Good afternoon, everyone. On behalf of Simulations Plus, I welcome you to our First Quarter Fiscal Year 2020 Financial Results Conference Call and Webinar. Hosting the call today is 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 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 questions directly. Please be sure to enter the unique audio pin 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 a number of 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 the current level 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 to the CEO, Shawn O’Connor. Shawn? Shawn O’Connor: Thank you, Cameron. Simulations Plus benefitted from continued strong execution on our objectives and unanticipated client-driven accelerated timing on several projects to deliver growth that exceeded our plan targets in the first quarter. The 25% top line growth and $0.11 per share earnings represents a strong start to our fiscal year. As most of you…

All right. I appreciate it, Shawn. Our consolidated net revenues for the first quarter of the fiscal year '20 were up as Shawn said 25% or 24.8% or 1.9 million to 9.4 million compared to 7.5 million in the prior year period. By division, Lancaster's revenues were up 13% to 4.9 million. Buffalo’s revenues were up 15% to 2.4 and RTP [indiscernible] a year ago. Gross profit increased 26.7% to 6.8 million representing a 71.9% margin in the first quarter of fiscal year '20 compared to 5.3 million or 70.8% gross margin in the same quarter last year. Cost of revenues have increased by approximately 443,000 compared to the prior year due to labor-related costs of approximately 399,000 and direct contract expenses of 81,000 for testing at DILIsym and RTP. As a percentage of revenues, cost of revenues were down slightly to 28.1% of total revenues compared to 29.2% of total revenues in the first quarter of fiscal year '19. SG&A expenses were 3.5 million or 37.4% of revenue in the first quarter of this year, an increase of approximately 794,000 or 29.2% compared to 2.7 million or 36.1% of revenue in the first quarter of '19. The increase in SG&A expense was primarily the result of increases in salary and wages and labor-related costs as the company has grown headcount to support revenue growth. In addition to labor, we saw an increase in year-over-year cost in professional fees, insurance expenses and directors’ fees as the Board is now made up of all paid non-management members. Research and development costs for the most recent fiscal quarter were just over $1 million. Of this total, approximately 526 was expensed and 507 was capitalized. Overall, we increased our R&D spend in the first quarter of fiscal year '20 by 49,000 compared to…

Thank you, Shawn. Once again, if you like to ask a question using your telephone, please use the hand raising icon on your control panel and be sure to enter the unique audio pin. Please hold on one second while I poll for the questions. As we poll for the questions, I’ll just go through some of the written questions. The first one is can you explain the nature of the increase of interest income ex increased interest rates or different cash management products? Shawn O’Connor: John, I’ll let you take that one.

I was muted there. The interest income has come up over the last year. We’ve held a little bit more in balances. We’ve taken a fairly conservative approach on investments at this point and holding cash for potential uses that would help the company at this point.

John, any other comments?

None in this regard, no.

Okay. The next question will be from Matthew Hewitt of Craig-Hallum. This question will be live.

Congratulations.

Hi, Matt. You are live.

I am. Can you guys hear me? Shawn O’Connor: Yes, Matt.

Okay. Congratulations on a strong start to the year. A couple questions for me. First of all, the accelerated consulting deals, maybe walk us through how those came about? Are you essentially pulling those forward from Q2 or is that a customer that came in and said, hey, we need this done this quarter? Maybe just a little explanation there.

Sure. Both our existing clients and projects that were anticipated to run through multiple quarters going forward and in each instance, the clients came to us and we are limited in terms of our disclosure capability, but driven by regulatory and internal drug development plans within their organizations, requested accelerated delivery of the results of the efforts that we had signed up for. And so in a situation in which we also don't want to push off deadlines for the projects that we were working on. The team doubled up, if you will, and brought forward work efforts that have been planned over multiple months going forward into a short window of time in basically October, November timeframe and really stood up and delivered results in support of the client. It speaks I think in both directions; a, the importance of the work that we do and the critical nature that it input that it provides the client either in their own internal decision making or in the face of response to the FDA in terms of queries and in interactions and also – and we’re very proud of the group in terms of stepping up and recognizing the importance of the client and doing what was necessary in order to fulfill the needs there. Very strong effort by the team.

