<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                               -------------------

                                    FORM 10-Q

(Mark One)
   [X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934
               For the Quarterly Period Ended September 30, 2000

   [ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934
                   For the Transition Period From ________ to



                         Commission File Number 0-68440



                           STRATEGIC DIAGNOSTICS INC.
             (Exact name of Registrant as specified in its charter)

                    ----------------------------------------


                Delaware                                        56-1581761
    (State or other jurisdiction of                          (I.R.S. employer
     incorporation or organization)                         identification no.)

          111 Pencader Drive
           Newark, Delaware                                       19702
(Address of principal executive offices)                        (Zip Code)


       Registrant's telephone number, including area code: (302) 456-6789

                              --------------------


               Former Name, Former Address and Former Fiscal Year,
                       if Changed Since Last Report: None


         Indicate by check mark whether the Registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.     Yes    X     No
                                                    ---      ---

         As of September 30, 2000 there were 16,597,940 outstanding shares of
the Registrant's common stock, par value $.01 per share.

<PAGE>

                           STRATEGIC DIAGNOSTICS INC.

<TABLE>
<CAPTION>
                                      INDEX

Item                                                                                            Page
----                                                                                            ----

PART I
<S>          <C>                                                                                <C>
      ITEM 1.  Financial Statements (Unaudited)

             Consolidated Balance Sheets - September 30, 2000 and December 31, 1999               2

             Consolidated Statements of Operations - Three months and nine months ended
                 September 30, 2000 and 1999                                                      3

             Consolidated Statements of Stockholders' Equity and
                      Comprehensive Income for the nine months ended
                      September 30, 2000                                                          4

             Consolidated Statements of Cash Flows - Nine months ended
                      September 30, 2000 and 1999                                                 5

             Notes to Consolidated Interim Financial Statements                                   6

      ITEM 2.  Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                                         13

      ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk                        17

PART II                                                                                          18

       ITEM 6. Exhibits and Reports on Form 8-K                                                  18

SIGNATURES                                                                                       19
</TABLE>

                                       1
<PAGE>

                                     PART I

Item 1. Financial Statements

                  STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                       (in thousands, except share data)
                                  (unaudited)
<TABLE>
<CAPTION>
                                                                                 September 30,        December 31,
------------------------------------------------------------------------------------------------------------------
                                                                                     2000                1999
------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------
<S>                                                                                <C>                 <C>
ASSETS
Current Assets:
         Cash and cash equivalents                                                 $ 1,229             $ 2,491
         Receivables, net                                                            4,491               6,021
         Inventories                                                                 7,356               5,524
         Other current assets                                                          528                 281
------------------------------------------------------------------------------------------------------------------
           Total current assets                                                     13,604              14,317
------------------------------------------------------------------------------------------------------------------

Property and equipment, net                                                          3,040               3,289
Other assets                                                                           351                 431
Deferred tax asset                                                                   6,686               7,071
Intangible assets, net                                                               4,083               4,564
------------------------------------------------------------------------------------------------------------------
           Total assets                                                            $27,764             $29,672
==================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------------------------------------------------------------------------------------
Current Liabilities:
         Accounts payable                                                          $ 1,065             $ 1,375
         Accrued expenses                                                              504                 697
         Taxes payable                                                                  --                  55
         Deferred revenue                                                              162                 162
         Revolving line of credit                                                    2,260                  --
         Current portion of long term debt                                           1,341               1,898
------------------------------------------------------------------------------------------------------------------
           Total current liabilities                                                 5,332               4,187
------------------------------------------------------------------------------------------------------------------
Long-term debt                                                                       2,223               6,275
------------------------------------------------------------------------------------------------------------------
Stockholders' Equity
          Preferred stock, $.01 par value, 17,500,000 shares authorized,
                   no shares issued or outstanding                                       -                   -
          Series A preferred stock, $.01 par value, 2,164,362
                   authorized, no shares issued or outstanding                           -                   -
          Series B preferred stock, $.01 par value, 556,286
                   authorized, no shares issued or outstanding                           -                   -
          Common stock, $.01 par value, 35,000,000 authorized,
                   16,597,940 and 16,470,106 issued and outstanding
                   at September 30, 2000 and December 31, 1999, respectively           166                 164
          Additional paid-in capital                                                26,579              26,241
          Accumulated deficit                                                       (6,511)             (7,170)
          Cumulative translation adjustments                                           (25)                (25)
------------------------------------------------------------------------------------------------------------------
                   Total stockholders' equity                                       20,209              19,210
------------------------------------------------------------------------------------------------------------------
                   Total liabilities and stockholders' equity                      $27,764             $29,672
==================================================================================================================
</TABLE>

 The accompanying notes are an integral part of these statements.

