Psychemedics Corporation (NASDAQ: PMD) today announced fourth quarter and year-end financial results for the period ended December 31, 2014. The Company also announced a quarterly dividend of $0.15 per share payable to shareholders of record as of February 23, 2015 to be paid on March 6, 2015. This will be the Company's 74th consecutive quarterly dividend.
The Company's revenue for the year ended December 31, 2014 was $29.2 million versus $26.9 million for the twelve months ended December 31, 2013, an increase of 9%. Net income for the twelve months ended December 31, 2014 was $3.2 million or $0.60 per diluted share, versus $3.8 million or $0.72 per diluted share, for the comparable period last year, a decrease of 16%. The Company's revenue for the quarter ended December 31, 2014 was $6.8 million versus $6.5 million for the quarter ended December 31, 2013, an increase of 4%. Net income for the quarter ended December 31, 2014 was $676 thousand or $0.13 per diluted share, versus $868 thousand or $0.16 per diluted share, for the comparable period last year, a decrease of 22%.
Raymond C. Kubacki, Chairman and Chief Executive Officer, said,
"2014 was the third consecutive year of record revenues. Our revenues continue to be driven by strong new business growth. New business has accounted for our entire gain, as well as offset softness in the jobs market. While there has been plenty of news recently about the jobs recovery, the fact is, the largest category of gains have been in temporary help.
"Another important milestone this year was that we completed our capacity expansion project which more than doubled our capacity. This expansion was needed to prepare Psychemedics for our expanding business, including a significant opportunity in Brazil. The project included additional lease space and over $7 million of new equipment and leasehold improvements. To finance this expansion, the Company obtained equipment financing of $7 million ($6.2 million of which was outstanding as of December 31, 2014) at a very favorable interest rate of 2.15% for 2014.
"The Brazilian opportunity mentioned in prior communications continues to progress. While this mandated testing has not yet become effective, we currently expect it will become a requirement in 2015, as there is both a proposed bill in the Brazilian Congress, as well as an existing regulation (the implementation of which was deferred once the legislative bill was introduced), that provide for mandatory drug testing utilizing hair of professional drivers.
"We remain excited about this opportunity in Brazil. However, short-term, the delay in implementation of the rule or passage of the law had a negative effect on current year earnings. The estimated impact on fourth quarter earnings from the increase in capacity and other costs related to the Brazil opportunity was about $0.06 per share, with the total impact in 2014 of about $0.25 per share. Without these additional costs, our EPS for the year would have been up 18%.
"In 2014, we were proud to once again be recognized as the industry and scientific leader with the publishing of a peer-reviewed paper by the FBI in the Journal of Analytical Toxicology. This paper provides additional validation of the Psychemedics extensive wash protocol used to eliminate the risks of false positives from external contamination. Our wash protocol plays a significant role in safeguarding our clients and those being tested. In addition, to continue our leadership role, we have increased investment in Research and Development and look forward to make available additional FDA cleared tests for drugs of abuse in 2015 and beyond.
"The Company's balance sheet remains strong with approximately $3.6 million in cash. 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 74th consecutive quarterly dividend."
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