Psychemedics (PMDI) 10-Q 28 Apr 16 2016 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 25, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Entity Registrant Name	PSYCHEMEDICS CORP
Entity Central Index Key	806,517
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	PMD
Entity Common Stock, Shares Outstanding		5,422,541

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Current Assets:
Cash and cash equivalents	$ 2,003,701	$ 2,689,464
Accounts receivable, net of allowance for doubtful accounts of $47,731 in 2016 and $58,684 in 2015	4,819,104	3,538,765
Prepaid expenses and other current assets	1,125,259	1,060,587
Income tax receivable	24,926	840,122
Deferred tax assets	388,104	327,442
Total Current Assets	8,361,094	8,456,380
Property and equipment:
Fixed Assets, net of accumulated amortization and depreciation of $7,162,360 in 2016 and $6,642,501 in 2015	13,213,779	13,132,114
Other assets	790,848	774,474
Total Assets	22,365,721	22,362,968
Current Liabilities:
Accounts payable	1,294,976	747,291
Accrued expenses	1,109,588	1,197,632
Current portion of long-term debt	1,741,602	1,619,633
Total Current Liabilities	4,146,166	3,564,556
Long-term debt	4,355,104	4,272,137
Deferred tax liabilities, long-term	2,852,745	2,852,745
Total Liabilities	$ 11,354,015	$ 10,689,438
Commitments and Contingencies (Note 7)
Shareholders' Equity:
Preferred stock, $0.005 par value, 872,521 shares authorized, no shares issued or outstanding	$ 0	$ 0
Common stock, $0.005 par value; 50,000,000 shares authorized 6,090,671 shares issued in 2016 and 2015	30,453	30,453
Additional paid-in capital	30,196,605	30,021,604
Accumulated deficit	(9,133,563)	(8,296,738)
Less - Treasury stock, at cost, 668,130 shares in 2016 and 2015	(10,081,789)	(10,081,789)
Total Shareholders' Equity	11,011,706	11,673,530
Total Liabilities and Shareholders' Equity	$ 22,365,721	$ 22,362,968

CONDENSED BALANCE SHEETS _Paren

CONDENSED BALANCE SHEETS [Parenthetical] - USD ($)	Mar. 31, 2016	Dec. 31, 2015
Allowance for doubtful accounts	$ 47,731	$ 58,684
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 7,162,360	$ 6,642,501
Preferred stock, par value (in dollars per share)	$ 0.005	$ 0.005
Preferred stock, shares authorized	872,521	872,521
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.005	$ 0.005
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	6,090,671	6,090,671
Treasury stock, shares	668,130	668,130

CONDENSED STATEMENTS OF OPERATI

CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) / INCOME - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Revenues	$ 6,667,064	$ 6,755,741
Cost of revenues	3,928,622	3,416,873
Gross profit	2,738,442	3,338,868
Operating Expenses:
General & administrative	1,252,075	1,144,090
Marketing & selling	1,127,654	1,288,481
Research & development	360,458	455,782
Total Operating Expenses	2,740,187	2,888,353
Operating (loss) income	(1,745)	450,515
Interest expense, net	(34,641)	(33,327)
Net (loss) / income before (benefit) from / provision for income taxes	(36,386)	417,188
(Benefit) from / provision for income taxes	(12,942)	139,666
Net (loss) / income and comprehensive (loss) / income	$ (23,444)	$ 277,522
Basic net (loss) / income per share (in dollars per share)	$ 0	$ 0.05
Diluted net (loss) / income per share (in dollars per share)	0	0.05
Dividends declared per share (in dollars per share)	$ 0.15	$ 0.15
Weighted average common shares outstanding, basic (in shares)	5,422,541	5,375,061
Weighted average common shares outstanding, diluted (in shares)	5,422,541	5,401,998

