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EPICOR 9 PUSHES RESULTS

Michael PietriniEpicor continues to crow about the success of Epicor 9. And although results for the second quarter ended June 30 were a moderate improvement, CFO Michael Pietrini said in a webcast that because of  Epicor 9, he expects the third quarter to buck the historical trend of showing a large drop in license revenue. Still, CEO George Klaus said sales haven't approached 2007 and 2008 levels in any geography, but Epicor 9 has allowed the company to move into new geographies.
Installed base sales, however, are weak. With those factors combined, Epicor lost just over $1 million, a sharp improvement from $6.7 million in red ink a year ago. However, revenue grew to $109.2 million, up 8.7 percent from $100.4 million in last year's corresponding period. One profitability problem was that gross margins dropped to 46.1 percent from 48 percent a year ago because of a sharp increase in sales of lower-margin hardware. Meanwhile, license fees hit $19.2 million, a rise of 9.3 percent from $17.5 million. License fees represented 17.5 percent of revenue and Klaus said he wants to see that rise to 20 percent. Klaus also spoke in detail about the growth of the company's channel as opposed to those webcasts in which he says Epicor is direct only. I like to think of the "Good George" and "Bad George". Maybe it had something to do with Everything Channel choosing his wife, VP Lorrie Klaus, as one of the top 100 women in channels. Whatever the reason, he said Epicor needs the channel because "the 2,700 people who work at Epicor cannot possibly expand the market" and he said he just finished the meeting with about 100 partners.
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