Simulations Plus, Inc.
Q3 2013 Earnings Call Transcript

Published: 11 Jul 2013

[Renee Bouche:]

Good afternoon. It is Thursday, July 11, 2013, and on behalf of Simulations Plus, I welcome you to our Third Quarter Fiscal Year 2013 Financial Results Conference Call and Webinar. We're mixing things up a bit this afternoon, giving you a new voice. Presenting this afternoon will be Vice President of Marketing and Sales, John DiBella. John is joined by our Chairman and Chief Executive Officer, Walt Woltosz; and Chief Financial Officer, Momoko Beran. An opportunity to ask questions will follow the presentation. [Operator Instructions] This call is being recorded for playback at our website, www.simulations-plus.com. It's now my pleasure to introduce today's presenter, Vice President of Marketing and Sales, John DiBella.

[John Anthony DiBella:]

Thank you, Renee, and thanks to everybody for spending some time today to learn a little bit more about our financial performance for the third fiscal quarter ending on May 31. As we normally do, I'll start by reading the Safe Harbor statement. 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, the company's ability to finance future growth, the company's ability to produce and market new products in a timely fashion, the company's ability to continue to attract and retain skilled personnel 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 and filed with the Securities and Exchange Commission. So let's get to the highlights for the second fiscal quarter ending in the end of May 2013. So the third quarter compared to the third quarter from fiscal year 2012, the 23rd consecutive profitable quarter and 45th of the last 47, so going on 5-plus years of profitability and almost 10-plus years of continued growth. Sales were up almost 12% to a third quarter record of nearly $3.1 million from $2.77 million in 2012. Gross profit was up approximately 13% to $2.64 million from $2.33 million. SG&A increased a little bit, about 1.4%. And as a percentage of revenues, SG&A actually decreased to 29% from 32%. The R&D expense decreased 9.5%, and this was primarily due to the 2012 R&D expenditures for the malaria NCE project. Net income from continuing operations increased over 14% to nearly $1 million from around $870,000. Diluted earnings per share from continuing operations also increased over 14% to just over $0.06. And the cash dividend of approximately -- of $0.03 per share was distributed during the third fiscal quarter, and that resulted in about $500,000 payout. We have a very strong balance sheet. Cash over $10 million as of the end of May. And that's after we paid almost $6 million in dividends since February of 2012. And cash as of July 7, last week or earlier this week, was approximately $10.3 million. Shareholders' equity at the end of May was about $14.5 million, and we continue to have no debt. Here is the income statement of this third fiscal quarter for 2013 compared to 2012. We've already talked about the sales growth. You can see that the gross profit margin was over 85%, so still very high margins and even higher than what we had in 2012. Income from continuing operations was increased approximately 20%, and also the income from continuing operations before income taxes, again approximately 20% up. And then as we mentioned earlier, earnings per share, a little over $0.06. Here, you can see the revenue trend over the last 5 years. You can see here that our revenue for this third quarter was nearly on par with the revenue from the second quarter. We see this very nice linear growth, again going back 5 years. The one hiccup, as we've talked about in the past, was in this first quarter of 2013 when the perfect storm of site closures and company reorganizations resulted in an atypical loss of renewable revenue. Historically, our renewal rates have been greater than 90% and actually over the past 2 quarters, they've exceeded 94%. So again, we continue to expect to see most likely this nice linear growth. Gross profit by fiscal quarter, you can see, in terms of gross profit, we've actually set a record here, and again, this nice linear trend over the last 5 years. EBITDA was over $1.7 million, and you can see very healthy EBITDAs over the last 5 years. And then the net income by quarter, again, approaching $1 million for this third quarter here. Now in terms of the number of new customers, in this particular quarter, we had 16 new clients in the third quarter. 13 of those were from completely new organizations, with the remaining licenses secured by new sites or new departments from existing clients. So we were able to add a number of new organizations in this particular quarter. And then selected balance sheet items, you can see here shareholders' equity is nearly on par to where it was at the end of August 2012, and that's even with our payout of the accelerated and also increased dividend this last quarter over the past 9 months. And returning cash to shareholders, even with the payout of close to $3 million in dividends over the past 3 quarters, you can see that cash has remained level and actually is now even increasing. So those are the highlights of the financial performance for this third quarter. Now we'll just talk a little bit about some of the products and services that we offer and go into a little bit more detail about