EX-99.1 2 simulations_ex9901.htm PRESS RELEASE

Exhibit 99.1

Simulations Plus Reports First Quarter Fiscal 2022 Financial Results

Total revenue growth of 16%; Software revenue growth of 19%; Diluted Earnings Per Share (EPS) growth of 25%

Board of Directors announces quarterly dividend of $0.06 per share

LANCASTER, CA, January 6, 2022 – Simulations Plus, Inc. (Nasdaq: SLP), a leading provider of modeling and simulation software and services for pharmaceutical safety and efficacy, today reported financial results for its first quarter of fiscal 2022, ended November 30, 2021.

Shawn O’Connor, chief executive officer of Simulations Plus, said, “Our software business continued to deliver higher revenue and margins in the first quarter, supplemented by improving momentum in our services business, which returned the company to overall double-digit revenue growth. The reinvigorated growth enabled a 22% improvement in net income, demonstrating both the benefit of a higher software versus services revenue mix and the inherent leverage in our operating model.”

First Quarter Fiscal 2022 Financial Highlights (compared with the corresponding period last fiscal year):

| · | Total revenue increased 16% to $12.4 million;

| · | Software revenue increased 19% to $7.4 million, representing 59% of total revenue;

| · | Services revenue increased 13% to $5.0 million, representing 41% of total revenue;

| · | Gross profit increased 17% to $9.7 million; gross margin was 78%;

| · | Net income and diluted EPS of $3.0 million and $0.15 compared to $2.5 million and $0.12, respectively;

| · | Adjusted EBITDA of $5.3 million, representing 42% of total revenue.

Mr. O’Connor concluded, “Looking forward, we remain focused on our organic growth strategy driven by key initiatives, including investing in our sales and marketing function, cross-selling products and services, and continuing to enhance our industry leading software offerings with new and improved functionality and incremental capabilities. With a software business that continues to generate consistently high growth rates, and a consulting services business that’s growing its pipeline and backlog, we remain confident in achieving our 10-15% total revenue guidance for fiscal 2022.”

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Quarterly Dividend

The company’s Board of Directors declared a cash dividend of $0.06 per share of the company’s common stock, payable on February 7, 2022, to shareholders of record as of January 31, 2022. 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.

Environmental, Social, and Governance (ESG)

We focus our Environmental, Social, and Governance (ESG) efforts where we can have the most positive impact. To learn more about our latest initiatives and priorities, please visit our website to read our ESG Report.

Webcast and Conference Call Details

Shawn O’Connor, chief executive officer, and Will Frederick, chief financial officer, will host a conference call and webcast today at 5 p.m. Eastern Time to discuss details of the company’s performance for the quarter and certain forward-looking information. The call may be accessed by registering here or by calling 1-201-389-0879. The webcast will be available on our website under Conference Calls & Presentations. A replay of the webcast will be available on the website approximately one hour following the call.

Non-GAAP Definition

Adjusted EBITDA is defined as earnings (loss) before interest, taxes, depreciation and amortization, stock-based compensation, and any acquisition or financial transaction-related expenses. Adjusted EBITDA represents a measure that we believe is customarily used by investors and analysts to evaluate the financial performance of companies in addition to the GAAP measures that we present. Our management also believes that Adjusted EBITDA is useful in evaluating our core operating results. However, Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America and should not be considered an alternative to net income or operating income as an indicator of our operating performance or to net cash provided by operating activities as a measure of our liquidity. The company’s Adjusted EBITDA measure may not provide information that is directly comparable to that provided by other companies in its industry, as other companies in its industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items.

About Simulations Plus

Serving clients worldwide for 25 years, Simulations Plus is a leading provider of modeling and simulation software and consulting services supporting drug discovery, development, research, and regulatory submissions. We offer solutions that 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 | LinkedIn.

Forward-Looking Statements

Except for historical information, the matters discussed in this press release are forward-looking statements that involve 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.

