SDIX Reports Second Quarter 2011 Results

  SDIX Reports Second Quarter 2011 Results

    Life Science & Food Safety Revenues Increase 13% & 26% Year-over-Year,
                                 Respectively

             Conference Call to Review Results at 4:30PM ET Today

Business Wire

NEWARK, Del. -- July 28, 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
June 30, 2011.

Revenue for the second quarter of 2011 was $7.1 million, increasing from $6.8
million for the same period in 2010. This growth was driven by strong revenue
in SDIX’s core focus areas of Life Science, up 13%, and Food Safety, up 26%.

Year-to-date total revenue for the six months ended June 30, 2011 was $14.5
million, increasing 8% from $13.5 million for the same period in 2010. For the
2011 six month period, Life Science and Food Safety revenue increased 16% and
27%, respectively.

Net loss for the second quarter of 2011 was $657,000, compared to net loss of
$215,000 in 2010. The increase in net loss was primarily related to
investments in the Company’s strategic growth initiatives in Life Science and
Food Safety. These initiatives included the expansion of marketing, sales and
R&D resources to support increased sales as well as new product and technology
development.

Highlights

  *Focused investment in marketing, sales and R&D yield continued double
    digit growth in Life Science and Food Safety revenue.
  *Expanded Life Science In Vitro Diagnostic (IVD) Portfolio with Launch of
    New Apo B Antibodies –  Apo B is used to help determine an individual’s
    risk for developing cardiovascular disease.
  *Expanded Development of Food Safety Testing Platform – To include the next
    six important types of E. coli pathogens. These E. coli types are
    bacterial toxins that are involved in the most serious forms of
    food-poisoning.

Francis DiNuzzo, SDIX’s President and CEO, commented, “Our investments in Life
Science and Food Safety produced the double digit revenue growth we expected
in our core businesses and areas of focus. In our Life Science business, we
expanded our product offerings and continue to invest in advancing our
proprietary Genomic Antibody Technology (GAT), which we believe will further
differentiate our capabilities, thereby allowing continued revenue growth and
accelerating our collaborative relationships with pharma customers.” Mr.
DiNuzzo added, “Our Food Safety business was particularly strong this quarter,
growing in excess of 25% over the prior year, with our Salmonella and E. coli
test systems showing continued momentum.” Mr. DiNuzzo concluded,
“Additionally, in our efforts to grow SDIX, our presence in international
markets is continuing to expand, and we are seeking additional distribution
partners in select countries.”

Financials

Gross profit for the second quarter of 2011 was $4.1 million, as compared to
$4.0 million for the same period in 2010. Gross margins were 58% for the
second quarter of 2011, compared to 59% for the same period in 2010. This
slight decrease was primarily due to product mix and recent international
distributor expansion.

Second quarter operating expenses of $4.8 million were up approximately
$500,000 compared with the second quarter of 2010. The increase was driven
primarily by planned R&D investments for new programs and sales and marketing
expansion in Life Science and Food Safety.

Operating loss for the second quarter was $642,000, compared with operating
loss of $201,000 for the second quarter of 2010.

Net loss for the second quarter of 2011 increased to $657,000, or $0.03 per
diluted share, compared to net loss of $215,000, or $0.01 per diluted share,
for the same period in 2010.

Life Science Revenues

Life Science revenues grew 13% to $4.2 million for the second quarter of 2011,
as compared to $3.7 million for the same period in 2010.

Kit Revenues

Food Safety revenues increased 26% to $1.6 million for the second quarter of
2011, up from $1.3 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 $1.0 million, respectively.

Balance Sheet

The Company completed the second quarter ended June 30, 2011 with cash of $8.0
million and stockholders’ equity of $18.7 million.

Conference Call

The dial-in number for the live conference call at 4:30 PM ET today will be
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
July 28, 2011 through 11:59 p.m. ET on August 11, 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 376184.

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)
                                                                  
                                                June 30,     December 31,
                                                2011         2010
ASSETS
Current Assets :
  Cash and cash equivalents                         $ 7,534       $  8,056
  Restricted cash                                     500            700
  Receivables, net                                    4,564          4,376
  Inventories                                         3,297          3,333
 Other current assets                              1,215       561     
   Total current assets                           17,110      17,026  
                                                                  
Property and equipment, net                           3,977          4,087
Other assets                                          7              45
Deferred tax asset                                    37             37
Intangible assets, net                              1,264       1,321   
   Total assets                                  $ 22,395    $  22,516  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities :
  Current portion of long-term debt                 $ 400         $  400
  Accounts payable                                    567            491
  Accrued expenses                                    2,499          1,597
 Deferred revenue                                  103         24      
   Total current liabilities                      3,569       2,512   
                                                                  
Long-term debt                                      100         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,
     20,995,281 and 20,916,433 issued
     at June 30, 2011 and December 31, 2010,          210            209
     respectively
  Additional paid-in capital                          41,871         41,551
  Treasury stock, 406,627 common shares at cost
     at June 30, 2011 and December 31, 2010           (555    )      (555    )
  Accumulated deficit                                 (22,554 )      (21,239 )
 Cumulative translation adjustments                (246    )    (262    )
   Total stockholders' equity                     18,726      19,704  
   Total liabilities and stockholders' equity    $ 22,395    $  22,516  
                                                                  

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,
                  2011            2010             2011            2010
                                                                        
Revenues             $ 7,070          $ 6,796          $ 14,547         $ 13,487
                                                                        
Cost of                2,959            2,764            6,273            5,519
sales
                                                                
     Gross profit    4,111         4,032          8,274         7,968      
                                                                        
OPERATING EXPENSES:
      Research and     842              764              1,705            1,440
      development
      Selling,
      general and      3,911            3,469            7,865            7,184
      administrative
      Gain on
     disposal of     -             -              -             (8         )
      assets
           Total
         operating  4,753         4,233          9,570         8,616      
           expenses
                                                                        
Operating              (642       )     (201       )     (1,296     )     (648       )
loss
                                                                        
Interest expense,      (8         )     (14        )     (17        )     (26        )
net
                                                                
                                                                        
Loss before taxes      (650       )     (215       )     (1,313     )     (674       )
                                                                        
Income tax expense     7                -                2                -
                                                                
                                                                        
Net loss             (657       )   (215       )    (1,315     )   (674       )
                                                                        
Basic loss per share $ (0.03      )  $ (0.01      )   $ (0.06      )  $ (0.03      )
                                                                        

Shares used in
computing basic loss  20,418,363    20,229,963     20,401,055    20,209,158 
per share
                                                                        
Diluted loss per     $ (0.03      )  $ (0.01      )   $ (0.06      )  $ (0.03      )
share
                                                                        

Shares used in
computing diluted     20,418,363    20,229,963     20,401,055    20,209,158 
loss per 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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