                                       2

<PAGE>

                  STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                (in thousands, except share and per share data)
                                  (unaudited)
<TABLE>
<CAPTION>
                                                                          Three Months                       Nine Months
                                                                       Ended September 30,                Ended September 30,
-----------------------------------------------------------------------------------------------------------------------------------
                                                                      2000             1999              2000             1999
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                              <C>               <C>               <C>               <C>
NET REVENUES:
-----------------------------------------------------------------------------------------------------------------------------------
          Product related                                        $      5,462      $      7,087      $     16,272      $     15,876
          Contract and other                                              239               372               993               977
-----------------------------------------------------------------------------------------------------------------------------------
                  Total net revenues                                    5,701             7,459            17,265            16,853
-----------------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSES:
          Manufacturing                                                 2,408             3,236             7,227             7,249
          Research and development                                        700               619             2,135             1,755
          Selling, general and administrative                           2,312             2,451             6,755             6,112
          Acquired research and development                              --                --                --               3,500
-----------------------------------------------------------------------------------------------------------------------------------
                   Total operating expenses                             5,420             6,306            16,117            18,616
-----------------------------------------------------------------------------------------------------------------------------------

                   Operating income (loss)                                281             1,153             1,148            (1,763)

Interest expense, net                                                    (120)             (143)             (333)             (232)

------------------------------------------------------------------------------------------------------------------------------------
Gain on sale of assets                                                    --                --                283                --
-----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before taxes                                                161             1,010             1,098            (1,995)
-----------------------------------------------------------------------------------------------------------------------------------
                   Income tax                                              72                --               439                --
-----------------------------------------------------------------------------------------------------------------------------------
Net income (loss)                                                          89             1,010               659            (1,995)
Preferred stock dividends                                                  --                --                --               (32)
-----------------------------------------------------------------------------------------------------------------------------------
Net income (loss)
          Applicable to common stockholders                                89             1,010               659            (2,027)
-----------------------------------------------------------------------------------------------------------------------------------

Basic income (loss) per share
          applicable to common stockholders                      $       0.01      $       0.07      $       0.04      $      (0.15)
-----------------------------------------------------------------------------------------------------------------------------------

Shares used in computing basic net income (loss)
          per share applicable to common stockholders              16,583,000        14,544,000        16,534,000        13,697,000
-----------------------------------------------------------------------------------------------------------------------------------

Diluted income (loss) per share
          applicable to common stockholders                      $       0.01      $       0.06      $       0.04      $      (0.15)
-----------------------------------------------------------------------------------------------------------------------------------

Shares used in computing diluted net income (loss)
          per share applicable to common stockholders              17,362,000        17,483,000        17,494,000        13,697,000
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       3
<PAGE>

                  STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                            AND COMPREHENSIVE INCOME
                                 (in thousands)
                                  (unaudited)

                      Nine Months Ended September 30, 2000

<TABLE>
<CAPTION>
                                                Series A   Series B           Additional                  Cumulative
                                               Preferred  Preferred   Common    Paid-In     Accumulated   Translation
                                                 Stock      Stock      Stock    Capital       Deficit     Adjustments     Total
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>        <C>           <C>      <C>            <C>            <C>           <C>
Balance
December 31, 1999                              $    --        --        164     26,241        (7,170)         (25)       $ 19,210
-----------------------------------------------------------------------------------------------------------------------------------
Exercises of stock options, warrants and
  other                                             --        --          2        223            --           --             225
Acquisition of Envirol Product Line                 --        --         --         43            --           --              43
Shares issued in connection with marketing
  agreement                                         --        --         --         72            --           --              72
Net income and comprehensive income                 --        --         --         --           659           --             659
-----------------------------------------------------------------------------------------------------------------------------------

Balance
September 30, 2000                             $   --         --       166      26,579        (6,511)         (25)       $ 20,209
===================================================================================================================================
</TABLE>

        The accompanying notes are an integral part of these statements.



                                       4
<PAGE>
                  STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>

                                                                          Nine Months
                                                                       Ended September 30,
---------------------------------------------------------------------------------------------
                                                                     2000              1999
---------------------------------------------------------------------------------------------
<S>                                                                 <C>              <C>
Cash Flows from Operating Activities:
Net income (loss)                                                   $   659          $(1,995)
         Adjustments to reconcile net income (loss) to
         cash provided by (used in) operating activities:
                  Depreciation and amortization                         613              734
                  Deferred income tax provision                         439               --
                  Gain on sale of intangible assets                    (283)              --
                  Acquired in-process research and development           --            3,500
(Increase) decrease in:
         Receivables                                                  1,530           (2,204)
         Inventories                                                 (1,832)            (396)
         Other current assets                                          (247)              82
         Note receivable and other assets                                80              376
Increase (decrease) in:
         Accounts payable                                              (310)            (205)
         Accrued expenses                                              (193)            (384)
         Deferred revenue                                                --              (11)
---------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities                     456             (503)