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Investor Relations Contacts:

Renee Bouche

Simulations Plus Investor Relations

661-723-7723

renee.bouche@simulations-plus.com

Brian Siegel

Hayden IR

346-396-8696

brian@haydenir.com

--Tables follow—

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SIMULATIONS PLUS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)

|  | Three months ended November 30, |
(in thousands, except per common share amounts) |  | 2021 |  |  | 2020 |
Revenue |  |  |  |  |  |  |  |
Software |  | $ | 7,362 |  |  | $ | 6,212 |
Services |  |  | 5,055 |  |  |  | 4,489 |
Total revenue |  |  | 12,417 |  |  |  | 10,701 |
Cost of revenue |  |  |  |  |  |  |  |
Software |  |  | 735 |  |  |  | 812 |
Services |  |  | 2,021 |  |  |  | 1,621 |
Total cost of revenue |  |  | 2,756 |  |  |  | 2,433 |
Gross profit |  |  | 9,661 |  |  |  | 8,268 |
Operating expenses |  |  |  |  |  |  |  |
Research and development |  |  | 882 |  |  |  | 809 |
Selling, general and administrative |  |  | 4,988 |  |  |  | 4,408 |
Total operating expenses |  |  | 5,870 |  |  |  | 5,217 |
Income from operations |  |  | 3,791 |  |  |  | 3,051 |
Other income (expense) |  |  |  |  |  |  |  |
Interest income |  |  | 64 |  |  |  | 61 |
Change in value of contingent consideration |  |  | (121 | ) |  |  | (121 | )
Gain on sale of assets |  |  | 1 |  |  |  | – |
Gain on currency exchange |  |  | 121 |  |  |  | 5 |
Total other income (expense), net |  |  | 65 |  |  |  | (55 | )
Income before income taxes |  |  | 3,856 |  |  |  | 2,996 |
Provision for income taxes |  |  | (830 | ) |  |  | (517 | )
Net Income |  | $ | 3,026 |  |  | $ | 2,479 |
Earnings per share |  |  |  |  |  |  |  |
Basic |  | $ | 0.15 |  |  | $ | 0.12 |
Diluted |  | $ | 0.15 |  |  | $ | 0.12 |
Weighted-average common shares outstanding |  |  |  |  |  |  |  |
Basic |  |  | 20,150 |  |  |  | 19,930 |
Diluted |  |  | 20,746 |  |  |  | 20,799 |
Other comprehensive income (loss), net of tax |  |  |  |  |  |  |  |
Foreign currency translation adjustments |  |  | (237 | ) |  |  | – |
Comprehensive income |  | $ | 2,789 |  |  | $ | 2,479 |

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SIMULATIONS PLUS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

|  | (Unaudited) |  |  | (Audited) |
(In thousands, except share and per share amounts) |  | November 30, 2021 |  |  | August 31, 2021 |
ASSETS |  |  |  |  |  |  |  |
Current assets |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 41,680 |  |  | $ | 36,984 |
Accounts receivable, net of allowance for doubtful accounts of $12 and $78 |  |  | 11,823 |  |  |  | 9,851 |
Revenue in excess of billings |  |  | 1,483 |  |  |  | 3,150 |
Prepaid income taxes |  |  | 584 |  |  |  | 1,012 |
Prepaid expenses and other current assets |  |  | 1,676 |  |  |  | 1,696 |
Short-term investments |  |  | 82,660 |  |  |  | 86,620 |
Total current assets |  |  | 139,906 |  |  |  | 139,313 |
Long-term assets |  |  |  |  |  |  |  |
Capitalized computer software development costs, |  |  |  |  |  |  |  |
net of accumulated amortization of $14,734 and $14,438 |  |  | 8,189 |  |  |  | 7,646 |
Property and equipment, net |  |  | 2,339 |  |  |  | 1,838 |
Operating lease right of use asset |  |  | 1,146 |  |  |  | 1,276 |
Intellectual property, net of accumulated amortization of $6,873 and $6,516 |  |  | 10,112 |  |  |  | 10,469 |
Other intangible assets, net of accumulated amortization of $2,319 and $2,186 |  |  | 6,331 |  |  |  | 6,464 |
Goodwill |  |  | 12,921 |  |  |  | 12,921 |
Other assets |  |  | 50 |  |  |  | 51 |
Total assets |  | $ | 180,994 |  |  | $ | 179,978 |
LIABILITIES AND SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |
Current liabilities |  |  |  |  |  |  |  |
Accounts payable |  | $ | 19 |  |  | $ | 387 |
Accrued payroll and other expenses |  |  | 3,967 |  |  |  | 5,604 |
Contracts payable - current portion |  |  | 4,671 |  |  |  | 4,550 |
Billings in excess of revenue |  |  | 52 |  |  |  | 117 |
Operating lease liability, current portion |  |  | 338 |  |  |  | 382 |
Deferred revenue |  |  | 568 |  |  |  | 534 |
Total current liabilities |  |  | 9,615 |  |  |  | 11,574 |
Long-term liabilities |  |  |  |  |  |  |  |
Deferred income taxes, net |  |  | 2,113 |  |  |  | 1,726 |
Operating lease liability |  |  | 810 |  |  |  | 896 |
Total liabilities |  |  | 12,538 |  |  |  | 14,196 |
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, 20,168,796 and 20,141,521 shares issued and outstanding |  |  | 134,512 |  |  |  | 133,418 |
Retained earnings |  |  | 34,224 |  |  |  | 32,407 |
Accumulated other comprehensive loss |  |  | (280 | ) |  |  | (43 | )
Total shareholders' equity |  |  | 168,456 |  |  |  | 165,782 |
Total liabilities and shareholders' equity |  | $ | 180,994 |  |  | $ | 179,978 |

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SIMULATIONS PLUS, INC.

