Simulations Plus Reports Fourth Quarter and Full Year Fiscal 2021 Results

Simulations Plus Reports Fourth Quarter and Full Year Fiscal 2021 Results




Simulations Plus Reports Fourth Quarter and Full Year Fiscal 2021 Results

Fiscal 2021 revenue increased 12% year-over-year to $46.5 million

Software revenue increased 28% year-over-year to $27.7 million

Fiscal 2022 financial outlook for total revenue of $51 million to $53 million, reflecting 10% to 15% year-over-year growth

LANCASTER, Calif.–(BUSINESS WIRE)–Simulations Plus, Inc. (Nasdaq: SLP), a leading provider of modeling and simulation solutions for the pharmaceutical and biotechnology industries, today reported financial results for its fourth quarter and full year 2021 fiscal year, ended August 31, 2021.

“We finished the year in a better position than we anticipated following our third quarter earnings report driven by both strong GastroPlus® sales and continued momentum in ADMET Predictor® sales following the introduction of new product functionality,” said Shawn O’Connor, chief executive officer. “We also benefitted from our consulting services business returning to more normalized operations with an increasing backlog and improved pipeline of new opportunities, furthering our belief that the events of the third quarter were a short-term occurrence, and the business remains fundamentally healthy.”

Fourth Quarter Financial Highlights (compared with the corresponding period last fiscal year):

  • Total revenue increased 3% to $9.8 million
  • Software revenue increased 14% to $5.4 million, representing 55% of total revenue
  • Services revenue declined 7% to $4.4 million, representing 45% of total revenue
  • Gross profit increased 3% to $7.1 million
  • Gross margin was unchanged at 72%
  • Net income was $0.3 million compared to $2.2 million for the period last fiscal year
  • Diluted earnings per share was $0.01 compared to $0.11 for the period last fiscal year

Full Year Financial Highlights (compared with the corresponding period last fiscal year):

  • Total revenue increased 12% to $46.5 million
  • Software revenue increased 28% to $27.7 million, representing 60% of total revenue
  • Services revenue declined 6% to $18.8 million, representing 40% of total revenue
  • Gross profit increased 16% to $35.9 million
  • Gross margin increased from 74% to 77%
  • Net income was $9.8 million compared to $9.3 million for the period last fiscal year
  • Diluted earnings per share was $0.47 compared to $0.50 for the period last fiscal year

Fiscal 2022 Financial Outlook

The Company expects full year fiscal 2022 total revenue to be in the range of $51 million to $53 million, representing 10% to 15% year-over-year growth.

Software revenue is expected to be in the range of 55% to 60% of total revenue and services revenue is expected to be in the range of 40% to 45% of total revenue. Services revenue is expected to recover sequentially throughout fiscal 2022 and any acquisitions would be incremental to the revenue growth target above.

Mr. O’Connor concluded, “We believe our proven business model and increasing software revenue mix will enable us to grow our bottom line faster than our top line, while generating strong cash flows to further strengthen our balance sheet. Our already strong balance sheet reduces the need to secure additional capital as we’re evaluating strategic acquisition opportunities that we believe can further position us for success and support our revenue CAGR target above 20% as we’ve achieved since our Cognigen acquisition in fiscal 2015.”

Quarterly Dividend Declared

On October 13, 2021, the Company’s Board of Directors declared a cash dividend of $0.06 per share of the Company’s common stock, payable on November 1, 2021, to shareholders of record as of October 25, 2021. 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 will host a conference call on October 25, 2021, at 5 p.m. Eastern Time. All interested parties are invited to join the call by registering here or by calling 1-201-389-0879. Please join five to 10 minutes before the scheduled start time. The call will be simulcast live on the Internet, and the webcast will be available on the Investors page of the Simulations Plus website under Conference Calls & Presentations. A replay of the webcast will be available on the website approximately one hour following the call.

About Simulations Plus, Inc.

Serving clients worldwide for 25 years, Simulations Plus, Inc. is a leading provider of modeling and simulation software and consulting services supporting drug discovery, development research, and regulatory submissions. We offer solutions which bridge machine learning, physiologically based pharmacokinetics, quantitative systems pharmacology/toxicology, and population PK/PD modeling approaches. Our technology is licensed and applied by major pharmaceutical, biotechnology, chemical, consumer goods companies, and regulatory agencies worldwide. For more information, visit our website at www.simulations-plus.com. Follow us on Twitter | Read our Environmental, Social, and Governance (ESG) Report.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 – With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. Words like “believe,” “expect” and “anticipate” mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to maintain our competitive advantages, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, our ability to identify and close acquisitions on terms favorable to the Company, and a sustainable market. Further information on our risk factors is contained in our quarterly and annual reports and filed with the U.S. Securities and Exchange Commission.

