Good afternoon everyone. On behalf of Simulations Plus, I welcome you to our Third Quarter Fiscal Year 2019 Financial Results Conference Call and Webinar. Hosting the call today Simulations Plus’ CEO, Shawn O'Connor and the company's CFO, John Kneisel. An opportunity to ask questions will follow today's presentation, you may send your written questions using the questions pane on the control panel or you may use the hand raising icon on your control panel to ask your question directly. Please be sure to enter the unique audio pane displayed when you join the call. Before beginning, I'd like to remind everyone that with the exception of historical information the matters discussed in this presentation are forward-looking statements that involve numerous risks and uncertainties. The actual results of the company could differ significantly from those statements. Factors that can cause or contribute to such differences include, but are not limited to, continued demand for the company's products, competitive factors, the company's ability to finance future growth, the company's ability to produce and market new products in a timely fashion, the company's ability to continue to attract and retain skilled personnel and the company's ability to sustain or improve their current levels of productivity. Further information on the company's risk factors is contained in the company's quarterly and annual reports and filed with the Securities and Exchange Commission. With that said, I’d like to turn the call over to Shawn O'Connor. Shawn?

Thank you, Cameron. This is a very strong quarter for Simulations Plus. We made excellent progress with regard to our key initiatives for the year and our financial results are reflective of the return on these investments with increased revenue growth and profitability during the quarter. As we have previously discussed, we have historically grown revenues in the 10% to 15% range excluding the effects of acquisitions. We have been focused on delivering at the high end of that range and in the long run beyond that range. Our third quarter revenue growth at 16% demonstrates good execution on this objective especially compared to fiscal year 2018 Q3 growth of 11% adjusted for last year's acquisition source growth. Software revenue growth achieved record levels in this our largest seasonality renewal quarter. Our consulting revenue growth accelerated to 39% year-over-year reflecting the growth of our service capacity through successful recruiting efforts and the significant projects related to RENAsym and IPF which initiated late last quarter. We have made progress with respect to each of our key initiatives. During the quarter, we hired another senior consulting scientist with business development skills who is scheduled to start with us in the fourth quarter. Not including this addition, we grew the consulting staff by three during the quarter and have now increased the company's consulting staff by 22% year-over-year. This capacity growth is critical to our efforts to meet the strong demand for services across all three divisions. I'm especially pleased with our efforts to coordinate our sales and marketing effort across each of the divisions which is beginning to deliver results. During the quarter, we were successful in closing business with a large pharma client with a proposal that included both software products and consulting services sourced across our three divisions. Internationally, we…

All right. Thanks Shawn, appreciate it. Our consolidated net revenues for our third quarter fiscal year 2019, they were up 16.2% or approximately $1.4 million to $9.9 million compared to $8.6 million for the prior year. By division, Lancaster's revenues were up 7% or 6.6% or almost 7% to $6 million. Buffalo revenues were up 30.7% to $2.5 million and RTP revenues were up 43.5% to $1.4 million over the same period last year. Consolidated software and software related revenues were up $230,000 or 4.1% and consulting service revenues were up $1.2 million or 39%. The gross profit increased 16.6% to $7.6 million representing a 76.6% gross margin in the third quarter of fiscal 2019 compared to $6.5 million or 76.3% gross margin in the same quarter last year. Cost of sales increased this quarter about $300,000 compared to the prior year due mainly to growth in labor count as well as salary and benefit increases accounting for the majority of the change. As a percentage of revenues, cost of sales was relatively unchanged decreasing slightly by 0.3% to 23.4%. SG&A expenses were $3.1 million in the quarter or 31.1% of revenue, an increase of about $500,000 or 18.6% compared to $2.6 million or 30.4% of revenue in the third quarter of 2018. This increase in SG&A expense was primarily the result of wage and salary increases from stock compensation, recruiting and hiring fees were included in there and we had an increase in full-time CEO costs and the increase in headcount in Lancaster and Buffalo make-up the majority that time. Our research and development costs during the period, we incurred $1.1 million of R&D costs. With that amount, we expense $643,000 which was 6.5% of revenue, $422,000 was capitalized. Overall we increased our R&D spend by $73,000 over the…

