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Psychemedics Corporation Announces Top Revenue Quarter

August 5, 2013

DECLARES 68th CONSECUTIVE QUARTERLY DIVIDEND

ACTON, Mass., Aug. 5, 2013 /PRNewswire/ — Psychemedics Corporation (NASDAQ: PMD) today announced second quarter financial results for the period ended June 30, 2013. The Company also announced a quarterly dividend of $0.15 per share payable to shareholders of record as of August 15, 2013 to be paid on August 28, 2013. This will be the Company’s 68(th) consecutive quarterly dividend.

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

The Company’s revenue for the quarter ended June 30, 2013 was $6.90 million versus $6.86 million for the quarter ended June 30, 2012, an increase of 1%. Net income for the quarter ended June 30, 2013 was $1.06 million or $0.20 per diluted share, versus $1.00 million or $0.19 per diluted share, for the comparable period last year, an increase of 6%. The Company’s revenue for the six months ended June 30, 2013 was $13.33 million versus $13.11 million for the six months ended June 30, 2012, an increase of 2%. Net income for the six months ended June 30, 2013 was $1.89 million or $0.36 per diluted share, versus $1.83 million or $0.35 per diluted share, for the comparable period last year, an increase of 3%.

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

<blockquote>

“We are very pleased to report record sales for this past quarter, which exceeds any quarter in the Company’s history. Our new business growth is strong, while larger companies in our base business remain more cautious on hiring. In addition, the pre-tax margins were strong at 25%.

“We are also very excited about the launch of our hair alcohol test. Alcohol is the most abused substance in the world, and excessive use poses serious health and safety risks. After years of investing time and research into developing our hair alcohol test, we are proud to add this offering to our existing tests that measure consumption over an extended period of time. (Please see our press release on July 8(th), 2013, for further information on this exciting new product.) Last year we announced a new fundamental patent for getting the drugs out of the hair, and FDA clearance of new custom designed assays. We are very proud to continue to demonstrate our technological leadership with this new alcohol hair test.

“We continue to have a strong balance sheet with more than $2.7 million in cash and cash equivalents as of June 30, 2013 with no long term debt, despite heavy investment in new equipment and software over the last two years.

“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 68(th) consecutive quarterly dividend.”

</blockquote>

Psychemedics Corporation is the world’s largest provider of hair testing for the detection of drugs of abuse. The Company’s patented process is used by thousands of U.S. and international clients, including over 10% of the Fortune 500 companies, for pre-employment and random drug testing. Major police departments, Federal Reserve Banks, schools, and other public entities also rely on our unique patented drug testing process. We strongly believe our drug testing method to be superior to any other product currently in use, including traditional urine testing and other hair testing methods.

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 and sales and marketing strategies) 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 development of markets for new products and services offered, 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.


    Contact:                                Neil Lerner

                                     Vice President of Finance

                                          (978) 206-8220

                                      Neill@psychemedics.com

                                                                  Psychemedics Corporation

                                                        Statements of Income and Comprehensive Income

                                                                         (UNAUDITED)

                                                                                                        Three Months Ended            Six Months Ended

                                                                                                             June 30,                     June 30,

                                                                                                            2013            2012          2013            2012
                                                                                                            ----            ----          ----            ----

                                                                                                                                 -              -

    Revenues                                                                                          $6,898,737      $6,861,720   $13,331,179     $13,105,575

    Cost of revenues                                                                                   2,819,788       2,758,334     5,764,959       5,337,069
                                                                                                       ---------       ---------     ---------       ---------

    Gross profit                                                                                       4,078,949       4,103,386     7,566,220       7,768,506
                                                                                                       ---------       ---------     ---------       ---------

    Operating Expenses:

       General & administrative                                                                        1,006,950       1,004,548     2,000,661       1,999,989

       Marketing & selling                                                                             1,150,244       1,220,794     2,276,902       2,345,619

       Research & development                                                                            190,036         213,894       354,746         381,942
                                                                                                         -------         -------       -------         -------

    Total Operating Expenses                                                                           2,347,230       2,439,236     4,632,309       4,727,550
                                                                                                       ---------       ---------     ---------       ---------

    Operating income                                                                                   1,731,719       1,664,150     2,933,911       3,040,956

    Other income                                                                                             300             485        91,713             995
                                                                                                             ---             ---        ------             ---

    Net income before provision for income taxes                                                       1,732,019       1,664,635     3,025,624       3,041,951

    Provision for income taxes                                                                           669,093         663,591     1,140,353       1,213,416
                                                                                                         -------         -------     ---------       ---------

    Net income and comprehensive income                                                               $1,062,926      $1,001,044    $1,885,271      $1,828,535
                                                                                                      ==========      ==========    ==========      ==========

    Basic net income per share                                                                             $0.20           $0.19         $0.36           $0.35
                                                                                                           =====           =====         =====           =====

    Diluted net income per share                                                                           $0.20           $0.19         $0.36           $0.35
                                                                                                           =====           =====         =====           =====

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

    Weighted average common shares outstanding, basic                                                  5,305,296       5,260,462     5,289,066       5,248,011
                                                                                                       =========       =========     =========       =========

    Weighted average common shares outstanding, diluted                                                5,316,657       5,266,461     5,304,129       5,255,354
                                                                                                       =========       =========     =========       =========

                                       Psychemedics Corporation

                                            Balance Sheets

                                             (UNAUDITED)

                                                June 30,           December 31,

                                                             2013                 2012
                                                             ----                 ----

                               ASSETS

     Current Assets:

       Cash and cash
        equivalents                                    $2,729,175           $3,065,785

       Accounts receivable, net of allowance
        for doubtful accounts

           of $144,088
            in 2013 and
            $121,583 in
            2012                                        5,190,299            4,620,768

       Prepaid
        expenses and
        other
        current
        assets                                            978,624              823,274

       Income tax
        receivable                                             --              854,212

       Deferred tax
        assets                                            304,124              209,877
                                                          -------              -------

    Total Current
     Assets                                             9,202,222            9,573,916
                                                        ---------            ---------

    Fixed Assets, net of accumulated
     amortization and depreciation

        of $4,804,135
         in 2013 and
         $4,395,605
         in 2012                                        4,489,308            4,201,409

    Other assets                                          436,730              345,293
                                                          -------              -------

    Total Assets                                      $14,128,260          $14,120,618
                                                      ===========          ===========

                LIABILITIES AND SHAREHOLDERS' EQUITY

    Current Liabilities:

       Accounts
        payable                                          $577,192             $669,789

       Accrued
        expenses                                        1,081,764            1,413,541
                                                        ---------            ---------

    Total Current
     Liabilities                                        1,658,956            2,083,330
                                                        ---------            ---------

       Deferred tax
        liabilities,
        long-term                                         814,619              814,619
                                                          -------              -------

    Total
     Liabilities                                        2,473,575            2,897,949
                                                        ---------            ---------

    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

           5,979,508
            shares
            issued in
            2013 and
            5,940,558
            shares
            issued in
            2012                                           29,898               29,703

       Additional
        paid-in
        capital                                        28,592,453           28,460,764

       Accumulated
        deficit                                        (6,885,877)          (7,186,009)

       Less -
        Treasury
        stock, at
        cost,
        668,130
        shares in
        2013 and
        2012                                          (10,081,789)         (10,081,789)
                                                       ----------           ----------

    Total
     Shareholders'
     Equity                                            11,654,685           11,222,669
                                                       ----------           ----------

    Total
     Liabilities
     and
     Shareholders'
     Equity                                           $14,128,260          $14,120,618
                                                      ===========          ===========

SOURCE Psychemedics Corporation


Source: PR Newswire