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) / income	$ (23,444)	$ 277,522
Adjustments to reconcile net (loss) / income to net cash provided by operating activities:
Depreciation and amortization	529,097	343,115
Stock-based compensation	175,001	160,230
Changes in assets and liabilities:
Accounts receivable	(1,280,339)	(411,733)
Prepaid expenses, other current assets, and income tax receivable	750,523	661,832
Accounts payable	547,685	(426,108)
Accrued expenses	(458,939)	(69,504)
Deferred income taxes	(60,662)	(62,089)
Net cash provided by operating activities	178,922	473,265
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and leasehold improvements	(200,538)	(128,053)
Cost of internally developed software	(30,091)	(66,981)
Other assets	(25,611)	(62,143)
Write-off capitalized patent costs	0	73,602
Net cash used in investing activities	(256,240)	(183,575)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from equipment financing	609,844	0
Payments of equipment financing	(404,908)	(349,981)
Cash dividends paid	(813,381)	(806,260)
Net cash used in financing activities	(608,445)	(1,156,241)
Net decrease in cash and cash equivalents	(685,763)	(866,551)
Cash and cash equivalents, beginning of period	2,689,464	3,612,153
Cash and cash equivalents, end of period	2,003,701	2,745,602
Supplemental Disclosures of Cash Flow Information:
Cash paid for income taxes	2,233	2,870
Cash paid for interest	34,285	33,201
Purchases of equipment through accrued liabilities	$ 370,895	$ 55,990

Interim Financial Statements

Interim Financial Statements	3 Months Ended
	Mar. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	1. Interim Financial Statements The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission for reporting on Form 10-Q. Accordingly, certain information and footnote disclosure required for complete financial statements are not included herein. It is recommended that these financial statements be read in conjunction with the financial statements and related notes of Psychemedics Corporation (“the Company,” “our Company,” “our” or “we”) as reported in the Company’s Annual Report on Form 10-K (“10-K”) for the year ended December 31, 2015, filed on February 26, 2016. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of financial position, results of operations, and cash flows at the dates and for the periods presented have been included. The results of operations for the three months ended March 31, 2016 may not be indicative of the results that may be expected for the year ending December 31, 2016, or any other period.

Cash and Cash Equivalents

Cash and Cash Equivalents	3 Months Ended
	Mar. 31, 2016
Cash and Cash Equivalents [Abstract]
Cash and Cash Equivalents Disclosure [Text Block]	2. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of 90 days or less to be cash equivalents. Cash equivalents consisted exclusively of cash in the bank as of December 31, 2015 and March 31, 2016.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	3. Stock-Based Compensation The Company’s 2006 Equity Incentive Plan (“the Plan”) provides for cash based awards or the grant or issuance of stock-based awards including; options, restricted stock or stock unit awards (SUA’s). As of December 31, 2015, 70,232 350,000 Activity for SUAs under the Plan for the three months ended March 31, 2016 is as follows: Aggregate Number of Intrinsic Shares Value (1) (000s) Unvested, December 31, 2015 111,464 Granted - Forfeited/expired - Converted to common stock - Unvested, March 31, 2016 111,464 $ 1,533 1) The aggregate intrinsic value on these tables were calculated based on the closing market value of the Company’s stock on March 31, 2016 ($ 13.75 47,000 Weighted Weighted Average Average Exercise Remaining Aggregate Number of Price Contractual Intrinsic Shares per Share Life Value (2) Outstanding, December 31, 2015 47,000 $ 10.21 $ - Granted - - Exercised - - Cancelled - - Outstanding, March 31, 2016 47,000 $ 10.21 9.5 years $ - (2) The aggregate intrinsic value on this table was calculated based on the amount, if any, by which the closing market value of the Company’s stock on the March 31, 2016 ($ 13.75 As of March 31, 2016, a total of 578,696 1.0 2.6

Basic and Diluted Net (Loss) _

Basic and Diluted Net (Loss) / Income Per Share	3 Months Ended
	Mar. 31, 2016
Earnings Per Share, Basic and Diluted [Abstract]
Earnings Per Share [Text Block]	4. Basic and Diluted Net (Loss) / Income Per Share Basic net loss per share for the three months ended March 31, 2016 was computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share for such period was computed by dividing net loss by the weighted average number of common and dilutive common equivalent shares outstanding during the period. The number of dilutive common equivalent shares outstanding during the period was determined in accordance with the treasury-stock method. Common equivalent shares consisted of common stock issuable upon the exercise of outstanding options and common stock issuable upon the vesting of outstanding, unvested SUAs. Three Months Ended March 31, March 31, 2016 2015 (in thousands) Weighted average common shares outstanding, basic 5,423 5,375 Dilutive common equivalent shares - 27 Weighted average common shares outstanding, diluted 5,423 5,402 Options outstanding to purchase common stock were excluded from the computation of diluted net loss per share for the three months ended March 31, 2016 because the effect of including such shares would have been anti-dilutive for the period.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Fair Value Disclosures [Text Block]	5. Fair Value Measurements The Company has financial instruments, such as accounts receivable, accounts payable, and accrued expenses, which are stated at carrying amounts that approximate fair value because of the short maturity of those instruments. The carrying amount of the Company’s long-term debt approximates fair value as the interest rate on the debt approximates the estimated borrowing rate currently available to the company.

