SofTech Announces Q4 and FY 2014 Operating Results

The estimated financial results contained in this announcement for the Company’s first fiscal quarter ended August 31, 2014 are preliminary, and are subject to the closing of its financial books and the completion of the customary quarter-end review procedures.

FINANCIAL STATEMENTS

The Statements of Operations for the three and twelve month periods ended May 31, 2014 compared to the same periods in the prior fiscal year are presented below. A reconciliation of Net income(loss) to EBITDA, a non-GAAP financial measure, is also provided.

 

Statements of Operations

(in thousands, except % and per share data)

                 
 
For the three months ended
May 31, May 31, Change
  2014         2013         $     %  
Product revenue 95 $ 347 (252 ) -72.6 %
Service revenue   783         1,211         (428 )   -35.3 %
Total revenue   878         1,558         (680 )   -43.6 %
 
Cost of sales   369         363         6     1.7 %
Gross margin 509 1,195 (686 ) -57.4 %
Gross margin % 58.0 % 76.7 %
 
R&D 256 288 (32 ) -11.1 %
SG&A 882 795 87 10.9 %
Gain on sale of CADRA product line   (494 )       -         (494 )   -  
 
Operating income (135 ) 112 (247 ) -220.5 %
Interest expense 48 144 (96 ) -66.7 %
Other (income) expense   (22 )       4         (26 )   -650.0 %
Income(loss) from operations before income taxes (161 ) (36 ) (125 ) 347.2 %
Provision for income taxes   2         15         (13 )   -86.7 %
Net income(loss)   (163 )       (51 )       (112 )   219.6 %
 
Weighted average shares outstanding   875         1,045         (170 )   -16.3 %
Basic and diluted net income per share: $ (0.19 )     $ (0.05 )     $ (0.14 )   281.7 %
 
Reconciliation of Net income to EBITDA:
 
Net income(loss) $ (163 ) $ (51 ) $ (112 ) 219.6 %
Plus interest expense 48 144 (96 ) -66.7 %
Plus tax expense 2 15 (13 ) -86.7 %
Plus non-cash expenses 128 176 (48 ) -27.3 %
Plus non-cash goodwill expense related to CADRA product line   44         -         44     -  
EBITDA $ 59       $ 284       $ (225 )   -79.2 %
 
 
 

Statements of Operations

(in thousands, except % and per share data)

       
 
For the fiscal years ended
May 31,     May 31,     Change
  2014         2013         $     %  
Product revenue $ 1,138     $ 1,284     $ (146 ) -11.4 %
Service revenue 3,861 4,784 (923 ) -19.3 %
Royalties on sale of patents   10         290         (280 )   -  
Total revenue   5,009         6,358         (1,349 )   -21.2 %
 
Cost of sales   1,567         1,375         192     14.0 %
Gross margin 3,442 4,983 (1,541 ) -0.8 %
Gross margin % 68.7 % 78.4 %
 
R&D 1,171 1,087 84 7.7 %
SG&A 3,465 3,186 279 8.8 %
Gain on sale of CADRA product line   (649 )       -         (649 )   -  
 
Operating income (545 ) 710 (1,255 ) -176.8 %
Interest expense 251 342 (91 ) -26.6 %
Other (income) expense   (50 )       (7 )       (43 )   614.3 %
Income from operations before income taxes (746 ) 375 (1,121 ) -298.9 %
Provision for income taxes   2         15         (13 )   -86.7 %
Net income   (748 )       360         (1,108 )   -307.8 %
 
Weighted average shares outstanding   877         1,019         (142 )   -13.9 %
Basic and diluted net income per share: $ (0.85 )     $ 0.35       $ (1.21 )   -341.4 %
 
Reconciliation of Net income to EBITDA
 
Net income $ (748 ) $ 360 (1,108 ) -307.8 %
Plus interest expense 251 342 (91 ) -26.6 %
Plus tax expense 2 15 (13 ) -86.7 %
Plus non-cash expenses, net 284 341 (57 ) -16.7 %
Plus non-cash goodwill expense related to CADRA product line   3,305         -         3,305     -  
EBITDA $ 3,094       $ 1,058       $ 2,036     192.4 %
 
 
 

Balance Sheets

(in thousands)

           
 
As of
May 31, May 31,
2014     2013
Cash $ 1,209 $ 1,188
Restricted cash - 100
Accounts receivable 666 895
Receivable due from sale of CADRA product line 547
Other current assets   343       299
Total current assets   2,765       2,482
 
Property and equipment, net 95 61
Goodwill 948 4,249
Other non-current assets   916       922
Total assets $ 4,724     $ 7,714
 
Accounts payable $ 483 $ 137
Accrued expenses 503 602
Deferred maintenance revenue 1,462 2,088
Current portion of long term debt 973 -
Other current liabilities   123       102
Total current liabilities   3,544       2,929
 
Other non-current liabilities 47 98
Long term debt   -       2,700
Total liabilities   3,591       5,727
 
Redeemable common stock   275       275
 
Stockholders' equity   858       1,712
Total liabilities, redeemable common stock
and stockholders' equity $ 4,724     $ 7,714
 
 

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