UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 25, 2013
PSYCHEMEDICS CORPORATION
(Exact Name of Registrant As Specified In Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
|
1-13738 (Commission File Number)
125 Nagog Park, Acton, Massachusetts 01720 (Address of Principal Executive Offices) (Zip Code)
|
58-1701987 (I.R.S. Employer Identification No.)
| |
|
(978) 206-8220 (Registrant’s Telephone Number, Including Area Code) N/A (Former name or former address, if changed since last report)
|
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On February 25, 2013, Psychemedics Corporation issued a press release announcing preliminary results for the Fourth Quarter of 2012. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein.
Limitation on Incorporation by Reference. The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of any general incorporation language in such filing.
Cautionary Note Regarding Forward-Looking Statements. Except for historical information contained in the press release attached as an exhibit hereto, the press release contains forward-looking statements which involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. Please refer to the cautionary note in the press release regarding these forward-looking statements.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
The following exhibits are filed herewith:
99.1 Press Release dated February 25, 2013
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: February 25, 2013 | PSYCHEMEDICS CORPORATION |
| By: /s/ Neil L. Lerner | |
| Neil L. Lerner | |
| Vice President - Finance |
Psychemedics Corporation Announces Record Revenues For 2012; Declares 66th Consecutive Quarterly Dividend
ACTON, Mass., Feb. 25, 2013 /PRNewswire/ -- Psychemedics Corporation (NASDAQ:PMD) today announced fourth quarter and year-end financial results for the period ended December 31, 2012. The Company also announced a quarterly dividend of $0.15 per share payable to shareholders of record as of March 7, 2013 to be paid on March 21, 2013. This will be the Company's 66th consecutive quarterly dividend.
(Logo: http://photos.prnewswire.com/prnh/20111107/NE00639LOGO )
The Company's revenue for the year ended December 31, 2012 was $25.2 million, an increase of 5% as compared to $24.1 million for 2011. Net income for the year ended December 31, 2012 was $3.0 million or $0.57 per diluted share, a decrease of 15% from 2011 during which the Company earned $3.5 million or $0.67 per diluted share. Revenue for the fourth quarter was $5.7 million, an increase of 2% as compared to $5.5 million in the fourth quarter of 2011. Net income for the quarter was $273 thousand or $0.05 per diluted share, a decrease of 38% from $438 thousand or $0.08 per share for the same period of 2011.
Raymond C. Kubacki, Chairman and Chief Executive Officer, stated:
"2012 was a year of major accomplishments and transition. In addition to record revenues, primarily due to strong new business growth, the Company re-established its strong patent protection and successfully transitioned to a new production technology.
"As you will recall, in January 2012, we received a new patent (our seventh) covering a process that releases virtually 100% of the 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.
"In the second quarter of 2012, 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 (RIAH), and represent a significant technological breakthrough.
"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.
"Of course, receiving the patent and FDA clearances was just the beginning. We then needed to implement this change in technology from RIAH to EIA. I am pleased to say that we made this once in a generation transition with an almost seamless impact to our clients. That said, the transition impacted profits in Q3 and Q4 of 2012 through the additional costs of; re-engineering of several operational processes and systems, one-time development costs, and maintaining two technologies in parallel to ensure a smooth transition for our clients. Even with this impact, we still obtained a pre-tax margin for 2012 of 20%. In addition to the P&L impact of this new technology, the project also required a major capital investment in excess of $1.5 million. This along with $1.2 million of additional capital investment, is the driver behind the reduction in our cash balance at year end.
"The Company's balance sheet remains strong with approximately $3.1 million in cash and cash equivalents and no long-term debt. 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 sixty-sixth consecutive quarterly dividend."
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.