Cash Flows from Investing Activities:
         Purchase of property and equipment                            (216)            (277)
         Proceeds from sale of intangible assets                        663               --
         Short-term investment activity                                  --            3,990
         Cash used in acquisition of HTI, net of cash acquired           --           (8,072)
         Cash used in acquisition of ATAB                                --           (3,150)
---------------------------------------------------------------------------------------------
Net cash provided by (used in) investing activities                     447           (7,509)

Cash Flows from Financing Activities:
         Proceeds from exercise of incentive stock options              225              538
         Proceeds from  issuance of long term debt                       --            9,000
         Restricted cash                                                 --           (1,400)
         Debt issuance costs                                            (41)              --
         Repayments on financing obligations                         (2,349)            (840)

---------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities                  (2,165)           7,298

Net decrease in Cash and Cash Equivalents                            (1,262)            (714)

Cash and Cash Equivalents, Beginning of Period                        2,491            1,864
---------------------------------------------------------------------------------------------
Cash and Cash Equivalents, End of Period                            $ 1,229          $ 1,150
=============================================================================================
Supplemental Cash Flow Disclosure:

         Cash paid for interest                                         409              385
=============================================================================================
Non-cash investing and financing activity:
         Common stock issued for the purchase of Envirol products        43               --
         Series B Preferred Stock issued for the acquisition of
         HTI Bio-Products, Inc.                                          --            1,067

=============================================================================================
</TABLE>

        The accompanying notes are an integral part of these statements.

                                       5

<PAGE>


                   STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS

                                   (unaudited)

1. BACKGROUND:

Business
--------

Strategic Diagnostics Inc. (the "Company") develops, manufactures and markets
immunoassay-based test kits for rapid and inexpensive detection of a wide
variety of substances in the agricultural, water quality and industrial market
segments.

Business Risks
--------------

The Company is subject to certain risks of entities in similar stages of
development. These risks include the Company's ability to successfully develop,
produce and market its products and its dependence on its key collaborative
partners and management personnel.

Basis of Presentation and Interim Financial Statements
------------------------------------------------------

The accompanying balance sheets at December 31, 1999 and September 30, 2000, and
the statements of operations for the three months and nine months ended
September 30, 1999 and 2000, and cash flows for the nine months ended September
30, 1999 and 2000 include the consolidated financial statements of the Company.
All intercompany balances and transactions have been eliminated in
consolidation.

The accompanying unaudited consolidated interim financial statements of the
Company have been prepared by the Company pursuant to the rules and regulations
of the Securities and Exchange Commission regarding financial reporting.
Accordingly, they do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements and
should be read in conjunction with the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1999. In the opinion of management, the
accompanying financial statements include all adjustments (all of which are of a
normal recurring nature) necessary for a fair presentation. The results of
operations for the three months and nine months ended September 30, 2000 are not
necessarily indicative of the results expected for the full year.

Use of Estimates
----------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amount of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results may differ from those estimates.

                                       6

<PAGE>

2. BASIC AND DILUTED INCOME PER SHARE:

Basic EPS is computed by dividing net income or loss by the weighted-average
number of common shares outstanding during the period. Diluted EPS is similar to
basic EPS except that the effect of converting or exercising all potentially
dilutive securities is also included in the denominator. The Company's
calculation of diluted EPS includes the effect of converting or exercising stock
options and warrants into common shares.

<TABLE>
<CAPTION>
                                                        Three months ended                          Nine months ended
                                            September 30, 2000    September 30, 1999     September 30, 2000     September 30, 1999
                                            ------------------    ------------------     ------------------     ------------------
<S>                                             <C>                   <C>                     <C>                   <C>
Average common shares outstanding               16,583,182            14,543,755              16,534,023            13,697,362

Shares used in computing basic net income
(loss) per share                                16,583,182            14,543,755              16,534,023            13,697,362
                                                ==========            ==========              ==========            ==========

Series A preferred stock                                --             1,618,576                      --                    --

Series B preferred stock                                --                    --                      --                    --

Stock options                                      726,722             1,156,309                 896,263                    --

Warrants                                            51,625               164,179                  63,493                    --
                                                ----------            ----------              ----------            ----------

Shares used in computing diluted net income
(loss) per share                                17,361,529            17,482,819              17,493,779            13,697,362
                                                ==========            ==========              ==========            ==========
</TABLE>


The impact of approximately 3.3 million shares of preferred stock, options and
warrants for the nine months ended September 30, 1999, was excluded from the
diluted net loss per share calculations because it was antidilutive.

