Acton drug testing firm boosts revenue in 2014, Q4
Acton-based employment drug testing company Psychemedics Corp. (NASDAQ: PMD) boosted revenue in fiscal 2014 by 9 percent on “strong new business growth,” CEO Raymond Kubacki said in an earnings statement, but not necessarily because companies are hiring at a greater clip.
“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,” Kubacki said.
For the year, Psychemedics reported revenue of $29.2 million, up from $26.9 million in the previous year, and for the quarter, revenue totaled $6.8 million, versus $6.5 million in the fourth quarter of 2013.
Brazil expansion delayed
Meanwhile, net income was down for both the year and the quarter, at $3.2 million and $676,000, representing respective decreases of 16 and 22 percent. The company reported earnings of 60 cents per share for the year, down from 72 cents in 2013, and 13 cents per share for the quarter, compared with 16 cents a year earlier.
Psychemedics achieved an “important milestone” when it completed a capacity expansion project that more than doubled the company’s drug testing capacity to accommodate expanding business, according to Kubacki. But he said earnings were negatively impacted as the company’s plans to expand operations in Brazil were put on hold.
Kubacki said there’s been a delay in Brazilian legislation that would mandate hair drug testing for professional drivers, a measured aimed at reducing the country’s high rate of traffic-related deaths. Psychemedics is waiting for the law to become effective before it moves forward.
“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 (which was deferred when the bill was introduced) that provide for mandatory drug testing utilizing hair of professional drivers,” Kubacki said.
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