PharmChem Laboratories Inc (PCHM)

[LMLYP]

As if I can't keep quiet if a number is brought up, you mentioned gross margins.

Gross margins are typically between 62 and 63 percent going back to 2013.

In the first half of 2020, gross margins were 63.9%.

In the second half of 2019, gross margins were 61.6%.

In the first half of 2019, gross margins were 62.2%

It is obvious what happened in the first half of 2020.

(1) They opened 173 new accounts during the first six months of 2020.
(2) They suffered significant sales declines by several existing customers.

In other words, they added retail and had a drop off at the federal level, so mix and profit margins improved.

I don't know what will happen or happened with the AOUSC in the second half of 2020, but continuance of new accounts increasing is pretty much a certainty.

I think its safe to say that we may see our highest gross margins ever, north of 64% to end out the year, and going forward in 2021.

PCHM