EX-99.1 2 simulations_8k-ex9901.htm PRESS RELEASE ISSUED ON JANUARY 9, 2019.

Exhibit 99.1

 

 

For Further Information:

Simulations Plus, Inc.

42505 10th Street West

Lancaster, CA 93534-7059

 

CONTACT:  
Simulations Plus Investor Relations Hayden IR
Ms. Renee Bouche Mr. Cameron Donahue
661-723-7723 651-653-1854
renee@simulations-plus.com cameron@haydenir.com

 

For Immediate Release:

January 9, 2019

 

Simulations Plus Reports First Quarter FY2019 Financial Results

 

First quarter net revenues of $7.5 million reflecting 6.6% year over year growth

Board of Directors announces quarterly dividend of $0.06 per share

 

LANCASTER, CA, January 9, 2019 – 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 first quarter of fiscal year 2019, the period ended November 30, 2018 (1QFY19).

 

1QFY19 highlights compared with 1QFY18:

·Net revenues increased 6.6%, or $467,000, to $7.5 million from $7.1 million
·Gross profit increased slightly and remained at $5.3 million
·Gross profit as a percentage of revenues decreased from 75.5% to 70.8%
·SG&A was $2.7 million, an increase of 12.9%, or $311,000, from $2.4 million
·SG&A as a percentage of revenues increased to 36.1% from 34.1%
·R&D expense increased 46.8% or $169,000, to $530,000 from $361,000
·Income before taxes decreased $495,000, to $2.0 million from $2.5 million
·Net income decreased $180,000, or 10.5%, to $1.5 million from $1.7 million
·Diluted earnings per share decreased $0.01 to $0.09 from $0.10 per share

 

Shawn O’Connor, chief executive officer of Simulations Plus, said: “Strong first quarter revenue growth in addition to key new business closures after quarter end support our outlook for full year revenue growth of 10-15%. We are investing in sales and marketing initiatives and our consulting service organization’s staff to respond to the opportunities we see in the marketplace. These investments impacted our expenses in this quarter but will position us well in quarters ahead to achieve anticipated profitable growth. Certain expenses lines, such as R&D, will remain higher, but expected revenue growth in coming quarters should move us back towards historical profitability levels as expenses as a percent of revenues are more in-line with historical levels.”

 

John Kneisel, chief financial officer of Simulations Plus, added: “During the quarter, we completed our implementation of FASB Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606), a new guidance on Revenue Recognition. ASC 606 had minimal impact on our current revenue, we expect it may have some impact on the timing of revenue recognition and service revenue margins on certain contracts going forward, but we do not anticipate significant changes to our annual historical service margins due to the minimal number of projects for which the standard changed revenue recognition.”

 

 

 

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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 February 1, 2019, to shareholders of record as of January 25, 2019. 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 at 1:15 p.m. PST/4:15 p.m. EST on Wednesday, January 9, 2019. 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 793-421-673. A replay of the webcast will be available at the Investors section of 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 STATEMENTS OF OPERATIONS

For the three months ended November 30,

 

   Unaudited 
   2018   2017 
           
Revenues  $7,535,903   $7,068,782 
Cost of revenues   2,200,371    1,735,608 
Gross margin   5,335,532    5,333,174 
Operating expenses          
Selling, general, and administrative   2,719,151    2,408,514 
Research and development   529,636    360,817 
Total operating expenses   3,248,787    2,769,331 
           
Income from operations   2,086,745    2,563,843 
           
Other income (expense)          
Interest income   3,672    4,310 
Interest expense   (38,188)   (38,470)
Miscellaneous income   –    – 
Gain (loss) from sale of assets   –    – 
Loss on currency exchange   (30,611)   (12,679)
Total other income (expense)   (65,127)   (46,839)
           
Income before provision for income taxes   2,021,618    2,517,004 
Provision for income taxes   (485,671)   (800,999)
Net Income  $1,535,947   $1,716,005 
           
Earnings per share          
Basic  $0.09   $0.10 
Diluted  $0.09   $0.10 
           
Weighted-average common shares outstanding          
Basic   17,421,838    17,282,132 
Diluted   17,997,735    17,871,683 

 

 

 

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SIMULATIONS PLUS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

As of

 

   (Unaudited)   (Audited) 
   November 30,   August 31, 
   2018   2018 
ASSETS          
           
Current assets          
Cash and cash equivalents  $9,352,238   $9,400,701 
Accounts receivable, net of allowance for doubtful accounts of $0   5,287,126    5,514,528 
Revenues in excess of billings   2,259,610    1,985,596 
Prepaid income taxes   –    312,593 
Prepaid expenses and other current assets   502,063    610,439 
Total current assets   17,401,037    17,823,857 
Long-term assets          
Capitalized computer software development costs, net of accumulated amortization of $3,251,875 and $3,019,584   4,549,084    5,152,594 
Property and equipment, net   302,431    335,224 
Intellectual property, net of accumulated amortization of $941,876 and $852,500   5,723,124    5,905,416 
Other intangible assets net of accumulated amortization of $17,416,445 and $17,416,445   3,548,125    3,637,500 
Goodwill   10,387,198    10,387,198 
Other assets   37,227    37,227 
Total assets  $41,948,226   $43,279,016 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
Current liabilities          
Accounts payable  $218,151   $351,605 
Accrued payroll and other expenses   1,218,068    1,152,176 
Income taxes payable   168,220    – 
Current portion -  Contracts payable   2,750,000    2,556,644 
Billings in excess of revenues   271,937    384,603 
Deferred revenue   453,984    381,928 
Total current liabilities   4,808,432    4,826,956 
           
Long-term liabilities          
Deferred income taxes,net   2,922,457    3,195,139 
Payments due under Contracts payable   1,622,484    3,334,296 
Total liabilities   9,325,301    11,356,391 
           
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 17,459,770 and 17,416,445 shares issued and outstanding   7,461    7,417 
Additional paid-in capital   14,055,994    13,453,668 
Retained earnings   18,259,470    18,461,540 
Total shareholders' equity   32,322,925   $31,922,625 
  $271,927    – 
Total liabilities and shareholders' equity  $41,948,226   $43,279,016 

 

 

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