Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of software for pharmaceutical discovery and development, today reported its financial results for its 2012 fiscal year (FY12) and fourth quarter (4Q12) ended August 31, 2012. The former Words+ subsidiary was sold on November 30, 2011, therefore results provided in this press release and in our annual report treat Words+ as discontinued operations and are based on the performance of the ongoing pharmaceutical software and services business.

Results for the 2012 fiscal year (FY12):

  • Revenues were $9.45 million, representing an increase of 8.1% over $8.74 million in FY11
  • SG&A expense increased 6.1% to $3.38 million from $3.19 million in FY11
    • As a percent of sales, SG&A decreased to 35.8% from 36.5% in FY11
  • R&D expense was $0.947 million, an increase of 104% over $0.464 million in FY11
    • This increase was due to investments in expanding our scientific staff and in our malaria project
  • Net income was $3.03 million, representing an increase of 11.5% over $2.71 million in FY11
  • Net income per fully diluted share was $0.187, representing an increase of 11.1% over $0.169 for FY11
  • Cash increased to $12.7 million, representing an increase of 24.8% from $10.2 million at the end of FY11
    • This was in spite of dividend distributions to shareholders of nearly $2.4 million
  • Shareholders’ equity increased to $15.1 million, representing an increase of 7.9% from $14.0 million at the end of FY11

Results for the fourth quarter FY12 (4Q12):

  • Revenues were $1.64 million, representing an increase of 14.9% over $1.43 million in 4Q11
  • SG&A decreased 14.5% to $0.831 million from $0.973 million in FY11
  • R&D expense was $0.203 million, an increase of 462.0% from $0.036 million in FY11
    • This increase was due to investments in expanding our scientific staff and in our malaria project
  • Net income was $0.349 million, representing an increase of 88.1% over $0.186 million in FY11
  • Earnings per fully diluted share were $0.021, representing an increase of 85.4% over $0.012 in 4Q11

Ms. Momoko Beran, chief financial officer for Simulations Plus, said: “We completed another record fiscal year, with all four quarters setting new quarterly records. Earnings per share increased by more than 11% - the direct result of a strong performance from our pharmaceutical software and services business. R&D expenses increased because we have increased our scientific staff, increased salaries for existing staff, and because of outside expenses incurred through our investment in our malaria project. SG&A increased 6.1% primarily because we now pay the entire office lease following the sale of Words+ on November 30, 2011. Words+ pays 20% of the lease, however it is reported as other income rather than offsetting the lease expense. Other increases in SG&A were advertising, trade shows, marketing labor as we attended more trade shows and conferences, 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.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “The sale of Words+ last year has enabled us 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 Advanced GastroPlus™ Training Workshops and we added Introductory GastroPlus Training Workshops which have been well attended by scientists from the pharmaceutical industry, academia, and government agencies in the U.S., Europe, and Asia. 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: “During this fiscal year, we embarked on a New Chemical Entity (NCE) project for malaria. Using our ADMET Design Suite™, which consists of our MedChem Studio™, MedChem Designer™, and ADMET Predictor™ software, we designed new molecules to treat malaria. In September 2011, we announced that we had completed our design efforts and that we were soliciting quotations from chemistry companies to synthesize these novel molecules. At that time, we had no idea whether we would be successful in our predictions that these molecules would inhibit the growth of the malaria parasite Plasmodium falciparum. After nearly nine months of challenging synthesis efforts, we had a total of seven new molecules synthesized and tested, and our hope was that at least one of our new molecules would inhibit the growth of the parasite. We were excited to learn that all of them did, but it’s important to add that our goal was not to develop a cure for malaria with this small effort. Rather, the purpose was to demonstrate that by using our software and design approaches, scientists can rapidly generate promising leads in a fraction of the typical time and cost – leads that could be followed up with a greater investment. As we have presented these results to audiences around the world, we’ve seen great interest and numerous requests to evaluate our ADMET Design Suite.”

