EX-99.1 2 simulations_8k-ex9901.htm PRESENTATION simulations_8k-ex9901.htm
Exhibit 99.1
 
Simulations Plus, Inc.
(NASDAQ:SLP)
Fourth Quarter and Fiscal Year 2011
Conference Call and Webinar
December 1, 2011
 
 

 
 With the exception of historical information, the matters discussed in this
 presentation are forward-looking statements that involve a number of risks
 and uncertainties. The actual 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: continuing demand for
 the Company’s products, competitive factors, the Company’s ability to
 finance future growth, the Company’s ability to produce and market new
 products in a timely fashion, the Company’s ability to continue to attract
 and retain skilled personnel, and the Company’s ability to sustain or
 improve current levels of productivity. Further information on the
 Company’s risk factors is contained in the Company’s quarterly and
 annual reports and filed with the Securities and Exchange Commission.

Safe Harbor Statement
 
 

 
 4Q11 compared to 4Q10:
  16th consecutive profitable quarter (38 of last 40 were profitable)
  4Q11 sales lower 3.9% to $2.12 million from $2.21 million
  Words+ subsidiary sales down 20.5%
  Net Income down 46.3% to $0.186 million from $0.345 million
  Diluted earnings per share down 44.4% to $0.01 from $0.02
 FY11 compared to FY10:
  Sales up 9.4% to Record $11.72 MM from $10.71 MM in FY10
  Words+ subsidiary sales down 3.6% to $2.98 million from $3.09 million
  Net Income up 25.9% to $2.71 million from $2.16 million
  Diluted earnings per share up 29.3% to $0.17 from $0.13
 Strong balance sheet:
  Cash $10.2 MM at 8/31/11, after using $2.07 million cash to repurchase shares
 during FY11. (Cash today =
$12.3 million after closing sale of Words+ yesterday)
  Shareholders’ equity up 7.6% to $14.0 million from $13.0 million at 9/1/10
  Equity per share up 9.4% to $0.90 from $0.82 at 9/1/10
  No debt
SLP 4Q11 Highlights
Three months and fiscal year ended 8/31/11
 
 

 
Consolidated Revenue
 
 

 
Revenue History by Division
 
 

 
Gross Margin (consolidated)
75.6%
78.9%
78.8%
70.4%
73.8%
74.4%
80.0%
67.9%
75.0%
76.3%
77.6%
75.6%
73.6%
77.6%
76.3%
73.0%
 
 

 
Income Before Taxes (consolidated)
 
 

 
Net Income by Division
$243K
$565K
$764K
$165K
$312K
$368K
$569K
$163K
$430K
$641K
$740K
$345K
$567K
$907K
$1.054 M
$185K
 
 

 
Consolidated Income Statement 4QFY11 vs 4QFY10
($ millions)
 
4Q11
4Q10
 Pharmaceutical software and services revenue
1.427
1.334
 Words+ revenue
0.693
0.872
Consolidated revenue
2.120
2.206
Gross profit
1.547
1.667
Gross profit margin
73.0%
75.6%
 SG&A
1.199
1.115
 R&D
0.234
0.222
 Total operating expenses
1.433
1.337
Income before income taxes
0.172
0.357
Net income
0.185
0.345
Earnings per share (diluted)
0.012
0.022
 
 

 
Selected Balance Sheet Items
($ millions)
 
August 31, 2011
August 31, 2010
Cash and cash equivalents
$10.181
$9.631
 Total current assets
13.275
12.390
 Total assets
$15.867
$14.660
 
 
 
 Total current liabilities
1.141
1.204
 Total liabilities
1.830
1.615
 
 
 
Shareholders’ equity
14.036
13.045
 Total liabilities and shareholders’ equity
15.867
14.660
 
 

