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Epicor Reports Software License Revenue, Total Revenue and Earnings Growth for Third Quarter 2003

  • 24 October, 2003 13:06

<p>Year Over Year Increase in License Revenues of 38 per cent Drives Strong Performance</p>
<p>FOR IMMEDIATE RELEASE
Sydney - October 24th, 2003</p>
<p>Epicor Software Corporation (NASDAQ:EPIC), a leading provider of integrated enterprise software solutions for the midmarket, today reported its financial results for the third quarter and nine months ended September 30, 2003.</p>
<p>Total revenues for the quarter were $40.3 million, up 19 per cent compared to $34.0 million for the third quarter 2002. Software license revenue totalled $9.4 million, up over 38 per cent compared to $6.8 million for the same quarter a year ago. Consulting and maintenance revenues totalled $30.4 million for the third quarter 2003 up over 14% compared to $26.6 million during the third quarter 2002. [All currency is in US Dollars.]</p>
<p>Total revenues for the nine months ended September 30, 2003 were $111.4 million compared with the nine months ended 2002 at $106.7 million. Software license revenues for the nine-month period were $26.7 million compared with $24.4 in the prior year period. Consulting and maintenance revenues for the nine-month period were $83.1 million compared with $80.3 million for the same period 2002.</p>
<p>GAAP net income for the third quarter 2003 was $1.8 million or $0.04 per diluted share. This net income result compares to a net loss for the third quarter 2002 of $1.4 million or $0.03 per diluted share. For the third quarter of 2003, adjusted earnings were $4.7 million or $0.09 per diluted share, compared to adjusted earnings of $572,000 or $0.01 per diluted share for the third quarter of 2002. Adjusted earnings exclude amortisation of capitalised software development costs and acquired intangible assets, stock-based compensation expense and restructuring charges.</p>
<p>GAAP net income for the nine months ended September 30, 2003 was $5.5 million or $0.11 per diluted share compared with a net loss of $5.1 million or $0.12 per diluted share for the same period ended 2002. For the nine month period, adjusted earnings, as described above, were $13.9 million or $0.28 per diluted share, compared to adjusted earnings of $848,000 or $0.02 per diluted share for the same period 2002.</p>
<p>The company ended the third quarter 2003 with cash and cash equivalents of $34.0 million. The company generated cash from operations of $7.4 million in the quarter, continuing the momentum of positive cash flow from operations for the last eight consecutive quarters. The company completed two all cash acquisitions during the quarter for approximately $19.0 million. The company's balance sheet at quarter-end also showed net accounts receivable of $23.0 million and deferred revenues of $37.8 million. Days sales outstanding decreased to 51 from 56 in the prior quarter.</p>
<p>Third Quarter 2003 Highlights
· Software license revenue growth in the third quarter up over 38 per cent including software license revenue from the recent ROI acquisition, which contributed approximately 11 per cent of the growth
· Total revenues were up 19 per cent year over year including the contribution from the ROI Systems acquisition
· Eighth consecutive quarter of positive cash flow from operations - generated $7.4 million from operations this quarter
· Successful integration of ROI Systems Added over 700 new customers year to date including approximately 300 new name accounts and over 400 customers from the ROI Systems acquisition
· Selected as Award Finalist for Microsoft's ".NET Application of the Year"
· Record attendance of over 1,500 at Perspectives Annual Customer Conference in Las Vegas</p>
<p>"We have continued our momentum throughout the year delivering solid execution and strong performance with revenue and earnings growth," said George Klaus, chairman, CEO, and president of Epicor.</p>
<p>"We are winning business from our competitors reflected by our strong license growth year over year. Our software license revenues were up over 38 per cent year over year. Growth in license revenues included the software license contribution of approximately 11 per cent from the newly acquired ROI Systems." Klaus added, "We have executed well on the integration of ROI Systems, achieving the forecasted level of synergies and resulting accretion. We are starting to benefit from increased traction in the marketplace of our new Web services solution suite for service enterprises released in June. And, we continue to focus on the execution of our balanced profitable growth strategy positioning us for enhanced shareholder value and continued success for our customers and employees."</p>
