Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE Company Contact:
Arthur A. Koch, Jr.
Chief Operating Officer
Chief Financial Officer
(302) 456-6789
www.sdix.com
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Investor Relations Contact:
Lippert/Heilshorn & Associates, Inc.
William A. Walkowiak, CFA
Klea Theoharis
(212) 838-3777
klea@lhai.com
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Strategic Diagnostics Reports First Quarter Results
NEWARK, Del., April 25, 2002 - Strategic Diagnostics Inc. (Nasdaq: SDIX) today
reported financial results for the first quarter ended March 31, 2002. Revenue
for the quarter was $5.7 million compared with $7.1 million in the first quarter
of 2001, which included an increase in volume of test-kit sales for StarLink(TM)
corn immediately following its discovery in certain manufactured food products.
The net loss in the first quarter totaled $373,000 or $0.02 per share, compared
to net income of $478,000 or $0.03 per diluted share, in the prior year. First
quarter 2002 results included a gain of $237,000, or $0.01 per share, from the
settlement of insurance claims and the sale of property in California, net of
applicable taxes.
The company's products are marketed to serve three primary markets: food safety,
water quality, and antibody products. Sales of food safety products were $1.4
million in the first quarter, versus $3.6 million in the first quarter of 2001
when StarLink(TM) sales were expanding. Water quality products were $1.6 million
versus $800,000 in the prior period, this growth resulting from the additional
sales of the general screening test for toxicity following the acquisition of
AZUR and the events of September 11, 2001. Antibody product sales were $2.5
million, about the same as last year.
President and CEO Richard C. Birkmeyer commented, "We are working on several
additional GMO test methods for new genetic traits. We continue to be excited
about the long-term opportunity for GMO testing. In addition, we have several
new, complementary products for the food safety market category which we plan to
bring to market in the second half of this year. For example, our product to
detect the food pathogen E. coli has been transferred to manufacturing and is
under third-party performance evaluation and validation. We expect to receive
AOAC approval and be able to launch this product in June, slightly ahead of
schedule. This method provides a clear signal (test result) in a shorter period
of time, with greater sensitivity, which we believe, offers significant
advantages over the competition. We are also working on methods to detect other
food-borne pathogens including salmonella and listeria. We expect to launch
these tests during the second half of this year. The rapid pathogen-testing
market potential is estimated by independent market research to be $180 million
worldwide, and growing at more than 20% annually. We believe we are developing
innovative products that will earn us meaningful market penetration over the
next several years.
"On other product fronts, our test for proteins in animal feed that are linked
to the transmission of BSE, or mad cow disease, is on schedule for release in
the third quarter. We also continue to experience steady demand for Microtox
water-testing instruments. In addition to the drinking water utility market, we
have begun to receive inquiries from food and beverage companies who are also
interested in protecting the water used in manufacturing processes and finished
products. We believe the value that our Microtox products bring to these
additional markets is substantial and this expanded market opportunity is
developing. As the base of installed instruments grows and routine testing
procedures are put in place to assure safety of water supplies, we expect
recurring sales of the related testing components to increase.
"Since the majority of our growth is dependent on the successful development,
third party approvals, launch and market acceptance of new products, our
business has exciting prospects but predicting the timing of these events is
very difficult. Accordingly, the company is not in a position at this time to
provide specific guidance as to future revenues or earnings for this year or any
particular fiscal quarter. We believe the markets we are pursuing are large and
growing, but visibility in emerging opportunities is inherently low."
Results for the quarter benefited from the adoption of SFAS 142 under which the
company no long amortizes goodwill. In the first quarter of 2001, $30,000 of
such amortization was included, net of related taxes. The company's results also
continued to be impacted by the additional costs of the consolidation of the
California and Maine facilities. This added approximately $50,000 to operating
expenses in the first quarter. However, when fully operational in the second
half of this year, we expect the impact on future production costs from these
new facilities to be between $750,000 and $1 million in annual savings.
The company also reported that it obtained a waiver and suspension of its loan
covenants for the first and second quarters of 2002, respectively, and that the
covenants have been modified to a minimum level of EBITDA of $1.5 million for
the third quarter of 2002.
Conference Call
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A conference call to review first quarter results is scheduled for 11:00 a.m.
