Exhibit 99.1
Epiq Systems, Inc. Announces Third Quarter 2007 Results Led By 77% Growth
for Electronic Discovery
KANSAS CITY, Kan.--(BUSINESS WIRE)--Oct. 23, 2007--Epiq Systems,
Inc. (NASDAQ: EPIQ) today announced results of operations for the
third quarter of 2007 with operating revenue (total revenue less
operating revenue from reimbursed direct costs) of $39.2 million
compared to $38.2 million for the second quarter of 2007 and $34.4
million for the same period last year. September 30, 2007 year-to-date
operating revenue was $112.5 million compared to $161.1 million for
the prior year. The third quarter of 2006 and September 30, 2006
year-to-date revenue reflects the recognition of $6.0 million and
$59.7 million, respectively, of revenue which had been previously
deferred from the periods in which the related services had been
provided. An expanded discussion of operating revenue is provided
below.
Net income for the third quarter of 2007 was $2.4 million, or
$0.07 per share compared to $1.8 million or $0.06 per share for the
second quarter of 2007 and $2.7 million or $0.09 per share for the
year ago quarter. The third quarter of 2006 reflects the recognition
of $6.0 million of revenue which had been previously deferred from the
periods in which the services had been provided. September 30, 2007
year-to-date net income was $4.4 million, or $0.14 per share compared
to $37.2 million or $1.10 per share for the prior year. September 30,
2006 year-to-date net income reflects recognition of $59.7 million of
revenue which had been previously deferred from the periods in which
the related services had been provided. These items are included as
adjustments for the non-GAAP financial measures provided below.
Third quarter 2007 net cash provided by operating activities was
$8.6 million compared to $6.0 million for the second quarter of 2007
and $5.2 million for the year ago quarter. September 30, 2007
year-to-date net cash provided by operations was $23.4 million
compared to $23.6 million for the same period in the prior year. A
condensed consolidated cash flow statement is provided below.
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, non-cash
mark-to-market adjustments 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, non-cash mark-to-market adjustments,
acquisition-related expenses, the effect of tax adjustments which are
outside of our anticipated effective tax rate, capitalized loan fee
amortization, and adjustments 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
financial measures are provided below.
Non-GAAP operating revenue for the third quarter of 2007 was $39.2
million compared to $38.2 million for the second quarter of 2007 and
$28.4 million for the same period last year. Non-GAAP operating
revenue for the third quarter of 2006 excludes $6.0 million of revenue
earned in previous periods but recognized during the quarter.
September 30, 2007 year-to-date non-GAAP operating revenue was $112.5
million compared to $101.4 million for the prior year. September 30,
2006 year-to-date non-GAAP operating revenue excludes $59.7 million of
revenue that was earned in previous periods but recognized during the
year-to-date period.
Third quarter 2007 non-GAAP adjusted EBITDA was $13.4 million,
compared to $12.3 million for the second quarter of 2007 and increased
86% compared to $7.2 million for the year ago quarter. September 30,
2007 year-to-date non-GAAP adjusted EBITDA of $37.1 million increased
23% compared to $30.0 million for the same period in the prior year.
Non-GAAP net income for the third quarter of 2007 was $4.5 million
or $0.13 per share, compared to $4.2 million or $0.12 per share for
the second quarter of 2007 and $1.0 million or $0.04 per share for the
year ago quarter. September 30, 2007 year-to-date non-GAAP net income
was $12.2 million or $0.36 per share, compared to $8.1 million or
$0.26 per share for the prior year. September 30, 2007 year-to-date
non-GAAP net income excludes $1.6 million in non-cash mark-to-market
adjustments compared to $(0.2) million for the prior year, net of tax.