3. SALE OF TECHNOLOGY:

In July 1998, the Company entered into an exclusive agreement to sell its
analytical test to detect concentrations of lipoprotein (a) to a biotechnology
company. The purchaser has an extensive portfolio of diagnostic assays and an
established sales and distribution network targeted to physicians and clinical
laboratories.

At December 31, 1999, pursuant to the terms of the July 1998 agreement, the
Company and the purchaser were to determine the purchase price to be paid to the
Company for its right, title and interest in the product. Such purchase price
was based on a multiple of sales volumes achieved during the second half of
1999.

                                       7

<PAGE>

The Company recorded proceeds of $663,000 from the sale of the asset during the
first quarter of 2000, after the sales price was determined on a preliminary
basis, and reported a net gain of $283,000.

4. ACQUISITIONS:

On February 26, 1999, the Company completed the acquisition of HTI Bio-Products
Inc. (HTI), a privately held manufacturer of custom and proprietary antibody
products and services located near San Diego, California. The acquisition was
accounted for using the purchase method of accounting. Under the terms of the
agreement to acquire HTI, the Company paid approximately $8.4 million in cash
and issued 556,286 shares of Series B preferred stock, with a fair market value
of approximately $1.1 million. Under the terms of the agreement, on June 16,
1999, such shares were converted into the Company's common stock on a 1 to 1
basis. The Company is also obligated to pay a percentage of net sales of certain
products over the next three years, not to exceed $3 million. As of September
30, 2000, approximately $5,000 has been paid under the percentage of sales
agreement. Approximately $6 million of acquisition financing was provided by a
commercial bank under a term loan, with the balance coming from existing cash on
hand.

The acquisition financing consists of a five-year term loan (the Term Loan) with
monthly amortization of equal principal payments plus interest. Interest on $3
million of original principal amount is at a fixed rate of interest of 8.96% per
annum, and the remaining principal bears interest at a variable rate of 3% over
the published London Interbank Offered Rate ("LIBOR"). Also under the terms of
the financing, the Company is required to meet certain financial covenants
including debt to net worth, minimum cash flows and no dividends or
distributions may be paid on account of the Company's common stock. On May 5,
2000, the Company refinanced substantially all of its existing debt, and as of
September 30, 2000, the Company was in compliance with all debt covenants under
its new financing agreement (see Note 7, Debt).

The Company recorded expenses of $3.5 million of in-process research and
development in the quarter ended March 31, 1999. This amount represents an
allocation of the purchase price of HTI to projects that are currently under
development but have not yet been launched commercially because the development
is not complete. Because technological feasibility had not been established and
no alternative use determined, the entire amount of in-process research and
development has been expensed. The identified research and development consists
of in process projects for the development of eleven antibodies, as listed
below:

<TABLE>
<S>                           <C>                             <C>
Troponin I                    Fatty Acid Binding Protein     Cystatin C
Human Red Blood Cell          cAMP                           Brain Natriuretic Peptide
Serum Amyloid A               cGMP                           Phosphorylated Amino Acids
Phosphorylated Tau            APE
</TABLE>

                                       8
<PAGE>

At this time, management believes that Troponin I and Cystatin C have the
greatest immediate potential as commercial products. Troponin I has potential
use as a diagnostic marker for the coronary care market. Cystatin C has
potential use as a diagnostic marker for kidney malfunction. In future years,
others of the in-process research and development assets, such as Human Red
Blood Cell, may prove to have even greater potential as commercial products.

There is no guarantee that any of these markers will be commercially viable, or
that the customers who assist in the development will succeed in the marker
being diagnostically significant.

The Company commissioned an appraisal of these in-process research and
development projects by an independent firm familiar with such appraisals. This
independent appraisal valued the in-process research and development projects at
$3.5 million by considering the nature and history of HTI's business, a
description of the in-process research and development assets, the general
economic outlook, the outlook for the antibody production industry, the expected
future cash flows of the products and usage of a discounted cash flow analysis.
The average completion stage of the products was estimated at 93% and a 20%
discount rate was used in computing the present value of the future cash flows
of the products.

On May 11, 1999, the Company completed the acquisition of the operating assets
of the OEM business of Atlantic Antibodies of Windham, Maine, one of the first
suppliers of custom and high-volume, bulk polyclonal antibodies for use in
diagnostic test kits and research. The acquisition was accounted for using the
purchase method of accounting. This unit serves a wide range of customers
including pharmaceutical, biotechnology, diagnostic companies and major research
centers in the United States and the Pacific Rim. Under the terms of the
agreement to acquire the operating assets of the OEM business of Atlantic
Antibodies, the Company paid $3 million in cash, and has agreed to a deferred
payment of $150,000, due on November 11, 2000. A commercial bank provided $3
million of long-term acquisition financing under the Term Loan (see Note 7,
Debt).

