Simulations Plus Reports Fourth Quarter and Full Year Fiscal 2021 Results

Rhea-AI Summary

Simulations Plus, Inc. (Nasdaq: SLP) reported a 12% year-over-year revenue increase to $46.5 million for fiscal 2021, with software revenue rising 28% to $27.7 million. In Q4, total revenue was $9.8 million, a 3% increase, while software revenue grew 14% to $5.4 million. Despite a 7% decline in services revenue, gross profit was $7.1 million with a 72% gross margin. For fiscal 2022, the company projects total revenue between $51 million and $53 million, indicating 10% to 15% growth.

Positive

• 12% revenue growth to $46.5 million for fiscal 2021
• 28% increase in software revenue to $27.7 million
• Gross profit rose 16% to $35.9 million with a 77% gross margin
• Fiscal 2022 revenue guidance of $51 million to $53 million indicates 10% to 15% growth
• Strong balance sheet reduces need for additional capital

Negative

• Services revenue decreased 6% to $18.8 million for fiscal 2021
• Net income for Q4 down to $0.3 million from $2.2 million year-over-year
• Diluted earnings per share decreased from $0.11 to $0.01 in Q4

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

 

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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

Source: Simulations Plus, Inc.

FAQ

What were Simulations Plus' total revenues for fiscal 2021?

Total revenues for fiscal 2021 were $46.5 million, reflecting a 12% year-over-year increase.

What is the fiscal 2022 revenue outlook for Simulations Plus?

Simulations Plus expects total revenue for fiscal 2022 to be between $51 million and $53 million, indicating 10% to 15% growth.

How much did the software revenue increase in fiscal 2021 for SLP?

Software revenue increased by 28% to $27.7 million in fiscal 2021.

What was the gross margin for Simulations Plus in fiscal 2021?

The gross margin for fiscal 2021 was 77%, up from 74% the previous year.

What was the net income for Simulations Plus in Q4 of fiscal 2021?

Net income for Q4 was $0.3 million, a decrease from $2.2 million in the corresponding period last fiscal year.