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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
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Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 2, 2000
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EPICOR SOFTWARE CORPORATION
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(Exact name of Registrant as specified in charter)
Delaware 0-20740 33-0277592
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
195 Technology Drive, Irvine, California 92618
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (949) 585-4000
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Not Applicable
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(Former name or former address, if changed, since last report)
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ITEM 5. OTHER EVENTS
On February 2, 2000 Epicor Software Corporation announced financial
results for its fourth quarter and fiscal year ending December 31, 1999.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) EXHIBITS.
Exhibit Number
Ex-99 Press Release dated February 2, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EPICOR SOFTWARE CORPORATION
Date: February 3, 2000 By /s/ Perry Tarnofsky
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Perry Tarnofsky
Vice President
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EXHIBIT INDEX
The following exhibits are attached hereto and incorporated herein by
reference:
Exhibit Number Sequentially
Numbered Page
Ex.-99 Press Release dated February 2, 2000. 5
4
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EXHIBIT 99
FOR IMMEDIATE RELEASE
Contacts: Valerie Brodie
Director, Investor Relations
949/585-4293
[email protected]
EPICOR REPORTS FOURTH QUARTER OF 1999 AND YEAR END FINANCIAL RESULTS
IRVINE, Calif., February 2, 2000 -- Epicor Software Corporation
(NASDAQ: EPIC), today reported its financial results for the fourth quarter and
year ended December 31 1999. Total revenues for the fourth quarter were $62.7
million. For the year ended December 31, 1999, revenues totaled $258.2 million.
License revenues for the fourth quarter were $22.9 million and for the
year license revenues were $94.3 million. The company reported a sequential
increase in license revenue over the third quarter ended September 30, 1999
consistent with the industry-wide consensus that the slowdown in enterprise
software demand, due primarily to Y2K factors, is dissipating. Service revenues
for the fourth quarter were down slightly compared to the previous quarter as a
result of the utilization of consultants to assist customers in their Y2K
transition and to accelerate beta testing of the company's new products
scheduled for delivery in the first quarter of 2000.
The company's balance sheet at December 31, 1999 showed cash, cash
equivalents and short-term investments of $30.4 million, accounts receivable of
$75.3 million and deferred revenue of $39.0 million. "Given the difficult
software market conditions during 1999, we are very encouraged to close the year
with a healthy cash position and a balance sheet that continues to remain
unencumbered by long term debt," said Lee Kim, vice president and chief
financial officer.
The acceleration of the company's critical investments in the
development of new products and the associated costs of transitioning its sales,
marketing and consulting teams to support the delivery of an Internet-enabled
offering that is designed to maximize the company's opportunities to leverage
the industry's highest growth sectors including eBusiness, eCRM and B2B,
contributed to the loss for the quarter of $22.7 million or $0.56 cents per
share before charges related to the previously announced reorganization of the
company along strategic product lines. Net loss for the year before write-downs
and charges was $29.9 million or $0.74 per share.
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Epicor Software Announces Fourth Quarter 1999 Results
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For the fourth quarter, the company posted a net loss of $41.6 million
or $1.02 per share, including write-downs related to the impairment of certain
intangible assets and charges attributable to the reorganization. For the year,
net loss including charges was $48.8 million or $1.20 per share. In early
January 2000, the company carried out a workforce reduction of approximately 11%
of its employees and contractors worldwide. The company also expects to reduce
its facilities over the next few months to better match its new streamlined
organization. The company also wrote down certain assets to realizable value,
including acquired technology, capitalized internal development costs, and
acquisition-related intangible assets. In addition, the company recorded an
additional charge to increase its allowance for doubtful accounts and related
reserves, partially due to the reorganization. The workforce and facilities
reductions, the write down of impaired assets, and the increase in receivables
allowances resulted in total charges of $19.0 million.
"During the fourth quarter of 1999, we took aggressive measures to
position the company for success in 2000 by reducing our on-going cost
structure, creating divisional structures with P&L responsibility, implementing
rigorous operating controls and procedures through the appointment of Rick Roll
to the executive team as chief operating officer and accelerating the commitment
to our customers to deliver on our industry-endorsed strategy to provide a cost
effective fully integrated BackOffice, FrontOffice and eBusinesss solution,"
said George Klaus, chairman and chief executive officer.
