LANCASTER, Calif.--( BUSINESS WIRE)-- Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of software for pharmaceutical discovery and development, today reported its financial results for its 2011 fiscal year (FY11) and fourth quarter (4Q11) ended August 31, 2011.

Results for the fiscal year FY11:

  • Consolidated revenues were $11.72 million, representing an increase of 9.4% over $10.71 million in FY10
  • Revenues for the pharmaceutical software and services sector were $8.74 million, representing an increase of 14.7% over $7.62 million in FY10
  • Consolidated net income was $2.71 million, representing an increase of 25.9% over $2.16 million in FY10
  • Revenues for the Words+ subsidiary were $2.98 million, a decrease of 3.6% over FY10
  • Net income per fully diluted share was $0.169, representing an increase of 29.3% over $0.131 for FY10
  • Cash increased to $10.18 million, representing an increase of 5.7% from $9.63 million at the end of FY10
  • Shareholders' equity increased to $14.04 million, representing an increase of 7.6% from $13.05 million at the end of FY10


Results for the fourth quarter FY11 (4Q11):

  • Consolidated revenues were $2.12 million, representing a decrease of 3.9% over 4Q10
  • Consolidated net income for the quarter was $0.186 million, representing a decrease of 46.3% over $0.345 million in 4Q10
  • Revenues for the pharmaceutical software and services sector were $1.43 million, representing an increase of 7.0% over $1.33 million in 4Q10
  • Net income for the pharmaceutical software and services sector was $0.173 million, representing a decrease of 16.6% over $0.208 million in 4Q10
  • Revenues for the Words+ subsidiary were down 20.5% to $0.693 million over 4Q10
  • Net income for the Words+ subsidiary was $0.012 million, down 91.1% from $0.137 million in 4Q10
  • Consolidated earnings per fully diluted share were $0.012, representing a decrease of 44.4% over the $0.021 for 4Q10

Ms. Momoko Beran, chief financial officer for Simulations Plus, said: "Im pleased to report that we completed another record fiscal year, with three of four quarters setting new quarterly records on a consolidated basis and all four quarters setting new records for the pharmaceutical software and services side of the business. Earnings per share increased nearly 30% as a result of strong performance from our pharmaceutical software and services business. Although fourth quarter revenues for the pharmaceutical side of the business were up 7% and earnings were positive, earnings were lower than last year's fourth quarter because of increases in both Research and Development (R&D) expenses and in Selling, General and Administrative (SG&A) expenses. R&D increased as a result of expanded staff in our Life Sciences department. SG&A increased because of consulting fees paid to our M&A advisers, increased selling expenses, increased insurance (health/dental, directors and officers), and increased legal fees incurred during our due diligence activities for the unsuccessful attempted acquisition of Entelos in bankruptcy court. As we announced earlier, we expect to close on the sale of our wholly owned subsidiary, Words+, Inc., on November 30. We believe the announced sale of Words+ to the Prentke Romich Company of Wooster, Ohio, is best for both Words+ and Simulations Plus. In accordance with standard practice, going forward we will report Words+ as "discontinued operations" and comparisons will be made with previous fiscal quarters and years based only on the pharmaceutical software and services business."

Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: "With the expected closing of the sale of Words+ tomorrow, we will be able to focus all of our energies and resources on the pharmaceutical software and services business. Our sustained growth and profitability in this business is the result of our annual license business model and the high renewal rates that we have consistently enjoyed, as well as continued growth in our consulting, collaboration, and training activities. During this fiscal year, we conducted our first two Advanced GastroPlus™ Training Workshops, with attendees from companies around the world and from the FDA. We'll be adding a number of shorter, basic training workshops during 2012. These workshops generate a profit and they serve to anchor our software with our customers as they learn how much more they can do with it beyond the basics."

Mr. Woltosz continued: "We now have compounds in synthesis for our New Chemical Entity (NCE) project for malaria. As we reported earlier, this is a project wherein we have used our own software tools, MedChem Studio™, MedChem Designer™, and ADMET Predictor™, to design new molecules to treat malaria. We expect to have samples available for testing in December, and we'll begin a few laboratory tests that will tell us how successful we were in predicting activity against malaria as well as a few ADMET properties. We don't think we're going to develop a cure for malaria with this small effort. The purpose is to show that our software and design approaches can rapidly generate promising leads within a fraction of the typical time and cost - leads that could be followed up with a greater investment. Demonstration of these capabilities is expected to boost our marketing and sales efforts for these products."

