Slide 1: Investor Conference Call November 11, 2016
(NASDAQ:SLP) Investor Conference Call November 11, 2016
Slide 2: Safe Harbor Statement
2 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 t
Slide 3: Highlights
3 Highlights Walt Woltosz Chairman and Chief Executive Officer
Slide 4: Highlights: company overview and 4QFY16 results
4 • Major provider of software and consulting services for pharma R&D • Earliest drug discovery – when a chemist first draws a molecule • Preclinical development (lab and animals) through first - in - human trials • Phase 2 and 3 clinical trials • Beyond patent life to supporting generic companies •
Slide 5: Software renewals and product development
5 • Software renewal rates: 88% (accounts); 97%(fees) • 19 new software client sites added • Product development • PKPlus™ released just prior to the end of the fiscal year • new software product for noncompartmental analysis and compartmental analysis for regulatory submissions • potential to becom
Slide 6: Two-year stock performance versus DOW, NASDAQ, S&P 500
* Yahoo! Data 11/9/2016 Two - year stock performance compared to DOW, NASDAQ, & S&P 500 *
Slide 7: FDA Office of Generic Drugs funded collaborations
7 • Completed second year of up to 3 - year, $200,000/year collaboration for improved ocular dosing simulations – contract renewed for 3rd year • Met all milestones during second full year • Established consortium of leading pharmaceutical companies • The global ophthalmic drugs market was valued at
Slide 8: Financial Overview
8 Financial Overview John Kneisel Chief Financial Officer
Slide 9: Income Statement 4QFY16 Compared to 4QFY15
9 Income Statement 4QFY16 Compared to 4QFY15 (in millions) Lancaster Buffalo 4QFY16 4QFY15 Diff % chg Net sales $ 2.696 $ 1.262 $ 3.958 $ 3.712 $ 0.246 6.6% Gross profit 2.215 0.683 2.898 2.635 0.263 10.0% Gross profit margin 82.16% 54.12% 73.22% 70.99% 2.23% 3.1% SG&A 1.096 0.517 1.613 1.510 0.103
Slide 10: Income Statement FY2016 Compared to FY2015
10 Income Statement FY2016 Compared to FY2015 (in millions) Lancaster Buffalo FY2016 FY2015 Diff % chg Net sales $ 14.418 $ 5.554 $ 19.972 $ 18.314 $ 1.658 9.1% Gross profit 12.150 3.220 15.370 $ 13.922 1.448 10.4% Gross profit margin 84.27% 57.98% 76.96% 76.02% 0.94% 1.2% SG&A 4.472 2.221 6.693 $ 6
Slide 11: Consolidated Revenues, by Fiscal Quarter and YTD
11 Consolidated Revenues, by Fiscal Quarter and YTD (pro forma prior to 2012; in millions) 4.01 4.57 5.94 3.71 4.84 5.16 6.01 3.96 $0 $1 $2 $3 $4 $5 $6 $7 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015 2016
Slide 12: Consolidated Net Income, by Fiscal Quarter and YTD
12 Consolidated Net Income, by Fiscal Quarter and YTD (pro forma prior to 2012; in millions) $0.53 $0.97 $1.85 $0.49 $1.11 $1.15 $1.91 $0.79 $ - $0.50 $1.00 $1.50 $2.00 $2.50 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015 2016
Slide 13: Consolidated Diluted Earnings Per Share
13 Consolidated Diluted Earnings Per Share 0 0.02 0.04 0.06 0.08 0.1 0.12 Q1 Q2 Q3 Q4 $0.03 $0.06 $0.11 $0.03 $0.06 $0.07 $0.11 $0.05 Quarterly EPS FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Slide 14: Consolidated EBITDA, by Fiscal Quarter and YTD
14 Consolidated EBITDA, by Fiscal Quarter & YTD (in millions) 1.22 1.97 3.33 1.19 2.2 2.18 3.28 1.51 $0 $1 $2 $3 $4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015 2016
Slide 15: Returning Cash to Shareholders
15 Returning Cash to Shareholders (in millions) 1.6 0.8 0.8 2.2 0 0.5 0.5 0.6 0.81 0.81 0.81 0.84 0.84 0.84 0.85 0.85 0.85 0.85 0.85 12.9 12.7 11.4 9.3 9.8 10 10.1 10.6 11 7.8 8.6 5.8 6.1 6.4 8.6 7.2 7.1 8.8 8 9.2* $0 $1 $1 $2 $2 $3 $0 $2 $4 $6 $8 $10 $12 $14 Dividend Paid Cash on Hand Cash paid $2.
