LANCASTER, Calif.--(BUSINESS WIRE)--Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of simulation and modeling software for pharmaceutical discovery and development, today reported financial results for its second quarter of fiscal year 2012 ended February 29, 2012 (2QFY12). Results below are reported for continuing operations (without the discontinued operations of the Company’s former Words+ subsidiary), except as noted.
2QFY12 highlights compared with 2QFY11:
- Net sales increased 6.4% to new record $2.789 million from $2.622 million
- Gross profit increased 8.3% to $2.393 million from $2.209 million
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SG&A increased 43.7% to $0.956 million from $0.666 million
- Final payment to our M&A consultants for the sale of Words+
- Increased costs for health, dental, liability, and workers’ compensation insurance
- Increased investor relations costs
- Expanded staff, as well as increased salaries and bonuses to existing staff
- All facility rent and related expenses charged to Simulations Plus SG&A after sale of Words+
- As a percent of revenues, SG&A increased to 34.3% from 25.4%
- R&D expense increased 13.1% to $265,000 from $234,000
- Income before taxes decreased 5.9% to $1.260 million from $1.338 million
- Net income from continuing operations decreased 3.7% to $839,000 from $871,000
- Diluted earnings per share were equal to 2QFY11 at $0.05
- Cash increased 51.2% to $13.241 million from $8.759 million
- Shareholders’ equity increased 9.9% to $15.425 million from $14.037 million
For the first six months of fiscal year 2012 (6moFY12) compared to the first six months of FY2011 (6moFY11):
- Net sales increased 7.8% to a new midyear record $5.037 million from $4.672 million
- Gross profit increased 9.8% to $4.288 million from $3.906 million
- SG&A increased 22.5% to $1.656 million from $1.352 million for the reasons cited above
- As a percent of revenues, SG&A increased to 32.9% from 28.9%
- R&D expenditures increased 18.8% to $517,000 from $435,000
- Income before taxes increased 7.0% to $2.323 million from $2.172 million
- Net income from continuing operations increased 10.4% to $1.594 million from $1.444 million
- Net income including discontinued operations increased 22.7% to $1.810 million from $1.475 million
- Total diluted earnings per share increased 25.5% to $0.11 from $0.09
Ms. Momoko Beran, chief financial officer of Simulations Plus, said: “Nonrecurring charges and other elements of the increased SG&A had a significant impact on gross profit and pretax earnings for the second quarter. SG&A increases over last year’s second quarter included a one-time charge for our M&A consultants with respect to the sale of our former Words+ subsidiary, increases in overhead staff and salaries, increased marketing and sales expenses, increased year-end bonuses, and the fact that we now accrue all building lease and facility-related expenses to SG&A, which includes the half that had previously been paid by Words+. The income we receive from Words+ for their smaller (now 20%) portion of the building and related costs is not included in SG&A, but is reported as Other Income and so does not offset SG&A. We expect that SG&A will be somewhat higher going forward by approximately $130,000 per quarter. In spite of this increase in SG&A, our earnings per share remained at $0.05 for the second quarter, and earnings per share for the first six months increased to $0.11 from $0.09. Cash at the end of the second quarter was up 51.2% from 2QFY11. Shortly after the end of the quarter we paid our first ongoing quarterly cash dividend of $0.05 per share per quarter, totaling just under $791,000. After paying out the dividend, cash as of yesterday was back up to $13.408 million.”
Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “Actual sales of software licenses and consulting services increased more than the 6.4% top-line revenue increase would indicate, because last year we had grant revenue of $65,000 during the second quarter, while this year we had none. Revenues from software licenses during 2QFY12 increased $256,000, or 10.7%, offsetting the $65,000 reduction in grant income as well as adding new business. For the first 6 months, software licenses increased $512,000, or 12.1%.”
The Company has announced an investor conference call that will be webcast live at 1:15 PDT/4:15 PM EDT today, Tuesday, April 10, 2012, which may be accessed by first registering at the following website: https://www2.gotomeeting.com/register/125724146. 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 (914) 339-0024, and enter access code 323-956-377.
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 U.S. Securities and Exchange Commission.
