Exhibit 99.1
Epiq Systems, Inc. Announces Second Quarter 2007 Results
Led by 67% Revenue Growth for Electronic Discovery
KANSAS CITY, Kan.--(BUSINESS WIRE)--July 24, 2007--Epiq Systems,
Inc. (NASDAQ: EPIQ) today announced results of operations for the
second quarter of 2007 with operating revenue (total revenue less
operating revenue from reimbursed direct costs) of $38.2 million
compared to $35.1 million for the first quarter of 2007 and $94.1
million for the same period last year. June 30, 2007 year-to-date
operating revenue was $73.3 million compared to $126.7 million for the
prior year. The second quarter of 2006 and June 30, 2006 year-to-date
revenue reflects the recognition of $60.1 million and $53.6 million,
respectively, of revenue which had been previously deferred. An
expanded discussion of operating revenue is provided below.
Net income for the second quarter of 2007 was $1.8 million, or
$0.06 per share compared to $0.2 million or $0.00 per share for the
first quarter of 2007 and $36.3 million or $1.06 per share for the
year ago quarter. The second quarter of 2006 reflects the recognition
of $60.1 million of revenue which had been previously deferred. June
30, 2007 year-to-date net income was $1.9 million, or $0.06 per share
compared to $34.5 million or $1.01 per share for the prior year. June
30, 2006 year-to-date net income reflects recognition of $53.6 million
of revenue which had been previously deferred. These items are
included as adjustments for the non-GAAP profit measures provided
below.
Second quarter 2007 net cash provided by operating activities was
$6.0 million compared to $8.9 million for the first quarter of 2007
and $12.7 million for the year ago quarter. June 30, 2007 year-to-date
net cash provided by operations was $14.9 million compared to $18.3
million for the prior year. A condensed consolidated cash flow
statement is attached.
Epiq Systems' management also evaluates the following non-GAAP
financial measures: (i) non-GAAP operating revenue (operating revenue
before reimbursed direct costs adjusted to include deferred revenue
accounted for under SOP 97-2, "Software Revenue Recognition," in the
period in which the services were provided and to exclude the revenue
in the later period in which the deferred revenue is recognized), (ii)
non-GAAP adjusted EBITDA (net income before interest/financing, taxes,
depreciation, amortization, share-based compensation, and acquisition
related expenses, adjusted to include deferred revenue accounted for
under SOP 97-2 in the period in which the services were provided and
to exclude the revenue in the later period in which it is recognized)
and (iii) non-GAAP net income (net income before amortization of
acquisition related intangibles, share-based compensation,
acquisition-related expenses, the effect of tax adjustments which are
outside of our anticipated effective tax rate, capitalized loan fee
amortization, and embedded option mark-to-market expense/convertible
debt accretion, adjusted to include deferred revenue accounted for
under SOP 97-2 in the period in which the services were provided and
to exclude the revenue in the later period in which it is recognized,
all net of tax). Reconciliation statements for non-GAAP operating
revenue, non-GAAP adjusted EBITDA, non-GAAP net income and non-GAAP
earnings per share are attached.
Non-GAAP operating revenue for the second quarter of 2007 was
$38.2 million compared to $35.1 million for the first quarter of 2007
and $34.0 million for the same period last year. Non-GAAP operating
revenue for the second quarter of 2006 excludes $60.1 million of
revenue earned in previous periods but recognized during the quarter.
June 30, 2007 year-to-date non-GAAP operating revenue was $73.3
million compared to $73.0 million for the prior year. June 30, 2006
year-to-date non-GAAP operating revenue reflects the exclusion of
$53.6 million of revenue that was earned in previous periods but
recognized during the year-to-date period.
Second quarter 2007 non-GAAP adjusted EBITDA was $12.3 million,
compared to $11.3 million for the first quarter of 2007 and $10.4
million for the year ago quarter. June 30, 2007 year-to-date non-GAAP
adjusted EBITDA was $23.6 million compared to $22.8 million for the
prior year.
