Simulations Plus Reports FY2020 and Fourth Quarter FY2020 Financial Results

 
LANCASTER, Calif.--(BUSINESS WIRE)-- Simulations Plus, Inc.  (Nasdaq: SLP), a leading provider of modeling and simulation solutions for the pharmaceutical, biotechnology, chemicals, and consumer goods industries, today reported financial results for its 2020 fiscal year (FY20) and fourth quarter (4QFY20) ended August 31, 2020.

Full Year FY20 highlights compared with Full Year FY19:

  • Revenues were $41.6 million, up 22.4% over $34.0 million in FY19
  • Gross profit was up 24.0%, or $6.0 million, to $30.9 million, from $24.9 million in FY19
  • SG&A was $16.4 million, an increase of $4.6 million, or 38.7%, over $11.8 million
  • Total R&D expenditures were $5.3 million, an increase of $1.0 million, or 24.8% over $4.3 million
    • For FY20, $2.4 million was capitalized and $3.0 million was expensed
    • For FY19, $1.8 million was capitalized and $2.5 million was expensed
  • Income before taxes increased 7.9% to $11.4 million, an increase of $831,000 over $10.6 million
  • Net income increased 8.7% to $9.3 million, an increase of $749,000 from $8.6 million
  • Diluted earnings per share increased $0.02 to $0.50 from $0.48. 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 diluted earnings per share
  • Cash, cash equivalents, and short-term investments were $116.0 million, compared to $11.4 million at the end of FY19 reflecting the follow-on offering completed on August 10, 2020

4QFY20 highlights compared with 4QFY19:

  • Revenues increased 18.9% to $9.5 million, an increase of $1.5 million over $8.0 million
  • Gross profit was up 19.7% to $6.9 million, an increase of $1.1 million over $5.7 million
  • SG&A was $3.7 million, an increase of 16.7%, or $531,000, over $3.2 million
  • Total R&D expenditures were $1.6 million, an increase of $559,000, or 55.4%, over $1.0 million
    • For 4QFY20, $621,000 was capitalized and $948,000 was expensed
    • For 4QFY19, $406,000 was capitalized and $603,000 was expensed
  • Income before taxes increased 2.6%, or $51,000, and remained at $2.0 million
  • Net income increased 6.3% to $2.2 million, an increase of $129,000 over $2.1 million
  • Earnings per fully diluted share remained unchanged at $0.11

Shawn O’Connor, chief executive officer of Simulations Plus, said: “Simulations Plus achieved its goal of accelerating organic growth to 15-20%, overcoming headwinds from the COVID-19 pandemic due to continued strong growth from both our software and consulting revenue streams. Our future growth prospects were bolstered by a significant acquisition to expand our software business, growing our European presence, and the recent introductions of new software versions as well as the launch of several important collaborations. We continue to invest in R&D, funded both internally and from leading pharmaceutical and regulatory agencies, building on our leadership position in modelling and simulation for the drug development marketplace.”

John Kneisel, chief financial officer of Simulations Plus, added: “During the fourth quarter, we completed a strategic offering, issuing approximately 2.1 million shares and raising net proceeds of approximately $107.7 million. This follow-on offering gives the Company resources and scale to pursue additional acquisitions to further bolster our growth rates and broaden the value we can deliver to our clients. Once again, in the fourth quarter we benefited from tax deductions from stock compensation expense as employees took advantage of the increased value of their options. Overall, we continue to generate solid profitability and free cash flow, even after paying our regular quarterly dividend.”

Investor Conference Call

The Company invites all interested persons to attend its conference call at 4:15 p.m. Eastern Time on November 16, 2020. The live webcast/teleconference will be accessible by registering here. Please dial in five to 10 minutes prior to the scheduled start time. A live, listen-only webcast will also be available by dialing (213) 929-4232. 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 leading provider of modeling and simulation software and consulting services supporting drug discovery, development research, and regulatory submissions. With our subsidiaries, Cognigen, DILIsym Services, and Lixoft, we offer solutions which bridge machine learning, physiologically based pharmacokinetics, quantitative systems pharmacology/toxicology, and population PK/PD modeling approaches. Our technology is licensed and applied by major pharmaceutical, biotechnology, chemical, consumer goods companies and regulatory agencies worldwide. 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.

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SIMULATIONS PLUS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the three months and years ended August 31,
    Three months ended   Years ended
   

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

   

2020

 

2019

 

2020

 

2019

 

2018

                     
Revenues  

$

9,540,081

 

 

$

8,025,895

 

$

41,589,084

 

 

$

33,970,440

 

 

$

29,666,524

 

Cost of revenues  

 

2,674,528

 

 

 

2,290,813

 

 

10,649,230

 

 

 

9,025,704

 

 

 

7,994,228

 

Gross margin  

 

6,865,553

 

 

 

5,735,082

 

 

30,939,854

 

 

 

24,944,736

 

 

 

21,672,296

 

Operating expenses                    
Selling, general, and administrative  

 

3,713,543

 

 

 

3,182,238

 

 

16,360,053

 

 

 

11,796,027

 

 

 

9,583,852

 

Research and development  

 

947,938

 

 

 

603,053

 

 

2,974,623

 

 

 

2,499,980

 

 

 

1,790,656

 

Total operating expenses  

 

4,661,481

 

 

 

3,785,291

 

 

19,334,676

 

 

 

14,296,007

 

 

 

11,374,508

 

                     
Income from operations  

 

