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Simulations Plus, Inc. Message Board

  • garmingchan garmingchan Sep 15, 2007 12:41 PM Flag

    IBD Article

    Its Success
    Starts At
    The Top

    Simulations Plus Chief Executive
    Walter Woltosz has a name for his
    company�s marketing strategy. It�s
    called�HeadManSelling.�
    In this case, Woltosz is the head
    man. He leads Simulations�SLP sales
    team and has only one marketing
    rep backinghimup.
    Thecompanymakes and sells predictive
    software for biopharma research
    and educational software
    for the disabled. Its scientists, 14 of
    whom have Ph.D.s, handle some of
    the salesworkas well.
    With only 40 people on the payroll,
    Woltosz decided to eliminate
    themiddlemanto get customers.
    Simulations Plus has sent speakers
    or presenters to more than 40
    major scientific meetings worldwidein
    the last three years.
    Those conferences give the company
    �a firsthand sense of clients�
    wishes,� Woltosz said. �We want
    our scientists not in here writing
    software.Wewantthemout there.�
    They also travel to customer sites
    to see what it�s like to work in labs at
    druggiantssuchasPfizerPFE,Eli LillyLLYandBristol-
    MyersSquibbBMY.
    To boost its presence, Simulations
    recently added more scientists to
    the payroll. That was a good move,
    says analyst Howard Halpern of
    Taglich Bros., which does business
    with Simulations Plus.
    �The increase is important since
    they all have the potential to bring
    in new customers due to their
    knowledge and interaction,� Halpern
    said.
    THE FINANCIALS
    Simulations has grown sales at
    least26%over the last five quarters.
    The surge has come from a variety
    of sources, Halpern says, including
    �increased licenses from new customers,
    new modules to existing
    customers, expansion of additional
    licenses to renewal customers, and
    increaseduse of the company�scontract
    services.�
    Sales gained 47% to $2.6 million
    during the fiscal third quarter,
    which ended in May. Profit doubled
    to4cents a share.
    Halpern, the sole analyst following
    Simulations Plus, expects the
    company to post earnings of 23
    cents a share for fiscal 2007, which
    endedinAugust.Hesees profit of32
    cents for fiscal 2008.
    International sales contributed
    38%of the total during the first nine
    monthsof fiscal 2007.
    THE COMPANY
    Simulations was founded in 1981
    and began working on software for
    biopharma research in 1996.
    Woltosz got the idea for predictive
    biopharma software while in
    the aerospace industry, where he
    worked on simulations for rocket
    motorsandlaunch vehicles.
    Simulations� software helps biopharmascientists
    quicklyandcheaply
    predict potential new compound
    and drug behavior. The idea is to
    speedupdrugdevelopmentbyobviating
    dead-end lab work and clinical
    trials.
    The company counts the top 25
    biopharma firms as customers.
    Pharmaceutical software provides
    51%of revenue.
    LOOKING AHEAD
    Simulations Plus has $4 million in
    cash. That�s enough to acquire new
    technology, Woltosz says. �We�re
    in negotiations for acquisitions on
    both the pharma and disability
    side.�
    His goal is annual sales growth of
    70%to80%for thebiopharma business
    and 50% for the company as a
    whole.PeterBenesh

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