 
 The sale of our Words+ subsidiary was closed on November
 30, 2011
 Proceeds after adjusting for changes in Net Working Capital
 from August 31, 2011 were $1
.98 million
 This sale is expected to have the following effects:
  Reduce our employee count to 24 from 39
  Reduce our auditing and legal fees going forward
  Simplify our accounting and reporting
  Simplify our internal controls (no hardware inventory, etc.)
  Reduce our revenues by ~$3MM/year
  Increase in office space available at increased lease cost
  Stronger balance sheet - increased cash and decreased total
 liabilities (accrued vacations for Words+ employees paid off)
  Increase our profit margin and net earnings
  Focus our energies and resources on growing the pharmaceutical
 software and services business
Sale of Words+ Subsidiary
 
 

 
 Going forward, Words+ will be reported as “discontinued
 operations”
 The next slides show the past financial performance of
 the pharmaceutical software and services business by
 itself to provide an indication of how the business will be
 reported from now on
 Adjustments to these numbers for changes in various
 expenses will be provided in
pro forma financials to be
 included in an 8K filing in the next 3 working days
  Lease costs will be going up
  Sublease income will be generated and treated as other income
  This will eventually be decreased as some Words+ operations move to Ohio
  It may go away completely at some point if PRC moves remaining operations
  Insurance and other overhead costs are expected to decrease
  Auditing and legal costs are expected to decrease
Sale of Words+ Subsidiary
 
 

 
 
 

 
Pharmaceutical Software &
Services Revenues by Fiscal Year
 
 

 
Pharmaceutical Software &
Services Net Income by Quarter
 
 

 
Pharmaceutical Software & Services
Net Income by Fiscal Year
 
 

 
Marketing and Sales Program
 Conferences/Scientific Meetings
 Training Workshops
 Posters, Presentations, and Peer-Reviewed Publications
 Strategic Digital Marketing Initiatives
 Collaborations/Consulting/Grants
  Progressing on our 5-year collaboration with the FDA Center for Food
 Safety and Applied Nutrition to build toxicity models with ADMET
 Predictor/Modeler™ for food additives and contaminants
  Consulting studies for both large and small companies (4 active projects)
  Negotiating a new funded collaboration with a top 5 pharmaceutical
 company to further enhance our GastroPlus software product
 Fundamental industry shift continues
  Pharma increasingly utilizing simulation software and modeling tools to
 increase productivity - steady stream of scientific meetings
  Recent AAPS meeting had 20+ presentations referencing our
 software - several from the FDA
  Software tools are always evolving, and as the technology advances,
  new capabilities attract new users
  58 new customers during FY11 (includes new companies and new
 departments within existing large customers)
 
 

 
 Simulations Plus continues to increase its technological advantage
Ongoing Enhancements
 Version 8.0 release expected in December 2011 - major upgrade
  Expanded drug-drug interaction to include transporters and induction
  Expanded PDPlus™ pharmacodynamics modeling module
  Expanded ocular delivery model
  Expanded nasal/pulmonary delivery model
 Version 6.0 release expected in December 2011 - major upgrade
  Prediction of sites of metabolism now available
  Best-in-class pKa models improved and display enhanced
  Retrained models with new atomic level descriptors -our already top-ranked
 property predictions were further improved
 Version 2.0 was released in April - major upgrade
  Integration of new MedChem Designer software
  MedChem Designer downloads/activations over 1600
  Significant improvements in processing speed
  Prediction of metabolite structures to be available soon
 Version 4.0 released in June
  Virtual Trials added to show expected variances in experiments
  FDA added more licenses during 3rd quarter
  Customer base continues to grow
 
 

 
Summary
 For FY11:
  Revenues = $11.8 million (up 9.4%)
  Net Income = $2.71 million (up 25.9%)
  Earnings/share = $0.17 (up 29.3%)
  Cash = $10.2 million (up 5.7% after share repurchases of $2.07)
 Continuing to Expand our Life Sciences team:
  To promote faster development of new products and services
  To strengthen our marketing and sales efforts
 Simulations Plus is globally recognized as a leader in our
 respective market niches
  Outstanding reputation for scientific expertise and innovation
  Strong customer support
 Sale of Words+ strengthens Simulations Plus
  Additional cash and reduced liabilities will strengthen balance sheet
  Will allow focusing our energies and resources on the pharmaceutical software
 and services business
 
 

 
Q&A