Jul20 Er
Jul20 Er
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
third quarter of fiscal year 2020 (3QFY20) and the first nine months of fiscal year 2020 (9moFY20), the period
ended May 31, 2020.
Net revenues increased 23.8% to $12.3 million, an increase of $2.4 million over $9.9 million
Gross profit was up 26.5% to $9.6 million, an increase of $2.0 million over $7.6 million
SG&A was $5.0 million, an increase of 62.6% or $1.9 million over $3.1 million
SG&A as a percentage of revenues increased to 40.9% from 31.1%, inclusive of $1.1 million in one-time
transaction costs related to the Lixoft acquisition
Total R&D expenditures were $1,359,000, an increase of $293,000, or 27.5% over $1,066,000
In 3QFY20, $606,000 was capitalized and $753,000 was expensed
In 3QFY19, $422,000 was capitalized and $643,000 was expensed
Income before taxes remained flat at $3.8 million
Net income increased 1.6% to $2.9 million, an increase of $47,000 over $2.9 million
Diluted earnings per share remained unchanged at $0.16. One-time transaction costs related to the Lixoft
acquisition of $1.1 million (approx. $837,000 net of tax) effected a decrease of $0.04 diluted earnings per
share for the quarter
Net revenues increased 23.5% to $32.0 million, an increase of $6.1 million over $25.9 million
Gross profit was up 25.3% to $24.1 million, an increase of $4.9 million over $19.2 million
SG&A was $12.6 million, an increase of $4.0 million, or 46.8%, over $8.6 million
SG&A as a percentage of revenues increased to 39.5% from 33.2%, inclusive of $1.4 million in one-time
transaction costs related to the Lixoft acquisition
Total R&D expenditures were $3.8 million, an increase of $500,000, or 15.4% over $3.3 million
For 9moFY20, $1.7 million was capitalized and $2.0 million was expensed
For 9moFY19, $1.4 million was capitalized and $1.9 million was expensed
Income before taxes increased 9.1% to $9.4 million, an increase of $779.000 over $8.6 million
Net income increased 9.5% to $7.1 million, an increase of $620,000 over $6.5 million
Diluted earnings per share increased 7.6% to $0.39 from $0.36. One-time transaction costs related to the
Lixoft acquisition of $1.4 million (approx. $1.1 million net of tax) effected a $0.06 decrease in 9moFY20
diluted earnings per share
Shawn O’Connor, chief executive officer of Simulations Plus, said: “Keeping with historical seasonality trends,
the third quarter was again a strong quarter with revenue increasing 24% year-over-year to $12.3 million,
demonstrating the significant progress we have made to accelerate growth. A solid base of recurring revenue and
a large backlog of project-based service business have minimized the impact from current economic conditions
resulting from the effects of the COVID-19 pandemic. While certain new customer software license and service
projects were delayed in recent months, we continue to believe opportunities have been delayed, but not lost.
Our backlog remains healthy, and we are encouraged by the pickup of new software license closures and
consulting contracts at the end of the quarter. We expect double-digit, year-over-year revenue growth in the
fiscal fourth quarter, despite the impact of seasonality on a sequential basis.”
“The integration of Lixoft is going well and initial feedback from the marketplace has been positive as
customers acknowledge the strengthening of our offerings with the Monolix Suite,” Mr. O’Connor continued.
“We are collaborating across the enterprise to fully integrate our sales and marketing efforts and leverage our
existing infrastructure to extract maximum synergies and present a unified approach to our customers.”
John Kneisel, chief financial officer of Simulations Plus, added: “The dependable cash flow generation of our
business was further enhanced with the immediately accretive acquisition of Lixoft in the third quarter.
Following this cash investment, our financial position remains strong with a solid balance sheet that includes $7
million in unrestricted cash and no outstanding borrowed debt at the end of the third quarter and access to
additional capital via a new, undrawn $3.5 million line of credit. Through a steady approach to growth and the
prudent allocation of capital, we are able to maintain the economic engine of our business, invest for future
growth, and return capital to shareholders in the form of quarterly cash dividends.”
In addition, the Company today filed with the Securities and Exchange Commission (the “Commission”) a
Registration Statement on Form S-3 (the “Registration Statement”) filed pursuant to the Securities Act of 1933,
as amended (the “Securities Act”). The Registration Statement was filed as a “well-known seasoned issuer” as
defined in Rule 405 under the Securities Act of 1933, as amended, or the Securities Act, using an automatic
“shelf” registration process and, thus, was immediately effective. No securities were sold in connection with its
filing, but, by using a shelf registration statement, the Company may sell securities from time to time in the
future and as described in a subsequently filed prospectus supplement.
Shawn O’Connor, chief executive officer of Simulations Plus, said: “The Company’s filing of its shelf
registration provides the company the flexibility required to support any future need to issue securities for any
working capital, mergers and acquisitions, or general corporate purposes in the future. Our recent qualification
under the well-known seasoned issuer standard made this undertaking timely and efficient.”
The Company’s Board of Directors has declared a cash dividend of $0.06 per share of the Company’s common
stock payable on August 3, 2020, to shareholders of record as of July 27, 2020. 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.
The Company invites all interested persons to attend its conference call at 4:15 p.m. Eastern Time on July 9,
2020. The live webcast/teleconference will be accessible by registering here. A live, listen-only teleconference
will also be available by dialing (562) 247-8422. Please dial in five to ten minutes prior to the scheduled start
time. A replay of the webcast will be available at the Investors section of the Simulations Plus website following
the call.
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/toxicology 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 research by major pharmaceutical, biotechnology, chemical, consumer
goods companies, and regulatory agencies worldwide. Our innovations in integrating new and existing science
in medicinal chemistry, computational chemistry, artificial intelligence, pharmaceutical science, biology, and
physiology into our software have made us the leading software provider for molecular property prediction from
structure and 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. 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 and filed with the U.S. Securities and Exchange Commission.
Disclaimer
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any
sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any such state or jurisdiction.
Long-term liabilities
Deferred income taxes, net 2,775,398 2,731,616
Operating Lease Liability 489,463 -
Payments due under Contracts payable 3,942,333 -
Total liabilities 14,992,239 7,515,093
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
17,788,498 and 17,591,834 shares issued and outstanding 7,791 7,595
Additional paid-in capital 20,231,443 15,319,474
Accumulated Translation Adjustment 30,460 -
Retained earnings 26,317,194 22,354,535
Total shareholders' equity $ 46,586,888 $37,681,604
Hayden IR
Mr. Cameron Donahue
651-653-1854
[email protected]