<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 March 31, 1998

[  ]  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 March 31, 1998 there were 13,112,949 outstanding shares of the 
Registrant's  common stock, par value $.01 per share.

<PAGE>


                           STRATEGIC DIAGNOSTICS INC.

                                      INDEX

Item                                                                       Page
----                                                                       ----

PART I

  ITEM 1.  Financial Statements (Unaudited)
     Consolidated Balance Sheets - March 31, 1998 and December 31, 1997      2
     Consolidated Statements of Operations - Three months ended 
       March 31, 1998 and 1997                                               3
     Consolidated Statements of Cash Flows - Three months ended
       March 31, 1998 and 1997                                               4
     Notes to Consolidated Interim Financial Statements                      5

  ITEM 2.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                        10

PART II

  ITEM 6.  Exhibits and Reports on Form 8-K                                 13

SIGNATURES                                                                  14


















<PAGE>









                                     PART I
ITEM 1.  FINANCIAL STATEMENTS

                   STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)
<TABLE>
<CAPTION>

<S>                                                                                 <C>                 <C>
                                                                                   March 31,         December 31,
---------------------------------------------------------------------------------------------------------------------
                                                                                      1998               1997
---------------------------------------------------------------------------------------------------------------------
 ASSETS                                                                           (unaudited)
---------------------------------------------------------------------------------------------------------------------
 CURRENT ASSETS:
        Cash and cash equivalents                                                        $ 1,999             $ 2,580
        Short-term investments                                                             3,869               3,638
        Receivables                                                                        2,938               3,159
        Inventories                                                                        1,551               1,547
        Other current assets                                                                 242                 174
---------------------------------------------------------------------------------------------------------------------
             Total current assets                                                         10,599              11,098
---------------------------------------------------------------------------------------------------------------------

 PROPERTY AND EQUIPMENT, net                                                                 500                 496
 OTHER ASSETS                                                                                630                 634
 INTANGIBLE ASSETS, net                                                                    1,762               1,832
---------------------------------------------------------------------------------------------------------------------
             Total assets                                                               $ 13,491            $ 14,060 
---------------------------------------------------------------------------------------------------------------------
 LIABILITIES AND STOCKHOLDERS' EQUITY
---------------------------------------------------------------------------------------------------------------------
 CURRENT LIABILITIES
        Accounts payable                                                                $    363            $    619
        Accrued expenses                                                                     464                 953
        Deferred revenue                                                                     247                 100
        Current portion of capital lease obligations                                          17                  23
---------------------------------------------------------------------------------------------------------------------
             Total current liabilities                                                     1,091               1,695
---------------------------------------------------------------------------------------------------------------------
 CAPITAL LEASE OBLIGATIONS                                                                    23                  25
---------------------------------------------------------------------------------------------------------------------
 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, issued and outstanding                                               22                  22
        Common stock, $.01 par value, 35,000,000 authorized,
             13,112,949 and 13,102,949 issued and outstanding
             at March 31, 1998 and December 31, 1997, respectively                           132                 132
        Additional paid-in capital                                                        23,930              23,913
        Accumulated deficit                                                              (11,682)            (11,702)
        Cumulative translation adjustments                                                   (25)                (25)
        Deferred compensation                                                                  -                   -
---------------------------------------------------------------------------------------------------------------------
             Total stockholders' equity                                                   12,377              12,340
---------------------------------------------------------------------------------------------------------------------
             Total liabilities and stockholders' equity                                 $ 13,491             $14,060
---------------------------------------------------------------------------------------------------------------------
        The accompanying notes are an integral part of these statements.