Fiscal Year 2011 Conference Call

As previously announced, on Thursday, December 1, at 4:30 p.m. (Eastern Time), the Company will hold a conference call to discuss its fourth quarter and fiscal year 2011 financial results. The call will be webcast live and may be accessed by registering at the following website: http://cts.businesswire.com/ct/CT?id=smartlink&url=https://www2.gotomeeting.com/register/878034490&esheet=50086741&lan=en-US&anchor=https://www2.gotomeeting.com/register/878034490&index=5&md5=dc890389f15e23b46de0c6f7b891a04e. 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 (470) 200-0304, and enter access code 505-242-046.

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 consulting expertise to pharmaceutical and chemical companies worldwide. For more information, visit our Web site at http://cts.businesswire.com/ct/CT?id=smartlink&url=http://www.simulations-plus.com&esheet=50086741&lan=en-US&anchor=www.simulations-plus.com&index=6&md5=2941fd3c4fe86739bdcb541c75efa0ae.

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 U.S. Securities and Exchange Commission.

Simulations Plus, Inc. and Subsidiary

Consolidated Balance Sheets

ASSETS
August 31,
2011 2010
Current assets
Cash and cash equivalents $ 10,181,049 $ 9,631,762
Income tax refund receivable 259,434 225,510

Accounts receivable, net of allowance for doubtful accounts and estimated contractual discounts of $233,385 and $421,118

1,774,038 1,291,350
Contracts receivable 185,816 184,081
Inventory 391,653 554,867
Prepaid expenses and other current assets 180,761 138,163
Deferred income taxes 302,076 364,264
Total current assets 13,274,827 12,389,997

Capitalized computer software development costs, net of accumulated amortization of $5,176,408 and $4,487,757

2,408,658 2,186,419
Property and equipment, net 163,538 55,984
Customer relationships, net of accumulated amortization of $126,172 and $118,442 1,870 9,600
Other assets 18,445 18,445
Total assets $ 15,867,338 $ 14,660,445
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 292,482 $ 239,424
Accrued payroll and other expenses 494,821 511,107
Accrued bonuses to officer - 60,000
Accrued income taxes 168,897 261,861
Accrued warranty and service costs 43,727 35,586
Deferred revenue 141,191 96,092
Total current liabilities 1,141,118 1,204,070
Long-term liabilities
Deferred income taxes 689,605 410,523
Total liabilities 1,830,723 1,614,593
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
15,572,943 and 15,833,006 shares issued and outstanding 4,044 4,304
Additional paid-in capital 4,167,650 5,891,268
Retained earnings 9,864,921 7,150,280
Total shareholders' equity 14,036,615 13,045,852
Total liabilities and shareholders' equity $ 15,867,338 $ 14,660,445


Simulations Plus, Inc. and Subsidiary

Consolidated Statements of Operations

For the years ended

August 31,
2011 2010
Net sales $ 11,719,758 $ 10,711,829
Cost of sales 2,878,891 2,545,709
Gross profit 8,840,867 8,166,120
Operating expenses
Selling, general, and administrative 4,305,156 4,325,621
Research and development 935,196 969,871
Total operating expenses 5,240,352 5,295,492
Income from operations 3,600,515 2,870,628
Other income (expense)
Interest income 91,861 101,545
Miscellaneous income 1,000 1,231
Gain on currency exchange 76,416 130,150
Gain on sale of assets 240 1,993
Interest expense (118 ) (1,045 )
Total other income (expense) 169,399 233,874
Income before income taxes 3,769,914 3,104,502
Provision for income taxes
Deferred income taxes (284,096 ) (289,829 )
Current Income taxes (771,177 ) (658,600 )
Net income $ 2,714,641 $ 2,156,073
Basic earnings per share $ 0.17 $ 0.14
Diluted earnings per share $ 0.17 $ 0.13

Weighted-average common shares outstanding

Basic 15,540,047 15,831,294
Diluted 16,082,454 16,513,018


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