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Simulations Plus Reports First-Quarter FY2014 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 first quarter of fiscal year 2014 ended November 30, 2013 (1QFY14).

1QFY14 highlights compared with 1QFY13:

  • Net sales increased 15.3% to first-quarter record $2.641 million from $2.291 million
  • Gross profit increased 15.2% to $2.193 million from $1.903 million
  • SG&A increased 15.0% to $1.071 million from $0.931 million
  • R&D expenditures decreased 10.1% to $162,000 from $180,000
  • Income before taxes increased 10.8% to $0.992 million from $0.896 million
  • Net income increased 16.7% to $685,000 from $587,000
  • Diluted earnings per share increased 16.7% to $0.042 from $0.036

Mr. John Kneisel, chief financial officer of Simulations Plus, said: “Increased Selling, General and Administrative (SG&A) expenses for 1QFY14 were due to increased commissions on sales to dealers in Asia, increases in salaries and wages, and increases in costs related to trade shows and travel, all of which outweighed decreases in M&A consultant fees and advertising costs. R&D expenses decreased due to increased scientific staff time spent on capitalized software development activities. A lower income tax rate for 1QFY14 resulted in a provision for income taxes of $307,000, nearly the same dollar amount as for 1QFY13 ($309,000). Cash increased to $10.55 million on November 30, 2013, compared to $10.18 million on August 31, 2013, after distributing $643,000 in dividends during 1QFY14. Shareholders’ equity was $14.35 million at the end of 1QFY14, compared to $14.24 million on August 31, 2013.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “Fiscal year 2014 is off to a very good start with this record first quarter. Revenues and earnings are both up nicely in spite of the fact that we completed all of our recent funded collaborations prior to the quarter. Our software development activities on the next releases of ADMET Predictor™, GastroPlus™, and MedChem Studio™ are proceeding well, and we hope to release our new MembranePlus™ software product in the second calendar quarter of this year. We continue to interview candidates to expand the technical team and we continue to look for opportunities to grow the business via acquisition. Our new NCE (new chemical entity) project is proceeding well with the synthesis of a number of molecules just completed and we hope to select the contractor for testing these molecules to determine their activities against their COX-2 (cyclooxygenase-2) and COX-1 enzyme targets in the next few days.”

The Company has announced an investor conference call that will be webcast live at 1:15 PST/4:15 PM EST today, Thursday, January 9, 2014, which may be accessed by first registering at the following website: https://www2.gotomeeting.com/register/132664954. Upon registering, you will receive a confirmation e-mail with a unique link and instructions for joining the call. Please dial in five to ten minutes prior to the scheduled start time. For listen-only mode, you may dial 646-307-1721, and enter access code 176-825-537.

About Simulations Plus, Inc.

Simulations Plus, Inc., is a premier developer of groundbreaking drug discovery and development simulation and modeling software, which is licensed to and used in the conduct of drug research by major pharmaceutical, biotechnology, agrochemical, and food industry companies worldwide. 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 site at www.simulations-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 Securities and Exchange Commission.

 
SIMULATIONS PLUS, INC.

CONDENSED BALANCE SHEETS

As of

                             
November 30,                 August 31,
ASSETS                
2013 2013
Current assets
Cash and cash equivalents $ 10,554,707 $ 10,179,298
Prepaid income taxes 64,798 301,573
Accounts receivable, net of allowance for doubtful accounts of $0 1,866,445 1,910,615
Contracts receivable 289,040 203,913
Prepaid expenses and other current assets 173,075 192,173
Deferred income taxes   188,126   184,258
Total current assets 13,136,191 12,971,830
Long-term assets
Capitalized computer software development costs,
net of accumulated amortization of $5,993,404 and $5,801,578 3,072,547 2,891,169
Property and equipment, net 115,927 117,987
Intellectual property, net of accumulated amortization of $13,125 and $11,250 61,875 63,750
Other assets   18,445   18,445
Total assets $ 16,404,985 $ 16,063,181
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 235,422 $ 146,011
Accrued payroll and other expenses 337,603 311,209
Accrued bonuses to officer 30,000 60,000
Other current liabilities 19,859 19,859
Deferred revenue   168,241   89,227
Total current liabilities 791,125 626,306
 
Long-term liabilities
Deferred income taxes 1,220,435 1,146,389
Other long-term liabilities   43,028   47,993
Total liabilities 2,054,588 1,820,688
 
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
16,073,894 and 16,030,894 shares issued and outstanding 4,545 4,502
Additional paid-in capital 4,908,456 4,842,794
Retained earnings   9,437,396   9,395,197
Total shareholders' equity   14,350,397   14,242,493
 
Total liabilities and shareholders' equity $ 16,404,985 $ 16,063,181
 
 
 
SIMULATIONS PLUS, INC.

CONDENSED STATEMENTS OF OPERATIONS

For the three months ended

           
November 30,
2013                 2012
 
Net sales $ 2,641,000 $ 2,290,094
Cost of sales   448,420     386,870  
Gross profit   2,192,580     1,903,224  
Operating expenses
Selling, general, and administrative 1,071,091 931,060
Research and development   162,116     180,335  
Total operating expenses   1,233,207     1,111,395  
 
Income from operations   959,373     791,829  
 
Other income (expense)
Interest income 9,026 13,728
Miscellaneous income - 15,404
Gain on currency exchange 23,709 74,654
  -     -  
Total other income (expense)   32,735     103,786  
 

Income from continuing operations before provision for income taxes

992,108 895,615
 
Provision for income taxes   (306,953 )   (308,629 )
 
Net Income $ 685,155   $ 586,986  
 
Earnings per share
Basic $ 0.04 $ 0.04
Diluted $ 0.04 $ 0.04
 
Weighted-average common shares outstanding
Basic 16,049,707 15,927,806
Diluted 16,366,720 16,365,552

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