SDIX Reports Fourth Quarter and Full Year 2011 Results

  SDIX Reports Fourth Quarter and Full Year 2011 Results

     Year-over-Year Life Science & Food Safety Revenues Both Increase 7%

               Fourth Quarter Revenues Decline over Prior Year

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

Business Wire

NEWARK, Del. -- March 22, 2012

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, 2011.

Revenues for the fourth quarter of 2011 were $5.5 million, decreasing from
$6.3 million for the same period in 2010. As described below, the Company’s
core Life Science and Food Safety businesses continued to grow year-over-year
for the full fiscal year, but decreased quarter-over-quarter by 10% and 15%,
respectively. These decreases were primarily related to the timing of IVD
sales and external legislative changes in the food industry, respectively.

Full year 2011 revenues were $24.2 million, increasing 3% from $23.6 million
in 2010. Notably though, for the full year, Life Science and Food Safety
revenues each increased 7% over full year 2010.

Net income for the fourth quarter of 2011 was $1.7 million, compared to a net
loss of $260,000 for the same period in 2010. Net loss for the full year was
$298,000, compared to a net loss of $963,000 for full year 2010. Net income
for the fourth quarter of 2011 included income from discontinued operations of
$3.2 million, compared with income from discontinued operations of $504,000 in
2010. For the full year 2011, net loss included income from discontinued
operations of $4.5 million, compared with income from discontinued operations
of $2.3 million for full year 2010.

Highlights

  *Sold Water Quality Division to Modern Water Plc – SDIX’s Water Quality
    assets were sold for $4.6 million, which resulted in a gain of $3.0
    million on the sale. The sale included the division’s intellectual
    property, current inventory and commercial contracts, as well as equipment
    and staff.
  *Signed Collaboration with BD Diagnostics to Develop a Microbiology
    Detection Solution – The agreement, signed in January 2012, aims to
    commercialize a novel system to address market needs for faster time to
    results and accurate detection of microorganisms. The partnership combines
    SDIX’s expertise in development of high performance antibodies with BD’s
    expertise in diagnostic system development. SDIX received an upfront
    payment of $1.25 million, along with $2.5 million in potential milestone
    payments and royalties on future product sales.
  *Published Peer-Reviewed Article Characterizing GAT^TM Strengths – The
    article provided data showing the advantage of SDIX’s antibody technology
    versus current conventional approaches.
  *Launched 24-Hour Listeria Testing Solution – RapidChek® ListeriaF.A.S.T.™
    Test System was successfully introduced to the market. The test
    subsequently earned AOAC Performance-Tested Methods Certification. The
    product allows food producers to now better meet “test-and-hold”
    requirements.

Francis DiNuzzo, SDIX’s President and CEO, commented, “Overall, in 2011, we
were pleased to see the positive results from our efforts to refocus SDIX on
the large and growing Life Science and Food Safety markets. While the fourth
quarter was challenging for these core businesses, we did see solid
year-over-year growth in both of these areas. We are especially pleased with
the continued strength of our IVD business, which delivered over 30% annual
growth in booked orders in 2011. Our GAT™ platform developments continued to
show progress against the milestone plans we have set out. In addition to
these achievements, we continued to strengthen our Food Safety business, with
the successful launch of our Listeria F.A.S.T.™ Test System. Our international
business distribution network continues to exhibit solid growth, with 72%
year-over-year growth across both core business product lines. Lastly, the
divestiture of our Water Quality business and our first quarter 2012 deal with
BD Diagnostics represent noteworthy milestones in the Company’s evolution as
well as provide additional financial resources that we plan to utilize going
forward."

Financials

Gross profit for the fourth quarter of 2011 was $2.8 million, as compared to
$3.5 million for the same period in 2010. Gross margins were 51% for the
fourth quarter of 2011, compared to 56% for the same period in 2010. Gross
profit for the year ended December 31, 2011 was $13.5 million, as compared to
$13.7 million in 2010. Gross margin in 2011 was 56%, compared to 58% in 2010.

Fourth quarter operating expenses were $4.3 million, up $77,000 compared to
the fourth quarter of 2010. Operating expenses for the year ended December 31,
2011 increased to $18.2 million, compared to $16.9 million for the year ended
December 31, 2010. This overall increase was primarily due to planned R&D
investments in SDIX’s next generation GAT™ platform, as well as in product and
marketing expansion across both core businesses. The operating loss from
continuing operations for the fourth quarter of 2011 was $1.5 million,
compared to $765,000 for the fourth quarter of 2010. Operating loss from
continuing operations for 2011 rose to $4.7 million, compared to $3.2 million
in 2010.

Due to the sale of the Company’s Water Quality assets, the financial
information of the Water Quality division has been reflected in the financial
statements as discontinued operations. Income from discontinued operations for
the fourth quarter was $3.2 million in 2011, including the gain on the sale of
the assets, as compared with $504,000 in 2010. Net income for the fourth
quarter of 2011 was $1.7 million, or $0.08 per diluted share, compared to a
net loss of $260,000, or $0.02 per diluted share, for the same period in 2010.
Net loss for the year ended December 31, 2011 was $298,000, or $0.01 per
diluted share, compared to a net loss of $963,000, or $0.05 per diluted share,
for the year ended December 31, 2010, including income from discontinued
operations of $4.5 million in 2011 and $2.3 million in 2010.

