Simulations Plus Reports First Quarter FY2010 Financial Results

Division: PBPK

Ms. Momoko Beran, chief financial officer of Simulations Plus, stated: “I’m pleased to report that our c onsolidated net sales increased 14.2% to $2,437,000 in 1QFY10 from $2,133,000 in the first fiscal quarter of fiscal 2009 (1QFY09). Sales for our pharmaceutical software and services business increased 21.3%, or $305,000, for 1QFY10 over 1QFY09. Revenues from our Words+ subsidiary were essentially flat, with a 0.1% decrease over 1QFY09.”

Ms. Beran continued: “For 1QFY10, consolidated gross profit increased 16.2% to $1,830,000 from $1,574,000 in 1QFY09. R&D expense decreased 2.9% to $261,000 in 1QFY10 from $269,000 in 1QFY09 due to more staff hours being spent on consulting studies in 1QFY10. Total R&D expenditures, which include capitalized software development costs, decreased by 1.9% to $462,000 from $471,000. Consolidated SG&A increased $100,000, or 11.1% to $1,004,000 in 1QFY10, compared to $904,000 in 1QFY09. As a percentage of sales, SG&A decreased to 41.2% in 1QFY10 from 42.4% in 1QFY09. Expanded travel and trade show expenses accounted for a significant portion of the increase as we have increased our marketing and sales efforts substantially over last year. For 1QFY10, net income before taxes increased 46.0%, or $208,000, to $661,000 compared with $453,000 in 1QFY09. Our provision for income taxes increased by 63.7%, or $90,000, to $231,000 (estimated tax rate of 35.0%) for 1QFY10 from $141,000 (tax rate of 31.2%) in 1QFY09. Using our best estimates for the remainder of the year, we anticipate a tax rate for the year to be in the range of 33-37%; however, this will depend on the tax credits we obtain from Non-qualified Incentive Stock Option events and the amount of R&D tax credits generated during the current fiscal year.

“Consolidated net earnings for 1QFY10 were $430,000, or $0.03 per fully diluted share, an increase of 38.0% from $312,000, or $0.02 per diluted share in 1QFY09. We attribute this to our increased revenues from pharmaceutical software licenses and consulting services, which offset the increase in our investment in marketing and sales. Our cash continues to grow, with cash at the end of 1QFY10 of $7,973,000, up 31.5% from $6,064,000 at the end of 1QFY09. Shareholders’ equity increased 4.8% from $10,315,004 on November 30, 2008, to $10,811,665 on November 30, 2009. Note that this was after we spent just over $1 million for share repurchases during the past year.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, said: “ These results represent a new record first quarter for both revenues and earnings. We believe much of the growth is the result of the aggressive marketing and sales program we began early in 2009, wherein we have attended approximately three times as many scientific meetings and trade shows compared to what we had typically done in previous years. The recognition we’ve received through scientific presentations by our industry and government customers at many of these scientific meetings has also undoubtedly contributed to our success. With the upcoming release of GastroPlus™ Version 7.0, which will add three very important new capabilities in drug-drug interaction, ocular drug delivery, and nasal/pulmonary drug delivery, and coming improvements in ADMET Predictor™, ClassPharmer™, and DDDPlus™, combined with the continued strong demand for our consulting services, we expect 2010 to continue to be a very good year. ”

For complete balance sheets, click here.