SDIX Reports Second Quarter 2010 Results

  SDIX Reports Second Quarter 2010 Results

       Net Loss Decreases 71%. Progress Made in Life Science Business.

Business Wire

NEWARK, Del. -- August 04, 2010

SDIX (Nasdaq:SDIX), a leading provider of biotechnology-based products and
services for a broad range of life science, biotechnology, diagnostic and food
safety applications, today reported financial results for the second quarter
ended June 30, 2010.

Revenues for the quarter ended June 30, 2010 were $6.8 million compared to
$6.9 million for the same period in 2009. Year-to-date revenues for the six
months ended June 30, 2010 were $13.5 million in 2010, compared to $13.8
million for the same period in 2009.

Second Quarter and Recent Highlights

  *Launched NOVUS BIOLOGICALS and SDIX Partnership – Novus has seen good
    initial sales from the over 800 pre-made GAT™ Polyclonal Antibodies
    provided for their catalog. A joint team is collaborating to create
    additional novel antibodies using GAT to targets selected by Novus for
    inclusion in their catalog offering.
  *Wayne P. Yetter joined SDIX’s Board of Directors, effective May 18, 2010 -
    currently Chief Executive Officer of ProActive for Patients Media, Inc.,
    Mr. Yetter has a 30-year career in the pharmaceutical industry, with
    executive positions at Pfizer, Merck, Astra-Merck (now AstraZeneca) and
    Novartis.
  *The RapidChek® SELECT™ Salmonella Enteritidis testing system was
    commercially launched - applicable to both egg and poultry industries,
    this product is designed specifically to help U.S. commercial egg
    producers comply with new FDA regulations that require them to test
    poultry houses and eggs for Salmonella Enteritidis. Initial orders have
    been placed, and SDIX has begun shipments while final regulatory
    validations are underway.
  *Announced multi-year collaboration with Banyan Biomarkers related to
    biomarker discovery work in the detection of traumatic brain injury – SDIX
    will provide antibody production from Banyan’s novel set of cell lines and
    will collaborate with them to utilize our complete range of
    immunosolutions in the development of additional biomolecules for this
    critical research.

Mr. Francis DiNuzzo, the Company’s President and CEO, said, “Our results for
the second quarter of 2010, though not demonstrating increased revenue year
over year, continue to show improvement in our operating model and the impact
of our strategic focus on Life Science and Food Safety. A significant portion
of our efforts and resources are now focused on driving growth in our target
markets. We are seeing the benefits with improved performance in Life Science,
and while Food Safety revenue was down year over year, we believe that the
outlook for the remainder of the year indicates an improving picture. We
recently launched a new testing system that will help U.S. commercial egg
producers implement the FDA-mandated testing for Salmonella Enteritidis. We
are also collaborating with Banyan Biomarkers in their biomarker work for
traumatic brain injury detection. These new developments exemplify the inroads
we are making in our target markets.”

Financials

Gross profit (defined as total revenues less manufacturing expenses) for the
quarter ended June 30, 2010 was $4.0 million, as compared to $3.6 million for
the same period in 2009. Year-to-date gross profit was $8.0 million in 2010,
compared to $7.4 million for 2009.

Gross margins were 59% for the second quarter of 2010, compared to 53% for the
same period in 2009. Gross margins for the six months ended June 30, 2010 were
59% compared to 54% for the same period in 2009.

Operating loss for the second quarter decreased 72% to $201,000 from $714,000
in the second quarter of 2009. Operating loss for the first six months of 2010
fell 50% to $648,000 from $1.3 million for the first six months of 2009.

Net loss for the second quarter of 2010 fell 71% to $215,000, or $0.01 per
diluted share, compared to a net loss of $734,000, or $0.04 per diluted share,
for the same period in 2009. For the six month period ended June 30, 2010, the
net loss was $674,000, or $0.03 per diluted share, compared to a net loss of
$1.3 million, or $0.06 per diluted share, for the same period in 2009.

Life Science Revenues

Life Science revenues were $3.7 million for the quarter ended June 30, 2010, a
10% increase from $3.3 million for the same period in 2009. For the six months
ended June 30, 2010, Life Science revenues increased 6% to $7.5 million
compared to $7.0 million for the same period in 2009.

Kit Revenues

Kit revenues were $3.1 million, including contract revenues of $75,000, for
the second quarter ended June 30, 2010, reflecting a decrease of 13%, from
$3.5 million in the second quarter of 2009. For the six months ended June 30,
2010, kit revenues decreased 10% to $6.0 million compared to $6.6 million for
the same period in 2009. The decrease in kit sales was primarily attributable
to lower revenues in the Water Quality and Ag-GMO markets where SDIX has been
reducing its focus.

Quarter Ended June 30,                   2010              2009
                                                          
Life Sciences                              $ 3.7 million         $ 3.3 million
Food Pathogen Products                     $ 1.3 million         $ 1.4 million
Ag-GMO Products, including contract        $ 0.5 million         $ 0.6 million
revenue
Water and Environmental Products           $ 1.3 million         $ 1.5 million
                                                                 

Conference Call

The dial-in number for our live conference call, to be held at 4:30 p.m. ET on
August 4, 2010, is 877-407-9210 (201-689-8049 outside the U.S.). A live
webcast of the conference call will be available on the Company’s website,
www.sdix.com, as well as www.investorcalendar.com. For those who cannot listen
to the live broadcast, an audio replay of the call will be available on each
of these websites for 90 days. Telephone replays of the call will be available
from 7:30 p.m. ET on August 4, 2010 through 11:59 p.m. ET on August 19, 2010.
To listen to the telephone replay, dial 877-660-6853 (201-612-7415 outside the
U.S.) and enter account number 286 and conference ID 354464.

