Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of simulation
and modeling software for pharmaceutical discovery and development,
today reported financial results for its third quarter of fiscal year
2014 ended May 31, 2014 (3QFY14) and first nine months of fiscal year
2014 (9moFY14) compared to the third quarter (3QFY13) and first nine
months of fiscal year 2013 (9moFY13).
3QFY14 highlights compared with 3QFY13:
-
Net sales increased 20.9% to $3.741 million, an increase of $646,000
from $3.095 million
-
A large renewal order and one study contract slipped from Q2 into
Q3 ($300,000)
-
Excluding this shift, the Company set a new record for revenues
(11.2% increase)
-
Gross profit was up 32.9% to $3.513 million, an increase of $870,000
from $2.643 million
-
SG&A was $1.204 million, an increase of 33.3% or $301,000 from $0.904
million
-
Increased commissions on higher Asian sales, as well as increased
marketing labor and travel, consulting and professional fees, and
increases in salaries and wages, drove the increased SG&A
-
R&D expenditures were $552,000, an increase of $94,000 or 20.5% over
$458,000
-
In 3QFY14, $317,000 was capitalized and $235,000 was expensed
-
In 3QFY13, $252,000 was capitalized and $206,000 was expensed
-
Increases were due to expanded staff, and increases in salaries
and stock-based compensation for existing employees
-
Income before taxes increased 35.2% to $2.089 million, an increase of
$544,000 from $1.546 million
-
Net income increased 31.6% to $1.307 million , an increase of $314,000
from $993,000
-
Diluted earnings per share increased 30.7% to $0.079 from $0.061
9moFY14 highlights compared with 9moFY13:
-
Net sales were $9.463 million, an increase of $960,000 or 11.3% from
$8.503 million
-
Gross profit was $8.295 million, an increase of $1.129 million or
15.8% from $7.165 million
-
SG&A was $3.379 million, an increase of $689,000 or 25.6% from $2.690
million
-
Increased commissions on higher Asian sales, as well as increased
marketing labor and travel, consulting and professional fees, and
increases in salaries and wages, drove the increased SG&A
-
R&D expenditures were $1.803 million , an increase of $335,000, or
22.8% over $1.468 million
-
In 3QFY14, $1,052,000 was capitalized and $751,000 was expensed
-
In 3QFY13, $834,000 was capitalized and $634,000 was expensed
-
Increases were due to expanded staff, and increases in salaries
and stock-based compensation for existing employees
-
Income before taxes increased 5.3% to $4.225 million, an increase of
$212,000 from $4.014 million
-
Net income increased 6.1% to $2.803 million , an increase of $161,000
from $2.642 million
-
Diluted earnings per share was $0.171, an increase of 5.7% from $0.162
Mr. John Kneisel, chief financial officer of Simulations Plus, said:
“Simulations Plus delivered record revenue growth of 20.9%, of which
8.7% was attributable to customer budget realignments. In fact, the
quarter would have been a record even excluding the $300,000 in orders
which shifted from the second quarter into this quarter. As expected
with this growth, we experienced an increase in commission expense. Our
marketing expenses have increased as we continue our aggressive sales
strategy of attending more trade shows and conferences, both
domestically and internationally. During this last quarter, we
negotiated an agreement with TSRL, which led to increased professional
fees. We anticipate this agreement will have a significant positive
impact on future earnings, as we will no longer be paying royalties on
GastroPlus™, but will have a fixed amortization expense of $150,000 per
quarter. R&D expenses increased due to increased scientific staff. After
distributing just over $800,000 in dividends during 3QFY14, and
disbursing $2.5 million to TSRL, cash on May 31 was a healthy $7.8
million.”
Walt Woltosz, chairman and chief executive officer of Simulations Plus,
added: “Simulations Plus continues to grow both software license sales
and our consulting services business. Renewals continue to be strong,
coming in at 91% for the quarter, and 20 new customers joined the
Simulations Plus family of users. Also, as we announced yesterday, the Environmental
Protection Agency acquired several new software licenses during this
fourth quarter. Our strategy for expansion into the Asian market is
proving effective, as 18% of revenue came from that territory. We
continue to enhance our software products to maintain our best-in-class
standing across the products line. We added to our talent in this
quarter, hiring new scientists and engineers to grow organically and we
continue to seek accretive acquisition possibilities. Our dividend
provides a nice return to our shareholders, and although the Board of
Directors reserves the right to modify or discontinue the dividend at
any time to meet the needs of the business, we do not anticipate any
changes at this time.”
