Simulations Plus, Inc. (NASDAQ: SLP), the premier provider of simulation and modeling software and consulting services for all phases of pharmaceutical discovery and development from the earliest discovery through all phases of clinical trials, today reported financial results for its first quarter of fiscal year 2016, the period ended November 30, 2015 (1QFY16).

1QFY16 highlights compared with 1QFY15:

  • Net revenues increased 18.4%, or $752,000, to a new record $4.84 million from $4.09 million
  • Gross profit increased 21.6% to $3.76 million from $3.09 million
  • SG&A was $1.68 million, a decrease of $403,000, or 19.4%, from $2.08 million
  • Income before taxes increased $971,000, or 30.1%, to $1.72 million from $746,000
  • Net income increased $578,000, or 109%, to $1.11 million from $529,000
  • Diluted earnings per share increased $0.03 to $0.06 from $0.03 per share

John Kneisel, chief financial officer, said: “This quarter is the first truly comparative period since the Company acquired Cognigen Corporation at the beginning of our 2015 fiscal year. It reflects earnings as anticipated from the acquisition as well as quarterly expenses unencumbered by acquisition costs. Last year’s first quarter (1QFY15) operating income was substantially affected by approximately $400,000 in one-time fees and expenses that were incurred for the acquisition. We continue to maintain our strong financial position with current cash balances of approximately $7.8 million and no loans.”

Ted Grasela, president of the Company, added: “We continue to offer new and expanded consulting services to clients of both companies. In addition, software development activities have continued apace and exciting opportunities are emerging as our scientists gain cross-disciplinary experience during our collaborations.”

John DiBella, vice president for marketing and sales for Simulations Plus, said: “The positive trend of strong software sales and increasing requests for our consulting services continued in 1QFY16. The number of software units licensed saw a 29% increase compared to 1QFY15, which was driven by robust renewal rates and 23 new organizations, or new departments at existing organizations, now utilizing our technology. Education remains a key focus for us in 2016, as we have an aggressive workshop schedule planned for the U.S., Europe, and Asia to allow us to train more scientists on the applications of our technology. This, coupled with new releases of all major software products expected in FY16, gives us confidence in our ability to continue expanding our client base. In addition to our vigorous marketing and sales activities in 1QFY16, we introduced a unified Simulations Plus brand to better present our comprehensive offering of powerful software and consulting expertise, which we believe will resonate across different departments, companies, and markets. We will be embarking on a website redesign project in 2016 to support this effort.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “Fiscal year 2016 is off to a very good start with this record first quarter. I am particularly excited about the upcoming release of our new PKPlus™ software, which we believe will have a significant impact on revenues and earnings later in FY16. I’m also encouraged by the contacts we’ve been making in the aerospace industry regarding the products we’ve been developing for use in the aerospace industry. These products use our artificial neural network ensemble modeling engine and we are pursuing customers and funding to develop customized tools and applications in this new market.”

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 14, 2016, which may be joined by registering at the following website: https://attendee.gotowebinar.com/register/7532000268685717505. Upon registering, you will receive a confirmation e-mail with 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 (415) 930-5321, and enter access code 448-867-227.

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. The company is a global leader focused on improving the ways scientists use knowledge and data to predict the properties and outcomes of pharmaceutical and biotechnology agents. Our software is licensed to and used in the conduct of drug research by major pharmaceutical and biotechnology 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.

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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 U.S. Securities and Exchange Commission.

 

SIMULATIONS PLUS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of

   

(Unaudited)

     (Audited)
November 30, August 31,

ASSETS

2015

2015

Current assets
Cash and cash equivalents $ 7,154,513 $ 8,551,275
Accounts receivable, net of allowance for doubtful accounts of $0 4,042,436 1,593,707
Revenues in excess of billings 742,939 795,125
Prepaid expenses and other current assets 263,062 381,718
Deferred income taxes   161,431   210,972
Total current assets   12,364,381   11,532,797
Long-term assets

Capitalized computer software development costs, net of accumulated amortization of $7,879,689 and $7,632,421

3,818,371 3,798,339
Property and equipment, net 364,499 413,510
Intellectual property, net of accumulated amortization of $953,125 and $801,250 5,121,875 5,273,750
Other intangible assets net of accumulated amortization of $184,375 and $147,500 1,465,625 1,502,500
Goodwill 4,789,248 4,789,248
Other assets   34,082   34,082
Total assets$27,958,081$27,344,226
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 90,155 $ 209,407
Accrued payroll and other expenses 501,935 429,580
Accrued bonuses to officer 30,250 121,000
Income taxes payable 385,095 43,602
Other current liabilities 19,859 19,859
Current portion - Contracts payable 2,604,404 2,604,404
Billings in excess of revenues 211,718 106,534
Deferred revenue   53,312   78,945
Total current liabilities   3,896,728   3,613,331
 
Long-term liabilities
Deferred income taxes 3,123,517 3,190,419
Payments due under Contracts payable 1,000,000 1,000,000
Other long-term liabilities   3,309   8,274
Total liabilities $ 8,023,554 $ 7,812,024
 
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
16,996,001 and 16,943,001 shares issued and outstanding 5,467 5,414
Additional paid-in capital 9,859,889 9,714,290
Retained earnings   10,069,171   9,812,498
Total shareholders' equity $ 19,934,527 $ 19,532,202
 
Total liabilities and shareholders' equity$27,958,081$27,344,226
 
 

SIMULATIONS PLUS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the three months ended November 30,

    Three months ended
(Unaudited)

2015

    

2014

 
Net Revenues $ 4,838,620 $ 4,086,192
Cost of revenues   1,083,347     997,734  
Gross margin   3,755,273     3,088,458  
Operating expenses
Selling, general, and administrative 1,676,433 2,079,169
Research and development   351,307     259,912  
Total operating expenses   2,027,740     2,339,081  
 
Income from operations   1,727,533     749,377  
 
Other income (expense)
Interest income 4,467 4,592
Gain(loss) on currency exchange   (14,895 )   (7,790 )
Total other income (expense)   (10,428 )   (3,198 )

Income from operations before provision for income taxes

 1,717,105 746,179
Provision for income taxes   (610,632 )   (217,275 )
Net Income$1,106,473   $528,904  
 
Earnings per share
Basic $ 0.07 $ 0.03
Diluted $ 0.06 $ 0.03
 
Weighted-average common shares outstanding
Basic 16,966,089 16,830,319
Diluted 17,255,068 17,097,858