Jake, PMD seemed to lose momentum with their flat earnings. I must be looking at the wrong things. Loss of tax loss carry forwards, major advertising costs to get PDT 90 off could have really made things look bad, except for revenue up 40%. Nine million in cash, many new large accounts. No guarantees on PDT 90 revenue, but the company is doing o.k. And if PDT 90 takes off so will we. Patience can be difficult, but I think we will be rewarded.
Psychemedics Corporation Reports Record Second Quarter Revenue,
Pre-Tax and Net Income
CAMBRIDGE, MASS. (Aug. 6) BW HEALTHWIRE -Aug. 6, 1997--Psychemedics
Corporation (AMEX:PMD) today announced record second quarter revenue,
pre-tax and net income for the period ending June 30, 1997.
The company's second quarter revenue increased 40 percent to $4,402,203
from $3,141,313 in the second quarter of 1996 while pre-tax income for
the quarter rose 40 percent to $1,129,575 from $804,787 in 1996. Net
income increased 4 percent to $745,519 or $.03 a share from $716,465 or
$.03 for the same quarter in 1996. Net income for the second quarter
of 1997 reflects an income tax provision of $384,056, an increase of
over 300 percent from 1996, resulting from the depletion of net
operating loss carryforwards.
Raymond C. Kubacki, President and Chief Executive Officer said, "We are
pleased to be able to report record second quarter revenue, pre-tax and
net income. We are particularly encouraged by the favorable quarter to
quarter comparisons in light of the higher effective tax rate used in
1997 as well as the major investment in advertising and marketing
surrounding our retail introduction and roll out of the `PDT-90' drug
testing service. Our balance sheet remains strong with over $9 million
in cash and no debt."
Kubacki continued, "Our second quarter performance is strictly the
result of strong growth in corporate business since the PDT-90 revenue
is being recognized on a very conservative "as tested" basis rather
than on the basis of delivery to retailers. Corporate drug testing,
therefore, is currently driving our revenue growth. We have added many
new, large accounts including several of the largest police departments
in the United States and several Fortune 500 companies. We believe
this demonstrates that our patented drugs of abuse testing technology,
using hair instead of urine as the sample, continues to gain broader
acceptance in the corporate drug testing market. Our client base has
expanded dramatically and currently includes over 900 customers.
Because of our rapid growth and large number of new customers, no one
customer is responsible for a disproportionate amount of our revenue.
Many of our customers have dramatically increased the amount of their
testing during the year while a few, like Blockbuster Entertainment,
have decreased theirs. While some of our new, large corporate customers
"ramp up" slowly as the testing is introduced to their many locations,
some smaller accounts are able to implement the program on a company
wide basis virtually overnight. The net effect is that we have been
able to increase market share and expect to continue to aggressively
seek new business. We have increased our sales and marketing effort
and have added Michael Lamb, formerly of Polaroid Corporation, as Vice
President of Sales."
Kubacki said, "While corporate drug testing remains our core product,
during the second quarter we rolled out our personal drug testing
service, `PDT-90', to retail drug stores. `PDT-90' was put on the
shelves of over 9300 retail drug stores during the second quarter,
including large national chains like Walgreens, Eckerd Drug, CVS,
Osco/Sav-On, Brooks Pharmacies, Longs Drugs and many independents. We
are supporting this product introduction with an aggressive advertising
campaign in newspapers, magazines and radio. The large initial
investment in this national roll out will make the `PDT-90' testing
service convenient and easily available to parents wishing to drug test
their children."
Kubacki concluded, "I am excited about our company and its products.
We remain strong financially and continue to experience good growth.
We are aggressively building market share in a growing market. Our
patented technology and drug testing method is the best in the world
and our people are enthusiastic, committed and talented. The future is
bright and we remain dedicated to building shareholder value." -0-
FINANCIAL SUMMARY
(unaudited)
June 30, 1997
Three Months Ended Six Months Ended
6-30-97 6-30-96 6-30-97 6-30-96
Revenue $4,402,203 $3,141,313 $7,655,946 $5,815,978
Pre-tax income $1,129,575 $ 804,787 $1,888,034 $1,258,783
Net Income $ 745,519 $ 716,465 $1,382,626 $1,165,752
Net Income Per Share $ 0.03 $ 0.03 $ 0.06 $ 0.05
Weighted Average
Common and Common
Equivalent Shares
Outstanding 22,797,637 22,514,614 22,807,787 21,964,568
--30--mb/bos* ld/bos
CONTACT: Psychemedics Corporation
Bruce Stillwell, 617/868-7455
KEYWORD: MASSACHUSETTS
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