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Simulations Plus Reports FY2020 and Fourth Quarter FY2020 Financial Results

·9 min read

Full-Year Revenue Increased 22.4% to $41.6 Million;

Fourth Quarter Revenue Increased 18.9% to $9.5 Million;

Fourth Quarter Diluted EPS of $0.11 and Full-Year Diluted EPS of $0.50

Simulations Plus, Inc. (Nasdaq: SLP), a leading provider of modeling and simulation solutions for the pharmaceutical, biotechnology, chemicals, and consumer goods industries, today reported financial results for its 2020 fiscal year (FY20) and fourth quarter (4QFY20) ended August 31, 2020.

Full Year FY20 highlights compared with Full Year FY19:

  • Revenues were $41.6 million, up 22.4% over $34.0 million in FY19

  • Gross profit was up 24.0%, or $6.0 million, to $30.9 million, from $24.9 million in FY19

  • SG&A was $16.4 million, an increase of $4.6 million, or 38.7%, over $11.8 million

  • Total R&D expenditures were $5.3 million, an increase of $1.0 million, or 24.8% over $4.3 million

    • For FY20, $2.4 million was capitalized and $3.0 million was expensed

    • For FY19, $1.8 million was capitalized and $2.5 million was expensed

  • Income before taxes increased 7.9% to $11.4 million, an increase of $831,000 over $10.6 million

  • Net income increased 8.7% to $9.3 million, an increase of $749,000 from $8.6 million

  • Diluted earnings per share increased $0.02 to $0.50 from $0.48. One-time transaction costs related to the Lixoft acquisition of $1.4 million (approx. $1.1 million net of tax) effected a $0.06 decrease in diluted earnings per share

  • Cash, cash equivalents, and short-term investments were $116.0 million, compared to $11.4 million at the end of FY19 reflecting the follow-on offering completed on August 10, 2020

4QFY20 highlights compared with 4QFY19:

  • Revenues increased 18.9% to $9.5 million, an increase of $1.5 million over $8.0 million

  • Gross profit was up 19.7% to $6.9 million, an increase of $1.1 million over $5.7 million

  • SG&A was $3.7 million, an increase of 16.7%, or $531,000, over $3.2 million

  • Total R&D expenditures were $1.6 million, an increase of $559,000, or 55.4%, over $1.0 million

    • For 4QFY20, $621,000 was capitalized and $948,000 was expensed

    • For 4QFY19, $406,000 was capitalized and $603,000 was expensed

  • Income before taxes increased 2.6%, or $51,000, and remained at $2.0 million

  • Net income increased 6.3% to $2.2 million, an increase of $129,000 over $2.1 million

  • Earnings per fully diluted share remained unchanged at $0.11

Shawn O’Connor, chief executive officer of Simulations Plus, said: "Simulations Plus achieved its goal of accelerating organic growth to 15-20%, overcoming headwinds from the COVID-19 pandemic due to continued strong growth from both our software and consulting revenue streams. Our future growth prospects were bolstered by a significant acquisition to expand our software business, growing our European presence, and the recent introductions of new software versions as well as the launch of several important collaborations. We continue to invest in R&D, funded both internally and from leading pharmaceutical and regulatory agencies, building on our leadership position in modelling and simulation for the drug development marketplace."

John Kneisel, chief financial officer of Simulations Plus, added: "During the fourth quarter, we completed a strategic offering, issuing approximately 2.1 million shares and raising net proceeds of approximately $107.7 million. This follow-on offering gives the Company resources and scale to pursue additional acquisitions to further bolster our growth rates and broaden the value we can deliver to our clients. Once again, in the fourth quarter we benefited from tax deductions from stock compensation expense as employees took advantage of the increased value of their options. Overall, we continue to generate solid profitability and free cash flow, even after paying our regular quarterly dividend."

Investor Conference Call

The Company invites all interested persons to attend its conference call at 4:15 p.m. Eastern Time on November 16, 2020. The live webcast/teleconference will be accessible by registering here. Please dial in five to 10 minutes prior to the scheduled start time. A live, listen-only webcast will also be available by dialing (213) 929-4232. A replay of the webcast will be available at the Investors section of the Simulations Plus website following the call.

About Simulations Plus, Inc.

Simulations Plus, Inc. is a leading provider of modeling and simulation software and consulting services supporting drug discovery, development research, and regulatory submissions. With our subsidiaries, Cognigen, DILIsym Services, and Lixoft, we offer solutions which bridge machine learning, physiologically based pharmacokinetics, quantitative systems pharmacology/toxicology, and population PK/PD modeling approaches. Our technology is licensed and applied by major pharmaceutical, biotechnology, chemical, consumer goods companies and regulatory agencies worldwide. For more information, visit our website at www.simulations-plus.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 – With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. Words like "believe," "expect" and "anticipate" mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to maintain our competitive advantages, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, our ability to identify and close acquisitions on terms favorable to the Company, and a sustainable market. Further information on our risk factors is contained in our quarterly and annual reports and filed with the U.S. Securities and Exchange Commission.

