Simulations Plus Reports FY2019 and Fourth Quarter FY2019 Financial Results

Full-Year Revenue Increased 14.5% to $34 Million

Fourth Quarter Revenue Up 20.0% to $8 Million

LANCASTER, Calif.--(BUSINESS WIRE)-- 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 2019 fiscal year (FY19) and fourth quarter (4Q19) ended August 31, 2019.

Full Year FY19 highlights compared with Full Year FY18:

• Revenues were $34.0 million, up 14.5% over $29.7 million in FY18
• Gross profit was up 15.1%, or $3.3 million, to $24.9 million, from $21.7 million in FY18
• SG&A was $11.8 million, an increase of $2.2 million, or 23.1%, over $9.6 million
• Total R&D expenditures were $4.3 million, an increase of $363,000, or 9.2% over $3.9 million
  • For FY19, $1.8 million was capitalized and $2.5 million was expensed
  • For FY18, $2.1 million was capitalized and $1.8 million was expensed
• Income before taxes increased 4.1% to $10.6 million, an increase of $418,000 over $10.1 million
• Net income decreased 3.9% to $8.6 million, a decrease of $351,000 from $8.9 million; FY18 included the one-time second-quarter tax benefit of $1.5 million
• Diluted earnings per share decreased 5.0% to $0.48 from $0.50. In FY18, the major change in diluted earnings per share came from the $1.5 million tax adjustment that accounted for an $0.08 increase in diluted earnings per share
• Cash was $11.4 million, an increase of $2.0 million, or 21.6%, from $9.4 million at the end of FY18.

4QFY19 highlights compared with 4QFY18:

• Revenues increased 20.0% to $8.0 million, an increase of $1.3 million over $6.7 million
• Gross profit was up 25.6% to $5.7 million, an increase of $1.2 million over $4.6 million
• SG&A was $3.2 million, an increase of 42.6%, or $951,000, over $2.2 million
• Total R&D expenditures were $1.0 million, an increase of $89,000, or 9.4%, over $951,000
  • For 4QFY19, $437,000 was capitalized and $603,000 was expensed
  • For 4QFY18, $514,000 was capitalized and $437,000 was expensed
• Income before taxes increased 7.9% to $2.0 million, an increase of $146,000 over $1.8 million
• Net income increased 53.9% to $2.1 million, an increase of $721,000 over $1.3 million
• Earnings per fully diluted share increased $0.03 to $0.11 from $0.08

Shawn O’Connor, chief executive officer of Simulations Plus, said: “We delivered 20% fourth quarter growth, a strong end to a solid year of growth for Simulations Plus as full-year revenue grew 14.5%. This progress is due to targeted investments in our sales and marketing infrastructure, which enabled us to achieve an increased revenue growth rate in excess of historical levels while maintaining excellent gross margins and overall profitability. We enter our fiscal year 2020 with strong market momentum, high backlogs and successful progress across our key objectives to extend our sales and marketing resources and capacity to deliver our strategic consulting services efficiently to our clients.”

John Kneisel, chief financial officer of Simulations Plus, added: “Continued investment in our sales and marketing and supporting teams’ infrastructure and higher R&D spending led to increases in our operating expenses. We believe these investments will help us continue to accelerate our revenue growth. Of special note, 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 13, 2019. The live webcast/teleconference will be accessible by registering here. Please dial in five to ten minutes prior to the scheduled start time. A live, listen-only webcast will also be available by dialing (914) 614-3221, and entering access code 588-454-748. 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 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.

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