Slide 1: Investor Conference Call April 13, 2016
( NASDAQ:SLP ) Investor Conference Call April 13, 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: Software renewals and product development
4 • Software renewal rates: 85% (accounts); 91%(fees) • 20 new software client sites added • Product development • Announced development of PKPlus ™ • new software product for noncompartmental analysis and compartmental analysis for regulatory submissions • potential to become significant contributo
Slide 5: FDA Office of Generic Drugs Funded Collaborations
5 • Completed first year of up to 3 - year, $200,000/year collaboration for improved ocular dosing simulations – contract renewed for 2nd year • Met all milestones during first full year • Established consortium of leading pharmaceutical companies • The global ophthalmic drugs market was valued at $
Slide 6: Exploring Business Opportunities Outside of Pharmaceutical Industry
6 • AEROModeler™ • Application of our artificial neural network ensemble (ANNE) technology to: • Predict aerodynamic force coefficients for missiles • Classify missiles from radar tracking data • Discriminate between warheads and decoys from sensor data • Exploring several government and industry co
Slide 7: Company overview and 2QFY16 results
7 • 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 8: Summary
8 • Continued Growth • Eight - year - plus profitable trend • Successful strategic acquisition • Customer base increased: • 20 new software customers in 2QFY16 • 91 percent renewal rate (fees) • Expecting continued compounded growth • 2nd Quarter earnings per share increased 17% • Strong cash positi
Slide 9: Financial Overview
9 Financial Overview John Kneisel Chief Financial Officer
Slide 10: Income Statement 2QFY16 Compared to 2QFY15
10 Income Statement 2 QFY16 Compared to 2QFY15 (in millions) Lancaster Buffalo 6moQFY16 6moFY15 Diff % chg Net sales $ 3.648 $ 1.516 $ 5.164 $ 4.574 $ 0.590 12.9% Gross profit 3.058 0.842 3.900 3.443 0.457 13.3% Gross profit margin 83.83% 55.54% 75.52% 75.27% 0.25% 0.3% SG&A 1.146 0.577 1.723 1.607
Slide 11: Income Statement 6moFY16 Compared to 6moFY15
11 Income Statement 6moFY16 Compared to 6moFY15 (in millions) Lancaster Buffalo 2QFY16 2QFY15 Diff % chg Net sales $ 7.058 $ 2.944 $ 10.002 $ 8.660 $ 1.342 15.5% Gross profit 5.911 1.744 7.655 $ 6.485 1.17 18.0% Gross profit margin 83.75% 59.24% 76.53% 74.88% 1.65% 2.2% SG&A 2.245 1.154 3.399 $ 3.62
Slide 12: Consolidated Revenues by Fiscal Quarter
12 Consolidated Revenues, by Fiscal Quarter and YTD (pro forma prior to 2012; in millions) 4.01 4.57 5.99 3.71 4.84 5.16 $0 $1 $2 $3 $4 $5 $6 $7 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015 2016
Slide 13: Consolidated Gross Profit by Fiscal Quarter
13 Consolidated Gross Profit, by Fiscal Quarter & YTD (pro forma prior to 2012; in millions) 3.09 3.45 4.83 2.64 3.76 3.9 $0 $1 $2 $3 $4 $5 $6 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015 2016
Slide 14: Consolidated Net Income by Fiscal Quarter
14 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 $- $0.50 $1.00 $1.50 $2.00 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015 2016
Slide 15: Consolidated Diluted Earnings Per Share
15 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 Quarterly EPS FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Slide 16: Consolidated EBITDA by Fiscal Quarter
16 Consolidated EBITDA, by Fiscal Quarter & YTD (in millions) 1.22 1.97 3.33 1.19 2.2 2.18 $0 $1 $2 $3 $4 Q1 Q2 Q3 Q4 2009 2010 2011 2012 2013 2014 2015 2016
Slide 17: Returning Cash to Shareholders
17 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 13.2 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 $0 $1 $1 $2 $2 $3 $0 $2 $4 $6 $8 $10 $12 $14 Dividend Paid Cash on Hand Cash paid $2.5M TSRL Cash
Slide 18: Selected Balance Sheet Items
18 Selected Balance Sheet Items (in millions, except where indicated) February 29, 2016 August 31, 2015 Cash and cash equivalents $ 7.155* $ 8.551 Cash per share ( in Dollars ) $ 0.42 $ 0.50 Total current assets 12.514 11.533 Total assets 27.903 27.344 Total current liabilities 3.537 3.613 Total lia
Slide 19: Marketing and Sales
19 Marketing and Sales John DiBella VP of Marketing and Sales
Slide 20: Overview of Products and Services
