Quarterly Revenues Up 22%;
Board of Directors Announces Quarterly Dividend of $0.06 Per Share
LANCASTER, Calif.–(BUSINESS WIRE)–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 second quarter of fiscal year 2020, the period ended February 29, 2020 (2QFY20).
2QFY20 highlights compared with 2QFY19:
- Net revenues increased 22.2%, or $1.9 million, to $10.3 million from $8.5 million
- Gross profit was $7.7 million, up $1.4 million, or 22.7%, from $6.3 million
- SG&A was $4.1 million, up $1.3 million, or 46.3%, from $2.8 million
- SG&A as a percentage of revenues increased to 39.7% from 33.2%, inclusive of $350,000 in transaction costs related to the Lixoft acquisition
- R&D expense increased 3.3%, or $23,600, to $748,000 from $724,000
- Income before taxes increased 5.2%, or $140,500, to $2.8 million from $2.7 million
- Net income increased to $2.2 million from $2.1 million
- Diluted earnings per share remained unchanged at $0.12 per share
6moFY20 highlights compared with 6moFY19:
- Net revenues increased 23.4%, or $3.7 million, to $19.8 million from $16.0 million
- Gross profit was $14.4 million, up $2.8 million, or 24.5%, from $11.6 million
- SG&A was $7.6 million, an increase of $2.1 million, or 37.9%, from $5.5 million
- R&D expense increased 1.6%, or $20,300, and remained at $1.3 million
- Income before taxes increased 18.1%, or $852,300, to $5.6 million from $4.7 million
- Net income increased $573,000, or 15.8%, to $4.2 million from $3.6 million
- Diluted earnings per share increased $0.03, to $0.23 from $0.20 per share
Shawn O’Connor, chief executive officer of Simulations Plus, said: “This was a strong, productive, and important quarter for Simulations Plus, highlighted by the acquisition of Lixoft, which expands our presence in Europe and bolsters our software revenue mix. Operationally, we grew revenues 22% for the quarter and 23% year-to-date, driving a nearly 16% increase in year-to-date net income and strengthening our balance sheet. Today, Simulations Plus is a strong company with a global presence, more than $40 million in trailing 12 month revenue, much of which is recurring, a service business that operates with a large backlog of project-based business, proven profitability and a balance sheet that gives us flexibility during these challenging times. Our new business sales have slowed, as our customers deal with the Covid-related interruptions and uncertainty. To date, this has resulted in sales pipeline growth, as sales have been mostly delayed but not lost.”
“To proactively contribute to solving this worldwide pandemic, we established the StrategiesPlus™ COVID-19 ACT Program to speed consulting assistance to any organization involved in coronavirus research,” Mr. O’Connor continued. “This program enables each part of our organization to provide tools and expertise to help accelerate drug development and R&D. In particular, we are adding to our consulting services team in an effort to address the growing demand and expanding opportunities we see in the marketplace.”
John Kneisel, chief financial officer of Simulations Plus, added: “We finished the quarter with $12.2 million in cash. Early in the third fiscal quarter, we paid approximately $6 million in net cash for the Lixoft acquisition. We maintain a strong balance sheet with sufficient cash reserves and working capital and access to a line of credit to provide flexibility. The Lixoft acquisition will be immediately accretive, helping boost future cash flows to further strengthen our position.”
