ACTON, Mass., Nov. 3 /PRNewswire-FirstCall/ -- Psychemedics Corporation
(Nasdaq: PMD) today announced third quarter financial results for the period
ended September 30, 2008. The Company also announced a quarterly dividend of
$0.17 per share payable to shareholders of record as of December 3, 2008 to be
paid on December 17, 2008. This will be the Company's 49th consecutive
quarterly dividend.
The Company's third quarter revenue was $6.2 million, down 4% as compared
to $6.5 million in the third quarter of 2007. Net income was $0.9 million or
$0.17 per diluted share, down 28% from $1.2 million or $0.23 per share for the
same period in 2007. The Company's revenue for the nine months ended
September 30, 2008 was $18.1 million, down 3% as compared to $18.7 million for
the comparable period of 2007. Net income for the nine months ended September
30, 2008 was $2.8 million or $0.53 per diluted share, a decrease of 22% over
the comparable period last year during which the Company earned $3.6 million
or $0.67 per diluted share.
Raymond C. Kubacki, Chairman and Chief Executive Officer, said, "We are
operating in a tough hiring environment. However, we continued to add new
accounts at a healthy pace which has served as a significant offset to the
general weakness in hiring."
Kubacki continued, "We are continuing to make investments in our sales and
marketing group to capitalize on significant future growth opportunities. We
believe this will continue to pay off with a steady stream of new customer
wins. While these are uncertain times, our services save customers a
significant cost, which is why we remain confident in our future."
Kubacki concluded, "We remain a solidly profitable company with a
promising outlook. It is important to also note that the Company continues to
have a strong balance sheet with no long-term debt and approximately $9.1
million of cash and investments, up 9% from the third quarter of 2007.
Therefore, we are declaring our 49th consecutive quarterly dividend. This
dividend demonstrates our continued commitment to maximizing shareholder
returns as we move forward."
On March 17, 2008, the Company announced the authorization of a 250,000
share stock repurchase program and the Company continued to buy back its own
shares in the third quarter.
Psychemedics is the world's largest provider of hair testing for drugs of
abuse with thousands of corporations relying on the patented 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.
Financial Summary:
-- Revenue for the third quarter of $6.2 million, down 4% from the prior
year quarter
-- Revenue for the nine month period of $18.1 million, down 3% from the
prior year period
-- Pretax income for the third quarter of $1.4 million, down 29% from the
prior year quarter
-- Pretax income for the nine month period of $4.7 million, down 22% from
the prior year period
-- Net income for the third quarter of $0.9 million, or $0.17 per diluted
share, down 27% from the prior year quarter
-- Net income for the nine month period of $2.8 million, or $0.53 per
diluted share, down 21% from the prior year period
The Psychemedics web site is http://www.drugtestwithhair.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 expansion of the Company's
sales and marketing team, development of markets for new products and services
offered, 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 NINE MONTHS
ENDED SEP 30, ENDED SEP 30,
2008 2007 2008 2007
REVENUE $6,204,647 $6,463,516 $18,124,587 $18,677,412
DIRECT COSTS $2,552,014 2,553,358 7,374,228 7,395,552
Gross profit 3,652,633 3,910,158 10,750,359 11,281,860
EXPENSES:
General and
administrative 1,145,486 1,108,625 3,262,804 2,969,680
Marketing and
selling 1,013,510 765,145 2,714,882 2,277,075
Research and
development 125,039 121,859 362,532 377,481
2,284,035 1,995,629 6,340,218 5,624,236
OPERATING INCOME 1,368,598 1,914,529 4,410,141 5,657,624
INTEREST INCOME 64,999 104,480 249,961 302,048
NET INCOME BEFORE
INCOME TAXES 1,433,597 2,019,009 4,660,102 5,959,672
PROVISION FOR INCOME
TAXES 560,042 809,400 1,864,041 2,382,800
NET INCOME $873,555 $1,209,609 $2,796,061 $3,576,872
BASIC NET INCOME PER
SHARE $0.17 $0.23 $0.54 $0.69
DILUTED NET INCOME PER
SHARE $0.17 $0.23 $0.53 $0.67
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING, BASIC 5,226,237 5,216,386 5,223,581 5,199,876
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING, DILUTED 5,255,301 5,333,341 5,275,311 5,301,756
PSYCHEMEDICS CORPORATION
BALANCE SHEETS
UNAUDITED
September December
30, 2008 31, 2007
UNAUDITED
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $6,910,753 $6,096,734
Short-term investments 2,150,000 3,875,000
Accounts receivable, net of
allowance for doubtful
accounts of $235,891 in 2008 and
$235,337 in 2007 4,312,292 3,555,342
Prepaid expenses and other current
assets 840,290 498,919
Deferred tax asset 531,930 429,472
Total current assets 14,745,265 14,455,467
EQUIPMENT AND LEASEHOLD IMPROVEMENTS 10,879,870 10,792,657
Less-accumulated depreciation and
amortization (10,225,849) (9,977,315)
654,021 815,342
DEFERRED TAX ASSET 231,346 231,346
OTHER ASSETS - NET 74,375 58,613
$15,705,007 $15,560,768
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $434,213 $488,640
Accrued expenses 1,166,457 951,242
Deferred revenue 166,261 242,955
Total current liabilities 1,766,931 1,682,837
SHAREHOLDERS' EQUITY:
Preferred stock, $.005 par value;
authorized 872,521 shares; none
outstanding
Common stock; $.005 par value;
authorized 50,000,000 shares;
5,843,068 shares issued in
2008 and 5,811,982 shares issued
in 2007 29,215 29,060
Paid-in capital 27,003,835 26,539,764
Accumulated deficit (3,293,751) (3,527,269)
Less - Treasury stock, at cost;
626,848 shares in 2008 and 586,197
shares in 2007 (9,801,223) (9,163,624)
Total shareholders' equity 13,938,076 13,877,931
$15,705,007 $15,560,768
Contact: Raymond Ruddy
Vice President and Controller
(978) 206-8220
Raymondr@psychemedics.com
