SDIX Reports Fourth Quarter and Full Year 2010 Results

  SDIX Reports Fourth Quarter and Full Year 2010 Results

                     Fourth Quarter Revenues Increase 19%

             Year-Over-Year Revenues Increase 4% to $28.3 Million

                Year-Over-Year Net Loss Decreases to $963,000

Business Wire

NEWARK, Del. -- March 03, 2011

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 quarter and
fiscal year ended December 31, 2010.

Revenues for the fourth quarter of 2010 were $7.4 million, increasing 19% from
$6.2 million for the same period in 2009. Net loss for the fourth quarter of
2010 was $260,000, compared to a net loss of $65,000 in 2009. Full year 2010
revenues were $28.3 million, increasing 4% from $27.2 million in 2009. This
overall growth resulted from increased revenues in SDIX’s core focus areas of
Life Science and Food Safety. Revenues in both of these markets increased 7%
in 2010 as compared to 2009. Net loss for the year was $963,000 in 2010, down
from $1.7 million in 2009.

Recent Highlights

  *RapidChek® SELECT™ Salmonella Enteritidis (SE) Test System Received AOAC
    Certification for Poultry Houses, Eggs, and Chicken Rinses – RapidChek
    SELECT SE test earned Performance-Tested Methods (PTM) Certification,
    validating the new test as equivalent to the FDA methodology for detecting
    SE in poultry house environments and pooled eggs. Competitive advantages
    over existing commercial tests can include faster time to results,
    increased sensitivity and accuracy, and reduced associated costs.
  *RapidChek® SELECT™ Salmonella 24-hour Test System Received AOAC
    Certification for Food Processing Environmental Testing – RapidChek SELECT
    Salmonella 24-hour test earned PTM certification as an analytical method
    for detecting Salmonella species on environmental surfaces including
    stainless steel, concrete, plastic and rubber. This test can help food
    processors quickly and accurately identify if Salmonella is present in
    their facilities before it can cross-contaminate food during production.
  *FDA Awards RapidChek® SELECT™ Salmonella Enteritidis (SE) Test System
    Method Equivalency for Salmonella Enteritidis Detection in Poultry Houses
    and Eggs – RapidChek SELECT SE test was reviewed by the FDA and determined
    to be equivalent in accuracy, precision and sensitivity to their current
    standard methods for poultry house environmental drag swabs and pooled egg
    testing.

Francis DiNuzzo, SDIX’s President and CEO, commented, “We continue to see
progress resulting from our strategic shift to focus on the Life Science and
Food Safety markets. Over the past year, aligned with this strategic shift, we
enhanced our leadership team, entered into new partnerships, updated our
corporate name, and improved efficiencies by streamlining processes and
scaling operations. Resulting from these efforts, SDIX not only saw overall
margin improvements, but also saw continued quarter-over-quarter and
year-over-year revenue growth. We anticipate continued growth in our Life
Science and Food Safety revenues in the year ahead as we solidify our presence
as a leading solutions provider to customers in these markets. We look forward
to leveraging our proprietary Life Science technologies through market share
growth in core Life Science market segments and additional revenue-generating
collaborations. In addition, we expect to see continued growth driven by
expansion of our Food Safety portfolio and international channels.”

Financials

Gross profit for the fourth quarter of 2010 was $4.1 million, as compared to
$3.2 million for the same period in 2009. Gross margins improved to 56% for
the fourth quarter of 2010, compared to 51% for the same period in 2009. Gross
profit for the year ended December 31, 2010 was $16.6 million, as compared to
$14.7 million for 2009. Gross margins improved to 58% for 2010, compared to
54% in 2009.

Operating expenses for the fourth quarter of 2010 increased to $4.4 million,
compared to $3.4 million for the fourth quarter of 2009. Operating expenses
for the year ended December 31, 2010 increased to $17.5 million, compared to
$16.5 million for the year ended December 31, 2009. This increase primarily
resulted from increased R&D costs associated with new programs and increased
SG&A costs associated with building up the Company’s sales and marketing
infrastructure.

While operating loss for the fourth quarter rose to $261,000, as compared to
$175,000 for the fourth quarter of 2009, as a result of increased R&D
spending; total operating loss for 2010 fell to $929,000, as compared to $1.7
million in 2009.

Net loss for the fourth quarter of 2010 increased to $260,000, or $0.01 per
diluted share, compared to a net loss of $65,000, or $0.00 per diluted share,
for the same period in 2009. Net loss for the year ended December 31, 2010
fell to $963,000, or $0.05 per diluted share, compared to a net loss of $1.7
million, or $0.08 per diluted share, for the year ended December 31, 2009.

