ACTON, Mass., Oct. 24, 2017 /PRNewswire/ -- Psychemedics
Corporation (NASDAQ: PMD) today announced third quarter financial
results for the period ended September
30, 2017. The Company also announced a quarterly
dividend of $0.15 per share payable
to shareholders of record as of November 6,
2017, to be paid on November
17, 2017. This will be the Company's 85th
consecutive quarterly dividend.
The Company's revenue for the quarter ended September 30, 2017 was $10.0 million versus $11.8
million for the quarter ended September 30, 2016, a decrease of 15%. Net
income for the quarter ended September 30,
2017 was $1.4 million or
$0.25 per diluted share, versus
$2.7 million or $0.49 per diluted share, for the comparable
period last year, a decrease of 50%. The Company's revenue for the
nine months ended September 30, 2017
was $29.9 million versus $28.2 million for the nine months ended
September 30, 2016, an increase of
6%. Net income for the nine months ended September 30, 2017 was $3.8 million or $0.68 per diluted share, versus $4.3 million or $0.79 per diluted share, for the comparable
period last year, a decrease of 13%.
Raymond C. Kubacki, Chairman and
Chief Executive Officer, said,
"Our 3rd Quarter contained some disappointing
short-term financial results compared to last year's all-time
record quarter for the Company. The revenue and earnings results
are not where we want to be, as we believe they do not reflect the
underlying fundamentals and long-term strength of our
Company. At the same time, we also achieved some significant
long-term positives.
"The Brazilian market continues to evolve, and, as in any new
and large market, short-term challenges and uncertainty are to be
expected. We will continue to address those challenges with
initiatives that are in the best long-term interests of the
Company. This is a large market that will be expanding by law
(the law required that in September
2018, professional drivers must renew their license every 2
½ years, instead of the current every 5 years). This will
represent a virtual doubling of this large market in the
not-too-distant future. In addition, the results of this
government mandated testing program have been so favorable for the
people of Brazil in terms of the
significant reduction in highway accidents and fatalities that the
government is discussing and considering requiring a hair test for
other types of driver's licenses. We intend to continue to be
a major factor in the development of this large and growing
market.
"At the same time, we were unfavorably impacted by a fall-off in
our Oil and Gas sector, partially as a result of Hurricane
Harvey. This sector had been up nicely in the 1st
half and we expect this business to recover in the near term.
"During the quarter, we also achieved some major positives,
which will continue to expand our market opportunity and help drive
future growth. We were excited to announce a number of
"FIRSTS" again for our Company:
- "In July, we announced that we were the first laboratory to be
approved for the testing of drugs of abuse in hair by the
State of Iowa. This follows a
long-overdue change in the Iowa
law allowing private sector pre-employment drug testing using hair
samples.
- "In August, we announced the launch of a Synthetic Cannabinoids
test – a hair test that looks for the compounds found in
commonly-abused products such as K2, Spice and Blaze. We believe we
are the first laboratory in the world to develop and offer a hair
test for Synthetic Cannabinoids for the workplace. Synthetic
Cannabinoids are often marketed as a "legal high" alternative to
marijuana, and are commonly sold as incense in retail stores, head
shops and on the internet. In response to reports of an alarming
increase in abuse and overdoses, the Federal Government has
classified many Synthetic Cannabinoids as Schedule I drugs under
the U.S. Controlled Substances Act -- the same category as heroin
and LSD.
- "In September, we announced the launch of an FDA-Cleared
Benzodiazepines hair test. Psychemedics is the first hair testing
laboratory to have its hair test for Benzodiazepines cleared by the
FDA. Our test detects numerous Benzodiazepines, including Xanax®,
Valium®, and Ativan®. The abuse of prescription Benzodiazepines has
grown at an alarming rate in the United
States, contributing to thousands of emergency room visits
and overdose deaths each year.
"Psychemedics has been the hair testing pioneer and global
scientific leader for over thirty years. We believe the continued
advancement in the science of hair testing is important to the
Company and our clients, and is a significant tool for addressing
one of the major issues of our time --- drug abuse. The development
of these new hair tests provides the market with unique and
reliable tests to identify and measure drugs over a period of
time. Drug abuse is a significant issue in our society, and
as a scientific leader in drug testing, we at Psychemedics continue
to advance the science and use our top flight scientific team and
R&D resources to develop new tests that will deter people from
abusing both prescription and illegal drugs.
"The Company's balance sheet remains strong with $5.6 million in cash and $7.7 million of working capital. The total
equipment financing obligation outstanding was $1.5 million as of September 30, 2017. 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 85th consecutive quarterly
dividend."