Non-GAAP net income for the second quarter of 2007 was $4.2
million or $0.12 per share, compared to $3.5 million or $0.11 per
share for the first quarter of 2007 and $3.1 million or $0.10 per
share for the year ago quarter. Non-GAAP net income excludes a
non-cash mark-to-market expense for an embedded option for our
convertible notes, which decreased $1.0 million compared to the first
quarter of 2007 and increased $0.2 million compared to the same period
last year. June 30, 2007 year-to-date non-GAAP net income was $7.7
million or $0.23 per share, compared to $7.6 million or $0.23 per
share for the prior year. June 30, 2007 year-to-date non-GAAP net
income excludes $1.6 million in non-cash mark-to-market expense
compared to $0.3 million for the prior year.
Operating revenue for Electronic Discovery for the second quarter
of 2007 was $12.2 million, a 21% increase compared to the first
quarter of 2007 and a 67% increase compared to the year ago quarter.
June 30, 2007 year-to-date operating revenue was $22.3 million, a 42%
increase compared to the prior year. New client engagements combined
with expansion of work for existing clients contributed to the
increase in operating revenue for the second quarter of 2007. Non-GAAP
adjusted EBITDA for Electronic Discovery was $6.5 million, a 24%
increase compared to the first quarter of 2007 and a 115% increase
compared to the year ago quarter. June 30, 2007 year-to-date non-GAAP
adjusted EBITDA was $11.7 million, a 46% increase compared to the
prior year.
Non-GAAP operating revenue for the Bankruptcy Trustee business for
the second quarter of 2007 was $8.3 million, compared to $8.3 million
in the first quarter of 2007 and $8.6 million for the year ago
quarter. June 30, 2007 year-to-date non-GAAP operating revenue was
$16.6 million, compared to $17.4 million in the prior year. Changes in
revenue are related to ordinary fluctuations in total bankruptcy
deposits and caseloads across all clients. Retention of existing
clients remains extremely high and we closed a variety of new client
engagements during the second quarter. Non-GAAP adjusted EBITDA for
the Bankruptcy Trustee business was $5.8 million compared to $5.7
million in the first quarter of 2007 and $5.9 million for the year ago
quarter. June 30, 2007 year-to-date non-GAAP adjusted EBITDA was $11.5
million, compared to $11.8 million in the prior year. Non-GAAP
adjusted EBITDA fluctuations between the quarters are primarily
related to the quarterly fluctuations in operating revenue.
Operating revenue for Settlements & Claims (which includes Chapter
11 bankruptcy, class action and related business) for the second
quarter of 2007 was $17.6 million compared to $16.7 million in the
first quarter of 2007 and $18.1 million in the year ago quarter. June
30, 2007 year-to-date operating revenue was $34.3 million, compared to
$39.9 million in the prior year. Non-GAAP adjusted EBITDA for
Settlements & Claims was $5.0 million for the second quarter of 2007
compared to $5.0 million in the first quarter of 2007 and $5.3 million
for the year ago quarter. June 30, 2007 year-to-date non-GAAP adjusted
EBITDA was $10.0 million, compared to $10.3 million in the prior year.
Tom W. Olofson, chairman and CEO, and Christopher E. Olofson,
president and COO of Epiq Systems, stated, "We have had strong results
for the first half of the year, highlighted by 42% operating revenue
growth and 46% EBITDA growth in electronic discovery, compared to the
first half of 2006. We continue to receive significant repeat business
from existing clients alongside the establishment of brand new
relationships. In the second quarter, we introduced a major new
version of our DocuMatrix software and integrated new features to help
attorneys review large document sets more efficiently. On the
bankruptcy front, with escalating debt levels in both the consumer and
business sectors of the economy, it is likely that bankruptcy filings
will return to more robust levels during the balance of 2007 and into
2008. We are well positioned to take advantage of this possibility in
both our corporate restructuring and bankruptcy trustee businesses."
Recent key events include:
-- The company further established its technology leadership in
the legal market with:
(i) a major software release in June of DocuMatrix(TM), our
flagship eDiscovery platform,
(ii) the announcement of the integration of a new near-duplication
detection service for DocuMatrix(TM), and
(iii) the release of major upgrades of our TCMS(R) and TCMSWeb
products, the company's Chapter 7 bankruptcy trustee case management
software.
