Epicor Software 8-K/A Completion of Acquisition or Disposition of Assets

Exhibit 99.3

Unaudited Pro Forma Condensed Combined Statement of Operations

for the Year Ended December 31, 2004

(in thousands, except per share amounts)

	Historical								Pro Forma Adjustments For						Pro Forma Combined
	Epicor			Scala			CRS		Scala			CRS
Revenues:
License fees	$	61,869		$	5,261		$	11,496	$	—		$	—		$	78,626
Consulting		56,891			7,513			17,081		—			—			81,485
Maintenance		103,967			17,055			7,611		—			—			128,633
Other		3,483			472			35,779		—			—			39,734
		226,210			30,301			71,967		—			—			328,478
Total revenues
Cost of revenues		80,022			8,056			51,976		—			494	(p)		140,548
Amortization of intangible assets and capitalized software development costs		7,327			724			3,215		2,494			7,785	(d,j,k,m)		21,545
Total cost of revenues		87,349			8,780			55,191		2,494			8,279			162,093
Gross profit		138,861			21,521			16,776		(2,494	)		(8,279	)		166,385
Operating expenses:
Sales and marketing		47,975			6,730			2,973		—			62	(p)		57,740
Research and development		24,736			5,191			4,546		—			100	(p)		34,573
General and administrative		35,043			15,241			4,121		—			86	(p)		54,491
Provision for doubtful accounts		1,485			791			4		—			—			2,280
Depreciation		—			—			742		—			(742	)(p)		—
Amortization of intangibles		—			203			1,368		(203	)		(1,368	)(d,j)		—
Stock based compensation expense		2,617			—			—		—			—			2,617
Restructuring charges and other		2,382			—			—		—			—			2,382
Settlement of a claim		(284	)		—			—		—			—			(284	)
Total operating expenses		113,954			28,156			13,754		(203	)		(1,862	)		153,799
Income (loss) from operations		24,907			(6,635	)		3,022		(2,291	)		(6,417	)		12,587
Other income (expenses), net		1,913			(209	)		3		(480	)		(7,044	)(g,l,n)		(5,817	)
Income (loss) before income taxes		26,820			(6,844	)		3,025		(2,771	)		(13,461	)		6,770
Income tax provision		1,336			831			1,066					(1,284	)(q)		1,949
Minority interest in income of consolidated subsidiary		171			—			—		(189	)		—	(o)		(18	)
Net income (loss)	$	25,313		$	(7,675	)	$	1,959	$	(2,582	)	$	(12,177	)	$	4,839
Net income per share applicable to common stockholders
Basic	$	0.50													$	0.09
Diluted	$	0.47													$	0.09
Weighted average common shares outstanding:
Basic		50,753								1,857	(r)					52,610
Diluted		53,714								1,857	(r)					55,571

Unaudited Pro Forma Condensed Combined Statement of Operations

for the Nine Months ended September 30, 2005

(in thousands, except per share amounts)

	Historical						Adjustments			Pro Forma Combined
	Epicor			CRS
Revenues:
License fees	$	54,037		$	7,292		$	—		$	61,329
Consulting		53,429			14,773			—			68,202
Maintenance		98,399			7,344			—			105,743
Hardware and other		2,617			15,420			—			18,037
		208,482			44,829			—			253,311
Total revenues
Cost of revenues		75,293			31,161			547	(p)		107,001
Amortization of intangible assets and capitalized software development costs		8,444			2,990			5,260	(d,m)		16,694
Total cost of revenues		83,737			34,151			5,807			123,695
Gross profit		124,745			10,678			(5,807	)		129,616
Operating expenses:
Sales and marketing		41,865			2,683			81	(p)		44,629
Research and development		21,373			4,254			108	(p)		25,735
General and administrative		30,692			3,859			100	(p)		34,651
Depreciation					836			(836	)(p)		—
Amortization of intangible assets					1,200			(1,200	)(d)		—
Provision for doubtful accounts		1,050			90			—			1,140
Stock based compensation expense		1,889			—			—			1,889
Total operating expenses		96,869			12,922			(1,747	)		108,044
Income (loss) from operations		27,876			(2,244	)		(4,060	)		21,572
Other income (expenses), net		(749	)		(86	)		(5,197	)(f,g,n)		(6,032	)
Income (loss) before income taxes		27,127			(2,330	)		(9,257	)		15,540
Income tax provision (benefit)		(16,474	)		(877	)		(3,645	)(q)		(20,996	)
Minority interest in income of consolidated subsidiary		88			—			—			88
Net income (loss)	$	43,513		$	(1,453	)	$	(5,612	)	$	36,448
Net income per share applicable to common stockholders
Basic	$	0.80								$	0.67
Diluted	$	0.77								$	0.64
Weighted average common shares outstanding:
Basic		54,469									54,469
Diluted		56,572									56,572

