Simulations Plus, Inc. (Nasdaq: SLP), the leading provider of modeling and simulation solutions for the pharmaceutical, biotechnology, chemicals, and consumer goods industries, today reported financial results for its 2019 fiscal year (FY19) and fourth quarter (4Q19) ended August 31, 2019.
Full Year FY19 highlights compared with Full Year FY18:
- Revenues were $34.0 million, up 14.5% over $29.7 million in FY18
- Gross profit was up 15.1%, or $3.3 million, to $24.9 million, from $21.7 million in FY18
- SG&A was $11.8 million, an increase of $2.2 million, or 23.1%, over $9.6 million
- Total R&D expenditures were $4.3 million, an increase of $363,000, or 9.2% over $3.9 million
- For FY19, $1.8 million was capitalized and $2.5 million was expensed
- For FY18, $2.1 million was capitalized and $1.8 million was expensed
- Income before taxes increased 4.1% to $10.6 million, an increase of $418,000 over $10.1 million
- Net income decreased 3.9% to $8.6 million, a decrease of $351,000 from $8.9 million; FY18 included the one-time second-quarter tax benefit of $1.5 million
- Diluted earnings per share decreased 5.0% to $0.48 from $0.50. In FY18, the major change in diluted earnings per share came from the $1.5 million tax adjustment that accounted for an $0.08 increase in diluted earnings per share
- Cash was $11.4 million, an increase of $2.0 million, or 21.6%, from $9.4 million at the end of FY18.
4QFY19 highlights compared with 4QFY18:
- Revenues increased 20.0% to $8.0 million, an increase of $1.3 million over $6.7 million
- Gross profit was up 25.6% to $5.7 million, an increase of $1.2 million over $4.6 million
- SG&A was $3.2 million, an increase of 42.6%, or $951,000, over $2.2 million
- Total R&D expenditures were $1.0 million, an increase of $89,000, or 9.4%, over $951,000
- For 4QFY19, $437,000 was capitalized and $603,000 was expensed
- For 4QFY18, $514,000 was capitalized and $437,000 was expensed
- Income before taxes increased 7.9% to $2.0 million, an increase of $146,000 over $1.8 million
- Net income increased 53.9% to $2.1 million, an increase of $721,000 over $1.3 million
- Earnings per fully diluted share increased $0.03 to $0.11 from $0.08
Shawn O’Connor, chief executive officer of Simulations Plus, said: “We delivered 20% fourth quarter growth, a strong end to a solid year of growth for Simulations Plus as full-year revenue grew 14.5%. This progress is due to targeted investments in our sales and marketing infrastructure, which enabled us to achieve an increased revenue growth rate in excess of historical levels while maintaining excellent gross margins and overall profitability. We enter our fiscal year 2020 with strong market momentum, high backlogs and successful progress across our key objectives to extend our sales and marketing resources and capacity to deliver our strategic consulting services efficiently to our clients.”
John Kneisel, chief financial officer of Simulations Plus, added: “Continued investment in our sales and marketing and supporting teams’ infrastructure and higher R&D spending led to increases in our operating expenses. We believe these investments will help us continue to accelerate our revenue growth. Of special note, in the fourth quarter we benefited from tax deductions from stock compensation expense as employees took advantage of the increased value of their options. Overall, we continue to generate solid profitability and free cash flow, even after paying our regular quarterly dividend.”
Investor Conference Call
The Company invites all interested persons to attend its conference call at 4:15 p.m. Eastern Time on November 13, 2019. The live webcast/teleconference will be accessible by registering here. Please dial in five to ten minutes prior to the scheduled start time. A live, listen-only webcast will also be available by dialing (914) 614-3221, and entering access code 588-454-748. A replay of the webcast will be available at the Investors section of the Simulations Plus website following the call.
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