Trended Financial Information*

(Unaudited)

|  | 2021 |  |  | 2022 |  |  | 2021 |  |  | 2022 |
(in millions except earnings per share amounts) |  | Q1 |  |  | Q2 |  |  | Q3 |  |  | Q4 |  |  | Q1 |  |  | Fiscal Year |  |  | Fiscal YTD |
Software revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gastroplus |  | $ | 3.3 |  |  | $ | 4.5 |  |  | $ | 5.4 |  |  | $ | 3.1 |  |  | $ | 4.0 |  |  | $ | 16.3 |  |  | $ | 4.0 |
MonolixSuite |  |  | 1.2 |  |  |  | 1.6 |  |  |  | 0.9 |  |  |  | 0.8 |  |  |  | 1.6 |  |  |  | 4.4 |  |  |  | 1.6 |
ADMET Predictor |  |  | 1.2 |  |  |  | 1.2 |  |  |  | 1.5 |  |  |  | 1.2 |  |  |  | 1.5 |  |  |  | 5.0 |  |  |  | 1.5 |
Other |  |  | 0.5 |  |  |  | 0.6 |  |  |  | 0.5 |  |  |  | 0.3 |  |  |  | 0.3 |  |  |  | 1.9 |  |  |  | 0.3 |
Total software revenue |  | $ | 6.2 |  |  | $ | 7.8 |  |  | $ | 8.3 |  |  | $ | 5.4 |  |  | $ | 7.4 |  |  | $ | 27.7 |  |  | $ | 7.4 |
Services revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
PKPD |  | $ | 2.2 |  |  | $ | 2.6 |  |  | $ | 1.9 |  |  | $ | 2.3 |  |  | $ | 2.3 |  |  | $ | 9.1 |  |  | $ | 2.3 |
QSP/QST |  |  | 1.1 |  |  |  | 1.7 |  |  |  | 1.2 |  |  |  | 1.1 |  |  |  | 1.5 |  |  |  | 5.1 |  |  |  | 1.5 |
PBPK |  |  | 0.6 |  |  |  | 0.9 |  |  |  | 0.7 |  |  |  | 0.7 |  |  |  | 0.9 |  |  |  | 3.0 |  |  |  | 0.9 |
Other |  |  | 0.5 |  |  |  | – |  |  |  | 0.6 |  |  |  | 0.3 |  |  |  | 0.4 |  |  |  | 1.4 |  |  |  | 0.4 |
Total services revenue |  | $ | 4.5 |  |  | $ | 5.3 |  |  | $ | 4.4 |  |  | $ | 4.4 |  |  | $ | 5.1 |  |  | $ | 18.8 |  |  | $ | 5.1 |
Total consolidated revenue |  | $ | 10.7 |  |  | $ | 13.1 |  |  | $ | 12.8 |  |  | $ | 9.8 |  |  | $ | 12.4 |  |  | $ | 46.5 |  |  | $ | 12.4 |
Gross Margin |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Software |  |  | 86.9% |  |  |  | 89.0% |  |  |  | 90.0% |  |  |  | 85.0% |  |  |  | 90.0% |  |  |  | 88.0% |  |  |  | 90.0% |
Services |  |  | 63.9% |  |  |  | 61.0% |  |  |  | 63.0% |  |  |  | 55.0% |  |  |  | 60.0% |  |  |  | 61.0% |  |  |  | 60.0% |
Total |  |  | 77.3% |  |  |  | 77.9% |  |  |  | 80.7% |  |  |  | 71.7% |  |  |  | 77.8% |  |  |  | 77.2% |  |  |  | 77.8% |
Income from operations |  | $ | 3.1 |  |  | $ | 3.5 |  |  | $ | 4.5 |  |  | $ | 0.2 |  |  | $ | 3.8 |  |  | $ | 11.3 |  |  | $ | 3.8 |
Operating Margin |  |  | 28.5% |  |  |  | 26.6% |  |  |  | 35.6% |  |  |  | 1.8% |  |  |  | 30.5% |  |  |  | 24.2% |  |  |  | 30.5% |
Net Income |  | $ | 2.5 |  |  | $ | 3.2 |  |  | $ | 3.8 |  |  | $ | 0.3 |  |  | $ | 3.0 |  |  | $ | 9.8 |  |  | $ | 3.0 |
Diluted Earnings Per Share |  | $ | 0.12 |  |  | $ | 0.15 |  |  | $ | 0.18 |  |  | $ | 0.01 |  |  | $ | 0.15 |  |  | $ | 0.47 |  |  | $ | 0.15 |
Adjusted EBITDA |  | $ | 4.3 |  |  | $ | 5.0 |  |  | $ | 5.9 |  |  | $ | 1.7 |  |  | $ | 5.3 |  |  |  | 16.9 |  |  | $ | 5.3 |
Cash Flow from Operations |  | $ | 5.3 |  |  | $ | 1.3 |  |  | $ | 4.3 |  |  | $ | 8.3 |  |  | $ | 3.6 |  |  |  | 19.2 |  |  | $ | 3.6 |
Revenue Breakdown by Region |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 7.1 |  |  | $ | 8.7 |  |  | $ | 9.7 |  |  | $ | 7.1 |  |  | $ | 8.5 |  |  |  | 32.5 |  |  | $ | 8.5 |
EMEA |  |  | 2.5 |  |  |  | 3.1 |  |  |  | 1.5 |  |  |  | 0.9 |  |  |  | 3.0 |  |  |  | 7.9 |  |  |  | 3.0 |
Asia Pacific |  |  | 1.1 |  |  |  | 1.4 |  |  |  | 1.7 |  |  |  | 1.8 |  |  |  | 0.9 |  |  |  | 6.0 |  |  |  | 0.9 |
Total consolidated revenue |  | $ | 10.7 |  |  | $ | 13.1 |  |  | $ | 12.8 |  |  | $ | 9.8 |  |  | $ | 12.4 |  |  | $ | 46.6 |  |  | $ | 12.4 |
Software Performance Metrics |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Average Revenue per Customer (in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 74.0 |  |  | $ | 84.0 |  |  | $ | 98.0 |  |  | $ | 65.0 |  |  | $ | 71.0 |  |  |  |  |  |  |  |  |
Services Performance Metrics |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Backlog |  | $ | 12.0 |  |  | $ | 11.2 |  |  | $ | 12.4 |  |  | $ | 13.0 |  |  | $ | 15.4 |  |  |  |  |  |  |  |  |

