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 2015 ended November 30, 2014 (1QFY15).
1QFY15 highlights compared with 1QFY14:
- Simulations Plus, Inc. acquired Cognigen Corporation through a merger that closed on September 2, 2014. The numbers presented herein represent the consolidated financial results.
- Net revenues increased 54.7%, or $1.4 million, to $4.1million from $2.6 million. $1.1 million of the increase was from Cognigen consulting revenue.
- Gross profit increased 40.9% to $3.1 million from $2.2 million. $600,000 of this increase due to Cognigen revenue.
- SG&A increased by $1.0 million of which $410,000 was one-time charges related to the merger, $538,000 was related to operating expenses of the new subsidiary, and $72,000 was from increased commission and selling expenses.
- Income before taxes and net income decreased approximately 22% due mainly to the effect of one-time charges for the Cognigen merger. As a result, diluted earnings per share decreased $0.01 to $0.03 from $0.04 per share. Without the one-time charges, diluted earnings per share would have been approximately $0.05 per share up 58%.
John Kneisel, chief financial officer of Simulations Plus, said: “This quarter, Simulations Plus continued its sustained growth in software revenues, as well as closing the acquisition with Cognigen. This quarter’s net income was substantially affected by approximately $410,000 in one-time fees and expenses that were incurred for the acquisition of Cognigen. The integration plan for financial reporting with Cognigen has gone smoothly and we continue to integrate our operational and financial processes. We are in a strong financial position with cash balances in excess of $6 million.”
Ted Grasela, newly appointed president of the combined Simulations Plus and Cognigen company, added: “I have been impressed with the quality and commitment of the scientists at Simulations Plus and the loyalty and enthusiasm of our client base. We have already seen significant opportunities for collaboration and synergies in terms of our marketing and sales efforts. I am excited about the enhanced scientific capabilities we are offering as a result of the merger. I look forward to offering new and expanded consulting services to clients of both companies. In addition, software development activities have continued apace and exciting opportunities are emerging as our scientists gain cross-disciplinary experience during our collaborations.”
John DiBella, vice president for marketing and sales for Simulations Plus, said: “1Q15 was very strong for software sales, as the number of units licensed saw a 20% increase compared to 1Q14. This was largely driven by 23 new organizations, or new departments at existing organizations, now utilizing our technology. Included among these new licenses were orders from several commercial companies in Asia, a territory we continue to penetrate. We are pleased by the level of interest seen in our new MembranePlus™ software, and the feedback received from the first round of evaluations has been positive. We are also close to releasing the next version of our flagship GastroPlus™ software, and with its ability to simulate the distribution of large molecules in humans and animals, we anticipate it will help us expand into the robust biopharmaceuticals market. Education remains a key focus for us in 2015, as we have scheduled workshops in the U.S., Europe, and Asia to allow us to train more scientists on the applications of our technology.”
Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “Fiscal year 2015 is off to a very good start with this record first quarter. Ted is ably managing the combined company, enabling me to increase my focus on products, services, and business development. I am particularly excited about two new products under development for use in the aerospace and healthcare industries. These products use our artificial neural network ensemble modeling engine and we intend to pursue customers and funding to develop customized tools and applications.”
The Company has announced an investor conference call that will be webcast live at 1:15 p.m. PST/4:15 p.m. EST on Wednesday, January 14, 2015, which may be joined by registering at the following website: https://attendee.gotowebinar.com/register/8868645760194807041. On registering, you will receive a confirmation e-mail with 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 (646) 307-1708, and enter access code 274-738-985.
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