“We are now communicating with several organizations that fund research for malaria and other diseases,” Mr. Woltosz continued. “We hope to secure outside funding to take the malaria effort on a larger scale and to pursue other disease targets with our tools and chemistry expertise. We will also select an additional target on our own and invest in a second demonstration project to confirm that this process can be repeated for targets other than malaria.”

Investor Conference Call November 19, 2012, 4:15 PM EST/1:15 PM PST

A conference call will be webcast live and may be accessed by first registering at the following website: 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 (415) 655-0056, and enter access code 283-912-397.

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

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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.

Balance Sheet for the Years Ended

    August 31,





Current assets
Cash and cash equivalents $ 12,701,075 $ 10,181,049
Income tax refund receivable 153,896 259,434
Accounts receivable, net of allowance for doubtful accounts of $0 1,451,864 1,170,861
Contracts receivable 18,893 185,816
Prepaid expenses and other current assets 150,856 123,954
Deferred income taxes 193,712 302,076
Current assets of discontinued operations   -   1,051,637
Total current assets 14,670,296 13,274,827
Long-term assets

Capitalized computer software development costs, net of accumulated amortization of $5,084,690 and $4,416,669

2,479,468 2,188,982
Property and equipment, net 107,410 43,010
Intellectual property, net of accumulated amortization of $3,750 71,250 -
Customer relationships, net of accumulated amortization of $128,042 and $126,172 - 1,870
Other assets 18,445 18,445
Non-current assets of discontinued operations   -   340,204
Total assets $ 17,346,869 $ 15,867,338
Current liabilities
Accounts payable $ 177,509 $ 176,136
Accrued payroll and other expenses 312,912 276,327
Accrued bonuses to officer 60,000 -
Accrued income taxes 733,233 168,897
Deferred revenue 131,782 141,191
Current liabilities of discontinued operations   -   378,567
Total current liabilities 1,415,436 1,141,118
Long-term liabilities
Deferred income taxes 788,857 656,047
Non-current liabilities of discontinued operations   -   33,558
Total liabilities 2,204,293 1,830,723
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
15,923,019 and 15,572,943 shares issued and outstanding 4,399 4,044
Additional paid-in capital 4,628,366 4,167,650
Retained earnings   10,509,811   9,864,921
Total shareholders' equity   15,142,576   14,036,615
Total liabilities and shareholders' equity $ 17,346,869 $ 15,867,338

Simulations Plus, Inc.

Results of Operation for the Years Ended

    August 31,




Net sales $ 9,448,608 $ 8,738,739
Cost of sales   1,510,148     1,558,178  
Gross profit   7,938,460     7,180,561  
Operating expenses
Selling, general, and administrative 3,379,017 3,185,999
Research and development   947,556     464,281  
Total operating expenses   4,326,573     3,650,280  
Income from operations   3,611,887     3,530,281  
Other income (expense)
Interest income 89,265 91,224
Miscellaneous income 76,149 -
Gain on currency exchange 177,790 76,416
Gain on sale of assets (433 ) 240
Interest expense   (3 )   (43 )
Total other income (expense)   342,768     167,837  

Income from continuing operations before provision for income taxes

3,954,655 3,698,118
Provision for income taxes   (1,142,693 )   (1,035,473 )
Income from continuing operations $ 2,811,962   $ 2,662,645  
Discontinued operations:
Gain (loss) from discontinued operations, net of tax (249,898 ) 51,996
Gain on sale of Words+, net of tax   465,820     -  
Results of discontinued operations   215,922     51,996  
Net Income $ 3,027,884   $ 2,714,641  
Basic earnings per share:
Continuing operations $ 0.18 $ 0.17
Discontinued operations   0.01     0.00  
Net basic earning per share $ 0.19   $ 0.17  
Diluted earnings per share
Continuing operations $ 0.18 $ 0.17
Discontinued operations   0.01     0.00  
Net basic earning per share $ 0.19   $ 0.17  
Weighted-average common shares outstanding
Basic 15,763,674 15,540,047
Diluted 16,151,873 16,082,454


Simulations Plus Investor Relations
Ms. Renee Bouche, 661-723-7723
Hayden IR
Mr. Cameron Donahue, 651-653-1854