Simulations Plus, Inc. (SLP)

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Simulations Plus, Inc. (SLP)

F4Q12 Earnings Call

November 19, 2012 4:15 p.m. ET

Executives

Walter Woltosz - Chairman, President and Chief Executive Officer

John DiBella - Vice President, Marketing and Sales

Momoko Beran - Chief Financial Officer

Presentation

Operator

It is Monday, November 19, 2012, and on behalf of Simulations Plus I welcome you to our Fourth Quarter and Fiscal Year 2012 Financial Results Conference Call and Webinar. Chairman and Chief Executive Officer, Walt Woltosz, will be presenting this afternoon. Joining Walt as panelists are Chief Financial Officer, Momoko Beran; and Vice President of Marketing and Sales, John DiBella. An opportunity to ask questions will follow Walt's presentation. (Operator Instructions) This call is being recorded for playback at our website www.simulations-plus.com.

It’s now my pleasure to turn the presentation over to Walt Woltosz, Chairman and CEO of Simulations Plus.

Walter Woltosz

Thank you, Rene. Again, I apologize folks. I switched to MacBook Pro Retina which has a very nice high resolution screen but apparently go to GoToMeeting or GoToWebinar has difficulty with the resolution. So I have just given John a thumb drive, we will make him the presenter. Okay, thank you very much.

Okay. So I apologize for the delays. Let me go right ahead with the safe-harbor statement to keep the attorneys happy. With the exception of historical information, the matters discussed in this presentation are forward-looking statements that involve a number of risks and uncertainties. The actual 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, competitive factors, company's ability to finance future growth, company's ability to produce and market new products in a timely fashion, company's ability to continue to attract and retain skilled personal, and the company's ability to sustain or improve current levels of productivity. Further information on the company's risk factors is contained in the company's quarterly and annual reports on file with the Securities and Exchange Commission.

Next slide please. Okay. So for the fourth quarter, June, July, August of this year, comparing 4Q ’12 to 4Q ’11, this was our 20th consecutive profitable quarter. And sales were up for the fourth quarter 14.9% to result in another record fourth quarter. So all four quarters of last fiscal year were record quarters and of course that makes for a record fiscal year. We did $1.64 million compared to $1.43 million in 4Q ’11. Our Gross profit was up 6.8%. I think actually that’s an error. That should have been 18.4% to $1.32 million from $1.11 million. I thought I gave you the corrected chart on that John, but I guess I didn’t, sorry. So the correct numbers there 18.4% increase in gross profit. The gross profit was $1.32 million and last year was $1.11 million.

Our SG&A decreased 14.5% to $0.83 million from $0.97 million. So revenue is up, SG&A down, I would like to see that trend. R&D investments were up significantly, 462% to about $203,000 from $36,000, and that’s due to a combination of expanding our scientific staff as well as our malaria molecule design project that I will talk about a little bit more in other slide.

Our net income for the fourth quarter increased a little over 88% to $0.349 million from $0.186 million. Our diluted earnings per share $0.02, 2.1 cents if you want another decimal place, increased 85.4% from $0.012 or 1.2 cents in fourth quarter of last year. And we paid our third ongoing cash dividend of $0.05 per share per quarter during the fourth quarter during August. Our balance sheet remains strong. Cash increased 24.8% to $12.7 million from $10.2 million at the end of 4Q ’11, and after our November 13 dividend payment last week of about $800,000 and paying income taxes of approximately -- that should be $1.1 million -- sorry, that’s another correction there, $1.1 million, cash today is approximately $11.6 million.

Our shareholders’ equity increased 7.9% to $15.1 million at the end of fiscal ’12 compared to ’14 million at the end of fiscal ’11, and of course we remain debt free.

Next slide please. For the entire fiscal year, sales were up 8.1%. Again, that’s a record fiscal year at $9.45 million from $8.74. And by the way all these numbers I am reporting are without the former subsidiary Words+, unless otherwise stated. Gross profit up 9.1% to $6.622 million from $6.069 million, SG&A up 6.1% to $3.38 million from $3.19 million for a variety of reasons listed here. But note also that as a percent of revenues SG&A was down to 35.8% from 36.5%.

Our net income increased for the fiscal year 11.5% to $3.03 million from $2.71 million in the previous year. And our diluted earnings per share increased 11.1% to $0.19 a share, 18.7 from $0.17 a share or 16.9, for that extra decimal place. And this strong balance sheet, same numbers as Q4. Cash increased and the other lines are exactly the same as on the previous slide. Next slide please.

So this is a table form. Same numbers that you can -- and I won't read every number to you. This gives you a side by side comparison without all the text embedded with it and the other statements. You can see our gross profit margin now is running tad over 80%. So very happy with that. Total operating expenses just over $1 million, very similar to last year. As far as the operating expenses, even though the sales were up a nice amount from last year. And then earnings per share, you can see about $0.02 a share for the fourth quarter compared to $0.01 in the previous fourth quarter.

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