Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of consulting services and software for pharmaceutical discovery and development, today released preliminary revenues for the third quarter of its fiscal year 2016, the period ended May 31, 2016 (3QFY16).
Mr. John Kneisel, chief financial officer of Simulations Plus, Inc., stated: “In accordance with our policy to release timely financial information to our shareholders, we are releasing preliminary revenues for 3QFY16. Earnings will not be released until just prior to the filing of our quarterly report on Form 10-Q. We expect to file our 10-Q with the U.S. Securities and Exchange Commission on or before the July 15, 2016 deadline.”
Preliminary results for the quarter:
- Preliminary revenues for the three months ended May 31, 2016, were $5.96 million, compared to $5.94 million for the same period in 2015. This represents an increase of 0.4%, or $22,000, which, although small, represents the highest quarter in the company’s history, following an exceptionally strong third quarter last year.
- Preliminary revenues for the nine months ended May 31, 2016, were $15.97 million, compared to $14.60 million for the same period in 2015. This represents an increase of 9.3% or $1.36 million.
- Approximately 76.5% of 3QFY16 revenues were from software and software-related training services.
- Software and software-related services were up approximately 2.6% for 3QFY16 compared to 3QFY15.
- Approximately 23.5% of 3QFY16 revenues were from consulting services and analytical studies including collaborations.
- Lancaster analytical study and collaboration revenues were approximately $153,000 for 3QFY16 decreasing by $4,000 when compared to 3QFY15.
- Buffalo preliminary revenues decreased by 7.2%, or $100,000, to $1.3 million from $1.4 million for 3QFY16 compared to 3QFY15. Even with this decrease, year-to-date revenues for the Buffalo division have increased by approximately 11.5%.
- During 3QFY16, the company added 15 new software customers and a total of 54 for the nine months ended May 31, 2016.
- Cash remains strong: as of May 31, 2016, cash was $7.3 million. The Company made a dividend distribution of approximately $851,000 on May 9, 2016 as well as a payment of $750,000 to TSRL in April.
John DiBella, vice president for marketing and sales of Simulations Plus, said: “Although these preliminary revenues constitute yet another record quarter, growth was not up to our usual expectations. Our 3QFY15 was an exceptionally strong third quarter, partially due to revenues that shifted into the quarter from other quarters. In spite of quarterly weakness in Asia, we were able to match and slightly exceed 3QFY15. Our underlying fundamentals remain strong, as we added a considerable number of new clients, achieved renewal rates within our historical range, and maintained a healthy pipeline of consulting projects. In this quarter, we had very successful visits to Europe, China, and Japan, where we trained many scientists, both industry and regulatory, on our technology and generated significant interest for our upcoming product releases. As we enter our fourth quarter, we expect to regain the positive momentum in revenue growth and finish the year on a high note.”
Dr. Ted Grasela, president of Simulations Plus, added, “Revenue for our Buffalo division was impacted by an unusual confluence of routine challenges, which usually do not occur all at once. Clinical trial failures remain common, and these issues will impact the timing of consulting projects or cancel them altogether. Typically, these challenges are not in concentrated batches like this.”
Walt Woltosz, chairman and chief executive officer of Simulations Plus, said: “A revenue growth of 0.2% is not exciting, but as John DiBella noted, this is compared to a record third quarter last fiscal year that experienced a large jump from previous years, setting a challenging pace for Q4FY16. We believe that the fact that we were able to meet and very slightly exceed it in spite of the several factors that combined to impact the quarter speaks well for the overall strength of the business. We have one new major product release (PKPlus™) and two significant upgrades (ADMET Predictor™ 8.0 and GastroPlus™ 9.5) in the coming quarter. As we have shown early versions of these three software programs, interest has been universally high. In addition, we recently submitted two proposals to the FDA in response to two requests for applications, each for two-year contracts for $250,000 per year, for a total of $1 million. Both of these would result in further improvements to our industry-leading GastroPlus software. If we are successful in winning one or both of them, we expect the start date to be in September.”