CIMdata PLM Industry Summary Online Archive
19 April 2011
Financial News
SofTech Announces Audit Completion & Financial Results for Its Fourth Quarter & Fiscal Year 2010
SofTech, Inc. announced the completion of its audit for fiscal year 2010. The audit for the fiscal year ended May 31, 2010 was delayed during the negotiation and completion of the recently announced recapitalization transaction that improved the Company’s book value by more than $8 million.
“While the results that are summarized below are now quite dated, I am very happy that we were able to complete the audit process,” said Joe Mullaney, the recently appointed President and CEO. “The completion of the FY2010 audit is a critical element of our plan to re-commence filing public reports with the Securities and Exchange Commission and seek an improved listing status for our common stock for our shareholders. We have committed to completing all filings with the Securities and Exchange Commission and, in the coming weeks, will be releasing our quarterly results for the first three quarters of fiscal year 2011,” he added.
Revenue for the fourth quarter ended May 31, 2010 was approximately $2.0 million as compared to about $2.2 million during the same period in 2009. Revenue for the twelve month period ended May 31, 2010 was approximately $7.7 million as compared to about $9.5 million for the same period in 2009.
Net income the fourth quarter ended May 31, 2010 was approximately $227,000 as compared to about $349,000 during the same period in 2009. Net income for the twelve month period ended May 31, 2010 was approximately $673,000 as compared to about $1.3 million for the same period in 2009.
“During the first three quarters of fiscal year 2011, the revenue and profitability have stabilized,” Joe Mullaney continued. “The new team is enthusiastically engaged in identifying growth opportunities that could allow us to monetize some or all of our tens of millions of dollars of tax assets.”
SOFTECH, INC. FINANCIAL SUMMARY (In thousands, except per share data) Statements of Operations: |
||||||
For the Three Months Ended May 31, |
||||||
2010 |
2009 |
|||||
Revenue |
$ |
1,956 |
$ |
2,241 |
||
Income from operations |
425 |
446 |
||||
Net income |
227 |
349 |
||||
Basic and diluted income per share |
.02 |
.03 |
||||
For the Fiscal Years Ended May 31, |
||||||
2010 |
2009 |
|||||
Revenue |
$ |
7,711 |
$ |
9,498 |
||
Income from operations |
1,349 |
2,132 |
||||
Net income |
673 |
1,321 |
||||
Basic and diluted income per share |
.06 |
.11 |
||||
Reconciliation of EBITDA to Net Income:
To arrive at EBITDA, net income, calculated in accordance with GAAP, is adjusted by adding back interest expense, taxes, non-cash expenses related to amortization of intangible assets resulting from acquisitions and depreciation expense.
For the Three Months Ended May 31, |
||||||
2010 |
2009 |
|||||
Net income |
$ |
227 |
$ |
349 |
||
Plus: Interest expense |
142 |
129 |
||||
Tax expense |
16 |
16 |
||||
Depreciation expense |
9 |
18 |
||||
Amortization expense |
24 |
101 |
||||
EBITDA |
418 |
613 |
||||
For the Fiscal Years Ended May 31, |
||||||
2010 |
2009 |
|||||
Net income |
$ |
673 |
$ |
1,321 |
||
Plus: Interest expense |
589 |
760 |
||||
Tax expense |
16 |
16 |
||||
Depreciation expense |
63 |
127 |
||||
Amortization expense |
113 |
|
405 |
|||
EBITDA |
1,454 |
2,629 |
||||
Non-GAAP Financial Measures
The Company believes that EBITDA is useful supplemental information for investors, when considered along with net income, cash flow from operations and other financial 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 non-cash expenses), 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 expense, a cost of debt 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. 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.
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