SofTech Announces Third Quarter Financial Results for FY 2007.TEWKSBURY, Mass. -- SofTech, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :SOFT), a proven provider of product lifecycle Product lifecycle or product life cycle is the course of a product's sales and profits over time. The five stages of each product lifecycle are product development, introduction, growth, maturity and decline. management (PLM (Product Life cycle Management) A comprehensive information system that coordinates all aspects of a product from initial concept to its eventual retirement. Sometimes called the "digital backbone" of a product, it includes the requirements phase, analysis and design ) 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 judg·men·tal adj. 1. Of, relating to, or dependent on judgment: a judgmental error. 2. Inclined to make judgments, especially moral or personal ones: . 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 that 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 Computer-aided design and manufacturing The application of digital computers in engineering design and production. Computer-aided design (CAD) refers to the use of computers in converting the initial idea for a product into a detailed engineering design. (CAD/CAM CAD/CAM in full computer-aided design/computer-aided manufacturing. Integration of design and manufacturing into a system under direct control of digital computers. ) 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 For other meanings and similar spellings, see . Sikorsky is an American aircraft and helicopter manufacturer. It was founded 1923 by a Ukrainian born American aircraft engineer Igor Sikorsky, who made the first stable, single-rotor, fully-controllable helicopter to enter , U.S. Army, and Whirlpool Corporation Whirlpool Corporation (NYSE: WHR) is the world's leading manufacturer and marketer of major home appliances,with annual sales of approximately $18 billion, more than 73,000 employees, and more than 70 manufacturing and technology research centers around the world. . Headquartered in Tewksbury, Massachusetts Tewksbury (pronounced IPA: /ˈtʊksbɛriː, ˈtʊksbriː/) is a town in Middlesex County, Massachusetts, United States. The population was 28,851 at the 2000 census. , SofTech (www.softech.com) has locations and distribution partners throughout North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , 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 Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses to fund working capital needs, potential obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. 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. [TABLE OMITTED] [TABLE OMITTED] Reconciliation of Net Loss to Pro Forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma Net Income: The net loss calculated in accordance with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (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. [TABLE OMITTED] [TABLE OMITTED] |
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