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 second quarter of fiscal year 2019, the period ended February 28, 2019 (2QFY19).
2QFY19 highlights compared with 2QFY18:
- Net revenues increased 15%, or $1.1 million, to $8.5 million from $7.4 million
- Gross profit was $6.3 million, up $1.0 million, or 19.5%, from $5.2 million
- SG&A was $2.8 million, up $470,000, or 20%, from $2.3 million
- SG&A as a percentage of revenues increased to 33.2% from 31.8%
- R&D expense increased 49.5%, or $240,000, to $724,000 from $484,000
- Income before taxes increased 13.0%, or $311,000, to $2.7 million from $2.4 million
- Net income decreased $1.4 million, or 39.6%, to $2.1 million from $3.5 million
- This decrease is mainly due to the Company recording in the prior year (2QFY18) a $1.5 million one-time adjustment to deferred taxes based on the Tax Cuts and Jobs Act passed in the prior fiscal year
- Diluted earnings per share decreased $0.07, to $0.12 from $0.19 per share; without the effect of the tax adjustment, the change would have been an increase of $0.01 per share as the prior years’ tax benefit effected diluted earnings per share by approximately $0.08 per share
6moFY19 highlights compared with 6moFY18:
- Net revenues increased 11%, or $1.6 million, to $16.0 million from $14.4 million
- Gross profit was $11.6 million, up $1.0 million, or 9.7%, from $10.6 million
- SG&A was $5.5 million, an increase of $782,000, or 16.5%, from $4.7 million
- R&D expenditures were $1.3 million, an increase of $409,000, or 48.3%, over $845,000
- Income before taxes decreased 3.8%, or $184,000, to $4.7 million from $4.9 million
- Net income decreased $1.6 million, or 30.0%, to $3.6 million from $5.2 million
- This decrease is mainly due to the Company recording in the prior year (2QFY18) a $1.5 million one-time adjustment to deferred taxes based on the Tax Cuts and Jobs Act in 2018
- Diluted earnings per share decreased $0.09, to $0.20 from $0.29 per share; approximately $0.08 per share of the decrease is associated with the prior years’ tax benefit recorded in 2QFY18. Without the effect of the tax adjustment, the change would have been a decrease of $0.01 per share as the prior years’ tax benefit effected diluted earnings per share by approximately $0.08 per share
Shawn O’Connor, chief executive officer of Simulations Plus, said: “As expected, our revenue growth accelerated in the second quarter, in line with historical seasonality and benefiting from double-digit growth in consulting services. This progress reinforced our confidence in our full-year revenue growth outlook of 10-15%, and this does not yet benefit from the ongoing investments in sales and marketing initiatives designed to drive future growth. In particular, we are adding to our consulting services team in an effort to address the growing demand and expanding opportunities we see in the marketplace.”
John Kneisel, chief financial officer of Simulations Plus, added: “Second quarter pretax earnings increased 13% over the prior year. Net income was down compared to the prior year due nearly entirely to the non-recurring $1.5 million tax benefit recorded in the prior year, which boosted the comparable period’s net income.”
Quarterly Dividend Declared
The Company’s Board of Directors has declared a cash dividend of $0.06 per share of the Company’s common stock payable on May 1, 2019, to shareholders of record as of April 24, 2019. The declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements, and other factors.
Investor Conference Call
The Company has announced an investor conference call that will be webcast live at 1:15 p.m. PDT/4:15 p.m. EDT on Tuesday, April 9, 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 (415) 930-5321, and entering access code 271-105-468. A replay of the webcast will be available at the Investors section of the Simulations Plus website following the call.
For complete balance sheets, click here.