About SDIX  (www.sdix.com)

SDIX is a biotechnology company, expert at creating advantage by providing a
broad range of quality, innovative and effective immuno-solutions to the
Pharmaceutical, biotechnology, diagnostics, and food safety markets. For
nearly 20 years, SDIX has developed antibodies which advance its customers’
immuno-based work – reducing time, labor, and costs while increasing accuracy
and reliability of results.

SDIX offers a full suite of integrated immuno-solution capabilities including
assay design, development, and production. In life science markets, SDIX
capabilities are being used to help discover the mechanisms of disease,
facilitate the development of new drugs, and provide mechanisms for rapid
diagnosis.

This news release may contain forward-looking statements reflecting SDIX's
current expectations. When used in this press release, words like
“anticipate”, “could”, “enable”, “estimate”, “intend”, “expect”, “believe”,
“potential”, “will”, “should”, “project”, “plan” and similar expressions as
they relate to SDIX are intended to identify said forward-looking statements.
Investors are cautioned that all forward-looking statements involve risks and
uncertainties, which may cause actual results to differ from those anticipated
by SDIX at this time. Such risks and uncertainties include, without
limitation, changes in demand for products, the application of our
technologies to various uses, delays in product development, delays in market
acceptance of new products, retention of customers and employees, adequate
supply of raw materials, inability to obtain or delays in obtaining fourth
party, or required government approvals, the ability to meet increased market
demand, competition, protection of intellectual property, non-infringement of
intellectual property, seasonality, and other factors more fully described in
SDIX's public filings with the U.S. Securities and Exchange Commission.

                                                               
STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
                                                                    
                 Three Months                      Six Months
               Ended June 30,                    Ended June 30,
               2010            2009             2010            2009
                                                                    
Revenues        $ 6,796         $ 6,853         $ 13,487        $ 13,755     
                                                                    
OPERATING
EXPENSES:
Manufacturing      2,764            3,223            5,519            6,320
Research and       764              820              1,440            1,483
development
Selling,
general and        3,469            3,524            7,184            7,244
administrative
Gain on
disposal of      -              -              (8         )    -          
assets
Total
operating        6,997          7,567          14,135         15,047     
expenses
                                                                    
Operating loss     (201       )     (714       )     (648       )     (1,292     )
                                                                    
Interest
income             (14        )     -                (26        )     5
(expense), net
                                                               
                                                                    
Loss before        (215       )     (714       )     (674       )     (1,287     )
taxes
                                                                    
Income tax
expense            -                20               -                8
(benefit)
                                                               
                                                                    
Net loss         (215       )    (734       )    (674       )    (1,295     )
                                                                    
Basic loss per  $ (0.01      )   $ (0.04      )   $ (0.03      )   $ (0.06      )
share
                                                                    
Shares used in
computing        20,229,963     20,105,814     20,209,158     20,070,882 
basic loss per
share
                                                                    
Diluted loss    $ (0.01      )   $ (0.00      )   $ (0.03      )   $ (0.06      )
per share
                                                                    
Shares used in
computing        20,229,963     20,105,814     20,209,158     20,070,882 
diluted loss
per share
                                                                    

                                                               
STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
                                                              
                                                    June 30,      December 31,
                                                  2010         2009
ASSETS
Current Assets :
Cash and cash equivalents                           $ 7,650       $  7,937
Restricted cash                                       1,250          1,250
Receivables, net                                      3,907          3,650
Inventories                                           3,658          3,714
Deferred tax asset                                    1              1
Other current assets                                761         551     
Total current assets                                17,227      17,103  
                                                                  
Property and equipment, net                           4,307          4,626
Other assets                                          85             10
Deferred tax asset                                    51             51
Intangible assets, net                              1,378       1,435   
Total assets                                       $ 23,048    $  23,225  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities :
Current portion of long-term debt                   $ 400         $  400
Accounts payable                                      449            571
Accrued expenses                                      1,978          1,386
Deferred revenue                                    2           75      
Total current liabilities                           2,829       2,432   
                                                                  
Long-term debt                                      500         700     
                                                                  
Stockholders' Equity:
Preferred stock, $.01 par value, 20,920,648
shares authorized, no shares issued or                -              -
outstanding
Common stock, $.01 par value, 35,000,000 shares
authorized, 20,902,030 and 20,786,515 issued at       209            208
June 30, 2010 and December 31, 2009, respectively
Additional paid-in capital                            41,294         40,958
Treasury stock, 406,627 common shares at cost at      (555    )      (555    )
June 30, 2010 and December 31, 2009
Accumulated deficit                                   (20,950 )      (20,276 )
Cumulative translation adjustments                  (279    )    (242    )
Total stockholders' equity                          19,719      20,093  
Total liabilities and stockholders' equity         $ 23,048    $  23,225  
                                                                  

Contact:

SDIX
Kevin Bratton
VP and CFO
302-456-6789
kbratton@sdix.com
 
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