Simulations Plus third-quarter consolidated revenues increase 14.9% to record $3.1 million

Simulations Plus, Inc.Jul 17 2010

Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of simulation and modeling software for pharmaceutical discovery and development, today reported financial results for its third quarter of fiscal year 2010 ended May 31, 2010 (3QFY10).

3QFY10 highlights compared with 3QFY09:

• Consolidated revenues increased 14.9% to record $3.1 million from $2.7 million
• Pharmaceutical software and services revenues up 17.1% to $2.32 million from $1.99 million
• Words+ subsidiary revenues up 9.1% to $794,000 from $728,000
• Gross profit up 13.6% to $2.42 million from $2.13 million
• SG&A increased 13.0% to $1.12 million from $0.99 million
• R&D expense decreased 20.4% to $234,000 from $294,000
• Income before income taxes up 25.2% to $1.11 million from $0.89 million
• Net income up 30.0% to $740,000 from $569,000
• Diluted earnings per share $0.044, an increase of 30.8% from $0.034

First nine months FY10 (9moFY10) highlights compared with 9moFY09:

• Consolidated revenues increased 16.5% to record $8.5 million from $7.3 million
• Pharmaceutical software and services revenues up 21.0% to $6.3 million from $5.2 million
• Words+ subsidiary revenues up 5.2% to $2.2 million from $2.1 million
• Gross profit up 17.4% to $6.5 million from $5.5 million
• SG&A increased 9.6% to $3.2 million from $2.9 million
• R&D expense decreased 12.0% to $748,000 from $849,000
• Income before income taxes up 44.6% to $2.7 million from $1.9 million
• Net income up 45.0% to $1.8 million from $1.2 million
• Diluted earnings per share $0.11, an increase of 51.1% from $0.07
• Cash increased to $8.6 million from $7.5 million at the beginning of the fiscal year
• Shareholders' equity increased 21% to $12.8 million from $10.6 million at the beginning of the fiscal year

Ms. Momoko Beran, chief financial officer of Simulations Plus, said, "We've again experienced a new record quarter as well as a new record for the first nine months. Shareholder equity continued to grow to $12.8 million from $10.6 million at the beginning of the fiscal year. Cash increased to $8.6 million as of May 31 from $7.5 million at the beginning of the fiscal year, in spite of spending approximately $603,000, including brokerage fees, to repurchase about 257,000 shares of our stock on the open market. Since May 31, we have repurchased approximately 52,000 additional shares at an average price of $2.39, for about $127,000, including brokerage fees. We are authorized to repurchase a little over 690,000 remaining shares between now and next February, and it is currently our intention to do so. The Company does not disclose the specifics of its repurchase strategy, other than to say that our goal is to buy back as many shares as we can within the constraints imposed on repurchasing, and at prices management determines subject to market conditions."

Walt Woltosz, chairman and chief executive officer of Simulations Plus, added, "Simulations Plus continues to set the standards for simulation and modeling software used in pharmaceutical research and development. GastroPlus™ Version 7.0 will be released during the fourth quarter, a major upgrade that will add three important market-expanding capabilities for drug-drug interaction, ocular drug delivery, and nasal/pulmonary drug delivery. New versions of ADMET Predictor™ and MedChem Studio™ (formerly ClassPharmer™) will also be released in the fourth quarter, marking the culmination of several man-years of effort that provide major improvements to all of these programs. We continue to receive consulting contracts at a steady pace that serve as evidence of our world-class expertise in absorption and pharmacokinetics. And our search for accretive acquisitions and for talented staff to expand our Life Sciences and Marketing and Sales teams is ongoing."