</TABLE>

                                       2



<PAGE>


                   STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except share and per share data)
                                   (unaudited)
<TABLE>
<CAPTION>
<S>                                                                                   <C>                      <C>   
                                                                                                Three Months
                                                                                               Ended March 31,
------------------------------------------------------------------------------------------------------------------------
                                                                                          1998               1997
------------------------------------------------------------------------------------------------------------------------
 NET REVENUES:
------------------------------------------------------------------------------------------------------  ----------------
        Product related                                                                $        2,521         $   2,402
        Contract and other                                                                        375         $     371
------------------------------------------------------------------------------------------------------------------------
               Total net revenues                                                               2,896             2,773
------------------------------------------------------------------------------------------------------------------------
 OPERATING EXPENSES:
        Manufacturing                                                                           1,131               919
        Research and development                                                                  377               494
        Selling, general and administrative                                                     1,454             1,320
------------------------------------------------------------------------------------------------------------------------
               Total operating expenses                                                         2,962             2,733
------------------------------------------------------------------------------------------------------------------------

               Operating income (loss)
                                                                                                  (66)               40
 Interest and other income (expense), net                                                          86                69
------------------------------------------------------------------------------------------------------------------------

 NET INCOME                                                                                        20               109

 BASIC NET INCOME PER SHARE
        APPLICABLE TO COMMON STOCKHOLDERS                                             $          0.00          $    0.01
------------------------------------------------------------------------------------------------------------------------

 SHARES USED IN COMPUTING BASIC NET INCOME
        PER SHARE APPLICABLE TO COMMON STOCKHOLDERS                                        13,146,504        13,056,421
------------------------------------------------------------------------------------------------------------------------

 DILUTED NET INCOME PER SHARE
        APPLICABLE TO COMMON STOCKHOLDERS                                             $          0.00        $     0.01
------------------------------------------------------------------------------------------------------------------------

 SHARES USED IN COMPUTING DILUTED NET INCOME
        PER SHARE APPLICABLE TO COMMON STOCKHOLDERS                                        16,184,751        15,585,000
------------------------------------------------------------------------------------------------------------------------

        The accompanying notes are an integral part of these statements.
</TABLE>


                                       3

<PAGE>



                  STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)
<TABLE>
<CAPTION>

<S>                                                                                   <C>                 <C>   
                                                                                             Three Months
                                                                                            Ended March 31,
--------------------------------------------------------------------------------------------------------------------
                                                                                        1998                 1997
--------------------------------------------------------------------------------------------------------------------

 Cash Flows from Operating Activities :
 Net income                                                                            $    20             $     109
        Adjustments to reconcile net income to 
        cash used in operating activities:
             Depreciation and amortization                                                 151                   182
 (Increase) decrease in:
        Receivables                                                                        221                (1,010)
        Inventories                                                                         (4)                 (117)
        Other current assets                                                               (68)                   77
        Note receivable and other assets                                                     4                    (2)
 Increase (decrease) in :
           Accounts payable                                                               (256)                 (451)
           Accrued expenses                                                               (489)                 (697)
           Deferred revenue                                                                147                    (8)
--------------------------------------------------------------------------------------------------------------------
 Net cash used in operating activities                                                    (274)               (1,917)

 Cash Flows from Investing Activities :
        Purchase of property and equipment                                                 (85)                  (15)
        Short-term investment activity                                                    (231)                1,679
--------------------------------------------------------------------------------------------------------------------
 Net cash provided by (used in) investing activities                                      (316)                1,664

 Cash Flows from Financing Activities:
        Proceeds from exercise of incentive stock options                                   17                     -
        Repayments on capital lease obligations                                             (8)                  (20)
--------------------------------------------------------------------------------------------------------------------
 Net cash provided by (used in) financing activities                                         9                   (20)

 Net Decrease in Cash and Cash Equivalents                                                (581)                 (273)

 Cash and Cash Equivalents, Beginning of Period                                          2,580                   917
--------------------------------------------------------------------------------------------------------------------

 Cash and Cash Equivalents, End of Period                                              $ 1,999               $   664
--------------------------------------------------------------------------------------------------------------------

 Supplemental Cash Flow Disclosure :
        Cash paid for interest                                                               9                     8
--------------------------------------------------------------------------------------------------------------------

         The accompanying notes are an integral part of these statements
</TABLE>

                                       4

<PAGE>

                   STRATEGIC DIAGNOSTICS INC. AND SUBSIDIARIES

               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                 (in thousands, except share and per share data)
                                   (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 water quality, industrial and
     agricultural market segments.

Business Risks

     The Company is subject to 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. Management believes that
     its current cash resources are sufficient to fund operations for at least
     the next 18 months.

