Psychemedics (PMD) Q2 2024 earnings summary

Executive summary

• Revenue for Q2 2024 decreased 15% year-over-year to $4.7 million, primarily due to lower volumes from the base business and continued labor shortages impacting customers.

• Net loss for Q2 2024 was $827,000 ($0.14 per share), compared to $726,000 ($0.13 per share) in Q2 2023.

• Six-month revenue fell 12% year-over-year to $10.1 million, with a net loss of $1.5 million ($0.26 per share).

• The board approved a reverse/forward stock split and plans to delist from Nasdaq, aiming to reduce costs and focus on core operations.

• Operating costs are being adjusted to offset revenue declines, with no adverse client impact.

Financial highlights

• Q2 2024 revenue: $4.7 million, down from $5.5 million in Q2 2023; six-month revenue: $10.1 million, down from $11.4 million year-over-year.

• Operating loss for Q2 2024 was $899,000, compared to $417,000 in Q2 2023.

• Adjusted for a $500,000 settlement expense in Q2 2024.

• Cash and cash equivalents at June 30, 2024, were $1.4 million, down from $2.0 million at year-end 2023.

• Net cash used in operating activities for the first half of 2024 was $353,000.

Outlook and guidance

• Management believes current funds and future operating profits should be adequate for at least the next 12 months, but may seek additional financing if needed.

• The company anticipates annual cost savings exceeding $900,000 from going private and delisting.

• Actively pursuing new markets and applications to offset lower client hiring.

• Focused on cost adjustments to maintain service quality.