Unaudited Pro Forma Condensed Combined Balance Sheet

As of September 30, 2005

(in thousands)

	Historical						Pro Forma Adjustments			Pro Forma Combined
	Epicor			CRS
ASSETS
Current assets:
Cash and cash equivalents	$	46,204		$	996		$	(9,246	)(a,b,c)	$	37,954
Short-term investments		10,176			—			—			10,176
Accounts receivable, net		44,652			12,281			—			56,933
Deferred income taxes		2,397			2,832			—			5,229
Inventories		—			5,262			—			5,262
Prepaid expenses and other current assets		7,026			735			—			7,761
Total current assets		110,455			22,106			(9,246	)		123,315
Property and equipment, net		7,078			3,569						10,647
Deferred income taxes		35,803			5,351						41,154
Intangible assets, net		40,245			24,217			30,783	(d,e)		95,245
Goodwill		87,048			12,056			42,300	(d,e)		141,404
Other assets		4,247			147						4,394
Total assets	$	284,876		$	67,446		$	63,837		$	416,159
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	8,192		$	3,525			—		$	11,717
Accrued expenses		39,134			10,033			(48	)(f,g)		49,119
Current portion of long term debt		228			—			—			228
Current portion of accrued restructuring costs		2,630			—			—			2,630
Current portion of deferred revenue		53,906			2,466			—			56,372
Total current liabilities		104,090			16,024			(48	)		120,066
Long-term portion of accrued restructuring costs		1,669			—			—			1,669
Long-term debt		14,801			2,700			112,300	(c,f,g)		129,801
Other long-term liabilities		—			307						307
Total long-term liabilities		16,470			3,007			112,300			131,777
Series A Preferred Stock		—			72,945			(72,945	)(h)		—
Commitments and contingencies
Stockholders’ equity
Preferred stock		—			6,546			(6,546	)(i)		—
Common stock		55			100,134			(100,134	)(i)		55
Additional paid-in capital		336,138			—			—			336,138
Less: treasury stock		(9,063	)		—			—			(9,063	)
Less: unamortized stock compensation expense		(2,365	)		—			—			(2,365	)
Accumulated other comprehensive loss		(1,186	)		—			—			(1,186	)
Accumulated earnings (deficit)		(159,263	)		(131,210	)		131,210	(i)		(159,263	)
Total stockholders’ equity		164,316			(24,530	)		24,530			164,316
Total liabilities and stockholders’ equity	$	284,876		$	67,446		$	63,837		$	416,159

Note 1. Purchase Accounting

The total preliminary purchase price for CRS is shown below. This purchase price will change as a result of additional anticipated transaction costs.

Cash paid	$	121,000,000
Transaction costs		2,250,000
Total estimated purchase price	$	123,250,000

This transaction is accounted for as a purchase business combination as defined in Statement of Financial Accounting Standards No. 141, “Business Combinations.” Under the purchase method of accounting, the preliminary purchase price will be allocated to CRS’s tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of December 6, 2005, with any excess being ascribed to goodwill. Management is primarily responsible for determining the fair values of these assets. Pending finalization of management’s determination of the fair values of assets acquired and liabilities assumed, the following table summarizes the preliminary allocation of the purchase price had the transaction occurred on September 30, 2005.

Fair value of tangible assets acquired	$	30,177,000
Assumed liabilities		(16,283,000	)
Intangible assets acquired		55,000,000
Goodwill		54,356,000
Total	$	123,250,000

Note 2. Revolving Credit Facility

In March 2005, the Company entered into a syndicated two year, $50 million senior revolving credit facility with multiple financial institutions. Quarterly interest payments are to be made on this credit facility, with any principal balance due at maturity, March 2007. The facility bears interest at a variable rate of either the prime rate or LIBOR plus an applicable margin based on the Company’s leverage ratio, at the Company’s option, and contains an “accordion” feature that allows the Company to increase the line of credit to $125 million under certain conditions. As of December 31, 2005, the interest rate was 6.150%, which was at USD LIBOR (6 months) plus an applicable margin. Borrowings under the facility are secured by substantially all of the Company’s assets. The Company is required to comply with various financial covenants. Significant financial covenants include:

• Achieving minimum earnings before interest, taxes, depreciation and amortization (EBITDA)

• Achieving minimum funded debt to EBITDA ratios

• Achieving minimum fixed charge coverage ratios

• Maintaining minimum cash balances through maturity.

