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MassachusettsNASDAQ-SMALL:PMDPR NewswirePsychemedics Corporation
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Psychemedics Corporation Announces Quarterly Results

Posted: April 27, 2016 1:15 am (UTC)

ACTON, Mass., April 26, 2016 /PRNewswire/ — Psychemedics Corporation (NASDAQ: PMD) today announced first quarter financial results for the period ended March 31, 2016. The Company also announced a quarterly dividend of $0.15 per share payable to shareholders of record as of May 6, 2016 to be paid on May 18, 2016. This will be the Company’s 79(th) consecutive quarterly dividend.

The Company’s revenue for the quarter ended March 31, 2016 was $6.7 million versus $6.8 million for the quarter ended March 31, 2015, a decrease of 1%. Net loss for the quarter ended March 31, 2016 was $23 thousand or $0.00 per share, versus net income of $278 thousand or $0.05 per diluted share, for the comparable period last year.

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

“Revenue for the quarter was down slightly from last year. The dramatic drop in the price of oil continues to impact a number of industries and clients. While oil and gas clients were most directly impacted (especially the drillers), there also was a ripple effect on other industries we serve, such as the railroads, who were also hit by a decrease in coal production. On the positive side, we are seeing solid growth in several sectors of our business, with our school testing and automotive and heavy equipment manufacturing testing especially strong.

“While our bottom line was also impacted by the on-going capacity expansion and ramp up costs related to anticipated new business from Brazil, the good news is that the Brazil legislated testing, requiring professional drivers in the transportation industry to pass a hair drug test, has started. As we anticipated, the ramp up period is more gradual as this is a major new program and some of the states in Brazil are requiring additional time to implement the law. In addition, the requirement to test professional drivers when being hired or fired was delayed to April 16, 2016. As a result, there were a relatively small number of tests received at the end of March 2016, but we are already seeing a meaningful pickup of testing volume in the second quarter.”

“We are excited about this opportunity in Brazil and are aggressively competing for a share of this potential business. As a result, we had additional ramp up costs in the quarter to support the anticipated new business which had a negative effect on Q1 2016 profitability. The estimated impact on the quarter earnings from the increase in capacity and ramp up costs related to the Brazil opportunity was about $0.10 per share.

“The Company’s balance sheet remains strong with approximately $2.0 million in cash and $4.2 million of working capital. We obtained $0.6 million of additional equipment financing proceeds in March 2016, for total equipment financing outstanding of $6.1 million as of March 31, 2016. Even with this additional financing, the total loan balance was $900 thousand less than our total original equipment financing in 2014 of $7.0 million. Our directors share our confidence in the future of Psychemedics and remain committed to rewarding shareholders and sharing the financial success of the Company with them as we grow. Therefore, we are pleased to declare a quarterly dividend of $0.15 per share. This dividend represents our 79th 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

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, cash flows, dividends, future business, growth opportunities (including an opportunity in Brazil), new accounts, customer base, market share, test volume, sales and marketing strategies, U.S. and foreign drug testing laws and regulations including effective dates thereof, required investments in plant, equipment and people and new test development) 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 laws and regulations and projected implementation dates, proposed laws and regulations, R&D spending, competition (including, without limitation, competition from other companies pursuing the same growth opportunities) and general economic conditions and other factors disclosed in the Company’s filings with the Securities and Exchange Commission. Information regarding testing volume for a partial quarter may not necessarily be an indicative of results to be expected for the full quarter or year. The forward-looking statements contained herein speak only of the Company’s expecta­tions as of the date of this press release. The Company express­ly disclaims any obligation or undertaking to release publicly any updates or revi­sions to any such statement to reflect any change in the Company’s expectations or any change in events, conditions, or circumstances on which any such statement is based.

