Epicor amends credit agreement to maximise operating flexibility; expects Q3 non-GAAP EPS to exceed previously provided guidance

Epicor Software Corporation (NASDAQ: EPIC), a leading provider of enterprise business software solutions for the mid-market 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 30 September 2009, to exceed the range it previously provided, and that total third quarter revenue will be within the range previously provided by the company. On 28 July 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 optimise 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 favour of minimum profitability and liquidity covenants, which are significantly more favourable 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 30 September 2012.
* Increasing the applicable interest rate margin by 2% to 2.25% from current levels.