-- Our electronic discovery business has grown the number of
customer relationships in 2007 by 40% since the end of 2006.
-- A 3-for-2 stock split was paid June 7, 2007 to shareholders of
record as of May 24, 2007. All share and per share amounts
have been adjusted retroactively to reflect this stock split.
-- In April, the holders of record of the outstanding $50.0
million principal amount of our contingent convertible
subordinated notes elected to extend the maturity of the notes
from June 15, 2007 to June 15, 2010, in accordance with the
terms of the notes.
-- All conditions to the permanent termination of the limited
price protection relative to the purchase of nMatrix have been
satisfied, and, accordingly, the company's obligations under
the limited protection provision have terminated. The company
made no payments under this provision.
-- 0.7 million bankruptcies were filed in the U.S. Court for the
twelve month period ended March 31, 2007.
-- The Federal Reserve reported that both corporate debt and
consumer credit increased compared to the prior year, reaching
$5.8 trillion and $2.5 trillion, respectively, as of March 31,
2007.
Conference Call
The Company will host a conference call today at 3:30 p.m. central
time to discuss these results. The Internet broadcast of the call can
be accessed at www.epiqsystems.com. To listen by phone, call
800-690-3108 before 3:30 p.m. central time. The archive of the
Internet broadcast will be available on the company's website until
the next earnings update. A recording of the call will be available
through August 31, 2007 beginning approximately two hours after the
call ends. To access the replay, call 877-519-4471 and enter pin
#9010980.
Company Description
Epiq Systems is a leading provider of integrated technology
solutions for the legal profession. Our solutions streamline the
administration of bankruptcy, litigation, financial transactions and
regulatory compliance matters. We offer innovative technology
solutions for electronic discovery, document review, legal
notification, claims administration and controlled disbursement. Our
clients include leading law firms, corporate legal departments,
bankruptcy trustees and other professional advisors who require
innovative technology, responsive service and deep subject-matter
expertise. For more information, visit us online at
www.epiqsystems.com.
Forward-looking and Cautionary Statements
This press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act, including those relating to the
possible or assumed future results of our operations and financial
condition. These forward-looking statements are based on our current
expectations and may be identified by terms such as "believe,"
"expect," "anticipate," "should," "planned," "may," "goal,"
"objective" and "potential." Because forward-looking statements
involve future risks and uncertainties, listed below are a variety of
factors that could cause actual results and experience to differ
materially from the anticipated results or other expectations
expressed in our forward-looking statements. These factors include (1)
any material changes in our total number of client engagements and the
volume associated with each engagement, (2) any material changes in
our client's deposit portfolio or the services required or selected by
our clients in engagements, (3) material changes in the number of
bankruptcy filings, class action filings or mass tort actions each
year, (4) risks associated with handling of confidential data and
compliance with information privacy laws, (5) changes in pricing
structures and arrangements, (6) risks associated with the integration
of acquisitions into our existing business operations, (7) risks
associated with our indebtedness, (8) risks associated with the
application of complex accounting rules to unique transactions,
including the risk that good faith application of those rules and
audits of those results may be later reversed by new interpretations
of those rules or new views regarding the application of those rules,
and (9) other risks detailed from time to time in our SEC filings,
including our annual report on Form 10-K. In addition, there may be
other factors not included in our SEC filings that may cause actual
results to differ materially from any forward-looking statements. We
undertake no obligations to update any forward-looking statements
contained herein to reflect future events or developments.