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 May 1, 2020, to shareholders of record as of April 24, 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 on April 9, 2020, at 1:15 p.m. Pacific Time/4:15 p.m. Eastern Time. 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 938-770-331. A replay of the webcast will be available at 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 | ||||
|
(Unaudited) |
(Audited) |
|||
|
February 29, |
August 31, |
|||
| ASSETS |
|
|
||
|
2020 |
2019 |
|||
| Current assets | ||||
| Cash and cash equivalents |
$ 12,248,652 |
$ 11,435,499 |
||
| Accounts receivable, net of allowance for doubtful accounts of $0 |
7,244,344 |
5,026,558 |
||
| Revenues in excess of billings |
4,113,185 |
3,233,659 |
||
| Prepaid income taxes |
457,232 |
765,110 |
||
| Prepaid expenses and other current assets |
612,505 |
704,316 |
||
| Total current assets |
24,675,918 |
21,165,142 |
||
| Long-term assets | ||||
| Capitalized computer software development costs, | ||||
| net of accumulated amortization of $12,983,725 and $12,356,055 |
5,458,837 |
4,959,736 |
||
| Property and equipment, net |
335,298 |
341,145 |
||
| Operating lease right of use asset |
637,509 |
– |
||
| Intellectual property, net of accumulated amortization of $4,413,334 and $3,948,750 |
4,561,666 |
5,026,249 |
||
| Other intangible assets net of accumulated amortization of $1,383,750 and $1,210,000 |
3,106,250 |
3,280,000 |
||
| Goodwill |
10,387,198 |
10,387,198 |
||
| Other assets |
37,227 |
37,227 |
||
| Total assets |
$ 49,199,903 |
$ 45,196,697 |
||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||
| Current liabilities | ||||
| Accounts payable |
$ 624,645 |
$ 204,075 |
||
| Accrued payroll and other expenses |
1,526,891 |
1,639,038 |
||
| Income taxes payable |
– |
– |
||
| Current portion – Contracts payable |
1,761,028 |
1,761,028 |
||
| Billings in excess of revenues |
891,905 |
798,549 |
||
| Operating lease liability, current portion |
493,257 |
– |
||
| Deferred revenue |
183,310 |
380,787 |
||
| Total current liabilities |
5,481,036 |
4,783,477 |
||
| Long-term liabilities | ||||
| Deferred income taxes,net |
2,714,398 |
2,731,616 |
||
| Operating Lease Liability |
142,343 |
– |
||
| Total liabilities |
8,337,777 |
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 | ||||
| 17,648,646 and 17,591,834 shares issued and outstanding |
7,651 |
7,595 |
||
| Additional paid-in capital |
16,406,702 |
15,319,474 |
||
| Retained earnings |
24,447,773 |
22,354,535 |
||
| Total shareholders’ equity |
$ 40,862,126 |
$ 37,681,604 |
||
| Total liabilities and shareholders’ equity |
$ 49,199,903 |
$ 45,196,697 |
||
| SIMULATIONS PLUS, INC. | |||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
| For the three and six months ended February 29, 2020 and February 28, 2019 | |||||||||||||
|
Three months ended |
|
Six months ended |
|||||||||||
|
(Unaudited) |
|
(Unaudited) |
|||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||
| Revenues |
$ 10,349,863 |
|
$ 8,471,720 |
|
$ 19,750,968 |
|
$ 16,007,623 |
|
|||||
| Cost of revenues |
2,666,388 |
|
2,207,831 |
|
5,309,297 |
|
4,406,952 |
|
|||||
| Gross margin |
7,683,475 |
|
6,263,889 |
|
14,441,671 |
|
11,600,671 |
|
|||||
| Operating expenses | |||||||||||||
| Selling, general, and administrative |
4,110,018 |
|
2,809,691 |
|
7,623,381 |
|
5,530,093 |
|
|||||
| Research and development |
747,612 |
|
724,034 |
|
1,273,965 |
|
1,253,670 |
|
|||||
| Total operating expenses |
4,857,630 |
|
3,533,725 |
|
8,897,346 |
|
6,783,763 |
|
|||||
| Income from operations |
2,825,845 |
|
2,730,164 |
|
5,544,325 |
|
4,816,908 |
|
|||||
| Other income (expense) | |||||||||||||
| Interest income |
12,073 |
|
5,573 |
|
23,349 |
|
9,245 |
|
|||||
| Interest expense |
– |
|
(38,188 |
) |
– |
|
(76,376 |
) |
|||||
| (Loss) income on currency exchange |
(1,825 |
) |
(1,916 |
) |
1,886 |
|
(32,526 |
) |
|||||
| Total other income (expense) |
10,248 |
|
(34,531 |
) |
25,235 |
|
(99,657 |
) |
|||||
| Income before provision for income taxes |
2,836,093 |
|
2,695,633 |
|
5,569,560 |
|
4,717,251 |
|
|||||
| Provision for income taxes |
(686,013 |
) |
(596,184 |
) |
(1,361,203 |
) |
(1,081,855 |
) |
|||||
| Net Income |
$ 2,150,080 |
|
$ 2,099,449 |
|
$ 4,208,357 |
|
$ 3,635,396 |
|
|||||
| Earnings per share | |||||||||||||
| Basic |
$ 0.12 |
|
$ 0.12 |
|
$ 0.24 |
|
$ 0.21 |
|
|||||
| Diluted |
$ 0.12 |
|
$ 0.12 |
|
$ 0.23 |
|
$ 0.20 |
|
|||||
| Weighted-average common shares outstanding | |||||||||||||
| Basic |
17,638,406 |
|
17,476,603 |
|
17,623,699 |
|
17,449,069 |
|
|||||
| Diluted |
18,315,824 |
|
18,002,741 |
|
18,305,645 |
|
17,984,078 |
|
|||||
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