SIMULATIONS PLUS, INC.        
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME      
         
 

Three months ended August 31,

 

Years ended August 31,

(in thousands, except per common share amounts)  

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

  (Unaudited)   (Unaudited)    
Revenues  

$

9,841

 

 

$

9,540

 

 

$

46,466

 

 

$

41,589

 

Cost of revenues  

 

2,785

 

 

$

2,675

 

 

 

10,600

 

 

 

10,649

 

Gross profit  

 

7,056

 

 

$

6,865

 

 

 

35,866

 

 

 

30,940

 

Operating expenses        
Research and development  

 

1,277

 

 

 

948

 

 

 

4,047

 

 

 

2,975

 

Selling, general and administrative  

 

5,606

 

 

 

3,713

 

 

 

20,566

 

 

 

16,360

 

Total operating expenses  

 

6,883

 

 

 

4,661

 

 

 

24,613

 

 

 

19,335

 

         
Income from operations  

 

173

 

 

 

2,204

 

 

 

11,253

 

 

 

11,605

 

         
Other income (expense)        
Interest income  

 

46

 

 

 

2

 

 

 

201

 

 

 

30

 

Interest expense  

 

 

 

 

 

 

 

(22

)

 

 

 

Change in value of contingent consideration  

 

(122

)

 

 

(122

)

 

 

(486

)

 

 

(203

)

Gain (loss) on currency exchange  

 

78

 

 

 

(46

)

 

 

139

 

 

 

(45

)

Total other income (expense), net  

 

2

 

 

 

(166

)

 

 

(168

)

 

 

(218

)

         
Income before income taxes  

 

175

 

 

 

2,038

 

 

 

11,085

 

 

 

11,387

 

Provision for income taxes  

 

130

 

 

 

150

 

 

 

(1,303

)

 

 

(2,055

)

Net Income  

$

305

 

 

$

2,188

 

 

$

9,782

 

 

$

9,332

 

         
Earnings per share        
Basic  

$

0.02

 

 

$

0.12

 

 

$

0.49

 

 

$

0.52

 

Diluted  

$

0.01

 

 

$

0.11

 

 

$

0.47

 

 

$

0.50

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding        
Basic  

 

20,137

 

 

 

18,289

 

 

 

20,045

 

 

 

17,819

 

Diluted  

 

20,753

 

 

 

19,152

 

 

 

20,743

 

 

 

18,538

 

         
Other comprehensive income (loss), net of tax        
Foreign currency translation adjustments  

 

(137

)

 

 

28

 

 

 

(101

)

 

 

58

 

Comprehensive income  

$

168

 

 

$

2,216

 

 

$

9,681

 

 

$

9,390

 

SIMULATIONS PLUS, INC.    
CONSOLIDATED BALANCE SHEETS    
 

August 31,

(In thousands, except share and per share amounts)  

 

2021

 

 

 

2020

ASSETS    
Current assets    
Cash and cash equivalents  

$

36,984

 

 

$

49,207

Accounts receivable, net of allowance for doubtful accounts of $78 and $50  

 

9,851

 

 

 

7,422

Revenues in excess of billings  

 

3,150

 

 

 

3,093

Prepaid income taxes  

 

1,012

 

 

 

970

Prepaid expenses and other current assets  

 

1,696

 

 

 

1,596

Short-term investments  

 

86,620

 

 

 

66,804

Total current assets  

 

139,313

 

 

 

129,092

Long-term assets    
Capitalized computer software development costs,    
net of accumulated amortization of $14,438 and $13,582  

 

7,646

 

 

 

6,087

Property and equipment, net  

 

1,838

 

 

 

438

Operating lease right of use asset  

 

1,276

 

 

 

927

Intellectual property, net of accumulated amortization of $6,516 and $5,087  

 

10,469

 

 

 

11,898

Other intangible assets, net of accumulated amortization of $2,186 and $1,642  

 

6,464

 

 

 

7,008

Goodwill  

 

12,921

 

 

 

12,921

Other assets  

 

51

 

 

 

51

Total assets  

$

179,978

 

 

$

168,422

     
LIABILITIES AND SHAREHOLDERS’ EQUITY    
Current liabilities    
Accounts payable  

$

387

 

 

$

351

Accrued payroll and other expenses  

 

5,604

 

 

 

2,251

Contracts payable – current portion  

 

4,550

 

 

 

2,000

Billings in excess of revenues  

 

117

 

 

 

141

Operating lease liability, current portion  

 

382

 

 

 

463

Deferred revenue  

 

534

 

 

 

300

Total current liabilities  

 

11,574

 

 

 

5,506

     
Long-term liabilities    
Deferred income taxes, net  

 

1,726

 

 

 

2,354

Operating lease liability  

 

896

 

 

 

463

Contracts payable – net of current portion  

 

 

 

 

4,064

Total liabilities  

 

14,196

 

 

 

12,387

     
Commitments and contingencies  

 

 

 

 

     
Shareholders’ equity    
Preferred stock, $0.001 par value 10,000,000 shares authorized no shares issued and outstanding  

$

 

 

$

Common stock, $0.001 par value and additional paid-in capital — 50,000,000 shares    
authorized, 20,141,521 and 19,923,277 shares issued and outstanding  

 

133,418

 

 

 

128,541

Retained earnings  

 

32,407

 

 

 

27,436

Accumulated other comprehensive income (loss)  

 

(43

)

 

 

58

Total shareholders’ equity  

 

165,782

 

 

 

156,035

Total liabilities and shareholders’ equity  

$

179,978

 

 

$

168,422

 

Contacts

Simulations Plus Investor Relations
Ms. Renee Bouche

661-723-7723

renee.bouche@simulations-plus.com

Hayden IR
Mr. Brian Siegel

346-396-8696

brian@haydenir.com