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2016
Subsequent Events [Abstract]
Subsequent Events [Text Block]	6. Subsequent Events On April 26, 2016, the Company declared a quarterly dividend of $ 0.15 813

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies Disclosure [Text Block]	7. Commitments and Contingencies The Company is subject to legal proceedings and claims which arise in the ordinary course of its business. The Company believes that based upon information available to the Company at this time, the expected outcome of these matters would not have a material impact on the Company’s results of operations or financial condition.

Debt and Other Financing Arrang

Debt and Other Financing Arrangements	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Debt Disclosure [Text Block]	8. Debt and Other Financing Arrangements On March 20, 2014, the Company entered into an equipment financing arrangement (“Loan Agreement”) with Banc of America Leasing & Capital, LLC, which it amended on September 15, 2015. The terms of this arrangement are detailed in the 10-K. On March 23, 2016, under the Loan Arrangement, the Company executed a note in the amount of $ 609 8.7 2.41 34,631 2.17 33,327 2.43 6.1 0.1 2016 $ 1,306 2017 1,742 2018 1,742 2019 990 2020 287 2021 30 Total long-term debt 6,097 Less current portion of long-term debt (1,742) Total long-term debt, net of current portion $ 4,355

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Mar. 31, 2016
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
Description of New Accounting Pronouncements Not yet Adopted [Text Block]	9. Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases, which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. The new standard will become effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impacts the adoption of this accounting guidance will have on its financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification of related amounts within the statement of cash flows. The new standard will become effective beginning with the first quarter of 2017, with early adoption permitted. The Company is currently evaluating the impacts the adoption of this accounting guidance will have on its financial statements.

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Nonvested Performance-based Units Activity [Table Text Block]	Activity for SUAs under the Plan for the three months ended March 31, 2016 is as follows: Aggregate Number of Intrinsic Shares Value (1) (000s) Unvested, December 31, 2015 111,464 Granted - Forfeited/expired - Converted to common stock - Unvested, March 31, 2016 111,464 $ 1,533 1) The aggregate intrinsic value on these tables were calculated based on the closing market value of the Company’s stock on March 31, 2016 ($ 13.75
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	As of March 31, 2016, the Company also had outstanding an aggregate of 47,000 Weighted Weighted Average Average Exercise Remaining Aggregate Number of Price Contractual Intrinsic Shares per Share Life Value (2) Outstanding, December 31, 2015 47,000 $ 10.21 $ - Granted - - Exercised - - Cancelled - - Outstanding, March 31, 2016 47,000 $ 10.21 9.5 years $ - (2) The aggregate intrinsic value on this table was calculated based on the amount, if any, by which the closing market value of the Company’s stock on the March 31, 2016 ($ 13.75

Basic and Diluted Net (Loss) 16

Basic and Diluted Net (Loss) / Income Per Share (Tables)	3 Months Ended
	Mar. 31, 2016
Earnings Per Share, Basic and Diluted [Abstract]
Schedule of Weighted Average Number of Shares [Table Text Block]	Basic and diluted weighted average common shares outstanding for the three months ended March 31, 2016 are as follows: Three Months Ended March 31, March 31, 2016 2015 (in thousands) Weighted average common shares outstanding, basic 5,423 5,375 Dilutive common equivalent shares - 27 Weighted average common shares outstanding, diluted 5,423 5,402

Debt and Other Financing Arra17

Debt and Other Financing Arrangements (Tables)	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Schedule of Long-term Debt Instruments [Table Text Block]	The annual principal repayment requirements for debt obligations as of March 31, 2016 were as follows (in 000’s): 2016 $ 1,306 2017 1,742 2018 1,742 2019 990 2020 287 2021 30 Total long-term debt 6,097 Less current portion of long-term debt (1,742) Total long-term debt, net of current portion $ 4,355

