Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE Company Contact:
Arthur A. Koch, Jr.
Chief Operating Officer
(302) 456-6789
www.sdix.com
Investor Relations Contact:
Lippert/Heilshorn & Associates, Inc.
William A. Walkowiak, CFA
Klea Theoharis
(212) 838-3777
klea@lhai.com
STRATEGIC DIAGNOSTICS REPORTS SECOND QUARTER AND
SIX MONTH RESULTS
NEWARK, Del., July 25, 2002 - Strategic Diagnostics Inc. (Nasdaq: SDIX) - a
leading provider of antibody products and analytical test kits for the food
safety and water quality markets, today reported financial results for the
second quarter and six months ended June 30, 2002.
Revenue for the second quarter of 2002 was $5.6 million, compared with $7.2
million in the second quarter of 2001, which included significant StarLink(TM)
test kit sales. The net loss in the second quarter totaled $547,000 or $0.03 per
share, compared to net income of $515,000 or $0.03 per diluted share, in the
prior year quarter. For the six months ended June 30, 2002, revenues were $11.3
million, versus $14.3 million in the prior year (a decrease of 21 percent),
which included significant StarLink(TM) sales. Net loss for the six months
totaled $920,000, or $0.05 per share, down from net income of $994,000, or $0.06
per diluted share in the prior year.
Second quarter manufacturing expenses were impacted by a number of factors,
including pre-production validation runs and development of standard operating
procedures for the food pathogen test. There were also higher research and
development expenses associated with the previously announced animal feed test
for McDonald's Corporation and the lateral flow food pathogen tests. Certain
selling expenses were higher due to the introduction of the new products,
including a general hygiene test in the food safety market category and the food
pathogen tests.
Last week, the Company launched its RapidChek(R) lateral flow test for E. coli,
the first in a series of several new products expected during the second half of
2002. These new products are expected to drive revenue growth in the second half
of 2002 and should be strong contributors to gross margins, both as compared to
the first half of 2002. Moreover, the manufacturing facilities in Maine for the
Company's antibody business have been fully validated, creating the capacity for
sales growth beginning in the second half of 2002. Manufacturing efficiencies in
these new facilities are expected to have a favorable impact on margins and
operating expenses.
President and CEO Richard C. Birkmeyer said, "We are very excited about the
launch of our E. coli test. Initial response to this test has been very
favorable and the market opportunity for pathogen testing is expanding as food
companies develop and expand existing procedures to avoid contamination.
Additionally, the Company's tests for mycotoxins continue to gain acceptance in
the grain industry. As we look to the balance of this year, our research and
product development continues and we are planning several additional product
introductions. These include new tests for genetically modified organisms (GMO),
as well as additional food-borne pathogen tests, such as for salmonella and for
proteins in animal feed that are linked to the transmission of BSE, or mad cow
disease.
"In our water quality market, we continue to experience steady demand for
Microtox(R) water-testing instruments. The Microtox(R) toxicity test system is
gaining acceptance with drinking water utilities across the country. These
utilities are currently compiling an assessment of their vulnerability to
intentional contamination under recently enacted legislation in the U.S. We are
working with these utilities to assist in addressing vulnerabilities by using
the Microtox(R) technologies."
Conference Call
A conference call to review second quarter results is scheduled for 11:00 a.m.
EDT today. The dial-in number for the live conference call will be 703-871-3022.
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 from 2:00 p.m. EDT on
July 25, until 11:59 p.m. on July 26. To listen to the telephone replay, dial
888-266-2081 (703-925-2533 outside the U.S.) and enter passcode 6067879.
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" 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 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 BALANCE SHEETS
(in thousands, except share and per share data)
June 30, December 31,
2002 2001
- ----------------------------------------------------------------------------------------------------------
ASSETS (unaudited)
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Current Assets:
Cash and cash equivalents $ 1,392 $ 2,379
Receivables, net 4,711 4,737
Inventories 7,192 7,639
Deferred tax asset 861 861
Other current assets 797 504
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Total current assets 14,953 16,120
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Property and equipment, net 3,883 4,072
Other assets 57 351
Deferred tax asset 7,471 6,875
Intangible assets, net 4,806 4,716
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Total assets $ 31,170 $ 32,134
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current Liabilities:
Accounts payable $ 1,139 $ 1,620
Accrued expenses 667 1,236
Current portion of long term debt 2,055 1,333
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Total current liabilities 3,861 4,189
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Long-term debt 1,264 1,174
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Stockholders' Equity
Preferred stock, $.01 par value, 20,920,648 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,
17,878,959 and 17,858,889 issued and outstanding at June 30, 2002
and December 31, 2001, respectively 179 178
Additional paid-in capital 31,307 31,114
Accumulated deficit (5,416) (4,496)
Cumulative translation adjustments (25) (25)
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Total stockholders' equity 26,045 26,771
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Total liabilities and stockholders' equity $ 31,170 $ 32,134
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STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
- ------------------------------------------------------------------------------- ------------------------------
2002 2001 2002 2001
=============================================================================== ==============================
NET REVENUES:
- ----------------------------------------------------------------- ------------- ------------- ------------
Product related $ 5,471 $ 6,999 $ 11,038 $ 13,890
Contract and other 105 202 282 385
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Total net revenues 5,576 7,201 11,320 14,275
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OPERATING EXPENSES:
Manufacturing 2,918 3,258 6,029 6,581
Research and development 888 705 1,644 1,424
Selling, general and administrative 2,681 2,463 5,504 4,649
- ----------------------------------------------------------------- ------------- ------------- ------------
Total operating expenses 6,487 6,426 13,177 12,654
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Operating income (loss) (911) 775 (1,857) 1,621
Interest expense, net (17) (15) (33) (48)
Gain on sale of assets -- 76 374 76
- ----------------------------------------------------------------- ------------- ------------- ------------
Income (loss) before taxes (928) 836 (1,516) 1,649
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Income tax expense (benefit) (381) 321 (596) 655
- ----------------------------------------------------------------- ------------- ------------- ------------
Net income (loss) (547) 515 (920) 994
- ----------------------------------------------------------------- ------------- ------------- ------------
Basic net income (loss) per share $ (0.03) $ 0.03 $ (0.05) $ 0.06
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Shares used in computing basic net income
net income (loss) per share 17,870,000 16,752,000 17,869,000 16,748,000
================================================================= ============= ============= ============
Diluted net income (loss) per share $ (0.03) $ 0.03 $ (0.05) $ 0.06
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Shares used in computing diluted net income
net income (loss) per share 17,870,000 17,352,000 17,869,000 17,303,000
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