SOFT SofTech Announces Improved Financial Results for Second Quarter FY 2009
Net Income rises substantially; operating cash flows improve
significantly
SofTech, Inc. (OTCBB: SOFT stock news), a proven provider of Product Lifecycle
Management (PLM) solutions, today announced financial results for the
second quarter of Fiscal Year 2009 (quarter ended November 30, 2008).
Revenue was approximately $2.5 million for Q2 2009, unchanged compared
to the second quarter of Fiscal Year 2008 (quarter ended November 30,
2007).
The Company’s profitability improved substantially, with net income
increasing by approximately $566,000 from a loss of $218,000 ($.02 per
share) in Q2 2008, to net income of approximately $348,000 ($.03 per
share) in Q2 2009. For the six months ended November 30, 2008, the
Company’s net income increased by approximately $984,000, from a loss of
$217,000 ($.02 per share) in the first half of FY 2008 to net income of
approximately $767,000 ($.06 per share).
Net Cash flows from operating activities also improved considerably
during the first half of FY 2009, increasing approximately $654,000 from
negative $235,000 during the first half of FY 2008 to positive net
operating cash flows of $419,000 in the first half of FY 2009. The
Consolidated Statement of Cash Flows for the six months ended November
30, 2008 and 2007 is included in the attached Financial Summary.
Earnings before Interest, Taxes, Depreciation and Amortization
(“EBITDA”), a non-GAAP financial measure, also improved considerably
during Q2 2009, increasing from $498,000 in Q2 2008 to $688,000 in Q2
2009, a 40% increase. For the first half of FY 2009, EBITDA was $1.5
million, compared to $1.2 million in the comparable prior period. A
reconciliation of EBITDA to Net Income (Loss) is provided on the
attached Financial Summary.
The Company’s revenue is derived almost entirely from technology
acquisitions completed between 1997 and 2002, and the Company’s
operations are not capital intensive. As of November 30, 2008,
approximately 4.3% of the Company’s assets represent amortizable
intangible assets related to these historical acquisitions. The Company
does not anticipate making further acquisitions in the foreseeable
future. For the quarter ended November 30, 2008, amortization expense (a
non-cash expense) related to these intangible assets was approximately
4.7% of total expenses, 4% of total revenue and 29% of net income.
Further, the periods over which these intangible costs are expensed are
highly judgmental.
The Company believes that EBITDA is useful supplemental information for
investors, when considered along with net income and other income
statement data. The Company believes that EBITDA is useful because it
provides investors with information concerning the potential longer term
profitability of the Company’s technology assets (subsequent to full
amortization of costs), as amortization of acquisition costs has been
added back to net income in arriving at EBITDA. Further, management
believes that EBITDA provides a useful financial metric by which the
Company can be compared with other companies that have different capital
structures (interest (a cost of capital) has been added back to net
income in arriving at EBITDA). It is also management’s belief that this
non-GAAP measure of performance continues to be used in the investment
community as a financial metric for business valuation purposes.
However, the Company believes that EBITDA is not a substitute for cash
flow from operating activities, which is disclosed above and in the
Company’s financial statements. Investors should carefully review the
financial statements of the Company in their entirety in order to obtain
a complete understanding of the Company’s financial condition and
results of operations.
About SofTech
SofTech, Inc. (OTCBB: SOFT stock news) is a proven provider of product lifecycle
management (PLM) solutions, including its flagship ProductCenter™ PLM
solution, and its computer-aided design and manufacturing (CAD/CAM)
products, including CADRA™ and Prospector™.
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 software solutions, including
General Electric Company, Goodrich, Honeywell, Siemens, Sikorsky
Aircraft, U.S. Army, and Whirlpool Corporation. Headquartered in Lowell,
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.
Forward Looking Statements
The statements made herein may 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, whether we will be able to generate sufficient cash
flow from operations to fund working capital needs, maintain the
existing relationship with our lender, successfully introduce and attain
market acceptance of planned new products, attract and retain qualified
personnel, in an extremely competitive environment, both in our existing
markets and in new territories, and the potential obsolescence of our
technologies..
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 statements are only predictions and involve known and
unknown risks, uncertainties, and other factors that may cause our
actual results, levels of activity, performance, or achievements to be
materially different from any future results, levels of activity,
performance, or achievements expressed or implied by such
forward-looking statements. Given these uncertainties, you should not
place undue reliance on any forward-looking statements. Also, these
forward-looking statements represent our estimates and assumptions only
as of the date of this release. Except as otherwise required by law, we
expressly disclaim any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statement contained in this
release to reflect any change in our expectations or any change in
events, conditions or circumstances on which any of our forward-looking
statements are based. We qualify all of our forward-looking statements
by these cautionary statements.
