Published on Benzinga (http://www.benzinga.com)
Psychemedics Gives Stoners a Hair-Pulling Experience
Posted on 11/07/11 at 1:31pm by John Thorpe
Whether you’re a pill-popper, a pot-head or a crack-head, Psychemedics (NASDAQ: PMD ) has the technology to sniff you out before your potential employer offers you a job.
Utilizing hair analysis technology, this smaller, Boston-area company delves into a potential employee’s recent drug history, saving employers the time and hassle of hiring drug-addicted employees. According to the company’s website, psychemedics.com , “Government studies from the late 1980s and early 1990s estimated that employing a drug user costs an employer an average of $7,000 to $10,000 per year. These are conservative estimates and if the studies were done in 2010, the costs would be much more.”
In other words, companies are literally throwing money away by not drug testing their employees. Considering that roughly 3 in 4 drug users is employed somewhere in America, many companies have turned to drug testing as an investment — a way to cut costs by eliminating larger health care bills and absenteeism down the road. For years, the standard means of drug testing has been urinalysis. Almost everyone has, at one time or another, been forced to pee into a little cup in front of a nurse, all so that nurse can verify your urine doesn’t show evidence of drug use.
By now, most people have figured out how to beat a urine test. Most of the people I know who smoke pot regularly passed a urine test before accepting their current job. Why? Because it’s stupidly easy to beat. That’s where Psychemedics comes in.
According to the company, “On average, 85% of the drug users identified by Psychemedics would have been missed by urinalysis. This is due not only to our much longer detection window of approximately 3 months, but also to our unique proprietary technology.” I would have to imagine that an 85 percent higher success rate would raise some eyebrows in the human resources departments of companies that employ drug testing as part of their HR process.
Apparently, Wall Street has noticed as well. Psychemedics just posted their quarterly earnings last week, and the results were good. Revenues rose by 24 percent year over year, coming in at $6.3 million. Net income was up 35 percent, to $1.1 million from $817k the previous third quarter. This led to a dividend of $0.12 per share, the 61st straight quarter that Psychemedics paid out a dividend.
“Our third quarter results were strong, both on the top line as well as earnings. The majority of our growth came from new business. However, in light of the current tepid economic environment, we were also encouraged to see growth in our base business. We continued to have robust margins including a 29% pre-tax margin. While we maintained tight cost control, we also continue to make investments in sales and marketing,” said CEO Raymond C. Kubacki.
Kubacki also announced that the company was continuing its stock repurchase program.
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.
Interestingly enough, the company offers more than just a sales pitch for potential clients on their web site. They’ve also got words of caution for folks who visit the site, looking for ways to beat their drug-testing system.
Anyone who is abusing drugs and being required to take the Psychemedics hair test should clearly understand the following:
•Abstaining from drug use for several days is not going to work with our test. On average, we can detect usage several months back and detect drug usage 5 to 10 times more effectively than urinalysis.
•Unlike other less effective hair tests, our hair test can detect marijuana users at a higher rate than urinalysis. Psychemedics spent many years of research to develop technology that allows us to detect marijuana users 4 to 7 times more frequently than urinalysis.
•Shaving your head hair will not prevent you from submitting a sample. We are not limited to just head hair and can test body hair samples. Shaving all your hair won’t work either because most companies have policies for that specific tactic.
•Claiming your hair was contaminated by someone else’s drug is not a valid excuse. We have the most extensive wash process in the industry to account for any external contamination. This has been proven not only in independent studies, but upheld in 20 years of court cases.