20 Overview of Products and Services 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 C linical COMING SOON: PKPlus™ KIWI™
Slide 21: Software Product News
21 • Version 9.5 scheduled for spring 2016 ‒ Intramuscular dosing model – optional add - on model ‒ Antibody - drug conjugate (ADC) models for biologics • Version 8.0 scheduled for spring 2016 ‒ Significant refresh of the graphical user interface ‒ New ‘MedChem Studio™’ module – optional add - on in
Slide 22: QFY16 Sales Review
22 2 QFY16 Sales Review • Highlights: – Software revenue +15% – C onsulting +9% – 85% renewal rate (accounts) – 91% renewal rate (fees) – 16% increase in license units – 12 new commercial clients – 8 new nonprofit groups 54% 14% 32% 0% Consolidated Sales Breakdown Renewal New Consulting Training 0 5
Slide 23: 6moFY16 Sales Review
23 6moFY16 Sales Review • Highlights: – Software revenue +14% – C onsulting +20% – 87% renewal rate (accounts) – 92% renewal rate (fees) – 25% increase in license units – 20 new commercial clients – 19 new nonprofit groups – Significant expansion of licenses at US and China FDA 53% 13% 33% 1% Consol
Slide 24: QFY16 Software Revenue by Region
24 2 QFY16 Software Revenue by Region Europe 29% North America 55% Asia 16% South America <1% Japan = 71% India = 15% China = 8 % Korea = 5%
Slide 25: Marketing Activities – 2QFY16
25 Marketing Activities – 2QFY16 • Website redesign – Kicked off website redesign project in February; live launch in July • Conferences and scientific meetings – 4 scientific meetings attended; co - authors on 2 presentations • Trainings and workshops – Hosted first GastroPlus workshop in India – o
Slide 26: Buffalo Division Update
26 Buffalo Division Update Re - imagining the future of science - based research and development Ted Grasela President
Slide 27: Consulting Services
27 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 28: Cutting Edge Scientific Projects
28 Cutting Edge Scientific Projects • Emerging applications of systems pharmacology and PBPK – O ncology (ongoing) – Diabetes (ongoing) – Nonalcoholic steatohepatitis (new) – Ophthalmology (new) • Working to develop “platform” opportunities (same model; different drugs) – Successful ongoing project
Slide 29: Status Report - Consulting
29 Status Report - Consulting • In FY2016 working with 22 companies on 43 drugs, 72 projects of which 2 projects started FY16Q2 • Expanded scope of projects with 5 companies • 32 outstanding proposals • Worked with 7 new companies over the past year; continuing to build relationships • Most common t
Slide 30: Behind the scenes in R&D: Coping with complexity and chaos
30 • Analysis in R&D can be messy • Data and inputs coming from many groups • Careful synthesis and communication is essential • The industry has enormous computing power • The industry lacks tools for harnessing that power Behind the scenes in R&D Coping with complexity and chaos
Slide 31: KIWI – A Software Platform for Validated Cloud Processing
31 KIWI™ – A Software Platform for Accessing Simulations Plus’ Validated Cloud Processing Capabilities
Slide 32: KIWI Update
32 • Signed a $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 • KIWI will become an integral driver of the foundation’s efforts to accelerate the e
Slide 33: KIWI Update - Continued
33 • Project builds on our extensive process - related research; enables substantial enhancements to the KIWI platform • Enhancements will provide a scaffold with broad applicability and will be available to academic and industry clients of KIWI • Our long - term goal is to creating an innovative fr
Slide 34: Summary – Buffalo division
34 Summary Buffalo division is strong and growing • Revenues and earnings up and contributing to overall growth of Simulations Plus • Consulting activities continuing to expand, and realizing synergies with Lancaster division for PBPK modeling in clinical pharmacology • New contract to enhance the K
Slide 35: Final Summary
35 Final Summary Walt Woltosz Chairman and Chief Executive Officer
Slide 36: Final Summary: 2QFY16 results and outlook
36 • 2QFY16 revenues were up by 12.9% • 2QFY16 net income was up by 18.0% • Diluted EPS for 2QFY16 up 16.9% to $0.07 from $0.06 in 2QFY15 • 6moFY16 revenues were up by 15.5% • 6moFY16 net income was up by 50.0% • Diluted EPS for 6moFY16 up 49.0% to $0.13 from $0.09 in 6moFY15 • California and Buffal