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Psychemedics Corp Reports Operating Results (10-Q)

August 13, 2010 | About:
10qk

10qk

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Psychemedics Corp (PMD) filed Quarterly Report for the period ended 2010-06-30.

Psychemedics Corp has a market cap of $52.9 million; its shares were traded at around $9.02 with a P/E ratio of 23.7 and P/S ratio of 3.1. The dividend yield of Psychemedics Corp stocks is 5.3%. Psychemedics Corp had an annual average earning growth of 20.4% over the past 10 years.PMD is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Revenue for the second quarter of 2010 was $5.4 million, an increase of 38% from second quarter 2009 revenue of $3.9 million. The Company reported net income of $0.17 per diluted share for the three months ended June 30, 2010, more than a fivefold increase over net income of $0.03 per share in the comparable period in 2009. At June 30, 2010, the Company had $4.7 million of cash, cash equivalents and short-term investments. The Company distributed $626 thousand or $0.12 per share of cash dividends to its shareholders in the three months ended June 30, 2010. The Company has paid fifty-five consecutive quarterly cash dividends.

Gross profit increased $1.3 million to $3.4 million for the three months ended June 30, 2010, compared to $2.1 million for the three months ended June 30, 2009. Direct costs grew by $213 thousand or 12% for the three months ended June 30, 2010 compared to the same period in 2009, mainly due to an increase from timing of purchases of certain direct materials and supplies. The gross profit margin increased to 62% for the three months ended June 30, 2010 compared to 54% for the comparable period of 2009. Gross profit for the six months ended June 30, 2010 increased $1.7 million to $5.9 million compared to $4.2 million for the comparable period in 2009. Direct costs increased by over $136 thousand or 4% for the six months ended June 30, 2010 when compared to the same period in 2009, mostly due to a greater volume in samples and partly due to an increase from timing of purchases of certain direct materials and supplies. The gross profit margin grew to 60% for the six month period ended June 30, 2010 from 52% during the same period in 2009 mainly a result of an increase in volume against direct fixed costs.

Marketing and selling expenses were $752 thousand for the three months ended June 30, 2010 as compared to $811 thousand for the three months ended June 30, 2009, a decrease of 7%. Total marketing and selling expenses represented 14% and 21% of revenue for the three months ended June 30, 2010 and 2009, respectively. The decrease in marketing and selling expenses was due to lower staffing levels and related expenses. For the six months ended June 30, 2010 and 2009, marketing and selling expenses were $1.4 million, down $307 thousand from the prior year at $1.7 million because of lower staffing levels and related expenses. This was offset, in part, by the hiring of a new Vice President of Sales in April 2010.

Interest income for the three months ended June 30, 2010 decreased by $1 thousand to $6 thousand when compared to the same period of 2009 in which interest income was $7 thousand. Interest income represented interest earned on cash, cash equivalents and short-term investments. Decreasing interest rates on our mix of cash, cash equivalents and short-term investments caused the decrease in interest income for the three month period ended June 30, 2010. Interest income for the six months ended June 30, 2010 decreased $8 thousand to $14 thousand as compared to $23 thousand for the same period in 2009. Interest income represented interest and dividends earned on cash and cash equivalents and short-term investments. Decreasing interest rates on our mix of cash, cash equivalents and short-term investments caused the decrease in interest income for both the three and six month periods ended June 30, 2010.

At June 30, 2010, the Company had approximately $4.7 million of cash, cash equivalents and short-term investments. The Company's operating activities provided net cash of $378 thousand for the six months ended June 30, 2010. Investing activities used $1.2 million of cash in the six month period while financing activities used $1.3 million of cash during the first half of 2010.

Cash provided by operating activities of $378 thousand reflected net income of $1.4 million adjusted for depreciation and amortization of $125 thousand, stock-based compensation of $222 thousand, and an increase in accounts payable and accrued expenses of $89 thousand and $151 thousand, respectively. This was offset by an increase in accounts receivable of $1.3 million, an increase in prepaid expenses and other current assets of $241 thousand and a decrease in accrued income tax of $69 thousand. Cash used in investing activities included equipment and leasehold improvements of $236 thousand which were purchased during the first half of 2010.

Read the The complete Report

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