SofTech Reports Q4 & FY 2006 Results.TEWKSBURY Tewksbury, town (1990 pop. 27,266), Middlesex co., NE Mass.; settled 1637, set off from Billerica and inc. 1734. It was once the site of a Native American settlement. Primarily residential, the town has light manufacturing, including pharmaceuticals and computer equipment. , Mass. -- ProductCenter Revenue Growth of 18% for the Year; Significant New Customer Growth 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 results for its fourth quarter and fiscal year 2006. Revenue for the fourth quarter of fiscal 2006 was about $3.1 million essentially unchanged from the same period in fiscal 2005 . The net loss for Q4 2006 was $(315,000) or $(.03) per share as compared to a net loss of $(482,000) or $(.04) per share for Q4 of the prior year. The net loss adjusted for non-cash expenses Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) related to amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. resulting from acquisitions, a Non-GAAP financial measure, was $39,000 in the fourth quarter of fiscal 2006 as compared to $126,000 for the same period in fiscal 2005. A reconciliation of GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). results to this non-GAAP financial measure for each of the periods is presented in a table below. Revenue for fiscal year 2006 was about $12.5 million as compared to about $12.1 million for fiscal year 2005. The net loss for fiscal 2006 was about $(1.33) million as compared to about $(1.43) million for fiscal 2005. The net loss adjusted for non-cash expenses related to amortization of intangible assets resulting from acquisitions, a Non-GAAP financial measure, was about $.5 million for fiscal 2006 as compared to about $1.0 million for fiscal 2005. 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. At May 31, 2006, approximately 73% of its assets are composed of intangible assets related to these acquisitions. For fiscal year 2006, the amortization of these intangible assets was approximately 14% of its total expenses and 15% of 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. The revenue increase from fiscal 2005 to 2006 was due to an 18% year-over-year increase in the Company's ProductCenter offering which was partially offset by decreases of 11% and 4% from its CADRA Noun 1. Cadra - a genus of Pyralidae genus Cadra arthropod genus - a genus of arthropods family Pyralidae, family Pyralididae, Pyralidae, Pyralididae - bee moths; corn borers; flour moths and AMT See vPro. product lines, respectively. The majority of the increase in ProductCenter revenue was the result of 11 new customer wins, mostly in very competitive situations, during fiscal 2006. This followed 12 new customer wins for this product line from 2005. The Company's expenses for 2006 increased by $265,000 or 2% from the prior year. Non-cash amortization expense decreased by $568,000 which was offset by increased spending related to R&D expenditures aimed at broadening the addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be market for ProductCenter and increased Sales and Marketing expenses also for that product line. The increase in the prime rate during fiscal 2006 increased our year-over-year cost of borrowing by 35% despite lower average debt balances. "We had a great year in expanding the capability of ProductCenter and in winning new business," said Joe Mullaney Joseph A. Mullaney (November 17 1925 – March 8 2000) was a successful American basketball player and coach. Biography Mullaney was born at in Long Island, New York. , President of SofTech, Inc. "Additional sales resources and new marketing initiatives in fiscal 2006 focused on that technology have increased our revenue and our pipeline of identified opportunities. Unfortunately, the combination of increases in the prime rate which increased our borrowing costs and reduced software maintenance renewal rates for our other product lines resulted in financial performance below our expectations for the fiscal year. This was especially true in the second half of fiscal 2006." "We remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that our ProductCenter technology can compete effectively as an affordable, easy to use and easy to install, data management and collaboration Working together on a project. See collaborative software. technology especially applicable to the multi-CAD design environment. It is our belief that the majority of manufacturing companies operate in this kind of environment. As the migration from 2D to 3D CAD CAD: see computer-aided design. (Computer-Aided Design) Using computers to design products. CAD systems are high-speed workstations or desktop computers with CAD software. authoring tools accelerates over the next several years, we believe ProductCenter has the opportunity to get its share of the market," Mullaney 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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 lender, 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.
SOFTECH, INC.
FINANCIAL SUMMARY
For the Three Month Periods Ended
(in thousands) May 31, May 31,
2006 2005
------------------------------------ ---------------- ----------------
Revenue $3,095 $3,112
------------------------------------ ---------------- ----------------
Income (loss) from operations
52 (261)
------------------------------------ ---------------- ----------------
Net loss (315) (482)
------------------------------------ ---------------- ----------------
Loss per share (.03) (.04)
------------------------------------ ---------------- ----------------
For the Fiscal Years Ended
(in thousands) May 31, May 31,
2006 2005
------------------------------------ ---------------- ----------------
Revenue $12,478 $12,120
------------------------------------ ---------------- ----------------
Loss from operations (115) (522)
------------------------------------ ---------------- ----------------
Net loss (1,332) (1,425)
------------------------------------ ---------------- ----------------
Loss per share (.11) (.12)
------------------------------------ ---------------- ----------------
Reconciliation of Net Loss to Non-GAAP Financial Measures:
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 provides important information in
understanding the Company's financial performance.
For the Three Month Periods Ended
(in thousands) May 31, May 31,
2006 2005
------------------------------------ ---------------- ----------------
Net loss $(315) $(482)
------------------------------------ ---------------- ----------------
Plus: Non-cash amortization 354 608
------------------------------------ ---------------- ----------------
Non-GAAP financial measure
39 126
------------------------------------ ---------------- ----------------
For the Fiscal Years Ended
(in thousands) May 31, May 31,
2006 2005
------------------------------------ ---------------- ----------------
Net loss $(1,332) $(1,425)
------------------------------------ ---------------- ----------------
Plus: Non-cash amortization 1,872 2,440
------------------------------------ ---------------- ----------------
Non-GAAP financial measure
540 1,015
------------------------------------ ---------------- ----------------
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion