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Psychemedics Corporation Announces Record Revenues DECLARES 64th CONSECUTIVE QUARTERLY DIVIDEND

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 64th 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 64th 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



RELATED LINKS
http://www.psychemedics.com

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