The Company completed an asset purchase agreement with Envirol, Inc., a private
company located in Logan, Utah on April 26, 2000. Pursuant to the terms of the
agreement, the Company acquired Envirol's TCE and PCP test kit product lines for
consideration consisting of (i) a cash payment of $35,000 (ii) the issuance of
10,000 shares of common stock with a value of $42,500 and (iii) the payment of a
continuing royalty to Envirol for ten years, at a rate of 10% of purchased
product sales for the first $125,000, and a rate of 4% of purchased product
sales for the remainder of the royalty term. TCE is a compound used
predominately in dry-cleaning solvents and is believed to be carcinogenic.
Several states have recently established environmental funds for the cleanup and
monitoring of TCE in groundwater and soil. TCE testing is also required at most
Superfund, RCRA and Department of Energy sites for soil and groundwater
contamination.

On September 26, 2000, the Company announced that it had entered into a
non-binding Letter of Intent to acquire AZUR Environmental. The purchase of AZUR
Environmental, whose corporate headquarters are located in Carlsbad, California,
is subject to due diligence and approval by both companies' Board of Directors,
approval of the stockholders of AZUR and other conditions.

                                       9

<PAGE>

The following unaudited pro forma statement of operations data gives effect to
the HTI transaction, which was accounted for using the purchase method of
accounting, as if the HTI purchase had occurred on January 1, 1998, and includes
certain adjustments, including amortization of goodwill, increased interest
expense and preferred stock dividends related to the HTI purchase. The 1999 pro
forma results exclude $3.5 million of in-process research and development
expenses incurred in connection with the HTI transaction. The acquisitions of
HTI and ATAB are fully included for the three month periods ended September 30,
2000 and 1999.

Unaudited Pro Froma Combined Results of Operations
(unaudited in thousands)

                                                         Nine Months Ended
                                                           September 30,
------------------------------------------------------------------------------
                                                       2000             1999
------------------------------------------------------------------------------


Revenues                                              $17,265         $17,635
------------------------------------------------------------------------------

Income before non-recurring charges directly
attributable to the HTI acquisition                   $   659         $ 1,175
------------------------------------------------------------------------------

Basic net income per share before non-recurring
charges directly attributable to HTI acquisition      $  0.04         $  0.09
------------------------------------------------------------------------------

Diluted net income per share before non-recurring
charges directly attributable to HTI acquisition      $  0.04         $  0.07
------------------------------------------------------------------------------



The purchase price of HTI Bio-Products and the operating assets of the OEM
business of Atlantic Antibodies Inc. was allocated as follows (in thousands):

HTI                                                  ATAB
---                                                  ----

Cash                                  $  249         Land                $  360
Other Assets                           1,562         Fixed Assets         1,215
Fixed Assets                           1,004         Inventory            1,575
Liabilities                             (863)                            ------
In-process research & development      3,500         Cash Paid           $3,150
Goodwill                               4,044                             ======
                                      ------
Total fair value                      $9,496
                                      ======
Cash Paid                             $8,429

Series B Preferred Stock Issued       $1,067


Goodwill is being amortized over its estimated useful life of 20 years.

                                       10
<PAGE>


5. SEGMENT INFORMATION:

The Test Kit segment develops, manufactures and markets immunoassay-based test
kits for rapid, cost-effective detection of a wide variety of different analytes
in three primary market categories: agriculture, water quality and food testing.

The Antibody Segment, Strategic BioSolutions (SBS), includes the former TSD
BioServices, HTI and the acquired operating assets of the OEM business of
Atlantic Antibodies. These companies provide fully integrated polyclonal and
monoclonal antibody development and large scale manufacturing services to
pharmaceutical and medical diagnostic companies.

For reporting purposes a "pro-rata" share of common costs is charged to the
Antibody segment. Segment assets are those assets associated with the respective
segment's operating activities. Segment profit is based on income after income
taxes excluding the $3.5 million one-time non-cash charge for in-process
research and development in connection with the acquisition of HTI.








