Simulations Plus Inc. Reports First Operating and Net
Profits in Second Quarter 2000 Financial Results
Record Quarter Exceeds Million-Dollar Revenue Milestone
LANCASTER, Calif.--(BUSINESS WIRE)--March 28, 2000--Simulations Plus Inc. (OTCBB:SIMU - news;
www.simulations-plus.com), the leading provider of oral absorption predictive software to the pharmaceutical industry, today
reported its financial results for the second quarter and six months ended Feb. 29, 2000.
In these results, the company reported its first operating and net profits since expanding into the science and pharmaceutical
software businesses in 1997. It also reported quarterly net revenues in excess of $1 million for the first time in its history.
For the quarter ended Feb. 29, 2000, net revenues hit a record $1,091,900, a 40.4% increase over the $777,600 reported in the
second quarter of fiscal 1999, and a 34% increase over the $813,900 reported for the first quarter 2000.
The total net revenue increase was driven by a 401% expansion in the sale of pharmaceutical simulation software, the company's
flagship business. The company reported pharmaceutical software sales of $462,280 for the quarter, as compared with $86,500 in
the second quarter 1999 and $140,980 in the first quarter 2000.
Revenues from Words+, the company's wholly owned subsidiary, were down slightly to $624,870, as compared with $684,400 in
second quarter 1999 and $662,780 in first quarter 2000.
While continuing to reflect the industrywide sluggishness in sales of assistive communication devices for the disabled, Words+'
second-quarter revenues were in line with first quarter 2000, which had included a very large MessageMate(TM) order for the
New York City School System. The Words+ products being sold continue to be more profitable.
The company reported its first operating and net profits for the quarter ended Feb. 29, 2000. Net profit for the quarter was
$47,619, or $0.01 per share, as compared with a net loss of $(199,581), or $(0.06) per share for the second quarter 1999. The
improvement in net income was driven by the 40.4% increase in sales and a 1670 basis point expansion in gross profit margin to
66.2%.
The increase in gross profit margin reflects the substantial fixed component in cost of sales related to the amortization of
capitalized software development costs. Gross profits in the second quarter increased 87.7% to $723,580, as compared with
$385,350 in the second quarter 1999.
Cash flow for the quarter ended Feb. 29, 2000, also reached record levels, with net cash from operations at $138,102, as
compared with $(52,053) for second quarter 1999. The company has no long-term debt.
For the six months ended Feb. 29, 2000, revenues reached a record $1,905,800, a 14.8% increase over the $1,658,900 reported for
the first six months of fiscal 1999. This increase, combined with a 1580 basis point expansion in gross profit margin to 68.2%,
resulted in a net profit of $6,128 as compared with a net loss of $(273,413) for the six months ended Feb. 28, 1999.
The net loss for the first six months of fiscal 1999 included $75,000 in SBIR grant revenue that was not available in the first six
months of fiscal 2000.
The increase in revenues for the six-month period is attributable to a 306.6% increase in pharmaceutical software sales to
$603,270, as compared with $148,380 for the first six months of fiscal 1999. The gross margin for the company's software, which
largely consists of its pharmaceutical industry products, increased nearly threefold to 76.7%, as compared with 26.8% in the first
half of fiscal 1999.
The combination of a significant increase in software sales and a very large expansion in gross profit margin produced a near
tenfold improvement in the software businesses' gross profit to $474,520, as compared with $48,430 in the first half of fiscal 1999.
Words+ revenues were down 12.9% for the period, reflecting the temporary discontinuation of one of the company's popular
products as well as industrywide softness. However, the gross profit for Words+ was up slightly over that of the first six months
of fiscal 1999, reflecting the sale of more profitable products.
``We are very pleased to be able to report both profitability and over a million dollars in revenue for the second quarter of fiscal
2000,' said Walt Woltosz, chairman and chief executive officer of Simulations Plus. ``The updraft in pharmaceutical sales reflects
our strong relicensing experience as well as new sales, and a trend towards larger orders.
``With our cost of sales being highly fixed in nature and our continued cost-containment efforts, we were able to capture even
greater expansion in gross profitability, and to produce a profitable bottom line. Our business development efforts have been
extensive over the past quarter, bringing strong indications of new customer interest in Europe, Asia and the United States.
``In addition, we are breaking ground in the biotechnology industry, which is taking a more aggressive role in the discovery and
development of new drugs. We have also received very encouraging responses to our next pharmaceutical software solution,
which builds on the leadership position we've established with our highly successful GastroPlus(TM).'
Simulations Plus is a premier developer of groundbreaking drug discovery and development simulation software, which is licensed
to and used in the conduct of drug research by major pharmaceutical and biotechnology companies worldwide.
The company has two other businesses, Words+ Inc. and FutureLab(TM), which are based on its proprietary software
technologies and which provide support for the emerging pharmaceutical enterprise. Simulations Plus has headquarters in Southern
California and trades on the OTCBB under the symbol ``SIMU.'
Safe Harbor Statement Under the Private Securities Litigation Act 1995: With the exception of historical information, the matters
discussed in this news release are forward-looking statements that involve a number of risks and uncertainties. The actual future
results of the company could differ significantly from those statements. Factors that could cause or contribute to such differences
include, but are not limited to: continuing demand for the company's products, competition, the ability of the company to
successfully produce new software products, the availability of working capital and a sustainable market. Further information on
the company's risk factors is contained in the company's quarterly and annual reports as filed with the Securities and Exchange
Commission.
SIMULATIONS PLUS INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three and six months ended Feb. 29, 2000, and Feb. 28, 1999
(Unaudited)
Three months Six months
ended ended
02/29/00 02/28/99 02/29/00 02/28/99
Net sales $ 1,091,949 $ 777,638 $ 1,905,865 $ 1,658,924
Cost of sales 368,363 392,286 605,952 788,896
Gross profit 723,586 385,352 1,299,913 870,028
Operating expenses:
Selling, general
& administration 596,408 542,865 1,121,700 1,141,588
Research and
development 74,686 35,797 164,498 71,670
Total operating
expenses 671,094 578,661 1,286,198 1,213,258
Profit (Loss) from
operations 52,492 (193,309) 13,715 (343,230)
Other income (expenses):
Grant revenue 0 0 0 75,000
Interest revenue 80 1,520 314 4,947
Interest expense (4,348) (7,791) (8,763) (10,130)
Gain (Loss) on
sale of asset (605) 0 (605) 0
Profit (Loss)
before provision
for income taxes 47,619 (199,580) 4,661 (273,413)
Provision (benefit)
for income taxes 0 0 0 0
Net profit (loss) $47,619 $(199,580) $4,661 $(273,413)
Basic net profit
(loss) per common
share $ 0.01 $ (0.06) $ 0.00 $ (0.08)
Diluted net profit
(loss) per common
share $ 0.01 $ (0.06) $ 0.00 $ (0.08)
Weighted average
number of common
shares
outstanding 3,384,203 3,383,531 3,380,403 3,371,423
Contact:
Simulations Plus Inc., Lancaster
Ron Creeley, 661/723-7723
or
Banchik & Associates, Solvang, Calif.
Doris Banchik, 805/688-2340 |