*Numbers may not add due to rounding

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SIMULATIONS PLUS, INC.

Reconciliation of Adjusted EBITDA to Net Income

(Unaudited)

|  | 2021 |  |  | 2022 |  |  | 2021 |  |  | 2022 |
(in millions) |  | Q1 |  |  | Q2 |  |  | Q3 |  |  | Q4 |  |  | Q1 |  |  | Fiscal Year |  |  | Fiscal YTD |
Net Income |  | $ | 2.5 |  |  | $ | 3.2 |  |  | $ | 3.8 |  |  | $ | 0.3 |  |  | $ | 3.0 |  |  | $ | 9.8 |  |  | $ | 3.0 |
Excluding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income and expense, net |  |  | (0.1 | ) |  |  | (0.0 | ) |  |  | (0.0 | ) |  |  | (0.0 | ) |  |  | (0.1 | ) |  |  | (0.2 | ) |  |  | (0.1 | )
Provision for income taxes |  |  | 0.5 |  |  |  | 0.2 |  |  |  | 0.7 |  |  |  | (0.1 | ) |  |  | 0.8 |  |  |  | 1.3 |  |  |  | 0.8 |
Depreciation and amortization |  |  | 0.9 |  |  |  | 0.9 |  |  |  | 0.9 |  |  |  | 1.0 |  |  |  | 0.8 |  |  |  | 3.6 |  |  |  | 0.8 |
Stock-based compensation |  |  | 0.5 |  |  |  | 0.7 |  |  |  | 0.6 |  |  |  | 0.6 |  |  |  | 0.6 |  |  |  | 2.4 |  |  |  | 0.6 |
Adjusted EBITDA |  | $ | 4.3 |  |  | $ | 5.0 |  |  | $ | 5.9 |  |  | $ | 1.7 |  |  | $ | 5.3 |  |  | $ | 16.9 |  |  | $ | 5.3 |

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