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Psychemedics Corporation Announces Quarterly And Annual Results
PR Newswire
Declares 78th Consecutive Quarterly Dividend

ACTON, Mass., Feb. 10, 2016 /PRNewswire/ -- Psychemedics Corporation (NASDAQ:PMD) today announced fourth quarter and year-end financial results for the period ended December 31, 2015. The Company also announced a quarterly dividend of $0.15 per share payable to shareholders of record as of February 22, 2016 to be paid on March 4, 2016. This will be the Company's 78th consecutive quarterly dividend.

The Company's revenue for the year ended December 31, 2015 was $27.0 million versus $29.2 million for the twelve months ended December 31, 2014, a decrease of 8%. Net income for the twelve months ended December 31, 2015 was $1.5 million or $0.28 per diluted share, versus $3.2 million or $0.60 per diluted share, for the comparable period last year, a decrease of 53%.The Company's revenue for the quarter ended December 31, 2015 was $6.1 million versus $6.8 million for the quarter ended December 31, 2014, a decrease of 9%. Net income for the quarter ended December 31, 2015 was $185 thousand or $0.03 per diluted share, versus $676 thousand or $0.13 per diluted share, for the comparable period last year, a decrease of 73%.

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

"2015 was a challenging, yet exciting year for us. Along with the headwinds in the economy, many industries and clients were impacted by the steep drop in the price of oil.  While oil and gas clients were most directly impacted, there also was a ripple effect on other industries we serve. However, we did bring in a solid amount of new business which is a most important positive.  

"In addition, we believe the Brazil opportunity will now begin shortly. We believe the administrative delays have been resolved as the Brazilian government has announced March 2nd, 2016 as the starting date. As previously reported, the Brazilian government passed a law in 2015, signed by the President on March 2nd, that required professional drivers in the transportation industry to pass a hair drug test when obtaining or renewing their driver's license. The law stated that testing was to begin ninety days after the law was signed, which would have meant June 1st. However, testing had been postponed due to continued administrative delays relating to implementation of the law. The Brazilian government administrative agencies implementing the drug testing law have now announced and published that this testing requirement is scheduled to begin on March 2nd, 2016."

"We remain excited about this opportunity in Brazil. However, short-term, the delay in implementation of this opportunity had a negative effect on 2015 earnings. The estimated impact on fourth quarter earnings from the increase in capacity and other costs related to the Brazil opportunity was about $0.07 per share, with the total impact in 2015 of about $0.28 per share. Earnings for the year were positively impacted by R&D tax credits from prior years related to the development of several strategic information technology projects – amounting to $0.09 per diluted share.

"We have continued our strong commitment to R&D and in 2015, we were very pleased to have launched 2 new drugs to the company's drug testing panels. In response to growing abuse concerns, the addition of Oxymorphone (brand name Opana®) was made to the synthetic opiate testing panel and D-Amphetamine/Adderall® was added as an option to the Amphetamine panel. As the 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 these additional drugs.

"The Company's balance sheet remains strong with approximately $2.7 million in cash and $4.9 million of working capital. We reduced our outstanding loan obligations from $6.2 million in 2014 to $5.9 million as of December 31, 2015. 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 our quarterly dividend of $0.15 per share. This dividend represents our 78th 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, 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 limitations, 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. 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 Comprehensive Income

(UNAUDITED)




Three Months Ended



Twelve Months Ended


December 31,



December 31,


2015


2014



2015


2014



















Revenues

$6,133,991


$6,761,813



$26,975,406


$29,204,818

Cost of revenues

3,482,343


3,280,269



14,258,465


14,066,652










Gross profit

2,651,648


3,481,544



12,716,941


15,138,166



















Operating Expenses:









   General & administrative

1,032,664


1,006,792



4,560,684


4,474,654

   Marketing & selling

1,158,603


1,154,786



5,053,217


4,625,375

   Research & development

346,750


362,296



1,631,664


1,348,496










Total Operating Expenses

2,538,017


2,523,874



11,245,565


10,448,525










Operating income

113,631


957,670



1,471,376


4,689,641

Other income (expense)

(29,974)


(27,419)



(124,588)


(56,576)










Net income before provision for income taxes

83,657


930,251



1,346,788


4,633,065










(Benefit from) / provision for income taxes

(101,282)


254,148



(164,388)


1,426,984










Net income and comprehensive income

$184,939


$676,103



$1,511,176


$3,206,081










Basic net income per share

$0.03


$0.13



$0.28


$0.60










Diluted net income per share

$0.03


$0.13



$0.28


$0.60










Dividends declared per share

$0.15


$0.15



$0.60


$0.60










Weighted average common shares outstanding, basic

5,422,541


5,375,061



5,405,032


5,355,367










Weighted average common shares outstanding, diluted

5,425,521


5,391,217



5,412,487


5,376,998

 

Psychemedics Corporation

Balance Sheets

(UNAUDITED)



December 31,


December 31,



2015


2014







ASSETS





 Current Assets:





   Cash and cash equivalents

$2,689,464


$3,612,153


   Accounts receivable, net of allowance for doubtful accounts





       of $58,684 in 2015 and $95,525 in 2014

3,538,765


4,078,133


   Prepaid expenses and other current assets

1,060,587


689,995


   Income tax receivable

840,122


1,819,743


   Deferred tax assets  

327,442


376,529







Total Current Assets

8,456,380


10,576,553


Fixed Assets, net of accumulated amortization and depreciation





    of $6,642,501 in 2015 and $5,788,551 in 2014

13,132,114


12,740,131


Other assets

774,474


761,025







Total Assets

$

22,362,968


$

24,077,709







LIABILITIES AND SHAREHOLDERS' EQUITY










Current Liabilities:





   Accounts payable

$747,291


$845,071


   Accrued expenses

1,197,632


1,351,333


   Current portion of long-term debt

1,619,633


1,399,925







Total Current Liabilities

3,564,556


3,596,329







   Long-term debt

4,272,137


4,848,158


   Deferred tax liabilities, long-term

2,852,745


2,796,666


Total Liabilities

10,689,438


11,241,153







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 2015 and 6,043,191 shares issued in 2014 

30,453


30,216


   Additional paid-in capital

30,021,604


29,454,023


   Accumulated deficit

( 8,296,738 )


( 6,565,894 )


   Less - Treasury stock, at cost, 668,130 shares in 2015 and 2014

( 10,081,789 )


( 10,081,789 )







Total Shareholders' Equity

11,673,530


12,836,556







Total Liabilities and Shareholders' Equity

$22,362,968


$24,077,709







 

Contact:




Neil Lerner





Vice President of Finance





(978) 206-8220





Neill@psychemedics.com

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SOURCE Psychemedics Corporation

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