At the end of the 2007 second quarter, net accounts receivable was approximately $82.5 million. Days sales outstanding (DSOs) was 71, up from 68 in the first quarter of 2007. Working capital increased to $189.8 million at the end of the 2007 second quarter, up from $67.6 million at the end of the 2007 first quarter. Deferred revenue was $63.6 million.
2007 Third Quarter and Full-Year Guidance
The Company is reaffirming its 2007 full-year total revenue guidance last issued on April 25, 2007. Specifically, total revenue for the 2007 year is expected to be in the range of $433 to $437 million. The Company's full-year guidance includes expectations for incremental 2007 second half total revenue contribution from its acquisition of the reseller of approximately $3.5 million, which includes approximately $0.5 million in NLR. The acquisition is expected to be slightly dilutive to GAAP and non-GAAP net income in the 2007 second half of the year. The acquisition has been integrated into Epicor's operations and the Company will not be separately reporting revenues or earnings from this acquisition in any subsequent quarters.
The Company is increasing its 2007 full-year GAAP net income and non-GAAP earnings per diluted share guidance. The Company now expects its 2007 GAAP net income to be in the range of $30 to $31 million, an increase of 26% to 30% over 2006 GAAP net income of $23.8 million. Non-GAAP earnings per share for the 2007 full-year are now expected to be in the range of $0.88 to $0.89, compared to the Company's earlier guidance of $0.85 to $0.87. 2007 full-year non-GAAP guidance includes the Company's expectations for accretion of approximately $0.03 in the second half of the 2007 year from the Company's convertible note offering in May 2007.
The Company's full-year 2007 non-GAAP net income guidance excludes current expectations for full-year amortization of intangible assets of approximately $11.1 million and full-year stock based compensation expense of approximately $9.5 million, each net of tax. 2007 full-year non-GAAP earnings per share expectations assume a weighted average share count of 58.1 million shares. Expected earnings results presume an effective tax rate of approximately 37.2%, with a cash tax provision of approximately 11% for the 2007 year.
For the 2007 third quarter, the Company expects revenue in the range of $107 to $109 million, which includes expectations for hardware and other revenue of $8 million. NLR revenue for the 2007 third quarter is expected to increase 10% to 13% over 2006 third quarter NLR. Non-GAAP earnings are expected to be $0.22 to $0.23 per diluted share, with GAAP earnings of approximately $0.14 to $0.15 per diluted share. The reseller acquisition is expected to be slightly dilutive to GAAP and non-GAAP net income for the 2007 third quarter.
The Company's 2007 third quarter non-GAAP earnings guidance excludes current expectations for third quarter amortization of intangible assets of approximately $2.9 million and stock based compensation expense of approximately $2.3 million, each net of tax. 2007 third quarter earnings per share expectations assume a weighted average share count of 58.1 million shares.
Conference Call Information
The Company will hold an investor and analyst conference call at 9:00 a.m. ET/6:00 a.m. PT on Wednesday, July 25, 2007.
When: Wednesday, July 25, 2007
Time: 9:00 a.m. ET/6:00 a.m. PT
Dial in: 1 (888) 802-2269 or outside the U.S. +1 (913) 312-1272
Conf ID: Epicor 2007 Second Quarter Earnings Call
On the call, George Klaus, chairman and CEO, Mark Duffell, president and COO, and Michael Piraino, executive vice president and CFO, will review second quarter earnings and the Company's outlook for the 2007 third quarter and full-year. Investors and analysts are invited to participate on the call. Please dial in approximately ten minutes prior to start time. A live audio- only webcast of the call will be made available to the public on the Company's Web site at http://www.epicor.com/company/investor and will be archived for thirty days following the call on the Company's Web site.
(1) On May 16, 2007, Epicor expanded its direct presence in Australia with
the acquisition of the Epicor Division of value-added reseller and
consulting services partner, Melbourne-based Professional Advantage in
an all-cash transaction valued at $16 million USD. Under the terms of
the agreement, Epicor has acquired the employees, vertical market
software extensions, customer contracts, and other related
intellectual property of Professional Advantage's Epicor Division.
All senior managers from the Epicor Division have joined Epicor in
conjunction with the acquisition. Since 1996, Professional Advantage
has consistently been one of Epicor's most successful reseller
partners and has been awarded Epicor's Worldwide Partner of the Year
award four out of the past five years. Focused on providing mission
critical software and services to midmarket companies throughout
Australia, the Epicor Division of Professional Advantage currently
services and supports approximately 200 customers utilizing Epicor's
ERP solutions.
About Epicor Software Corporation
Epicor, named one of FORTUNE magazine's 100 Fastest-Growing Companies in 2006, is a global leader dedicated to providing integrated enterprise resource planning (ERP), customer relationship management (CRM), supply chain management (SCM) and professional services automation (PSA) software solutions to midmarket companies and divisions of the Global 1000. Founded in 1984, Epicor serves over 20,000 customers in more than 140 countries, providing solutions in over 30 languages. Employing innovative service-oriented architecture (SOA) and Web services technology, Epicor delivers end-to-end, industry-specific solutions for manufacturing, distribution, retail, hospitality and services that enable companies to drive increased efficiency, improve performance and build competitive advantage. Epicor solutions provide the scalability and flexibility to meet today's business challenges, while empowering enterprises for even greater success tomorrow. Epicor offers a comprehensive range of services with its solutions, providing a single point of accountability to promote rapid return on investment and low total cost of ownership. Epicor's worldwide headquarters are located in Irvine, California with offices and affiliates around the world. For more information, visit http://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
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 (including growth rates), earnings and earnings per share (including on a non-GAAP basis), tax rates, sales pipelines and opportunities, target market, customer renewal rates, product release dates, technology lead, competitive advantage 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. Actual results may differ materially from those expressed or implied in the forward-looking statements.
Such risks and uncertainties include but are not limited to changes in the demand for enterprise resource planning 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; the discovery of undetected software errors; changes in the financial condition of Epicor's major commercial customers and Epicor's future ability to continue to develop and expand its product and service offerings to address emerging business demand and technological trends and other factors discussed in Epicor's annual report on Form 10K for the year ended December 31, 2006 at pages 21-28. 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.