Operating revenue for Electronic Discovery for the third quarter
of 2007 was $13.0 million, compared to $12.2 million for the second
quarter of 2007 and a 77% increase compared to $7.4 million for the
year ago quarter. September 30, 2007 year-to-date operating revenue
was $35.3 million, a 53% increase compared $23.0 million for the prior
year. New client engagements combined with increased work for existing
clients and expansion of the international business contributed to the
increase in operating revenue for the third quarter of 2007. Non-GAAP
adjusted EBITDA for Electronic Discovery was $6.1 million, compared to
$6.5 million for the second quarter of 2007 and an 87% increase
compared to $3.3 million in the year ago quarter. September 30, 2007
year-to-date non-GAAP adjusted EBITDA was $17.8 million, a 58%
increase compared to $11.3 million in the prior year.
Non-GAAP operating revenue for the Bankruptcy Trustee business for
the third quarter of 2007 was $8.4 million, compared to $8.3 million
in the second quarter of 2007 and $8.3 million for the year ago
quarter. September 30, 2007 year-to-date non-GAAP operating revenue
was $25.0 million, compared to $25.8 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 third quarter. Non-GAAP adjusted EBITDA
for the Bankruptcy Trustee business was $5.5 million compared to $5.8
million in the second quarter of 2007 and $5.6 million for the year
ago quarter. September 30, 2007 year-to-date non-GAAP adjusted EBITDA
was $17.0 million, compared to $17.5 million in the prior year.
Non-GAAP adjusted EBITDA fluctuations between the quarters are
primarily related to changes in operating revenue resulting from
ordinary fluctuations in deposits and caseloads across all clients.
Operating revenue for Settlements & Claims (which includes Chapter
11 bankruptcy, class action and related business) for the third
quarter of 2007 was $17.8 million compared to $17.6 million in the
second quarter of 2007 and $12.7 million in the year ago quarter.
September 30, 2007 year-to-date operating revenue was $52.1 million,
compared to $52.6 million in the prior year. Non-GAAP adjusted EBITDA
for Settlements & Claims was $7.1 million for the third quarter of
2007 compared to $5.0 million in the second quarter of 2007 and $2.6
million for the year ago quarter. September 30, 2007 year-to-date
non-GAAP adjusted EBITDA was $17.1 million, compared to $12.9 million
in the prior year.
Tom W. Olofson, chairman and CEO, and Christopher E. Olofson,
president and COO of Epiq Systems stated, "We are very pleased to have
concluded the quarter with record monthly revenue for electronic
discovery. In addition to the significant increase compared with the
prior year, we achieved sequential quarterly growth in both operating
revenue and non-GAAP net income despite customary summertime
seasonality.
"We enter the fourth quarter with optimism, as every one of our
segments has strong momentum. Our trustee services unit has won new
business, and our settlement & claims business has been retained on
our all-time largest multi-year individual client engagement. In
electronic discovery, we continue to grow our customer relationships
and introduce major enhancements to our proprietary software."
Recent key events include:
-- A major software release of DocuMatrix(TM), our eDiscovery
software, and upgrades to our TCMS(R) and TCMSWeb bankruptcy
trustee case management software.
-- 40% growth in the number of electronic discovery client
relationships since the end of 2006.
-- A top-5 ranking for eDiscovery services to corporate customers
on the 2007 Socha Gelbmann 5th Annual Electronic Discovery
survey.
-- Win of the company's all-time largest multi-year individual
client engagement in the class action market.
-- Filing of a $150.0 million shelf registration statement in
August with the Securities Exchange Commission to support
long-term strategic business expansion.
-- Total bankruptcy filings have increased each quarter for each
of the past five quarters.
-- The Federal Reserve reported that both corporate debt and
consumer credit increased compared to the prior year, reaching
$6.0 trillion and $2.5 trillion, respectively, as of June 30,
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
888-459-5609 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 November 30, 2007 beginning approximately two hours after the
call ends. To access the replay, call 877-519-4471 and enter pin
#9343160.