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
------------------ -----------------
2007 2006 2007 2006
--------- -------- -------- --------
REVENUE:
Case management services $23,702 $18,182 $44,534 $37,083
Case management bundled products
and services 6,733 67,009 13,412 67,694
Document management services 7,736 8,929 15,321 21,904
--------- -------- -------- --------
Operating revenue before
reimbursed direct costs 38,171 94,120 73,267 126,681
Operating revenue from
reimbursed direct costs 6,035 6,376 12,068 12,033
--------- -------- -------- --------
Total Revenue 44,206 100,496 85,335 138,714
--------- -------- -------- --------
OPERATING EXPENSES:
Direct costs of services 10,415 10,752 20,746 25,128
Direct costs of services -
bundled 898 980 1,784 2,015
Reimbursed direct costs 6,010 6,447 12,032 12,167
General and administrative 15,252 12,359 28,177 24,058
Depreciation and software and
leasehold amortization 2,837 2,494 5,798 4,791
Amortization of identifiable
intangible assets 2,352 2,878 4,876 5,645
Acquisition related - 250 - 250
--------- -------- -------- --------
Total Operating Expenses 37,764 36,160 73,413 74,054
--------- -------- -------- --------
INCOME FROM OPERATIONS 6,442 64,336 11,922 64,660
--------- -------- -------- --------
EXPENSES (INCOME) RELATED TO
FINANCING:
Interest income (25) (42) (32) (88)
Interest expense 3,345 3,382 8,447 6,692
--------- -------- -------- --------
Net Expenses (Income)
Related to Financing 3,320 3,340 8,415 6,604
--------- -------- -------- --------
INCOME BEFORE INCOME TAXES 3,122 60,996 3,507 58,056
INCOME TAX PROVISION 1,328 24,704 1,563 23,513
--------- -------- -------- --------
NET INCOME $1,794 $36,292 $1,944 $34,543
========= ======== ======== ========
NET INCOME PER SHARE INFORMATION:
Net income per share -
Diluted $0.06 $1.06 $0.06 $1.01
========= ======== ======== ========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - DILUTED 31,980 34,507 31,458 34,738
========= ======== ======== ========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, December 31,
2007 2006
-------------- -------------
ASSETS
ASSETS:
Cash and cash equivalents $3,776 $5,274
Trade accounts receivable, net 37,980 33,066
Property, equipment and leasehold
improvements, net 29,086 23,153
Goodwill 261,243 260,609
Other intangibles, net 38,964 43,840
Other 16,619 16,278
-------------- -------------
Total Assets $387,668 $382,220
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable $13,229 $7,930
Indebtedness 139,357 154,361
Other liabilities 41,130 35,750
STOCKHOLDERS' EQUITY 193,952 184,179
-------------- -------------
Total Liabilities and Stockholders'
Equity $387,668 $382,220
============== =============
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended Six months ended
June 30, June 30,
------------------ -----------------
2007 2006 2007 2006
--------- -------- -------- --------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $1,794 $36,292 $1,944 $34,543
Non-cash adjustments to net
income:
Depreciation and amortization 5,189 5,372 10,674 10,436
Other, net 1,403 24,330 2,869 22,689
Changes in operating assets and
liabilities, net (2,387) (53,324) (624) (49,342)
--------- -------- -------- --------
Net cash provided by
operating activities 5,999 12,670 14,863 18,326
--------- -------- -------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Cash paid for business
combinations, net - (3,335) - (3,485)
Other (3,846) (2,589) (7,062) (6,511)
--------- -------- -------- --------
Net cash used in investing
activities (3,846) (5,924) (7,062) (9,996)
--------- -------- -------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net payments on indebtedness (9,320) (7,008) (17,932) (16,720)
Other 6,010 248 8,633 1,640
--------- -------- -------- --------
Net cash used in financing
activities (3,310) (6,760) (9,299) (15,080)
--------- -------- -------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS $(1,157) $(14) $(1,498) $(6,750)
========= ======== ======== ========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF OPERATING REVENUE TO
NON-GAAP OPERATING REVENUE
(In thousands)
(Unaudited)
Three months ended Six months ended
----------------------------- -------------------
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
--------- ---------- -------- --------- ---------
OPERATING REVENUE
BEFORE REIMBURSED
DIRECT COSTS $38,171 $35,095 $94,120 $73,267 $126,681
Less:
Deferred revenue
(SOP 97-2) - - (60,085) - (53,647)
--------- ---------- -------- --------- ---------
NON-GAAP OPERATING
REVENUE $38,171 $35,095 $34,035 $73,267 $73,034
========= ========== ======== ========= =========
Note: The adjustment reverses the effect of deferred revenue
related to a specific 36 month Chapter 7 bankruptcy arrangement
spanning October 2003 - September 2006. Throughout the 36 month fixed
term of the arrangement the company provided services to clients and
received ordinary course cash payments each month. However, based on
the structure of this arrangement, SOP 97-2 required the deferral of
substantially all revenue from the arrangement to the final two
quarterly periods. A deferral of $66.1 million of revenue was reported
through the first quarter of 2006, of which $60.1 million was
recognized in the second quarter of 2006 and $6.0 million was
recognized in the third quarter of 2006. Although revenue from the
arrangement was deferred, under generally accepted accounting
principles the related costs were not deferred but rather recognized
as incurred. Revenue for arrangements in periods prior to October 2003
and for the current arrangement, which began October 1, 2006, are
recognized in the period the services are provided.