Basis of Presentation and Interim Financial Statements

     The accompanying balance sheets at December 31, 1997 and March 31, 1998,
     and the statements of operations for the three months ended March 31, 1997
     and 1998 and cash flows for the three months ended March 31, 1997 and 1998
     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, 1997. 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
     ended March 31, 1998 are not necessarily indicative of the results expected
     for the full year.


                                       5
<PAGE>


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 could differ from those
     estimates.

2. NET INCOME PER SHARE APPLICABLE TO COMMON STOCKHOLDERS:

     Net income per share applicable to common stockholders for all periods
     presented is calculated by dividing net income applicable to common
     stockholders by the weighted average number of shares outstanding. All
     shares and per share amounts have been adjusted retroactively to give
     effect to the equivalent number of shares received by the SDI stockholders
     in the EnSys Merger discussed in Note 3. This retroactive adjustment is
     reflected in the net income per share calculations and the Notes to the
     Consolidated Interim Financial Statements.

     Net income applicable to common stockholders is the sum of the net income
     less the accretion of the redeemable convertible preferred stock
     liquidation value. Effective December 30, 1996, the redeemable convertible
     preferred stock was converted into shares of a newly issued class of Series
     A Preferred Stock (Note 5). No additional accretion will be recorded.

3. MERGERS AND ACQUISITIONS

Merger with EnSys Environmental Products, Inc.

     On December 30, 1996, SDI merged with and into EnSys (the "Merger"). The
     Merger agreement provided that SDI common and preferred stockholders
     receive .7392048 shares of EnSys stock for each share of SDI Common or
     Preferred Stock. This resulted in the former SDI stockholders owning
     5,780,136 shares of EnSys Common Stock and 2,164,362 shares of EnSys Series
     A Convertible Preferred Stock or approximately 52% of the 15,219,532 voting
     shares outstanding after the Merger. In addition to the Common and
     Preferred Stock noted above, SDI option and warrant holders received
     options and warrants to purchase .7818026 shares of EnSys Common Stock for
     each option or warrant held. Upon consummation of the Merger, SDI option
     and warrant holders received options and warrants for the purchase of
     383,216 and 599,644 shares, respectively, of EnSys Common Stock. The
     difference in exchange ratios between stockholders and option and warrant
     holders is due to the stock preferences received by SDI's preferred
     stockholders upon exchange of their shares. The cost of receiving these
     preferences was shared by all SDI stockholders upon exchange of their
     shares, but was not borne by the SDI option and warrant holders.

      The Merger was accounted for as a purchase transaction with SDI as the
     acquiring company. Based on the $1.75 per share closing price of EnSys
     Common Stock on October 14, 1996, (date of transaction public announcement)

                                        6

<PAGE>

     the estimated total purchase price of EnSys was $16,133, which consists of
     the following: (i) the $12,731 market value of the outstanding shares of
     EnSys Common Stock (7,275,034 shares multiplied by $1.75 per share), (ii)
     the $328 fair value of the outstanding options and warrants to purchase
     EnSys Common Stock and (iii) estimated transaction costs of approximately
     $3,074. Since SDI is the acquiror for accounting purposes, the EnSys
     options and warrants are required to be valued for purchase accounting
     purposes as if they are additional consideration in the transaction. The
     valuation for EnSys options and warrants was provided by an investment
     banking firm using a traditional valuation approach. Of the approximately
     $3,074 of estimated transaction costs, approximately $457 relates to
     severance payments to former EnSys employees, $362 to facility termination
     and moving and $36 to employee relocation. In connection with the Merger,
     approximately 35 EnSys employees were terminated in December 1996.

