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Simulations Plus Reports FY2019 and Fourth Quarter FY2019 Financial Results

November 13, 2019 GMT

LANCASTER, Calif.--(BUSINESS WIRE)--Nov 13, 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 2019 fiscal year (FY19) and fourth quarter (4Q19) ended August 31, 2019.

Full Year FY19 highlights compared with Full Year FY18:

4QFY19 highlights compared with 4QFY18:

Shawn O’Connor, chief executive officer of Simulations Plus, said: “We delivered 20% fourth quarter growth, a strong end to a solid year of growth for Simulations Plus as full-year revenue grew 14.5%. This progress is due to targeted investments in our sales and marketing infrastructure, which enabled us to achieve an increased revenue growth rate in excess of historical levels while maintaining excellent gross margins and overall profitability. We enter our fiscal year 2020 with strong market momentum, high backlogs and successful progress across our key objectives to extend our sales and marketing resources and capacity to deliver our strategic consulting services efficiently to our clients.”

John Kneisel, chief financial officer of Simulations Plus, added: “Continued investment in our sales and marketing and supporting teams’ infrastructure and higher R&D spending led to increases in our operating expenses. We believe these investments will help us continue to accelerate our revenue growth. Of special note, in the fourth quarter we benefited from tax deductions from stock compensation expense as employees took advantage of the increased value of their options. Overall, we continue to generate solid profitability and free cash flow, even after paying our regular quarterly dividend.”

Investor Conference Call

The Company invites all interested persons to attend its conference call at 4:15 p.m. Eastern Time on November 13, 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 588-454-748. 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/toxicology 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 research by major pharmaceutical, biotechnology, chemical, consumer goods companies, and regulatory agencies worldwide. Our innovations in integrating new and existing science in medicinal chemistry, computational chemistry, artificial intelligence, pharmaceutical science, biology, and physiology into our software have made us the leading software provider for molecular property prediction from structure and 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. 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 and filed with the U.S. Securities and Exchange Commission.

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Simulations Plus, Inc.

Condensed Consolidated Balance Sheets

August 31,

August 31,

ASSETS

 

2019

 

2018

Current assets

Cash and cash equivalents

$

11,435,499

$

9,400,701

Accounts receivable, net of allowance for doubtful accounts of $0

 

5,026,558

 

5,514,528

Revenues in excess of billings

 

3,233,659

 

1,985,596

Prepaid income taxes

 

754,610

 

312,593

Prepaid expenses and other current assets

 

704,316

 

610,439

Total current assets

 

21,154,142

 

17,823,857

Long-term assets

Capitalized computer software development costs,

net of accumulated amortization of $12,356,055 and $11,095,903

 

4,959,736

 

5,152,594

Property and equipment, net

 

341,145

 

335,224

Intellectual property, net of accumulated amortization of $3,716,460 and $3,019,584

 

5,026,249

 

5,905,416

Other intangible assets net of accumulated amortization of $1,120,625 and $852,500

 

3,280,000

 

3,637,500

Goodwill

 

10,387,198

 

10,387,198

Other assets

 

37,227

 

37,227

Total assets

$

45,196,697

$

43,279,016

 

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

$

204,075

$

351,605

Accrued payroll and other expenses

 

1,639,038

 

1,152,176

Current portion - Contracts payable

 

1,761,028

 

2,556,644

Billings in excess of revenues

 

798,549

 

384,603

Deferred revenue

 

380,787

 

381,928

Total current liabilities

 

4,783,477

 

4,826,956

 

Long-term liabilities

Deferred income taxes, net

 

2,731,616

 

3,195,139

Payments due under Contracts payable

 

-

 

3,334,296

Total liabilities

 

7,515,093

 

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

17,591,834 and 17,416,445 shares issued and outstanding

 

7,595

 

7,417

Additional paid-in capital

 

15,319,474

 

13,453,668

Retained earnings

 

22,354,535

 

18,461,540

Total shareholders' equity

$

37,681,604

$

31,922,625

 

Total liabilities and shareholders' equity

$

45,196,697

$

43,279,016

Simulations Plus, Inc.

