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Simulations Plus Reports Record Second Quarter FY2019 Revenue

Quarterly Revenues Up 15%; Board of Directors Announces Quarterly
Dividend of $0.06 Per Share

LANCASTER, Calif.–(BUSINESS WIRE)–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 second quarter of fiscal year 2019, the period ended
February 28, 2019 (2QFY19).

2QFY19 highlights compared with 2QFY18:

  • Net revenues increased 15%, or $1.1 million, to $8.5 million from $7.4
    million
  • Gross profit was $6.3 million, up $1.0 million, or 19.5%, from $5.2
    million
  • SG&A was $2.8 million, up $470,000, or 20%, from $2.3 million
  • SG&A as a percentage of revenues increased to 33.2% from 31.8%
  • R&D expense increased 49.5%, or $240,000, to $724,000 from $484,000
  • Income before taxes increased 13.0%, or $311,000, to $2.7 million from
    $2.4 million
  • Net income decreased $1.4 million, or 39.6%, to $2.1 million from $3.5
    million

    • This decrease is mainly due to the Company recording in the prior
      year (2QFY18) a $1.5 million one-time adjustment to deferred taxes
      based on the Tax Cuts and Jobs Act passed in the prior fiscal year
  • Diluted earnings per share decreased $0.07, to $0.12 from $0.19 per
    share; without the effect of the tax adjustment, the change would have
    been an increase of $0.01 per share as the prior years’ tax benefit
    effected diluted earnings per share by approximately $0.08 per share

6moFY19 highlights compared with 6moFY18:

  • Net revenues increased 11%, or $1.6 million, to $16.0 million from
    $14.4 million
  • Gross profit was $11.6 million, up $1.0 million, or 9.7%, from $10.6
    million
  • SG&A was $5.5 million, an increase of $782,000, or 16.5%, from $4.7
    million
  • R&D expenditures were $1.3 million, an increase of $409,000, or 48.3%,
    over $845,000
  • Income before taxes decreased 3.8%, or $184,000, to $4.7 million from
    $4.9 million
  • Net income decreased $1.6 million, or 30.0%, to $3.6 million from $5.2
    million

    • This decrease is mainly due to the Company recording in the prior
      year (2QFY18) a $1.5 million one-time adjustment to deferred taxes
      based on the Tax Cuts and Jobs Act in 2018
  • Diluted earnings per share decreased $0.09, to $0.20 from $0.29 per
    share; approximately $0.08 per share of the decrease is associated
    with the prior years’ tax benefit recorded in 2QFY18. Without the
    effect of the tax adjustment, the change would have been a decrease of
    $0.01 per share as the prior years’ tax benefit effected diluted
    earnings per share by approximately $0.08 per share

Shawn O’Connor, chief executive officer of Simulations Plus, said: “As
expected, our revenue growth accelerated in the second quarter, in line
with historical seasonality and benefiting from double-digit growth in
consulting services. This progress reinforced our confidence in our
full-year revenue growth outlook of 10-15%, and this does not yet
benefit from the ongoing investments in sales and marketing initiatives
designed to drive future growth. In particular, we are adding to our
consulting services team in an effort to address the growing demand and
expanding opportunities we see in the marketplace.”

John Kneisel, chief financial officer of Simulations Plus, added:
“Second quarter pretax earnings increased 13% over the prior year. Net
income was down compared to the prior year due nearly entirely to the
non-recurring $1.5 million tax benefit recorded in the prior year, which
boosted the comparable period’s net income.”

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 May 1, 2019, to
shareholders of record as of April 24, 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. PDT/4:15 p.m. EDT on Tuesday, April 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 (415)
930-5321, and entering access code 271-105-468. 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 BALANCE SHEETS
As of February 28, 2019 and 2018
 
(Unaudited) (Audited)
February 28,   August 31,
ASSETS

2019

2018

Current assets
Cash and cash equivalents 9,893,953 $ 9,400,701
Accounts receivable, net of allowance for doubtful accounts of $0 6,227,555 5,514,528
Revenues in excess of billings 2,264,518 1,985,596
Prepaid income taxes 312,593
Prepaid expenses and other current assets   518,512   610,439
Total current assets 18,904,538 17,823,857
Long-term assets
Capitalized computer software development costs,
net of accumulated amortization of $11,708,089 and $11,095,903 4,779,575 5,152,594
Property and equipment, net 302,977 335,224
Intellectual property, net of accumulated amortization of $3,484,168
and $3,019,584
5,490,833 5,905,416
Other intangible assets net of accumulated amortization of
$1,031,250 and $852,500
3,458,750 3,637,500
Goodwill 10,387,198 10,387,198
Other assets   37,227   37,227
Total assets $ 43,361,098 $ 43,279,016
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable 289,762 $ 351,605
Accrued payroll and other expenses 1,135,579 1,152,176
Income taxes payable 106,845
Current portion – Contracts payable 1,750,000 2,556,644
Billings in excess of revenues 958,948 384,603
Deferred revenue   891,650   381,928
Total current liabilities 5,132,784 4,826,956
 
Long-term liabilities
Deferred income taxes,net 2,814,535 3,195,139
Payments due under Contracts payable   1,660,672   3,334,296
Total liabilities 9,607,991 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
17,499,958 and 17,416,445 shares issued and outstanding 7,501 7,417
Additional paid-in capital 14,435,574 13,453,668
Retained earnings   19,310,032   18,461,540
Total shareholders’ equity   33,753,107 $ 31,922,625

 

 

 

Total liabilities and shareholders’ equity $ 43,361,098 $ 43,279,016

 

 
SIMULATIONS PLUS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six months ended February 28, 2019 and 2018
 
    Three months ended   Six months ended
(Unaudited) (Unaudited)

2019

 

2018

2019

 

2018

 
Revenues $ 8,471,720 $ 7,356,714 $ 16,007,623 $ 14,425,496
Cost of revenues   2,207,831     2,115,483     4,406,952     3,851,090  
Gross margin   6,263,889     5,241,231     11,600,671     10,574,406  
Operating expenses
Selling, general, and administrative 2,809,691 2,339,721 5,530,093 4,748,237
Research and development   724,034     484,329     1,253,670     845,146  
Total operating expenses   3,533,725     2,824,050     6,783,763     5,593,383  
 
Income from operations   2,730,164     2,417,181     4,816,908     4,981,023  
 
Other income (expense)
Interest income 5,573 6,180 9,245 10,489
Interest expense (38,188 ) (38,188 ) (76,376 ) (76,658 )
Miscellanous income
Gain (loss) from sale of assets
Loss on currency exchange   (1,916 )   (585 )   (32,526 )   (13,262 )
Total other income (expense)   (34,531 )   (32,593 )   (99,657 )   (79,431 )
 
Income before provision for income taxes 2,695,633 2,384,588 4,717,251 4,901,592
Provision for income taxes   (596,184 )   1,090,198     (1,081,855 )   289,198  
Net Income $ 2,099,449   $ 3,474,786   $ 3,635,396   $ 5,190,790  
 
Earnings per share
Basic $ 0.12 $ 0.20 $ 0.21 $ 0.30
Diluted $ 0.12 $ 0.19 $ 0.20 $ 0.29
 
Weighted-average common shares outstanding
Basic 17,476,603 17,302,763 17,449,069 17,292,391
Diluted 18,002,741 17,855,351 17,984,078 17,843,345
 

Contacts

Simulations Plus Investor Relations
Ms.
Renee Bouche, 661-723-7723
[email protected]

Hayden IR
Mr. Cameron Donahue
651-653-1854
[email protected]

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