     In connection with the Merger, all identifiable assets acquired by SDI,
     including intangible assets, were assigned a portion of the cost of the
     acquired company based on an independent valuation of EnSys' assets. Such
     allocation included the identification and evaluation of each development
     project to determine if technological feasibility had been achieved and if
     there were any alternative future uses. EnSys' primary research and
     development focus, the "One Step" assay, is currently under development. If
     such technology is not fully developed on a timely basis, the existing
     products may not be competitive enough to satisfy the technical
     requirements of a changing market or be cost effective despite
     demonstration of research prototypes by EnSys. The costs of developing the
     remaining technology for the "One Step" assay is significant. As a result
     of the substantial time and effort to produce the product in accordance
     with all functions and specification, it has been determined that
     technological feasibility has not been achieved. In addition, since
     alternative uses of this developmental technology do not exist, the costs
     of such technology have been charged to expense in accordance with SFAS No.
     2, "Accounting for Research and Development Costs," ("SFAS No. 2"). Based
     on the foregoing purchase price, the amount allocated to acquired research
     and development of $4,353 was charged to the statement of operations at the
     effective date of the Merger. The remaining amount of intangible assets of
     approximately $1,167 includes approximately $472 for developed technology,
     $55 for assembled workforce and $640 for goodwill. The intangible assets
     purchased are being amortized on a straight-line basis over 7-10 years.
     Amortization expense included in selling, general and administrative in the
     accompanying consolidated statement of operations, for the three months
     ended March 31, 1998 is approximately $34 related to the merger.


Acquisition of Ohmicron Corporation

     On August 30, 1996, SDI acquired Ohmicron and certain of its wholly owned
     subsidiaries for 2,268,456 shares of common stock. Prior to the
     acquisition, Ohmicron spun-off certain assets and liabilities of another of
     its wholly-owned subsidiaries, Ohmicron Medical Diagnostics, Inc. The
     acquisition of Ohmicron was recorded as a purchase transaction accounting
     using the fair market value of the SDI common stock issued to Ohmicron. The
     total purchase price of approximately $4,503, including transaction and

                                       7

<PAGE>

     other costs of $533, has been allocated to the fair market value of the
     assets acquired and liabilities assumed. Based on the foregoing estimated
     purchase price, the amount allocated to acquired research and development
     of $3,913 was charged to the statement of operations at the time of the
     acquisition. In connection with the Ohmicron transaction, all identifiable
     assets acquired including intangible assets were assigned a portion of the
     cost of the acquired company based on an independent valuation of
     Ohmicron's assets. Such allocation included the evaluation of each
     development project identified to determine if technological feasibility
     had been achieved and if there were any alternative future uses. Based on
     this analysis, it has been determined that technological feasibility has
     not been achieved, and that alternative uses of this developmental
     technology do not exist. The cost of such technology has therefore been
     charged to expense in accordance with SFAS No. 2. The remaining amount of
     intangible assets of approximately $590 included approximately $384 for
     developed technology, $103 for assembled workforce and $103 for goodwill.
     The intangible assets purchased are being amortized on a straight-line
     basis over 7-10 years. Amortization expense included in selling, general
     and administrative in the accompanying consolidated statement of operations
     for the three months ended March 31, 1998 is approximately $19. The fair
     market value of the common stock issued to Ohmicron was based on several
     factors including recent equity transactions, as well as the subsequently
     negotiated Merger.

TSD BioServices Dissolution

     In October 1996, SDI entered into an agreement with Taconic Farms, Inc.
     ("Taconic") to dissolve TSD BioServices, a partnership between Taconic and
     SDI and to liquidate its assets, in connection with which certain of the
     rights and assets were distributed to SDI. Upon dissolution, certain rights
     and assets formerly owned by the joint venture were placed in a
     wholly-owned subsidiary of SDI. The agreement to dissolve TSD BioServices
     provides that each of the former partners receive rights to perform
     services that were considered to be either a core part of that partner's
     expertise, or an area in which the partner wanted to increase its market
     presence or technical competency. The dissolution agreement also provided
     that certain services previously provided by TSD BioServices, such as
     ascites production and sales and marketing, would be subcontracted to
     Taconic by SDI in the future based on established fees set annually. For
     accounting purposes, this transaction was treated as a purchase, with the
     consideration provided being SDI's investment of $338 which approximated
     the fair market value of the assets received.


                                       8
<PAGE>


4. SHORT-TERM INVESTMENTS:

     The Company considers its investments as being available for sale in
     accordance with SFAS No. 115 "Accounting for Certain Investments in Debt
     and Equity Securities."


