LANCASTER, CA, April 15, 2009 – 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 2009 ended February 28, 2009 (2QFY09).

Ms. Momoko Beran, chief financial officer of Simulations Plus, stated: “In spite of the global economic crisis that has been among the greatest challenges to worldwide business since the end of World War II, Simulations Plus has continued to grow, with a new record for second quarter revenues. Consolidated net sales increased 12.7% to $2,457,000 in 2QFY09 from $2,180,000 in the second fiscal quarter of fiscal 2008 (2QFY08). Pharmaceutical software and services revenues for 2QFY09 increased 14.8% over 2QFY08, while revenues from our Words+ subsidiary increased 7.6% over 2QFY08.”

Ms. Beran continued: “For 2QFY09, consolidated gross profit increased 10.4% to $1,904,000 from $1,724,000 in 2QFY08. R&D expense increased 42.9% to $360,000 in 2QFY09 from $252,000 in 2QFY08; while total R&D expenditures, which include capitalized software development costs, increased by 9.6%, primarily due to expansion of our Life Sciences staff and salary increases. Consolidated SG&A increased 24.5% to $1,037,000 in 2QFY09, compared to $832,000 in 2QFY08. As a percentage of sales, SG&A increased to 42.2% in 2QFY09 from 38.2% in 2QFY08. Travel and trade show expenses accounted for a significant portion of the increase as we have increased our marketing and sales efforts substantially over last year. For 2QFY09, net income before taxes decreased 20.4% or $143,000, to $559,000 compared with $702,000 in 2QFY08. The provision for income taxes increased by 39.4%, or $54,000, to $191,000 for 2QFY09 from $137,000 in 2QFY08. Using our best estimates for the remainder of the year, we anticipate a tax rate for the year to be in the range of 32 ~ 35%; however, this will depend on the amount of R&D tax credits generated during the current fiscal year.

“Consolidated net earnings for 2QFY09 were $368,000, or $0.02 per fully diluted share, a decrease of 34.9% from $565,000, or $0.03 per diluted share in 2QFY08. We attribute this primarily to our increased investment in R&D and marketing and sales. Our cash continues to grow, with cash at the end of 2QFY09 of $7,522,000, up 20.2% from $6,257,000 (including $750,000 in auction rate securities that were later redeemed at full face value plus interest) at the end of 2QFY08. Shareholders’ equity at the end of 2QFY09 was $10,453,000, an increase of 17.4% from $8,900,000 at the end of 2QFY08.”

Ms. Beran added: “For the first six months of FY09, c onsolidated net sales increased 10.2% to $4,590,000 from $4,163,000 in the first six months of FY08. Sales from pharmaceutical software and services increased approximately $221,000, or 7.4%, and revenues from our Words+ subsidiary increased $206,000, or 17.5% over the first half of FY08.

“For the first half of FY09, consolidated gross profit increased 9.0% to $3,511,000 from $3,222,000 in the first half of FY08. R&D expense increased 38.5% to $662,000 from $478,000; while total R&D expenditures, which include capitalized software development costs, increased by 17.1%, primarily due to expansion of our Life Sciences staff and salary increases. Consolidated SG&A increased 10.1% to $1,940,000, compared to $1,763,000 in the first half of FY08. Travel and trade show expenses accounted for a significant portion of the increase as we have increased our marketing and sales efforts substantially over last year. However, as a percentage of sales, SG&A expenses are identical; 42.3% in the first half of FY09 and FY08.

“For the first six months of FY09, net income before taxes was $1,012,000, a decrease of 8.6% from $1,107,000 in the first half of FY08. The provision for income taxes increased by 11.0% to $332,000 for FY09 from $299,000 in the first half of FY08.