Additional material covenants under the agreement include limitations on the Company’s indebtedness, liens on Company assets, guarantees, investments, dividends, repurchases of securities and certain acquisitions and dispositions of assets by the Company. On April 20, 2005, the revolving credit facility was amended to allow for borrowings in major foreign currencies. On November 21, 2005, the Company exercised the “accordion” feature to increase the revolving credit facility commitment to $125 million. On or about December 6, 2005, the Company borrowed $115 million available under this credit facility in connection with the CRS acquisition.

As of December 31, 2005, the Company was in compliance with all covenants included in the terms of the credit agreement, as amended. As of December 31, 2005, the credit facility had an outstanding balance of $124.4 million. In January of 2006, the Company used funds generated from operations to make a discretionary principal payment of $5 million reducing the outstanding balance to $119 million.

Note 3. Unaudited Pro Forma Combines Adjustments

The following adjustments have been reflected in the Pro Forma Condensed Statement of Operations and Balance Sheet:

(a) To record cash paid for CRS purchase price of $121,000,000 and transaction costs of $2,250,000.

(b) To reflect cash at closing kept by seller ($996,000 at September 30, 2005).

(c) To record debt incurred of $115,000,000 to finance CRS acquisition (see Note 2).

(d) To eliminate intangible assets and goodwill of $24,217,000 and $12,056,000, respectively, included in CRS’s historical balance sheet which are in the process of being revalued by management and to eliminate amortization of these intangibles included in the historical CRS statement of operations as follows:

	Year ended December 31, 2004		Nine months ended September 30, 2005
Included in:
Cost of revenues	$	3,215,000	$	2,990,000
Operating expenses	$	1,368,000	$	1,200,000

(e) To record preliminary estimated CRS identified intangible assets and goodwill of $55,000,000 and $54,356,000, respectively (see Note 1).

(f) To eliminate $2,000,000 of debt and $40,000 of accrued interest related to CRS’s acquisition of Apropos Retail Management in 2004, which was not assumed in the Company’s acquisition of CRS and $40,000 of interest expense related to this debt for the nine months ended September 30, 2005.

(g) To eliminate $700,000 of outstanding debt and $8,000 of accrued interest related to CRS’s revolving credit agreement with a financial institution which was not assumed in the Company’s acquisition of CRS and interest expense related to this debt of $28,000 for the year ended December 31, 2004 and $67,000 for the nine months ended September 30, 2005.

(h) To eliminate CRS Series A Preferred Stock that was converted into common shares in conjunction with the Company’s acquisition of CRS.

(i) To eliminate the equity of CRS.

(j) To eliminate the amortization of Scala’s historical intangible assets of $724,000 included in cost of revenues and $203,000 included in operating expenses.

(k) To record $3,218,000 of amortization related to the identified intangible assets as a result of Epicor’s acquisition of Scala.

(l) To record interest expense of $480,000 on debt incurred of $30,000,000 to finance Scala acquisition.

(m) To record amortization of $11,000,000 for the year ended December 31, 2004 and $8,250,000 for the nine months ended September 30, 2005 related to the preliminary estimated value of the CRS identified intangible assets using an estimated average life of 5 years. The allocation and assumed estimated average life is preliminary and could change based on the outcome of management’s final determination of the fair values of the assets acquired and liabilities assumed (see Note 1).

(n) To record estimated interest expense of $5,304,000 and $7,072,000 for the nine months ended September 30, 2005 and the year ended December 31, 2004, respectively, on debt incurred of $115,000,000 to finance CRS acquisition using the rate as of December 31, 2005 of 6.15%, which was at USD LIBOR (6 months) plus an applicable margin. A change in the rate of ¹/8% would increase or decrease net interest expense by $144,000 on an annual basis.

(o) To record minority interest in the net loss of Scala.

(p) To reclass depreciation expense to cost of revenues, research and development expense, sales and marketing expense and general and administrative expense to conform to Epicor financial statement classification.

(q) To adjust income taxes to reflect Epicor filing a consolidated tax return with Scala and CRS for the year ended December 31, 2004 and with CRS for the nine months ended September 30, 2005 using the Company’s marginal tax rate for the respective periods presented.

(r) To adjust the weighted average number of shares outstanding for shares issued in the Scala acquisition for the period January 1, 2004 to June 18, 2004.