Psychemedics, a leading provider of hair testing for drug abuse, recorded a net loss of $726,000, or 13 cents per share, in the second quarter. This marked an increase from the year-ago period, where the loss stood at $338,000, or 6 cents per share.
Additionally, the company reported a decrease in revenue from $6.5 million to $5.54 million during this quarter.
Labor Shortage and Lawsuit Settlement
Psychemedics attributed their widened loss to a persistent labor shortage that affected the use of hair testing for hiring purposes. This, however, offset the growth in add-on tests for fentanyl and benzodiazepines, as well as price increases implemented in the fourth quarter of the previous year.
Furthermore, the company recently reached a settlement in a contract dispute with a consultant, resulting in a payment of $500,000. Although Psychemedics did not admit wrongdoing, they agreed to this sum in exchange for the dismissal of the lawsuit. The payment will be made over the course of the next 18 months.
As of June 30, Psychemedics reported having approximately $2.4 million in cash and cash equivalents.