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Simulations Plus Reports Record First Quarter FY2020 Financial Results

First quarter net revenues of $9.4 million reflecting 24.8% year-over-year growth

Board of Directors announces quarterly dividend of $0.06 per share

Simulations Plus, Inc. (Nasdaq: SLP), the leading provider of modeling and simulation solutions for the pharmaceutical, biotechnology, chemicals, and consumer goods industries, today reported financial results for its first quarter of fiscal year 2020, the period ended November 30, 2019 (1QFY20).

1QFY20 highlights compared with 1QFY19:

  • Net revenues increased 24.8%, or $1.9 million, to $9.4 million from $7.5 million
  • Gross profit increased 26.7%, or $1.4 million, to $6.8 million from $5.3 million
  • Gross profit as a percentage of revenues increased to 71.9% from 70.8%
  • SG&A was $3.5 million, an increase of 29.2%, or $794,000, from $2.7 million
  • SG&A as a percentage of revenues increased to 37.4% from 36.1%
  • R&D expense decreased slightly to $526,000 from $530,000
  • Income before taxes increased to $2.7 million from $2.0 million
  • Net income increased $522,000, or 34.0%, to $2.1 million from $1.5 million
  • Diluted earnings per share increased $0.02 to $0.11 from $0.09 per share

Shawn O’Connor, chief executive officer of Simulations Plus, said: "This was a very strong start to our fiscal year thereby demonstrating the effects of our investments in sales and marketing and scientific consulting resources to accelerate our revenue growth above historical levels. The quarter also benefitted from our consulting team’s response to accelerated project delivery requests from two clients in support of critical development and regulatory strategies. This underscores the value we provide our customers and the dedication of our scientists to support our client’s success. We continue to expect full-year growth in the 15-20% range."

John Kneisel, chief financial officer of Simulations Plus, added: "Simulations Plus continues to generate strong revenue growth which produced an increase in fully diluted EPS of $0.02. Net cash provided by operations remains solid at $2.6 million this quarter. During the quarter, we adopted the provisions of ASC 842, Leases. Under the standard we have recognized operating leases as Right-of-Use assets, with a corresponding lease liability. As of the beginning of this fiscal year, we increased assets and liabilities by approximately $903,000 which will be taken to expense over the life of the respective leases. The effect on operating income was not significant as the amount expensed approximates the rental commitments; moreover, we do not anticipate any material effect on operating earnings going forward."

Quarterly Dividend Declared

The Company’s Board of Directors has declared a cash dividend of $0.06 per share of the Company’s common stock payable on February 3, 2020, to shareholders of record as of January 27, 2020. The declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements, and other factors.

Investor Conference Call

The Company has announced an investor conference call that will be webcast live at 1:15 p.m. PST/4:15 p.m. EST on Thursday, January 9, 2020. The live webcast/teleconference will be accessible by registering here. Please dial in five to ten minutes prior to the scheduled start time. A live, listen-only webcast will also be available by dialing (914) 614-3221, and entering access code 601-658-992. 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 premier developer of drug discovery and development software as well as a leading provider of both preclinical and clinical pharmacometric consulting services for regulatory submissions and quantitative systems pharmacology models for drug-induced liver injury and nonalcoholic fatty liver disease. The company is a global leader focused on improving the ways scientists use knowledge and data to predict the properties and outcomes of pharmaceutical, biotechnology, and chemical agents. Our software is licensed to and used in the conduct of drug research by major pharmaceutical, biotechnology, chemical, and consumer goods companies and regulatory agencies worldwide. Our innovations in integrating new and existing science in medicinal chemistry, computational chemistry, pharmaceutical science, biology, and physiology into our software have made us the leading software provider for physiologically based pharmacokinetic modeling and simulation. 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. 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 our new software products as well as 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, 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.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of
 
(Unaudited) (Audited)
November 30, August 31,
ASSETS

2019

2019

Current assets
Cash and cash equivalents

$

 

12,610,446

$

 

11,435,499

Accounts receivable, net of allowance for doubtful accounts of $0

 

 

6,353,416

 

 

5,026,558

Revenues in excess of billings

 

 

3,480,934

 

 

3,233,659

Prepaid income taxes

 

 

87,078

 

 

765,110

Prepaid expenses and other current assets

 

 

561,129

 

 

704,316

Total current assets

 

 

23,093,003

 

 

21,165,142

Long-term assets
Capitalized computer software development costs, net of accumulated amortization of $12,669,722 and $12,356,055

 

 

5,152,941

 

 

4,959,736

Property and equipment, net

 

 

334,763

 

 

341,145

Operating lease right of use asset

 

 

770,853

 

 

-

Intellectual property, net of accumulated amortization of $4,181,042 and $3,948,750

 

 

4,793,958

 

 

5,026,249

Other intangible assets net of accumulated amortization of $1,296,875 and $1,210,000

 

 

3,193,125

 

 

3,280,000

Goodwill

 

 

10,387,198

 

 

10,387,198

Other assets

 

 

37,227

 

 

37,227

Total assets

$

 

47,763,068

$

 

45,196,697

 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable

$

 

584,944

$

 

204,075

Accrued payroll and other expenses

 

 

1,597,643

 

 

1,639,038

Income taxes payable

 

 

-

 

 

-

Current portion - Contracts payable

 

 

1,761,028

 

 

1,761,028

Billings in excess of revenues

 

 

889,699

 

 

798,549

Operating lease liability, current portion

 

 

528,055

 

 

-

Deferred revenue

 

 

271,739

 

 

380,787

Total current liabilities

 

 

5,633,108

 

 

4,783,477

 
Long-term liabilities
Deferred income taxes, net

 

 

2,703,711

 

 

2,731,616

Operating Lease Liability

 

 

240,072

 

 

-

Total liabilities

 

 

8,576,891

 

 

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
17,623,324 and 17,591,834 shares issued and outstanding

 

 

7,626

 

 

7,595

Additional paid-in capital

 

 

15,822,118

 

 

15,319,474

Retained earnings

 

 

23,356,433

 

 

22,354,535

Total shareholders' equity

$

 

39,186,177

$

 

37,681,604

 
Total liabilities and shareholders' equity

$

 

47,763,068

$

 

45,196,697

 
 
SIMULATIONS PLUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended November 30,
Three months ended
(Unaudited)

 

2019

 

 

2018

 

 
Revenues

$

9,401,103

 

$

7,535,903

 

Cost of revenues

 

2,642,908

 

 

2,200,371

 

Gross margin

 

6,758,195

 

 

5,335,532

 

Operating expenses
Selling, general, and administrative

 

3,513,361

 

 

2,719,151

 

Research and development

 

526,352

 

 

529,636

 

Total operating expenses

 

4,039,713

 

 

3,248,787

 

 
Income from operations

 

2,718,482

 

 

2,086,745

 

 
Other income (expense)
Interest income

 

11,274

 

 

3,672

 

Interest expense

 

-

 

 

(38,188

)

(Loss) income on currency exchange

 

3,711

 

 

(30,611

)

Total other income (expense)

 

14,985

 

 

(65,127

)

 
Income before provision for income taxes

 

2,733,467

 

 

2,021,618

 

Provision for income taxes

 

(675,190

)

 

(485,671

)

Net Income

$

2,058,277

 

$

1,535,947

 

 
Earnings per share
Basic

$

0.12

 

$

0.09

 

Diluted

$

0.11

 

$

0.09

 

 
Weighted-average common shares outstanding
Basic

 

17,608,991

 

 

17,421,838

 

Diluted

 

18,306,998

 

 

17,997,735

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200109005822/en/

Contacts

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

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