EXHIBIT 99.1
FOR IMMEDIATE RELEASE
SOFTECH ANNOUNCES THIRD QUARTER FINANCIAL RESULTS FOR FY 2007
TEWKSBURY, Mass. - April 16, 2007 - SofTech, Inc. (OTCBB:SOFT), a proven
provider of product lifecycle management (PLM) solutions, today announced Q3
fiscal 2007 results. Revenue for Q3 FY 2007 was $2.9 million as compared to $2.9
million for the same period in fiscal 2006. The net loss for the current quarter
was ($116,000) or ($.01) per share as compared to ($581,000) or ($.05) per share
for the same period in the prior fiscal year.
Revenue for the nine months ended February 28, 2007 was about $8.4 million as
compared to about $9.4 million for the same period in the prior fiscal year. The
net loss for the nine months ended February 28, 2007 was ($1,077,000) or ($.09)
per share as compared to a net loss of ($1,017,000) or ($.08) per share for the
same period in the prior fiscal year.
The net loss adjusted for non-cash expenses related to amortization of
intangible assets resulting from acquisitions, a non-GAAP financial measure, was
$238,000 for the current quarter as compared to $(227,000) for the same period
in the prior fiscal year. This same non-GAAP financial measure for the nine
months ended February 28, 2007 was $(15,000) as compared to $501,000 for the
same period in the prior year. A reconciliation is provided on the attached
Financial Summary.
The Company's revenue is derived almost entirely from technology acquisitions
completed between 1997 and 2002. As a result, management believes the Company's
financial profile is very unique, at least in the industry in which it operates.
As of February 28, 2007 approximately 64% of its assets are composed of
intangible assets related to these acquisitions. For the current quarter, the
amortization of these intangible assets was approximately 12% of its total
expenses and its revenue. Further, the periods over which these intangible costs
are expensed are highly judgmental.
It is management's opinion that comparing results of operations from period to
period and to other companies in our industry absent these non-cash expenses
related to acquisitions is a more meaningful measure of our performance given
the Company's unique financial profile detailed above. It is also management's
belief that this non-GAAP measure of performance is one of the most critical
measures of Company valuation for investors. Lastly, this measure of performance
has been, and is expected to continue to be, a significant component of the
incentive compensation plan for the Company's President.
"Our Q3 product revenue increased from the prior quarter and even though total
revenue decreased from Q2 it was consistent to our performance in the same
period of the prior year," said Jean Croteau, President of SofTech. "We have had
an overwhelming response from our latest release of Cadra, which contributed to
a 36% increase from Q2. Our ProductCenter offering continues to establish itself
as a proven product lifecycle management solution, we are optimistic we will
have continued success in the upcoming quarters," he added.
ABOUT SOFTECH
SofTech, Inc. (OTCBB: SOFT) is a proven provider of product lifecycle management
(PLM) solutions with its flagship ProductCenter(TM) PLM solution, and its
computer-aided design and manufacturing (CAD/CAM) products, including CADRA(TM)
and Prospector(TM).
SofTech's solutions accelerate products 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 solutions, including General Electric
Company, Goodrich, Honeywell, 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, 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 2007 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, 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: Jean J. Croteau
President
(978) 640-6222
SOFTECH, INC.
FINANCIAL SUMMARY
(in thousands, except per share data)
STATEMENTS OF OPERATIONS:
FOR THE THREE MONTH PERIODS ENDED
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FEBRUARY 28, FEBRUARY 28,
2007 2006
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Revenue $ 2,851 $ 2,924
Income from operations 256 (260)
Net loss (116) (581)
Loss per share (.01) (.05)
FOR THE NINE MONTH PERIODS ENDED
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FEBRUARY 28, FEBRUARY 28,
2007 2006
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Revenue $ 8,353 $ 9,383
Income from operations 2 (167)
Net loss (1,077) (1,017)
Loss per share (.09) (.08)
RECONCILIATION OF NET LOSS TO PRO FORMA NET INCOME:
The net loss calculated in accordance with GAAP is adjusted below by non-cash
expenses related to amortization of intangible assets resulting from
acquisitions. It is management's view that this non-GAAP financial measure of
cash flow provides important information in understanding the Company's
financial performance.
FOR THE THREE MONTH PERIODS ENDED
---------------------------------
FEBRUARY 28, FEBRUARY 28,
2007 2006
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Net loss $ (116) $ (581)
Plus: Non-cash amortization 354 354
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Pro Forma net income (loss) 238 (227)
FOR THE NINE MONTH PERIODS ENDED
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FEBRUARY 28, FEBRUARY 28,
2007 2006
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Net loss $(1,077) $ (1,017)
Plus: Non-cash amortization 1062 1,518
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Pro Forma net income (loss) (15) 501