                                       11


<PAGE>

Segment Information:
<TABLE>
<CAPTION>

 For the three months ended September 30,          Test Kits         Antibody           Total
<S>                                                 <C>               <C>              <C>
2000     Revenues                                  $ 3,016            $2,685           $ 5,701
         Segment Profit                                (61)              150                89
         Segment Assets                             23,524             4,240            27,764
         Depreciation and amortization                  71               121               192
         Capital expenditures                           96                 -                96

1999     Revenues                                  $ 5,147            $2,312           $ 7,459
         Segment Profit                              1,297              (287)            1,010
         Segment Assets                             17,102             6,040            23,142
         Depreciation and amortization                 154               121               275
         Capital expenditures                           98                 -                98

 For the nine months ended September 30,           Test Kits         Antibody            Total

2000     Revenues                                  $ 9,135            $8,130           $17,265
         Segment Profit                                121               538               659
         Segment Assets                             23,524             4,240            27,764
         Depreciation and amortization                 249               364               613
         Capital expenditures                          216                 -               216

1999     Revenues                                  $11,285            $5,568           $16,853
         Segment Profit                              1,754              (249)            1,505
         Segment Assets                             17,102             6,040            23,142
         Depreciation and amortization                 481               253               734
         Capital expenditures                          277                 -               277
</TABLE>


6. INVENTORIES:

At September 30, 2000 and December 31, 1999, inventories consisted of the
following (in thousands):

                                September 30, 2000        December 31, 1999
                                ------------------        -----------------

      Raw Materials                  $  2,759                 $  2,258
      Work in progress                  1,879                      804
      Finished goods                    2,718                    2,462
                                     --------                 --------
                                     $  7,356                 $  5,524
                                     ========                 ========

                                       12
<PAGE>

7. DEBT:

On May 5, 2000, the Company entered into a financing agreement with a commercial
bank. This agreement provides for a $4 million term loan, of which approximately
$3.6 million is outstanding at September 30, 2000, repayable over three years,
and for up to a $5 million revolving line of credit, based on eligible assets as
described below. Proceeds from this financing retired substantially all of the
Company's previous indebtedness, incurred in connection with the acquisitions
described above (see Note 4, Acquisitions).

The term loan bears a variable interest rate of between 2% and 3% over the
London Interbank Offered Rate ("LIBOR"), depending upon the ratio of the
Company's funded debt to EBITDA (earnings before interest expense, income taxes,
depreciation and amortization). Payments are due monthly, with equal
amortization of principal payments plus interest.

The revolving line of credit bears a variable interest rate of between 1.75% and
2.75% over LIBOR, depending upon the ratio of the Company's funded debt to
EBITDA, and is subject to a borrowing base determined by the Company's eligible
accounts receivable.

Under the terms of the financing, the Company is required to meet certain
financial covenants including funded debt to EBITDA and EBITDA to current
maturities of debt plus interest and taxes. At September 30, 2000, the Company
is in compliance with all such covenants, with additional borrowing capabilities
of approximately $769,000 available under the revolving line of credit. The
financing is secured by substantially all of the Company's assets.


Item 2.  Management's Discussion and Analysis of Financial Condition and
Results of Operations

Forward-Looking Statements

The information included in this report on Form 10-Q contains certain
forward-looking statements reflecting the current expectations of Strategic
Diagnostics Inc. and its subsidiaries (the "Company"). When used in this report,
the words "anticipate," "enable," "expect," "intend," "believe," "estimate,"
"potential," "promising," "will" and similar expressions as they relate to SDI
are intended to identify such 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 at this time.
Such risks and uncertainties include, without limitation, changes in demand for
products, delays in product development, delays in market acceptance of new
products, long-term consequences of StarLink(TM) on the GMO market, ability of
manufacturers of non-GMO food products to charge premiums to consumers,
successful consummation of the AZUR transaction and successful integration of
the AZUR business, customers and employees, adequate supply of raw materials,
inability to obtain required domestic and foreign government regulatory
approvals, modifications to regulatory requirements, modifications to
development and sales relationships, the ability to achieve anticipated growth,
competition, seasonality, and other factors more fully described in the
Company's filings with the Securities and Exchange Commission.

                                       13

<PAGE>

Background

The Company is the entity resulting from the combination of EnSys Environmental
Products, Inc. ("EnSys"), Ohmicron Corporation ("Ohmicron"), TSD BioServices
("TSD"), HTI Bio-Products Inc. ("HTI"), Atlantic Antibodies Inc. ("ATAB") and
Strategic Diagnostics Inc. ("SDI").

Since inception, the Company and its predecessors have, in addition to
conducting internal research and development of new products, entered into
research and development agreements with multiple corporate partners that have
led to the introduction of various products to the agricultural, water quality,
environmental testing and other markets. These agreements generally provide that
sales and marketing costs associated with a new product are borne by the
corporate partner, and the Company has the manufacturing rights. In addition,
the Company currently sells directly other products that it has developed or
acquired.

On September 26, 2000, the Company announced that it had entered into a
non-binding Letter of Intent to acquire AZUR Environmental. The purchase of AZUR
Environmental, whose corporate headquarters are located in Carlsbad, California,
is subject to due diligence and approval by both companies' Board of Directors,
approval of the stockholders of AZUR and other conditions.