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF BANKRUPTCY TRUSTEE OPERATING REVENUE TO BANKRUPTCY
TRUSTEE NON-GAAP OPERATING REVENUE
(In thousands)
(Unaudited)
Three months ended Six months ended
----------------------------- ------------------
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
--------- ---------- -------- --------- --------
OPERATING REVENUE
BEFORE REIMBURSED
DIRECT COSTS $8,329 $8,266 $68,731 $16,597 $71,090
Less:
Deferred revenue
(SOP 97-2) - - (60,085) - (53,647)
--------- ---------- -------- --------- --------
NON-GAAP OPERATING
REVENUE $8,329 $8,266 $8,646 $16,597 $17,443
========= ========== ======== ========= ========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO
NON-GAAP ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three months ended Six months ended
----------------------------- ------------------
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
--------- ---------- -------- --------- --------
NET INCOME $1,794 $150 $36,292 $1,944 $34,543
Deferred revenue
(SOP 97-2) - - (60,085) - (53,647)
Acquisition related
expense - - 250 - 250
Depreciation and
amortization 5,189 5,485 5,372 10,674 10,436
Share-based
compensation 703 311 562 1,014 1,092
Expenses related to
financing, net 3,320 5,094 3,340 8,415 6,604
Provision for income
taxes 1,328 235 24,704 1,563 23,513
--------- ---------- -------- --------- --------
10,540 11,125 (25,857) 21,666 (11,752)
--------- ---------- -------- --------- --------
NON-GAAP ADJUSTED
EBITDA $12,334 $11,275 $10,435 $23,610 $22,791
========= ========== ======== ========= ========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF SEGMENT PERFORMANCE MEASURE TO
BANKRUPTCY TRUSTEE NON-GAAP ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three months ended Six months ended
----------------------------- ------------------
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
--------- ---------- -------- --------- --------
SEGMENT PERFORMANCE
MEASURE $5,792 $5,735 $65,959 $11,530 $65,493
Deferred revenue
(SOP 97-2) - - (60,085) - (53,647)
--------- ---------- -------- --------- --------
NON-GAAP ADJUSTED
EBITDA $5,792 $5,735 $5,874 $11,530 $11,846
========= ========== ======== ========= ========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO
NON-GAAP NET INCOME
(In thousands)
(Unaudited)
Three months ended Six months ended
---------------------------- ------------------
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
-------- ---------- -------- --------- --------
NET INCOME $1,794 $150 $36,292 $1,944 $34,543
Plus (net of tax):
Deferred revenue (SOP
97-2) - - (35,764) - (31,985)
Amortization of
acquisition
intangibles 1,423 1,527 1,741 2,950 3,415
Share-based
compensation 444 221 367 665 717
Acquisition related
expense - - 151 - 151
Effective tax rate (2) 67 - 65 -
Loan fee amortization 216 238 220 454 441
Non-cash embedded
option charges 314 1,295 110 1,609 273
-------- ---------- -------- --------- --------
2,395 3,348 (33,175) 5,743 (26,988)
-------- ---------- -------- --------- --------
NON-GAAP NET INCOME $4,189 $3,498 $3,117 $7,687 $7,555
======== ========== ======== ========= ========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF EPS TO
NON-GAAP EPS
(Unaudited)
Three months ended Six months ended
----------------------------- ------------------