ABOUT EPICOR SOFTWARE CORPORATION
Epicor is the largest enterprise software supplier focused exclusively
on the real-world requirements of midmarket companies. Epicor delivers business
performance solutions including Front Office, Back Office and eBusiness
capabilities, that enable companies to automate on their own terms and
outperform their competition by capitalizing on customer relationships,
minimizing the risks and upheaval of conventional enterprise resource planning
(ERP) systems.
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Epicor Software Announces Fourth Quarter 1999 Results
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Founded in 1984, Epicor is ranked among the industry's ten largest
enterprise business solutions providers by industry analysts, with more than
10,000 enterprise customers worldwide. Epicor is headquartered in Irvine,
California. More information about Epicor, its products and services is
available at www.epicor.com.
# # #
Epicor is a trademark of Epicor Software Corporation. Platinum is a registered
trademark of PLATINUM technology International, Inc. The product and service
offerings depicted in this document are produced by Epicor Software Corporation.
The foregoing statements regarding anticipated facilities reductions and
opportunities to leverage industry growth sectors, 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, and the discovery of undetected software
errors and other factors discussed in the company's Quarterly report on Form
10-Q, for the period ending September 30, 1999, at pages 14-19. 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.
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Epicor Software Announces Fourth Quarter 1999 Results
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EPICOR SOFTWARE CORPORATION
AUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1999 1998
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ASSETS
Current assets:
Cash and cash equivalents $ 14,866 $ 22,175
Short-term investments 15,509 30,511
Accounts receivable, net 75,263 84,789
Inventories 1,413 971
Prepaid expenses and other 7,571 13,826
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Total current assets 114,622 152,272
Property and equipment, net 16,650 13,388
Software development costs, net 9,083 5,572
Intangible assets, net 25,668 32,056
Other assets 4,154 8,989
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Total assets $ 170,177 $ 212,277
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 14,591 $ 16,490
Accrued expenses 31,000 24,741
Accrued merger and restructuring costs 11,562 15,090
Deferred revenue 39,018 36,845
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Total current liabilities 96,171 93,166
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Long-term liabilities 400 1,116
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Stockholders' equity:
Preferred stock 7,501 7,501
Common stock 41 40
Additional paid-in capital 237,536 232,042
Less: notes receivable from officers for issuance
of restricted stock (11,269) (11,563)
Accumulated other comprehensive loss (1,590) (245)
Accumulated deficit (158,613) (109,780)
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Total stockholders' equity 73,606 117,995
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Total liabilities and stockholders'equity $ 170,177 $ 212,277
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Epicor Software Announces Fourth Quarter 1999 Results
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EPICOR SOFTWARE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
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1999 1998 1999 1998
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(Unaudited) (Unaudited) (Audited) (Unaudited)
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Revenues:
License fees $ 22,876 $ 16,870 $ 94,344 $ 68,877
Services 38,540 16,389 157,770 52,861
Other 1,294 128 6,062 551
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Total revenues 62,710 33,387 258,176 122,289
Cost of revenues 34,418 10,473 122,602 37,253
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Gross profit 28,292 22,914 135,574 85,036
Operating expenses:
Sales and marketing 26,780 12,077 89,592 46,208
Software development 9,256 3,416 29,722 11,862
General and administrative 23,790 1,962 55,579 7,636
Special charges 9,975 5,950 9,975 5,950
Charge for in-process research & development -- 6,384 -- 6,384
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Total operating expenses 69,801 29,789 184,868 78,040
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Income (loss) from operations (41,509) (6,875) (49,294) 6,996
Other income (expense), net 218 123 1,211 1,148
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Income (loss) before income taxes (41,291) (6,752) (48,083) 8,144
Provision for income taxes 314 -- 750 180
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Net income (loss) $(41,605) $ (6,752) $ (48,833) $ 7,964
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Net income (loss) per share - basic $ (1.02) $ (0.24) $ (1.20) $ 0.30
Net income (loss) per share - diluted $ (1.02) $ (0.24) $ (1.20) $ 0.27
Common shares outstanding - basic 40,836 28,415 40,605 26,780
Common shares outstanding - diluted 40,836 28,415 40,605 29,749
</TABLE>
