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Simulations Plus Reports Record Second Quarter FY2018 Revenue

April 9, 2018 4:01 PM

Board of Directors Announces Quarterly Dividend of $0.06 Per Share

LANCASTER, Calif.--(BUSINESS WIRE)-- Simulations Plus, Inc. (NASDAQ: SLP), the premier provider of simulation and modeling software and consulting services for all stages of pharmaceutical discovery and development from the earliest discovery through all phases of clinical trials, today reported financial results for its second quarter of fiscal year 2018, the period ended February 28, 2018 (2QFY18).

2QFY18 highlights compared with 2QFY17:

6MoFY18 highlights compared with 6MoFY17:

John Kneisel, chief financial officer of Simulations Plus, said, “We saw another strong quarterly revenue growth in our core divisions in Lancaster and Buffalo coupled with the new revenues and profits from DILIsym Services acquired in the last quarter of our prior fiscal year. Even with the addition of a higher percentage of non-software sales we have seen increases in operating income margins. The Company produced a 28.9% growth in revenues and a 34.7% growth in income from operations.”

Kneisel continued: “This quarter we completed our assessment of deferred taxes based on the new tax rates enacted under the Tax Cuts and Jobs Act of 2017 passed this last December. Based on the assessment, the Company has posted a tax benefit in the amount of approximately $1.5 million in the second fiscal quarter of 2018, the result of estimating future deferred liabilities at the lower tax rates under the newly enacted tax provisions. The Company will continue to benefit from the lower rate structure under the new Federal tax law allowing for future investment in staffing for development and future growth initiatives.”

“Inclusive of this $1.5 million non-recurring and non-taxable benefit, which had an $0.08 per diluted share effect, we recorded net income of $3.5 million for the second fiscal quarter and $5.2 million for the first six months of fiscal year 2018, resulting in diluted earnings per share of $0.19 and $0.29 for the second fiscal quarter and six months, respectively.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “Simulations Plus is benefitting from a strategic transformation that began in 2011 when we divested a business which didn’t fit with the pharmaceutical software business, and sometimes represented a drag on earnings. Subsequently, we have acquired two complementary businesses that are accretive to both revenues and earnings, resulting in three consistently profitable divisions selling essentially to the same customers. Today, we are a diversified provider of sophisticated services to a growing pharmaceutical industry. We have the ability to leverage a modest, fixed cost structure as we grow, which has been seen to drive our bottom line faster than the top line. As a result, we have increased our dividend from $0.05 per share per quarter last summer to $0.06 per share per quarter today. We expect the positive impact of the new tax law to allow us to further benefit our customers and shareholders through continued expansion of our products and services.”

Quarterly Dividend Declared

The Company’s Board of Directors declared a cash dividend of $0.06 per share of the Company’s common stock payable on May 2, 2018 to shareholders of record as of April 25, 2018. 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. PDT/4:15 p.m. EDT on Monday, April 9, 2018. All interested parties are invited to join the call by registering here. On registering, you will receive a confirmation e-mail with 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 (562) 247-8422, and enter access code 553-540-204. A replay will be available on 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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CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited) (Audited)
February 28, August 31,
ASSETS

2018

2017

Current assets
Cash and cash equivalents $ 6,920,792 $ 6,215,718
Accounts receivable, net of allowance for doubtful accounts of $0 6,003,051 4,048,725
Revenues in excess of billings 1,837,952 1,481,082
Prepaid income taxes 136,312 462,443
Prepaid expenses and other current assets 436,652 459,902
Total current assets 15,334,759 12,667,870
Long-term assets
Capitalized computer software development costs, net of accumulated amortization of $10,416,501 and $9,795,469
4,834,058 4,307,600
Property and equipment, net 288,708 291,135
Intellectual property, net of accumulated amortization of $2,557,501 and $2,095,417 6,367,499 6,829,583
Other intangible assets net of accumulated amortization of $673,750 and $495,000 3,816,250 3,995,000
Goodwill 10,387,198 10,387,198
Other assets 37,227 34,082
Total assets $ 41,065,699 $ 38,512,468
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 164,857 $ 240,892
Accrued payroll and other expenses 938,100 983,293
Current portion - Contracts payable 2,910,000 247,328
Billings in excess of revenues 452,365 216,958
Deferred revenue 1,056,819 353,962
Total current liabilities 5,522,141 2,042,433
Long-term liabilities
Deferred income taxes,net 3,204,373 4,926,960
Payments due under Contracts payable 2,904,564 5,738,188
Total liabilities 11,631,078 12,707,581
Commitments and contingencies
Shareholders' equity (note 6)
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
17,287,652 and 17,277,604 shares issued and outstanding 7,326 7,278
Additional paid-in capital 12,624,190 12,109,141
Retained earnings 16,803,105 13,688,468
Total shareholders' equity 29,434,621 $ 25,804,887

Total liabilities and shareholders' equity $ 41,065,699 $ 38,512,468

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three months ended Six months ended
(Unaudited)

2018

2017

2018

2017

Revenues $ 7,356,715 $ 5,705,590 $ 14,425,496 $ 11,123,525
Cost of revenues 2,115,482 1,553,952 3,851,090 2,889,935
Gross margin 5,241,233 4,151,638 10,574,406 8,233,590
Operating expenses
Selling, general, and administrative 2,339,721 1,948,136 4,748,237 3,811,692
Research and development 484,330 408,536 845,146 698,836
Total operating expenses 2,824,051 2,356,672 5,593,383 4,510,528
Income from operations 2,417,182 1,794,966 4,981,023 3,723,062
Other income (expense)
Interest income 6,179 4,429 10,489 8,886
Interest expense (38,188 ) - (76,658 ) -

Miscellaneous income

- - - -
Gain (loss) from sale of assets - - - -

Gain (loss) on currency exchange

(584 ) (14,441 ) (13,262 ) 20,486
Total other income (expense) (32,593 ) (10,012 ) (79,431 ) 29,372
Income before provision for income taxes 2,384,589 1,784,954 4,901,592 3,752,434
Benefit (Provision) for income taxes 1,090,198 (589,194 ) 289,198 (1,195,109 )
Net Income $ 3,474,787 $ 1,195,760 $ 5,190,790 $ 2,557,325
Earnings per share
Basic $ 0.20 $ 0.07 $ 0.30 $ 0.15
Diluted $ 0.19 $ 0.07 $ 0.29 $ 0.15
Weighted-average common shares outstanding
Basic 17,302,763 17,233,017 17,292,391 17,229,586
Diluted 17,855,351 17,438,508 17,843,345 17,421,457

Simulations Plus Investor Relations

Ms. Renee Bouche

661-723-7723

[email protected]

or

Hayden IR

Mr. Cameron Donahue

651-653-1854

[email protected]

Source: Simulations Plus, Inc.

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