SDIX Reports First Quarter 2012 Results and First Advanced Genomic Antibody Technology Collaboration with a Major Pharmaceutical

  SDIX Reports First Quarter 2012 Results and First Advanced Genomic Antibody
  Technology Collaboration with a Major Pharmaceutical Company

                 Conference Call to Review at 4:30PM ET Today

Business Wire

NEWARK, Del. -- May 10, 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 ended
March 31, 2012.

Revenue for the first quarter of 2012 was $5.6 million, decreasing from $6.6
million for the same period in 2011. This decrease was primarily related to
the timing of IVD sales, a softening biopharmaceutical market, and external
regulatory changes in the food industry.

Net loss for the first quarter of 2012 was $1.2 million, compared to a net
loss of $658,000 for the same period in 2011. Net loss for the first quarter
of 2011 included income from discontinued operations of $388,000.

The Company also announced that it has established a collaborative
relationship with a top 10 pharmaceutical company with the goal of utilizing
the advanced Genomic Antibody Technology (“GAT™”) platform to generate
monoclonal antibodies against a GPCR target. The advanced GAT™ platform, which
builds on SDIX’s antibody generation capabilities, has been shown in internal
studies to be effective in raising diverse collections of monoclonal
antibodies against GPCR targets. SDIX will employ its advanced GAT™ platform
for the discovery of monoclonal antibodies against a specific GPCR target
chosen by its collaborator. Resulting antibodies are expected to be
incorporated into a clinical assay that is considered essential to this
pharmaceutical company’s development of a novel therapeutic.

Regarding the collaboration, Francis M. DiNuzzo, President and CEO of SDIX,
stated, “The initiation of this collaboration marks an important step forward
for SDIX. We are pleased to have progressed our advanced GAT™ system to the
point where pharmaceutical and biotechnology companies are willing to
collaborate with us, using our technology to develop monoclonal antibodies
against critical targets.” Klaus Lindpaintner, Vice President of Research and
CSO for SDIX, went on to say, “We believe our advanced GAT™ system can
establish a new paradigm in monoclonal antibody development for difficult
targets such as GPCRs.” He added, “This collaboration offers us the
opportunity to demonstrate our capabilities with a well-regarded antibody
development group within a major pharmaceutical company. We expect to be
successful in providing our collaborator with antibodies they have so far been
unable to generate."

Commenting on the core business, Mr. DiNuzzo said, “We are taking aggressive
actions in our core Life Science business to increase our order flow and
believe these actions will allow us to achieve higher revenue as the year
progresses. In Food Safety, we are focused on growing our Salmonella and
Listeria products, and continue to drive our international market expansion.
Food Safety revenue increased over the fourth quarter of 2011 and we believe
the improvement will continue in subsequent quarters.”

Financials

Gross profit for the first quarter of 2012 was $3.2 million, as compared to
$3.6 million for the same period in 2011. Gross margins were 57% for the first
quarter of 2012, compared to 56% for the same period in 2011. The revenue from
our February 2012 agreement with Becton Dickinson’s BD Diagnostics business
unit contributed approximately $900,000 in gross margin during the quarter.

First quarter operating expenses were $4.4 million, a decrease of $303,000
compared to the first quarter of 2011. The overall decrease in SG&A expenses
offset the planned R&D investments in SDIX’s next generation GAT™ platform,
which increased to $1.1 million from $863,000 in the first quarter of 2011.

Loss from continuing operations for the first quarter was $1.2 million in
2012, as compared with $1.0 million in 2011. Net loss for the first quarter of
2012 was $1.2 million, or $0.06 per diluted share, compared to a net loss of
$658,000, or $0.03 per diluted share, for the same period in 2011.

Life Science Revenues

Life Science revenue decreased to $4.0 million for the first quarter of 2012,
as compared to $4.5 million for the same period in 2011. This decrease was
primarily related to order timing in the IVD business where large orders from
customers result in quarter to quarter variability, coupled with a softer
market in the biopharmaceutical area. This was partially offset by $920,000 of
revenue from the BD agreement.

Kit Revenues

Food Safety revenue decreased 18%, to $1.5 million, for the first quarter of
2012, as compared to $1.8 million for the same period in 2011. The decrease is
primarily attributable to regulatory changes that have moved a number of our
customers away from SDIX’s E-coli products to other testing solutions.

As the Company continued to shift focus away from the Ag-GMO business, revenue
for the quarter decreased by $81,000 to $180,000.

Balance Sheet

The Company completed the first quarter 2012 with cash and restricted cash of
$10.0million and stockholders’ equity of $19.0 million.

Conference Call

The dial-in number for the live conference call at 4:30PM ET today will be
877-407-8035 (201-689-8035 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 May 10, 2012 through 11:59 p.m. ET on May 24, 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 394108.

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,
                                             2012         2011
ASSETS                                                    
Current Assets:
Cash and cash equivalents                        $  9,798        $   10,665
Restricted cash                                     200              300
Receivables, net                                    3,313            3,758
Inventories                                         2,254            2,142
Other current assets                            1,159        618
Total current assets                            16,724       17,483
                                                                     
Property and equipment, net                         4,244            3,890
Other assets                                    1,247        1,249
Total assets                                  $  22,215    $   22,622
                                                                     
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of debt                          $  200          $   300
Accounts payable and accrued expenses               2,720            2,325
Deferred revenue                                334          -
Total current liabilities                       3,254        2,625
                                                                     
Total stockholders' equity                      18,961       19,997
Total liabilities and stockholders' equity    $  22,215    $   22,622
                                                                     


STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

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


                                        Three Months Ended March 31,
                                           2012              2011
                                                            
Revenues                                   $ 5,637              $ 6,558
                                                                             
Cost of sales                                2,442                2,912
                                                                        
Gross profit                                3,195              3,646      
                                                                             
Operating expenses:
Research and development                     1,098                863
Selling, general and administrative         3,287              3,825      
Total operating expenses                    4,385              4,688      
                                                                             
Operating loss                               (1,190     )         (1,042     )
                                                                             
Interest expense, net                       (7         )        (9         )
                                                                             
Loss from continuing operations              (1,197     )         (1,051     )
before taxes
                                                                             
Income tax benefit                          -                  (5         )
                                                                             
Loss from continuing operations, net       $ (1,197     )       $ (1,046     )
of taxes
                                                                             
Discontinued operations:
                                                                             
Income from discontinued operations         -                  388        
                                                                             
                                                                             
Net loss                                   $ (1,197     )       $ (658       )
                                                                             
Basic loss per share from continuing         (0.06      )         (0.05      )
operations
Basic income per share from                 0.00               0.02       
discontinued operations
                                                                             
Basic net loss per share                   $ (0.06      )       $ (0.03      )
                                                                             
Shares used in computing basic net          20,488,242         20,384,041 
loss per share
                                                                             
Diluted loss per share from                  (0.06      )         (0.05      )
continuing operations
Diluted income per share from               0.00               0.02       
discontinued operations
                                                                             
Diluted net loss per share                 $ (0.06      )       $ (0.03      )
                                                                             
Shares used in computing diluted net        20,488,242         20,384,041 
loss per share
                                                                             

Contact:

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