| Simulations Plus, Inc. Condensed Balance Sheets | ||||||||
| At February 29, 2012 (Unaudited) and August 31, 2011 (Audited) | ||||||||
| ASSETS | ||||||||
| February 29, | August 31, | |||||||
|
2012 |
2011 |
|||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 13,240,930 | $ | 10,037,891 | ||||
| Income tax refund receivable | 259,434 | 259,434 | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $0 | 2,175,756 | 1,170,861 | ||||||
| Contracts receivable | 130,827 | 185,816 | ||||||
| Prepaid expenses and other current assets | 140,433 | 123,954 | ||||||
| Deferred income taxes | 211,393 | 302,076 | ||||||
| Current assets of discontinued operations | - | 1,194,795 | ||||||
| Total current assets | 16,158,773 | 13,274,827 | ||||||
| Long-term assets | ||||||||
| Capitalized computer software development costs, | ||||||||
| net of accumulated amortization of $4,720,005 and $4,416,669 | 2,372,145 | 2,188,982 | ||||||
| Property and equipment, net (note 3) | 113,090 | 43,010 | ||||||
| Intellectual property, net (note 4) | 75,000 | - | ||||||
| Customer relationships, net of accumulated amortization of $127,793 and $126,172 | 249 | 1,870 | ||||||
| Other assets | 18,445 | 18,445 | ||||||
| Non-current assets of discontinued operations | - | 340,204 | ||||||
| Total assets | $ | 18,737,702 | $ | 15,867,338 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 387,848 | $ | 176,136 | ||||
| Dividends payable | 790,692 | - | ||||||
| Accrued payroll and other expenses | 294,071 | 276,327 | ||||||
| Accrued bonuses to officer | 60,000 | - | ||||||
| Accrued income taxes | 859,834 | 168,897 | ||||||
| Deferred revenue | 180,932 | 141,191 | ||||||
| Current liabilities of discontinued operations | - | 378,567 | ||||||
| Total current liabilities | 2,573,377 | 1,141,118 | ||||||
| Long-term liabilities | ||||||||
| Deferred income taxes | 738,974 | 656,047 | ||||||
| Non-current liabilities of discontinued operations | - | 33,558 | ||||||
| Total liabilities | 3,312,351 | 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 | ||||||||
| 15,875,594 and 15,572,943 shares issued and outstanding | 4,347 | 4,044 | ||||||
| Additional paid-in capital | 4,537,177 | 4,167,650 | ||||||
| Retained earnings | 10,883,827 | 9,864,921 | ||||||
| Total shareholders' equity | 15,425,351 | 14,036,615 | ||||||
| Total liabilities and shareholders' equity | $ | 18,737,702 | $ | 15,867,338 | ||||
| Simulations Plus, Inc. | |||||||||||||||||||
| Condensed Statements of Operations | |||||||||||||||||||
| For the three and six months ended February 29, | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three months ended | Six months ended | ||||||||||||||||||
|
2012 |
2011 |
2012 |
2011 |
||||||||||||||||
| Net sales | $ | 2,789,226 | $ | 2,621,686 | $ | 5,037,182 | $ | 4,672,120 | |||||||||||
| Cost of sales | 396,566 | 412,778 | 748,936 | 766,434 | |||||||||||||||
| Gross profit | 2,392,660 | 2,208,908 | 4,288,246 | 3,905,686 | |||||||||||||||
| Operating expenses | |||||||||||||||||||
| Selling, general, and administrative | 956,325 | 665,641 | 1,656,438 | 1,351,692 | |||||||||||||||
| Research and development | 264,581 | 233,894 | 516,516 | 434,648 | |||||||||||||||
| Total operating expenses | 1,220,906 | 899,535 | 2,172,954 | 1,786,340 | |||||||||||||||
| Income from operations | 1,171,754 | 1,309,373 | 2,115,292 | 2,119,346 | |||||||||||||||
| Other income (expense) | |||||||||||||||||||
| Interest income | 25,083 | 20,317 | 46,956 | 44,321 | |||||||||||||||
| Interest expense | - | - | (3 | ) | (43 | ) | |||||||||||||
| Miscellaneous income | 22,656 | - | 22,656 | - | |||||||||||||||
| Gain on currency exchange | 40,502 | 8,341 | 138,888 | 8,341 | |||||||||||||||
| Gain (loss) from sale of assets | (433 | ) | 240 | (433 | ) | 240 | |||||||||||||
| Total other income (expense) | 87,808 | 28,898 | 208,064 | 52,859 | |||||||||||||||
| Income from continuing operations before provision for income taxes | 1,259,562 | 1,338,271 | 2,323,356 | 2,172,205 | |||||||||||||||
| Provision for income taxes | (420,985 | ) | (467,324 | ) | (729,680 | ) | (728,340 | ) | |||||||||||
| Income from continuing operations | 838,577 | 870,947 | 1,593,676 | 1,443,865 | |||||||||||||||
| Discontinued operations: | |||||||||||||||||||
| Gain (loss) from discontinued operations, net of tax | - | 36,533 | (249,898 | ) | 31,108 | ||||||||||||||
| Gain on sale of Words+, net of tax | - | - | 465,820 | - | |||||||||||||||
| Results of discontinued operations | - | 36,533 | 215,922 | 31,108 | |||||||||||||||
| Net Income | $ | 838,577 | $ | 907,480 | $ | 1,809,598 | $ | 1,474,973 | |||||||||||
| Basic earnings per share: | |||||||||||||||||||
| Continuing operations | $ | 0.05 | $ | 0.06 | $ | 0.10 | $ | 0.09 | |||||||||||
| Discontinued operations | - | - | 0.01 | - | |||||||||||||||
| Net basic earning per share | $ | 0.05 | $ | 0.06 | $ | 0.11 | $ | 0.09 | |||||||||||
| Diluted earnings per share | |||||||||||||||||||
| Continuing operations | $ | 0.05 | $ | 0.05 | $ | 0.10 | $ | 0.09 | |||||||||||
| Discontinued operations | - | - | 0.01 | - | |||||||||||||||
| Net basic earning per share | $ | 0.05 | $ | 0.05 | $ | 0.11 | $ | 0.09 | |||||||||||
| Weighted-average common shares outstanding | |||||||||||||||||||
| Basic | 15,635,898 | 15,472,504 | 15,604,420 | 15,581,301 | |||||||||||||||
| Diluted | 15,995,226 | 16,217,573 | 15,957,657 | 16,322,845 | |||||||||||||||