the marketing and sales program. This slide here kind of illustrates how our products fit in across the discovery and development research pipeline. We like to say that from the point at which we start to draw molecules, we do have software products and features that would address nearly every research activity. From the discovery side, we have what we call our cheminformatics products, and those are going to be the MedChem Studio, MedChem Designer and ADMET Predictor tools. And then as we start to transition from some of the benchwork or lab work that's going to be done in chemistry and start going into some of the preclinical work, where testing involving animals is going to be done, we'll start shifting more to the use of simulation software programs that we offer -- GastroPlus and then complemented by DDDPlus and soon MembranePlus. Now across this entire spectrum, again, from discovery through development, in addition to providing the licenses to our software programs, we also offer consulting services and collaborations. And our staff has been busy handling all of the requests that have come in over the last few months. Now specific products news. The flagship product, which is what we call GastroPlus, is in final testing and the release is expected sometime this quarter before the end of August. Now just as a reminder, GastroPlus is going to be the program that simulates the absorption of pharmacokinetics, the pharmacodynamics of drugs administered to humans and animals. This is going to be the simulation of the in vivo environment. And with this new version coming out, we're adding a number of new features and capabilities that were requested by customers, as well as improvements that we have identified in-house. And you can see what some of those new features are going to be. ADMET Predictor is our software program that currently takes molecular structures as inputs and predicts over 140 different properties at a rate of about 200,000 compounds per hour on a standard laptop computer. So this capability is going to allow chemists to get estimates for a large number of important properties without the need to synthesize and test the molecules. And ADMET Predictor also serves as kind of an anchor program for the MedChem Studio product, along with the GastroPlus product. So we do have a number of clients who make use of the ADMET Predictor in combination with some of the other products. Now we did release a new version of ADMET Predictor in June, and this version extends the metabolism predictions based upon a much larger experimental data set that we have. We've also added a number of new property models at the request of customers, and revised some of the models that belong to our toxicity module to try and increase or improve the accuracy of those models. Now the MedChem Studio software package that we offer, MedChem Studio is going to be a computational program that's going to have features to address both data mining and also for designing new drug-like molecules, so we like to say that it can be used for mining large libraries of data that clients or chemists may have already synthesized and made some measurements on, but also being able to utilize the program to design completely new molecules. And in combination with ADMET Predictor, we believe the 2 programs really do provide an unmatched capability for chemists to search through these large libraries of compounds and be able to rank order them based upon their ADMET potential or ADMET risks. Now version 3.5 of MedChem Studio was released actually within the last week or so. It's got a number of new features, including molecule depictions and some new ways to analyze data, helping us identify activity cliffs in large libraries. A little plug-in that we actually offer for free is called MedChem Designer. This is our sketching software and it started off as just a simple sketcher but now has improved to the point where there's really no other program like it on the market in terms of some of its features and capabilities. And we've also released a new version of this product. This is automatically included with installations of the MedChem Studio and ADMET Predictor program. And we do offer it for free. The reason for this was to try and essentially increase the exposure for our product line overall. So offering this product is kind of a teaser to then encourage people to consider testing some of the other software. DDDPlus is our program that simulates the in vitro dissolution experiment. And we continue to see increased interest in this product, especially for scientists who work in the areas of formulation design, dissolution method, development or performing analytical studies, in general. And this product has quite a bit of synergy with the GastroPlus program, whereby scientists could begin to do simulations of in vitro release and utilize those inputs back into GastroPlus to do predictions of the in vivo exposure. And then ultimately, once we've gotten some data back from real in vivo testing, we could utilize some of the information from GastroPlus to feedback into DDDPlus in order to identify a dissolution method that's going to allow us to correlate to that in vivo exposure or to use it to help us design a new formulation in order to hit some target release. Soon we're going to be releasing the MembranePlus