5. SERIES A PREFERRED STOCK:

     In June 1993, the Company sold 1,267,208 shares of redeemable convertible
     preferred stock and received proceeds of $3,000 less $47 of transaction
     costs. In connection with the 1996 financing, the Company converted the
     $1,500 of notes payable and $124 of accrued interest into 685,952 shares of
     redeemable convertible preferred stock at $2.37 per share and received an
     additional investment of $500 for the purchase of 211,202 shares less
     transaction costs of $27. All such shares were redeemable with cumulative
     dividends, at the option of the holders, beginning in 1998. Dividends have
     been accreted through the Merger (Note 3).

     In connection with the Merger, the redeemable convertible preferred stock
     plus cumulative dividends were converted into 2,164,362 shares of a newly
     issued class of Series A Preferred Stock ("Series A"). The Series A has no
     redemption provisions outside the control of the Company. As a result, the
     Series A is now classified as a component of stockholders' equity.

     The Series A is convertible into one share of Common Stock at the option
     of the holder at any time, or at the option of the Company if the closing
     share price of the Company's Common Stock exceeds $4.50 per share for a
     period of 45 business days. The Series A carries an aggregate liquidation
     preference of $6,378. The Series A contains no annual dividend provisions
     and is only redeemable in the event the Company converts the Series A into
     securities of a lesser value, as defined.

                                       9

<PAGE>

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 forward
looking statements reflecting the current expectations of Strategic Diagnostics
Inc. and its subsidiaries (the "Company"). Investors are cautioned that all
forward looking statements involve risks and uncertainties that 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, failure to obtain necessary regulatory approvals,
modifications to development and sales relationships, the ability to integrate
the acquired businesses and achieve anticipated synergies, and competition.

Background

        The Company is the entity resulting from the combination of EnSys
Environmental Products, Inc. ("EnSys"), Ohmicron Corporation ("Ohmicron"), TSD
BioServices ("TSD") and Strategic Diagnostics Inc. ("SDI"). On August 30, 1996
Ohmicron was acquired by SDI, with certain Ohmicron shareholders and note
holders receiving shares of SDI common stock. On October 1, 1996 SDI entered
into an agreement to dissolve TSD BioServices, a partnership, between Taconic
Farms, Inc. and SDI and to liquidate its assets, in connection with which
certain rights and assets formerly owned by the partnership were distributed to
SDI and placed in a wholly owned subsidiary of SDI. On December 30, 1996 SDI was
merged with and into EnSys. The surviving entity was then renamed Strategic
Diagnostics Inc. Each of the transactions was accounted for as a purchase
transaction with SDI as the acquiring company and, therefore, the surviving
company for financial reporting purposes.

        EnSys was formed in 1987 to develop proprietary biotechnology based
test systems designed for fast and inexpensive detection of various chemicals in
soil and water samples. EnSys raised approximately $30 million in equity
financing, including approximately $16 million from the sale of 1,800,000 shares
of EnSys common stock in its initial public offering in October 1993. Since
1991, EnSys commercialized eleven immunoassay test kits and four other test kits
for the detection of various environmental contaminants. EnSys marketed and sold
these test kits and other associated products and services to environmental
consulting and engineering firms, hazardous waste processing firms,
environmental testing laboratories, and various state and federal agencies
through distributors and a regionally based direct sales force in the US. EnSys
also marketed and sold its products in Europe through EnSys (Europe) Limited, a
wholly owned subsidiary of EnSys. In March 1996, EnSys acquired from Millipore,
Inc. certain assets, which consisted primarily of inventory, work-in-process,
equipment, intellectual property rights, contract rights and customer lists
related to Millipore's EnviroGard(TM) product line for $1 million and 1,100,000
shares of EnSys common stock.

         Ohmicron was founded in 1984 and began marketing its RaPID Assay(R)
products in 1991 to the same general market and in the same fashion as
previously described for EnSys.

                                       10
<PAGE>


         Since its inception in 1990, SDI has focused on using proprietary
technology and know-how to develop, manufacture and market immunoassay test kits
for applications primarily in the water quality, industrial testing and
agricultural markets. Commercial operations were initiated with a contact with a
corporate partner (a large integrated chemical company) to develop an
immunoassay test to detect certain corrosion causing bacteria. This product was
introduced in late 1991 and SDI purchased all rights and technology related to
this product in 1994.