Slide 16: Selected Balance Sheet Items
16 Selected Balance Sheet Items (in millions, except where indicated) August 31, 2016 August 31, 2015 Cash and cash equivalents $ 8.030* $ 8.551 Cash per share ( in Dollars ) $ 0.47 $ 0.50 Total current assets 12.930 11.533 Total assets 28.043 27.344 Total current liabilities 2.126 3.613 Total liabi
Slide 17: Marketing and Sales
17 Marketing and Sales John DiBella VP of Marketing and Sales
Slide 18: End-to-end M&S Solutions Provider
18 End - to - end M&S Solutions Provider N H O OH O CH 3 CH 3 CH 3 ADMET Predictor™ GastroPlus ™ MedChem Studio™ MedChem Designer™ DDDPlus ™ MembranePlus™ Consulting Services and Collaborations Discovery Preclinical Clinical PKPlus™ KIWI™
Slide 19: Software Product News
19 • Version 9.5 scheduled for end of 2016 ‒ Intramuscular dosing model – optional add - on model ‒ Antibody - drug conjugate (ADC) models for biologics • Version 8.1 scheduled for end of 2016 ‒ 64 - bit compatibility & minor bug fixes ‒ Rebuilt toxicity models • Version 4.0 still licensed by client
Slide 20: 4QFY16 Sales Review
4QFY16 Sales Review • Consolidated revenue +6.6% vs. 4QFY15 • Highlights: – Software revenue +19.9% • 88% renewal rate (accounts) • 97% renewal rate (fees) • 15% increase in license units • 8 new commercial companies • 11 new nonprofit groups – Consulting revenue ( - 10.3%) • ( - 11.5%) decrease in
Slide 21: FY2016 Sales Review
FY2016 Sales Review • Consolidated revenue +9.1% vs. FY2015 • Highlights: – Software revenue +10.6% • 87% renewal rate (accounts) • 94% renewal rate (fees) • 10% increase in license units • 37 new commercial companies • 38 new nonprofit groups – Consulting revenue +5.9% • 6.6% increase in Buffalo •
Slide 22: FY2016 Software Revenue by Region
FY2016 Software Revenue – by Region Europe 28% (+10% vs. FY15) North America 47% (+9% vs. FY15) Asia 25% (+14% vs. FY15) South America <1% (No change vs. FY15) Japan = 58% China = 18% India = 16% Korea = 4% 22
Slide 23: Major Marketing Activities
Major Marketing Activities Website Redesign • Website launched: November 9 th – Continue to update content – both written and visual – Continue to migrate over to new ShareFile system for file exchange/downloads Workshops and Conferences • GastroPlus/pop PK workshops held in Bethesda in October – Ga
Slide 24: Buffalo Division Update
24 Buffalo Division Update Re - imagining the future of science - based research and development Ted Grasela President
Slide 25: Consulting Services
25 Consulting Services • Strategic and synergistic benefits of the Buffalo (Cognigen) acquisition are being realized • Strong collaborations between Buffalo and Lancaster scientists have identified new and innovative ways of using modeling and simulation to bringing value to our clients • Consulting
Slide 26: Status Report - Consulting
26 Status Report - Consulting • In FY2016 worked with 33 companies on 58 drugs, 107 projects – 9 new companies in FY2016 – 9 new projects in FY2016Q4 – 1 project expanded scope in FY2016Q4 – 4 projects delayed because of slow trial enrollment – 4 projects cancelled because of failed studies – 13 out
Slide 27: Presentations of Note
27 Presentations of Note • Presentation of an application of ADMET Predictor™ and GastroPlus™ at the Japanese Society for the Study of Xenobiotics meeting in Matsumoto Japan opened up conversations about value of our products to support drug discovery • Presentation at EU SimInhale Consortium meetin
Slide 28: KIWI Update
28 • Continued to work on $4.7 million contract with a major foundation to implement a KIWI platform for global teams engaged in model - based drug development; 5 - year term contingent on satisfactory completion of milestones • Project builds on our extensive process - related research; enables sub
Slide 29: Summary: Buffalo division
29 Summary Buffalo division is strong and growing • Consulting activities continuing to expand, and realizing synergies with Lancaster division for PBPK modeling in clinical pharmacology • Foundation contract to enhance the KIWI platform is a major step forward in our long - term vision for the prod
Slide 30: Final Summary
30 Final Summary Walt Woltosz Chairman and Chief Executive Officer
Slide 31: Summary
31 • 4QFY16 • revenues up $246,000 (6.6%) to $3.96 million • net income up $298,000 (60.6%) to $ 789,000 • diluted EPS up 58.9% to $ 0.046 (5¢) per share from $ 0.029 (3¢) in 4QFY15. • FY2016 • revenues up $ 1.66 Million (9.1%) to $ 19.97 million • net income up $ 1.11 Million ( 28.8%) to $4.95 mill