Epicor Software Corp. (EPIC) recently updated the guidance for the third quarter. The company earlier anticipated revenues between $96 million and $100 million and earnings per share of 9 cents to 10 cents. However, Epicor now expects that it will exceed the EPS guidance provided earlier.

The company had earlier reported a disappointing second quarter as results were adversely impacted by unfavorable movement in foreign exchange rates. The company’s exposure to retail environment has been under pressure due to recessionary economic environment.

Management is trying hard to maintain profitability in difficult times. The company earlier reduced its workforce by 10% and lowered its discretionary spending. These actions are expected to result in annual savings of at least $18 million providing a boost to margins in the upcoming quarters.

Meanwhile, management also stated that it has amended its existing credit facility to provide the company with more flexibility in light of changing economic conditions over the past eighteen months as the fixed charge covenant was overweighing many business decisions.

The amendment also includes elimination of the total leverage and fixed charge coverage financial covenants in favor of minimum profitability and liquidity covenants, which are significantly more favorable for Epicor. In addition, the size of the credit facility was reduced to $100 million from $171 million and maturity date was shortened by five months to Sept 30, 2012. The interest rate was increased by 2.0% to 2.25%.

Headquartered in California, Epicor develops and markets enterprise application software solutions targeting mid-sized firms with annual revenues of $10 million to $1 billion.

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