Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of software for pharmaceutical discovery and development, today reported its financial results for its 2008 fiscal year (FY08) ended August 31, 2008.
Ms. Momoko Beran, chief financial officer of Simulations Plus, stated: “Fourth quarter fiscal year 2008 (4Q08) consolidated revenues were $1,836,000, a decrease of $400,000 from 4Q07; however, consolidated revenues for the entire fiscal year 2008 (FY08) increased 1.2% to $8,968,000 from $8,858,000 in fiscal year 2007 (FY07). Part of this decrease was caused by one renewal order for about $118,000 from 4Q07 that was received in 3Q08 this year. For the entire fiscal year, revenues from pharmaceutical software and services were up $300,000, or 5.2%, to $6,055,000 from $5,755,000 in FY07. Revenues for our Words+ subsidiary for FY08 decreased 6.1% to $2,913,000 from $3,102,000 in FY07, primarily as a result of the poor first two quarters for the subsidiary, which were followed by a record third quarter. Although Words+ improved in the last two quarters, the improvement was not enough to make up for the first two quarters. SG&A increased by approximately 7.0% to $3,699,000 for FY08, compared to $3,458,000 for FY07, due to increases in selling expenses such as commissions and trade shows, increases in the stipends paid to outside members of the board of directors for the first time since the Company incorporated, recruiting expenses, legal and accounting fees, and salary increases along with payroll-related expenses such as health insurance, payroll taxes, and 401(k) matching contributions, which outweighed decreases in CEO bonus, investor relations, and repairs.
“Net income for FY08 increased 17.7% to $1,726,000, or $0.11 per basic share and $0.10 per fully diluted share, from $1,466,000, or $0.08 per fully diluted share for FY07. The number of fully diluted shares increased about 1% from 17,956,796 in FY07 to 18,141,287 in FY08. Shareholders’ equity at the end of FY08 increased 29.4% to $9,915,000, as compared to $7,665,000 at the end of FY07. Cash and equivalents at the end of the fiscal year were up over $2.1 million for the year if we include the $750,000 in ARSs that UBS has promised to buy back after January 1, 2009.”
Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “Along with most other industries, the pharmaceutical industry is being challenged this year to achieve greater productivity. We believe that because our offerings are primarily productivity tools, in spite of numerous challenges in FY08, we are able to report continued growth in our pharmaceutical software and services revenues, as well as growth in overall earnings and earnings per share. Our Words+ subsidiary struggled in the first two quarters of the year with the delayed release of its new Say-it! SAM PDA-based communication system, yet Words+ managed to complete the year with a small profit through cost controls and sales of products with better margins. Our pharmaceutical software and services business continues to be recognized as best-in-class for our major products, and we believe the pharmaceutical industry is now showing much more inclination to use software for research as opposed to software for storing and accessing data. The American Association of Pharmaceutical Scientists conference in Atlanta in mid-November was once again a showplace for Simulations Plus software, with our GastroPlus™ program especially being mentioned in numerous presentations and posters. As a result, the number of new leads we obtained at that meeting is more than double any other meeting we’ve attended in our history. We were not able to complete a single acquisition during FY08 in spite of aggressively exploring several opportunities; however, we continue to communicate with several new companies. We expect that our increased cash reserves will continue to grow and that we will identify and close one or more acquisitions in the coming fiscal year.”
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