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Apr 15, 2010
  |  Press Release

Simulations Plus Reports Second Quarter FY2010 Financial Results

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 2010 ended February 28, 2010 (2QFY10).

2QFY10 highlights compared with 2QFY09:

  • Consolidated revenues increased 20.1% to record $2.95 million from $2.46 million
  • Pharmaceutical software and services revenues up 25.2% to $2.23 million from $1.78 million
  • Words+ subsidiary revenues up 6.6% to $723,000 from $678,000
  • R&D expense decreased 11.9% to $252,000 from $286,000
  • SG&A increased 5.0% to $1.09 million from $1.04 million
  • Gross profit up 22.9% to $2.25 million from $1.83 million
  • Income before income taxes up 74.3% to $974,000 from $559,000
  • Net income up 74.1% to $641,000 from $368,000
  • Diluted earnings per share $0.04, an increase of 79.9% from $0.02

First six months FY10 (6moFY10) highlights compared with 6moFY09:

  • Consolidated revenues increased 17.4% to record $5.39 million from $4.59 million
  • Pharmaceutical software and services revenues up 23.5% to $3.96 million from $3.21 million
  • Words+ subsidiary revenues up 3.2% to $1.43 million from $1.38 million
  • R&D expense decreased 7.3% to $513,000 from $554,000
  • SG&A increased 7.9% to $2.09 million from $1.94 million
  • Gross profit up 19.9% to $4.08 million from $3.40 million
  • Income before income taxes up 61.6% to $1.64 million from $1.01 million
  • Net income up 57.5% to $1.07 million from $680,000
  • Diluted earnings per share $0.06, an increase of 65.5% from $0.04
  • Cash increased to $8.64 million from $7.47 million at the beginning of the fiscal year

Walt Woltosz, chairman and chief executive officer of Simulations Plus, said: “These results represent a new record second quarter and first six months for both revenues and earnings. Shareholder equity grew once again, to $11.5 million from $10.6 million at the beginning of the fiscal year. Cash flow remains strong with no debt. We continue seeking accretive acquisitions. We think that the aggressive marketing and sales program we began last year is bearing fruit and gathering momentum as more and more of the pharmaceutical industry adopts simulation and modeling tools to increase productivity. We believe there is a fundamental change underway in how drugs are designed and developed, with greater reliance on computer modeling that keeps getting better in a variety of areas. GastroPlus™ Version 7.0 will be released very soon, adding three very important new capabilities in drug-drug interaction, ocular drug delivery, and nasal/pulmonary drug delivery, expanding our markets and our capabilities within existing customer sites. Coming improvements in ADMET Predictor™, ClassPharmer™, and DDDPlus™, along with the continued strong growth we’ve experienced for our consulting services, gives FY2010 a bright outlook.”

 

Simulations Plus, Inc. and Subsidiary

Condensed Consolidated Balance Sheets

February 28, 2010 (Unaudited) and August 31, 2009 (Audited)

ASSETS
February 28, 2010

August 31,
2009

Current assets
Cash and cash equivalents $ 8,641,289 $ 7,473,485
Accounts receivable, net of allowance for doubtful accounts
and estimated contractual discounts of $369,897 and $447,073 1,646,851 1,888,904
Contracts receivable 383,111 79,565
Inventory 336,177 325,926
Prepaid expenses and other current assets 110,743 158,738
Deferred income taxes 329,573 338,516
Total current assets 11,447,744 10,265,134

Capitalized computer software development costs,

net of accumulated amortization of $4,160,046 and $3,843,743 2,082,671 1,942,893
Property and equipment, net 48,191 53,220
Customer relationships, net of accumulated amortization of $112,332 and $104,728 15,709 23,314
Other assets 18,445 18,445
Total assets $ 13,612,760 $ 12,303,006
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable $ 301,637 $ 199,218
Accrued payroll and other expenses 613,921 552,431
Accrued bonuses to officers 60,000 60,000
Accrued warranty and service costs 30,670 43,236
Accrued income taxes 168,438
Deferred revenue 119,751 82,190
Total current liabilities 1,294,417 937,075
Long-Term liabilities
Deferred income taxes 857,104 795,140
Total liabilities 2,151,521 1,732,215
Commitments and contingencies
Shareholders’ equity
Preferred stock, $0.001 par value
10,000,000 shares authorized
no shares issued and outstanding
Common stock, $0.001 par value
50,000,000 shares authorized

16,054,176 and 15,700,382 shares issued and outstanding on February 28, 2010 and August 31, 2009, respectively.

4,526 4,172
Additional paid-in capital 5,391,840 5,572,411
Retained earnings 6,064,873 4,994,208
Total shareholders’ equity 11,461,239 10,570,791
Total liabilities and shareholders’ equity $ 13,612,760 $ 12,303,006

 

Simulations Plus, Inc. and Subsidiary

Condensed Consolidated Statements of Operations

For the Three and Six Months Ended February 28,

(Unaudited)

Three months ended Six months ended
2010 2009 2010 2009
Net sales $ 2,949,719 $ 2,456,762 $ 5,386,771 $ 4,590,012
Cost of sales 700,475 627,124 1,307,364 1,187,096
Gross profit 2,249,244 1,829,638 4,079,407 3,402,916
Operating expenses
Selling, general, and administrative 1,088,819 1,036,724 2,093,092 1,940,414
Research and development 252,098 286,115 513,423 553,954
Total operating expenses 1,340,917 1,322,839 2,606,515 2,494,368
Income from operations 908,327 506,799 1,472,892 908,548
Other income (expense)
Interest income 23,560 19,606 46,046 52,993
Interest expense (1 ) (303 )
Miscellaneous income 231 43
Gain on sales of property and equipment 1,024
Gain on currency exchange 41,962 32,340 115,194 50,216
Total other income (expense) 65,521 51,946 162,192 103,252
Income before provision for income taxes 973,848 558,745 1,635,084 1,011,800
Provision for income taxes (332,985 ) (190,673 ) (564,418 ) (332,006 )
Net income $ 640,863 $ 368,072 $ 1,070,666 $ 679,794
Basic earnings per share $ 0.04 $ 0.02 $ 0.07 $ 0.04
Diluted earnings per share $ 0.04 $ 0.02 $ 0.06 $ 0.04
Weighted-average common shares outstanding
Basic 15,826,030 16,268,583 15,735,400 16,309,683
Diluted 16,558,423 17,108,322 16,479,033 17,312,242

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