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SIMULATIONS PLUS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the three months and years ended August 31,

Three months ended

Years ended

(Unaudited)

(Unaudited)

2020

2019

2020

2019

2018

Revenues

$

9,540,081

$

8,025,895

$

41,589,084

$

33,970,440

$

29,666,524

Cost of revenues

2,674,528

2,290,813

10,649,230

9,025,704

7,994,228

Gross margin

6,865,553

5,735,082

30,939,854

24,944,736

21,672,296

Operating expenses

Selling, general, and administrative

3,713,543

3,182,238

16,360,053

11,796,027

9,583,852

Research and development

947,938

603,053

2,974,623

2,499,980

1,790,656

Total operating expenses

4,661,481

3,785,291

19,334,676

14,296,007

11,374,508

Income from operations

2,204,072

1,949,791

11,605,178

10,648,729

10,297,788

Other income (expense)

Interest income

1,653

13,225

29,468

33,522

27,122

Change in value of contingent consideration

(121,500

)

-

(202,500

)

(109,078

)

(153,034

)

(Loss) income on currency exchange

(46,380

)

23,769

(45,097

)

(16,697

)

(32,934

)

Total other income (expense)

(166,227

)

36,993

(218,129

)

(92,253

)

(158,846

)

Income before provision for income taxes

2,037,845

1,986,784

11,387,049

10,556,476

10,138,942

Provision for income taxes

150,287

72,443

(2,054,989

)

(1,973,147

)

(1,204,130

)

Net Income

$

2,188,132

$

2,059,227

$

9,332,060

$

8,583,329

$

8,934,812

Earnings per share

Basic

$

0.12

$

0.12

$

0.52

$

0.49

$

0.52

Diluted

$

0.11

$

0.11

$

0.50

$

0.48

$

0.50

Weighted-average common shares outstanding

Basic

18,289,256

17,549,636

17,819,064

17,492,258

17,328,707

Diluted

19,151,857

18,265,585

18,538,373

18,057,431

17,860,392

Other comprehensive Income (Loss), net of tax

Foreign currency translation adjustments

28,007

-

58,467

-

-

Comprehensive Income (Loss)

$

2,216,139

$

2,059,227

$

9,390,527

$

8,583,329

$

8,934,812

SIMULATIONS PLUS, INC.

CONSOLIDATED BALANCE SHEETS

(Audited)

(Audited)

August 31,

August 31,

ASSETS

2020

2019

Current assets

Cash and cash equivalents

$

49,207,314

$

11,435,499

Accounts receivable, net of allowance for doubtful accounts of $50,000 and $0

7,421,970

5,026,558

Revenues in excess of billings

3,093,343

3,233,659

Prepaid income taxes

969,688

765,110

Prepaid expenses and other current assets

1,595,447

704,316

Short-term investments

66,803,595

-

Total current assets

129,091,357

21,165,142

Long-term assets

Capitalized computer software development costs, net of accumulated amortization of $13,581,599 and $12,356,055

6,087,378

4,959,736

Property and equipment, net

437,787

341,145

Operating lease right of use asset

926,600

-

Intellectual property, net of accumulated amortization of $5,087,031 and $3,948,750

11,897,970

5,026,249

Other intangible assets net of accumulated amortization of $1,641,725 and $1,210,000

7,008,275

3,280,000

Goodwill

12,921,185

10,387,198

Other assets

50,965

37,227

Total assets

$

168,421,517

$

45,196,697

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

$

349,940

$

204,075

Accrued payroll and other expenses

2,250,692

1,639,038

Current portion - Contracts payable

2,000,000

1,761,028

Billings in excess of revenues

140,991

798,549

Operating lease liability, current portion

463,465

-

Deferred revenue

299,482

380,787

Total current liabilities

5,504,570

4,783,477

Long-term liabilities

Deferred income taxes, net

2,353,857

2,731,616

Operating Lease Liability

463,312

-

Payments due under Contracts payable

4,063,833

-

Other long-term liabilities

-

-

Total liabilities

12,385,572

7,515,093

Commitments and contingencies

Shareholders' equity

Preferred stock, $0.001 par value

10,000,000 shares authorized

no shares issued and outstanding

$

-

$

-

Common stock, $0.001 par value

50,000,000 shares authorized

19,923,277 and 17,591,834 shares issued and outstanding

9,926

7,595

Additional paid-in capital

128,531,428

15,319,474

Accumulated Other Comprehensive Income (Loss)

58,467

-

Retained earnings

27,436,124

22,354,535

Total shareholders' equity

156,035,945

37,681,604

Total liabilities and shareholders' equity

$

168,421,517

$

45,196,697

View source version on businesswire.com: https://www.businesswire.com/news/home/20201116005984/en/

Contacts

Simulations Plus Investor Relations
Ms. Renee Bouche
661-723-7723
renee@simulations-plus.com

Hayden IR
Mr. Cameron Donahue
651-653-1854
slp@haydenir.com