“Consolidated net earnings for the first half of FY09 were $680,000, or $0.04 per fully diluted share, a decrease of 15.8% from $808,000, or $0.04 per diluted share in the first six months of FY08.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, said: “We’re very pleased with our second quarter and first six months results. The global economic situation has had no significant impact on our business to date, and Simulations Plus continues to thrive and grow. Our four funded collaborations with three different major pharmaceutical companies are going very well, and we expect to receive an official go-ahead soon for the Phase II SBIR grant we proposed last year. Such efforts allow us to support and grow our world-class scientific staff, and we continue to interview potential candidates to further expand the team. We have increased our investments into R&D and our marketing and sales efforts that we believe are going to help us continue to expand the business in spite of the current global economic situation. In other words, we’re spending money to make money. For example, in the month of April alone, we will have attended and/or exhibited at eight different scientific meetings. We have just hired a new Director of Business Development which we expect to announce formally when he comes to Lancaster in mid-May. We have major new releases of several of our pharmaceutical software programs coming in the near future. We continue the due diligence process on the acquisition candidate company I mentioned in my 1QFY09 results conference call. Although this process is taking longer than expected, we hope to conclude it one way or another within the next two or three months. As our cash is growing, we are able to consider additional acquisition opportunities as well.”


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.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. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

February 28, 2009 (Unaudited ) and August 31, 2008 (Audited)



ASSETS

February 28, 2009

August 31, 2008

Current assets

Cash and cash equivalents

$7,522,211

$5,889,601

Accounts receivable, net of allowance for doubtful accounts

and estimated contractual discounts of $450,179 and $319,609

2,181,850

2,105,074

Inventory

391,677

342,051

Prepaid expenses and other current assets

106,792

195,330

Deferred income taxes

432,400

318,400

Total current assets

10,634,930

8,850,456

Investment

-

750,000

Capitalized computer software development costs ,

net of accumulated amortization of $3,576,371 and $3,324,328

1,889,582

1,788,756

Property and equipment , net

54,612

102,633

Customer relationships, net of accumulated amortization of $95,626 and $85,029

32,416

43,013

Other assets

18,445

18,445

Total assets

$12,629,985

$11,553,303



LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Accounts payable

$174,473

$181,230

Accrued payroll and other expenses

596,272

537,363

Accrued bonuses to officer

53,253

60,000

Accrued warranty and service costs

51,658

33,899

Accrued income tax

301,564

-

Deferred revenue

205,833

83,333

Total current liabilities

1,383,053

895,825

Long-Term liabilities

Deferred income taxes

794,000

742,400

Total liabilities

2,177,053

1,638,225

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

16,136,898 and 16,297,400 shares issued and outstanding

4,608

4,769

Additional paid-in capital

6,186,407

6,328,185

Retained Earnings

4,261,917

3,582,124

Total shareholders' equity

10,452,932

9,915,078

Total liabilities and shareholders' equity

$12,629,985

$11,553,303


SIMULATIONS PLUS, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

for the three and six months ended February 28, and 29,

(Unaudited)

Three months ended

Six months ended

2009

2008

2009

2008

Net sales

$2,456,762

$2,179,675

$4,590,012

$4,163,484

Cost of sales

552,956

455,513

1,079,369

941,453

Gross profit

1,903,806

1,724,162

3,510,643

3,222,031

Operating expenses

Selling, general, and administrative

1,036,724

832,493

1,940,414

1,762,783

Research and development

360,283

251,894

661,681

477,845

Total operating expenses

1,397,007

1,084,387

2,602,095

2,240,628

Income from operations

506,799

639,775

908,548

981,403

Other income (expense)

Interest income

19,606

47,076

52,993

92,223

Miscellaneous income

-

-

43

25

Gain on currency exchange

32,340

14,925

50,216

33,560

Total other income (expense)

51,946

62,001

103,252

125,808

Income before income taxes

558,745

701,776

1,011,800

1,107,211

Provision for income taxes

(190,673)

(136,967)

(332,006)

(299,141)

Net income

$368,072

$564,809

$679,794

$808,070

Basic earnings per share

$0.02

$0.04

$0.04

$0.05

Diluted earnings per share

$0.02

$0.03

$0.04

$0.04

Weighted-average common

shares outstanding

Basic

16,268,583

16,130,622

16,309,683

16,020,147

Diluted

17,108,322

18,279,889

17,312,242

18,369,400



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