SDIX (Nasdaq: SDIX), a leading provider of biotechnology-based products and services for a broad range of life science, biotechnology, diagnostic and food safety applications, today reported financial results for the quarter ended June 30, 2012.
Revenue for the second quarter of 2012 was $5.5 million, decreasing from $6.1 million for the same period in 2011. The decrease was primarily related to the timing of IVD sales and continued softness in the biopharmaceutical market. Food Safety revenue continued to show improvement over the fourth quarter of 2011 which marked a recent low point for quarterly revenue as a result of regulatory changes that started impacting the Company during the second quarter of 2011. Second quarter Food Safety revenue increased 8.8% over first quarter 2012 revenue, which in turn was 5% over fourth quarter 2011 revenue. Year-to-date revenue for the six months ended June 30, 2012 was $11.1 million, decreasing 12% from $12.6 million for the same period in 2011.
Net loss for the second quarter of 2012 was $1.5 million, compared to net loss of $657,000 for the same period in 2011. Net loss for the second quarter of 2011 included income from discontinued operations of $438,000. Net loss for the six months ended June 30, 2012 was $2.7 million, compared to a net loss of $1.3 million for the same period in 2011. Net loss in 2011 included income from discontinued operations of $826,000.
Francis M. DiNuzzo, President and CEO of SDIX, commented, “We were pleased to see our Life Science customer orders at the highest level since the second quarter of 2011. While we continue to experience spending challenges in our Life Science end markets, efforts undertaken late in the first quarter to refocus and reorganize our commercial team have played a key role in the improved order performance. Notably, our Food Safety revenues continued to strengthen, with sequential quarterly growth over the last two quarters, driven primarily by success in our Listeria and Salmonella product offerings. This is a trend we believe will continue in subsequent quarters.” Mr. DiNuzzo continued, “We are excited about our continued progress with the Advanced Genomic Antibody Technology™ platform development. Our R&D team continues to meet milestones, including generating recent data that validates our ability to utilize the technology to discover potentially novel monoclonal antibodies against key therapeutic targets. Based on current market trends, this technology could represent a large market opportunity for SDIX. Our next key objective is to compile a full data package which we will use to engage additional pharmaceutical and biotechnology companies in partnership discussions. We are on target to complete the data package in the fourth quarter of this year.”
Gross profit for the second quarter of 2012 was $3.0 million, as compared to $3.5 million for the same period in 2011. Gross margins were 54% for the second quarter of 2012, compared to 58% for the same period in 2011. This decrease was primarily due to lower revenue, especially in Life Science which has high fixed manufacturing costs. The gross margin in the second quarter reflects improvement over the gross margin in both the first quarter of 2012 (after eliminating gross margin on licensing revenue) and the fourth quarter of 2011 reflecting both increased Life Science product revenue and improved operating efficiencies in the recently concluded quarter.
Second quarter 2012 operating expenses of $4.4 million were down $217,000, compared to the second quarter of 2011. The overall decrease in SG&A expenses offset the planned R&D investments in SDIX’s next generation GAT platform, which increased, as planned, to $976,000 from $842,000 in the second quarter of 2011.
Operating loss for the second quarter was $1.5 million, compared with operating loss of $1.1 million for the second quarter of 2011. R&D spending on the Company’s advanced GAT platform was approximately $750,000 during the second quarter of 2012, representing over 50% of the operating loss for the quarter.
Loss from continuing operations for the second quarter was $1.5 million in 2012, as compared with $1.1 million in 2011. Net loss for the second quarter of 2012 increased to $1.5 million, or $0.07 per diluted share, compared to net loss of $657,000, or $0.03 per diluted share, for the same period in 2011.
Investments in the GAT platform were a major factor in the adjusted EBITDA loss of $935,000 for the quarter and $1.7 million for the six months ended June 30, 2012. These were planned investments to develop this key technology platform. Capital expenditures to expand the Company’s R&D laboratories and operational capabilities were approximately $1.3 million for the six months ended June 30, 2012. Based on the progress made on the GAT platform, SDIX believes these investments in R&D and capital expenditures will begin to slow as the year progresses. As of June 30, 2012, the Company had approximately $7.5 million in available cash and total debt of $363,000.
The dial-in number for the live conference call at 4:30 PM ET today will be 877-407-8035 (201-689-8035 outside the U.S.). A live webcast of the conference call will be available on the Company’s website, , as well as . For those who cannot listen to the live broadcast, an audio replay of the call will be available on each of these websites for 90 days. Telephone replays of the call will be available from 7:30 p.m. ET on August 8, 2012 through 11:59 p.m. ET on August 23, 2012. To listen to the telephone replay, dial 877-660-6853 (201-612-7415 outside the U.S.) and enter account number 286 and conference ID 398583.
SDIX is a biotechnology company with a core expertise in creating better antigens, better antibodies and better assays for the pharmaceutical, biotechnology and food safety markets. For over 20 years, SDIX has been a leading immuno-solutions company, developing results-oriented and innovative antibody-based solutions that enable customers to meet high performance research, diagnostic and commercialization objectives.
In the life science market, SDIX’s technology and capabilities are being used to help discover disease mechanisms, facilitate development of new drugs and provide antibodies and assays for the diagnosis of disease. In the food safety market, SDIX continues to expand its footprint as an international supplier of rapid pathogen test technologies that enable more accurate and cost-effective results.
This news release may contain forward-looking statements reflecting SDIX's current expectations. When used in this press release, words like “anticipate”, “could”, “enable”, “estimate”, “intend”, “expect”, “believe”, “can”, “potential”, “will”, “should”, “project”, “plan” and similar expressions as they relate to SDIX 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 SDIX at this time. Such risks and uncertainties include, without limitation, changes in demand for products, the application of our technologies to various uses, delays in product development, delays in market acceptance of new products, retention of customers and employees, adequate supply of raw materials, inability to obtain or delays in obtaining fourth party, or 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 SDIX's public filings with the U.S. Securities and Exchange Commission.