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Psychemedics posts drastic Q2 revenue, income declines

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Psychemedics Corp. blamed the recession for a dismal second-quarter performance, saying the depressed job market means fewer employers are buying its drug tests.

Revenues fell to $3.9 million during the three months ended June 30, down 36.7 percent compared with $6.2 million during the same period last year. Second-quarter net income plunged 83 percent to $174,381, down from $1 million during the second quarter of 2008.

Still, the Acton, Mass.-based company issued its 52nd consecutive dividend, saying it will pay 12 cents per share to shareholders of record as of Sept. 4.

Chairman and CEO Raymond Kubacki blamed “the biggest employment slump of any recession in the last eight decades” for the results, citing a low point for workplace drug testing. The company cut pay for all workers and executives as part of a cost-cutting program, Kubacki said.

Even so, he added, Psychemedics is in sound shape financially, as it carries no debt and has about $5 million in cash on hand, and recently inked a deal to provide its hair analysis drug tests to one of the U.K.’s largest private insurers, Bupa Wellness.

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