software. And MembranePlus is also going to be a tool that links up in some ways to the GastroPlus program. So this is going to be part of the simulation suite and its focus is going to be on the in vitro permeability studies. Whereas DDDPlus is focused on dissolution aspects, MembranePlus will be focused on absorption aspects. And we see again a nice synergy between the GastroPlus flagship product, DDDPlus and MembranePlus. We are in final stages of testing right now with MembranePlus. We hope to release it by the end of the calendar year. And based upon some early presentations and posters that we've presented at conferences, there's quite a bit of interest in this product. So we're staying active with regards to the software development. And then with respect to marketing and sales, specifically, conferences and scientific meetings continue to be a major source of leads for us. And during Q3, so just in 3 months, we did or we attended 19 scientific meetings and conferences, so about 6 per month. And these conferences took place in the U.S. and in Europe. And then we also made a 2-week visit over to Japan. We usually do this trip twice a year. And this visit took place at the end of May, where we did a number of client visits over there. Now one of our focus over the past year or two has been on the education aspects. And so we've been really making an effort to try and train and educate users of the software so that they get the best use from it, reach its full potential so that then the renewals of the licenses going forward are nearly automatic. So we've started to do our host workshops, whereby companies will send scientists to these workshops for a 2- to 3-day period of time. They'll receive training. These workshops do act as an additional revenue source for us. But what we see more importantly are these scientists going back to their companies and requesting new licenses to new modules or features that they don't currently have and so on. So these have served as a very good way for us to promote some of the other offerings that these scientists may not have been aware of. We also do on-site visits, one-on-one with clients, and so in the past quarter, we conducted 8 on-site trainings at various customer sites. And we also visited the FDA and the EPA for 2 separate 3-day training sessions within that quarter. We had over 35 scientists attend for those 2 workshops, and they're starting to utilize the programs more and more at the regulatory levels. The FDA has been using it for a while. Now we're starting to see use of the software at the EPA as well, and this is going to be important for us as we start to -- or continue to penetrate the toxicity arena. We held the first cheminformatics workshop in March in Boston. It was very well received. And then we also hosted 2 GastroPlus workshops, one in Boston, the other one in San Diego, both to overflow crowds. We continue with the strategic digital marketing initiatives. The senior marketing -- Senior Marketing and Sales Manager for the chemistry software has been successful in hosting a webinar series over the past year. In this particular quarter, we hosted 2 webinars on the cheminformatics software. We had over 350 registrations. We continue to be very active with the promotion of our software and services on LinkedIn, Facebook and Twitter. And then we also finished a website redesign. We have seen an increase in website traffic. We've added a number of new kind of interactive features to try and make people aware of some of the software and services we offer and how those programs can assist with some of their in-house research. So really trying to find new ways to deliver the message to the end users. Now for collaborations, we still have the ongoing collaboration, the 5-year collaboration with the FDA Center for Food Drug Safety. We continue to work on that. The FDA scientists and our scientists are using the chemistry software, primarily ADMET Predictor and ADMET Modeler, to build predictive models for likely toxicities of food additives and contaminants. So we're building a series of models to classify new compounds as toxic or non-toxic. And what we're able to do is utilize those models then as part of the software products that we then can release to the rest of the client base. Another important development was that we entered into a material transfer agreement with the National Toxicology Program at the National Institute for Environmental Health Sciences, NIEHS. We're going to be collaborating with them to hopefully identify how our software programs can be used as a platform to drive toxicity testing. So hopefully, this relationship with a very major regulatory group will help us to continue to again penetrate the toxicological market, whether it's related to pharmaceuticals, biotech, chemicals, cosmetics or food ingredient companies. So we're excited to enter into that collaboration agreement with them. The consulting studies continue. We had a number of consulting projects over the last quarter. All were successfully completed, and all left with happy clients. And we continue to receive more requests for these studies than really we can even handle. So people really see the value and the need for our modeling and simulation technology. And we continue with the collaboration to incorporate transdermal dosing