Quantcast

Psychemedics Corporation Announces Record First Quarter Revenues

April 29, 2014

DECLARES 71st CONSECUTIVE QUARTERLY DIVIDEND

ACTON, Mass., April 29, 2014 /PRNewswire/ — Psychemedics Corporation (NASDAQ: PMD) today announced first quarter financial results for the period ended March 31, 2014. The Company also announced a quarterly dividend of $0.15 per share payable to shareholders of record as of May 9, 2014 to be paid on May 19, 2014. This will be the Company’s 71(st) consecutive quarterly dividend.

http://photos.prnewswire.com/prnvar/20111107/NE00639LOGO

The Company’s revenue for the quarter ended March 31, 2014 was $7.0 million versus $6.4 million for the quarter ended March 31, 2013, an increase of 10%. Net income for the quarter ended March 31, 2014 was $756 thousand or $0.14 per diluted share, versus $822 thousand or $0.16 per diluted share, for the comparable period last year.

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

“We are very pleased to report record sales for any first quarter in the Company’s history. Our new business growth accounted for the entire gain in the quarter, as well as offsetting the decline in our business due to the soft hiring/jobs environment.

“In late 2013, we reported that the Company will be competing for hair testing business in Brazil in 2014. As you may recall, the Brazilian Federal Government had announced new regulations that will require professional drivers in the transportation industry to pass a hair drug test when obtaining or renewing their driver’s license, with the first testing to begin on July 1, 2014.

“This is an exciting opportunity. As we have also stated, in order to service this potential volume, we are making significant investments in plant, equipment and people. These investments are being made in the first half of 2014 to be ready for the start date. During this period, we will not have any revenues from this Brazil opportunity to offset these costs. Therefore, we would expect earnings in the first half of 2014 to be unfavorably impacted.

“The impact in the first quarter of 2014 was estimated at $0.04 per diluted share, including the R&D costs to develop three additional new drug tests for Brazil requirements. However, the greater portion of these expenses will occur in the second quarter, so we expect the impact on earnings to be significantly greater in the second quarter.

“At the same time, the project also requires additional capital for equipment. As a result, the Company entered into an equipment financing arrangement which will allow the Company, at its option, to finance up to $6 Million of equipment purchases. In this quarter, the Company borrowed $1.1 million under this financing arrangement at a 2.15% interest rate. We still have $2.2 million in cash on our balance sheet and approximately $5 million additional equipment financing available.

“While increasing capacity will have a negative impact on our cash flow, we believe this to be short-term. We remain excited about this opportunity. 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 71st consecutive quarterly dividend.”

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, sales and marketing strategies, foreign drug testing laws and regulations, required investments in plant, equipment and people) 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, costs of capacity expansion, U.S. and foreign government regulation, including but not limited to FDA regulations, Brazilian drivers license 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 Comprehensive Income

                     (UNAUDITED)

                                          Three Months
                                             Ended

                                            March 31,

                                          2014           2013
                                          ----           ----

    Revenues                        $7,044,821     $6,432,442

    Cost of revenues                 3,249,039      2,945,171
                                     ---------      ---------

    Gross profit                     3,795,782      3,487,271
                                     ---------      ---------

    Operating Expenses:

       General & administrative      1,184,147        993,711

       Marketing & selling           1,098,600      1,126,658

       Research & development          344,983        164,710
                                       -------        -------

    Total Operating Expenses         2,627,730      2,285,079
                                     ---------      ---------

    Operating income                 1,168,052      1,202,192

    Other income                         1,549         91,413
                                         -----         ------

    Net income before provision
     for income taxes                1,169,601      1,293,605

    Provision for income taxes         413,442        471,260
                                       -------        -------

    Net income and comprehensive
     income                           $756,159       $822,345
                                      ========       ========

    Basic net income per share           $0.14          $0.16
                                         =====          =====

    Diluted net income per share         $0.14          $0.16
                                         =====          =====

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

    Weighted average common shares
     outstanding, basic              5,317,836      5,272,647
                                     =========      =========

    Weighted average common shares
     outstanding, diluted            5,371,418      5,292,686
                                     =========      =========

                                       Psychemedics Corporation

                                            Balance Sheets

                                             (UNAUDITED)

                                                March 31,          December 31,

                                                             2014                 2013
                                                             ----                 ----

                               ASSETS

     Current Assets:

       Cash and cash
        equivalents                                    $2,208,788           $3,970,512

       Accounts receivable, net of allowance
        for doubtful accounts

           of $148,605
            in 2014 and
            $144,921 in
            2013                                        4,818,663            4,368,864

       Prepaid
        expenses and
        other
        current
        assets                                          1,172,688              769,269

       Income tax
        receivable                                        207,119              554,828

       Deferred tax
        assets                                            351,403              292,795
                                                          -------              -------

    Total Current
     Assets                                             8,758,661            9,956,268

    Fixed Assets, net of accumulated
     amortization and depreciation

        of $5,368,057
         in 2014 and
         $5,175,722
         in 2013                                        8,593,455            6,050,203

    Other assets                                          672,093              543,345
                                                          -------              -------

    Total Assets                                      $18,024,209          $16,549,816
                                                      ===========          ===========

                LIABILITIES AND SHAREHOLDERS' EQUITY

    Current Liabilities:

       Accounts
        payable                                          $778,548             $510,550

       Accrued
        expenses                                        2,443,695            2,447,920

       Current
        portion of
        long-term
        debt                                              210,589                   --
                                                          -------                  ---

    Total Current
     Liabilities                                        3,432,832            2,958,470

       Long-term
        debt                                              842,354                   --

       Deferred tax
        liabilities,
        long-term                                       1,314,221            1,314,221
                                                        ---------            ---------

    Total
     Liabilities                                        5,589,407            4,272,691
                                                        ---------            ---------

    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

           5,991,945
            shares
            issued in
            2014 and
            5,981,896
            shares
            issued in
            2013                                           29,956               29,910

       Additional
        paid-in
        capital                                        29,088,238           28,888,712

       Accumulated
        deficit                                        (6,601,603)          (6,559,708)

       Less -
        Treasury
        stock, at
        cost,
        668,130
        shares                                        (10,081,789)         (10,081,789)
                                                       ----------           ----------

    Total
     Shareholders'
     Equity                                            12,434,802           12,277,125
                                                       ----------           ----------

    Total
     Liabilities
     and
     Shareholders'
     Equity                                           $18,024,209          $16,549,816
                                                      ===========          ===========

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

Logo – http://photos.prnewswire.com/prnh/20111107/NE00639LOGO

SOURCE Psychemedics Corporation


Source: PR Newswire



comments powered by Disqus