LANCASTER, Calif.--(BUSINESS WIRE)--Simulations Plus, Inc. (Nasdaq: SLP - News), a leading provider of simulation and modeling software for pharmaceutical discovery and development, today reported its financial results for the first quarter of fiscal year 2008 (1Q08) ended November 30, 2007.

Ms. Momoko Beran, chief financial officer of Simulations Plus, stated: “Consolidated revenues for 1Q08 were $1,984,000, an increase of 36.2% from $1,456,000 in the first quarter of fiscal year 2007 (1Q07) and a new record for first quarters. A large pharmaceutical software order that had been received in the second quarter last year came in during the first quarter this year; however, pharmaceutical revenues would have exceeded last year’s first quarter even without that order. First quarter revenues from pharmaceutical software and services increased 74.5% to $1,438,000 from $824,000 in 1Q07. First quarter revenues for our Words+ subsidiary for 1Q08 decreased 13.8% to $545,000 from $632,000 in 1Q07. This decrease was due to our inability to ship Say-it! SAM Handheld Communicators during the first quarter after the supply of the previously discontinued PDA was exhausted, and before the new design was ready for release at the end of the quarter.

Ms. Beran continued: “Consolidated gross profit increased 47.6% to $1,498,000 in 1Q08 from $1,015,000 in 1Q07. R&D expense increased 23.0% to $226,000 in 1Q08 from $184,000 in 1Q07, primarily due to expansion of our Life Sciences staff. Consolidated SG&A increased 22.9% to $930,000 in 1Q08, compared to $757,000 in 1Q07; however, as a percentage of sales, SG&A decreased from approximately 52% to approximately 47%. The major increases in expenses were travel, investor relations, accrued bonus to the corporate Secretary, salaries, and payroll-related expenses such as health insurance, 401K, and payroll taxes, which outweighed decreases in commissions, telephone, supplies, and printer rental.

“Net income before taxes for 1Q08 increased 332% or $311,000 to $405,000 compared with $94,000 in 1Q07. First quarter earnings were impacted by a provision for income taxes of $162,000, of which $37,000 was accrued as a payable. Consolidated net earnings for 1Q08 tripled to $243,000, or $0.013 per diluted share, as compared to $73,000, or $0.004 per diluted share for 1Q07, even after allowing for a 7.8% increase in the number of fully diluted shares. Cash at the end of 1Q08 was $4,584,000, up more than double from $2,103,000 at the end of 1Q07. We believe shareholder equity is one of the best indicators of a company’s growth. Our shareholder equity at the end of 1Q08 increased to $8,075,000, up 40.3% from $5,755,000 at the end of 1Q07, and up 5.3% from $7,665,000 at the beginning of the fiscal year 2008.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, said: “Simulations Plus continues as a financially strong, steadily growing, debt-free company with best-in-class products and outstanding customer relationships. Our Life Sciences team continues to grow and to receive recognition from our industry peers worldwide. Our subsidiary business struggled a bit during the first quarter with the inability to accept orders for our handheld communication system, but our new design has now been released and shipments have been going out the door since the last few days of the first fiscal quarter. Going forward this fiscal year we are optimistic about our prospects for continued strong growth. We’re also optimistic about our $750,000, two-year, Phase II follow-on Small Business Innovation Research proposal to the National Institutes of Health, and we expect to be announcing some important new collaborations in the near future. We continue to work hard to identify, research, and close strategic acquisitions that will strengthen both the pharmaceutical and the disability products businesses, and we hope to be able to announce results in the near future.”

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 as well as a personal productivity tool for the mass market called Abbreviate! ™; and an educational software series for science students in middle and high schools known as FutureLab™. 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. 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 success with our Phase II SBIR proposal to the NIH, 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. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEET

at November 30, 2007

(Unaudited)

ASSETS





Current assets


Cash and cash equivalents
$ 4,584,313

Accounts receivable, net of allowance for doubtful accounts and estimated contractual discounts of $117,050


2,379,574

Inventory



237,167
Prepaid expenses and other current assets

69,079
Deferred tax asset
200,954









Total current assets

7,471,087









Capitalized computer software development costs,


net of accumulated amortization of $2,973,764

1,585,610









Property and equipment

77,003
Customer relationships, net of accumulated amortization of $66,328

61,714
Other assets

18,445









Total assets
$ 9,213,859









LIABILITIES AND SHAREHOLDERS' EQUITY









Current liabilities


Accounts payable
$ 225,150
Accrued payroll and other expenses

507,845
Accrued bonuses to officer

21,339
Accrued warranty and service costs

35,004
Accrued income tax
36,513









Total current liabilities

825,851









Long-Term liabilities


Deferred tax liability
313,215









Total liabilities

1,139,066









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




20,000,000 shares authorized


15,981,400 shares issued and outstanding

4,453
Additional paid-in capital

5,970,525
Retained Earnings
2,099,815









Total shareholders' equity
8,074,793









Total liabilities and shareholders' equity
$ 9,213,859


SIMULATIONS PLUS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

for the three months ended November 30,

(Unaudited)




2007 2006









Net sales

$

1,983,809



$ 1,456,451
Cost of sales
485,940
441,440
Gross profit
1,497,869
1,015,011









Operating expenses




Selling, general, and administrative

930,291


756,777
Research and development
225,951
183,627
Total operating expenses
1,156,242
940,404









Income from operations
341,627
74,607









Other income (expense)




Interest income

45,147


15,928
Miscellaneous income

25


358
Gain on currency exchange
18,635
2,972
Total other income (expense)
63,807
19,258









Income (Loss) before income taxes

405,434


93,865









Benefit from (provision for) income taxes




Benefit from (provision for) income tax
(162,174 )
(20,650 )
Total benefit from (provision for) income taxes
(162,174 )
(20,650 )









Net income (loss)

$

243,260


$ 73,215









Basic earnings (loss) per share

$

0.02


$ 0.00
Diluted earnings (loss) per share

$

0.01


$ 0.00









Weighted-average common shares outstanding(a)






Basic

15,911,312
14,889,102
Diluted

18,429,743
17,097,120









(a)

The numbers of shares at November 30, 2007 and 2006 reflect the 2-for-1 stock splits which occurred on both October 1, 2007 and August 14, 2006.



For further information:
Simulations Plus, Inc.
42505 10th Street West
Lancaster, CA
93534-7059 USA
www.simulations-plus.com
CONTACT: investor relations:
Contact: Renee Bouche