SDIX Reports Third Quarter 2011 Results

  SDIX Reports Third Quarter 2011 Results

   Life Science & Food Safety Combined Revenues Increase 6% Year-over-Year

           Significant GAT Proof of Performance Milestones Achieved

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

Business Wire

NEWARK, Del. -- November 14, 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
September 30, 2011.

Revenue for the third quarter of 2011 was $6.9 million, decreasing from $7.5
million for the same period in 2010. The Company’s core Life Science and Food
Safety businesses continued to grow, with combined revenues increasing 6%
compared to the third quarter of 2010 despite a small decline in Food Safety
revenue compared to the prior year.

Revenue for the nine months ended September 30, 2011 was $21.5 million,
increasing 2% from $21.0 million for the same period in 2010. For this nine
month period, Life Science and Food Safety revenues increased 13% and 16%,
respectively, over the same period in 2010.

Net loss for the third quarter of 2011 was $694,000, compared to a net loss of
$29,000 in 2010. The increase in net loss was primarily related to the lower
revenue and the planned investment increases in the Company’s strategic
initiative to further develop its next-generation Genomic Antibody Technology
(GAT) platform.

Highlights

  *Enhanced Life Science Proprietary In Vitro Diagnostic (IVD) Portfolio with
    New Antibody Products – Following the launch of new Apo B antibodies
    earlier in the quarter, three additional polyclonal antibodies were
    completed and are being introduced to IVD customers.
  *Launched New Listeria Testing Solution – RapidChek® ListeriaF.A.S.T.™
    24-hour Test System was introduced to the market. The test later earned
    AOAC Performance-Tested Methods Certification, providing validation for
    food producers, whom the Company expects to use it to better meet
    “test-and-hold” requirements.
  *Salmonella Enteritidis Test Data Published by the Journal of AOAC
    International – Scientific publication provided detailed performance
    specifications for the Company’s RapidChek® SELECT™ Salmonella Enteritidis
    Test System, which demonstrated equivalent performance with both the
    standard FDA BAM method for testing egg-pools and the USDA FSIS method for
    poultry carcass rinsates.
  *Sold Water Quality Assets to Modern Water Plc – Water Quality division was
    sold for $4.5 million; assets sold include the division’s intellectual
    property, current inventory and commercial contracts, as well as equipment
    and staff.

Francis DiNuzzo, SDIX’s President and CEO, commented, “The third quarter and
subsequent water quality business announcement last week mark important
milestones in the transition of SDIX to a focused biotechnology company
targeting growth opportunities in the Life Science and Food Safety markets.
Most notably, our R&D team achieved significant results in our next-generation
GAT development efforts, reaching a key performance milestone and providing
evidence that our technology has the potential to enable us to create novel
monoclonal antibodies against biological targets. We believe that these
capabilities will further differentiate SDIX in the eyes of potential Pharma
partners who are looking to pursue biotherapeutic antibodies or engage in
biomarker discovery and validation. Our Food Safety business had a somewhat
difficult quarter, resulting from a change in a federal contract and a delay
in approval of our new Listeria product. Still, year-to-date, the Food Safety
business has achieved double digit growth over the same period in 2010.” Mr.
DiNuzzo added, “Our recent agreement to sell our Water Quality business to
Modern Water again reinforces our corporate strategy and provides additional
resources to continue growing our core Life Science and Food Safety
businesses.”

Financials

Gross profit for the third quarter of 2011 was $4.1 million, as compared to
$4.5 million for the same period in 2010. Gross margins were 59% for the third
quarter of 2011, compared to 60% for the same period in 2010.

Third quarter operating expenses were $4.7 million, up $230,000 compared to
the third quarter of 2010. The increase was primarily driven by planned R&D
investments in SDIX’s next generation GAT platform, as well as in product,
sales and marketing expansion in both the core Life Science and Food Safety
businesses.

Operating loss for the third quarter of 2011 was $657,000, compared to an
operating loss of $20,000 for the third quarter of 2010.

Net loss for the third quarter of 2011 increased to $694,000, or $0.03 per
diluted share, compared to a net loss of $29,000, or $0.00 per diluted share,
for the same period in 2010.