Investor Conference Call
The Company will hold an investor conference call on Tuesday, July 8, at
1:15 PM PT/4:15 PM ET. The call will be webcast live and may be joined
by registering at the following website: https://www2.gotomeeting.com/register/915571978.
Upon registering, you will receive a confirmation e-mail with a unique
link and instructions for joining the call. Please dial in five to ten
minutes prior to the scheduled start time. For listen-only mode, you may
dial (646) 307-1724, and enter access code 649-164-171.
About Simulations Plus, Inc.
Simulations Plus, Inc., is a premier developer of groundbreaking drug
discovery and development simulation and modeling software, which is
licensed to and used in the conduct of drug research by major
pharmaceutical, biotechnology, agrochemical, and food industry companies
worldwide. Simulations Plus, Inc., is headquartered in Southern
California and trades on the NASDAQ Capital Market under the symbol
“SLP.” For more information, visit our Web site 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 as filed with the Securities and
Exchange Commission.
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SIMULATIONS PLUS, INC.
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CONDENSED STATEMENTS OF OPERATIONS
|
For the three and nine months ended May 31,
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(Unaudited)
|
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|
|
|
|
|
|
|
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Three months ended
|
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Nine months ended
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
$
|
3,740,567
|
|
|
$
|
3,094,779
|
|
|
$
|
9,463,059
|
|
|
$
|
8,502,994
|
|
Cost of sales
|
|
|
|
|
227,600
|
|
|
|
451,935
|
|
|
|
1,168,219
|
|
|
|
1,337,583
|
|
Gross profit
|
|
|
|
|
3,512,967
|
|
|
|
2,642,844
|
|
|
|
8,294,840
|
|
|
|
7,165,411
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
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Selling, general, and administrative
|
|
|
|
|
1,204,312
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|
|
|
903,589
|
|
|
|
3,378,950
|
|
|
|
2,689,632
|
|
Research and development
|
|
|
|
|
234,685
|
|
|
|
206,424
|
|
|
|
750,808
|
|
|
|
634,281
|
|
Total operating expenses
|
|
|
|
|
1,438,997
|
|
|
|
1,110,013
|
|
|
|
4,129,758
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|
|
|
3,323,913
|
|
|
|
|
|
|
|
|
|
|
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Income from operations
|
|
|
|
|
2,073,970
|
|
|
|
1,532,831
|
|
|
|
4,165,082
|
|
|
|
3,841,498
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
8,017
|
|
|
|
9,203
|
|
|
|
25,000
|
|
|
|
40,005
|
|
Interest expense
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Miscellaneous income
|
|
|
|
|
-
|
|
|
|
4,694
|
|
|
|
-
|
|
|
|
35,488
|
|
Gain on currency exchange
|
|
|
|
|
7,340
|
|
|
|
(980
|
)
|
|
|
35,477
|
|
|
|
96,662
|
|
Total other income (expense)
|
|
|
|
|
15,357
|
|
|
|
12,917
|
|
|
|
60,477
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|
|
|
172,155
|
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Income from continuing operations before
|
|
|
|
|
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|
|
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|
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provision for income taxes
|
|
|
|
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2,089,327
|
|
|
|
1,545,748
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|
|
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4,225,559
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|
|
|
4,013,653
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Provision for income taxes
|
|
|
|
|
(781,778
|
)
|
|
|
(552,518
|
)
|
|
|
(1,422,991
|
)
|
|
|
(1,371,862
|
)
|
Net Income
|
|
|
|
$
|
1,307,549
|
|
|
$
|
993,230
|
|
|
$
|
2,802,568
|
|
|
$
|
2,641,791
|
|
|
|
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|
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Earnings per share
|
|
|
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Basic
|
|
|
|
$
|
0.08
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|
|
$
|
0.06
|
|
|
$
|
0.17
|
|
|
$
|
0.17
|
|
Diluted
|
|
|
|
$
|
0.08
|
|
|
$
|
0.06
|
|
|
$
|
0.17
|
|
|
$
|
0.16
|
|
|
|
|
|
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Weighted-average common shares outstanding
|
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Basic
|
|
|
|
|
16,193,976
|
|
|
|
16,024,467
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|
|
|
16,117,198
|
|
|
|
15,984,819
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|
Diluted
|
|
|
|
|
16,455,078
|
|
|
|
16,335,608
|
|
|
|
16,361,695
|
|
|
|
16,307,618
|
|
|
|
|
|
|
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SIMULATIONS PLUS, INC.