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - Stock Unit Award [Member] - Stock Incentive Plan 2006 [Member] $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Unvested	111,464
Number of Shares, Granted	0
Number of Shares Forfeited/expired	0
Number of Shares, Converted to common stock	0
Number of Shares, Unvested	111,464
Aggregate Intrinsic Value, Unvested | $	$ 1,533	[1]
[1]	The aggregate intrinsic value on these tables were calculated based on the closing market value of the Company’s stock on March 31, 2016 ($13.75).

Stock-Based Compensation (Det19

Stock-Based Compensation (Details 1) - Stock Incentive Plan 2006 [Member]	3 Months Ended
	Mar. 31, 2016USD ($)$ / sharesshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of Shares, Outstanding - Beginning balance | shares	47,000
Number of Shares, Granted | shares	0
Number of Shares, Exercised | shares	0
Number of Shares, Cancelled | shares	0
Number of Shares, Outstanding - Ending balance | shares	47,000
Weighted Average Exercise Price per Share, Outstanding - Beginning balance | $ / shares	$ 10.21
Weighted Average Exercise Price per Share, Granted | $ / shares	0
Weighted Average Exercise Price per Share, Exercised | $ / shares	0
Weighted Average Exercise Price per Share, Cancelled | $ / shares	0
Weighted Average Exercise Price per Share, Outstanding - Ending balance | $ / shares	$ 10.21
Weighted Average Remaining Contractual Life, Outstanding	9 years 6 months
Aggregate Intrinsic Value, Outstanding - Beginning balance | $	$ 0	[1]
Aggregate Intrinsic Value, Outstanding - Ending balance | $	$ 0	[1]
[1]	The aggregate intrinsic value on this table was calculated based on the amount, if any, by which the closing market value of the Company’s stock on the March 31, 2016 ($13.75) exceeded the exercise price of the underlying options, multiplied by the number of shares subject to each option.

Stock-Based Compensation (Det20

Stock-Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2016	Feb. 29, 2016	Dec. 31, 2015
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 13.75
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	47,000
Stock Unit Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Unamortized Fair Value (in dollars)	$ 1
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Unamortized Fair Value Period For Amortization	2 years 7 months 6 days
Stock Incentive Plan 2006 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		350,000
Common Stock, Capital Shares Reserved for Future Issuance	578,696
Stock Incentive Plan 2006 [Member] | Stock Unit Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant			70,232
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 13.75

Basic and Diluted Net (Loss) 21

Basic and Diluted Net (Loss) / Income Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Weighted average common shares outstanding, basic	5,422,541	5,375,061
Dilutive common equivalent shares	0	27,000
Weighted average common shares outstanding, diluted	5,422,541	5,401,998

Subsequent Events (Details Text

Subsequent Events (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Apr. 26, 2016	Mar. 31, 2016	Mar. 31, 2015
Common Stock, Dividends, Per Share, Declared		$ 0.15	$ 0.15
Subsequent Event [Member]
Common Stock, Dividends, Per Share, Declared	$ 0.15
Dividends Payable	$ 813

Debt and Other Financing Arra23

Debt and Other Financing Arrangements (Details) - USD ($)	Mar. 31, 2016	Dec. 31, 2015
2,016	$ 1,306,000
2,017	1,742,000
2,018	1,742,000
2,019	990,000
2,020	287,000
2,021	30,000
Total long-term debt	6,097,000
Less current portion of long-term debt	(1,741,602)	$ (1,619,633)
Total long-term debt, net of current portion	$ 4,355,104	$ 4,272,137

Debt and Other Financing Arra24

Debt and Other Financing Arrangements (Details Textual) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 23, 2016
Interest Expense		$ 33,327
Equipment Loan Arrangement [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 8,700,000		$ 609,000
Debt Instrument, Interest Rate, Effective Percentage	2.43%	2.17%
Interest Expense	$ 34,631
Long-term Debt and Capital Lease Obligations	6,100,000
Line of Credit Facility, Remaining Borrowing Capacity	$ 100,000
Debt, Weighted Average Interest Rate	2.41%