EPIQ Systems, Inc. announced record results for the third quarter ended September 30, 2002, with quarterly revenue growth of 26% vs. prior year. Cash net income per diluted share increased 45% to $.16, meeting the First Call consensus estimate.
Results for the quarter ended September 30, 2002 compared to the same period last year were:
— Revenues of $9.702 million, a 26% increase compared to $7.691 million. Revenues for bankruptcy services were $9.202 million while revenues for infrastructure software were $500,000.
— Gross profit was $6.651 million. The gross profit margin was 69% vs. 68%.
— Operating income (excluding acquisition-related expenses) was $3.584 million. The operating margin was 37% vs. 27%.
— Cash net income (net income plus after-tax amortization of acquisition- related goodwill/intangibles and after-tax acquisition-related expenses) was $2.349 million, a 38% increase compared to $1.708 million. Cash net income per diluted share was $.16, a 45% increase vs. $.11.
— Net income, as reflected on the attached GAAP statements, was $1.912 million, a 28% increase compared to $1.493 million. Net income per diluted share increased 30% to $.13, compared to $.10.
— Cash flow (pretax income plus depreciation/amortization) was $4.636 million or 48% of revenues, which equals $.31 per diluted share.
— Adoption of Statement of Financial Accounting Standards (SFAS) No. 142, which requires the discontinuance of amortization of goodwill, had a favorable impact of $272,000 on quarterly operating income.
Results for the first nine months of the year compared to the same period last year were:
— Revenues of $27.774 million, a 27% increase compared to $21.890 million. Revenues for bankruptcy services were $26.332 million while revenues for infrastructure software were $1.442 million.
— Gross profit was $18.812 million. The gross profit margin was 68% vs. 66%.
— Operating income (excluding acquisition-related expenses) was $9.375 million. The operating margin was 34% vs. 24%.
— Cash net income (net income plus after-tax amortization of acquisition- related goodwill/intangibles and after-tax acquisition-related expenses) was $6.222 million, a 48% increase compared to $4.204 million. Cash net income per diluted share was $.42, a 40% increase vs. $.30.
— Net income, as reflected on the attached GAAP statements, was $5.641 million, a 57% increase compared to $3.583 million. Net income per diluted share increased 46% to $.38, compared to $.26.
— Cash flow (pretax income plus depreciation/amortization) was $13.447 million or 48% of revenues, which equals $.90 per diluted share.
— Adoption of Statement of Financial Accounting Standards (SFAS) No. 142, which requires the discontinuance of amortization of goodwill, had a favorable impact of $817,000 on year-to-date operating income.
Recent key events for the company include:
— In September, the company announced that it had signed four new Chapter 13 trustee clients in recent months. The company’s new clients are located across the country and currently use a variety of competitive platforms that will be replaced with EPIQ Systems’ CasePower product. These trustee clients collectively manage over 10,000 individual bankruptcy cases.
— EPIQ Systems demonstrated TCMS 8.0, a pre-production version of its market-leading Chapter 7 caseload management software, at this year’s National Association of Bankruptcy Trustees, the largest annual gathering of Chapter 7 trustees. Trustees greeted the announcement enthusiastically and expressed strong support for the TCMS product line. TCMS 8.0 is scheduled for release during the first quarter of 2003.
— Also in September, EPIQ Systems announced that it had completed its integration of the Chapter 7 business of CPT Group, acquired by the company in July 2002. The company experienced a 100% retention rate of the acquired client list, which makes CPT Group client assimilation among the company’s most successful initiatives.
— Bankruptcy filings for the twelve month period ended June 30, 2002 reached a record 1.5 million filings with over 400,000 filings in that quarter alone.
Tom W. Olofson, chairman and CEO, and Christopher E. Olofson, president and COO, said, “We are very pleased with the strength of EPIQ Systems’ third quarter financial performance. EPIQ Systems continues to see strong market share growth in our core bankruptcy business. Our focus on maintaining technology leadership further strengthens our position in the market. Bankruptcy filings continue to escalate and corporate and consumer debt levels remain high, which we believe has a very beneficial impact on our bankruptcy business.”
EPIQ Systems, Inc. develops, markets and licenses proprietary software solutions for workflow management and data communications infrastructure that serve the bankruptcy trustee market and financial services market.
For more 3Q/02 information visit CardData ([www.carddata.com][1]).
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