Life Science Revenues

Life Science revenues were $4.2 million for the quarter ended December 31,
2010, an increase of 38% from $3.0 million for the same period in 2009. This
increase was due partially to increased In-Vitro Diagnostics (“IVD”) revenues,
which tend to vary quarter to quarter due to customer buying patterns, coupled
with increases in non-IVD business.

Life Science revenues for the year ended December 31, 2010 increased 7% to
$15.4 million, as compared to $14.3 million for 2009. This growth resulted
from both IVD and non-IVD revenues increasing year-over-year as the Company
continued to make inroads in the biopharma market.

Kit Revenues

Food Safety revenues were $1.7 million for the fourth quarter of 2010,
increasing 24% from $1.3 million for the same period in 2009. Food Safety
revenues for the year ended December 31, 2010 were $5.9 million, a 7% increase
from $5.5 million for 2009. Revenue gains in the Food Safety business
primarily resulted from the Company’s E. coli and Salmonella test systems.

Additionally year-over-year revenues for Ag-GMO Products and Water &
Environmental Products were $2.2 million and $4.8 million respectively,
remaining relatively consistent with 2009.

Balance Sheet

The Company completed the year ended December 31, 2010 with $8.8  million in
available and restricted cash and stockholders’ equity of $19.7 million.

Conference Call

The dial-in number for SDIX’s live conference call, to be held at 4:30 p.m. ET
on March 3, 2011, will be 877-407-9205 (201-689-8054 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 March 3, 2011 through 11:59 p.m. ET on March 18, 2011. 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 368079.

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 capabilities including antigen design,
antibody development and production, as well as assay design. 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”,
“can”, “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                      Twelve Months
               Ended December 31,                Ended December 31,
               2010             2009             2010             2009
                                                                    
Revenues         $ 7,389          $ 6,203          $ 28,349         $ 27,154
                                                                    
Cost of sales      3,247            3,013            11,781           12,416
                                                               
Gross profit     4,142          3,190          16,568         14,738     
                                                                    
OPERATING
EXPENSES:
Research and       870              659              3,077            2,894
development
Selling,
general and        3,533            2,707            14,428           13,593
administrative
Gain on
disposal of      -              (1         )    (8         )    (1         )
assets
Total
operating        4,403          3,365          17,497         16,486     
expenses
                                                                    
Operating loss     (261       )     (175       )     (929       )     (1,748     )
                                                                    
Interest           (7         )     (11        )     (42        )     (15        )
expense, net
                                                               
                                                                    
Loss before        (268       )     (186       )     (971       )     (1,763     )
taxes
                                                                    
Income tax         (8         )     (121       )     (8         )     (112       )
benefit
                                                               
                                                                    
Net loss         (260       )    (65        )    (963       )    (1,651     )
                                                                    
Basic loss per  $ (0.01      )   $ (0.00      )   $ (0.05      )   $ (0.08      )
share
                                                                    
Shares used in
computing        20,295,799     20,158,711     20,251,534     20,113,659 
basic loss per
share
                                                                    
Diluted loss    $ (0.01      )   $ (0.00      )   $ (0.05      )   $ (0.08      )
per share
                                                                    
Shares used in
computing        20,295,799     20,158,711     20,251,534     20,113,659 
diluted loss
per share



STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
                                                               
                                                 December 31,  December 31,
                                                 2010          2009
ASSETS
Current Assets :
Cash and cash equivalents                          $  8,056       $  7,937
Restricted cash                                       700            1,250
Receivables, net                                      4,376          3,650
Inventories                                           3,333          3,714
Deferred tax asset                                    -              1
Other current assets                                561         551     
Total current assets                                17,026      17,103  
                                                                  
Property and equipment, net                           4,087          4,626
Other assets                                          45             10
Deferred tax asset                                    37             51
Intangible assets, net                              1,321       1,435   
Total assets                                      $  22,516    $  23,225  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities :
Current portion of long-term debt                  $  400         $  400
Accounts payable                                      491            571
Accrued expenses                                      1,597          1,386
Deferred revenue                                    24          75      
Total current liabilities                           2,512       2,432   
                                                                  
Long-term debt                                      300         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, 20,916,433 and 20,786,515 issued at       209            208
December 31, 2010 and December 31, 2009,
respectively
Additional paid-in capital                            41,551         40,958
Treasury stock, 406,627 common shares at cost at      (555    )      (555    )
December 31, 2010 and December 31, 2009
Accumulated deficit                                   (21,239 )      (20,276 )
Cumulative translation adjustments                  (262    )    (242    )
Total stockholders' equity                          19,704      20,093  
Total liabilities and stockholders' equity        $  22,516    $  23,225  
                                                                  


Contact:

SDIX Company Contact:
Kevin Bratton
VP and CFO
302-456-6789
kbratton@sdix.com
or
Investor Relations Contact:
The Trout Group
Jessica Lloyd
646-378-2928
jlloyd@troutgroup.com
 
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