Simulations Plus Reports Third Quarter FY2018 Financial Results

Simulations Plus, Inc. (Nasdaq: SLP), the leading provider of modeling and simulation solutions for the pharmaceutical, biotechnology, chemicals, and consumer goods industries, today reported financial results for its third quarter of fiscal year 2018 (3QFY18) and the first nine months of fiscal year 2018 (9moFY18), the period ended May 31, 2018.

3QFY18 highlights compared with 3QFY17:

• Net revenues increased 26.7% to $8.6 million, an increase of $1.8 million from $6.7 million
• Gross profit was up 23.1% to $6.5 million, an increase of $1.2 million from $5.3 million
• SG&A was $2.6 million, an increase of 33.2% or $649,000 from $2.0 million
• R&D expenditures were $993,000 an increase of $395,000, or 66.0% over $598,000
  • In 3QFY18, $485,000 was capitalized and $508,000 was expensed
  • In 3QFY17, $344,000 was capitalized and $254,000 was expensed
• Income before taxes increased 10.1% to $3.4 million, an increase of $313,000 from $3.1 million
• Net income increased 15.7% to $2.4 million, an increase of $327,000 from $2.1 million
• Diluted earnings per share increased 13.7% to $0.13 from $0.12.

9moFY18 highlights compared with 9moFY17:

• Net revenues increased 28.6% to $23.0 million, an increase of $5.1 million from $17.9 million
• Gross profit was up 26.4% to $17.1 million, an increase of $3.6 million from $13.5 million
• SG&A was $7.4 million, an increase of $1.6 million, or 27.5%, from $5.8 million
• R&D expenditures were $3.0 million, an increase of $1.1 million, or 58.3% over $1.9 million
  • For 9moFY18, $1.6 million was capitalized and $1.4 million was expensed
  • For 9moFY17, $928,000 was capitalized and $953,000 was expensed
• Income before taxes increased 21.4% to $8.3 million, an increase of $1.5 million from $6.8 million
• Net income increased 63.8% to $7.6 million, an increase of $3.0 million from $4.6 million; this included the one-time second-quarter tax benefit of $1.5 million reported last quarter. Without the adjustment, year-to-date income would have been $6.1 million, up $1.5 million or 31.5%
• Diluted earnings per share increased 60.2% to $0.43 from $0.27, the $1.5 million tax adjustment accounted for $0.08 of the increase in diluted earnings per share

Walt Woltosz, chairman of the board of Simulations Plus, said: "Simulations Plus continues to execute on its growth strategy and deliver quantifiable value to its expanding customer base. With more than a decade of consistent growth in revenue and earnings, we believe we are well-positioned for continued success, especially as in silico modeling takes on an increasing importance with our customers. We believe simulation and modeling, and consulting services based on them, are essential components of reducing the cost and time required for drug discovery and development. I believe it is an appropriate time for me to turn over the day-to-day leadership of our strong organization to Shawn O’Connor, our experienced new CEO.”

John Kneisel, chief financial officer of Simulations Plus, added: "We continue to deliver consistent growth and profitability, and maintain a strong cash position. Consolidated cash as of May 31, 2018, was $7.2 million, and $9.9 million as of July 9, 2018. Our financial position has allowed us to make strategic investments over the last several years and enabled continued investment in research and development to bolster our strategic position in the market. This year we have released new versions of GastroPlus™, ADMET Predictor™, PKPlus™, KIWI™, DILIsym™ and are working on NAFLDsym™. As the recognized leader in the space, with a growing base of loyal customers, these product introductions will help us capture market share and better serve the industry.”

Quarterly Dividend Declared

The Company’s Board of Directors has declared a cash dividend of $0.06 per share of the Company’s common stock payable on August 2, 2018, to shareholders of record as of July 26, 2018. The declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements, and other factors.

Investor Conference Call

The Company invites all interested persons to attend its conference call at 4:15 p.m. Eastern Time on July 10, 2018. The live webcast/teleconference will be accessible by registering here. Please dial in five to ten minutes prior to the scheduled start time. A live, listen-only webcast will also be available by dialing (914) 614-3221, and entering access code 637-051-430. A replay of the webcast will be available at the Investors section of the Simulations Plus website following the call.

About Simulations Plus, Inc.

Simulations Plus, Inc., is a premier developer of drug discovery and development software as well as a leading provider of both preclinical and clinical pharmacometric consulting services for regulatory submissions and quantitative systems pharmacology/toxicology models for drug-induced liver injury and nonalcoholic fatty liver disease. The company is a global leader focused on improving the ways scientists use knowledge and data to predict the properties and outcomes of pharmaceutical, biotechnology, and chemical agents. Our software is licensed to and used in the conduct of research by major pharmaceutical, biotechnology, chemical, consumer goods companies, and regulatory agencies worldwide. Our innovations in integrating new and existing science in medicinal chemistry, computational chemistry, artificial intelligence, pharmaceutical science, biology, and physiology into our software have made us the leading software provider for molecular property prediction from structure and physiologically based pharmacokinetic modeling and simulation. For more information, visit our website at 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 and filed with the U.S. Securities and Exchange Commission.

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