Simulations Plus, Inc. (AMEX: SLP), the leading provider of ADME absorption simulation and neural net structure-to-property prediction software for pharmaceutical discovery and development, today reported its financial results for the first fiscal quarter of its 2005 fiscal year ended November 30, 2004.
Momoko Beran , chief financial officer of Simulations Plus, stated: “Consolidated revenues for the first quarter were $1,066,000, a decrease of 6.4% from $1,139,000 in the first quarter of fiscal year 2004. Revenues from pharmaceutical software and services were $523,000, a decrease of 18.5% from $642,000 in the first quarter of fiscal year 2004. Revenues for our Words+ subsidiary increased 9.3% to $543,000 from $497,000 in the first quarter of fiscal year 2004. Consolidated earnings were $22,000, or $0.01 per diluted share, as compared to $47,000, or $0.01 per diluted share for the first quarter of fiscal year 2004. Earnings from pharmaceutical software and services were $41,000 as compared to $155,000 for the first quarter of fiscal year 2004. The loss for the Words+ subsidiary was $19,000, as compared with $97,000 in the first quarter of fiscal year 2004. SG&A increased by 4.3% to $632,000 in the first quarter of fiscal 2005, compared to $606,000 in the first quarter of fiscal year 2004. Shareholders’ equity was $4,495,000, an increase of 33.2% as compared to $3,374,000 for the first quarter of fiscal year 2004.”
Ron Creeley , vice president of marketing and sales for Simulations Plus, added: “The first quarter is typically our slowest quarter. This year it was unusually challenging primarily due to two factors: (1) as a result of four companies slipping their renewals into the second quarter, pharmaceutical software sales, which usually account for more than 50% of each quarter’s revenues, were only about 13%, and (2) last year we had a $300,000 multi-year license in the first quarter, which means there would be no renewal from that customer this year. In spite of these factors, we were able to sustain pharmaceutical software revenues at over a half million dollars by generating new business. This included a new one-year global license with a very large pharmaceutical company. This was only for one year, and only for a portion of our software, so we expect to add additional licenses within the year for other software, and we expect that this customer will renew next year. Adding new customers builds the foundation of our compounded growth because of annual license renewals in subsequent years.”
Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “Pharmaceutical revenues were sustained at nearly the same level as last year, in spite of four renewal orders that slipped into the second quarter.We expect that these four renewal orders will be received in the second quarter, adding to our usual second quarter business. We also did not have income from study contracts in the first quarter, while last year study revenues accounted for approximately $0.01 per diluted share. The dramatically reduced loss in our Words+ subsidiary is important as well, and reflects the results of the successful restructuring we completed last year. The release of the new SAM Tablet is expected to ramp up in the coming months just as the Say-it! SAM system orders did after its introduction last year. So we view the first quarter as successful, and we continue to advise investors to expect some lumpiness because of the nature of our business.”
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