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
July 3, 2014
(Date of the earliest event reported)
Simulations Plus, Inc.
(Exact name of registrant as specified in its charter)
| California | 001-32046 | 95-4595609 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
42505 10th Street West, Lancaster, California 93534-7059
(Address of principal executive offices) (Zip Code)
661-723-7723
Registrant's telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14z-12 under Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under Exchange Act (17 CFR 240.13e-4(c))
Item 8.01 Other Events
On July 3, 2014, Simulations Plus, Inc., a California corporation (the "Company"), sent out a press release announcing financial results for its third fiscal quarter ended May 31, 2014. Also on July 3, 2014, the Company issued a press release announcing that it expects to file its 10-Q for the third quarter of its 2014 fiscal year on July 8, 2014 and it will be holding a conference call on July 8, 2014 to discuss those results.
Copies of those press releases are attached hereto as Exhibit 99.1 and 99.2 and incorporated herein by reference.
This report on Form 8-K (the "Report"), including the disclosures set forth herein, contains certain forward-looking statements that involve substantial risks and uncertainties. When used herein, the terms "anticipates," "expects," "estimates," "believes" and similar expressions, as they relate to us or our management, are intended to identify such forward-looking statements.
Forward-looking statements in this Report or hereafter, including in other publicly available documents filed with the Securities and Exchange Commission (the "Commission"), reports to the stockholders of Simulations Plus, Inc., a California corporation (the "Company" or "us," "our" or "we") and other publicly available statements issued or released by us involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance (financial or operating) or achievements to differ from the future results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. Such future results are based upon management's best estimates based upon current conditions and the most recent results of operations. These risks include, but are not limited to, the risks set forth herein and in such other documents filed with the Commission, each of which could adversely affect our business and the accuracy of the forward-looking statements contained herein. Our actual results, performance or achievements may differ materially from those expressed or implied by such forward-looking statements.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
| 99.1 | Press Release | |
| 99.2 | Press Release |
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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: July 7, 2014 | By: | /s/ John R. Kneisel |
| John R. Kneisel Chief Financial Officer | ||
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EXHIBIT 99.1
Simulations Plus
Integrating Science and Software
For Further Information:
Simulations Plus, Inc.
42505 10th Street West
Lancaster, CA 93534-7059
| CONTACT: | |
| Simulations Plus Investor Relations | Hayden IR |
| Ms. Renée Bouché | Mr. Cameron Donahue |
| 661-723-7723 | 651-653-1854 |
| renee@simulations-plus.com | cameron@haydenir.com |
For Immediate Release:
July 3, 2014
Simulations Plus Reports Third Quarter FY2014 Financial Results
Revenues up 20.9%, Net Income up 31.6%
LANCASTER, CA, July 3, 2014 – 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 |
| o | A large renewal order and one study contract slipped from Q2 into Q3 ($300,000) |
| o | 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 |
| o | 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 |
| o | In 3QFY14, $317,000 was capitalized and $235,000 was expensed |
| o | In 3QFY13, $252,000 was capitalized and $206,000 was expensed |
| o | 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 |
| o | 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 |
| o | In 3QFY14, $1,052,000 was capitalized and $751,000 was expensed |
| o | In 3QFY13, $834,000 was capitalized and $634,000 was expensed |
| o | 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 |
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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.
--Tables follow --
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SIMULATIONS PLUS, INC.
CONDENSED STATEMENTS OF OPERATIONS
For the three and nine months ended May 31,
(Unaudited)
| Three months ended | 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 | ||||||||||||||||
| Selling, general, and administrative | 1,204,312 | 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 | 3,323,913 | ||||||||||||
| 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 | – | – | – | – | ||||||||||||
| Miscellanous 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 | 172,155 | ||||||||||||
| Income from continuing operations before | ||||||||||||||||
| provision for income taxes | 2,089,327 | 1,545,748 | 4,225,559 | 4,013,653 | ||||||||||||
| 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 | ||||||||
| Earnings per share | ||||||||||||||||
| Basic | $ | 0.08 | $ | 0.06 | $ | 0.17 | $ | 0.17 | ||||||||
| Diluted | $ | 0.08 | $ | 0.06 | $ | 0.17 | $ | 0.16 | ||||||||
| Weighted-average common shares outstanding | ||||||||||||||||
| Basic | 16,193,976 | 16,024,467 | 16,117,198 | 15,984,819 | ||||||||||||
| Diluted | 16,455,078 | 16,335,608 | 16,361,695 | 16,307,618 | ||||||||||||
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SIMULATIONS PLUS, INC.
CONDENSED BALANCE SHEETS
at May 31, 2014 (Unaudited) and August 31, 2013 (Audited)
| (Unaudited) | (Audited) | |||||||||||
| 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 | ||||||||||||
| Capitalized computer software development costs, | ||||||||||||
| 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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EXHIBIT 99.2
Simulations Plus
Integrating Science and Software
For Further Information:
Simulations Plus, Inc.
42505 10th Street West
Lancaster, CA 93534-7059
661-723-7723
www.simulations-plus.com
| CONTACT: | |
| Simulations Plus Investor Relations | Hayden IR |
| Ms. Renée Bouché | Mr. Cameron Donahue |
| 661-723-7723 | 651-653-1854 |
| renee@simulations-plus.com | cameron@haydenir.com |
For Immediate Release:
July 3, 2014
SIMULATIONS PLUS SETS DATE FOR 3rd QUARTER 2014 earnings release and conference call
Conference Call to be on Tuesday, July 8, at 4:15 PM ET
LANCASTER, CA, July 3, 2014 – Simulations Plus, Inc. (Nasdaq: SLP), a leading provider of software and consulting services for pharmaceutical R&D and environmental toxicology, announced that it expects to file its quarterly report on Form 10-Q for the third quarter of its 2014 fiscal year, ended May 31, 2014, with the U.S. Securities and Exchange Commission on Tuesday, July 8, 2014. Chairman and Chief Executive Officer Walt Woltosz will host a conference call to discuss the Company’s performance on Tuesday, July 8, at 1:15 p.m. PT/4:15 p.m. ET.
The conference call will be webcast live and may be accessed by first 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.
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