SIMULATIONS PLUS REPORTS RECORD 3RD QTR REVENUES.

Simulations Plus, Inc. (AMEX:SLP), Lancaster, Calif., a leading provider of ADMET absorption simulation and neural net structure-to-property prediction software for pharmaceutical discovery and development, has reported its results for the fiscal third quarter ended May 31, 2005.

Momoko Beran, chief financial officer of Simulations Plus, stated: "This was a very good quarter, setting a new record for third quarter revenues. Consolidated net sales increased $191,000, or 15.5%, to $1,424,000 for the third fiscal quarter of 2005 from $1,233,000 in the third fiscal quarter of 2004. Pharmaceutical and educational software revenues increased approximately $59,000, or 9.8%, and our Words+, Inc. subsidiary's sales increased approximately $132,000, or 20.9%, for the quarter over last year's third fiscal quarter. Earnings increased 31.1% to $173,000, or $0.04 per fully diluted share (based on 3,958,063 shares), as compared to $132,000, or $0.03 per fully diluted share (based on 4,046,223 shares) for the same period in fiscal year 2004."

Ms. Beran continued: "For the first nine months of this fiscal year, consolidated revenues were $3,523,000, a decrease of 5.8% from $3,741,000 for the first nine months of fiscal year 2004. For the pharmaceutical software and services business, total revenues for the nine-month period were $1,596,000, a decrease of 19.7%, from $1,988,000 in the first nine months of last fiscal year (which included a two-year order for just under $500,000). For the Words+ subsidiary, total revenues for the first nine months were $1,927,000, up 9.9% from $1,753,000 in the first nine months of last fiscal year. Consolidated earnings for the first nine months of this fiscal year (which includes a deferred tax asset write off of $50,000) were $205,000, a decrease of 11.3% from $231,000 in the first nine months of last fiscal year. Net income before tax (NIBT) from the pharmaceutical software and services business was $146,000 in the first nine months of this fiscal year, as compared with $548,000 for the first nine months of last fiscal year, a decrease of 73.4%. For our Words+ subsidiary, earnings for the first nine months of this fiscal year were $109,000, as compared with a net loss of $317,000 in the first nine months of last fiscal year. Shareholders' equity at the end of nine months increased 6.9% to $4,753,000, up from $4,446,000 at the end of fiscal year 2004."

Walt Woltosz, chairman and chief executive officer, said: "We're pleased to see that we've exceeded last year's third quarter in total revenues, and that NIBT was also greater than last year's for the first nine months. Sales to new customers have been good in addition to consistent renewals and upgrades from existing customers. We're also very pleased that our Words+ subsidiary has rebounded nicely and is now also contributing to earnings."

Woltosz continued: "Going forward, we expect to realize a significant savings in the Words+ subsidiary from the terminated agreement with SAM Communications, LLC that was recently announced, and we believe the ongoing improvements in our existing products and the addition of new core products will continue to fuel our growth on the pharmaceutical software and services side. Our cash position is the best it's been since our IPO eight years ago and we intend to continue to seek opportunities for sound investments to grow the company both internally and through strategic acquisitions."

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. The company has two other businesses, Words+, Inc. and FutureLab(TM), which are based on its proprietary software technologies.

Our Lengthy Sales Cycle Makes It Difficult To Predict Our Quarterly Operating Results.

We have a long sales cycle because we generally need to educate potential customers regarding the use and benefits of our products and allow prospective customers a period of weeks or months to test and evaluate our products and services. The length of our sales cycle varies depending on the size and type and complexity of the customer contemplating a purchase, whether we have conducted business with a potential customer in the past and the size of the deal. On average, our sales cycle is about 6 months. In addition, these potential customers frequently need to obtain approvals from multiple decision makers prior to making purchase decisions, a process that has been further lengthened as a result of the current market conditions surrounding technology spending. Our long sales cycle, which can range from several weeks to several months or more, makes it difficult to predict the quarter in which sales will occur and increases our dependence on existing customer contracts. Delays in sales could cause significant variability in our revenues and operating results for any particular quarterly period.

For more information, call 661/723-7723 or visit http://www.simulations-plus.com.