Results of Operations

Three Months Ended September 30, 2000 vs. September 30, 1999

Net revenues for the third quarter of 2000 were $5.7 million versus $7.5 million
in the third quarter of 1999 or a decrease of 24%. Product related revenues
decreased by $1.6 million or 23%. The decrease in product related revenues was
primarily attributable to shortfalls in purchases of the Company's agriculture
products and certain products in the water quality category being de-emphasized.
The shortfalls in purchases of the Company's agriculture products were primarily
the result of the market for the Company's agriculture test kits developing more
slowly than previously anticipated. These decreases offset increases in the
Company's antibody business, which grew 16% in the third quarter of 2000 to $2.7
million versus the third quarter of 1999. Contract and other revenues decreased
$133,000 or 36% in the third quarter of 2000 versus the same period in 1999.
This decrease reflects the Company's continued emphasis on internal research and
development projects.

Significant changes affecting the volume of analytical testing are currently
occurring throughout the agricultural complex in response to StarLink(TM) corn,
which contains a trait not approved for food use, entering into food production.
While the full effects of these changes are difficult to predict at this time,
demand for the Company's TraitCheck Bt9 product has exceeded 700,000 tests
shipped through November 10, 2000, which were sold primarily in the fourth
quarter. Many factors led to this increased demand, including decisions by food
processors to suspend operations until the volume of StarLink(TM) corn has been
accounted for or until supplies on-hand can be tested to ensure that
StarLink(TM) corn is not present. There is uncertainty as to whether, and if so,
how long this need will persist and at what rate.

                                       14

<PAGE>

Manufacturing expenses decreased $828,000 or 26% in the third quarter of 2000
versus the third quarter of 1999. This decrease reflects the lower level of
product shipments made in the third quarter of 2000 versus the comparable period
of 1999.

Research and development costs increased $81,000 or 13% in the third quarter of
2000 when compared to the third quarter of 1999. This increase is due to
increased personnel and related expenses to develop additional analytical
methods, most within the agriculture and food product categories.

Selling, general and administrative expenses decreased $139,000 or 6% in the
third quarter of 2000 versus the third quarter of 1999. This decrease is
primarily the result of the lower levels of business activity in the period as
described above.

Interest expense decreased $23,000 or 16% in third quarter of 2000 versus the
third quarter of 1999. This decrease is due to the repayment and refinancing of
the Company's debt during May 2000 (See Note 7, Debt) and the resulting lower
outstanding indebtedness.

In the third quarter of 2000, the Company accrued approximately $72,000 of
income tax expense, a non-cash charge related to the utilization of the
Company's net operating tax-loss carry-forwards, which have been previously
recognized in the fourth quarter of 1999 for financial reporting purposes. There
was no income tax expense or benefit in the third quarter of 1999.

Net income decreased $921,000 or 91% in the third quarter of 2000 versus the
third quarter of 1999, for reasons all as described above.

Nine Months Ended September 30, 2000 vs. September 30, 1999

Net revenues for the first nine months of 2000, increased $412,000 or 2%
compared with the same period in 1999. Product related revenues for the first
nine months of 2000, increased $396,000, or 2% compared with the first nine
months of 1999. This increase is primarily attributable to increases in revenues
of the antibody segment of 46%, due to growth within the business unit, as well
as the acquisition of HTI in February 1999 and the operating assets of the OEM
business of ATAB in May of 1999. This increase more than offset decreases in the
Company's other product categories, primarily agriculture, as described for the
third quarter of 2000 above. Contract and other revenues increased $16,000 or 2%
during the nine-month period ended September 30, 2000 versus the nine-month
period ended September 30, 1999.

Manufacturing expenses were approximately the same during the nine-month period
ending September 30, 2000 versus the nine-month period ending September 30,
1999.

Research and development expenses increased $380,000 or 22% in the first nine
months of 2000 versus the comparable period in 1999. This increase is primarily
the result of increased development costs related to the introduction of new
products, primarily within the agriculture and food product categories.

                                       15

<PAGE>

Selling, general and administrative expenses increased $643,000 or 11% in the
first nine months of 2000 versus the comparable period in 1999. This increase is
primarily attributable to increased selling and marketing efforts in the
agriculture, antibody and food product categories.

Interest expense increased $101,000 or 44% in the first nine months of 2000
versus the comparable period in 1999. This increase is due to the borrowings the
Company made to purchase HTI in the first quarter of 1999, and the OEM assets of
ATAB in the second quarter of 1999.

In the first nine months of 2000, the Company accrued approximately $439,000 of
income tax expense, a non-cash charge related to the utilization of the
Company's net operating tax-loss carry-forwards, which have been previously
recognized in the fourth quarter of 1999, for financial reporting purposes.
There was no income tax expense or benefit in the first nine months of 1999.

