EXHIBIT 99.1
FOR IMMEDIATE RELEASE
SOFTECH REPORTS Q4 & FY 2004 RESULTS
YEAR OVER YEAR REVENUE INCREASE OF 15%; FREE CASH FLOW RISES DRAMATICALLY FOR
THE QUARTER AND FOR THE YEAR AS COMPARED TO PRIOR YEAR
TEWKSBURY, Mass.--(BUSINESS WIRE)--AUGUST 30, 2004--SofTech, Inc. (OTCBB:SOFT -
NEWS), a leading provider of design-through-manufacturing productivity
solutions, announced today results for its fourth quarter and fiscal year 2004.
Revenue for Q4 was about $3.3 million as compared to about $3.6 million for the
same period in the prior year. The net loss for Q4 2004 was $(384,000) or $(.03)
per share as compared to a net loss of $(613,000) or $(.05) per share for the
prior year. Free Cash Flow (as defined below) for Q4 2004 was $256,000 as
compared to $(97,000) for the same period in fiscal 2003. Free Cash Flow is
defined as the net loss calculated on a GAAP basis plus non-cash amortization
and depreciation minus capital expenditures. A reconciliation of GAAP results to
Free Cash Flow for each of the periods is presented in a table below.
Revenue for fiscal year 2004 was about $12.3 million as compared to about $10.7
million for fiscal year 2003. The net loss for fiscal 2004 was about $(1.9)
million for each of fiscal 2004 and 2003. The Free Cash Flow for fiscal 2004 was
$692,000 as compared to $284,000 in fiscal 2003.
"Fiscal 2004 represented our third consecutive year of positive Free Cash Flow,"
said Joe Mullaney, SofTech's President. "We continued to improve on most
measures of financial performance despite a very uneven economic recovery in the
worldwide manufacturing sector. Our pipeline of identified new business has
continued to grow over the last year although it has been difficult to predict
or greatly influence exactly when those customers will make their final purchase
decisions.
Our outlook for the full fiscal year 2005 is for continued improvement on the
excellent foundation we have built over the last three years although the uneven
license revenue order flow from quarter to quarter is expected to continue. We
have an exceptional customer base for our Cadra, ProductCenter and our CAM
family of products throughout the U.S., Western Europe and Japan and we will
continue to serve their needs while targeting growth opportunities. All of our
products compete in the Product Lifecycle Management ("PLM") market.
One particular growth opportunity we have identified relates to our
ProductCenter technology. ProductCenter is a well established technology that
controls product information and allows for the sharing of that information
throughout an extended enterprise. Our customers include some of the largest
design and manufacturing companies in the world. This portion of the PLM market
is expected to experience double-digit growth over the next several years.
Our distinct advantage relative to our competition is that we believe
ProductCenter is, by far, the most affordable, full-featured, data management
and collaboration offering on the market. It can be put into production within a
four to six week period without significant customization. It is especially
applicable to multi-CAD environments.
The continued migration of 2D computer-aided-design users to mid-range 3D, solid
modeling tools will increase the need to manage product information with
technologies such as ProductCenter. It is my view that ProductCenter is very
well positioned to capture more than its share of these users," Mullaney added.
ABOUT SOFTECH
SofTech, Inc. (OTCBB: SOFT) provides design-through-manufacturing productivity
solutions with its computer-aided design (CAD), computer-aided manufacturing
(CAM) and product lifecycle management (PLM) products including CADRA(R),
DesignGateway(TM), Prospector(TM), and ProductCenter(TM) (through SofTech's
Workgroup Technology Division). SofTech's solutions optimize product lifecycle
processes at the lowest cost by fostering innovation, extended enterprise
collaboration, product quality improvements, and compressed time-to-market
cycles.
SofTech has more than 100,000 users benefiting from its solutions, including
Boeing, FlightSafety International, General Electric Company, Goodrich Turbine
Fuel Technologies, Honeywell, Millipore Corporation, Siemens, Sikorsky Aircraft,
U.S. Army, and Whirlpool Corporation.
Headquartered in Tewksbury, Massachusetts, SofTech (www.softech.com) has
locations and distribution partners throughout North America, Europe, and Asia.
SofTech, CADRA, DesignGateway, ProductCenter and Prospector are trademarks of
SofTech, Inc. All other products or company references are the property of their
respective holders.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements made above with respect to SofTech's outlook for fiscal 2005 and
beyond represent "forward looking statements" within the meaning of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act
of 1934 and are subject to a number of risks and uncertainties. These include,
among other risks and uncertainties, general business and economic conditions,
generating sufficient cash flow from operations to fund working capital needs,
potential obsolescence of the Company's technologies, maintaining existing
relationships with the Company's lenders, remaining in compliance with debt
covenants, successful introduction and market acceptance of planned new products
and the ability of the Company to attract and retain qualified personnel both in
our existing markets and in new territories.
Contact: Joseph P. Mullaney
President and COO
(781) 890-8373
SOFTECH, INC.
FINANCIAL SUMMARY
FOR THE THREE MONTH PERIODS ENDED
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MAY 31, MAY 31,
(in thousands) 2004 2003
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Revenue $ 3,273 $ 3,585
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Loss from operations (126) (363)
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Net loss (384) (613)
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Loss per share (.03) (.05)
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FOR THE FISCAL YEARS ENDED
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MAY 31, MAY 31,
(in thousands) 2004 2003
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Revenue $ 12,294 $ 10,688
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Loss from operations (838) (712)
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Net loss (1,853) (1,852)
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Loss per share (.15) (.15)
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RECONCILIATION OF NET LOSS TO PRO FORMA NET INCOME AND FREE CASH FLOW:
The net loss calculated in accordance with GAAP is adjusted below by non-cash
expenses related to amortization and depreciation and by capital expenditures.
It is management's view that these non-GAAP financial measures provide important
information in understanding the Company's financial performance.
FOR THE THREE MONTH PERIODS ENDED
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MAY 31, MAY 31,
(in thousands) 2004 2003
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Net loss $ (384) $ (613)
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Plus: Non-cash
amortization 603 635
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Pro Forma net income (loss) 219 22
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Plus: Non-cash depreciation 39 (15)
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Less: Capital expenditures ( 2) (104)
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Free Cash Flow $ 256 $ (97)
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FOR THE FISCAL YEARS ENDED
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MAY 31, MAY 31,
(in thousands) 2004 2003
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Net loss $ (1,853) $ (1,852)
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Plus: Non-cash
amortization 2,438 2,040
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Pro Forma net income 585 188
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Plus: Non-cash depreciation 147 283
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Less: Capital expenditures (40) (187)
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Free Cash Flow $ 692 $ 284
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