That’s great. Thank you. And then you had a strong quarter of hiring, adding people at a number of the facilities. I’m just curious how much do you have left to go yet this year from a hiring perspective? Shawn O’Connor: Matt, it’s an ongoing process. If our expectations are to continue to grow consistently going forward, recruiting is an everyday, every week, every month, every quarter endeavor. But certainly this quarter, especially in the Cognigen group out of Buffalo, we're able to take advantage of opportunity in terms of there being candidates, good candidates out there that fit our needs and brought them in. And so as we look out over the next couple of quarters, a, we’re not dependent upon that level of hiring to support our near-term needs. At the same time should candidates come forth that are keepers, we will not hesitate to pursue them balancing our capacity against the work effort that's in front of us. But we have over $6 million in backlog of projects in that division. And so given the ramp up times it takes to bring a consultant onboard and get them productive, we’re certainly in a position where we’ve got client work effort available to assign new people too.

Got it. Good luck as you continue to search for more consultants. I guess the last question for me on the RENAsym, maybe how is that product progressing and when do you anticipate a launch? Thank you. Shawn O’Connor: RENAsym is there. We’re seeing both consulting revenues, consulting project opportunities as well as licensing opportunities in that space. So it’s starting to kick off now.

That’s great. Thank you and congratulations again on the strong start to the year. Shawn O’Connor: Thanks, Matt.

Thank you. The next question on the written questions is from Howard Halpern of Taglich. Congratulations on the great quarter. Can you quantify the amount of accelerated revenue from the two clients in the quarter? And was it expected to occur in second quarter 2020? Shawn O’Connor: Howard, as I mentioned before, the projects were in place and anticipated to flow over multiple quarters. So some of that is drawing it in from the second quarter. Don’t want to get into disclosing specific client revenue streams. Without these two accelerations, we would have had a good quarter. It would have been in that 15% to 20% range not up to the 25% range, so that gives you a little bit of a feel. We’re scrambling and with the backlog that we have, it doesn’t mean that what came forward out of the second quarter into the first quarter can’t be filled in and replaced in the second quarter, hence our longer-term expectations of the year being in at 15% to 20% is still our expectation.

Thank you, Shawn. A follow-up question from Howard. Does the first quarter 2020 results validate your prior investments to drive revenue growth while also improving and maintaining the gross margins as well as consulting services when demanded? Shawn O’Connor: Yes. If I understand the question, I think first quarter results accelerated projects aside for the moment. We’ve continued the path that we initiated and start to come to fruition in 2019 in stepping up the revenue growth and believe that has been driven by our investments in several initiatives both on the software side as well as the consulting side to sales and marketing tweaks and changes in investments that we’re making hiring senior scientists but have a little bit more business development D&A in their capability and focusing the organization. So we are seeing that continue and have started the year with great results in that regard.

Thank you, Shawn. And two other follow ups from Howard. What is the significance of your collaboration agreement with Bayer AG? Shawn O’Connor: I don’t think there’s several sort of angles on the collaboration there. One, ADMET Predictor and the data mining, machine learning I should say capabilities in that product are recognized by the industry, in this case Bayer, in terms of being their tool of choice in discovery applications. And secondly, their collaboration with us to add this utility to the product further embeds our software in a very significant client. You see the renewal rates at 98% this quarter for our software business is very indicative, 98% on fees is very indicative of the stickiness of our software application in the industry once it gets into our clients’ hands and this is one of the ways in which that stickiness comes about.

Thank you, Shawn. And then the final question is how are your efforts in Europe progressing? I know we announced we had I believe three or four employees that are based there starting in the fourth quarter call. If you can just expand upon that growth as far as one of the areas that we have discussed as far as an opportunity for future growth going forward? Shawn O’Connor: Sure. No fifth employee in Europe to announce this quarter. We remain at the four that we entered the fiscal year with. Obviously, those consultants are engaging both in terms of project work as well as integrating themselves in terms of the community and in supporting conference attendance and relationship build with clients there in Europe. I still believe that this is – I strongly believe this is a tremendous opportunity for us down the road that is yet to be paying dividends but will in the near term.

Well, thank you everyone. It appears there’s no further questions at this point. This concludes today’s conference call and webinar. If you missed any part of today’s presentation, a replay will be available on our Web site, simulations-plus.com. Thank you. Look forward to speaking with you in the second quarter. Shawn O’Connor: Thanks, everyone.