EXHIBIT 99.1
FOR IMMEDIATE RELEASE
SOFTECH ANNOUNCES FIRST QUARTER FY 2005 RESULTS
REPORTS SOLID FIRST QUARTER PERFORMANCE; OUTLOOK POSITIVE
TEWKSBURY, Mass. - October 14, 2004 - SofTech, Inc. (OTCBB:SOFT), a leading
provider of design-through-manufacturing productivity solutions, today announced
Q1 fiscal 2005 results. Revenue for Q1 FY 2005 was about $2.8 million, a
decrease of about 6% as compared to the same period last year. The net loss for
the current quarter was ($459,000) or ($.04) per share as compared to a net loss
of ($478,000) or ($.04) per share for the same period in the prior fiscal year.
Pro forma net income, which excludes non-cash expenses related to amortization
of intangible assets, was $152,000 for the current quarter as compared to
$137,000 for the same period in the prior fiscal year. Free Cash Flow, defined
as net loss adjusted for non-cash expenses less capital expenditures, totaled
$166,000 for the current quarter as compared to $173,000 for the same period in
the prior fiscal year. It is management's view that these non-GAAP financial
measures of cash flow provide important information in understanding the
Company's performance. A reconciliation is provided on the attached Financial
Summary.
"Our first quarter is traditionally our slowest quarter and this year was no
different" said Joe Mullaney, President and COO. "Our Q1 performance was on
budget and I was very pleased that we were able to generate positive cash flow
comparable to last year's performance. We have a greater volume of outstanding
proposals than we have had for a long time and I am looking for us to deliver on
some exceptional quarters going forward, well above prior year cash flow
performance, as these customers make their buying decisions."
"It is critical for design and manufacturing companies to improve operating
efficiencies and reduce cost and time to market. To accomplish these goals while
improving quality is a difficult goal but one that is attainable through the use
of our technology. Our PLM technology offering is the lowest price,
full-featured product on the market. It can be implemented in a month and pay
for itself in a year or less. As the economy continues to improve, I expect
companies will begin to ramp up their capital expenditures on technologies like
ours that improve their operations," 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 data management (PDM) products including CADRA(R),
DesignGateway(TM), Prospector(TM), and ProductCenter(TM) (through SofTech's
Workgroup Technology
Division). SofTech's solutions optimize producT lifecycle management 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.
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 lender, 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
(in thousands, except per share data)
STATEMENTS OF OPERATIONS:
FOR THE THREE MONTH PERIODS ENDED
- ------------------------------------- ----------------------------------- -----------------------------------
AUGUST 31, AUGUST 31,
2004 2003
---- ----
- ------------------------------------- ----------------------------------- -----------------------------------
Revenue $ 2,777 $ 2,943
- ------------------------------------- ----------------------------------- -----------------------------------
Loss from operations (209) (225)
- ------------------------------------- ----------------------------------- -----------------------------------
Net loss (459) (478)
- ------------------------------------- ----------------------------------- -----------------------------------
Loss per share (.04) (.04)
- ------------------------------------- ----------------------------------- -----------------------------------
- ------------------------------------- ----------------------------------- -----------------------------------
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 of cash flow
provide important information in understanding the Company's performance.
FOR THE THREE MONTH PERIODS ENDED
- ------------------------------------- ----------------------------------- -----------------------------------
AUGUST 31, AUGUST 31,
2004 2003
---- ----
- ------------------------------------- ----------------------------------- -----------------------------------
Net loss $ (459) $ (478)
- ------------------------------------- ----------------------------------- -----------------------------------
Plus: Non-cash amortization 611 615
--- ---
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Pro Forma net income 152 137
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Plus: Non-cash depreciation 21 48
- ------------------------------------- ----------------------------------- -----------------------------------
Less: Capital expenditures (7) (12)
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- ------------------------------------- ----------------------------------- -----------------------------------
Free cash flow $ 166 $ 173
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