Net income declines 87%
Mid-market ERP vendor Epicor Software has reported a 87% decline in net income to $2.85m for the fourth quarter 2008, compared to a profit of $22.47m in the year-ago quarter, on revenue up 2% at $122m.
Operating income fell 19% to $11.26m, while diluted EPS fell 87% to $0.05 from $0.38 in the same period last year. It had cash and cash equivalents of $89.8m and free cash flow of $21.5m. It added 570 new customers and won back 600 customers.
The company said license revenue fell 34% to $25.15m, while consulting revenue grew 8% to $38.11m. Maintenance revenue grew 14% to $47.31m, while hardware and other revenue increased to $11.37m compared to $4.96m in the previous year.
During the quarter, the company announced a series of cost-reduction initiatives including reduction in workforce, stricter controls on discretionary spending, technology initiatives to improve efficiencies, and reduction of operating expenses. It incurred restructuring charges of $4.4m and expects to save $16m to $20m each year.
For fiscal year 2008, the company reported a 97% decline in net income to $1.02m compared to of $41.27m a year ago, on revenue up 13% at $488m.
Epicor chairman, president and CEO George Klaus, said: Despite extremely difficult economic conditions, Epicor has remained on sound financial footing supported by strong underlying fundamentals and a highly competitive suite of products. We earned $0.66 per share on a non-GAAP basis and generated free cash flow of more than $56m on revenues of approximately half a billion dollars. These results were driven in-part by improvements in consulting gross margins and growth in high-margin maintenance revenues.
For the first quarter 2009, the company expects revenue between $100m and $105m and non-GAAP EPS in the range of $0.06 to $0.08.