into GastroPlus. Hopefully, this will be wrapped up in the version 9.0 release, which I think we're targeting for the end of calendar year. So we believe that the fundamental shift in the industry is continuing. One of the announcements that we did make in this past quarter were that 4 recent submissions from consulting projects that we worked on using GastroPlus modeling results were accepted by regulatory agencies. And a couple of those did result in biowaivers being granted. This is a very big development. We also know that there were a number of submissions directly from our clients without any consulting on our end. So our clients are also utilizing the program. They're utilizing them intelligently and submitting their results to support some of the submissions to these regulatory groups. And then, as I mentioned earlier, we've added 16 new customers during this third fiscal quarter. Now the new chemical entity, the NCE project. Based on our strong belief in the ADMET Design Suite, so that's going to be the products MedChem Studio, MedChem Designer and ADMET Predictor, in March 2011, what we did was initiate our own project to design new molecules. What we did was to -- after considering various targets, what we did was select the malaria parasite because there is an unmet need for a low-cost cure and because we also believe that external funding opportunities might exist if we were successful in generating really high-quality leads using our software. So the goal was to demonstrate how well the ADMET Design Suite worked to generate new lead molecules in a fraction of the time and cost normally required in the pharmaceutical industry. So we completed the design process in September of 2012 and then made an announcement that we had requested quotations for chemical synthesis. We were excited to learn that after the testing, we ended up synthesizing 7 molecules, had them tested. All 7 showed inhibition of the growth of the parasite, and 2 were active at the nanomolar level against both wild type and drug-resistant strains. Now we are still in the process of selecting a second target for another NCE design demonstration, and that's ongoing. And hopefully, we'll have something to announce by the end of this quarter, at the end of August. We just want to remind everyone that, again, the purpose here isn't to necessarily design drugs that are going to be cures, but it's more to show proof of concept and how our software programs can really be utilized to cut down on the time needed to design good leads. And we've been able to show that by presenting at various conferences and in webinars. And we have seen a significant number of new licenses coming in for the ADMET Design Suite, easily exceeding the cost that we invented on -- invested on this NCE project. So just to summarize, for this third fiscal quarter of 2013, a record financial performance, continues the 5-year plus profitable trend, earnings growth of over 14% on revenue growth of nearly 12%. We're continuing to expand our Life Sciences team. We're a growing company. We added 2 new Ph.D.s in the third fiscal quarter alone. We continue to seek and interview additional scientists. Our motto is that if we find somebody who's really bright and intelligent, we'll hire them and we know that they'll find good things to work on. We've got a number of projects that we're waiting to tackle. We just need to add the manpower. The additional staff is going to help support the expansion of the product line and also help with consulting projects. And most -- and more importantly, the Life Sciences team really does strengthen and support the marketing and sales efforts. It's been mentioned a few times. We have to remember that our audience for these products are going to be highly educated scientists. And they really appreciate the ability to go into and discuss technical details with one of our scientists at conferences or on-site visits. So the Life Sciences group, we very much put them out in front to help with the communication with the end users. And also they do a really nice job of presenting work at various conferences and so forth. Now we're continuing to be aggressive with the marketing and sales activities. We're going to be planning for a workshop in Japan in the fall, and we're also thinking about maybe setting up another 1 or 2 smaller workshops before the end of the calendar year. And nothing has been finalized yet. So we feel that Simulations Plus continues to be globally recognized as a leader, and I think that's reflective of some of the collaboration agreements we've entered into with regulatory groups, the submissions that are being accepted by the major regulatory groups. We have an outstanding reputation for scientific expertise and innovation, and we're known for really strong customer support. I think that helps with the high renewal rates that we see quarter-over-quarter. And we're extremely healthy. Strong cash position, no debt. The cash dividends totaling approximately $6 million have been distributed, and yet we still have over $10 million in cash as of today. And the next Board of Directors meeting on July 29, we'll be voting at that point to discuss the potential August dividend distribution. So that wraps up the formal presentation. And now, I think we're ready for the question-and-answer session.

