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SDIX Reports First Quarter 2010 Results

May 3, 2010

First Quarter Reflects Improved Operating Efficiencies - Net Loss Decreases 18%.
 
NEWARK, DE (May 3, 2010) - Strategic Diagnostics Inc., now doing business as 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 first quarter ended March 31, 2010.  

Revenues for the quarter ended March 31, 2010 were $6.7 million compared to $6.9 million for the same period in 2009. While overall revenues were down compared to 2009, Life Science revenues were up 3% over 2009 and Food Safety revenues were even, despite difficult market conditions. The decrease in revenues compared to 2009 is attributable to lower revenues in the Water Quality and Ag-GMO markets where SDIX has been reducing its focus.

First Quarter Highlights

SDIX Collaborates with Fred Hutchinson Cancer Research Center to Discover Biomarkers for Use in Early Detection of Cancer – The objective of the collaboration, which is initially focused on pancreatic cancer, is to identify potential cancer biomarkers to advance the prognostic and diagnostic potential for these challenging diseases.

Dr. Klaus Lindpaintner Joined as Vice President of R&D / Chief Scientific Officer - Dr. Lindpaintner served most recently as Director of the “Roche Molecular Medicine Laboratories” and as Roche’s Global Head, Molecular Medicines Policy and External Affairs, coordinating Roche’s efforts in implementing biomarker research based on genetics, genomics, proteomics, and associated disciplines from early discovery to late-stage clinical trials.

Strategic Diagnostics Inc. Becomes SDIX - The new SDIX branding initiative better reflects the Company’s evolution to a biotechnology company, with all of its core capabilities and expanded expertise in developing and delivering a full suite of innovative immuno-solutions.

NOVUS BIOLOGICALS and SDIX Form Partnership for Creation and Dissemination of Pre-made GAT™ Polyclonal Antibodies - Initial commercial efforts are expected to focus on Novus’ dissemination of over 800 antibodies from SDIX’s pre-made collection of cancer antigen polyclonal antibodies and the creation of additional novel antibodies through the application of GAT to targets selected by Novus for inclusion in Novus’ catalog offering.

Francis DiNuzzo, the Company’s President and Chief Executive Officer, said, “We had a modest first quarter of 2010, which continued to show improvement in our financial efficiencies. Consistent with our comments at the end of 2009, we have shifted a significant portion of our efforts and resources to driving growth in our target markets of Food Safety and Life Science. We have added distribution strength through our partnership with Novus Biologicals and further strengthened our direct selling organization in the U.S. with an expanded sales team in our Food Safety and Life Science markets. In addition, our new director of international business joined during the quarter and has already begun to shape a plan for growth in both Europe and Asia. With new partnerships and a strengthened team at SDIX, we are positioning to grow revenues and establish our presence in these two markets.”

Financials

           Three Months Ended March 31,

Gross profit (defined as total revenues less manufacturing expenses) for the quarter ended March 31, 2010 was $3.9 million, as compared to $3.8 million for the same period in 2009, an increase of 3%.  Gross margins were 59% for the first quarter of 2010, compared to 55% for the same period in 2009.  

Operating expenses for the first quarter of 2010 decreased 5% to $7.1 million, compared to $7.5 million for the first quarter of 2009.  

Selling, general and administrative (SGA) expenses were $3.7 million for the first quarter of both 2010 and 2009.

Research and development (R&D) expenses were 10% of revenues for the first quarters of both 2010 and 2009.

Operating loss for the first quarter decreased 23% to $447,000 from $578,000 in the first quarter of 2009.  

Net loss in the first quarter of 2010 fell 18% to $459,000, or $0.02 per diluted share, compared to a net loss of $561,000, or $0.03 per diluted share, for the same period in 2009.

Life Science Revenues

Life Science revenues were $3.8 million for the quarter ended March 31, 2010, a 3% increase from $3.7 million for the same period in 2009.  

Kit Revenues

Kit revenues were $2.9 million for the first quarter ended March 31, 2010, reflecting a decrease of 10%, including contract revenues, from $3.2 million in the first quarter of 2009. The decrease is the result of lower sales and contract revenues in our Water Quality and Ag-GMO markets.  

Quarter Ended March 31,                                      2010                  2009
Life Sciences                                                        $ 3.8 million         $ 3.7 million
Food Pathogen Products                                       $ 1.4 million         $ 1.4 million
Ag-GMO Products, including contract revenue   $ 0.6 million         $ 0.7 million
Water and Environmental Products                     $ 0.9 million         $ 1.1 million       

Balance Sheet

The Company completed the first quarter with $9.3 million in available and restricted cash, an increase of $129,000 from December 31, 2009, and stockholders’ equity of $19.7 million.

Conference Call        

A conference call to review first quarter results is scheduled for May 3, 2010 at 4:30 p.m. The dial-in number for the live conference call 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 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 3, 2010 through 11:59 p.m. ET on May 17, 2010. 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 349986.

 Click to view Consolidated Statements of Operations and Consolidated Balance Sheets. 

About SDIX

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.

Media Contact

Media Relations

mediarelations@sdix.com

SDIX

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