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.”

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 also provide a productivity tool called Abbreviate! for PCs and the Apple iPhone as well as an educational software series for science students in middle and high schools known as FutureLab . Our wholly owned subsidiary, Words+, Inc., provides assistive technologies to persons with disabilities, including the computerized communication system used by world-famous theoretical astrophysicist Professor Stephen Hawking. 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. 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
CONDENSED CONSOLIDATED BALANCE SHEETS
May 31, 2010 (Unaudited) and August 31, 2009 (Audited)
ASSETS
May 31, 2010 August 31, 2009
Current assets
Cash and cash equivalents $ 8,583,193 $ 7,473,485
Accounts receivable, net of allowance for doubtful accounts
and estimated contractual discounts of $394,428 and $447,073 2,164,277 1,888,904
Contracts receivable 169,346 79,565
Income tax refund receivable 524,151 -
Inventory 408,741 325,926
Prepaid expenses and other current assets 101,332 158,738
Deferred income taxes 384,492 338,516
Total current assets 12,335,532 10,265,134
Capitalized computer software development costs,
net of accumulated amortization of $4,321,641 and $3,843,743 2,154,995 1,942,893
Property and equipment, net 44,340 53,220
Customer relationships, net of accumulated amortization of $115,574 and $104,728 12,468 23,314
Other assets 18,445 18,445
Total assets $ 14,565,780 $ 12,303,006
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 281,387 $ 199,218
Accrued payroll and other expenses 520,463 552,431
Accrued bonuses to officers 60,000 60,000
Accrued warranty and service costs 40,731 43,236
Accrued income taxes 247,614 -
Deferred revenue 191,922 82,190
Total current liabilities 1,342,117 937,075
Long-Term liabilities
Deferred income taxes 432,761 795,140
Total liabilities 1,774,878 1,732,215
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
15,852,464 and 15,700,382 shares issued and outstanding on May 31, 2010
and August 31, 2009, respectively. 4,324 4,172
Additional paid-in capital 5,981,591 5,572,411
Retained earnings 6,804,987 4,994,208
Total shareholders' equity 12,790,902 10,570,791
Total liabilities and shareholders' equity $ 14,565,780 $ 12,303,006


SIMULATIONS PLUS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended May 31,
(Unaudited)

Three months ended

Nine months ended
2010 2009 2010 2009
Net sales $ 3,118,936 $ 2,713,524 $ 8,505,707 $ 7,303,536
Cost of sales 699,402 582,954 2,006,766 1,768,804
Gross profit 2,419,534 2,130,570 6,498,941 5,534,732
Operating expenses
Selling, general, and administrative 1,117,557 989,165 3,210,649 2,929,578
Research and development 234,318 294,284 747,741 849,484
Total operating expenses 1,351,875 1,283,449 3,958,390 3,779,062
Income from operations 1,067,659 847,121 2,540,551 1,755,670
Other income (expense)
Interest income 27,433 20,105 73,479 73,098
Interest expense - - (303 ) -
Miscellaneous income 1,000 514 1,231 557
Gain on sales of property and equipment 969 - 1,993 -
Gain on currency exchange 14,955 20,233 130,149 70,449
Total other income (expense) 44,357 40,852 206,549 144,104
Income before provision for income taxes 1,112,016 887,973 2,747,100 1,899,774
Provision for income taxes (371,903 ) (318,840 ) (936,321 ) (650,846 )
Net income $ 740,113 $ 569,133 $ 1,810,779 $ 1,248,928
Basic earnings per share $ 0.05 $ 0.04 $ 0.11 $ 0.08
Diluted earnings per share $ 0.04 $ 0.03 $ 0.11 $ 0.07
Weighted-average common shares outstanding
Basic 16,023,000 16,051,133 15,832,791 16,222,867
Diluted 16,830,281 16,925,581 16,499,813 17,194,349



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