Simulations Plus Reports First Quarter FY2012 Financial Results

Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of simulation and modeling software for pharmaceutical discovery and development, today reported financial results for its first quarter of fiscal year 2012 ended November 30, 2011 (1QFY12). Results below are reported for continuing operations (without the discontinued operations of the Company’s former Words+ subsidiary), except as noted.

1QFY12 highlights compared with 1QFY11:
  • Net sales increased 9.6% to first-quarter record $2.248 million from $2.050 million
  • Gross profit increased 11.7% to $1.896 million from $1.697 million
  • SG&A increased 2.0% to $0.700 million from $0.686 million, but decreased as a percent of revenues to 31.1% from 33.5%
  • R&D expenditures increased 14.9% to $454,000 from $395,000
  • Income before taxes increased 27.6% to $1.064 million from $0.834 million
  • Net income from continuing operations increased 30.9% to $755,000 from $577,000, and including the proceeds from the sale of Words+, partially offset by the discontinued operations of Words+, net income increased 71.1% to $971,000 from $567,000
  • Total diluted earnings per share, including discontinued operations, increased 100% to $0.06 from $0.03
  • Diluted earnings per share for only the continuing operations up 67% to $0.05 from $0.03

Ms. Momoko Beran, chief financial officer of Simulations Plus, said: “This was a very busy quarter, with increased Selling, General and Administrative expenses related to the attempted acquisition of assets of Entelos in bankruptcy court as well as the sale of our former Words+ subsidiary. Despite these nonrecurring expenses, we’re pleased to report these results that show continued strong top- and bottom-line performance, including record first-quarter revenue and a 30.9% increase in net income. Cash at the end of 1QFY12 was up 42.7% to $12.662 million compared to $8.873 million at the end of 1QFY11, and up 26.1% from $10.037 million at the beginning of the quarter. Shareholders’ equity increased 20.9% to $15.088 million compared to $12.482 million in 1QFY11.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “Simulations Plus continues to demonstrate sustained strong growth in sales and even stronger sustained growth in net income. The increased sales and net income from our continuing operations for this new record first quarter are enhanced even more with the small profit from the sale of our former Words+ subsidiary. Accomplishing that sale was a major effort over the past half year that leaves us now with a focused business and without the losses that occurred all too often in the subsidiary that reduced the overall financial performance of the company. It’s worthy to note that as we compare this first quarter with last year, we had about $67,000 in grant revenues last year that we did not have this year, so comparing software and consulting revenue growth alone increased by about 13.4% rather than the 9.6% shown above. Our cash position is stronger than ever, and the board of directors is evaluating the potential effects of either another share repurchase program, an ongoing dividend with an attractive yield, or some combination of the two that could be accomplished without using all of our positive cash flow so that net cash would not decrease. Of course, there can be no assurances that the board will approve a share repurchase or dividend, but the board is committed to creating shareholder value.”

Woltosz continued: “We continue to evaluate acquisition opportunities as we can identify any that would fit our business model. The difficulty we’ve had in finding appropriate acquisition opportunities, i.e., those that would not require an inordinate amount of time and money to realize a reasonable return on investment, is a matter of record. We continue to grow organically and to pursue our aggressive marketing and sales program, which has yielded the growth that can be seen in this report. We are also making progress on our NCE (new chemical entity) project for malaria, with compounds in synthesis, and we expect to have samples ready for testing in the coming quarter.”

The Company has announced an investor conference call that will be webcast live at 1:15 PM PST/4:15 PM EST today, Wednesday, January 18, 2012, which may be accessed by first registering at the following website: https://www2.gotomeeting.com/register/267646562. 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 (314) 627-1519, and enter access code 367-620-098.

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. We also provide a productivity tool called Abbreviate! for PCs as well as an educational software series for science students in middle and high schools known as FutureLab . 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.
Simulations Plus, Inc. Condensed Balance Sheets
At November 30, 2011 (Unaudited) and August 31, 2011 (Audited)
 
ASSETS
    November 30,     August 31,

2011

2011
Current assets
Cash and cash equivalents $ 12,662,240 $ 10,037,891
Income tax refund receivable 259,434 259,434
Accounts receivable, net of allowance for doubtful accounts of $0 1,203,863 1,170,861
Contracts receivable 219,683 185,816
Prepaid expenses and other current assets 106,783 123,954
Deferred income taxes 134,196 302,076
Current assets of discontinued operations   -   1,194,795
Total current assets 14,586,199 13,274,827
Long-term assets

Capitalized computer software development costs, net of accumulated amortization of $4,573,869 and $4,416,669
2,233,674 2,188,982
Property and equipment, net 120,491 43,010
Customer relationships, net of accumulated amortization of $127,169 and $126,172 873 1,870
Other assets 18,445 18,445
Non-current assets of discontinued operations   -   340,204
Total assets $ 16,959,682 $ 15,867,338
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 314,424 $ 176,136
Accrued payroll and other expenses 303,425 276,327
Accrued bonuses to officer 44,950 -
Accrued income taxes 328,900 168,897
Deferred revenue 108,482 141,191
Current liabilities of discontinued operations   -   378,567
Total current liabilities 1,100,181 1,141,118
 
Long-term liabilities
Deferred income taxes 771,726 656,047
Non-current liabilities of discontinued operations   -   33,558
Total liabilities 1,871,907 1,830,723
 
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
15,572,943 and 15,572,943 shares issued and outstanding 4,044 4,044
Additional paid-in capital 4,247,789 4,167,650
Retained earnings   10,835,942   9,864,921
 
Total shareholders' equity   15,087,775   14,036,615
 
Total liabilities and shareholders' equity $ 16,959,682 $ 15,867,338
 
Simulations Plus, Inc.
Condensed Statements of Operations
For the three months ended November 30,
(Unaudited)
 
   

2011
   

2010
 
Net sales $ 2,247,956 $ 2,050,434
Cost of sales   352,370     353,656  
Gross profit   1,895,586     1,696,778  
Operating expenses
Selling, general, and administrative 700,113 686,051
Research and development   251,935     200,754  
Total operating expenses   952,048     886,805  
Income from operations   943,538     809,973  
 
Other income (expense)
Interest income 21,873 24,004
Interest expense (3 ) (43 )
Gain on currency exchange   98,386     -  
Total other income (expense)   120,256     23,961  

Income from continuing operations before provision for income taxes
1,063,794 833,934
Provision for income taxes   (308,695 )   (257,150 )
Income from continuing operations   755,099     576,784  
 
Discontinued operations:
Loss from discontinued operations, net of tax (249,898 ) (9,291 )
Gain on sale of Words+, net of tax   465,820     -  
Results of discontinued operations   215,922     (9,291 )
Net Income $ 971,021   $ 567,493  
 
Basic earnings per share:
Continuing operations $ 0.05 $ 0.04
Discontinued operations   0.01     -  
Net basic earning per share $ 0.06   $ 0.04  
Diluted earnings per share
Continuing operations $ 0.05 $ 0.03
Discontinued operations   0.01     -  
Net basic earning per share $ 0.06   $ 0.03  

Copyright Business Wire 2010

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