The Psychemedics web site is http://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, dividends, future business, new accounts, customer base, market share, test volume sales, marketing strategies, and technological advantages) 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, technological developments, intellectual property protection, 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 and Comprehensive Income
Three Months Ended | Twelve Months Ended | |||||||
December 31, | December 31, | |||||||
2012 | 2011 | 2012 | 2011 | |||||
Revenues | $5,658,184 | $5,546,942 | $25,223,534 | $24,089,608 | ||||
Cost of revenues | 2,892,745 | 2,373,511 | 10,971,886 | 9,616,985 | ||||
Gross profit | 2,765,439 | 3,173,431 | 14,251,648 | 14,472,623 | ||||
Operating Expenses: | ||||||||
General & administrative | 1,024,964 | 1,050,280 | 3,946,844 | 3,948,706 | ||||
Marketing & selling | 1,130,210 | 1,170,567 | 4,543,598 | 4,116,059 | ||||
Research & development | 146,487 | 207,623 | 825,518 | 607,408 | ||||
Total Operating Expenses | 2,301,661 | 2,428,470 | 9,315,960 | 8,672,173 | ||||
Operating income | 463,778 | 744,961 | 4,935,688 | 5,800,450 | ||||
Interest income | 447 | 556 | 1,889 | 5,346 | ||||
Net income before provision for income taxes | 464,225 | 745,517 | 4,937,577 | 5,805,796 | ||||
Provision for income taxes | 191,612 | 307,329 | 1,957,948 | 2,316,513 | ||||
Net income and comprehensive income | $272,613 | $438,188 | $2,979,629 | $3,489,283 | ||||
Basic net income per share | $0.05 | $0.08 | $0.57 | $0.67 | ||||
Diluted net income per share | $0.05 | $0.08 | $0.57 | $0.67 | ||||
Dividends declared per share | $0.15 | $0.12 | $0.60 | $0.48 | ||||
Weighted average common shares outstanding, basic | 5,272,428 | 5,235,422 | 5,260,320 | 5,229,646 | ||||
Weighted average common shares outstanding, diluted | 5,291,370 | 5,240,146 | 5,272,542 | 5,235,940 | ||||
Psychemedics Corporation
Balance Sheets
December 31, | December 31, | ||
2012 | 2011 | ||
ASSETS | |||
Current Assets: | |||
Cash and cash equivalents | $3,065,785 | $5,564,233 | |
Accounts receivable, net of allowance for doubtful accounts | |||
of $121,583 in 2012 and $169,191 in 2011 | 4,620,768 | 4,490,976 | |
Prepaid expenses and other current assets | 823,274 | 565,508 | |
Income tax receivable | 854,212 | 564,083 | |
Deferred tax assets | 209,877 | 315,501 | |
Total Current Assets | 9,573,916 | 11,500,301 | |
Fixed Assets, net of accumulated amortization and depreciation | |||
of $4,395,605 in 2012 and $11,026,278 in 2011 | 4,201,409 | 2,063,377 | |
Other assets | 345,293 | 237,174 | |
Total Assets | $ 14,120,618 | $ 13,800,852 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current Liabilities: | |||
Accounts payable | $669,789 | $961,844 | |
Accrued expenses | 1,413,541 | 1,321,856 | |
Total Current Liabilities | 2,083,330 | 2,283,700 | |
Deferred tax liabilities, long-term | 814,619 | 482,523 | |
Total Liabilities | 2,897,949 | 2,766,223 | |
Commitments and Contingencies | |||
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 | |||
5,940,558 shares issued in 2012 and 5,903,552 shares issued 2011 | 29,703 | 29,518 | |
Additional paid-in capital | 28,460,764 | 28,095,946 | |
Accumulated deficit | (7,186,009) | (7,009,046) | |
Less - Treasury stock, at cost, 668,130 shares | (10,081,789) | (10,081,789) | |
Total Shareholders' Equity | 11,222,669 | 11,034,629 | |
Total Liabilities and Shareholders' Equity | $14,120,618 | $13,800,852 | |
Contact:
Neil Lerner
Vice President Finance
(978) 206-8220
Neill@psychemedics.com