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Last updated on April 16, 2014 at 1:21 EDT

Psychemedics Corporation Announces Record Revenues

August 7, 2012

ACTON, Mass., Aug. 7, 2012 /PRNewswire/ — Psychemedics Corporation (NASDAQ:PMD) today announced second quarter financial results for the period ended June 30, 2012. The Company also announced a quarterly dividend of $0.15 per share payable to shareholders of record as of August 17, 2012 to be paid on August 30, 2012. This will be the Company’s 64(th) consecutive quarterly dividend.

(Logo: http://photos.prnewswire.com/prnh/20111107/NE00639LOGO )

The Company’s revenue for the quarter ended June 30, 2012 was $6.9 million versus $6.2 million for the quarter ended June 30, 2011, an increase of 10%. Net income for the quarter ended June 30, 2012 was $1.0 million or $0.19 per diluted share, versus $1.1 million or $0.21 per diluted share for the comparable period last year, a decrease of 8%. The Company’s revenue for the six months ended June 30, 2012 was $13.1 million, as compared to $12.2 million for the comparable period in 2011, an increase of 7%. Net income for the six months ended June 30, 2012 was $1.8 million or $0.35 per diluted share, as compared to last year, during which the Company earned $2.0 million or $0.37 per diluted share, a decrease of 6%.

Raymond C. Kubacki, Chairman and Chief Executive Officer, said,

“We are very pleased to report record sales for any quarter in the Company’s history. This is even more significant considering we were able to achieve this in a soft hiring environment. It is also a reflection of the investment that the Company has made, and continues to make, in sales and marketing, as all of our gain came from new business.

“The record sales have come at an exciting time for us. This quarter, the FDA granted the Company 501(k) clearances for five new, additional assays to test for the detection of cocaine, opiates, PCP, methamphetamine and marijuana using enzyme immunoassay (EIA) analysis of head and body hair. The newly developed immunoassays produced by the R&D team at Psychemedics were uniquely designed specifically to meet and even exceed the standards of radioimmunoassay, and represent a significant technological breakthrough. As you will recall, in January, we received a new patent (our seventh) covering a process that releases drugs trapped in hair without destroying the drugs. This patent is fundamental to hair analysis drug testing because if you can’t get the drugs out of the hair, you cannot measure them. By combining our new FDA-cleared immunoassays, which are equivalent in effectiveness and sensitivity to radioimmunoassay, with our new patented method of releasing the drugs from the hair, we continue to demonstrate our technological leadership and to offer truly proprietary technology that provides superior detection of drugs of abuse for our many clients. That is what sets us apart.

“Profits were impacted by an increase in research and development spending, costs associated with the changeover to our new technology and increased sales and marketing expenses. Yet our pre-tax profit margin for the second quarter was still over 24%. In addition, we fully expect that these expenses, or investments, bode well for our long-term growth, despite the impact on the quarter.

“We continue to have a strong balance sheet with more than $4.7 million in cash and cash equivalents as of June 30, 2012 and no long term debt.

“Our directors share our confidence in the long-term future of Psychemedics and remain committed to rewarding shareholders and sharing the financial success of the Company with them as we move forward.

“Therefore, the Board has declared a $0.15 dividend for the quarter. This is our 64(th) consecutive quarterly dividend. In addition, we continue to have a share buyback program.”

Psychemedics is the world’s largest provider of hair testing for drugs of abuse with thousands of corporations relying on the proprietary Psychemedics drug testing services. Psychemedics’ clients include over 10% of the Fortune 500, some of the largest police departments in America and six Federal Reserve Banks.

The Psychemedics web site is www.psychemedics.com.

Cautionary Statement for purposes of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995: From time to time, information provided by Psychemedics may contain forward-looking information that involves risks and uncertainties. In particular, statements contained in this release that are not historical facts (including but not limited to statements concerning earnings, earnings per share, revenues, dividends, future business, growth opportunities, new accounts, customer base, market share, test volume, sales and marketing strategies, technological changes, technological advantages, regulatory matters, and implementation of new testing procedures and processes) may be “forward looking” statements. Actual results may differ from those stated in any forward-looking statements. Factors that may cause such differences include but are not limited to risks associated with the expansion of the Company’s sales and marketing team, development of markets for new products and services offered, implementation of new testing procedures and methodologies including training, personnel changes, changes in supplier relationships, customer contract provisions, customer relationships, the economic health of principal customers of the Company, government regulation, including but not limited to FDA regulations, competition and general economic conditions and other factors disclosed in the Company’s filings with the Securities and Exchange Commission.