Thank you, John. In summary, the quarter demonstrated the continued returns on our growth related investments. Revenue growth outpaced increased spending and we enjoyed strong gross and operating margins leading to increased profitability. Our revenue outlook is positive and tracking to higher -- the higher end of our growth expectations for 2019. We continue to recruit additional staff in support of our service business and invest in our sales and marketing efforts and finally look to expand our international presence. As this quarter has demonstrated, the absolute dollar impact of these investments can be offset with revenue, strong revenue growth. I'm encouraged with our progress and believe we are on track. With that, let's open it up for questions.

Thank you, Shawn. Once again, if you would like to ask a question in your telephone, please use the hand raising icon on the control panel and be sure to enter unique audio pin while we wait for any potential questions on the telephone, we will first start with some of the online questions that have been posed. The first question comes from Howard Halpern. And this question is you mentioned that large customers that will include software consulting services across your three divisions. Do you have any additional proposals outstanding that will use all three resources for your three divisions. And how does a new renewed licenses with regulatory agencies globally play into your sales and marketing strategy?

Well, first of all if we go to the cross divisional sales activity, yes we’re certainly targeting our larger accounts and any other opportunities for a more broad sales process with them that covers all of our three divisions. This process is initiating. We've had some success to date. There's certainly other opportunities in the pipeline for these sorts of efforts, a lot of benefits that they come from this. It's our ability to reach more broadly across our client organizations both in the preclinical and clinical sides of their organization, leverage visibility that we may have in those clients in one side or the other into a broader understanding of what we can offer in the less impacted areas historically; raise our visibility up the organization chart within those clients. So yes this is a key piece of our sales strategy one that we've really just on the early ground level efforts or good to see some results starting to come from it. I believe a lot of opportunity ahead of us in this regard. Regulatory opportunities as I said, there's a people benefit in terms of moving people in the industry much like our efforts to provide academic licenses for those institutions that leads to training using our products and as those individuals matriculate into industry, they're familiar with our products and gravitate to them. Beyond the people side obviously and in many ways more importantly, the regulatory use of our products is a strong signal to the commercial marketplace out there in terms of the impactful use of our products in the regulatory analysis and decision making process and a validation of our software products that that is sourced in the regulatory bodies using our products. So there's tremendous validation and driving commercial customers from the visibility we get with our relationships on the regulatory side.

Thank you. The next question also from Howard is where does the KIWI communication and collaboration platform stand in terms of customer acceptance and revenue growth potential?

Yes, we had the release in the quarter as well on our KIWI product providing more functionality there. We continue to support it and have a loyal but small base of customers there and they’re responding very well, the marketplace as a whole is still one that is maturing, maturing in the sense of the functionalities, the value that a KIWI product brings to the table is still being accepted and evaluated in the industry as a whole for those that have adopted that sort of product have typically built -- built the solution in-house to meet their particular needs, SOPs process that they have implemented internally and like in large ERP sales cycles, part of the challenge is getting clients to recognize that while third-party products can be tailored to meet their specific needs, there is some acceptance on that client's part of accepting a standard process that is embedded in a third-party solution. And so the market is working its way through that evolution right now. We continue to support the KIWI product, we see an opportunity in the future. It contributes in terms of small incremental growth, contributes in terms of visibility and the comprehensive nature of our software portfolio that we're able to offer in those presentations to our clients. So there is value there and this revenue opportunity sits out in front of us still at this point in time.

Thank you, Shawn. The next question also from Howard Halpern as a follow-up is what types of sales potential do you see in Europe. Will it tilt more towards software or consulting services?

