Slow Q4 sales affect Strategic Diagnostics' 2005 financial results

Newark, Delaware-based Strategic Diagnostics (Nasdaq: SDIX) is a biotechnology company offering solutions to analytical testing problems by using immunotechnology. SDI develops immunoassay-based test kits for both field testing and laboratory use. The company’s products are used for contaminated waste site assessment and remediation, water quality management, food labeling, and transgenic crop seed production. SDI, a technology savvy company, is a major developer and producer of antibodies and immunoreagents for a broad range of applications. The company also benefits from strong sales, marketing, and manufacturing capabilities.

The company has released financial results for the fourth quarter and year ending 31 December 2005. Revenues for the year ending 31 December 2005 increased 4.8 percent to $24.85 million, compared to $23.71 million for the same period in 2004. Organic growth delivered a 107.3 percent increase in revenues from sales of products for the detection of food pathogens, and a 5.6 percent increase in custom antibodies and services revenues. For the fourth quarter of 2005, revenues decreased 7.3 percent to $5.90 million, compared to $6.36 million in the fourth quarter of 2004. The company notes that lower sales of agricultural products had a negative influence on revenues in the fourth quarter of 2005. Lower sales also occurred in the water and environmental product group reflecting the ongoing reduction in large-scale environmental remediation projects in the United States.

Matthew Knight, the company’s president and CEO, commented: “Continued improvements in sales of our food pathogen products were unable to offset a number of significant events that led to increased attrition. The higher than normal attrition levels we experienced in the fourth quarter of 2005 relate primarily to the loss of several large pieces of business in the most price sensitive areas of our agricultural products and order pattern in our antibody product group. We have instituted a strategy that we believe will result in successfully recapturing this business in 2006. We expect the launch of new products in 2006 to also make a significant contribution to profitable growth.”