Life Science Revenues

Life Science revenues grew 10%, to $4.1 million for the third quarter of 2011,
as compared to $3.7 million for the same period in 2010. This growth was lead
by the IVD business, which increased 14% over the third quarter of 2010 and
which has already booked more orders year-to-date than in all of last year.
Year-to-date Life Science revenue grew 13%, to $12.7 million, as compared to
$11.3 million for the same period in 2010.

Kit Revenues

Food Safety revenues decreased 4%, to $1.5 million, for the third quarter of
2011, as compared to $1.6 million for the same period in 2010. Year-to-date
Food Safety revenue grew 16% to $4.9 million, as compared to $4.3 million for
the same period in 2010.

Revenues for Ag-GMO Products and Water & Environmental Products were $0.4
million and $0.9 million, respectively, for the third quarter of 2011,
compared to $0.7 million and $1.5 million, respectively, for the third quarter
of 2010.

Balance Sheet

The Company completed the third quarter ended September 30, 2011 with cash of
$7.4  million and stockholders’ equity of $18.1 million.

Conference Call

The dial-in number for the live conference call at 4:30PM 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
aswww.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 November 14, 2011 through 11:59 p.m. ET on November 28, 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 382908.

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)
                                                                  
                                                September 30,  December 31,
                                                2011           2010
ASSETS
Current Assets :
Cash and cash equivalents                         $  7,035        $  8,056
Restricted cash                                      400             700
Receivables, net                                     4,436           4,376
Inventories                                          3,376           3,333
Other current assets                               940          561     
Total current assets                               16,187       17,026  
                                                                  
Property and equipment, net                          3,886           4,087
Other assets                                         6               45
Deferred tax asset                                   36              37
Intangible assets, net                             1,235        1,321   
Total assets                                     $  21,350     $  22,516  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities :
Current portion of long-term debt                 $  400          $  400
Accounts payable                                     449             491
Accrued expenses                                     2,270           1,597
Deferred revenue                                   87           24      
Total current liabilities                          3,206        2,512   
                                                                  
Long-term debt                                     -            300     
                                                                  
Stockholders' Equity:
Preferred stock, $.01 par value, 20,920,648
shares authorized, no shares issued or               -               -
outstanding
Common stock, $.01 par value, 50,000,000 and
35,000,000 shares authorized, at September 30,
2011 and December 31, 2010, respectively             210             209
20,997,587 and 20,916,433 issued at September
30, 2011 and December 31, 2010, respectively
Additional paid-in capital                           42,000          41,551
Treasury stock, 406,627 common shares at cost        (555     )      (555    )
at September 30, 2011 and December 31, 2010
Accumulated deficit                                  (23,248  )      (21,239 )
Cumulative translation adjustments                 (263     )    (262    )
Total stockholders' equity                         18,144       19,704  
Total liabilities and stockholders' equity       $  21,350     $  22,516  
                                                                  

               
STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES
                                                                
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
                                                                    
                 Three Months                      Nine Months
               Ended September 30,               Ended September 30,
               2011            2010             2011            2010
                                                                    
Revenues         $ 6,915          $ 7,473          $ 21,462         $ 20,960
                                                                    
Cost of sales      2,864            3,015            9,137            8,534
                                                             
Gross profit     4,051         4,458          12,325        12,426     
                                                                    
OPERATING
EXPENSES:
Research and       1,056            767              2,761            2,207
development
Selling,
general and        3,652            3,711            11,517           10,895
administrative
Gain on
disposal of      -             -               -             (8         )
assets
Total
operating        4,708         4,478           14,278        13,094     
expenses
                                                                    
Operating loss     (657       )     (20        )     (1,953     )     (668       )
                                                                    
Interest           (10        )     (9         )     (27        )     (35        )
expense, net
                                                             
                                                                    
Loss before        (667       )     (29        )     (1,980     )     (703       )
taxes
                                                                    
Income tax         27               -                29               -
expense
                                                             
                                                                    
Net loss         (694       )   (29        )    (2,009     )   (703       )
                                                                    
Basic loss per  $ (0.03      )  $ (0.00      )   $ (0.10      )  $ (0.03      )
share
                                                                    
Shares used in
computing        20,467,245    20,289,602     20,423,521    20,236,462 
basic loss per
share
                                                                    
Diluted loss    $ (0.03      )  $ (0.00      )   $ (0.10      )  $ (0.03      )
per share
                                                                    
Shares used in
computing        20,467,245    20,289,602     20,423,521    20,236,462 
diluted 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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