Simulations Plus Inc. said its fiscal first-quarter net income fell 22 percent as the specialty software developer was hurt by cutbacks at some of its large customers.
The Lancaster company, which licenses software that enables drug companies and researchers to simulate the effect of experimental drugs, on Tuesday reported net income of $587,000 (4 cents a share) for the quarter ended Nov. 30, compared with $755,000 (6 cents) in the same period a year earlier. Revenue rose nearly 2 percent to nearly $2.3 million.
Chief Executive Walt Woltosz said the company lost nearly $450,000 in licensing fees when four large customers closed sites and reorganizations at three other customers reduced the number of needed licenses. He noted that Simulations Plus did have a 90 percent renewal rate among its remaining customers, and brought in enough new business to eke out the small revenue gain.
“At this point, we do not foresee a recurrence of such a large drop,” Woltosz said in a statement, “although there can be no assurance that such a drop will not occur at some time in the future.”
Shares on Wednesday closed up 5 cents, or 1 percent, to $4.23 on the Nasdaq.