[John Anthony DiBella:]

And I will take the lead on reading the questions. The first one here, can you discuss the terms of the royalty agreement on the base GastroPlus module and what the likelihood of that royalty agreement being bought out? Walter, Momo?

[Walter S. Woltosz:]

I'll take that question. This is Walt. I'd rather not discuss that right now. There is some discussion going on with respect to that. But there's nothing public that we can disclose at this point.

[John Anthony DiBella:]

Okay, we have a multi-question response here from Howard Halpern. How important to long-term growth is the training of FDA and EPA scientists? Well, we feel like it's going to be the FDA, it's going to be the EPA, it's going to be these other regulatory groups, which ultimately will be driving the direction that pharmaceutical research or research being done by industrial chemical companies, cosmetics and so on. They're going to be the ones who drive the direction. And so for us, it's going to be important to make sure that the scientists at these various regulatory agencies have a firm understanding about what our products can do and what they can expect as more and more clients start to submit results over. How does the collaboration with the National Toxicology Program fit into your growth strategy? I'll take this one as well. Again, we know that we've done a pretty good job of penetrating the pharmaceutical and, to an extent, the biotech markets. And right now, the majority of the client base is going to be utilizing the program for chemistry purposes, for preclinical and clinical development activities. One of our key goals is to try and start penetrating other markets, and one of the markets that we've identified is this toxicology arena. And so being able to work with the NIEHS scientists, making sure that they utilize or first are aware of what our products can do, make sure that they can utilize those programs properly and then really identify how our programs can be used as a platform for toxicity testing going forward, it's going to be pretty crucial. So we're going to make sure that we work closely with them. And once we've got this platform in place, make sure that we do some sort of co or joint publication work and make sure that everybody is aware how groups at -- how the regulatory groups, especially NPP, is utilizing the tools and then how they should ultimately be utilizing them. Any thoughts regarding potential price increases? We do consider to have some internal discussions, and I think it has been approximately 4 years since the last price increase. So we're continuing to keep our eye on currency changes and also our own internal costs to see whether or not we need to reinvestigate price increases. So there is a discussion ongoing right now. I don't know, Walt, if you wanted to add anything. Can you provide an update of the...

[Walter S. Woltosz:]

Sorry, John. I was talking to or trying to unmute myself. Yes, we have had significant increase in income tax rate this year, as well as health insurance and some other expenses. So I think it's time for us to take a good hard look at prices and see if we want to pass on some of our cost increases to our customers.

[John Anthony DiBella:]

And I think this one is going to be for you, too, Walt. Can you provide an update on the malaria project or the second NCE project? With regards to the second project, when should we begin modeling in some additional or added R&D costs?

[Walter S. Woltosz:]

Well, again, malaria project is essentially complete unless we get external funding. We're not planning to put anymore money into the malaria project. Rather, we'd like to look at another target. We do have a target that we're investigating. It's a pretty challenging target because we actually have to hit 2 targets instead of one, and we have to hit them at a certain ratio. So designing a single molecule that binds to two different proteins at the right ratio of binding affinity for each of the 2 is quite a challenge. We think we're on top of it. We're kind of looking at some final analyses that should be done here hopefully this month. And with any luck, if those analyses pan out the way we expect them to, we should be going out for close for a synthesis for the molecules we have during this quarter. I would expect that synthesis would probably begin either late in this quarter in August or certainly in the next quarter, the first quarter of FY '14. The actual cost we won't know until we get the quotes. My gut feel, and not being a chemist, is that these molecules seem to, at least on the surface, look perhaps a little easier to synthesize than the ones that we had for malaria, which were some pretty challenging synthesis problems. But again, I'm not a chemist, so I maybe -- my chemist may be laughing at me here offline. So we'll have to see. I'm expecting that perhaps over the next 12 months, we might be seeing somewhere on the order of $100,000 in expenditures, depending on how much testing we decide to do and how easy the synthesis goes.

[John Anthony DiBella:]

One last question, initially at least from Howard is

[Walter S. Woltosz:]

Well, I think you can look at -- can you go back to the Slide #5, John? So here's our revenues by quarter, and you can see there is a definite seasonality. And this is self-perpetuating because remember, our business model is based on annual licenses. So you see Q2 and Q3 are traditionally our strongest quarters, and that continues because a company that licenses in 2Q -- Q2 this year is going to renew in Q2 next year. And so with a rare exception, where something might slip from one quarter to the next, this is pretty well a self-sustaining seasonality. The fourth quarter, which is June, July, August -- our fiscal year runs September 1 to August 31 -- so the fourth quarter is this summer. And of course, in Europe and Asia and a lot of the United States, there's a lot of vacations and so on. What's nice to see is that the fourth quarter last year was higher than the first quarter in 2009. So the fourth quarter is also growing, and you can see it appears to be a pretty nice linear trend for that quarter as well. And this is pretty well with no new products during the 5 years that you see here. We've had all the products that we have now on the market for this entire 5-year period. MembranePlus will be joining the product line hopefully this fall. We're shooting to have it ready to show at the American Association of Pharmaceutical Scientists conference, which is in November. That's our biggest conference of the year. And so hopefully, we'll get a little steeper increase out of that. No guarantees, but we certainly take that based on the feedback we're getting about the concept and the posters that we've presented. Doing analysis with it with the beta test version, we think there's going to be a pretty good market for the MembranePlus product. So the seasonality is what you see here, and we don't see any change to that.

[John Anthony DiBella:]

I think we addressed this question already. Since your renewal rates are so high, do you have any plans to raise prices in the near future? And if so, approximately how much would the increase be? So I think we are looking closely at our prices and having some serious discussions internally. Have you hired new scientists during the quarter?

