EPS from Continuing Operations $.07 for Q4’12 vs. ($.79) for Q4’11;
EPS from Continuing Operations $.45 for FY’12 vs. ($.84) for FY’11.
LOWELL, Mass. — (BUSINESS WIRE) — August 29, 2012 — SofTech, Inc. (OTCQB: SOFT), a proven provider of Product Lifecycle Management (PLM) solutions today announced its fourth quarter and fiscal year 2012 operating results. Revenue for the three months ended May 31, 2012 was approximately $1.5 million, down about 3% from the same period in the prior fiscal year. Net income from continuing operations was $67,000 or $.07 per share for the three months ended May 31, 2012 compared to a net loss from continuing operations of $(744,000) or ($.79) per share for the same period in the prior fiscal year which included approximately $560,000 of non-recurring transaction related expenses from the recapitalization transaction completed in March 2011.
Revenue for fiscal year 2012 was approximately $6.4 million, down approximately 6% from the same period in the prior fiscal year. The revenue decline was primarily due to the loss of one customer that chose to replace our technology prior to the March 2011 recapitalization transaction. Product revenue increased by $300,000, or nearly 27% over the prior fiscal year. Net income from continuing operations for fiscal year 2012 was $444,000 or $.45 per share as compared to a net loss from continuing operations of $(582,000) or ($.84) per share for the same period in the prior fiscal year. Fiscal year 2011 results included approximately $1 million of expenses related to non-recurring professional fees and transaction related expenses from the aforementioned recapitalization transaction.
“We have made excellent progress over the course of fiscal 2012 in resolving the pre-recapitalization transaction issues, stabilizing the business and identifying new profitable revenue streams,” said Joe Mullaney, CEO since the March 2011 recapitalization transaction. “There is new energy resulting from these actions that we expect will lead to revenue growth in fiscal 2013. The double-digit growth in product revenue year over year is an early sign that we are on the right track.”
FINANCIAL STATEMENTS
The Statements of Operations for the three and twelve month periods ended May 31, 2012 compared to the same periods in the prior fiscal year are presented below. A reconciliation of Net income (loss) to EBITDA from continuing operations, a non-GAAP financial measure, is also provided.
| Quarters ended | |||||||||||||||
| (000's, except per share data) | May 31, | Change | |||||||||||||
| 2012 | 2011 | $ | % | ||||||||||||
| Product revenue | $ | 255 | $ | 162 | $ | 93 | 57.4 | % | |||||||
| Service revenue | 1,252 | 1,389 | (137 | ) | -9.9 | % | |||||||||
| Total revenue | 1,507 | 1,551 | (44 | ) | -2.8 | % | |||||||||
| Cost of sales | 330 | 336 | (6 | ) | -1.8 | % | |||||||||
| Gross margin $ | 1,177 | 1,215 | (38 | ) | -3.1 | % | |||||||||
| Gross margin % | 78.1 | % | 78.3 | % | |||||||||||
| R&D | 285 | 387 | (102 | ) | -26.4 | % | |||||||||
| SG&A | 729 | 1,471 | (742 | ) | -50.4 | % | |||||||||
| Operating income (loss) | 163 | (643 | ) | 806 | 125.3 | % | |||||||||
| Interest expense | 69 | 105 | (36 | ) | -34.3 | % | |||||||||
| Other (income) expense | 24 | (22 | ) | 46 | 209.1 | % | |||||||||
| Income (loss) from continuing operations before income taxes | 70 | (726 | ) | 796 | 109.6 | % | |||||||||
| Provision for income taxes | 3 | 18 | (15 | ) | -83.3 | % | |||||||||
| Income (loss) from continuing operations | 67 | (744 | ) | 811 | 109.0 | % | |||||||||
