Simulations Plus Reports FY2011 and Fourth Quarter FY2011 Financial Results

Keywords: financial results, net income
Division: PBPK

Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of software for pharmaceutical discovery and development, today reported its financial results for its 2011 fiscal year (FY11) and fourth quarter (4Q11) ended August 31, 2011.

Results for the fiscal year FY11:

  • Consolidated revenues were $11.72 million, representing an increase of 9.4% over $10.71 million in FY10
  • Revenues for the pharmaceutical software and services sector were $8.74 million, representing an increase of 14.7% over $7.62 million in FY10
  • Consolidated net income was $2.71 million, representing an increase of 25.9% over $2.16 million in FY10
  • Revenues for the Words+ subsidiary were $2.98 million, a decrease of 3.6% over FY10
  • Net income per fully diluted share was $0.169, representing an increase of 29.3% over $0.131 for FY10
  • Cash increased to $10.18 million, representing an increase of 5.7% from $9.63 million at the end of FY10
  • Shareholders’ equity increased to $14.04 million, representing an increase of 7.6% from $13.05 million at the end of FY10

Results for the fourth quarter FY11 (4Q11):

  • Consolidated revenues were $2.12 million, representing a decrease of 3.9% over 4Q10
  • Consolidated net income for the quarter was $0.186 million, representing a decrease of 46.3% over $0.345 million in 4Q10
  • Revenues for the pharmaceutical software and services sector were $1.43 million, representing an increase of 7.0% over $1.33 million in 4Q10
  • Net income for the pharmaceutical software and services sector was $0.173 million, representing a decrease of 16.6% over $0.208 million in 4Q10
  • Revenues for the Words+ subsidiary were down 20.5% to $0.693 million over 4Q10
  • Net income for the Words+ subsidiary was $0.012 million, down 91.1% from $0.137 million in 4Q10
  • Consolidated earnings per fully diluted share were $0.012, representing a decrease of 44.4% over the $0.021 for 4Q10

Ms. Momoko Beran, chief financial officer for Simulations Plus, said: “Im pleased to report that we completed another record fiscal year, with three of four quarters setting new quarterly records on a consolidated basis and all four quarters setting new records for the pharmaceutical software and services side of the business. Earnings per share increased nearly 30% as a result of strong performance from our pharmaceutical software and services business. Although fourth quarter revenues for the pharmaceutical side of the business were up 7% and earnings were positive, earnings were lower than last year’s fourth quarter because of increases in both Research and Development (R&D) expenses and in Selling, General and Administrative (SG&A) expenses. R&D increased as a result of expanded staff in our Life Sciences department. SG&A increased because of consulting fees paid to our M&A advisers, increased selling expenses, increased insurance (health/dental, directors and officers), and increased legal fees incurred during our due diligence activities for the unsuccessful attempted acquisition of Entelos in bankruptcy court. As we announced earlier, we expect to close on the sale of our wholly owned subsidiary, Words+, Inc., on November 30. We believe the announced sale of Words+ to the Prentke Romich Company of Wooster, Ohio, is best for both Words+ and Simulations Plus. In accordance with standard practice, going forward we will report Words+ as “discontinued operations” and comparisons will be made with previous fiscal quarters and years based only on the pharmaceutical software and services business.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “With the expected closing of the sale of Words+ tomorrow, we will be able to focus all of our energies and resources on the pharmaceutical software and services business. Our sustained growth and profitability in this business is the result of our annual license business model and the high renewal rates that we have consistently enjoyed, as well as continued growth in our consulting, collaboration, and training activities. During this fiscal year, we conducted our first two Advanced GastroPlus™ Training Workshops, with attendees from companies around the world and from the FDA. We’ll be adding a number of shorter, basic training workshops during 2012. These workshops generate a profit and they serve to anchor our software with our customers as they learn how much more they can do with it beyond the basics.”

Mr. Woltosz continued: “We now have compounds in synthesis for our New Chemical Entity (NCE) project for malaria. As we reported earlier, this is a project wherein we have used our own software tools, MedChem Studio™, MedChem Designer™, and ADMET Predictor™, to design new molecules to treat malaria. We expect to have samples available for testing in December, and we’ll begin a few laboratory tests that will tell us how successful we were in predicting activity against malaria as well as a few ADMET properties. We don’t think we’re going to develop a cure for malaria with this small effort. The purpose is to show that our software and design approaches can rapidly generate promising leads within a fraction of the typical time and cost – leads that could be followed up with a greater investment. Demonstration of these capabilities is expected to boost our marketing and sales efforts for these products.”

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