Simulations Plus Reports Record Second Quarter FY2020 Revenue

Division: Simulations Plus

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 2020, the period ended February 29, 2020 (2QFY20).

2QFY20 highlights compared with 2QFY19:

Net revenues increased 22.2%, or $1.9 million, to $10.3 million from $8.5 million
Gross profit was $7.7 million, up $1.4 million, or 22.7%, from $6.3 million
SG&A was $4.1 million, up $1.3 million, or 46.3%, from $2.8 million
SG&A as a percentage of revenues increased to 39.7% from 33.2%, inclusive of $350,000 in transaction costs related to the Lixoft acquisition
R&D expense increased 3.3%, or $23,600, to $748,000 from $724,000
Income before taxes increased 5.2%, or $140,500, to $2.8 million from $2.7 million
Net income increased to $2.2 million from $2.1 million
Diluted earnings per share remained unchanged at $0.12 per share
6moFY20 highlights compared with 6moFY19:

Net revenues increased 23.4%, or $3.7 million, to $19.8 million from $16.0 million
Gross profit was $14.4 million, up $2.8 million, or 24.5%, from $11.6 million
SG&A was $7.6 million, an increase of $2.1 million, or 37.9%, from $5.5 million
R&D expense increased 1.6%, or $20,300, and remained at $1.3 million
Income before taxes increased 18.1%, or $852,300, to $5.6 million from $4.7 million
Net income increased $573,000, or 15.8%, to $4.2 million from $3.6 million
Diluted earnings per share increased $0.03, to $0.23 from $0.20 per share
Shawn O’Connor, chief executive officer of Simulations Plus, said: “This was a strong, productive, and important quarter for Simulations Plus, highlighted by the acquisition of Lixoft, which expands our presence in Europe and bolsters our software revenue mix. Operationally, we grew revenues 22% for the quarter and 23% year-to-date, driving a nearly 16% increase in year-to-date net income and strengthening our balance sheet. Today, Simulations Plus is a strong company with a global presence, more than $40 million in trailing 12 month revenue, much of which is recurring, a service business that operates with a large backlog of project-based business, proven profitability and a balance sheet that gives us flexibility during these challenging times. Our new business sales have slowed, as our customers deal with the Covid-related interruptions and uncertainty. To date, this has resulted in sales pipeline growth, as sales have been mostly delayed but not lost.”

“To proactively contribute to solving this worldwide pandemic, we established the StrategiesPlus™ COVID-19 ACT Program to speed consulting assistance to any organization involved in coronavirus research,” Mr. O’Connor continued. “This program enables each part of our organization to provide tools and expertise to help accelerate drug development and R&D. 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: “We finished the quarter with $12.2 million in cash. Early in the third fiscal quarter, we paid approximately $6 million in net cash for the Lixoft acquisition. We maintain a strong balance sheet with sufficient cash reserves and working capital and access to a line of credit to provide flexibility. The Lixoft acquisition will be immediately accretive, helping boost future cash flows to further strengthen our position.”

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, 2020, to shareholders of record as of April 24, 2020. 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 on April 9, 2020, at 1:15 p.m. Pacific Time/4:15 p.m. Eastern Time. 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 938-770-331. A replay of the webcast will be available at the Simulations Plus website following the call.

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