SDIX Reports First Quarter 2011 Results

  SDIX Reports First Quarter 2011 Results

              First Quarter Revenues Increase 12% Year-over-Year

    Life Science & Food Safety Revenues Increase 19% & 28% Year-over-Year,
                                 Respectively

Business Wire

NEWARK, Del. -- May 12, 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 ended
March 31, 2011.

Revenues for the first quarter of 2011 were $7.5 million, increasing 12% from
$6.7 million for the same period in 2010. This growth was driven by strong
revenues in SDIX’s core focus areas of Life Science, up 19%, and Food Safety,
up 28%. Net loss for the first quarter of 2011 was $658,000, compared to a net
loss of $459,000 in 2010. This increase in net loss was primarily attributable
to increased operating expenses resulting from the Company’s strategic growth
initiatives in Life Science and Food Safety and the related expansion of
marketing, sales and R&D infrastructure to support the increased revenue
levels.

Recent Highlights

  *Strong Growth in Life Science Revenues Driven by IVD and Biopharma
    Customers – In total, In-Vitro Diagnostics and Biopharma customer revenues
    increased by 30%.
  *RapidChek® SELECT™ Salmonella Enteritidis (SE) Test System Awarded Method
    Equivalency and Granted Interim NPIP Approval – RapidChek SELECT SE test
    was reviewed by the FDA and determined to be equivalent in accuracy,
    precision and sensitivity to the FDA’s current standard methods for
    poultry house environmental drag swabs and pooled egg testing. The test
    also received interim National Poultry Improvement Plan (NPIP) approval
    for use in detecting the presence of SE in poultry environments. The SDIX
    test system offers egg producers an easier, faster, and more cost
    effective way to comply with regulations.
  *C. elegans Antibodies from the modENCODE Project Became Available through
    Novus Biologicals – Antibodies against 69C. eleganschromosomal proteins
    generated by the modENCODE project (model organism ENCyclopedia Of DNA
    Elements), funded by the NIH, became commercially available through Novus
    Biologicals, SDIX’s distributor for pre-made antibodies.

Francis DiNuzzo, SDIX’s President and CEO, commented, “We are pleased with our
first quarter earnings results, which showed strong revenue growth and
domestic and international strategic progress in both our core Life Science
and Food Safety businesses. We saw notable growth in our IVD and Biopharma
customer revenues this quarter, while we also forge ahead to leverage our
Genomic Antibody Technology, or GAT, a differentiated platform for additional
value-creating and revenue-generating collaborations. In Food Safety, we are
quite pleased with the acceptance and growing momentum for our RapidChek
SELECT solution, and in particular our Salmonella and E. coli test systems. In
addition, we put a concerted effort into building up our international
distribution channels and are pleased with the strong contribution the team
made to revenue growth this quarter.”

Financials

Gross profit for the first quarter of 2011 was $4.2 million, as compared to
$3.9 million for the same period in 2010. Gross margins were 56% for the first
quarter of 2011, compared to 59% for the same period in 2010. This slight
decrease is primarily due to both our varied product mix and recent
international distributor expansion.

Operating expenses for the first quarter of 2011 increased to $4.8 million,
compared to $4.4 million for the first quarter of 2010. Operating loss for the
first quarter was $654,000, compared to $447,000 for the first quarter of
2010. These planned and expected increases resulted directly from investments
designed to increase top line growth. Specifically, SDIX increased R&D costs
resulting from new programs and increased SG&A costs resulting from
strengthening the Company’s sales and marketing infrastructure.

Net loss for the first quarter of 2011 increased to $658,000, or $0.03 per
diluted share, compared to a net loss of $459,000, or $0.02 per diluted share,
for the same period in 2010.

Life Science Revenues

Life Science revenues grew 19% to $4.5 million for the quarter ended March 31,
2011, compared to $3.8 million for the same period in 2010.

