Epicor Amends Credit Agreement to Maximize Operating Flexibility; Expects Q3 Non-GAAP EPS to Exceed Previously Provided Guidance
October 06 2009 - 8:15AM
Business Wire
Epicor Software Corporation (NASDAQ:EPIC), a leading provider of
enterprise business software solutions for the midmarket and
divisions of Global 1000 companies, today announced that it amended
its existing Credit Facility (Facility) agreement to provide the
Company with more operating flexibility in light of changing
economic conditions over the past 18 months. The Company also said
that it expects its non-GAAP earnings per share for its 2009 third
quarter ended September 30, 2009, to exceed the range it previously
provided, and that total third quarter revenues will be within the
range previously provided by the Company. On July 28, 2009 the
Company said it expected 2009 third quarter total revenue of $96 to
$100 million and non-GAAP earnings per share of $0.09 to $0.10.
Epicor EVP and CFO Michael Pietrini commented, “We have always
been confident in our ability to manage our business within the
terms of the previously existing Facility. However, due to the
dramatic changes in the economic climate since we first negotiated
the Facility terms more than 18 months ago, the previous covenants
— particularly the fixed charge covenant — were becoming a
potential impediment for the Company and were being factored into
many of the business decisions we made.
“We are fortunate to be well positioned within the markets we
address,” Pietrini continued, “and we continue to execute on our
product strategy and manage the business to optimize results in the
current environment, which helped lead to 100% lender consent to
the amendment. We have realigned the Facility’s financial covenants
with the current state of the economic environment, which we
believe provides us with significantly more flexibility to operate
our business for the near and long term benefit of our customers,
employees and shareholders, as we anticipate the eventual upturn in
the industries and markets we serve.”
The key changes to the amended credit agreement are as
follows:
- Elimination of the total
leverage and fixed charge coverage financial covenants in favor of
minimum profitability and liquidity covenants, which are
significantly more favorable for the Company.
- Reduction of the size of the
credit facility to $100 million.
- Shortening the maturity date of
the revolving credit facility by five months to September 30,
2012.
- Increasing the applicable
interest rate margin by 2.0% to 2.25% from current levels.
About Epicor Software Corporation
Epicor Software is a global leader delivering business software
solutions to the manufacturing, distribution, retail, hospitality
and services industries. With 20,000 customers in over 150
countries, Epicor provides integrated enterprise resource planning
(ERP), customer relationship management (CRM), supply chain
management (SCM) and enterprise retail software solutions that
enable companies to drive increased efficiency and improve
profitability. Founded in 1984, Epicor celebrates 25 years of
technology innovation delivering business solutions that provide
the scalability and flexibility businesses need to build
competitive advantage. Epicor provides a comprehensive range of
services with a single point of accountability that promotes rapid
return on investment and low total cost of ownership, whether
operating business on a local, regional or global scale. The
Company’s worldwide headquarters are located in Irvine, California
with offices and affiliates around the world. For more information,
visit www.epicor.com.
Epicor is a registered trademark of Epicor Software Corporation.
Other trademarks referenced are the property of their respective
owners. The product and service offerings depicted in this document
are produced by Epicor Software Corporation.
Forward-Looking Statements
The Management of Epicor Software believes certain statements in
this press release may constitute forward-looking statements under
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include statements regarding expected
revenues and earnings per share (including on a non-GAAP basis) and
other statements that are not historical fact. These
forward-looking statements are based on currently available
competitive, financial and economic data together with management’s
views and assumptions regarding future events and business
performance as of the time the statements are made and are subject
to risks and uncertainties, including, without limitation, the
risks associated with closing the accounting books for the third
quarter ending September 30, 2009 and having our outside auditors
finalize their review and render their opinion for the third
quarter ended September 30, 2009 and other factors and the risks
and uncertainties described in Epicor’s Annual Report on Form 10-K
for the year ended December 31, 2008 and Quarterly Report on
Form 10-Q for the three month period ended June 30, 2009. Actual
results may differ materially from those expressed or implied in
the forward-looking statements. Epicor undertakes no obligation to
revise or update publicly any forward-looking statements.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. In
evaluating the Company’s performance, management uses certain
non-GAAP financial measures to supplement consolidated financial
statements prepared under GAAP.
Non-GAAP Earnings Measures. The Company uses a non-GAAP earnings
measure in its public statements. Management believes these
non-GAAP measures help indicate the Company’s baseline performance
before gains, losses or charges that are considered by management
to be outside on-going operating results. Accordingly, management
uses this non-GAAP measure to gain a better understanding of the
Company’s comparative operating performance from period-to-period
and as a basis for planning and forecasting future periods.
Management believes these non-GAAP measures, when read in
conjunction with the Company’s GAAP financials, provides useful
information to investors by offering:
- the ability to make more
meaningful period-to-period comparisons of the Company’s on-going
operating results;
- the ability to better identify
trends in the Company’s underlying business and perform related
trend analysis;
- a better understanding of how
management plans and measures the Company’s underlying business;
and,
- an easier way to compare the
Company’s most recent results of operations against investor and
analyst financial models.
General. These non-GAAP measures have limitations, however,
because they do not include all items of income and expense that
impact the Company’s operations. Management compensates for these
limitations by also considering the Company’s GAAP results. The
non-GAAP financial measures the Company uses are not prepared in
accordance with, and should not be considered an alternative to,
measurements required by GAAP, such as operating income, net income
and income per share, and should not be considered measures of the
Company’s liquidity. The presentation of this additional
information is not meant to be considered in isolation or as a
substitute for the most directly comparable GAAP measures. In
addition, these non-GAAP financial measures may not be comparable
to similar measures reported by other companies.
As a result of these factors the business or prospects expected
by the Company as part of this announcement may not occur. Epicor
undertakes no obligation to revise or update publicly any
forward-looking statements.
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