Simulations Plus Reports FY2013 and Fourth Quarter FY2013 Financial Results

Keywords: financial results, gross profit, net revenues
Division: PBPK

Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of software for pharmaceutical discovery and development, today reported its financial results for its 2013 fiscal year (FY13) and fourth quarter (4Q13) ended August 31, 2013. The Company’s former Words+ subsidiary was sold on November 30, 2011, therefore results provided in this press release and in our annual report treat Words+ as discontinued operations and are based on the performance of the ongoing pharmaceutical software and services business.

Results for the 2013 fiscal year (FY13):

  • Revenues were $10.07 million, representing an increase of 6.6% over $9.45 million in FY12
  • SG&A expense increased 5.05% to $3.55 million from $3.38 million in FY12
    • As a percent of sales, SG&A decreased to 35.3% from 35.8% in FY12
  • R&D expense was $0.802 million, a decrease of 15% from $0.947 million in FY12
    • During FY12, approximately $150,000 in outside expenses for chemical synthesis and laboratory work were incurred for the NCE (New Chemical Entity) molecule design project, while no such expenses were incurred in FY13
  • Net income was $2.89 million, representing a decrease of 4.7% from $3.03 million in FY12
    • Net income from continuing operations increased 2.7%, also impacted by the increase in income tax rate from approximately 29% to approximately 32%
    • This was due to $216,000 recognized from the sale of the Company’s former Words+ subsidiary in FY12, as well as an increase in income taxes of 19.9%
  • Net income per fully diluted share was $0.177, representing a decrease of 5.6% from $0.187 for FY12
  • Cash decreased to $10.2 million, representing a decrease of 19.9% from $12.7 million at the end of FY12
    • This was due to the dividend distributions to shareholders made in FY13
  • Shareholders’ equity decreased to $14.2 million, representing a decrease of 5.9% from $15.1 million at the end of FY12
    • This was also due to the dividend distributions to shareholders in FY13

Results for the fourth quarter FY13 (4Q13):

  • Revenues were $1.58 million, representing a decrease of 4.4% over $1.64 million in 4Q12
  • SG&A increased 3.4% to $0.860 million from $0.831 million in 4Q12
  • R&D expense was $0.168 million, a decrease of 17.1% from $0.203 million in 4Q12
    • Note that total R&D expenditures for our products actually increased; however, costs associated with our NCE project in FY12 were not duplicated in FY13, offsetting the product development R&D increases
  • Net income was $0.245 million, representing a decrease of 29.8 % over $0.349 million in 4Q12
  • Earnings per fully diluted share were $0.015, representing a decrease of 28.6% over $0.021 in 4Q12

Ms. Momoko Beran, chief financial officer for Simulations Plus, said: “We completed another record fiscal year. Gross Revenues increased 6.6% and Income from Continuing Operations increased 2.7%. R&D Expenses increased due to expanded scientific staff as well as salary increases for existing staff. SG&A increased 5.0% primarily due to increased commission expenses to our dealers in Japan and China whose sales increased, and an increase in insurance expenses as we increased the number of employees, as well as an overall increase in insurance premiums for health coverage.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “Our continued growth is a tribute to our marketing and sales staff and our scientific team, whose ongoing efforts to keep us out in front of the technologies in which we specialize have enabled us to hold onto our leadership position in a competitive market. The new developments now underway are expected to continue this trend, and we believe our continued aggressive marketing and sales program and training workshops have been bolstering our pipeline for continued growth.”

John DiBella, vice president for marketing and sales for Simulations Plus, said: “As was mentioned in the earlier press release announcing preliminary revenues for Q4FY13, a large upgrade order was delayed due to new contract proceedings initiated by the client. This order has since been received and will be recognized in Q1FY14. Revenue from new licenses comprised 14% of total revenue in Q4FY13, and consulting service revenue saw an increase of $65,000 compared to Q4FY12, as several new contracts were started.

“For FY13, revenue from new licenses comprised 13% of total revenue, with 60 new companies, or new departments at existing companies, now utilizing our technology. Included among these new licenses were orders from the U.S. FDA, the U.S. EPA, and the Chinese SFDA. After the ‘perfect storm’ of site closures and reorganizations in Q1FY13, resulting in $450,000 in lost revenue, we experienced a 94% renewal rate over the last three quarters. And increased adoption of modeling & simulation in Asian territories resulted in a 27% increase versus FY12.

“Without the external factors impacting results in Q1FY13 and Q4FY13, our top-line growth of 10-15% would have continued. We believe there is significant momentum in the use of modeling & simulation technology across several industries, both here and abroad, and we are in a good position to capitalize from this going forward.”

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