Well it certainly will provide opportunity increased opportunity on both sides of our business both the software and the consulting side. We see a good 18% contribution from Europe already to the company's revenues as a whole. So it's not like we are entering a brand new Greenfield marketplace there. We do operate have supported that geography on the software side by conference attendance and sending our people there. The presence of staff onsite, it’s not a high customer service application in the marketplace but having presence there will help in that regard. And so I see opportunity that will contribute on the software side significantly on the consulting side presence of our consulting staff on the ground in Europe will allow for closer face to face interaction with our clients and reach in to new clients that perhaps we've missed opportunities on in the past. So I believe it will contribute both. It certainly will have its impact perhaps little bit more greater on the consulting side but it will be contribute on both sides of our business.

Thank you. And we have one final question from Howard Halpern, Research Analyst at Taglich Brothers. What is your -- sorry what is your outlook for the recently released PKPlus Version 2.5, and can they drive sales of your existing offerings?

Yes, we significantly released the PKPlus just recently announced and is evidence of our continued process of listening to the marketplace and responding with enhanced feature functionality in the product. Certainly, the market is large. We've got some entrenched competitors there. We're finding our niche in those clients especially those that are utilizing crossover modeling opportunities using both PB PK and PK/PD approaches. And so given our strength on the PBPK side with GastroPlus our PKPlus product enhances gives a client that's familiar with our application environment an opportunity to stay in their environments if you will. And I think the opportunity for PKPlus will be enhanced as we integrate it more closely with our other existing platforms something that will come in a bigger way potentially down the road with the refactoring project across our software applications. So again it's a product that is early in its penetration to the marketplace, for us it is we are adding new users on a quarterly basis and that's positive. It still is not a size that is extremely material to the revenue growth today but I think it has its place and again the breadth of our software portfolio that we're able to offer our clients down the road and as we continue to add enhancements as we did again this quarter, I think its opportunity will only grow.

Thank you. And we do have one audio question from Adam Keller, please standby while I unmute the line.

Hi, this is Adam. So I was wondering Simulations Plus is growing top line revenue to over 20% per year. I was wondering at what point of time you expect this growth rates decline and what you see is the stable long-term growth rate for the business?

Well, the historical growth rate of the company while we've jumped up to 20% and above. If you look at those quarters where we've been in that in that bubble, it's usually been contributed to significantly because it was a year in which we were seeing the benefits of acquired revenue versus comparable years where that acquired company be it Cognigen or DILIsym did not exist and so the revenue growth percentage basis was enhanced by this acquisition revenues. If you go back and you look at the company on an apples-to-apples basis and extract that acquisition revenue, the base business at each step of the way versus Simulations Plus alone and then with Cognigen and then the addition of DILIsym on organic growth basis has grown 10% to 15% within that range pretty consistently over the years. Good results more typically at the bottom end of that 10% to 15% but within that range. We are today without any acquisition revenues seeing our growth rate step up to the higher end of that range this quarter with a 16% and our objective is to grow at the high end of the range and beyond that to meet what is a pretty aggressive adoption of modeling and simulation in the marketplace out there. And so our opportunity from my perspective is one to continue to increase above the 10% to 15% annual revenue growth. Acquisitions are part of our strategy and when they come into play, they will pump our growth rate up temporarily during that first year after an acquisition and we look forward to that benefit as well. But on an organic basis, our sights are set pretty firmly on growing at the top end and beyond that 10% to 15% range and certainly don't look out and see a decline in the future ahead of us at this point in time.

And we do have one further written in question from Karl Hoffman and his question is you indicate that the payout ratio for the dividend is at 46%. Is the board thinking about a targeted payout ratio going forward?

Well, the board on a quarterly basis in the process of approving the dividend always takes a look and evaluates the value of the dividend in the marketplace, the investment community as well as the impact of it in terms of the operation of the company always taking a look at it is payout ratio, one of those metrics that is part of that evaluation certainly and so yes it’s a quarterly assessment that has had by the board.

Thank you. That completes the question-and-answer portion and also our conference call and webinar for today. If you missed any part of today’s presentation, the replay will be available at our website, www.simulations-plus.com. Thank you and have a great day.

Thanks everyone.