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
--------- ---------- -------- --------- --------
EPS (on a diluted
basis) $0.06 $- $1.06 $0.06 $1.01
Plus (net of tax):
Deferred revenue
(SOP 97-2) - - (1.03) - (0.92)
Amortization of
acquisition
intangibles 0.03 0.05 0.05 0.08 0.10
Share-based
compensation 0.01 - 0.01 0.02 0.02
Acquisition related
expense - - - - -
Effective tax rate - - - - -
Loan fee
amortization 0.01 0.01 0.01 0.01 0.01
Non-cash embedded
option charges 0.01 0.05 - 0.06 0.01
--------- ---------- -------- --------- --------
0.06 0.11 (0.96) 0.17 (0.78)
--------- ---------- -------- --------- --------
NON-GAAP EPS (on a
diluted basis) $0.12 $0.11 $0.10 $0.23 $0.23
========= ========== ======== ========= ========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
NON-GAAP REVENUE
(In thousands)
(Unaudited)
Three months ended Six months ended
------------------------------ -------------------
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
--------- ---------- --------- --------- ---------
Electronic
Discovery $12,224 $10,112 $7,318 $ 22,336 $15,692
Bankruptcy Trustee 8,329 8,266 8,646 16,597 17,443
Settlements &
Claims 17,618 16,717 18,071 34,334 39,899
--------- ---------- --------- --------- ---------
NON-GAAP OPERATING
REVENUE BEFORE
REIMBURSED DIRECT
COSTS $38,171 $35,095 $34,035 $73,267 $73,034
========= ========== ========= ========= =========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
NON-GAAP ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three months ended Six months ended
--------------------------- -----------------
June 30, March 31, June 30, June 30, June 30,
2007 2007 2006 2007 2006
-------- --------- -------- -------- --------
Electronic Discovery $6,454 $5,210 $2,995 $11,665 $8,007
Bankruptcy Trustee 5,792 5,735 5,874 11,530 11,846
Settlements & Claims 5,033 4,986 5,292 10,017 10,310
Unallocated (4,945) (4,656) (3,726) (9,602) (7,372)
-------- --------- -------- -------- --------
TOTAL NON-GAAP ADJUSTED
EBITDA $12,334 $11,275 $10,435 $23,610 $22,791
======== ========= ======== ======== ========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
EPS CALCULATION
(In thousands, except per share data)
(Unaudited)
Three months ended Six months ended
---------------------------- ------------------
June 30, March 31, June 30, June 30, June 30,
2007(a) 2007(a) 2006 2007(a) 2006
-------- --------- --------- -------- ---------
NET INCOME $1,794 $150 $36,292 $1,944 $34,543
Interest expense
adjustment for
convertible debt - - 301 - 600
-------- --------- --------- -------- ---------
ADJUSTED FOR DILUTED
CALCULATION $1,794 $150 $36,593 $1,944 $35,143
======== ========= ========= ======== =========
DILUTED WEIGHTED
AVERAGE SHARES 29,848 29,266 29,082 29,559 29,005
Adjustment to reflect
stock options 2,132 1,514 1,139 1,899 1,447
Adjustment to reflect
convertible debt
shares - - 4,286 - 4,286
-------- --------- --------- -------- ---------
ADJUSTED FOR DILUTED
CALCULATION 31,980 30,780 34,507 31,458 34,738
======== ========= ========= ======== =========
NET INCOME PER SHARE -
DILUTED $0.06 $0.00 $1.06 $0.06 $1.01
======== ========= ========= ======== =========
(a) Convertible debt is antidilutive and therefore excluded from
EPS calculation.
CONTACT: Epiq Systems, Inc.
Mary Ellen Berthold, 913-621-9500
ir@epiqsystems.com