Life Science Revenues

Life Science revenue decreased to $3.8 million for the fourth quarter of 2011,
as compared to $4.2 million for the same period in 2010. This decrease was
primarily related to order timing in the IVD business, as larger orders were
placed earlier in the year. Overall in 2011, the IVD business booked 34% more
orders than in 2010. Full year 2011 Life Science revenue grew 7%, to $16.5
million, as compared to $15.4 million for full year 2010.

Kit Revenues

Food Safety revenue decreased 15%, to $1.4 million, for the fourth quarter of
2011, as compared to $1.6 million for the same period in 2010. Full year 2011
Food Safety revenue grew 7% to $6.3 million, as compared to $5.9 million for
the same period in 2010.

As the Company continued to shift focus away from the Ag-GMO business,
year-over-year revenue decreased by $872,000 to $1.3 million.

Balance Sheet

The Company completed the fourth quarter and year end 2011 with cash and
restricted cash of $11.0million and stockholders’ equity of $20.0 million. Our
cash position for 2011 compares favorably to the 2010 year-end cash position
of $8.8million.

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 March 22, 2012 through 11:59 p.m. ET on April 5, 2012. 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 391104.

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)
                                                             
                                              December 31,   December 31,
                                              2011           2010
ASSETS
Current Assets:
Cash and cash equivalents                        $  10,665        $  8,056
Restricted cash                                     300              700
Receivables, net                                    3,758            4,376
Inventories                                         2,142            3,333
Other current assets                             618          561     
Total current assets                             17,483       17,026  
                                                                             
Property and equipment, net                         3,890            4,087
Other assets                                        6                45
Deferred tax asset                                  36               37
Intangible assets, net                           1,207        1,321   
Total assets                                   $  22,622     $  22,516  
                                                                             
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt                $  300           $  400
Accounts payable                                    556              491
Accrued expenses                                    1,769            1,597
Deferred revenue                                 -            24      
Total current liabilities                        2,625        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 December
31, 2011 and December 31, 2010, respectively        210              209
21,000,960 and 20,916,433 issued at December
31, 2011 and December 31, 2010, respectively
Additional paid-in capital                          42,146           41,551
Treasury stock, 406,627 common shares at
cost at December 31, 2011 and December 31,          (555    )        (555    )
2010
Accumulated deficit                                 (21,537 )        (21,239 )
Cumulative translation adjustments               (267    )     (262    )
Total stockholders' equity                       19,997       19,704  
Total liabilities and stockholders' equity     $  22,622     $  22,516  
                                                                             


STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)


                 Three Months                        Year
                Ended December 31,                    Ended December 31,
                2011             2010               2011             2010
                                                                       
Revenues           $ 5,547            $ 6,255            $ 24,193           $ 23,559
                                                                                         
Cost of sales        2,733              2,763              10,663             9,832
                                                                       
Gross profit      2,814          3,492            13,530         13,727     
                                                                                         
OPERATING
EXPENSES:
Research and         973                870                3,734              3,034
development
Selling,
general and       3,361          3,387            14,504         13,880     
administrative
Total
operating         4,334          4,257            18,238         16,914     
expenses
                                                                                         
Operating loss       (1,520     )       (765       )       (4,708     )       (3,187     )
                                                                                         
Interest             (6         )       (7         )       (33        )       (42        )
expense, net
                                                                       
                                                                                         
Loss from
continuing           (1,526     )       (772       )       (4,741     )       (3,229     )
operations
before taxes
                                                                                         
Income tax
expense              -                  (8         )       29                 (8         )
(benefit)
                                                                       
                                                                                         
Loss from
continuing        (1,526     )    (764       )      (4,770     )    (3,221     )
operations
                                                                                         
Discontinued
operations:
                                                                                         
Income from
discontinued         204                504                1,439              2,258
operations
                                                                                         
Gain on sale      3,033          -                3,033          -          
                                                                                         
Income from
discontinued      3,237          504              4,472          2,258      
operations
                                                                                         
Net income       $ 1,711         $ (260       )     $ (298       )   $ (963       )
(loss)
                                                                                         
Basic loss per
share from         $ (0.07      )     $ (0.04      )     $ (0.23      )     $ (0.16      )
continuing
operations
Basic income
per share from    0.16           0.02             0.22           0.11       
discontinued
operations
                                                                                         
Basic income
(loss) per       $ 0.08          $ (0.01      )     $ (0.01      )   $ (0.05      )
share
                                                                                         
Shares used in
computing
basic income      20,472,771     20,295,779       20,435,935     20,251,534 
(loss) per
share
                                                                                         
Diluted loss
per share from     $ (0.07      )     $ (0.04      )     $ (0.23      )     $ (0.16      )
continuing
operations
Diluted income
per share from    0.16           0.02             0.22           0.11       
discontinued
operations
                                                                                         
Diluted income
(loss) per       $ 0.08          $ (0.01      )     $ (0.01      )   $ (0.05      )
share
                                                                                         
Shares used in
computing
diluted income    20,691,518     20,295,779       20,435,935     20,251,534 
(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