8-K
PSYCHEMEDICS CORP (PMDI)
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): May 9, 2023
_______________________________
PSYCHEMEDICS CORPORATION
(Exact name of registrant as specified in its charter)
_______________________________
| Delaware | 1-13738 | 58-1701987 |
|---|---|---|
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
289 Great Road
Acton, Massachusetts 01720
(Address of Principal Executive Offices) (Zip Code)
(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:
| ☐ | 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 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock. $0.005 par value | PMD | The NASDAQ Stock Market, LLC. |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On May 9, 2023, Psychemedics Corporation (the “Company”) issued a press release announcing, among other things, its results for the first quarter March 31, 2023. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein in its entirety by reference.
Limitation on Incorporation by Reference. The information furnished in this Item 2.02, including the press release attached hereto as Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a 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 that 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 of the Company dated May 9, 2023, announcing, among other things, its results for the first quarter March 31, 2023. |
|---|---|
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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.
| PSYCHEMEDICS CORPORATION | ||
|---|---|---|
| Date: May 9, 2023 | By: | /s/ William B. Norris |
| William B. Norris | ||
| Controller |
EdgarFiling EXHIBIT 99.1
Psychemedics Corporation Reports First Quarter 2023 Financial Results and Declares Cash Dividend
ACTON, Mass., May 09, 2023 (GLOBE NEWSWIRE) -- Psychemedics Corporation (NASDAQ: PMD), the world’s largest provider of hair testing for drugs of abuse, today announced financial results for the first quarter ended March 31, 2023, and the declaration of a cash dividend of $0.07 per share to be paid on June 8, 2023, to shareholders of record as of May 25, 2023.
The Company’s revenue for the quarter ended March 31, 2023, was $5.9 million versus $6.5 million for the quarter ended March 31, 2022, a decrease of 10%. Net loss for the quarter ended March 31, 2023, was $(384,000) or $(0.07) per diluted share, versus net income of $39,000 or $0.01 per diluted share, for the comparable period last year.
The first quarter of 2023 continued to be challenging due to the ongoing negative impact of major economic forces. The labor shortage continued, having an adverse impact on our clients’ use of hair testing in hiring. In addition, inflationary pressures persisted throughout the quarter. Oil & Gas, Railroad and School market segments recorded solid performances. Revenues were aided by the growth in add-on tests for fentanyl and benzodiazepines, as well as by our Q4 2022 price increase.
Despite the shortfall in revenues, and the inflationary pressures, gross margin came in at 38%, flat with Q1 2022, aided substantially by cost reductions implemented in Q4 2022.
The Company had approximately $4.4 million of cash as of March 31, 2023. The total equipment financing outstanding was $0.5 million as of March 31, 2023.
The Board has declared a cash dividend of $0.07 per share. The Board will continue to evaluate the dividend as it moves forward.
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.
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, receivables collection dates, dividends, future business, growth opportunities, profitability, pricing, new accounts, customer base, market share, test volume, and strategic alternatives, 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 changes in U.S. and foreign government regulations, including but not limited to FDA regulations, R&D spending, competition (including, without limitation, competition from other companies pursuing the same growth opportunities), the Company’s ability to maintain its reputation and brand image, the ability of the Company to achieve its business plans, cost controls, leveraging of its global operating platform, risks of information technology system failures and data security breaches, the uncertain global economy, the Company’s ability to attract, develop and retain executives and other qualified employees and independent contractors, including distributors, the Company’s ability to obtain and protect intellectual property rights, litigation risks, including acceptance by the court of our wage/break settlement arrangement, general economic conditions and other factors disclosed in the Company's filings with the Securities and Exchange Commission. With respect to the continued payment of cash dividends, factors include, but are not limited to, all of the factors listed above, plus current and anticipated cash flows, available surplus, capital expenditure reserves required, debt service obligations, regulatory requirements, requirements under our bank loan agreements and other factors that the Board of Directors of the Company may take into account. 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.
The Psychemedics Corporation web site is www.psychemedics.com
William Norris Controller (978) 206-8220 WilliamN@psychemedics.com
| Psychemedics Corporation<br>Consolidated Statements of Operations<br>(in thousands, except per share amounts)<br>(UNAUDITED) | ||||||
|---|---|---|---|---|---|---|
| Three Months Ended | ||||||
| March 31, | ||||||
| 2023 | 2022 | |||||
| Revenues | $ | 5,859 | $ | 6,508 | ||
| Cost of revenues | 3,654 | 4,067 | ||||
| Gross profit | 2,205 | 2,441 | ||||
| Operating Expenses: | ||||||
| General & administrative | 1,646 | 1,327 | ||||
| Marketing & selling | 789 | 806 | ||||
| Research & development | 298 | 318 | ||||
| Total Operating Expenses | 2,733 | 2,451 | ||||
| Operating loss | ( 528 | ) | ( 10 | ) | ||
| Other (expense) income, net | ( 5 | ) | 66 | |||
| Net (loss) income before (benefit from) provision for income taxes | ( 533 | ) | 56 | |||
| (Benefit from) provision for income taxes | ( 149 | ) | 17 | |||
| Net (loss) income | $ | ( 384 | ) | $ | 39 | |
| Diluted net (loss) income per share | $ | (0.07 | ) | $ | 0.01 | |
| Dividends declared per share | $ | 0.07 | $ | - | ||
| Psychemedics CorporationConsolidated Balance Sheets(in thousands, except par value)(UNAUDITED) | ||||||
| --- | --- | --- | --- | --- | --- | |
| December 31, | ||||||
| 2023 | 2022 | |||||
| ASSETS | ||||||
| Current Assets: | ||||||
| Cash | 4,380 | $ | 4,750 | |||
| Accounts receivable, net of allowance for doubtful accounts | 4,058 | 3,739 | ||||
| Prepaid expenses and other current assets | 1,088 | 1,136 | ||||
| Income tax receivable | 9 | 339 | ||||
| Total Current Assets | 9,535 | 9,964 | ||||
| Fixed assets, net of accumulated amortization and depreciation | 4,150 | 4,573 | ||||
| Other assets | 840 | 823 | ||||
| Net deferred tax assets | 850 | 691 | ||||
| Operating lease right-of-use assets | 2,532 | 2,681 | ||||
| Total Assets | 17,907 | $ | 18,732 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current Liabilities: | ||||||
| Accounts payable | 785 | $ | 448 | |||
| Accrued expenses | 3,632 | 3,939 | ||||
| Current portion of long-term debt | 297 | 294 | ||||
| Current portion of operating lease liabilities | 1,076 | 1,037 | ||||
| Total Current Liabilities | 5,790 | 5,718 | ||||
| Long-term debt | 230 | 305 | ||||
| Long-term portion of operating lease liabilities | 1,721 | 1,938 | ||||
| Total Liabilities | 7,741 | 7,961 | ||||
| Shareholders' Equity: | ||||||
| Common stock, 0.005 par value; 50,000 shares authorized; 6,354 and 6,349 shares issued and 5,686 and 5,681 shares outstanding, respectively | 32 | 32 | ||||
| Additional paid-in capital | 34,452 | 34,275 | ||||
| Less - Treasury stock, at cost, 668 shares | ( 10,082 | ) | ( 10,082 | ) | ||
| Accumulated deficit | ( 12,602 | ) | ( 11,820 | ) | ||
| Accumulated other comprehensive loss | ( 1,634 | ) | ( 1,634 | ) | ||
| Total Shareholders' Equity | 10,166 | 10,771 | ||||
| Total Liabilities and Shareholders' Equity | 17,907 | $ | 18,732 |
All values are in US Dollars.