Simulations Plus, Inc. (Nasdaq: SLP – News), a leading provider of simulation and modeling software for pharmaceutical discovery and development, today reported its financial results for the first quarter of fiscal year 2008 (1Q08) ended November 30, 2007.
Ms. Momoko Beran, chief financial officer of Simulations Plus, stated: “Consolidated revenues for 1Q08 were $1,984,000, an increase of 36.2% from $1,456,000 in the first quarter of fiscal year 2007 (1Q07) and a new record for first quarters. A large pharmaceutical software order that had been received in the second quarter last year came in during the first quarter this year; however, pharmaceutical revenues would have exceeded last year’s first quarter even without that order. First quarter revenues from pharmaceutical software and services increased 74.5% to $1,438,000 from $824,000 in 1Q07. First quarter revenues for our Words+ subsidiary for 1Q08 decreased 13.8% to $545,000 from $632,000 in 1Q07. This decrease was due to our inability to ship Say-it! SAM Handheld Communicators during the first quarter after the supply of the previously discontinued PDA was exhausted, and before the new design was ready for release at the end of the quarter.
Ms. Beran continued: “Consolidated gross profit increased 47.6% to $1,498,000 in 1Q08 from $1,015,000 in 1Q07. R&D expense increased 23.0% to $226,000 in 1Q08 from $184,000 in 1Q07, primarily due to expansion of our Life Sciences staff. Consolidated SG&A increased 22.9% to $930,000 in 1Q08, compared to $757,000 in 1Q07; however, as a percentage of sales, SG&A decreased from approximately 52% to approximately 47%. The major increases in expenses were travel, investor relations, accrued bonus to the corporate Secretary, salaries, and payroll-related expenses such as health insurance, 401K, and payroll taxes, which outweighed decreases in commissions, telephone, supplies, and printer rental.
“Net income before taxes for 1Q08 increased 332% or $311,000 to $405,000 compared with $94,000 in 1Q07. First quarter earnings were impacted by a provision for income taxes of $162,000, of which $37,000 was accrued as a payable. Consolidated net earnings for 1Q08 tripled to $243,000, or $0.013 per diluted share, as compared to $73,000, or $0.004 per diluted share for 1Q07, even after allowing for a 7.8% increase in the number of fully diluted shares. Cash at the end of 1Q08 was $4,584,000, up more than double from $2,103,000 at the end of 1Q07. We believe shareholder equity is one of the best indicators of a company’s growth. Our shareholder equity at the end of 1Q08 increased to $8,075,000, up 40.3% from $5,755,000 at the end of 1Q07, and up 5.3% from $7,665,000 at the beginning of the fiscal year 2008.”
Walt Woltosz, chairman and chief executive officer of Simulations Plus, said: “Simulations Plus continues as a financially strong, steadily growing, debt-free company with best-in-class products and outstanding customer relationships. Our Life Sciences team continues to grow and to receive recognition from our industry peers worldwide. Our subsidiary business struggled a bit during the first quarter with the inability to accept orders for our handheld communication system, but our new design has now been released and shipments have been going out the door since the last few days of the first fiscal quarter. Going forward this fiscal year we are optimistic about our prospects for continued strong growth. We’re also optimistic about our $750,000, two-year, Phase II follow-on Small Business Innovation Research proposal to the National Institutes of Health, and we expect to be announcing some important new collaborations in the near future. We continue to work hard to identify, research, and close strategic acquisitions that will strengthen both the pharmaceutical and the disability products businesses, and we hope to be able to announce results in the near future.”
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