Contact:
Neil Lerner
Vice President of Finance
(978) 206-8220
Neill@psychemedics.com
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, cash
flows, dividends, future business, growth opportunities,
profitability, pricing, new accounts, customer base, market share,
test volume, sales and marketing strategies, U.S. and foreign drug
testing laws and regulations and the enforcement of such laws and
regulations, 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, proposed laws and regulations, currency
risks, R&D spending, competition (including, without
limitation, competition from other companies pursuing the same
growth opportunities), the Company's ability to maintain its
reputation and brand image, the ability of the Company to achieve
its business plans, cost controls, leveraging of its global
operating platform, risks of information technology system
failures and data security breaches, the uncertain global economy,
the Company's ability to attract, develop and retain
executives and other qualified employees and independent
contractors, including distributors, the Company's ability to
obtain and protect intellectual property rights, litigation risks,
general economic conditions and other factors disclosed in the
Company's filings with the Securities and Exchange
Commission. 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
|
Consolidated
Statements of Income and Comprehensive Income
|
(in thousands, except
per share amounts)
|
(UNAUDITED)
|
|
|
Three Months
Ended
|
|
|
Nine Months
Ended
|
|
September
30,
|
|
|
September
30,
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
10,049
|
|
$
11,849
|
|
|
$
29,942
|
|
$
28,216
|
Cost of
revenues
|
4,928
|
|
4,744
|
|
|
14,896
|
|
13,164
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
5,121
|
|
7,105
|
|
|
15,046
|
|
15,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
General
& administrative
|
1,471
|
|
1,278
|
|
|
4,278
|
|
3,716
|
Marketing & selling
|
1,065
|
|
1,375
|
|
|
3,552
|
|
3,804
|
Research
& development
|
353
|
|
348
|
|
|
1,005
|
|
1,059
|
|
|
|
|
|
|
|
|
|
Total Operating
Expenses
|
2,889
|
|
3,001
|
|
|
8,835
|
|
8,579
|
|
|
|
|
|
|
|
|
|
Operating
income
|
2,232
|
|
4,104
|
|
|
6,211
|
|
6,473
|
Interest income
(expense), net
|
13
|
|
(34)
|
|
|
(22)
|
|
(104)
|
|
|
|
|
|
|
|
|
|
Net income before
provision for income taxes
|
2,245
|
|
4,070
|
|
|
6,189
|
|
6,369
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
881
|
|
1,362
|
|
|
2,418
|
|
2,051
|
|
|
|
|
|
|
|
|
|
Net income
|
$
1,364
|
|
$
2,708
|
|
|
$
3,771
|
|
$
4,318
|
|
|
|
|
|
|
|
|
|
Earnings per common
share (basic)
|
$0.25
|
|
$0.50
|
|
|
$0.69
|
|
$0.79
|
Earnings per common
share (diluted)
|
$0.25
|
|
$0.49
|
|
|
$0.68
|
|
$0.79
|
|
|
|
|
|
|
|
|
|
Dividends declared
per share
|
$0.15
|
|
$0.15
|
|
|
$0.45
|
|
$0.45
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
Foreign
currency translation (gross)
|
$
108
|
|
$
-
|
|
|
$
37
|
|
$
-
|
Total comprehensive income
|
$
1,472
|
|
$
2,708
|
|
|
$
3,808
|
|
$
4,318
|
|
|
|
|
|
|
|
|
|
Psychemedics
Corporation
|
Consolidated
Balance Sheets
|
(in thousands, except
par value)
|
(UNAUDITED)
|
|
|
September
30,
|
|
December
31,
|
|
2017
|
|
2016
|
|
|
|
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and
cash equivalents
|
$
5,604
|
|
$
3,938
|
Accounts
receivable, net of allowance for doubtful accounts
|
|
|
|
of $62 in 2017
and $50 in 2016
|
5,421
|
|
5,837
|
Prepaid
expenses and other current assets
|
1,351
|
|
1,079
|
|
|
|
|
Total Current
Assets
|
12,376
|
|
10,854
|
|
|
|
|
Fixed Assets, net of
accumulated amortization and depreciation
|
|
|
|
of
$10,961 in 2017 and $8,900 in 2016
|
12,258
|
|
13,358
|
Other
assets
|
818
|
|
820
|
|
|
|
|
Total
Assets
|
$
25,452
|
|
$
25,032
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
1,103
|
|
$
1,363
|
Accrued
expenses
|
2,905
|
|
1,988
|
Current
portion of debt
|
542
|
|
1,144
|
|
|
|
|
Total Current
Liabilities
|
4,550
|
|
4,495
|
|
|
|
|
Long-term debt
|
928
|
|
2,237
|
Deferred
tax liabilities, long-term
|
2,742
|
|
2,693
|
Total
Liabilities
|
8,220
|
|
9,425
|
|
|
|
|
Shareholders'
Equity:
|
|
|
|
Preferred stock, $0.005 par value, 873 shares
authorized,
|
|
|
|
no shares
issued or outstanding
|
--
|
|
--
|
Common
stock, $0.005 par value; 50,000 shares authorized
|
|
|
|
6,160 shares
issued in 2017 and 6,128 shares issued in 2016
|
31
|
|
31
|
Accumulated other comprehensive gain
|
37
|
|
--
|
Additional paid-in capital
|
30,885
|
|
30,603
|
Accumulated deficit
|
(3,639)
|
|
(4,945)
|
Less -
Treasury stock, at cost, 668 shares in 2017 and 2016
|
(10,082)
|
|
(10,082)
|
|
|
|
|
Total Shareholders'
Equity
|
17,232
|
|
15,607
|
|
|
|
|
Total Liabilities and
Shareholders' Equity
|
$
25,452
|
|
$
25,032
|
|
|
|
|
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SOURCE Psychemedics Corporation