Industry Summary Articles

SofTech, Inc. today announced its third quarter fiscal year 2016 operating results. Revenue for the three months ended February 29, 2016 was approximately $912,000 as compared to approximately $925,000 for the same period in the prior fiscal year. The net loss for the current quarter was approximately ($310,000) or ($.34) per share compared to approximately $(356,000) or $(.40) per share for the same period in the prior fiscal year. EBITDA for current quarter was approximately $(249,000) as compared to approximately $(171,000) for the same period in fiscal year 2015.

Product revenue for the current quarter was down by about $117,000 as compared to the same period last year which was offset by an increase of $104,000 in services revenue. Product revenue has been generating approximately $500,000 per year for the last two fiscal years, however, the quarterly product revenue has been erratic and difficult to forecast. The increase in services revenue is the result of an increase in maintenance and subscription revenue of 9.5% and an increase of 30.3% in consulting revenue.

Gross margins improved to 61.3% in the current quarter as compared to 53.5% in the same period last year. Increased sales and marketing expenditures primarily related to the launch of the HomeView product more than offset that improvement in gross margin.

Revenue for the nine months ended February 29, 2016 was approximately $3.2 million as compared to approximately $2.8 million for the same period in the prior fiscal year. The net loss for the first nine months of the current fiscal year was approximately $(505,000) or ($.56) per share compared to a net loss of approximately $(1,307,000) or $(1.47) per share for the same period in the prior fiscal year. EBITDA for the first nine months of the current fiscal year was $(280,000) as compared to approximately $(686,000) for the same period in fiscal 2015.

For the nine month period ended February 29, 2016, product revenue increased by about 4.6% as compared to the same period in the prior year and services revenue increased by about 15.2%. The product revenue increase was primarily from our ProductCenter technology with several existing customers expanding their usage of the solution. The increase in services revenue was the result of a 6% increase in maintenance and subscription revenue and a 47.1% increase in consulting revenue. The increase in consulting revenue is primarily related to the previously announced contract award at AgustaWestland.

Gross margins improved to 62.4% in the nine month period ended February 29, 2016 as compared to 53.6% for the same period last year generating an additional $486,000 of gross margin. Operating expenses declined by about $235,000 thereby significantly reducing the operating loss for the current nine month period as compared to the same period in the prior fiscal year.

“Our revenue for the current quarter was essentially flat compared to the same period last year while our operating expenses increased as expected with the launch of the HomeView technology,” said Joe Mullaney, SofTech’s CEO. “Product revenue has been erratic from quarter to quarter but our annual run rate for the last two years has been about $500,000 and our pipeline of qualified proposals suggests that annual trend will continue. Services revenue has been performing very well during fiscal 2016 on all fronts: maintenance, subscriptions and consulting. We see that trend continuing.”

“The launch of our HomeView technology this quarter has been very exciting. We believe there is a significant market opportunity for this technology and the feedback from builders, Realtors and homeowners alike has been very positive. We will be continuing our market outreach activities over the coming quarters,” Mullaney added.

To view the original press release, please click here.

Search for SofTech on CIMdata.com