Psychemedics reports 35% dip in Q2
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The Acton headquarters of Psychemedics
Acton maker of hair drug tests Psychemedics reported both revenue and profit declines in the second quarter and through the first six months of the year due to what it says is growth in jobs not requiring drug tests.
The company said its net income was $800,000 compared to $1.2 million for last year’s second quarter, a 35% dip. For the first six months, that number is down 43% from $2.4 million to $1.4 million this year.
That follows a similar downward trend in revenue, which dipped 14% from $10.8 million in the prior year’s quarter to $9.3 million this year. For the first six months, revenue is down 12% from $21.7 million to $19.1 million.
In a statement, Chairman and CEO Ramyond Kubacki said those declines were due to dips in both domestic and international business.
In the U.S., oil & gas, manufacturing and transportation represented the largest declines.
“While the total jobs numbers for the U.S. economy appear to look good on the surface, the facts are that a significant portion of the gains in jobs created in the second quarter were in the service industry and other market segments where drug testing is currently under-represented,” Kubacki said. “Conversely, some of the largest declines in job creation were in major market segments cited above.”
Internationally, revenues were down primarily due to a decline in business from Brazil in what was supposed to be a major growth area for the company.
The country was due last year to implement a law that would require professional driver to renew their license every two-and-a-half years -- instead of every five years -- and be tested for drugs.
However, the Brazilian government has not yet implemented the mandated testing.
Further complicating the company’s business prospects in Brazil is the acquisition of 55% of its independent distributor in Brazil by another provider of medical and diagnostic services. That business arrangement is now in jeopardy, the company said.
Despite those challenges, the company is continuing to release new products, including the first and only hair test for fentanyl.
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