of revenues | 3,271 | 3,389 |
Research and development | 507 | 523 |
Selling, general and administrative | 2,924 | 2,628 |
Legal fee expense | 7 | 3 |
Total operating costs and expenses | 6,709 | 6,543 |
Operating income (loss) | 254 | 799 |
Interest | 16 | 12 |
Other | 4 | 7 |
Foreign exchange loss | (324) | (195) |
Income (loss) before income taxes | (50) | 623 |
Depreciation and amortization included above | 342 | 326 |
Capital expenditures | 52 | 43 |
Products [Member] | Selling, General and Administrative Expenses [Member] | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation | 24 | 23 |
Products [Member] | Total [Member] | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation | 24 | 23 |
Consolidated [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 21,260 | 26,876 |
Cost of revenues | 14,239 | 15,431 |
Research and development | 728 | 747 |
Selling, general and administrative | 10,970 | 10,905 |
Legal fee expense | 1,301 | 431 |
Total operating costs and expenses | 27,238 | 27,514 |
Operating income (loss) | (5,978) | (638) |
Interest | 274 | 157 |
Other | 47 | 36 |
Foreign exchange loss | (324) | (195) |
Income (loss) before income taxes | (5,981) | (640) |
Depreciation and amortization included above | 766 | 749 |
Capital expenditures | 406 | 461 |
Consolidated [Member] | Selling, General and Administrative Expenses [Member] | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation | 235 | 205 |
Consolidated [Member] | Total [Member] | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation | 235 | 205 |
Therapeutics [Member] | ||
Segment Reporting Information [Line Items] | ||
Research and development | 221 | 224 |
Total operating costs and expenses | 221 | 224 |
Operating income (loss) | (221) | (224) |
Income (loss) before income taxes | (221) | (224) |
Other Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Selling, general and administrative | 1,986 | 2,182 |
Legal fee expense | 1,258 | 415 |
Total operating costs and expenses | 3,244 | 2,597 |
Operating income (loss) | (3,244) | (2,597) |
Interest | 276 | 170 |
Other | 3 | 15 |
Income (loss) before income taxes | (2,965) | (2,412) |
Depreciation and amortization included above | 21 | 19 |
Other Segments [Member] | Selling, General and Administrative Expenses [Member] | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation | 173 | 150 |
Other Segments [Member] | Total [Member] | ||
Segment Reporting Information [Line Items] | ||
Share-based compensation | $ 173 | $ 150 |
Contingencies (Details)
Contingencies (Details) | 3 Months Ended |
Oct. 31, 2018 | |
Loss Contingency [Abstract] | |
Number Of Pending Cases | 7 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event [Member] | 1 Months Ended |
Nov. 27, 2018USD ($)ft² | |
Mortgages [Member] | |
Subsequent Event (Details) [Line Items] | |
Debt Instrument, Face Amount | $ 4,500,000 |
Debt Instrument Maturity Period | 10 years |
Debt Instrument, Interest Rate, Stated Percentage | 5.09% |
Debt Instrument, Periodic Payment | $ 30,106 |
Debt Instrument, Covenant Compliance | The mortgage includes financialcovenants requiring adherence to certain financial ratios |
Farmingdale, NY [Member] | |
Subsequent Event (Details) [Line Items] | |
Payments to Acquire Property, Plant, and Equipment | $ 6,000,000 |
Area of Land (in Square Feet) | ft² | 36,000 |
Enzo New York [Member] | |
Subsequent Event (Details) [Line Items] | |
Area of Land (in Square Feet) | ft² | 101,000 |