Acton, Massachusetts, August 7, 2012 — 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.
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 gains 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.”