Simulations Plus Reports Third Quarter FY2016 Financial Results

Keywords: quarterly cash dividend
Division: PBPK

Simulations Plus, Inc. (NASDAQ: SLP), the premier provider of simulation and modeling software and consulting services for pharmaceutical discovery and development from the earliest discovery through all phases of clinical trials, today reported financial results for its third quarter of fiscal year 2016 (3QFY16) and the first nine months of fiscal year 2016 (9moFY16), the period ended May 31, 2016.

3QFY16 highlights compared with 3QFY15:

  • Net revenues increased 1.2% to $6.01 million, an increase of $70,000 from $5.94 million
  • Gross profit was up 0.2% to $4.82 million, an increase of $8,000 from $4.81 million
  • SG&A was $1.68 million, an increase of 4.6% or $73,000 from $1.61 million
  • R&D expenditures were $617,000, an increase of $23,000, or 3.8% over $594,000
    • In 3QFY16, $269,000 was capitalized and $348,000 was expensed
    • In 3QFY15, $246,000 was capitalized and $348,000 was expensed
  • Income before taxes decreased 0.8% to $2.80 million, a decrease of $22,000 from $2.82 million
  • Net income increased 3.1% to $1.91 million, an increase of $57,000 from $1.85 million
  • Diluted earnings per share increased 2.1% to $0.111 from $0.108

9moFY16 highlights compared with 9moFY15:

  • Net revenues increased 9.7% to $16.01 million, an increase of $1.41 million from $14.60 million
  • Gross profit was up 10.4% to $12.47 million, an increase of $1.18 million from $11.29 million
  • SG&A was $5.08 million, a decrease of $154,000, or 2.9%, from $5.23 million
  • R&D expenditures were $1.974 million, an increase of $17,000, or 0.9% over $1.957 million
    • For 9moFY16, $814,000 was capitalized and $1.16 million was expensed
    • For 9moFY15, $976,000 was capitalized and $982,000 was expensed
  • Income before taxes increased 23.9% to $6.21 million, an increase of $1.2 million from $5.01 million
  • Net income increased 24.2% to $4.16 million, an increase of $810,000 from $3.35 million
  • Diluted earnings per share increased 23.1% to $0.242 from $0.196

John Kneisel, chief financial officer of Simulations Plus, said: “The Company continues to produce record financial results, with year-to-date sales up nearly 10% and net income increased by 24%, speaking to our operational efficiency and demonstrating the leverage inherent in our business model. The Company’s strong cash position enables continuing investment in software products while being able to reward shareholders by providing continuing quarterly dividends. As always, such distributions are at the discretion of the Board of Directors.”

John DiBella, vice president for marketing and sales of Simulations Plus, said: “While revenue growth for 3QFY16 was lower than our historical averages, it is compared with an exceptionally strong third quarter in FY15. We executed on several fronts and achieved the highest quarter in our history for both revenues and earnings. Software renewal rates exceeded 88% (accounts) and 96% (fees) for the quarter, and we added 16 new clients, with several coming from India. The first nine months of FY2016 have shown strong growth trends in both software and consulting services revenue, and along with the imminent release of our new PKPlus™ software, we have a full pipeline of new contracts keeping our experts busy as we move towards FY2017. We believe our aggressive marketing and training programs, coupled with positive underlying sales fundamentals, set us up nicely to end FY2016 on a strong note.”

Ted Grasela, president of Simulations Plus, added: “The recently announced 5-year, $4.7 million contract to expand and further develop the KIWI™ software platform for a major research foundation is expected to add significantly to the revenue growth of our Buffalo division. We believe this effort, which is based on our secure in-house computing cloud, has the potential to lead to additional opportunities for such services, both with this foundation and with pharmaceutical companies and other research organizations around the world. In addition, we are now routinely providing physiologically based pharmacokinetics (PBPK) analysis to clinical pharmacology groups as we have realized the expected synergies between our Lancaster and Buffalo divisions.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, concluded: “This month marks the 20th anniversary of Simulations Plus. Driving the evolution of the pharmaceutical industry over the past two decades from minimal use of simulation and modeling to widespread adoption by industry and regulatory agencies has been very satisfying. As John DiBella noted, our nine-month results demonstrate excellent continued revenues and earnings growth. Now we are beginning to perform on our five-year contract and expecting the release of our newest software product, PKPlus™, along with updates to GastroPlus™ and ADMET Predictor™, all in the fourth fiscal quarter. We’re excited about these developments and expect them to contribute to a strong finish to FY2016.”