| Discontinued operations: | |||||||||||||||
| Income from discontinued operations | - | 84 | (84 | ) | - | ||||||||||
| Gain on disposal of discontinued operations, net of tax | - | 151 | (151 | ) | - | ||||||||||
| Net income from discontinued operations | - | 235 | (235 | ) | - | ||||||||||
| Net income (loss) | $ | 67 | $ | (509 | ) | $ | 576 | 113.2 | % | ||||||
| Weighted average shares outstanding | 995 | 949 | |||||||||||||
| Basic and diluted net income (loss) per share: | |||||||||||||||
| From continuing operations | $ | .07 | ($.79 | ) | |||||||||||
| From discontinued operations | - | .25 | |||||||||||||
| Basic and diluted net income (loss) per share | $ | .07 | ($.54 | ) | |||||||||||
| Reconciliation of Net income (loss) to EBITDA from continuing operations: | |||||||||||||||
| Net income (loss) | $ | 67 | $ | (509 | ) | ||||||||||
| Plus: Interest expense | 69 | 105 | |||||||||||||
| Plus: Tax expense | 3 | 18 | |||||||||||||
| Plus: Non-cash expenses | 73 | 668 | |||||||||||||
| Plus: Non-recurring professional fees | - | 19 | |||||||||||||
| Less: Net income from discontinued operations | - | (235 | ) | ||||||||||||
| EBITDA from continuing operations | $ | 212 | $ | 66 | |||||||||||
| Fiscal years ended | |||||||||||||||
| (000's, except per share data) | May 31, | Change | |||||||||||||
| 2012 | 2011 | $ | % | ||||||||||||
| Product revenue | $ | 1,420 | $ | 1,120 | $ | 300 | 26.8 | % | |||||||
| Service revenue | 5,015 | 5,747 | (732 | ) | -12.7 | % | |||||||||
| Total revenue | 6,435 | 6,867 | (432 | ) | -6.3 | % | |||||||||
| Cost of sales | 1,410 | 1,408 | 2 | 0.1 | % | ||||||||||
| Gross margin $ | 5,025 | 5,459 | (434 | ) | -8.0 | % | |||||||||
| Gross margin % | 78.1 | % | 79.5 | % | |||||||||||
| R&D | 1,243 | 1,614 | (371 | ) | -23.0 | % | |||||||||
| SG&A | 2,984 | 3,956 | (972 | ) | -24.6 | % | |||||||||
| Operating income (loss) | 798 | (111 | ) | 909 | 818.9 | % | |||||||||
| Interest expense | 320 | 520 | (200 | ) | -38.5 | % | |||||||||
| Other (income) expense | 31 | (67 | ) | 98 | 146.3 | % | |||||||||
| Income (loss) from continuing operations before income taxes | 447 | (564 | ) | 1,011 | 179.3 | % | |||||||||
| Provision for income taxes | 3 | 18 | (15 | ) | -83.3 | % | |||||||||
| Income (loss) from continuing operations | 444 | (582 | ) | 1,026 | 176.3 | % | |||||||||
| Discontinued operations: | |||||||||||||||
| Income from discontinued operations | - | 209 | (209 | ) | - | ||||||||||
| Gain on disposal of discontinued operations, net of tax | - | 151 | (151 | ) | - | ||||||||||
| Net income from discontinued operations | - | 360 | (360 | ) | - | ||||||||||
| Net income | $ | 444 | $ | (222 | ) | $ | 666 | 300.0 | % | ||||||
| Weighted average shares outstanding | 995 | 698 | |||||||||||||
| Basic and diluted net income (loss) per share: | |||||||||||||||
| From continuing operations | $ | .45 | ($.84 | ) | |||||||||||
| From discontinued operations | - | .52 | |||||||||||||
| Basic and diluted net income (loss) per share | $ | .45 | ($.32 | ) | |||||||||||
| Reconciliation of Net income (loss) to EBITDA from continuing operations: | |||||||||||||||
| Net income (loss) | $ | 444 | $ | (222 | ) | ||||||||||
| Plus: Interest expense | 320 | 520 | |||||||||||||
| Plus: Tax expense | 3 | 18 | |||||||||||||
| Plus: Non-cash expenses | 201 | 651 | |||||||||||||
| Plus: Non-recurring professional fees | 58 | 507 | |||||||||||||
| Less: Net income from discontinued operations | - | (360 | ) | ||||||||||||
| EBITDA from continuing operations | $ | 1,026 | $ | 1,114 | |||||||||||
