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Newark, New Jersey
October 25, 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 third
quarter ended Sept. 30, 2001.
Revenue for the quarter increased 49% to $8.5 million from $5.7
million in the third quarter of 2000. Operating income increased
five-fold, to $1,419,000 from $281,000, with a corresponding
ten-fold increase in net income, to $896,000 from $89,000 in the
prior year. On a per share basis, fully diluted net income was
$0.05 versus $0.01 for the same period last year. These results
for the third quarter of 2001 include approximately $150,000 in
expenses related to the previously announced consolidation of
the Company's Strategic BioSolutions division, approximately
$0.01 per diluted share after related income tax effects.
For the nine months ended Sept. 30, 2001, revenues were $22.8
million, versus $17.3 million in the prior year, an increase of
32%. Operating income for the nine-month period was $3.0 million
versus $1.1 million in the prior year. Net income for the first
nine months was $1,889,000, or $0.11 per fully diluted share, up
187% from $659,000, or $0.04 per fully diluted share in the
prior year.
Financial results for the nine-month periods in the past two
fiscal years included a number of one-time items. The first nine
months of fiscal 2001 included the $150,000 expense mentioned
above, in addition to the $253,000 severance charge recorded in
the second quarter, both related to the consolidation of the
Company's Strategic BioSolutions division. The Company also
recorded gains on the sale of assets of $76,000 in the first
nine months of 2001 and $283,000 in the first nine months of
2000. Excluding these charges and gains, after related effects
on income taxes, adjusted net income for the first nine months
of 2001 was $2,093,000 or $0.12 per diluted share, an increase
of over 300% from the adjusted $489,000, or $0.03 per diluted
share, in the prior year.
Revenues increased in all three business categories during the
quarter. Revenue in the food safety category grew more than
115%, to $3.3 million, as demand for GMO
(genetically modified organism) tests continues to build.
Water safety revenues increased 80%, to $2.2 million, on strong
sales of the Company's recently acquired Microtox(R) water
toxicity test system. Sales of antibody products from the
Strategic BioSolutions division increased 3% to $2.8 million.
Commenting on the Company's strong results, President and CEO
Richard C. Birkmeyer stated, "We are extremely pleased with the
success of our strategic approach, building on existing market
leading positions. As a result, we believe it is now clear that
we will meet or exceed our 20% revenue growth target and achieve
net earnings growth on a fully diluted basis of 60% - 70%,
exceeding our previous target of 25% - 30% for the full year. We
attribute these results to the strategy of marketing a full
testing solution, not simply individual tests. These unique
testing solutions are based on reliable technology that is
affordable and easy to use.
"For example, our Microtox(R) water system is the only broad
screen for chemical toxicity in water available in the country.
While others have tests for individual chemicals, Microtox(R)
responds to a very broad range of toxins and classes of chemical
agents including metals, pesticides, fungicides, chlorinated
solvents, industrial chemicals, and similar materials. Nearly 20
years of scientific studies have documented the sensitivity of
Microtox(R) to more than a thousand different simple and complex
chemicals.
"The Microtox(R) test system is increasingly being used to
monitor drinking water supplies in various countries and major
U.S. cities where either accidental or deliberate contamination
is a concern. The test can be completed in as little as 15
minutes, allowing for a quick response to changes in water
quality. The US Army Corps of Engineers and the Washington
Aqueduct system are currently using Microtox(R) systems to
monitor the drinking water that is supplied to the Pentagon to
protect personnel from the terrorist threat of contaminated
drinking water.
"Our strategy has been equally successful
in food safety. As we entered this year's harvest, our customers
had the full complement of testing tools needed to detect all of
the major genetic traits in commercial production. This testing
capability gives farmers, grain handlers and food processors a
fast and inexpensive tool for consigning grain to meet the
expectations of their customers and ensure appropriate
distribution. For example, TraitCheck(TM) RUR is the only
commercially available test for NK603 Roundup Ready(R) Corn.
"In our antibody business, we have made significant progress
with our plans to consolidate our production operations. Our
designs to streamline production systems and increase efficiency
through automation are being realized with the opening of the
first of two 36,000 square foot facilities in Windham, Maine. We
have begun to initiate new customer projects at this facility
and we are well positioned for improved production margins
beginning in 2002. Also, during the third quarter, we took
significant steps to streamline manufacturing in our preparation
for full scale production of test kits under our Bayer program."
Mr. Birkmeyer concluded, "Strategic Diagnostics is moving ahead
on a number of fronts with the commercialization of our
technology. At the same time, revenue and profitability continue
to improve and our balance sheet is stronger than ever. I
believe that the Company is well-positioned for sustained,
long-term growth."
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
N3907
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