EX-99.1 2 b54864pcexv99w1.htm EX-99.1 PRESS RELEASE DATED APRIL 27, 2005 exv99w1
 

EXHIBIT 99.1

NEWS RELEASE

     
Contact:
 
Peter Monson
 
Chief Financial Officer
 
(978) 206-8220
 
Peterm@psychemedics.com

PSYCHEMEDICS CORPORATION ANNOUNCES RECORD
1st QUARTER REVENUE AND NET INCOME
DECLARES QUARTERLY DIVIDEND

Acton, Massachusetts, April 27, 2005 — Psychemedics Corporation (AMEX: PMD) today announced first quarter results for the period ending March 31, 2005. The Company also announced a quarterly dividend of $.08 per share, which will be paid on June 24, 2005 to shareholders of record on June 10, 2005.

The Company’s first quarter revenue was $5,337,750, up 28% compared to $4,155,872 in the first quarter of 2004. Net income was $948,140 or $0.18 per share, up 109% from $452,988 or $0.09 per share for the same period in 2004.

Raymond C. Kubacki, Chairman and Chief Executive Officer, said, “We are pleased to be able to report record results for the first quarter of 2005. Our revenue and net income for the first quarter of 2005 represent another significant milestone for our Company — it was the highest revenue and net income for any first quarter in the history of Psychemedics Corporation. Our revenue growth of 28% came from both new and existing customers, and with our continued adherence to rigid cost controls, resulted in strong operating margins and an increase in net income of 109%. Significantly, we achieved these superior results in a job market that continues to be challenging.”

Kubacki added, “Our strong revenue increase of over 28% was aided by the addition of a new client that undertook a major start-up hiring effort at its new facility that resulted in over 11,000 tests during the first quarter. However, it should be noted that our revenue for the first quarter still would have increased by a healthy 20% if we had not added this

 

 

new client. We will also be doing all the ongoing testing for this client after this initial start-up phase is completed.”

Kubacki continued, “We continue to add new accounts at a brisk pace and to demonstrate our ability to produce strong profit margins. With our patented and FDA-cleared hair test and our large and diverse customer base, we feel we are well-positioned for substantial growth in the future. The Company’s balance sheet remains strong with over $4.1 million of cash and short-term investments, no long-term debt and approximately $6.1 million of working capital. We are pleased to declare our 35th consecutive quarterly dividend, demonstrating the Directors’ commitment to rewarding shareholders and sharing the financial success of the Company with them as we grow.”

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. Psychemedics is the only company that has received FDA clearance for a five-drug panel test of hair samples for drugs of abuse.

Financial Highlights:

  •   Revenue for the first quarter increased 28% over the prior year quarter to $5,337,750
 
  •   Net Income for the first quarter of $948,140, or $0.18 per diluted share, up 109% from the prior year quarter

The Psychemedics web site is 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 growth, earnings, earnings per share, revenues, dividends, future business, 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 network, 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

                 
    THREE MONTHS  
    ENDED MARCH 31,  
    2005     2004  
REVENUE
   $ 5,337,750     $ 4,155,872  
DIRECT COSTS
     2,164,830       2,004,706  
 
            
Gross profit
     3,172,920       2,151,166  
 
            
EXPENSES:
                
General and administrative
     872,638       743,801  
Marketing and selling
     729,081       606,529  
Research and development
     71,947       77,019  
 
            
 
     1,673,666       1,427,349  
 
            
OPERATING INCOME
     1,499,254       723,817  
INTEREST INCOME
     12,636       7,921  
OTHER INCOME
     1,250       3,750  
 
            
 
     13,886       11,671  
 
            
NET INCOME BEFORE INCOME TAXES
     1,513,140       735,488  
PROVISION FOR INCOME TAXES
     565,000       282,500  
 
            
NET INCOME
   $ 948,140     $ 452,988  
 
            
BASIC NET INCOME PER SHARE
   $ 0.18     $ 0.09  
 
            
DILUTED NET INCOME PER SHARE
   $ 0.18     $ 0.09  
 
            
DIVIDENDS DECLARED PER SHARE
   $ 0.08     $ 0.08  
 
            
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
     5,128,508       5,126,907  
 
            
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, ASSUMING DILUTION
     5,141,527       5,133,050  
 
            

 

 

PSYCHEMEDICS CORPORATION
BALANCE SHEETS

                 
    MARCH 31,     DECEMBER 31,  
    2005     2004  
ASSETS
CURRENT ASSETS:
                
Cash and cash equivalents
   $ 2,068,783     $ 3,260,178  
Short-term investments
     2,000,000       —  
Accounts receivable, net
     3,527,303       3,289,863  
Prepaid expenses and other assets
     568,427       246,372  
Deferred tax asset
     529,752       529,752  
 
            
Total current assets
     8,694,265       7,326,165  
PROPERTY AND EQUIPMENT:
                
Equipment and leasehold improvements, at cost
     10,000,889       9,960,831  
Less — accumulated depreciation and amortization
     (9,203,041 )     (9,099,472 )
 
            
 
     797,848       861,359  
DEFERRED TAX ASSET
     166,583       166,583  
OTHER ASSETS, NET
     60,462       79,529  
 
            
 
   $ 9,719,158     $ 8,433,636  
 
            
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
                
Accounts payable
   $ 550,101     $ 554,214  
Accrued expenses
     1,562,890       1,157,740  
Deferred revenue
     502,543       487,633  
 
            
Total current liabilities
     2,615,534       2,199,587  
SHAREHOLDERS’ EQUITY:
                
Preferred stock, $0.005 par value; 872,521 shares authorized; none issued or outstanding
     —       —  
Common stock; $0.005 par value; 50,000,000 shares authorized; 5,738,202 shares in 2005 and 5,710,704 shares in 2004 issued
     28,691       28,554  
Paid-in capital
     25,309,490       24,978,039  
Accumulated deficit
     (9,111,866 )     (9,649,853 )
Less — Treasury stock, at cost; 583,797 shares
     (9,122,691 )     (9,122,691 )
 
            
Total shareholders’ equity
     7,103,624       6,234,049  
 
            
 
   $ 9,719,158     $ 8,433,636