<p>The company confirms its previously stated revenue guidance of approximately $42.0 million in the fourth quarter of 2003, $0.07 GAAP earnings per diluted share and $0.13 per diluted share, adjusted earnings, as described above. Fiscal year 2003 revenues are anticipated to be $153.0 million with $0.18 GAAP earnings per diluted share and $0.41 per diluted share, adjusted earnings, as described above.</p>
<p>The company will hold a conference call today at 2:00 p.m. PDT for investors and analysts. The investment community is invited to participate on the call. Please dial in to the call approximately ten minutes prior to the call. The dial in number for the conference call is 888-662-8850. A live webcast of the call will be available to all interested parties on the "Company" section under Investor Info, of the company's Web site www.epicor.com. The call will be archived on the site for thirty days.</p>
<p>About Epicor Software Corporation
Epicor is a leading provider of integrated enterprise software solutions for midmarket companies around the world. Founded in 1984, Epicor has over 15,000 customers and delivers end-to-end, industry-specific solutions that enable companies to immediately improve business operations and build competitive advantage in today's Internet economy. Epicor's comprehensive suite of integrated software solutions for Customer Relationship Management, Financials, Manufacturing, Supply Chain Management, Professional Services Automation and Collaborative Commerce provide the scalability and flexibility to support long-term growth. Epicor's solutions are complemented by a full range of services, providing single point of accountability to promote rapid return on investment and low total cost of ownership, now and in the future. Epicor is headquartered in Irvine, California and has offices and affiliates around the world. For more information, visit the company's Web site at www.epicor.com.</p>
<p>Epicor is a registered trademark of Epicor Software Corporation. The product and service offerings depicted in this document are produced by Epicor Software Corporation. The foregoing statements regarding anticipated revenue, and GAAP and adjusted earnings, which are not historical fact, are "forward-looking statements" that involve risks and uncertainties and actual results may differ materially. Such risks and uncertainties include but are not limited to, the company's success in controlling costs, achieving operating results and margins; fluctuations in demand for the company's products, particularly in light of competitive offerings; the timely availability and market acceptance of new products and upgrades; the impact of competitive products and pricing; the discovery of undetected software errors; our ability to realise the synergies and operating efficiencies anticipated from the ROI acquisition; our ability to continue to integrate the ROI employees and retain key personnel following the acquisition and other factors discussed in the company's Quarterly report on Form 10-Q, for the quarter ended June 30, 2003 at pages 29-36. As a result of these factors the business or prospects expected by the company as part of this announcement may not occur. The company undertakes no obligation to revise or update publicly any forward-looking statements. This press release includes certain non-GAAP financial measures, including adjusted net income and net income per diluted share amounts, which exclude the amortisation of capitalised software development costs and acquired intangible assets, stock compensation expense and restructuring charges. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles and may be different from non-GAAP financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for measures of financial performance prepared in accordance with GAAP. The company's management believes that these non-GAAP financial measures provide meaningful supplemental information regarding the performance of the company's business operations. These measures also facilitate management's internal comparisons to our historical operating results and to our competitors' operating results, operational forecasting and budgeting. Investors and potential investors are encouraged to review the reconciliation of the non-GAAP financial measures contained within this press release with their most directly comparable GAAP financial results.</p>
<p>For further information please contact:
Susan Burt
Epicor Software Australia and New Zealand
Level 32, 100 Miller Street, North Sydney NSW, Australia
Phone: + 61 (0) 2 9927 6200</p>
<p>Press contact:
Derek Evans
Gotley Nix Evans Pty Ltd
Phone: + 61 (0) 2 9957 5555
Email: derek.evans@gne.com.au</p>

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