Kit Revenues

Food Safety revenues increased 28% to $1.8 million for the first quarter of
2011, up from $1.4 million for the same period in 2010. This Food Safety
revenue growth primarily resulted from continued strong adoption of the
Company’s Salmonella and E. coli test systems.

Revenues for Ag-GMO Products and Water & Environmental Products were $0.3
million and $0.9 million respectively.

Balance Sheet

The Company completed the first quarter ended March 31, 2011 with $9.1 
million in available and restricted cash, and stockholders’ equity of $19.2
million.

Conference Call

The dial-in number for the live conference call 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 May
12, 2011 through 11:59 p.m. ET on May 26, 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 372183.

About SDIX  (www.sdix.com)

SDIX is a biotechnology company with a core expertise in creating better
antigens, better antibodies and better assays for the pharmaceutical,
biotechnology and food safety markets. For over 20 years, SDIX has been a
leading immuno-solutions company, developing results-oriented and innovative
antibody-based solutions that enable customers to meet high performance
research, diagnostic and commercialization objectives.

In the life science market, SDIX’s technology and capabilities are being used
to help discover disease mechanisms, facilitate development of new drugs and
provide antibodies and assays for the diagnosis of disease. In the food safety
market, SDIX continues to expand its footprint as an international supplier of
rapid pathogen test technologies that enable more accurate and cost-effective
results.

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 BALANCE SHEETS
(in thousands, except share and per share data)
(unaudited)
                                                                  
                                                  March 31,    December 31,
                                                  2011         2010
ASSETS
Current Assets :
Cash and cash equivalents                           $ 8,490       $  8,056
Restricted cash                                       600            700
Receivables, net                                      3,867          4,376
Inventories                                           3,202          3,333
Other current assets                                1,130       561     
Total current assets                                17,289      17,026  
                                                                  
Property and equipment, net                           3,893          4,087
Other assets                                          16             45
Deferred tax asset                                    37             37
Intangible assets, net                              1,292       1,321   
Total assets                                       $ 22,527    $  22,516  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities :
Current portion of long-term debt                   $ 400         $  400
Accounts payable                                      465            491
Accrued expenses                                      2,184          1,597
Deferred revenue                                    82          24      
Total current liabilities                           3,131       2,512   
                                                                  
Long-term debt                                      200         300     
                                                                  
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, 20,943,357 and 20,916,433 issued at       210            209
March 31, 2011 and December 31, 2010,
respectively
Additional paid-in capital                            41,681         41,551
Treasury stock, 406,627 common shares at cost at      (555    )      (555    )
March 31, 2011 and December 31, 2010
Accumulated deficit                                   (21,897 )      (21,239 )
Cumulative translation adjustments                  (243    )    (262    )
Total stockholders' equity                          19,196      19,704  
Total liabilities and stockholders' equity         $ 22,527    $  22,516  
                                                                  

                                                             
STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES
                                                                
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
                                                                
                                               Three Months
                                             Ended March 31,
                                             2011            2010
                                                                
Revenues                                       $ 7,477          $ 6,691
                                                                
Cost of sales                                    3,314            2,755
                                                             
Gross profit                                   4,163          3,936      
                                                                
Operating expenses:
Research and development                         863              676
Selling, general and administrative              3,954            3,715
Gain on disposal of assets                     -              (8         )
Total operating expenses                       4,817          4,383      
                                                                
Operating loss                                   (654       )     (447       )
                                                                
Interest expense, net                            (9         )     (12        )
                                                             
                                                                
Loss before taxes                                (663       )     (459       )
                                                                
Income tax benefit                               (5         )     -
                                                             
                                                                
Net loss                                       (658       )    (459       )
                                                                
Basic loss per share                          $ (0.03      )   $ (0.02      )
                                                                
Shares used in computing basic loss per        20,384,041     20,187,890 
share
                                                                
Diluted loss per share                        $ (0.03      )   $ (0.02      )
                                                                
Shares used in computing diluted loss per      20,384,041     20,187,890 
share
                                                                

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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