Net income was $659,000 during the first nine months of 2000 versus a net loss
of $2 million in the first nine months of 1999. Net income for the nine months
ended September 30, 2000, included $283,000 of other income attributable to a
gain on the sale of assets the Company recorded in connection with the sale of
its Macra Lp(a) product line in the third quarter of 1998, and represents the
amount the Company received in excess of its investment in the product.
Exclusive of the $3.5 million non-cash charge for acquired research and
development included in the first nine months of 1999, net income decreased to
$659,000 in the first nine months of 2000 from the $1.5 million recorded in the
first nine months of 1999 for the reasons all as described above.

Liquidity and Capital Resources

The Company's working capital was $8.3 million at September 30, 2000, a decrease
of $1.9 million or 18% from December 31, 1999. Cash and cash equivalents
decreased $1.3 million to $1.2 million at September 30, 2000. This decrease was
primarily attributable to the voluntary repayment of debt and a more flexible
structure of its indebtedness. Outstanding debt decreased $2.4 million from $8.2
million at December 31, 1999 to $5.8 million on September 30, 2000. On May 5,
2000, the Company entered into a financing agreement with a commercial bank
which provides for a $4 million term loan, of which approximately $3.6 million
was outstanding at September 30, 2000, repayable over three years, and up to a
$5 million revolving line of credit, of which $2.3 million was outstanding at
September 30, 2000. Proceeds from this financing retired substantially all of
the Company's previous indebtedness.

The Company believes that it has, or has access to, sufficient resources to meet
its operating requirements for the foreseeable future. The Company's ability to
meet its long-term working capital and capital expenditure requirements will
depend on a number of factors, including the success of the Company's current
and future products, the focus and direction of the Company's research and
development programs, competitive and technological advances, future
relationships with corporate partners, government regulation, the Company's
marketing and distribution strategy and the success of the Company's plans to
make future acquisitions. Accordingly, no assurance can be given that the
Company will be able to meet the future liquidity requirements that may arise
from these inherent uncertainties.

                                       16

<PAGE>

New Accounting Pronouncements

On December 3, 1999, the staff of the Securities and Exchange Commission, or
SEC, issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial
Statements," or SAB No. 101. SAB No. 101 provides the SEC staff's views on the
recognition of revenue including nonrefundable technology access fees received
by biotechnology companies in connection with research collaborations with third
parties. SAB No. 101 states that in certain circumstances the SEC staff believes
that up-front fees, even if nonrefundable, should be deferred and recognized
systematically over the term of the research agreement. SAB No. 101, as amended,
requires registrants to adopt the accounting guidance contained therein by no
later than the fourth fiscal quarter of the fiscal year beginning after December
15, 1999, with an effective date as of the beginning of such year. The adoption
of this standard is not expected to have a material impact on the Company's
financial position or results of operations.

In June 1998, the Financial Accounting Standards Board, or FASB, issued
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("Statement 133"). Statement 133 establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging activities.
Statement 133 requires that an entity recognize all derivatives as either assets
or liabilities in the statement of financial position and measure the instrument
at fair value. The accounting for changes in the fair value of a derivative,
depend on the intended use of the derivative and the resulting designation. This
Statement, as amended, is effective for the first fiscal quarter beginning after
December 31, 2000. The adoption of this standard will not have a material impact
on the Company's earnings or financial position.


Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The Company has exposure to changing interest rates, and is currently not
engaged in hedging activities. Interest on approximately $5.8 million of
outstanding indebtedness is at a variable rate of between 1.75% to 3% over the
published London Interbank Offered Rate.

The Company conducts operations in Great Britain. The consolidated financial
statements of the Company are denominated in U.S. Dollars and changes in
exchange rates between foreign countries and the U.S. dollar will affect the
translation of financial results of foreign subsidiaries into U.S. dollars for
purposes of recording the Company's consolidated financial results.
Historically, the effects of translation have not been material to the
consolidated financial results.


                                       17
<PAGE>


                                     PART II


Item 4.   Submission of Matters to a Vote of Security Holders

          None


Item 6.   Exhibits and Reports on Form 8-K

(a)      27 Financial Data Schedule (in electronic format only).










                                       18


<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                           STRATEGIC DIAGNOSTICS INC.
                           --------------------------
                                  (Registrant)

<TABLE>
<CAPTION>

Signature                                            Title                                       Date
---------                                            -----                                       ----
<S>                                   <C>                                                  <C>
/s/ RICHARD C. BIRKMEYER              President and Chief Executive Officer                November 13, 2000
------------------------              (Principal Executive Officer)
    Richard C. Birkmeyer

/s/ ARTHUR A. KOCH, JR.               Vice President and Chief Operating Officer           November 13, 2000
-----------------------               (Principal Financial Officer)
    Arthur A. Koch, Jr.
</TABLE>