SofTech, Inc. (OTCQB: SOFT), a proven provider of Product
Lifecycle Management (PLM) solutions today announced its second quarter
fiscal 2013 operating results. Revenue for the three months ended
November 30, 2012 was $1.772 million, an increase of 3.9% from the same
period in the prior fiscal year. Net income was $252,000 or $.25 per
share for the three months ended November 30, 2012, an increase of
nearly 35% from the net income of $187,000 or $.19 for the same period
in the prior fiscal year.
Revenue for the six months ended November 30, 2012 was $3.342 million,
an increase of 2.2% from the same period in the prior fiscal year. Net
income increased 77% to $425,000 or $.43 per share for the six months
ended November 30, 2012, from net income of $240,000 or $.24 for the
same period in the prior fiscal year.
The current quarter revenue included $100,000 of royalties on our
previously announced sale of patents. The same period in the prior year
included approximately $100,000 of maintenance revenue from a large
customer for whom the services were delivered over the previous eleven
months but not recognized until Q2 fiscal 2012.
"This was our best quarter since the March 2011 Recapitalization
Transaction. Our CADRA product line revenue was 10% higher than the same
period last year and represented the best quarterly performance in four
years while the pipeline of opportunities for ProductCenter and for our
new Connector technology offerings strengthened," said Joe Mullaney,
CEO. "We have now completed six full fiscal quarters since the
Recapitalization Transaction and during that time period the average
quarterly license revenue for our technology was 22% higher than the
average quarterly license revenue during the two year period prior to
the aforementioned transaction," he added.
"Our cash levels are lowest at the end of the calendar year just before
the majority of our annual maintenance contracts renew in the January
through May time period. The recently announced sale of 45,000 common
shares at $5.00 per share helped strengthen our balance sheet and will
provide additional working capital," Mullaney added.
The Statement of Operations for the three and six month periods ended
November 30, 2012 compared to the same periods in the prior fiscal years
are presented below. A reconciliation of Net income to EBITDA, a
non-GAAP financial measure, is also provided.
The Balance Sheets as of November 30, 2012 and our fiscal year end May
31, 2012 are presented below.
SofTech, Inc. (OTCQB: SOFT) is a proven provider of product lifecycle
management (PLM) solutions, including its ProductCenter® PLM solution
and its computer-aided design product CADRA®.
SofTech's solutions accelerate productivity and profitability by
fostering innovation, extended enterprise collaboration, product quality
improvements, and compressed time-to-market cycles. SofTech excels in
its sensible approach to delivering enterprise PLM solutions, with
comprehensive out-of-the-box capabilities, to meet the needs of
manufacturers of all sizes quickly and cost-effectively.
Over 100,000 users benefit from SofTech software solutions, including
General Electric Company, Goodrich, Honeywell, AgustaWestland, Sikorsky
Aircraft and the U.S. Army. Headquartered in Lowell, Massachusetts,
has locations and distribution partners in North America, Europe, and
SofTech, CADRA and ProductCenter are registered trademarks of SofTech,
Inc. All other products or company references are the property of their
Forward Looking Statements
This press release contains forward-looking statements relating to,
among other matters, our outlook for fiscal year 2013 and beyond. In
some cases, you can identify forward-looking statements by terms such as
"may," "will," "should," "could," "would," "expects," "plans,"
"anticipates," "believes," "estimates," "projects," "predicts,"
"potential" and similar expressions intended to identify forward-looking
statements. These forward-looking statements are based on estimates,
projections, beliefs, and assumptions and are not guarantees of future
events or results. Actual future events and results could differ
materially from the events and results indicated in these statements as
a result of many factors, including, how successful the buyer of our
patents will be in its efforts to monetize them and our ability to: (1)
generate sufficient cash flow from our operations or other sources to
fund our working capital needs and growth initiatives; (2) maintain good
relationships with our lender; (3) comply with the covenant requirements
of the loan agreement; (4) successfully introduce and attain market
acceptance of any new products and/or enhancements of existing products;
(5) attract and retain qualified personnel; (6) prevent obsolescence of
our technologies; (7) maintain agreements with our critical software
vendors; (8) secure renewals of existing software maintenance contracts,
as well as contracts with new maintenance customers; and (9) secure new
business, both from existing and new customers, among others.
These and other additional factors that may cause actual future events
and results to differ materially from the events and results indicated
in the forward-looking statements above are set forth more fully under
"Risk Factors" in the Company's Form S-1 Registration Statement (No.
333-174818) and the Company's Quarterly Report on Form 10-Q for the
quarter ended August 31, 2012. The Company undertakes no obligation to
update these forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors that may affect such
Use of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with generally
accepted accounting principles (GAAP), this press release also contains
non-GAAP financial measures. Specifically, the Company has presented
EBITDA from continuing operations, which is defined as Net income plus
interest expense, tax expense, non-cash expenses such as depreciation,
amortization, non cash loss (gain) and stock based compensation expense,
non-recurring professional fees related to the recapitalization
transaction less the Net income from discontinued operations. The
Company believes that the inclusion of EBITDA from continuing operations
helps investors gain a meaningful understanding of the Company's core
operating results and enhance comparing such performance with prior
periods, without the distortion of non-operating expenses and non-cash
expenditures. Management uses EBITDA from continuing operations, in
addition to GAAP financial measures, as the basis for measuring our core
operating performance and comparing such performance to that of prior
periods. EBITDA from continuing operations is also the most important
measure of performance in measuring compliance with the Company's debt
facilities. EBITDA from continuing operations is not meant to be
considered superior to or a substitute for results of operations
prepared in accordance with GAAP. Reconciliations of EBITDA from
continuing operations to the most directly comparable GAAP financial
measures are set forth in the text of, and the accompanying tables to,
this press release.
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