Newark, Delaware
July 24, 2003

Strategic Diagnostics, Inc., 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, 2003.

Revenues for the second quarter of 2003 were $6.4 million, compared to $5.6 million for the second quarter of 2002. Net income in the second quarter of 2003 totaled $211,000, or $0.01 per diluted share, compared to a net loss of $547,000, or $0.03 per diluted share, in the second quarter of 2002. For the six months ended June 30, 2003, revenues were $12.9 million, versus $11.3 million for the same period in 2002. Net income for the six months ended June 30, 2003 totaled $546,000, or $0.03 per diluted share, compared to a net loss of $920,000, or $0.05 per diluted share, for the same period in the prior year.

Antibody revenues increased 24% to $3.0 million for the second quarter of 2003 compared to the same quarter in the prior year, and increased by 21% to $6.0 million in the six months ended June 30, 2003, compared to the same period in the prior year. This increase continues to reflect the benefits of the consolidation of the production facilities completed in 2002, which has attracted additional business.

Water quality revenues increased 17% to $2.1 million for the second quarter of 2003 compared to the same quarter in the prior year, and increased by 12% to $3.8 million for the six months ended June 30, 2003, compared to the same period in the prior year. The Company continues to work with drinking water utilities as they assess their vulnerability to chemical contamination. SDI's participation in the EPA's Environmental Technology Verification (ETV) program to formally evaluate Microtox® for drinking water protection, and the Company's collaboration with the U.S. Navy to further evaluate and develop the capabilities of the Deltatox® system for toxin detection are ongoing, with results expected in the fourth quarter 2003.

Food safety revenues increased 5% to $1.3 million in the second quarter of 2003 compared to the same quarter in the prior year, and increased by 13% to $3.0 million for the six months ended June 30, 2003, compared to the same period in the prior year. Food pathogen test sales, led by E. coli, grew significantly during the quarter. Sales of the Company's products to detect genetically modified (GM) traits declined in the second quarter of 2003 compared to the second quarter of 2002, due to the continued reduction in StarLink(TM) sales. Comparing second quarter 2003 to first quarter 2003, the decline in StarLink(TM) sales has slowed to the mid single digits, and it is expected these sales will continue to decline at a similar rate for the balance of 2003. Sales of grain, non- StarLink(TM) tests continue to grow.

For the three months and six months ended June 30, 2003, when compared to the respective periods in 2002, contract and other revenue declined as the Company continued to place greater emphasis on devoting research and development resources on internal projects.

Gross profits (total revenues less manufacturing costs) increased $895,000, or 34%, to $3.6 million in the second quarter of 2003 compared to $2.7 million in the same quarter of 2002, and gross margin percentages increased to 55% in 2003 in the second quarter 2003 as compared to 48% for the same quarter in 2002. For the six months ended June 30, 2003, gross profits increased $1.9 million, or 36%, to $7.2 million as compared to $5.3 million for the same period in the prior year, and gross margin percentages increased to 56% in the first six months of 2003 as compared to 47% in the same period of 2002. The increase in gross profits was primarily driven by the increase in product sales for the quarter and six months and lower manufacturing expenses.

Manufacturing expenses decreased $54,000 to $2.9 million for the second quarter of 2003 compared to the same quarter in the prior year, and decreased by $312,000 to $5.7 million for the six months ended June 30, 2003, compared to the same period in the prior year. The decreases were primarily driven by benefits realized from the consolidation of the California antibody production facility into the Maine location, which was completed in 2002, and by the Company's initiatives taken in the fourth quarter 2002 and early in the first quarter 2003 to leverage its manufacturing capacity and improve production yields.

Research and development expenses decreased $270,000 to $618,000 in the second quarter of 2003 compared to the same quarter in the prior year, and decreased by $312,000 to $1.3 million in the six months ended June 30, 2003, compared to the same period in the prior year, primarily due to higher expenses in the prior year associated with the development efforts of the Company's food pathogen and animal feed test.

During the second quarter 2003, Bayer AG notified SDI of its termination of the Supply Agreement. They informed the Company that the device, developed by SDI and used by Bayer in its clinical study, as presently designed, does not meet the anticipated commercial requirements, principally due to the short shelf life of the screening test. Efforts to lengthen the shelf life would require modifications to Bayer's product development protocol, which could result in a substantial delay in the preparation of Bayer's New Drug Application. The Company does not expect that this will have a material financial impact on its results of operations for the year.

Selling, general and administrative expenses decreased $66,000 to $2.6 million for the second quarter of 2003 compared to the same quarter in the prior year, and decreased by $502,000 to $5.0 million in the six months ended June 30, 2003, compared to the same period in the prior year, primarily due to the actions taken by the Company in late 2002 and early 2003 to streamline its operations and the effect of the consolidation of its antibody facilities in Maine, which was completed in 2002. Included in the selling, general and administrative expenses of $2.6 million for the second quarter 2003 is a $315,000 provision for severance and related expenses associated with the Company's termination of its former CEO in May 2003.

Pre-tax income totaled $309,000 in the second quarter of 2003 compared to a pre-tax loss of $928,000 in the second quarter of 2002, and pre-tax income totaled $821,000 for the six months ended June 30, 2003 compared to a pre-tax loss of $1.5 million for the same period in the prior year. Commenting on the improvement, Arthur A. Koch, Jr., President and CEO, stated, "SDI believes that there are significant market opportunities for its portfolio of products. The Board and management of SDI are fully committed to reaching the Company's potential in each of its market categories. The Company continues to manage its expenses and position itself to grow profitably."

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. FeedChek(TM), Trait Chek(TM), GMO QuickChek(TM), and GMO Chek(TM) are pending trademarks for SDI.