Psychemedics Corporation Announces Second Quarter Profits

ACTON, Mass., Aug. 10 /PRNewswire-FirstCall/ -- Psychemedics Corporation (Nasdaq: PMD) today announced second quarter financial results for the period ended June 30, 2010. The Company also announced a quarterly dividend of $0.12 per share payable to shareholders of record as of September 3, 2010 to be paid on September 17, 2010. This will be the Company’s 56th consecutive quarterly dividend.

The Company’s revenue for the quarter ended June 30, 2010 was $5.4 million versus $3.9 million for the quarter ended June 30, 2009, an increase of 38%. Net income for the quarter ended June 30, 2010 was $873 thousand or $0.17 per share, versus $174 thousand or $0.03 per share, for the comparable period last year. The Company’s revenue for the six months ended June 30, 2010 was $9.9 million, as compared to $8.0 million for the comparable period of 2009. Net income for the six months ended June 30, 2010 was $1.4 million or $0.26 per diluted share, as compared to last year during which the Company earned $213 thousand or $0.04 per diluted share.

Raymond C. Kubacki, Chairman and Chief Executive Officer, said, “Our second quarter results were strong and broad based. We continued to add new clients; and are also encouraged by the fact that our broad existing client base showed improved demand.”

Kubacki continued, “With this revenue increase and continued strong cost controls, we recorded strong margin expansion. Our operating margin was 29% and our net income increased fourfold.”

“While the near-term outlook for overall business conditions remains somewhat uncertain, we continued to add elements that bolster our long-term outlook. The recently announced sales/marketing agreement with LGC in the UK that will aid our international expansion is another good example of that.”

Kubacki concluded, “We continue to have a strong balance sheet with more than $4.7 million in cash, cash equivalents and short-term investments 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, we are pleased to declare our 56th consecutive quarterly dividend. The quarterly dividend will be $0.12/share.”

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 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 earnings, earnings per share, revenues, dividends, future business, growth opportunities, 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 team, 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.