First-quarter profit for Acton's Psychemedics Corp.
Acton-based employment drug testing company Psychemedics Corp. Monday reported a profit of 5 cents per share on net income of $278,000 in the first quarter, which ended March 31. The company also reported promising business prospects because of recently passed regulations in Brazil.
The company's profit was down from the fourth quarter of 2014, when it was 14 cents a share.
The company said it would pay a quarterly dividend of 15 cents a share, its 75th consecutive quarterly dividend.
Revenue for the first quarter was $6.77 million, down 4 percent from the $7.0 million in the first quarter of 2014.
The revenue decline “was driven primarily by a major slowdown in hiring in a few sectors of the economy and less than solid growth in other business sectors,” Raymond C. Kubacki, chairman and CEO said. “The good news,” he said, “is that we have not lost any significant clients and we continue to gain new clients.”
As the company has reported previously, an important opportunity for new clients is in Brazil. That country has been considering regulations requiring drivers in the transportation industry to have hair samples tested for drug when obtaining or renewing their driver’s license. The latest version of the law passed the Brazilian Congress in March, and testing is expected to begin in June.
“This is an exciting opportunity. However, in order to service this potential volume, we have made significant investments in plant, equipment and people. The impact from these investments in the first quarter of 2015 was estimated at $0.05 per diluted share,” Kubacki said. He added that the company’s balance sheet remains strong, with $2.7 million in cash.
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