Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of simulation and modeling software for pharmaceutical discovery and development, today reported financial results for its first quarter of fiscal year 2012 ended November 30, 2011 (1QFY12). Results below are reported for continuing operations (without the discontinued operations of the Company’s former Words+ subsidiary), except as noted.
1QFY12 highlights compared with 1QFY11:
- Net sales increased 9.6% to first-quarter record $2.248 million from $2.050 million
- Gross profit increased 11.7% to $1.896 million from $1.697 million
- SG&A increased 2.0% to $0.700 million from $0.686 million, but decreased as a percent of revenues to 31.1% from 33.5%
- R&D expenditures increased 14.9% to $454,000 from $395,000
- Income before taxes increased 27.6% to $1.064 million from $0.834 million
- Net income from continuing operations increased 30.9% to $755,000 from $577,000, and including the proceeds from the sale of Words+, partially offset by the discontinued operations of Words+, net income increased 71.1% to $971,000 from $567,000
- Total diluted earnings per share, including discontinued operations, increased 100% to $0.06 from $0.03
- Diluted earnings per share for only the continuing operations up 67% to $0.05 from $0.03
Ms. Momoko Beran, chief financial officer of Simulations Plus, said: “This was a very busy quarter, with increased Selling, General and Administrative expenses related to the attempted acquisition of assets of Entelos in bankruptcy court as well as the sale of our former Words+ subsidiary. Despite these nonrecurring expenses, we’re pleased to report these results that show continued strong top- and bottom-line performance, including record first-quarter revenue and a 30.9% increase in net income. Cash at the end of 1QFY12 was up 42.7% to $12.662 million compared to $8.873 million at the end of 1QFY11, and up 26.1% from $10.037 million at the beginning of the quarter. Shareholders’ equity increased 20.9% to $15.088 million compared to $12.482 million in 1QFY11.”
Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “Simulations Plus continues to demonstrate sustained strong growth in sales and even stronger sustained growth in net income. The increased sales and net income from our continuing operations for this new record first quarter are enhanced even more with the small profit from the sale of our former Words+ subsidiary. Accomplishing that sale was a major effort over the past half year that leaves us now with a focused business and without the losses that occurred all too often in the subsidiary that reduced the overall financial performance of the company. It’s worthy to note that as we compare this first quarter with last year, we had about $67,000 in grant revenues last year that we did not have this year, so comparing software and consulting revenue growth alone increased by about 13.4% rather than the 9.6% shown above. Our cash position is stronger than ever, and the board of directors is evaluating the potential effects of either another share repurchase program, an ongoing dividend with an attractive yield, or some combination of the two that could be accomplished without using all of our positive cash flow so that net cash would not decrease. Of course, there can be no assurances that the board will approve a share repurchase or dividend, but the board is committed to creating shareholder value.”
Woltosz continued: “We continue to evaluate acquisition opportunities as we can identify any that would fit our business model. The difficulty we’ve had in finding appropriate acquisition opportunities, i.e., those that would not require an inordinate amount of time and money to realize a reasonable return on investment, is a matter of record. We continue to grow organically and to pursue our aggressive marketing and sales program, which has yielded the growth that can be seen in this report. We are also making progress on our NCE (new chemical entity) project for malaria, with compounds in synthesis, and we expect to have samples ready for testing in the coming quarter.”
The Company has announced an investor conference call that will be webcast live at 1:15 PST/4:15 PM EST today, Wednesday, January 18, 2012, which may be accessed by first registering at the following website: https://www2.gotomeeting.com/register/267646562. Upon registering, you will receive a confirmation e-mail with a unique link and instructions for joining the call. Please dial in five to ten minutes prior to the scheduled start time. For listen-only mode, you may dial (314) 627-1519, and enter access code 367-620-098.
For complete balance sheets, click here.