Board of Directors Announces Quarterly
Dividend of $0.06 Per Share
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:
- Revenues were $7.4 million, up $1.7
million, or 28.9%, compared to $5.7 million in 2QFY17
- 57% of the increase is from DILIsym
Services, acquired on June 1, 2017
- Gross profit was $5.2 million, up $1.1
million, or 26.2%, compared to $4.2 million in 2QFY17
- 48% of the increase is from DILIsym
Services, acquired on June 1, 2017
- Gross margin was 71.2%, down slightly
from 72.8% in 2Q17, because more of the new revenues from DILIsym
are from consulting rather than software
- SG&A expenses were $2.3 million, up
$0.4 million, or 20.1%, compared to $1.9 million in 2QFY17
- Income from operations was $2.4
million, up $0.6 million, or 34.7%, compared to $1.8 million in
2QFY17
- 31% of this operating income increase
is from DILIsym Services, acquired on June 1, 2017
- The Company recorded a benefit for
income taxes of $1.1 million in 2QFY18 compared to $589,000 of
income tax expense in 2QFY17, due to the effects of a $1.5 million
one-time adjustment to deferred taxes based on the new Federal tax
law and the lower blended Federal tax rates for the 2nd quarter of
this fiscal year
- Inclusive of the $1.5 million
adjustment, net income was $3.5 million, up $2.3 million, or
190.6%, compared to $1.2 million in 2QFY17; without the adjustment,
income would have been $2.0 million for the quarter, up $0.8
million or 65%
- Inclusive of the tax benefit, diluted
earnings per share increased $0.13 to $0.19 from $0.07; the tax
adjustment accounted for $0.08 of the increase in quarterly diluted
earnings per share
6MoFY18 highlights compared with 6MoFY17:
- Revenues were $14.4 million, up $3.3
million, or 29.7%, compared to $11.1 million for 6MoFY17
- 62% of the increase is from DILIsym
Services, acquired on June 1, 2017
- Gross profit was $10.6 million, up
$2.34 million, or 28.4%, compared to $8.2 million for 6MoFY17
- 56% of the increase is from DILIsym
Services, acquired on June 1, 2017
- Gross margin was 73.3%, down slightly
from 74.0% in 2Q17, because more of the new revenues from DILIsym
are from consulting rather than software
- SG&A expenses were $4.7 million, up
$0.94 million, or 24.6%, compared to $3.8 million for 6MoFY17
- Income from operations was $5 million,
up $1.26 million, or 33.8%, compared to $3.7 million for 6MoFY17
- 48% of this operating income increase
is from DILIsym Services, acquired on June 1, 2017
- The non-recurring benefit for income
taxes for the six-month period was $289,000, compared to $1.2
million of income tax expense in 6MoFY17, due to the adjustment
mentioned above and the lower blended Federal rates for the second
quarter of this fiscal year.
- Inclusive of the tax benefit, net
income was $5.2 million, up $2.63 million, or 103.0%, compared to
$2.6 million for 6MoFY17; without the adjustment, income would have
been $3.7 million for the quarter, up $1.1 million or 44%
- Inclusive of the tax benefit, diluted
earnings per share increased $0.14 to $0.29 from $0.15, the tax
adjustment accounted for $0.08 of the increase in diluted earnings
per share
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
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version on businesswire.com: https://www.businesswire.com/news/home/20180409006319/en/
Simulations Plus Investor
RelationsMs. Renee
Bouche661-723-7723renee@simulations-plus.comorHayden IRMr. Cameron
Donahue651-653-1854cameron@haydenir.com
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