         In February 1992, SDI entered into a $3.9 million research and
development partnership with EM Industries, Inc. (an affiliate of Merck KGaA,
Darmstadt, Germany) for the development and manufacture of a line of immunoassay
test kits capable of identifying and quantifying targeted priority pollutants.
The first products under this agreement were introduced in 1993. Through August
1996, these products were manufactured by SDI and marketed by EM Industries,
Inc. In September 1996, EM Industries, Inc. and SDI reached an agreement whereby
the February 1992 agreement was terminated, together with EM Industries, Inc.'s
marketing rights thereunder, in exchange for certain specified royalty payments
to EM Industries, Inc. and shares of SDI common stock. The marketing activities
with respect to such products are now the responsibility of the Company.

         Since 1992, the Company has entered into research and development
agreements with multiple corporate partners that have led to the introduction of
various products to the water quality, industrial testing, agricultural and
other markets. These agreements generally provide that sales and marketing costs
associated with a new product are borne by the corporate partner. In addition,
the Company currently sells directly other products that it has developed or
acquired.
                                                                                

Results of Operations

Three Months Ended March 31, 1998 vs. March 31, 1997

          Total net revenues increased during the three month period ended March
31, 1998 over the three month period ended March 31, 1997 by $123,000 or 4%.
Product related sales increased $119,000 or 5%. This increase is due to 39%
growth in the agricultural product category as such revenues rose to $317,000
for the period ended March 31, 1998, versus $228,000 in this category for the
first quarter of 1997. All other product revenues increased slightly, largely
due to higher sales of the Macra product, antibodies and royalties.

          Total operating expenses for the period ended March 31, 1998 increased
by $229,000 or 8% over the period ended March 31, 1997. Manufacturing costs
increased $212,000 or 23%, in the first quarter of 1998 over the first quarter
of 1997. This increase reflects the increased manufacturing staff added during
the latter portion of 1997 as product volume grew. Research and development
expenses decreased $117,000 or 24% in the first quarter of 1998 versus the first
quarter of 1997. This decrease is due to lower costs for lab supplies and other

                                       11

<PAGE>

consumables. Selling, general and administrative expenses increased $134,000 or
10% in the first quarter of 1998 or versus the first quarter of 1997. This
increase is attributable to the higher levels of business activity.

          Net interest income increased $17,000 or 25%. This increase is
attributable to a higher level of invested balances during the quarter ended
March 31, 1998, as compared to the quarter ended March 31, 1997.


Liquidity and Capital Resources

          The Company's working capital which consists principally of cash, cash
equivalents and marketable investments, increased $105,000 from December 31,
1997 to $9,508,000 at March 31, 1998. Cash, cash equivalents and short-term
investments decreased $350,000 to $5,868,000. This decrease was used to reduce
accounts payable and accrued expenses by $745,000, and was net of increases
attributable to changes in other current assets and liabilities of $300,000 and
net income of $20,000.

          The Company believes that its current cash, cash equivalents and
marketable securities will be sufficient to meet its working capital and funding
needs for at least the next 18 months. However, 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 and the Company's
marketing and distribution strategy. Accordingly, there can be no assurance that
the Company will be able to meet its long-term requirements.


                                       12

<PAGE>


                                     PART II


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)     Exhibits:

        27 Financial Data Schedule (in electronic format only).

(b)     Reports on Form 8-K

        No reports on Form 8-K were filed by the registrant during the quarter
        covered by this report.




                                       13

<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>



<S>                                         <C>                                     <C>
Signature                                  Title                                   Date
---------                                  -----                                   ----

/s/ RICHARD C. BIRKMEYER         President and Chief Executive Officer          May 12, 1998
------------------------         (Principal Executive Officer)
    Richard C. Birkmeyer

/s/ ARTHUR A. KOCH, JR.          Vice President and Chief Financial Officer     May 12, 1998
------------------------         (Principal Financial Officer)
    Arthur A. Koch, Jr.            
  
</TABLE>

_______________________________________________________________________________


                                       14