-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CPiMBFQg24qlqnbMHe/XYiHK8oUeFRDGsKUFSghZvf4dt5+SGPLkK10W8GkF/Wy2 bzddIAvnjXmX/oqfajclNw== 0001019687-03-002406.txt : 20031128 0001019687-03-002406.hdr.sgml : 20031127 20031128122636 ACCESSION NUMBER: 0001019687-03-002406 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031126 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIMULATIONS PLUS INC CENTRAL INDEX KEY: 0001023459 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 954595609 FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-05600-LA FILM NUMBER: 031028387 BUSINESS ADDRESS: STREET 1: 1220 W. AVENUE J STREET 2: * CITY: LANCASTER STATE: CA ZIP: 93534-2902 BUSINESS PHONE: 661-723-7723 MAIL ADDRESS: STREET 1: 1220 W. AVENUE J STREET 2: * CITY: LANCASTER STATE: CA ZIP: 93534-2902 8-K 1 simulations_8k-112603.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 November 26, 2003 ----------------- (Date of the earliest event reported) Simulations Plus, Inc. ---------------------- (Exact name of Registrant as specified in its charter) California 0-21665 95-4595609 ---------- ------- ---------- (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 1220 West Avenue J, Lancaster, California 93534 ----------------------------------------------- (Address of principal executive offices) (Zip Code) (661) 723-7723 -------------- Registrant's telephone number, including area code ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (C) EXHIBITS. 99.1 Press Release, dated November 26, 2003. ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On November 26, 2003, Simulations Plus, Inc., a California corporation (the "Company") reported its results of operations for the fiscal year ended August 31, 2003. A copy of the press release issued by the Company concerning the foregoing results is furnished herewith as Exhibit 99.1. The information contained herein and in the accompanying exhibit shall not be incorporated by reference into any of the Company's filings, whether made before or after the date hereof, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference to such filing. The information in this report, including the exhibit hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The Company included in its press release certain historical non-GAAP financial measures with respect to the fiscal years ended August 31, 2003 and August 31, 2002, as defined in Regulation G promulgated by the Securities and Exchange Commission. The Company believes that the presentation of historical non-GAAP financial measures provides useful supplementary information to investors. These historical non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SIMULATIONS PLUS, INC. Dated: November 26, 2003 By: /s/ Walter S. Woltosz ----------------------- Walter S. Woltosz Chief Executive Officer 3 EXHIBIT INDEX ------------- Exhibit Number Description -------------- ----------- 99.1 Press release, dated November 26, 2003. 4 EX-99.1 3 simulations_8kex99-1.txt EXHIBIT 99.1 SIMULATIONS PLUS REPORTS AUDITED FISCAL YEAR ENDED AUGUST 31, 2003 RESULTS NET EARNINGS INCREASE TO $0.67 PER SHARE; INCOME FROM OPERATIONS INCREASES TO $0.34 PER SHARE LANCASTER, CA, NOVEMBER 26, 2003. Simulations Plus, Inc. (OTCBB: SIMU.OB), the leading provider of ADME absorption simulation and neural net structure-to-property prediction software for pharmaceutical discovery and development, today reported its audited results for the fiscal fourth quarter and year ended August 31, 2003. Total consolidated revenues for the fourth quarter were $2,027,000, an increase of $817,000, or 67.5%, compared to $1,210,000 in the same period in fiscal 2002. Net income for the quarter was $2,079,000, or $0.56 per diluted share, compared to $148,000, or $0.04 per diluted share, for the same period in fiscal 2002. The Company's results were positively impacted by a 3-year license agreement with a large pharmaceutical customer for over one million dollars, which was recognized in full at its net present value in the fourth quarter of 2003, as well as a net income tax benefit of $1,291,000 arising from the release of the valuation allowance in anticipation of full utilization of its net operating loss carryforwards and certain tax credits; no such benefits were recorded in the same period in fiscal 2002. If the Company does not generate taxable profits in future periods, then the Company may reassess whether a valuation allowance is required on the deferred tax asset recognized during the year ended August 31, 2003. If this occurs in future periods, the net income (loss), total assets, and shareholders' equity could be materially adversely affected. Income from operations (which does not include interest income, other income, interest expense, income tax benefits and tax credits) for the fourth quarter was $830,000, an increase of 449.7%, compared to $151,000 for the same period in fiscal 2002. For the fiscal year ended August 31, 2003, total consolidated revenues were $5,485,000, an increase of $1,041,000, or 23.4%, compared to $4,444,000 in fiscal 2002. Net income in fiscal 2003 was $2,506,000, or $0.67 per diluted share, compared to $485,000, or $0.14 per diluted share, for fiscal 2002. The Company's results were positively impacted by the aforementioned license agreement and the net income tax benefit of $1,291,000, which includes certain tax credits of $405,000 in fiscal 2003; no such benefits were recorded in fiscal 2002. Income from operations (which does not include interest income, other income, interest expense, income tax benefits and tax credits) for fiscal 2003 was $1,265,000, or $0.34 per fully diluted share, an increase of 153%, compared to $500,000, or $0.14 per fully diluted share for the same period in fiscal 2002. Shareholder equity increased 327% from $768,000 to $3,279,000; $1,291,000 of the increase was due to the Company's recognition of this deferred tax asset following the release of the valuation allowance, and over $1 million was due to revenues recorded from the 3-year software license agreement. Walt Woltosz, chairman and chief executive officer of Simulations Plus, commented, "This performance speaks once again to the high degree of dedication and professionalism from our team. I'm obviously very pleased with the past year's results, not only from the standpoint of revenues and earnings, but also from the standpoint of the good science, and the resulting new products and product improvements that have driven the financial results. 