SofTech Announces Q1FY 2016 Operating Results

SofTech, Inc. (OTC: SOFT), a proven provider of Product Lifecycle Management (PLM) solutions, today announced its first quarter operating results for the three months ended August 31, 2015.

For the first quarter of fiscal year 2016, the Company generated revenue of approximately $981,000 as compared to $864,000 in the same period in fiscal year 2015, an increase of about 13.5%. The net loss for the first quarter of fiscal year 2016 was approximately $(174,000) or $(0.19) per share as compared to a net loss of $(572,000) or $(.64) per share for the same period in fiscal year 2015. EBITDA for the first quarter of fiscal year 2016 was $(114,000) as compared to $(368,000) during the same period in fiscal year 2015.

Revenue growth for the Company’s ProductCenter and Connector technologies was consistent with the growth experienced in fiscal year 2015. Revenue from the CADRA technology, a product we market and support in Europe under a Distributorship Agreement with Mentor Graphics Corporation, decreased 26% in the current quarter as compared to the same period in the prior fiscal year. The decline in the Euro relative to the USD was the primary reason for the CADRA revenue decline.

Cash expenses other than purchase of third party products and services were approximately $992,000 for the first quarter of fiscal year 2016 as compared to $1,180,000 in the same period in fiscal year 2015, a decrease of 15.9%. Third party purchases were essentially unchanged.

“We are pleased with the consistent revenue growth of our own technology and service offerings,” said Joe Mullaney, SofTech’s CEO. “In addition, we have controlled our spending and continued to develop the HomeView™ product, an offering we believe has a significant market opportunity. We will be introducing HomeView to the market place in our third fiscal quarter.”

“The pipeline of identified, qualified projects signals continued revenue growth for our ProductCenter and Connector technologies over the coming quarters. In the first quarter our consultants continued to bill at an above average rate as compared to the average quarterly billings for the last two years which we also expect to continue,” he added.

The Company will be demonstrating its HomeView product at Inman Connect, a real estate focused event in New York City in January 2016. The mobile app will be available for download from the Apple iTunes Store well before the Conference.

“We have invested a great deal of time, money and energy into the HomeView technology and we are more enthused and confident of its value than ever,” said Bob Anthonyson, HomeView’s President and CEO. “Current trends support our view that prospective home buyers will welcome, and over time will insist on, the comprehensive information about a home’s details and history that HomeView can capture. Moreover, existing homeowners can use HomeView in the day-to-day running of their homes, a task which is becoming only more complex as themes such as energy efficiency and home automation become more popular,” he added.

FINANCIAL STATEMENTS
The Statements of Operations for the three month periods ended August 31, 2015 compared to the same period in the prior fiscal year is presented below. A reconciliation of Net loss to EBITDA, a non-GAAP financial measure, is also provided.

About SofTech

SofTech, Inc. (OTCQB: SOFT) is a proven provider of product lifecycle management (PLM) solutions, including its ProductCenter® PLM solution and its Connector technology.

SofTech’s solutions accelerate productivity 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 software and service solutions, including General Electric Company, Goodrich, Honeywell, AgustaWestland and the U.S. Army. Headquartered in Lowell, Massachusetts, SofTech (www.softech.com) has locations and distribution partners in North America, Europe, and Asia.

SofTech, ProductCenter and HomeView are registered trademarks of SofTech, Inc. All other products or company references are the property of their respective holders.

Forward Looking Statements

This press release contains forward-looking statements relating to, among other matters, our outlook for fiscal year 2016 and beyond. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs, and assumptions and are not guarantees of future events or results. Actual future events and results could differ materially from the events and results indicated in these statements as a result of many factors, including, among others, (1) generate sufficient cash flow from our operations or other sources to fund our working capital needs and growth initiatives; (2) maintain good relationships with our lender; (3) comply with the terms of the loan agreement; (4) successfully introduce and attain market acceptance of any new products and/or enhancements of existing products; (5) attract and retain qualified personnel; (6) prevent obsolescence of our technologies; (7) maintain agreements with our critical software vendors; (8) secure renewals of existing software maintenance contracts, as well as contracts with new maintenance customers; and (9) secure new business, both from existing and new customers.

These and other additional factors that may cause actual future events and results to differ materially from the events and results indicated in the forward-looking statements above are set forth more fully under “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2015. The Company undertakes no obligation to update these forward-looking statements to reflect actual results, changes in assumptions or changes in other factors that may affect such forward-looking statements.

Use of Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), this press release also contains non-GAAP financial measures. Specifically, the Company has presented EBITDA, which is defined as Net loss plus interest expense, tax expense, non-cash expenses such as depreciation, amortization and the goodwill write-off related to the sale of our CADRA product line, non-cash loss (gain) and stock based compensation expense. The Company believes that the inclusion of EBITDA helps investors gain a meaningful understanding of the Company’s core operating results and enhances comparing such performance with prior periods, without the effect of non-operating expenses and non-cash expenditures. Management uses EBITDA, in addition to GAAP financial measures, as the basis for measuring our core operating performance and comparing such performance to that of prior periods. EBITDA is also the most important measure of performance in measuring compliance with the Company’s debt facility. EBITDA is not meant to be considered superior to or a substitute for results of operations prepared in accordance with GAAP. Reconciliations of EBITDA to the most directly comparable GAAP financial measures are set forth in the text of, and the accompanying tables to, this press release.

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