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 Nine months ended
September 30, September 30,
------------------ -----------------
2007 2006 2007 2006
--------- -------- -------- --------
REVENUE:
Case management services $26,536 $16,980 $71,069 $54,064
Case management bundled products
and services 6,728 12,818 20,139 80,511
Document management services 5,921 4,591 21,242 26,495
--------- -------- -------- --------
Operating revenue before
reimbursed direct costs 39,185 34,389 112,450 161,070
Operating revenue from
reimbursed direct costs 5,662 4,643 17,730 16,676
--------- -------- -------- --------
Total Revenue 44,847 39,032 130,180 177,746
--------- -------- -------- --------
OPERATING EXPENSES:
Direct costs of services 9,355 8,299 30,101 33,427
Direct costs of services -
bundled 998 961 2,782 2,976
Reimbursed direct costs 5,593 4,685 17,625 16,852
General and administrative 16,208 12,411 44,383 36,469
Depreciation and software and
leasehold amortization 3,272 2,633 9,071 7,424
Amortization of identifiable
intangible assets 2,352 3,027 7,228 8,672
Other operating expenses 565 - 565 250
--------- -------- -------- --------
Total Operating Expenses 38,343 32,016 111,755 106,070
--------- -------- -------- --------
INCOME FROM OPERATIONS 6,504 7,016 18,425 71,676
--------- -------- -------- --------
INTEREST EXPENSE (INCOME):
Interest income (10) (23) (42) (111)
Interest expense 2,168 2,523 10,615 9,215
--------- -------- -------- --------
Net Interest Expense 2,158 2,500 10,573 9,104
--------- -------- -------- --------
INCOME BEFORE INCOME TAXES 4,346 4,516 7,852 62,572
PROVISION FOR INCOME TAXES 1,922 1,835 3,485 25,348
--------- -------- -------- --------
NET INCOME $2,424 $2,681 $4,367 $37,224
========= ======== ======== ========
NET INCOME PER SHARE
INFORMATION:
Net income per share - Diluted $0.07 $0.09 $0.14 $1.10
========= ======== ======== ========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING - DILUTED 36,704 34,366 31,803 34,597
========= ======== ======== ========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
September 30, December 31,
2007 2006
-------------- -------------
ASSETS
ASSETS:
Cash and cash equivalents $2,854 $5,274
Trade accounts receivable, net 36,219 33,066
Property, equipment and leasehold
improvements, net 32,147 23,153
Goodwill 260,933 260,609
Other intangibles, net 36,612 43,840
Other 15,986 16,278
-------------- -------------
Total Assets $384,751 $382,220
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable $6,819 $7,930
Indebtedness 139,484 154,361
Other liabilities 40,508 35,750
STOCKHOLDERS' EQUITY 197,940 184,179
-------------- -------------
Total Liabilities and Stockholders'
Equity $384,751 $382,220
============== =============
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
2007 2006 2007 2006
--------- -------- -------- --------
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $2,424 $2,681 $4,367 $37,224
Non-cash adjustments to net
income:
Depreciation and amortization 5,624 5,660 16,299 16,096
Other, net 728 1,981 3,597 24,670
Changes in operating assets and
liabilities, net (203) (5,073) (827) (54,415)
--------- -------- -------- --------
Net cash provided by operating
activities 8,573 5,249 23,436 23,575
--------- -------- -------- --------
CASH FLOWS FROM INVESTING
ACTIVITIES:
Cash paid for business
combinations, net - (101) - (3,586)
Other (8,285) (1,991) (15,348) (8,502)
--------- -------- -------- --------
Net cash used in investing
activities (8,285) (2,092) (15,348) (12,088)
--------- -------- -------- --------
CASH FLOWS FROM FINANCING
ACTIVITIES:
Net payments on indebtedness (1,902) (6,923) (19,834) (23,643)
Other 692 979 9,326 2,619
--------- -------- -------- --------
Net cash used in financing
activities (1,210) (5,944) (10,508) (21,024)
--------- -------- -------- --------
