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Newark, New Jersey
April 26, 2001
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 first quarter
ended March 31, 2001.
Revenue for the quarter increased 22.5% to $7.1 million from $5.8 million in the first quarter of 2000. Market demand was strong in all
three of SDI's markets, despite a weakening economy. Net income was $478,000, or $0.03 per share. This is a 270% percent
increase over the prior year's net income of $129,000, or $0.01 per share, adjusted to exclude the tax-affected gain on a sale of
assets in the first quarter of 2000. Actual net income in the prior year was $304,000, or $0.02 per share.
Highlights for the quarter included the previously announced USDA verification of the Company's GMO (genetically modified organism)
QuickCheck(TM) Bt9 Test Kit, and the overall acceptance of SDI's tests for detecting StarLink(TM) corn. As a result, an increasing
number of production, distribution, and food companies are purchasing GMO test kits, resulting in the Company's food safety unit's
strong performance. More importantly, the recall of foods containing StarLink(TM) corn is accelerating change in the procedures used
throughout the food processing industry. This will allow SDI to leverage its customer relationships, including new relationships that
have developed as a result of the StarLink(TM) corn situation.
Publicity surrounding this issue is also increasing market awareness of the need for other types of testing. SDI offers the most
comprehensive set of GMO test kits available today. SDI is working to develop comprehensive GMO testing protocols and procedures
for a variety of crops, including soybeans, corn, and sugar beets.
Richard C. Birkmeyer, President and CEO of Strategic Diagnostics, attributed the company's improving performance to its new
strategy of creating a full package of analytical tools that a customer needs to make informed decisions. "Rather than selling
individual tests, we now provide a full testing solution, including the procedures and standards needed to obtain successful results.
This strategy will continue to guide our marketing efforts. For example, by combining our GMO tests with our MycoCheck(TM) family
of mycotoxin tests, we are able to offer the grain industry a comprehensive solution to their analytical needs. We are also taking this
approach with our water-quality testing product line."
SDI is still in discussions with AZUR regarding a potential acquisition. The potential benefits from a combined operation, as well as a
joint sales and marketing agreement, are still appealing. However, there can be no assurance that the Company will be able to
complete either transaction.
In the pharmaceutical category, SDI is developing diagnostic devices to monitor drug levels within a patient's body, in order to
determine optimum dosages. Phase III clinical trials being conducted by Bayer AG are continuing as planned. In addition, the
Company entered into development agreements with two other customers in the pharmaceutical industry during the quarter relating to
the use of SDI antibody technology in the product development process. These projects
demonstrate the potential utility of the company's proprietary technology for a variety of applications in the pharmaceutical industry.
"For the remainder of fiscal 2001," continued Mr. Birkmeyer, "we are reiterating our expectations of revenue growth of at least 20%
and net income growth of 25% - 30% for the year. We believe the food safety, water quality, and antibody
product lines will each contribute to this growth. We remain extremely optimistic about the potential of our core antibody technology,
and our vision of becoming the preeminent source of reliable and efficient diagnostic tests in a number of exciting applications."
In other news, the Company announced that Mr. Birkmeyer, Grover C. Wrenn and Kathleen E. Lamb have been re-elected to the
Board of Directors. Morton Collins was also elected to replace C. Lee Smith, who retired from the Company's Board. Mr. Smith had
served as a director since 1991. Mr. Smith's years of dedicated service and guidance to the Company have been invaluable, and his
contributions to the success of the Company are greatly appreciated.
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.
Company news release
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