Simulations Plus Reports First Quarter FY2013 Financial Results

Simulations Plus Reports First Quarter FY2013 Financial Results

Net sales increase 1.9% to first-quarter record $2.290 million; Earnings per share $0.04

LANCASTER, Calif.--(BUSINESS WIRE)-- Simulations Plus, Inc. (NAS: SLP) , a leading provider of simulation and modeling software for pharmaceutical discovery and development, today reported financial results for its first quarter of fiscal year 2013 ended November 30, 2012 (1QFY13). Results below for the first quarter of FY2012 (1QFY12) are reported for continuing operations (without the discontinued operations of the Company's former Words+ subsidiary, which was sold on November 30, 2011), except as noted.


1QFY13 highlights compared with 1QFY12:

  • Net sales increased 1.9% to first-quarter record $2.290 million from $2.248 million

  • Gross profit increased 0.4% to $1.903 million from $1.896 million

  • SG&A increased 8.3% to $0.931 million from $0.860 million

    • This apparent increase was due to reclassification of M&A consultant fees for 1QFY12 from SG&A to Selling Expense with the sale of the former Words+ subsidiary, reducing SG&A for 1QFY12

  • R&D expense increased 95.2% to $180,000 from $92,000

  • Income before taxes decreased 15.8% to $0.896 million from $1.064 million

  • Net income decreased 22.3% to $587,000 from $755,000

  • Diluted earnings per share decreased 33% to $0.04 from $0.06

Ms. Momoko Beran, chief financial officer of Simulations Plus, said: "Increased Selling, General and Administrative (SG&A) expenses for 1QFY13 were in part due to increased commissions on sales, but mostly due to a reclassification of M&A consultant fees from SG&A to Selling Expense with the sale of our former Words+ subsidiary last year. Those fees had accrued as SG&A last year until the sale was completed, but with the sale, they became Selling Expense, resulting in a large reduction in the reclassified SG&A for 1QFY12. R&D expenses increased due to increased scientific staff time spent to support marketing and sales and due to expenses for our malaria new chemical entity (NCE) project. Increased income tax rates for FY2013 resulted in a provision for income taxes of $309,000, nearly the same dollar amount as for 1QFY12, but caused by an increase in tax rate to 34% for 1QFY13 compared to 29% in 1QFY12. In spite of distributing a total of just under $3.2 million in dividends during calendar 2012, cash remained at $11.4 million on November 30, 2012, compared to $12.7 million on November 30, 2011. Shareholders' equity was $15.0 million at the end of 1QFY13 compared to $15.1 million at the end of 1QFY12. The subsequent accelerated dividend of $0.14 per share distributed on December 28, 2012, reduced cash to about $9.5 million on December 29."

Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: "A 'perfect storm' of site closures for four large customers and major reorganizations within three other customers resulted in nearly $450,000 in lost revenues over 1QFY12; however, exclusive of these closures and reorganizations, our renewal rate remained over 90% for our remaining customers, and we added a number of software licenses at new customer sites as well as increased services revenues. In fact, we were successful in generating enough new sales to offset these reductions and still show a slight increase in revenues over 1QFY12. At this point, we do not foresee a recurrence of such a large drop in renewal revenues, although there can be no assurance that such a drop will not occur at some time in the future."

Woltosz continued: "The resounding success we've had in our malaria NCE (new chemical entity) project has created increased interest in our software products that we used to design these new molecules. And we are pursuing additional funding to take this project to the next level. We're also selecting a new disease target for another NCE project this year, and we hope to announce our selection soon."

Investor Conference Call

The Company has announced an investor conference call that will be webcast live at 1:15 PM PST/4:15 PM EST today, Tuesday, January 15, 2013, which may be accessed by first registering here. Upon registering, a confirmation e-mail will be sent 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 909-259-0023 and enter access code 400-233-725.

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. The Company also provides 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 www.simulations-plus.com.

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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 November 30, 2012 (Unaudited) and August 31, 2012 (Audited)

ASSETS

November 30,

August 31,

2012

2012

Current assets

Cash and cash equivalents

$

11,379,378

$

12,701,075

Income tax refund receivable

153,896

153,896

Accounts receivable, net of allowance for doubtful accounts of $0

1,720,669

1,451,864

Contracts receivable

140,522

18,893

Prepaid income taxes

96,022

-

Prepaid expenses and other current assets

115,764

150,856

Deferred income taxes

177,921

193,712

Total current assets

13,784,172

14,670,296

Long-term assets

Capitalized computer software development costs,

net of accumulated amortization of $5,266,775 and $5,084,691

2,559,466

2,479,468

Property and equipment, net

98,358

107,410

Intellectual property, net of accumulated amortization of $5,625 and $3,750

69,375

71,250

Other assets

18,445

18,445

Total assets

$

16,529,816

$

17,346,869

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

$

194,107

$

177,509

Accrued payroll and other expenses

322,805

312,912

Accrued bonuses to officer

15,000

60,000

Accrued income taxes

-

733,233

Deferred revenue

207,228

131,782

Total current liabilities

739,140

1,415,436

Long-term liabilities

Deferred income taxes

819,405

788,857

Total liabilities

1,558,545

2,204,293

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

15,927,806 and 15,923,019 shares issued and outstanding

4,399

4,399

Additional paid-in capital

4,666,465

4,628,366

Retained earnings

10,300,407

10,509,811

Total shareholders' equity

14,971,271

15,142,576

Total liabilities and shareholders' equity

$

16,529,816

$

17,346,869

Simulations Plus, Inc.

Condensed Statements of Operations

For the three months ended November 30,


(Unaudited)

2012

2011

Net sales

$

2,290,094

$

2,247,956

Cost of sales

386,870

352,370

Gross profit

1,903,224

1,895,586

Operating expenses

Selling, general, and administrative

931,060

859,681

Research and development

180,335

92,367

Total operating expenses

1,111,395

952,048

Income from operations

791,829

943,538

Other income (expense)

Interest income

13,728

21,873

Interest expense

-

(3

)

Miscellaneous Income

15,404

-

Gain on currency exchange

74,654

98,386

Total other income (expense)

103,786

120,256

Income from continuing operations before provision for income taxes

895,615

1,063,794

Provision for income taxes

(308,629

)

(308,695

)

Income from continuing operations

586,986

755,099

Discontinued operations:

Loss from discontinued operations, net of tax

-

(249,898

)

Gain on sale of Words+, net of tax

-

465,820

Results of discontinued operations

-

215,922

Net Income

$

586,986

$

971,021

Basic earnings per share:

Continuing operations

$

0.04

$

0.05

Discontinued operations

-

0.01

Net basic earning per share

$

0.04

$

0.06

Diluted earnings per share

Continuing operations

$

0.04

$

0.05

Discontinued operations

-

0.01

Net basic earning per share

$

0.04

$

0.06

Weighted-average common shares outstanding

Basic

15,927,806

15,572,943

Diluted

16,365,552

16,129,535



Simulations Plus Investor Relations
Ms. Renée Bouché, 661-723-7723
renee@simulations-plus.com
or
Hayden IR
Mr. Cameron Donahue, 651-653-1854
cameron@haydenir.com

KEYWORDS: United States North America California

INDUSTRY KEYWORDS:

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