LANCASTER, CA, April 12, 2006 - Simulations Plus, Inc. (AMEX: SLP), a leading provider of ADMET absorption simulation and neural net structure-to-property prediction software for pharmaceutical discovery and development, today reported its financial results for the second fiscal quarter of its 2006 fiscal year ended February 28, 2006.
Ms. Momoko Beran, chief financial officer of Simulations Plus, stated: "Consolidated revenues for the second quarter were $1,482,000, an increase of 43.6% from $1,032,000 in the second quarter of fiscal year 2005. This is a new record for second quarter revenues - it's important to note that it would be a new record even without the $300,000 order that slipped from the first quarter to the second that we announced in December. Revenues from pharmaceutical software and services were $884,000, an increase of 115.6% from $410,000 in the second quarter of fiscal year 2005. Revenues for our Words+ subsidiary decreased 3.8% to $598,000 from $622,000 in the second quarter of fiscal year 2005. Net income before taxes increased 3295% for the quarter compared to last fiscal year. Consolidated net earnings for the quarter were $248,000, or $0.06 per diluted share, as compared to net earnings of $9,000, or $0.00 per diluted share for the second quarter of fiscal year 2005. SG&A increased by approximately 29% to $690,000 in the second quarter of fiscal 2006, compared to $535,000 in the second quarter of fiscal year 2005, primarily as a result of costs associated with our acquisition of certain secured assets of Bioreason, Inc. in 2005, as well as salary increases, increases in health insurance, moving expenses to move to our new building, and recruiting costs. Second quarter earnings were impacted by acquisition costs as well as a provision for income taxes of $52,000 that will not actually be paid but will be written off our deferred tax asset."
"For the first six months, revenues were $2,301,000, an increase of 9.6% over $2,098,000 for the first six months of fiscal year 2005. Sales of pharmaceutical software licenses and services were $1,083,000, an increase of 16% over $934,000 in the first six months of fiscal year 2005, while Words+ sales were $1,218,000, an increase of 4.5% from $1,165,000 in the previous fiscal year. Net income before taxes increased 90% for the first six months compared to last fiscal year. Net earnings for the first six months were $50,000, an increase of 61.3% over $31,000 for the first six months of fiscal year 2005. Shareholders' equity at the end of the first six months increased 38.9% to $4,996,000, as compared to $3,596,000 for the second quarter of fiscal year 2005."
Ms. Beran continued: "We have begun receiving payments from the purchased accounts receivable that were part of the acquired assets from Bioreason. These payments contribute to cash flow, but as purchased assets they are not accounted as revenues, nor will they contribute to reported earnings. Cash remains strong, with our cash position increasing to over $1,067,000, even after we used almost $1 million in cash for our acquisitions of assets of Sage Informatics, LLC, and Bioreason, Inc."
Walt Woltosz, chairman and chief executive officer of Simulations Plus, noted: "As we announced in our press release of December 27, 2005, we received a large order in December for the renewal of global software licenses from one of our biggest customers, while this customer's order was received in the first quarter last year. This, of course, helped the second quarter, but even without this $300,000, the second quarter would have exceeded last year's second quarter by about 15%. A portion of the new revenues in the second quarter was due to ClassPharmer sales, so we're beginning to see the benefits of our acquisitions and the recent release of ClassPharmer 4.0. We have just released DDDPlus 2.0, which is a major upgrade that took about a year to implement. We've been showing it at a number of customer sites over the past couple of months, and we believe that the combination of the new sophistication and practical use of this product, along with an aggressive pricing model, will promote significant sales in the coming months. The Company remains financially strong, debt-free, and we are clearly growing."
About Simulations Plus, Inc.
Simulations Plus, Inc. is a premier developer of groundbreaking drug discovery and development simulation software, which is licensed to and used in the conduct of drug research by major pharmaceutical and biotechnology companies worldwide. We have two other businesses that are based on our proprietary technologies: a wholly owned subsidiary, Words+, Inc., which provides assistive technologies to persons with disabilities; and an educational software series for science students in middle and high schools known as FutureLab™. 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. 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, 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. and Subsidiary
Consolidated Balance Sheet
At February 28, 2006
Simulations Plus, Inc. and Subsidiary
Consolidated Statements of Operations
For the three and six months ended February 28,
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Simulations Plus, Inc.
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