Simulations Plus Reports Second Quarter FY2011 Financial Results

LANCASTER, Calif.--(BUSINESS WIRE)--Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of simulation and modeling software for pharmaceutical discovery and development, today reported financial results for its second quarter of fiscal year 2011 ended February 28, 2011 (2QFY11).

2QFY11 highlights compared with 2QFY10:

• Consolidated revenues up 13.5% to record $3.349 million from $2.949 million
• Pharmaceutical software and services revenues up 17.7% to $2.621 million from $2.227 million
• Words+ subsidiary revenues up 0.7% to $728,000 from $723,000
• Gross profit up 15.6% to $2.601 million from $2.249 million
• SG&A decreased 10.0% to $0.980 million from $1.089 million
• R&D expense increased 1.0% to $255,000 from $252,000
• Income before income taxes up 43.2% to $1.394 million from $0.974 million
• Net income up 41.6% to $907,000 from $641,000
• Diluted earnings per share up 44.6% to $0.06 from $0.04

First six months FY11 (6moFY11) highlights compared with 6moFY10:

• Consolidated revenues increased 14.4% to record $6.161 million from $5.387 million
• Pharmaceutical software and services revenues up 17.9% to $4.672 million from $3.961 million
• Words+ subsidiary revenues up 4.4% to $1.489 million from $1.425 million
• Gross profit up 14.5% to $4.671 million from $4.079 million
• SG&A decreased 2.4% to $2.043 million from $2.093 million
• R&D expense decreased 9.9% to $463,000 from $513,000
• Income before income taxes up 35.7% to $2.219 million from $1.635 million
• Net income up 37.7% to $1.475 million from $1.071 million
• Diluted earnings per share $0.09, an increase of 39.1% from $0.06
• Cash decreased to $8.76 million from $9.63 million at the beginning of the fiscal year due to cash used for the repurchase of Company shares

Ms. Momoko Beran, chief financial officer of Simulations Plus, said: “Once again, we’re pleased to report a record quarter for both revenues and profitability. As we have noted in the past, earnings growth outpaces revenue growth because of the margins on the pharmaceutical software and services side of the business. Cash at the end of 2QFY11 was $8.759 million compared to $8.873 million at the end of 1QFY11, and compared to $9.632 million at the beginning of the fiscal year. We used $1.202 million of our cash to repurchase 397,680 shares during the first quarter and another $865,000 to repurchase 278,159 shares in the second quarter, which ended the second phase of our authorized share repurchase program. Over a period of two years for both phases of our repurchase program, we repurchased a total of 2,022,731 shares at an average price of $2.05 at an expenditure of $4,200,810. Shareholders’ equity at the end of the second quarter was $12.655 million compared to $13.045 million at the beginning of our fiscal year on September 1, 2010, while shareholders’ equity per share decreased slightly from $0.79 to $0.78 per diluted share. Now that the share repurchases have ended, we will not be using cash for that purpose unless the Board of Directors decides to institute a third phase. At this time, the board has not indicated its intent to do so.”

Walt Woltosz, chairman and chief executive officer, added: “Our sustained growth and continued record quarter-over-quarter performance are the result of providing the very best in our product areas, an aggressive marketing and sales program, world-class customer support, and frugal expense management. Although we’ve had little recent success in identifying appropriate acquisitions, we continue to look and we are increasing our recruiting efforts to expand our Life Sciences staff. This will enable us to more rapidly pursue more of the organic growth opportunities we’ve identified. These opportunities are both in the area of increased capabilities of our existing pharmaceutical software and services, and in new product developments. The recently announced releases of ADMET Predictor™ 5.5, MedChem Studio™ 2.0, and our new MedChem Designer™ software are evidence of the continued product enhancements and new product developments going on at Simulations Plus. We remain committed to providing only the best in each of our product areas and to expanding our offerings going forward.”

The Company has announced an earnings conference call for Monday, April 18, at 4:15 PM EDT/1:15 PM PDT, which can be joined by registering at: https://www2.gotomeeting.com/register/366534586/. For listen-only mode, dial 773-945-1010 and enter access code 445-447-672.

About Simulations Plus, Inc.

Simulations Plus, Inc., is a premier developer of groundbreaking drug discovery and development simulation software, which is licensed and used worldwide by major pharmaceutical and biotechnology companies for drug research and in the study of environmental toxicology. We also provide a productivity tool called Abbreviate! for PCs and the Apple iPhone as well as an educational software series for science students in middle and high schools known as FutureLab^™. Our wholly owned subsidiary, Words+, Inc., provides assistive technologies to persons with disabilities. Simulations Plus, Inc., is headquartered in Southern California and trades on the NASDAQ Capital Market under the symbol “SLP.” For more information, visit our Web sites at www.simulations-plus.com and www.words-plus.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 – With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. Words like “believe,” “expect” and “anticipate” mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to maintain our competitive advantages, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, our ability to identify and close acquisitions on terms favorable to the Company, and a sustainable market. Further information on our risk factors is contained in our quarterly and annual reports as filed with the U.S. Securities and Exchange Commission.