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Third quarter total revenue increased 4% to $12.8 million, with software revenue up 21%;
Board of Directors announces quarterly dividend of $0.06 per share
LANCASTER, Calif., July 12, 2021--(BUSINESS WIRE)--Simulations Plus, Inc. (Nasdaq: SLP), a leading provider of modeling and simulation solutions for the pharmaceutical, biotechnology, chemical, and consumer goods industries, today reported financial results for its third quarter of fiscal 2021, ended May 31, 2021.
Third Quarter Fiscal 2021 Financial highlights (compared with the corresponding period last fiscal year):
Total revenue increased 4% to $12.8 million;
Software revenue increased 21% to $8.3 million;
Services revenue declined 18% to $4.5 million;
Gross profit increased 7% to $10.3 million;
Gross margin increased from 78% to 81%;
Net income increased 29% to $3.8 million;
Diluted earnings per share increased 13% to $0.18 per share.
YTD Financial highlights (compared with the corresponding period last fiscal year):
Total revenue increased 14% to $36.6 million;
Software revenue increased 32% to $22.3 million;
Services revenue declined 6% to $14.3 million;
Gross profit increased 20% to $28.8 million;
Gross margin increased from 75% to 79%;
Net income increased 33% to $9.5 million;
Diluted earnings per share increased 18% to $0.46 per share.
Shawn O’Connor, chief executive officer of Simulations Plus, said: "Our software business continued its strong performance during the quarter, with revenues increasing by 21% versus last year as product updates and cross-selling initiatives led to an acceleration in growth rates. However, our overall growth rate was moderated due to a higher than normal number of late quarter project delays and drug development program cancellations in our services business, which has historically had periods of volatility. Despite these delays and cancellations, our services pipeline continued to expand, and backlog grew in the quarter. While these trends are encouraging and support our long-term outlook, the delays in services projects will impact the growth rates for the remainder of our fiscal year, and we now expect full-year revenue growth of 5 to 10%."
Mr. O’Connor concluded, "The accelerating growth of software revenue and leverage in our business model continues to support strong and increasing profitability as demonstrated by our net income for the first nine months of fiscal 2021 already exceeding full-year fiscal 2020 net income. With a strong balance sheet, growing industry adoption of artificial intelligence-based simulation software and outsourced services, and an acceleration in software sales, we believe we are well-positioned for success and continue to target annual revenue growth rates above 15% over the next several years following fiscal 2021."
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 August 2, 2021, to shareholders of record as of July 26, 2021. 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 will host a conference call on July 12, 2021, at 4:15 p.m. Eastern Time. All interested parties are invited to join the call by registering here or by calling 1-201-389-0879. Please join 5 to 10 minutes before the scheduled start time. The call will be webcast live and will be available on the Investors page of the Simulations Plus website at https://www.simulations-plus.com/investorscorporate-profile/corporate-profile/. A replay of the webcast will be available on the website approximately one hour following the call.
About Simulations Plus, Inc.
Serving clients worldwide for 25 years, 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 that 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. Follow us on Twitter | Read our Environmental, Social, and Governance (ESG) Report.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 – Except for historical information, the matters discussed in this press release are forward-looking statements that involve 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.
SIMULATIONS PLUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the three and nine months ended May 31, 2021 and 2020
Three months ended
Nine months ended
(in thousands, except per common share amounts)
Cost of revenues
Selling, general, and administrative
Research and development
Total operating expenses
Income from operations
Other income (expense)
Change in value of contingent consideration
Income/(Loss) on currency exchange
Total other income (expense), net
Income before provision for income taxes
Provision for income taxes
Earnings per share
Weighted-average common shares outstanding
Other Comprehensive Income, net of tax
Foreign currency translation adjustments
SIMULATIONS PLUS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
Cash and cash equivalents
Accounts receivable, net of allowance for doubtful accounts of $100 and $50
Revenues in excess of billings
Prepaid income taxes
Prepaid expenses and other current assets
Total current assets
Capitalized computer software development costs, net of accumulated amortization of $14,616 and $13,582
Property and equipment, net
Operating lease right-of-use assets
Intellectual property, net of accumulated amortization of $6,159 and $5,087
Other intangible assets, net of accumulated amortization of $2,054 and $1,642
LIABILITIES AND SHAREHOLDERS' EQUITY
Accrued payroll and other expenses
Income taxes payable
Current portion - contracts payable
Billings in excess of revenues
Operating lease liability, current portion
Total current liabilities
Deferred income taxes, net
Operating lease liability
Payments due under contracts payable
Commitments and contingencies
Preferred stock, $0.001 par value 10,000,000 shares authorized, no shares issued and outstanding
Common stock, $0.001 par value and additional paid in capital — 50,000,000 shares authorized, 20,121,040 and 19,923,277 shares issued and outstanding
Accumulated other comprehensive income
Total shareholders' equity
Total liabilities and shareholders' equity
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Simulations Plus Investor Relations
Ms. Renee Bouche
Mr. Brian Siegel