                         Psychemedics Corporation      Condensed Statements of Operations and Comprehensive (Loss) / Income                                 (UNAUDITED)                                                    Three Months Ended                                                       March 31,                                                       2016                      2015                                                      ----                      ----        Revenues                                   $6,667,064                $6,755,741      Cost of revenues                            3,928,622                 3,416,873                                                 ---------                 ---------       Gross profit                                2,738,442                 3,338,868                                                 ---------                 ---------        Operating Expenses:         General & administrative                 1,252,075                 1,144,090         Marketing & selling                      1,127,654                 1,288,481         Research & development                     360,458                   455,782                                                   -------                   -------       Total Operating Expenses                    2,740,187                 2,888,353                                                 ---------                 ---------       Operating (loss) income                       (1,745)                  450,515      Interest expense, net                        (34,641)                 (33,327)                                                   -------                   -------       Net (loss) /income before      (benefit) from /provision      for income taxes                            (36,386)                  417,188       (Benefit) from /provision      for income taxes                            (12,942)                  139,666                                                   -------                   -------       Net (loss) /income and      comprehensive (loss) /      income                                     ($23,444)                 $277,522                                                  ========                  ========       Basic net (loss) /income      per share                                      $0.00                     $0.05                                                     =====                     =====       Diluted net (loss) /income      per share                                      $0.00                     $0.05                                                     =====                     =====       Dividends declared per      share                                          $0.15                     $0.15                                                     =====                     =====       Weighted average common      shares outstanding, basic                  5,422,541                 5,375,061                                                 =========                 =========       Weighted average common      shares outstanding,      diluted                                    5,422,541                 5,401,998                                                 =========                 =========   

                                                        Psychemedics Corporation                                                              Balance Sheets                                                               (UNAUDITED)                                                                 March 31,             December 31,                                                                                 2016                    2015                                                                                ----                    ----                                          ASSETS       Current Assets:         Cash and cash equivalents                                         $2,003,701              $2,689,464         Accounts receivable, net of allowance for doubtful accounts             of $47,731 in 2016 and             $58,684 in 2015                                               4,819,104               3,538,765         Prepaid expenses and other         current assets                                                    1,125,259               1,060,587         Income tax receivable                                                 24,926                 840,122         Deferred tax assets                                                  388,104                 327,442                                                                             -------                 -------       Total Current Assets                                                  8,361,094               8,456,380      Fixed Assets, net of accumulated amortization and      depreciation          of $7,162,360 in 2016 and          $6,642,501 in 2015                                              13,213,779              13,132,114      Other assets                                                            790,848                 774,474                                                                             -------                 -------       Total Assets                                                        $22,365,721             $22,362,968                                                                         ===========             ===========                           LIABILITIES AND SHAREHOLDERS' EQUITY       Current Liabilities:         Accounts payable                                                  $1,294,976                $747,291         Accrued expenses                                                   1,109,588               1,197,632         Current portion of long-         term debt                                                         1,741,602               1,619,633                                                                           ---------               ---------       Total Current Liabilities                                             4,146,166               3,564,556          Long-term debt                                                     4,355,104               4,272,137         Deferred tax liabilities,         long-term                                                         2,852,745               2,852,745                                                                           ---------               ---------      Total Liabilities                                                    11,354,015              10,689,438                                                                          ----------              ----------       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             6,090,671 shares issued in             2016 and 2015                                                    30,453                  30,453         Additional paid-in capital                                        30,196,605              30,021,604         Accumulated deficit                                              (9,133,563)            (8,296,738)         Less -Treasury stock, at         cost, 668,130 shares in         2016 and 2015                                                  (10,081,789)           (10,081,789)                                                                         -----------             -----------       Total Shareholders' Equity                                           11,011,706              11,673,530                                                                          ----------              ----------       Total Liabilities and      Shareholders' Equity                                               $22,365,721             $22,362,968                                                                         ===========             ===========  

Neil Lerner
Vice President of Finance
(978) 206-8220

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SOURCE Psychemedics Corporation


Company – Psychemedics Corporation
Location: Massachusetts (GeographyCode)
GEOTAG: Massachusetts

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