NET DECREASE IN CASH AND CASH
EQUIVALENTS $(922) $(2,787) $(2,420) $(9,537)
========= ======== ======== ========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF OPERATING REVENUE TO
NON-GAAP OPERATING REVENUE
(In thousands)
(Unaudited)
Three months ended Nine months ended
---------------------------- --------------------
September June September September September
30, 30, 30, 30, 30,
2007 2007 2006 2007 2006
---------- ------- --------- ---------- ---------
OPERATING REVENUE
BEFORE REIMBURSED
DIRECT COSTS $39,185 $38,171 $34,389 $112,450 $161,070
Less:
Deferred revenue
(SOP 97-2) - - (6,027) - (59,674)
---------- ------- --------- ---------- ---------
NON-GAAP OPERATING
REVENUE $39,185 $38,171 $28,362 $112,450 $101,396
========== ======= ========= ========== =========
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 Nine months ended
-------------------------- -------------------
September June September September September
30, 30, 30, 30, 30,
2007 2007 2006 2007 2006
--------- ------ --------- --------- ---------
OPERATING REVENUE
BEFORE
REIMBURSED DIRECT
COSTS $8,417 $8,329 $14,369 $25,012 $85,459
Less:
Deferred revenue (SOP
97-2) - - (6,027) - (59,674)
--------- ------ --------- --------- ---------
NON-GAAP OPERATING
REVENUE $8,417 $8,329 $8,342 $25,012 $25,785
========= ====== ========= ========= =========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO
NON-GAAP ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three months ended Nine months ended
--------------------------- -------------------
September June September September September
30, 30, 30, 30, 30,
2007 2007 2006 2007 2006
--------- ------- --------- --------- ---------
NET INCOME $2,424 $1,794 $2,681 $4,367 $37,224
Deferred revenue (SOP
97-2) - - (6,027) - (59,674)
Acquisition related
expense - - - - 250
Depreciation and
amortization 5,624 5,189 5,660 16,299 16,096
Share-based
compensation 795 703 579 1,809 1,671
Expenses related to
financing, net 2,158 3,320 2,500 10,573 9,104
Mark-to-market
interest rate floors 521 - - 521 -
Provision for income
taxes 1,922 1,328 1,835 3,485 25,348
--------- ------- --------- --------- ---------
11,020 10,540 4,547 32,687 (7,205)
--------- ------- --------- --------- ---------
NON-GAAP ADJUSTED
EBITDA $13,444 $12,334 $7,228 $37,054 $30,019
========= ======= ========= ========= =========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF SEGMENT PERFORMANCE MEASURE TO
BANKRUPTCY TRUSTEE NON-GAAP ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three months ended Nine months ended
--------------------------- --------------------
September June September September September
30, 30, 30, 30, 30,
2007 2007 2006 2007 2006
---------- ------ --------- ---------- ---------
SEGMENT PERFORMANCE
MEASURE $5,485 $5,792 $11,639 $17,013 $77,133
Deferred revenue
(SOP 97-2) - - (6,027) - (59,674)
---------- ------ --------- ---------- ---------
NON-GAAP ADJUSTED
EBITDA $5,485 $5,792 $5,612 $17,013 $17,459
========== ====== ========= ========== =========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO
NON-GAAP NET INCOME
(In thousands)
(Unaudited)
Three months ended Nine months ended
---------------------------- --------------------
September June September September September
30, 30, 30, 30, 30,
2007 2007 2006 2007 2006
---------- ------- --------- ---------- ---------
NET INCOME $2,424 $1,794 $2,681 $4,367 $37,224
Plus (net of tax):
Deferred revenue
(SOP 97-2) - - (3,646) - (36,103)
Amortization of
acquisition
intangibles 1,423 1,423 1,831 4,373 5,247
Share-based
compensation 504 444 374 1,170 1,091
Acquisition related
expense - - - - 151
Effective tax rate 67 (2) - 132 -
Loan fee
amortization 80 216 222 534 663
Mark-to-market
adjustments 31 314 (441) 1,640 (168)
---------- ------- --------- ---------- ---------