                        PSYCHEMEDICS CORPORATION
                          STATEMENTS OF INCOME
                               (UNAUDITED)

                        Three Months Ended              Six Months Ended
                             June 30,                       June 30,
                             2012                  2011        2012             2011
                             ----                  ----        ----             ----

    Revenues           $6,861,720            $6,227,785 $13,105,575      $12,227,524
    Cost of
     revenues           2,758,334             2,489,193   5,337,069        4,872,219
                        ---------             ---------   ---------        ---------

    Gross
     profit             4,103,386             3,738,592   7,768,506        7,355,305
                        ---------             ---------   ---------        ---------

    Operating
     Expenses:
       General &
        administrative  1,004,548               909,395   1,999,989        1,879,459
       Marketing
        & selling       1,220,794               950,178   2,345,619        1,964,295
       Research
        &
        development       213,894               121,053     381,942          263,504
                          -------               -------     -------          -------

    Total
     Operating
     Expenses           2,439,236             1,980,626   4,727,550        4,107,258
                        ---------             ---------   ---------        ---------

    Operating
     income             1,664,150             1,757,966   3,040,956        3,248,047
    Interest
     income                   485                 1,812         995            4,017
                              ---                 -----         ---            -----

    Net
     income
     before
     provision
     for
     income
     taxes              1,664,635             1,759,778   3,041,951        3,252,064

    Provision
     for
     income
     taxes                663,591               666,556   1,213,416        1,300,354
                          -------               -------   ---------        ---------

    Net
     income
     and
     comprehensive
     income            $1,001,044            $1,093,222  $1,828,535       $1,951,710
                       ==========            ==========  ==========       ==========

    Basic net
     income
     per
     share                  $0.19                 $0.21       $0.35            $0.37
                            =====                 =====       =====            =====

    Diluted
     net
     income
     per
     share                  $0.19                 $0.21       $0.35            $0.37
                            =====                 =====       =====            =====

    Dividends
     declared
     per share              $0.15                 $0.12       $0.30            $0.24
                            =====                 =====       =====            =====

    Weighted
     average
     common
     shares
     outstanding,
     basic              5,260,462             5,233,200   5,248,011        5,222,665
                        =========             =========   =========        =========

    Weighted
     average
     common
     shares
     outstanding,
     diluted            5,266,461             5,241,510   5,255,354        5,231,790
                        =========             =========   =========        =========
                                      PSYCHEMEDICS CORPORATION
                                           BALANCE SHEETS
                                            (UNAUDITED)

                                            June 30,              December 31,
                                                            2012                    2011
                                                            ----                    ----

                      ASSETS
     Current Assets:
       Cash and cash equivalents                      $4,761,857              $5,564,233
       Accounts receivable, net of
        allowance for doubtful
        accounts
           of $126,570 in 2012 and
            $169,191 in 2011                           5,351,587               4,490,976
       Prepaid expenses and other
        current assets                                   998,185                 565,508
       Income tax receivable                                  --                 564,083
       Deferred tax assets                               402,760                 315,501
                                                         -------                 -------

    Total Current Assets                              11,514,389              11,500,301
                                                      ----------              ----------

       Fixed Assets                                    2,339,432               2,063,377
                                                       ---------               ---------

       Other assets                                      267,366                 237,174
                                                         -------                 -------

    Total Assets                                     $14,121,187             $13,800,852
                                                     ===========             ===========

                  LIABILITIES AND
                SHAREHOLDERS' EQUITY

    Current Liabilities:
       Accounts payable                               $1,130,727                $961,844
       Accrued expenses                                1,098,210               1,321,856
                                                       ---------               ---------

    Total Current Liabilities                          2,228,937               2,283,700
                                                       ---------               ---------

       Deferred tax liabilities,
        long-term                                        482,523                 482,523
                                                         -------                 -------
    Total Liabilities                                  2,711,460               2,766,223
                                                       ---------               ---------

    Shareholders' Equity:
       Preferred-stock, $0.005
        par value, 872,521 shares
        authorized,
            no shares issued or
             outstanding                                      --                      --
       Common stock, $0.005 par
        value; 50,000,000 shares
        authorized
           5,940,558 shares issued in
            2012 and 5,903,552 shares
            issued 2011                                   29,703                  29,518
       Additional paid-in capital                     28,217,190              28,095,946
       Accumulated deficit                            (6,755,377)             (7,009,046)
       Less -Treasury stock, at
        cost, 668,130 shares                         (10,081,789)            (10,081,789)
                                                     -----------             -----------

    Total Shareholders' Equity                        11,409,727              11,034,629
                                                      ----------              ----------

    Total Liabilities and
     Shareholders' Equity                            $14,121,187             $13,800,852
                                                     ===========             ===========

Contact:
Neil Lerner
Vice President of Finance
(978) 206-8220
Neill@psychemedics.com

SOURCE Psychemedics Corporation


Source: PR Newswire