[Walter S. Woltosz:]

During the third quarter, I don't think any started in the third quarter. But we've had 2 already that have started in the fourth quarter.

[John Anthony DiBella:]

Yes, this might be actually Q4, for the new 2 Ph.D.s that were added.

[Walter S. Woltosz:]

Yes, I think that should be Q4 because it was June and July.

[John Anthony DiBella:]

Yes.

[Walter S. Woltosz:]

And we have another one that's committed that will be joining us in October.

[John Anthony DiBella:]

One other -- another question. My question is about investment and growth. You mentioned a number of things you were doing to reach customers but looking at your financial statements, you really have remarkable operating margins, revenue growth outpaced sales and marketing in the quarter, expanding margins further. Is there an opportunity to invest more money in sales and marketing to grow faster?

[Walter S. Woltosz:]

That's for you, John.

[John Anthony DiBella:]

As I mentioned, I think what one of the things that we really want to try and do is target some of these new markets. And so I think that there is an opportunity to start going to conferences that are focused in the areas of, again, environmental chemicals, herbicides, pesticides, cosmetics and so on. We're going to be having some new features coming out in some of the new releases soon that will help us present how these software programs can be used specifically for some -- those purposes. As mentioned in the last summary slide, the Life Sciences team, so when we hire Ph.D. scientists, they do spend some time assisting with the marketing and sales activities. And I think that as we add more and more scientists, that will only help as well. And we want to try and continue to work with some of the new initiatives. The webinar series, we want to expand that to cover some of the other product lines so there'll be an investment there. And then with the website redesign, we've got the capabilities now to put up some new interactive features to try and better explain the messages and make sure that people understand what the benefits are to using the software, so we'll be making some more investments. As far as actual investments in personnel, sales personnel and having more feet on the street, I don't think right now that's something we're going to be doing because, again, the audience that we typically target, the end user scientists, very much appreciate being able to interact at the initial level with scientists from our end. And by the time we get somebody properly trained who's just going to be a pure sales person, they would have to generate significant revenue in order to pay for the investment that we've made. So I think we'll probably not be focusing too much on adding more feet on the street in terms of pure sales personnel, but we'll continue to lean on the new scientists that are joining the Life Sciences group. I don't know if you have anything to add, Walt?

[Walter S. Woltosz:]

No, I think that's been our philosophy all along is that we've had several philosophies with Simulations Plus that have been very successful for us. One is hiring very smart people who fit in, in terms of personal chemistry with the rest of the group. The team here is just an incredibly intelligent and hardworking team, and fun people to work with. They enjoy working with each other. And we also -- we give everybody a private office. That's been a philosophy since we've begun. And the other thing is to get them out of that office, get them out in the real world. As soon as they're settled in a little bit and have an appreciation for what we do, we get them out to these scientific meetings. We're doing, what, 60 or so meetings a year. And so we want people, not to just sit at their computer and develop software or do studies. We want them to get out there and meet the customers, build those relationships because it is a very much a relationship-based business. As much as it sounds like it's a pure science play, it's a very much relationship-oriented as well. And so one of the things we offer our new scientists, they can come, in some cases, in fact, probably the majority of cases, come right out of a university with a new Ph.D. in hand. And within a couple of years, they've got a reputation that spans the globe. They've gotten out there and done the meetings and met folks. They get a reputation. And you can't really do that going to work for a large pharma, where you get stuck in a cubicle and you might get out to one or, if you're really lucky, maybe 2 scientific meetings a year. So we're going to continue that. The support that the scientific team gives marketing and sales is tremendous. We've got some of our folks, our 100,000-mile travelers year after year involved in going to these meetings, staffing the booths, giving scientific presentations, interacting with customers at the customer sites. And it's worked well. So we're going to continue that model.

[John Anthony DiBella:]

Okay, I don't see any further written questions. Renee, I don't know if anybody has got their hand up.

[Renee Bouche:]

No, there are no raised hands, either. So I think that pretty much wraps up the questions.

[John Anthony DiBella:]

Okay. Renee, back to you.

[Renee Bouche:]

All right. Well, thank you, John. Excellent presentation. This concludes today's conference call and webinar. If you missed any part of today's presentation, the replay will be available at our website, www.simulations-plus.com. Thank you so much for joining us, and have a great afternoon.