Psychemedics Corporation Announces Second Quart...(2117 1861 Marketing and selli...),Health

Marketing and selling 902 807 1,701 1,512

Research and development 120 161 238 256

2,117 1,997 4,056 3,629

Operating income 1,659 2,113 3,042 3,743

Interest income 73 101 185 197

Income before income taxes 1,732 2,214 3,227 3,940

Provision for income taxes 699 882 1,304 1,573

Net income $1,033 $1,332 $1,923 $2,367

Basic net income per share $0.20 $0.26 $0.37 $0.46

Diluted net income per share $0.20 $0.25 $0.36 $0.45

Dividends declared per share $0.17 $0.15 $0.32 $0.275

Weighted average common shares

outstanding, basic 5,224 5,172 5,222 5,191

Weighted average common shares

outstanding, diluted 5,279 5,237 5,277 5,260

PSYCHEMEDICS CORPORATION

BALANCE SHEETS

(in thousands, except per share amounts)

June 30, December 31,

2008 2007

(Unaudited)

ASSETS

Current assets

Cash and cash equivalents $7,118 $6,097

Short-term investments 200 3,875

Accounts receivable, net of allowance for

doubtful accounts of $238 in 2008 and

$235 in 2007 3,876 3,555

Prepaid expenses and other current assets 955 499

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