EDT today. The dial-in number for the live conference call will be 212-346-0226.
A live webcast of the conference call will be available on the company's Web
site, www.sdix.com, as well as www.on24.com. For those who cannot listen to the
live broadcast, an audio replay of the call will be available on these sites for
30 days. Telephone replays of the call will be available for 24 hours, from 1:00
p.m. EDT on April 25, until 1:00 p.m. EDT on April 26. To listen to the
telephone replay, dial 800-633-8284 (858-812-6440 outside the U.S.) and enter
reservation number 20501568.
About Strategic Diagnostics Inc.
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SDI is a leading provider of biotechnology-based diagnostic tests for a broad
range of agricultural, industrial, and water treatment applications. Through its
antibody business, Strategic BioSolutions, Strategic Diagnostics also provides
antibody and immunoreagent research and development services. SDI's test kits
are produced in a variety of formats suitable for field and laboratory use,
offering advantages of accuracy, cost-effectiveness, portability, and rapid
response. Trait Check(TM), GMO QuickCheck(TM), and GMO Check(TM) are pending
trademarks for SDI.
This news release contains forward-looking statements reflecting SDI's current
expectations. When used in this press release, the words "anticipate", "enable",
"estimate", "intend", "expect", "believe", "potential", "will", "should",
"project" "plan" and similar expressions as they relate to SDI 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 SDI at this time. Such risks
and uncertainties include, without limitation, changes in demand for products,
delays in product development, delays in market acceptance of new products,
retention of customers and employees, adequate supply of raw materials, the
successful integration and consolidation of the Maine production facilities,
inability to obtain or delays in obtaining third party, including AOAC, 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
SDI's public filings with the U.S. Securities and Exchange Commission.
STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
Three Months
Ended March 31,
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2002 2001
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NET REVENUES:
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Product related $5,567 $6,891
Contract and other 177 183
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Total net revenues 5,744 7,074
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OPERATING EXPENSES:
Manufacturing 3,111 3,323
Research and development 756 719
Selling, general and administrative 2,823 2,187
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Total operating expenses 6,690 6,229
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Operating income (loss) (946) 845
Interest expense, net (16) (33)
Gain on sale of assets 374 --
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Income (loss) before taxes (588) 812
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Income tax expense (benefit) (215) 334
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Net income (loss) (373) 478
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Basic net income (loss) per share ($0.02) $0.03
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Shares used in computing basic net income
net income (loss) per share 17,860,000 16,703,000
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Diluted net income (loss) per share ($0.02) $0.03
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Shares used in computing diluted net income
net income (loss) per share 17,860,000 17,216,000
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STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
March 31, December 31,
2002 2001
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ASSETS (unaudited)
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Current Assets:
Cash and cash equivalents $1,348 $2,379
Receivables, net 4,644 4,737
Inventories 7,472 7,639
Deferred tax asset 861 861
Other current assets 705 504
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Total current assets 15,030 16,120
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Property and equipment, net 3,702 4,072
Other assets 65 351
Deferred tax asset 7,090 6,875
Intangible assets, net 4,841 4,716
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Total assets $30,728 $32,134
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current Liabilities:
Accounts payable $1,309 $1,620
Accrued expenses 606 1,236
Current portion of long-term debt 1,168 1,333
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Total current liabilities 3,083 4,189
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Long-term debt 1,193 1,174
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Stockholders' Equity
Preferred stock, $.01 par value, 17,500,000 shares
authorized, no shares issued or outstanding -- --
Series A preferred stock, $.01 par value, 2,164,362
shares authorized, no shares issued or outstanding -- --
Series B preferred stock, $.01 par value, 556,286
shares authorized, no shares issued or outstanding -- --
Series C preferred stock, $.01 par value, 700,000
shares authorized, no shares issued or outstanding -- --
Common stock, $.01 par value, 35,000,000 shares
authorized, 17,861,068 and 17,858,889 issued and
outstanding at March 31, 2002 and December 31, 2001,
respectively 178 178
Additional paid-in capital 31,168 31,114
Accumulated deficit (4,869) (4,496)
Cumulative translation adjustments (25) (25)
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Total stockholders' equity 26,452 26,771
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Total liabilities and stockholders' equity $30,728 $32,134
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