2,105 2,395 (1,660) 7,849 (29,119)
---------- ------- --------- ---------- ---------
NON-GAAP NET INCOME $4,529 $4,189 $1,021 $12,216 $8,105
========== ======= ========= ========== =========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
RECONCILIATION OF EPS TO
NON-GAAP EPS
(Unaudited)
Three months ended Nine months ended
-------------------------- --------------------
September June September September September
30, 30, 30, 30, 30,
2007 2007 2006 2007 2006
---------- ----- --------- ---------- ---------
EPS (on a diluted
basis) $0.07 $0.06 $0.09 $0.14 $1.10
Plus (net of tax):
Deferred revenue (SOP
97-2) - - (0.11) - (1.04)
Amortization of
acquisition
intangibles 0.05 0.03 0.05 0.13 0.15
Share-based
compensation 0.01 0.01 0.01 0.03 0.03
Acquisition related
expense - - - - -
Effective tax rate - - - - -
Loan fee amortization - 0.01 0.01 0.01 0.02
Mark-to-market
adjustments - 0.01 (0.01) 0.05 -
---------- ----- --------- ---------- ---------
0.06 0.06 (0.05) 0.22 (0.84)
---------- ----- --------- ---------- ---------
NON-GAAP EPS (on a
diluted basis) $0.13 $0.12 $0.04 $0.36 $0.26
========== ===== ========= ========== =========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
NON-GAAP REVENUE
(In thousands)
(Unaudited)
Three months ended Nine months ended
------------------------------- -----------------------
September June September September September
30, 30, 30, 30, 30,
2007 2007 2006 2007 2006
----------- ------- ----------- ----------- -----------
Electronic
Discovery $13,003 $12,224 $7,354 $35,339 $23,046
Bankruptcy
Trustee 8,417 8,329 8,342 25,012 25,785
Settlements &
Claims 17,765 17,618 12,666 52,099 52,565
----------- ------- ----------- ----------- -----------
NON-GAAP
OPERATING
REVENUE
BEFORE
REIMBURSED
DIRECT COSTS $39,185 $38,171 $28,362 $112,450 $101,396
=========== ======= =========== =========== ===========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
NON-GAAP ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three months ended Nine months ended
---------------------------- -------------------
September June 30, September September September
30, 30, 30, 30,
2007 2007 2006 2007 2006
--------- -------- --------- --------- ---------
Electronic Discovery $6,111 $6,454 $3,264 $17,776 $11,270
Bankruptcy Trustee 5,485 5,792 5,612 17,013 17,459
Settlements & Claims 7,108 5,033 2,580 17,125 12,891
Unallocated (5,260) (4,945) (4,228) (14,860) (11,601)
--------- -------- --------- --------- ---------
TOTAL NON-GAAP
ADJUSTED EBITDA $13,444 $12,334 $7,228 $37,054 $30,019
========= ======== ========= ========= =========
EPIQ SYSTEMS, INC. AND SUBSIDIARIES
EPS CALCULATION
(In thousands, except per share data)
(Unaudited)
Three months ended Nine months ended
--------------------------- -------------------
September June September September September
30, 30, 30, 30, 30,
2007 2007(a) 2006 2007(a) 2006
--------- ------- --------- --------- ---------
NET INCOME $2,424 $1,794 $2,681 $4,367 $37,224
Interest expense
adjustment for
convertible debt 305 - 305 - 904
--------- ------- --------- --------- ---------
ADJUSTED FOR DILUTED
CALCULATION $2,729 $1,794 $2,986 $4,367 $38,128
========= ======= ========= ========= =========
DILUTED WEIGHTED
AVERAGE SHARES 30,185 29,848 29,162 29,770 29,057
Adjustment to reflect
stock options 2,233 2,132 918 2,033 1,254
Adjustment to reflect
convertible debt
shares 4,286 - 4,286 - 4,286
--------- ------- --------- --------- ---------
ADJUSTED FOR DILUTED
CALCULATION 36,704 31,980 34,366 31,803 34,597
========= ======= ========= ========= =========
NET INCOME PER SHARE -
DILUTED $0.07 $0.06 $0.09 $0.14 $1.10
========= ======= ========= ========= =========
(a) Convertible debt is antidilutive and therefore excluded from EPS
calculation.
CONTACT: Epiq Systems, Inc.
Mary Ellen Berthold, 913-621-9500
ir@epiqsystems.com