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CONDENSED BALANCE SHEETS
|
at May 31, 2014 (Unaudited) and August 31, 2013 (Audited)
|
|
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|
(Unaudited)
|
|
(Audited)
|
|
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|
|
May 31,
|
|
August 31,
|
|
|
|
|
2014
|
|
2013
|
ASSETS
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
7,757,972
|
|
$
|
10,179,298
|
Income tax refund receivable/Prepaid
|
|
|
|
|
946,518
|
|
|
301,573
|
Accounts receivable, net of allowance for doubtful accounts of $0
|
|
|
|
|
3,219,743
|
|
|
1,910,615
|
Contracts receivable
|
|
|
|
|
124,270
|
|
|
203,913
|
Prepaid expenses and other current assets
|
|
|
|
|
119,180
|
|
|
192,173
|
Deferred income taxes
|
|
|
|
|
217,655
|
|
|
184,258
|
Total current assets
|
|
|
|
|
12,385,338
|
|
|
12,971,830
|
Long-term assets
|
|
|
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|
|
Capitalized computer software development costs,
|
|
|
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net of accumulated amortization of $6,385,815 and $5,443,703
|
|
|
|
|
3,358,632
|
|
|
2,891,169
|
Property and equipment, net
|
|
|
|
|
103,596
|
|
|
117,987
|
Intellectual property, net of accumulated amortization of $41,875
and $11,250
|
|
|
|
|
6,033,125
|
|
|
63,750
|
Other assets
|
|
|
|
|
18,445
|
|
|
18,445
|
Total assets
|
|
|
|
$
|
21,899,136
|
|
$
|
16,063,181
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
Current liabilities
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
177,356
|
|
$
|
146,011
|
Accrued payroll and other expenses
|
|
|
|
|
349,464
|
|
|
311,209
|
Accrued bonuses to officer
|
|
|
|
|
90,000
|
|
|
60,000
|
Other Current Liabilities
|
|
|
|
|
19,859
|
|
|
19,859
|
Current portion - Contract payable
|
|
|
|
|
750,000
|
|
|
-
|
Deferred revenue
|
|
|
|
|
234,671
|
|
|
89,227
|
Total current liabilities
|
|
|
|
|
1,621,350
|
|
|
626,306
|
|
|
|
|
|
|
|
Long-term liabilities
|
|
|
|
|
|
|
Deferred income taxes
|
|
|
|
|
2,529,371
|
|
|
1,146,389
|
Payments due under Contract payable
|
|
|
|
|
1,750,000
|
|
|
-
|
Other long-term liabilities
|
|
|
|
|
33,099
|
|
|
47,993
|
Total liabilities
|
|
|
|
|
5,933,820
|
|
|
1,820,688
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
16,335,804 and 16,030,894 shares issued and outstanding
|
|
|
|
|
4,807
|
|
|
4,502
|
Additional paid-in capital
|
|
|
|
|
6,021,432
|
|
|
4,842,794
|
Retained earnings
|
|
|
|
|
9,939,077
|
|
|
9,395,197
|
|
|
|
|
|
|
|
Total shareholders' equity
|
|
|
|
|
15,965,316
|
|
|
14,242,493
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
21,899,136
|
|
$
|
16,063,181
|
|
|
|
|
|
|
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Copyright Business Wire 2014