Condensed Consolidated Statements of Operations

Three months ended August 31,

Year ended August 31,

2019

2018

2019

2018

(unaudited)

(unaudited)

Revenues

$

8,025,895

$

6,687,959

 

$

33,970,440

 

$

29,666,524

 

Cost of revenues

 

2,290,813

 

2,120,165

 

 

9,025,704

 

 

7,994,228

 

Gross margin

 

5,735,082

 

4,567,794

 

 

24,944,736

 

 

21,672,296

 

Operating expenses

Selling, general, and administrative

 

3,182,238

 

2,231,446

 

 

11,796,027

 

 

9,583,852

 

Research and development

 

603,054

 

437,153

 

 

2,499,980

 

 

1,790,656

 

Total operating expenses

 

3,785,292

 

2,668,599

 

 

14,296,007

 

 

11,374,508

 

 

Income from operations

 

1,949,790

 

1,899,195

 

 

10,648,729

 

 

10,297,788

 

 

Other income (expense)

Interest income

 

13,225

 

8,808

 

 

33,522

 

 

27,122

 

Interest expense

 

(38,188

)

 

(109,078

)

 

(153,034

)

(Loss) income on currency exchange

 

23,769

 

(29,115

)

 

(16,697

)

 

(32,934

)

Total other income (expense)

 

36,994

 

(58,495

)

 

(92,253

)

 

(158,846

)

 

 

 

 

Income before provision for income taxes

 

1,986,784

 

1,840,700

 

 

10,556,476

 

 

10,138,942

 

(Provision) benefit for income taxes

 

72,443

 

(502,714

)

 

(1,973,147

)

 

(1,204,130

)

Net Income

$

2,059,227

$

1,337,986

 

$

8,583,329

 

$

8,934,812

 

 

Earnings per share

Basic

$

0.12

$

0.08

 

$

0.49

 

$

0.52

 

Diluted

$

0.11

$

0.08

 

$

0.48

 

$

0.50

 

 

Weighted-average common shares outstanding

Basic

 

17,549,636

 

17,265,976

 

 

17,492,258

 

 

17,328,707

 

Diluted

 

18,265,585

 

17,733,044

 

 

18,057,431

 

 

17,860,392

 

Simulations Plus, Inc.

Condensed Consolidated Statements of Cash Flows

 

 

Year ended August 31,

 

2019

 

 

2018

 

Cash flows from operating activities

Net income

$

8,583,329

 

$

8,934,812

 

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization

 

2,750,245

 

 

2,721,304

 

Change in value of contingent consideration

 

109,060

 

 

152,752

 

Stock-based compensation

 

1,077,837

 

 

709,083

 

Deferred income taxes

 

(299,098

)

 

(1,731,821

)

(Increase) decrease in

Accounts receivable

 

487,970

 

 

(1,465,803

)

Revenues in excess of billings

 

(1,248,063

)

 

(504,514

)

Prepaid income taxes

 

(452,517

)

 

149,850

 

Prepaid expenses and other assets

 

(93,877

)

 

(153,682

)

Increase (decrease) in

Accounts payable

 

(147,521

)

 

110,713

 

Accrued payroll and other expenses

 

436,862

 

 

168,883

 

Billings in excess of revenues

 

413,946

 

 

167,645

 

Accrued income taxes

 

0

 

 

-

 

Deferred revenue

 

(29,747

)

 

27,966

 

Net cash provided by operating activities

 

11,638,420

 

 

9,287,188

 

 

Cash flows used in investing activities

Purchases of property and equipment

 

(137,745

)

 

(183,291

)

Purchases of intellectual property

 

(50,000

)

 

-

 

Capitalized computer software development costs

 

(1,767,996

)

 

(2,145,429

)

Net cash used in investing activities

 

(1,955,741

)

 

(2,328,720

)

 

Cash flows used in financing activities

Payment of dividends

 

(4,197,055

)

 

(4,161,740

)

Payments on Contracts Payable

 

(4,238,973

)

 

(247,328

)

Proceeds from the exercise of stock options

 

788,147

 

 

635,583

 

Net cash used in financing activities

 

(7,647,881

)

 

(3,773,485

)

 

Net increase (decrease) in cash and cash equivalents

 

1,995,304

 

 

3,184,983

 

Cash and cash equivalents, beginning of year

 

9,400,701

 

 

6,215,718

 

Cash and cash equivalents, end of period

$

11,435,499

 

$

9,400,701

 

 

Supplemental disclosures of cash flow information

Income taxes paid

$

2,673,475.04

 

$

2,712,988

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20191113005876/en/

CONTACT: Simulations Plus Investor Relations

Ms. Renee Bouche

661-723-7723

renee@simulations-plus.com Hayden IR

Mr. Cameron Donahue

651-653-1854

cameron@haydenir.com

KEYWORD: CALIFORNIA UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: TECHNOLOGY RESEARCH CONSULTING PROFESSIONAL SERVICES SOFTWARE BIOTECHNOLOGY HEALTH PHARMACEUTICAL SCIENCE

SOURCE: Simulations Plus, Inc.

Copyright Business Wire 2019.

PUB: 11/13/2019 04:05 PM/DISC: 11/13/2019 04:05 PM

http://www.businesswire.com/news/home/20191113005876/en