Epicor Software, distributed in SA by New Era Solutions, has reported a revenue increase of 20% in its fourth quarter and 2003 year-end financial results and has generated $17 million in cash.
Revenue for the quarter was $44.1 million compared to $36.7 million for the same period the previous year and customers increased by 800, 400 through new sales and 400 through acquisition, bringing the total installed base to 20 000.
"We executed and delivered profitable growth and significant cash flow in 2003," says chairman, CEO and president, George Klaus.
"With increased revenue growth, profitability and cash generating operations, a number of new products in the marketplace and the planned acquisition of Scala Business Solutions, Epicor is poised to become the largest exclusive midmarket provider with global distribution for diversified solutions in services, distribution and manufacturing sectors," says Scott McKenzie, MD of New Era Solutions.
Revenue for the year was $155.4 million compared to $143.5 million for the previous year, an increase of 8%.
Licence revenues were $12 million for the fourth quarter compared to $9.8 million for the same period in 2002 while annual licence revenues were $38.7 million compared to $34.2 million in 2002.
Service revenues for the fourth quarter of 2003 were $31.4 million compared to $26.4 million in the fourth quarter of 2002, up 19%. Service revenues for the year were $114.5 million compared to $106.7 million in 2002, up over 7%. For the fourth quarter, the company reported GAAP net income of $3.5 million or $0.07 per diluted share compared with a net loss of $2.1 million or $0.05 per diluted share in the prior year`s period. For the fourth quarter of 2003, adjusted earnings were $6.6 million or $0.13 per diluted share compared with adjusted earnings of $3.7 million or $0.08 per diluted share in the same period last year. Adjusted earnings exclude amortisation of capitalised software development costs and acquired intangible assets, stock-based compensation expense and restructuring charges.
For the year 2003, the company reported GAAP net income of $9.3 million or $0.18 per diluted share compared with a net loss of $7.3 million or $0.17 per diluted share reported in the year 2002. For the year, adjusted earnings, as described above, were $20.5 million or $0.41 per diluted share, compared to adjusted earnings of $4.5 million or $0.10 per diluted share for the year 2002.
The company`s balance sheet at 31 December 2003 showed cash and cash equivalents of $38.9 million. At year-end, net accounts receivable was $27.1 million and deferred revenues were $37.3 million.
The company also provided its guidance for the first quarter 2004, with total revenues expected to be in the range of $40 million to $41 million. GAAP earnings per diluted share for the first quarter 2004 is expected to be $0.07 with adjusted earnings, as described above, per share of $0.10.
The company has also provided an updated outlook for the fiscal year 2004. On a standalone basis, the company provided guidance for $172 million to $175 million in revenues, GAAP earnings per diluted share of $0.40 and adjusted earnings, as described above, of $0.52 per diluted share, using a weighted average share count of 52 million shares.
Based on the revised timeframe for the offer period to acquire the shares of Scala Business Solutions, announced on 23 January, the company expects annual revenues in 2004 for the combined entity to be approximately $230 million. The companies expect to drive operating efficiencies from the merger predominantly through reducing redundant G&A and facilities and by streamlining the R&D and technical support organisations. Based on the current expected timeframe to close the transaction, operating activities for the combined entity are expected to result in GAAP earnings per diluted share for the year 2004 of approximately $0.40, or neutral to earnings per diluted share, and an accretion of $0.12 for Epicor`s adjusted earnings per diluted share for fiscal year 2004, or $0.64 (adjusted) per diluted share, in each case using a weighted average share count of 56 million shares.
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