2,204,072

 

 

 

1,949,791

 

 

11,605,178

 

 

 

10,648,729

 

 

 

10,297,788

 

                     
Other income (expense)                    
Interest income  

 

1,653

 

 

 

13,225

 

 

29,468

 

 

 

33,522

 

 

 

27,122

 

Change in value of contingent consideration  

 

(121,500

)

 

 

-

 

 

(202,500

)

 

 

(109,078

)

 

 

(153,034

)

(Loss) income on currency exchange  

 

(46,380

)

 

 

23,769

 

 

(45,097

)

 

 

(16,697

)

 

 

(32,934

)

Total other income (expense)  

 

(166,227

)

 

 

36,993

 

 

(218,129

)

 

 

(92,253

)

 

 

(158,846

)

                     
Income before provision for income taxes  

 

2,037,845

 

 

 

1,986,784

 

 

11,387,049

 

 

 

10,556,476

 

 

 

10,138,942

 

Provision for income taxes  

 

150,287

 

 

 

72,443

 

 

(2,054,989

)

 

 

(1,973,147

)

 

 

(1,204,130

)

Net Income  

$

2,188,132

 

 

$

2,059,227

 

$

9,332,060

 

 

$

8,583,329

 

 

$

8,934,812

 

                     
Earnings per share                    
Basic  

$

0.12

 

 

$

0.12

 

$

0.52

 

 

$

0.49

 

 

$

0.52

 

Diluted  

$

0.11

 

 

$

0.11

 

$

0.50

 

 

$

0.48

 

 

$

0.50

 

                     
Weighted-average common shares outstanding                    
Basic  

 

18,289,256

 

 

 

17,549,636

 

 

17,819,064

 

 

 

17,492,258

 

 

 

17,328,707

 

Diluted  

 

19,151,857

 

 

 

18,265,585

 

 

18,538,373

 

 

 

18,057,431

 

 

 

17,860,392

 

                     
Other comprehensive Income (Loss), net of tax                    
Foreign currency translation adjustments  

 

28,007

 

 

 

-

 

 

58,467

 

 

 

-

 

 

 

-

 

Comprehensive Income (Loss)  

$

2,216,139

 

 

$

2,059,227

 

$

9,390,527

 

 

$

8,583,329

 

 

$

8,934,812

 

SIMULATIONS PLUS, INC.
CONSOLIDATED BALANCE SHEETS
         
    (Audited)   (Audited)
    August 31,   August 31,
ASSETS        
   

2020

 

2019

Current assets        
Cash and cash equivalents  

$

49,207,314

 

$

11,435,499

Accounts receivable, net of allowance for doubtful accounts of $50,000 and $0  

 

7,421,970

 

 

5,026,558

Revenues in excess of billings  

 

3,093,343

 

 

3,233,659

Prepaid income taxes  

 

969,688

 

 

765,110

Prepaid expenses and other current assets  

 

1,595,447

 

 

704,316

Short-term investments  

 

66,803,595

 

 

-

Total current assets  

 

129,091,357

 

 

21,165,142

Long-term assets        
Capitalized computer software development costs, net of accumulated amortization of $13,581,599 and $12,356,055  

 

6,087,378

 

 

4,959,736

Property and equipment, net  

 

437,787

 

 

341,145

Operating lease right of use asset  

 

926,600

 

 

-

Intellectual property, net of accumulated amortization of $5,087,031 and $3,948,750  

 

11,897,970

 

 

5,026,249

Other intangible assets net of accumulated amortization of $1,641,725 and $1,210,000  

 

7,008,275

 

 

3,280,000

Goodwill  

 

12,921,185

 

 

10,387,198

Other assets  

 

50,965

 

 

37,227

Total assets  

$

168,421,517

 

$

45,196,697

         
LIABILITIES AND SHAREHOLDERS' EQUITY        
Current liabilities        
Accounts payable  

$

349,940

 

$

204,075

Accrued payroll and other expenses  

 

2,250,692

 

 

1,639,038

Current portion - Contracts payable  

 

2,000,000

 

 

1,761,028

Billings in excess of revenues  

 

140,991

 

 

798,549

Operating lease liability, current portion  

 

463,465

 

 

-

Deferred revenue  

 

299,482

 

 

380,787

Total current liabilities  

 

5,504,570

 

 

4,783,477

         
Long-term liabilities        
Deferred income taxes, net  

 

2,353,857

 

 

2,731,616

Operating Lease Liability  

 

463,312

 

 

-

Payments due under Contracts payable  

 

4,063,833

 

 

-

Other long-term liabilities  

-

 

 

-

Total liabilities  

 

12,385,572

 

 

7,515,093

         
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        
19,923,277 and 17,591,834 shares issued and outstanding  

 

9,926

 

 

7,595

Additional paid-in capital  

 

128,531,428

 

 

15,319,474

Accumulated Other Comprehensive Income (Loss)  

 

58,467

 

 

-

Retained earnings  

 

27,436,124

 

 

22,354,535

Total shareholders' equity  

 

156,035,945

 

 

37,681,604

         
Total liabilities and shareholders' equity  

$

168,421,517

 

$

45,196,697

 

Contacts

Simulations Plus Investor Relations
Ms. Renee Bouche
661-723-7723
renee@simulations-plus.com

Hayden IR
Mr. Cameron Donahue
651-653-1854
slp@haydenir.com

 
 

Source: Simulations Plus, Inc.

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