1 "We are especially pleased with our 3-year license with one of the pharmaceutical giants, which had a significant impact on our performance. We are actively pursuing similar license agreements with several other large companies. Of course, there can be no assurances that any customer will actually place such orders." ABOUT SIMULATIONS PLUS, INC. Simulations Plus, Inc., is a premier developer of groundbreaking drug discovery and development simulation software, which is licensed to and used in the conduct of drug research by major pharmaceutical and biotechnology companies worldwide. The Company has two other businesses, Words+, Inc. and FutureLab(TM), which are based on its proprietary software technologies. Simulations Plus, Inc., is headquartered in Southern California and trades on the OTCBB under the symbol "SIMU.OB." For more information, visit our Web site at www.simulations-plus.com. OUR LENGTHY SALES CYCLE MAKES IT DIFFICULT TO PREDICT OUR QUARTERLY OPERATING RESULTS. We have a long sales cycle because we generally need to educate potential customers regarding the use and benefits of our products and allow prospective customers a period of weeks or months to test and evaluate our products and services. The length of our sales cycle varies depending on the size and type and complexity of the customer contemplating a purchase, whether we have conducted business with a potential customer in the past and the size of the deal. On average, our sales cycle is about 6 months. In addition, these potential customers frequently need to obtain approvals from multiple decision makers prior to making purchase decisions, a process that has been further lengthened as a result of the current market conditions surrounding technology spending. Our long sales cycle, which can range from several weeks to several months or more, makes it difficult to predict the quarter in which sales will occur and increases our dependence on existing customer contracts. Delays in sales could cause significant variability in our revenues and operating results for any particular quarterly period. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION ACT 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. The actual future results of the Company could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: the ability of the Company to book revenues and earnings as it expects for the current quarter, the ability of the Company to maintain its competitive advantage, the general economics of the pharmaceutical industry, the ability of the Company to attract and retain sufficient scientific and technical staff to sustain its R&D and customer support functions, and a sustainable market. Further information on the Company's risk factors is contained in the Company's quarterly and annual reports as filed with the Securities and Exchange Commission. Tables to follow 2 SIMULATIONS PLUS, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEET August 31, 2003 ASSETS Current assets Cash and cash equivalents $ 260,733 Accounts receivable, net of allowance for doubtful accounts of $26,180 and present value discount of $49,835 1,422,508 Inventory 191,839 Prepaid expenses and other current assets 65,148 Total current assets 1,940,228 Long term receivables, net of present value discount of $29,165 270,835 Capitalized computer software development costs, net of accumulated amortization of $1,859,292 373,924 Property and equipment, net 79,711 Deferred tax 1,291,110 Other assets 11,755 Total assets $ 3,967,563 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 175,008 Accrued payroll and other expenses 236,243 Accrued bonuses to officers 133,538 Accrued income taxes 42,566 Accrued warranty and service costs 44,730 Current portion of deferred revenue 15,016 Capitalized lease obligations 9,964 Total current liabilities 657,065 Deferred revenue 31,401 Total liabilities 688,466 3 Commitments and contingencies Consolidated Balance Sheet - Continued Shareholders' equity Preferred stock, $0.001 par value 10,000,000 shares authorized no shares issued and outstanding -- Common stock, $0.001 par value 20,000,000 shares authorized 3,412,247 shares issued and outstanding 3,413 Additional paid-in capital 4,659,905 Accumulated deficit (1,384,221) Total shareholders' equity 3,279,097 Total liabilities and shareholders' equity $ 3,967,563 4 SIMULATIONS PLUS, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF OPERATIONS For the year ended August 31, 2003 and 2002
2003 2002 Net sales $ 5,484,720 $ 4,443,842 Cost of sales 1,537,844 1,456,332 Gross profit 3,946,876 2,987,510 Operating expenses Selling, general, and administrative 2,301,800 2,105,253 Research and development 379,632 382,143 Total operating expenses 2,681,432 2,487,396 Income from operations 1,265,444 500,114 Other income (expense) Interest income 233 165 Interest expense (5,359) (13,764) Loss on sale of assets (2,311) -- Total other income (expense) (7,437) (13,599) Income before benefit from (provision for) income taxes 1,258,007 486,515 Benefit from (provision for) income taxes Provision for income tax (43,057) (1,600) Change in valuation allowance 1,291,110 -- Total benefit from (provision for) income taxes 1,248,053 (1,600) Net income $ 2,506,060 $ 484,915 Basic earnings per share $ 0.73 $ 0.14 Diluted earnings per share $ 0.67 $ 0.14 Weighted-average common shares outstanding Basic 3,410,144 3,408,331 Diluted 3,740,439 3,525,038
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