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) July 26 2016
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, (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 July 26 2016, Psychemedics Corporation issued a press release announcing preliminary results for the Second Quarter of 2016. 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
99.1 Press Release dated July 26 2016
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: July 26, 2016 | PSYCHEMEDICS CORPORATION | |
By: | /s/ Neil Lerner | |
Neil Lerner | ||
Vice President, Finance |
Exhibit 99.1
Psychemedics Corporation Announces Record Revenues And Earnings
ACTON, Mass., July 26, 2016 /PRNewswire/ -- Psychemedics Corporation (NASDAQ: PMD) today announced second quarter financial results for the period ended June 30, 2016. The Company also announced a quarterly dividend of $0.15 per share payable to shareholders of record as of August 5, 2016 to be paid on August 15, 2016. This will be the Company's 80th consecutive quarterly dividend.
The Company's revenue for the quarter ended June 30, 2016 was $9.7 million versus $7.0 million for the quarter ended June 30, 2015, an increase of 39%. Net income for the quarter ended June 30, 2016 was $1.6 million or $0.30 per diluted share, versus $252 thousand or $0.05 per diluted share, for the comparable period last year, an increase of 547%. The Company's revenue for the six months ended June 30, 2016 was $16.4 million versus $13.8 million for the six months ended June 30, 2015, an increase of 19%. Net income for the six months ended June 30, 2016 was $1.6 million or $0.30 per diluted share, versus $530 thousand or $0.10 per diluted share, for the comparable period last year, an increase of 204%.
Raymond C. Kubacki, Chairman and Chief Executive Officer, said,
"We are very pleased to report the highest revenue and earnings for any quarter in the Company's history. The growth has been driven by our international business, specifically an opportunity in Brazil as noted below. We also reached another milestone this quarter with 20 years of consecutive quarterly dividends.
"We have noted since 2013 a significant opportunity in Brazil, and are very pleased to begin to see the results of our efforts and the efforts of our exclusive independent Brazilian distributor, Psychemedics Brasil. This opportunity is to compete for the testing of drugs of abuse required for professional drivers in Brazil. As of March 2016, testing for this opportunity had begun and is being phased in as some states have required additional time to implement the law. Over the last two years, we have made significant investments in equipment, people and an additional facility to handle this business. In the recent past, these investments have impacted earnings and required the Company to take on long term debt. We are pleased about the very positive impact this opportunity had on the revenue and earnings this quarter.
"The Company's balance sheet remains strong with approximately $2.3 million in cash and $4.7 million of working capital. The total equipment financing outstanding was $5.7 million as of June 30, 2016, compared to a total original amount borrowed of $8.7 million. 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 a quarterly dividend of $0.15 per share."
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 limitation, 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 Income and Comprehensive Income | ||||||||
(UNAUDITED) | ||||||||
| ||||||||
| Three Months Ended |
|
| Six Months Ended | ||||
| June 30, |
|
| June 30, | ||||
| 2016 |
| 2015 |
|
| 2016 |
| 2015 |
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Revenues | $ 9,700,052 |
| $ 7,001,409 |
|
| $16,367,116 |
| $13,757,150 |
Cost of revenues | 4,490,907 |
| 3,731,667 |
|
| 8,419,529 |
| 7,148,540 |
|
|
|
|
|
|
|
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Gross profit | 5,209,145 |
| 3,269,742 |
|
| 7,947,587 |
| 6,608,610 |
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Operating Expenses: |
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General & administrative | 1,185,775 |
| 1,154,489 |
|
| 2,437,850 |
| 2,298,579 |
Marketing & selling | 1,302,034 |
| 1,322,117 |
|
| 2,429,688 |
| 2,610,598 |
Research & development | 350,205 |
| 437,090 |
|
| 710,663 |
| 892,872 |
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|
|
|
|
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|
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Total Operating Expenses | 2,838,014 |
| 2,913,696 |
|
| 5,578,201 |
| 5,802,049 |
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Operating income | 2,371,131 |
| 356,046 |
|
| 2,369,386 |
| 806,561 |
Interest expense, net | ( 35,492 ) |
| ( 30,877 ) |
|
| ( 70,133 ) |
| ( 64,204 ) |
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Net income before provision for income taxes | 2,335,639 |
| 325,169 |
|
| 2,299,253 |
| 742,357 |
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Provision for income taxes | 701,884 |
| 72,840 |
|
| 688,942 |
| 212,506 |
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Net income and comprehensive income | $ 1,633,755 |
| $ 252,329 |
|
| $1,610,311 |
| $529,851 |
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Basic net income per share | $0.30 |
| $0.05 |
|
| $0.30 |
| $0.10 |
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Diluted net income per share | $0.30 |
| $0.05 |
|
| $0.30 |
| $0.10 |
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Dividends declared per share | $0.15 |
| $0.15 |
|
| $0.30 |
| $0.30 |
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Weighted average common shares outstanding, basic | 5,443,150 |
| 5,399,270 |
|
| 5,432,902 |
| 5,387,232 |
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Weighted average common shares outstanding, diluted | 5,454,167 |
| 5,408,372 |
|
| 5,440,376 |
| 5,396,740 |
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Psychemedics Corporation | |||
Balance Sheets | |||
(UNAUDITED) | |||
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| June 30, |
| December 31, |
| 2016 |
| 2015 |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents | $ 2,279,905 |
| $ 2,689,464 |
Accounts receivable, net of allowance for doubtful accounts |
|
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of $41,373 in 2016 and $58,684 in 2015 | 5,460,101 |
| 3,538,765 |
Prepaid expenses and other current assets | 1,241,588 |
| 1,060,587 |
Income tax receivable | - |
| 840,122 |
Deferred tax assets | 488,759 |
| 327,442 |
Total Current Assets | 9,470,353 |
| 8,456,380 |
Fixed Assets, net of accumulated amortization and depreciation |
|
|
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of $7,695,144 in 2016 and $6,642,501 in 2015 | 13,259,268 |
| 13,132,114 |
Other assets | 813,028 |
| 774,474 |
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Total Assets | $ 23,542,649 |
| $ 22,362,968 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current Liabilities: |
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Accounts payable | $ 988,507 |
| $ 747,291 |
Accrued expenses | 1,461,183 |
| 1,197,632 |
Accrued income taxes | 535,287 |
| - |
Current portion of long-term debt | 1,741,602 |
| 1,619,633 |
Total Current Liabilities | 4,726,579 |
| 3,564,556 |
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Long-term debt | 3,919,703 |
| 4,272,137 |
Deferred tax liabilities, long-term | 3,042,122 |
| 2,852,745 |
Total Liabilities | 11,688,404 |
| 10,689,438 |
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Shareholders' Equity: |
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Preferred-stock, $0.005 par value, 872,521 shares authorized, |
|
|
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no shares issued or outstanding | - |
| - |
Common stock, $0.005 par value; 50,000,000 shares authorized |
|
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6,127,850 shares issued in 2016 and 6,090,671 shares issued in 2015 | 30,639 |
| 30,453 |
Additional paid-in capital | 30,280,467 |
| 30,021,604 |
Accumulated deficit | ( 8,375,072 ) |
| ( 8,296,738 ) |
Less - Treasury stock, at cost, 668,130 shares | ( 10,081,789 ) |
| ( 10,081,789 ) |
|
|
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Total Shareholders' Equity | 11,854,245 |
| 11,673,530 |
|
|
|
|
Total Liabilities and Shareholders' Equity | $ 23,542,649 |
| $ 22,362,968 |
Contact:
Neil Lerner
Vice President of Finance
(978) 206-8220
Neill@psychemedics.com
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