8-K

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


July 22, 2008 (July 22, 2008)
Date of Report (Date of earliest event reported)


EPIQ SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

Missouri	0-22081	48-1056429
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

501 Kansas Avenue

Kansas City, Kansas 66105

(Address of principal executive offices)

(913) 621-9500(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02.     Results of Operations and Financial Condition.

On July 22, 2008, Epiq Systems, Inc. issued a press release announcing its financial results for the three and six months periods ended June 30, 2008.  A copy of the press release is attached as Exhibit 99.1 to this report and is incorporated herein by reference.

The attached press release includes three non-GAAP financial measures that management uses and that the company believes may be useful to investors:

• Non-GAAP net income, calculated as net income plus amortization of acquisition-related intangibles, share-based compensation expense, realized cash gains on financial instruments, non-cash mark-to-market adjustments, acquisition related expense, and the effect of tax adjustments which are outside of the company’s anticipated effective tax rate, all net of tax;
• Non-GAAP earnings per share, calculated as non-GAAP net income on a fully diluted per share basis; and
• Non-GAAP adjusted EBITDA, calculated as net income before interest/financing, taxes, depreciation, amortization, share-based compensation, realized cash gains on financial instruments, non-cash mark-to-market adjustments, and acquisition related expense.

Reconciliations of each of these non-GAAP measures are included in schedules to the press release filed with this report.  The press release also includes certain reconciliations of non-GAAP financial measures for the company’s business segments.

These non-GAAP financial measures are intended to supplement the accounting principles generally accepted in the United States of America (GAAP) financial information included in the press release by providing management and investors with additional insight regarding results of operations.  

Management uses non-GAAP net income (i) in its strategic planning for the company and (ii) in evaluating the results of operations of the company.  The company’s compensation committee has used non-GAAP net income in evaluating the performance of management and in determining executive bonuses.  Management believes the non-GAAP net income measure provides management with additional perspective when evaluating the results of operations and may be similarly useful to investors when evaluating financial results of the company for comparable periods for the following reasons:

• Certain of the adjusted items can fluctuate significantly from period-to-period due in part to the timing of completion of major acquisitions, the timing of major refinancings (whether or not related to those acquisitions) and similar events. Management believes the adjustments to net income to account for these types of significant corporate arrangements may be useful to investors in comparing the results of operations of the company without the effect of certain aspects of those corporate arrangements;
• Certain of the adjusted items represent non-cash credits or charges to net income, which investors may find useful in excluding from operating results to evaluate comparable periods; and
• Mark-to-market adjustments represent non-cash credits or charges related to its convertible debt embedded option and interest rate floor options, adjusted to reflect realized cash gains.

Management recognizes that its use of non-GAAP net income, as with any non-GAAP financial measure, has various limitations, including the fact that the adjusted item may be a normally recurring expense for the company or may involve the actual use of cash.  Nonetheless, management believes that this non-GAAP net income measure provides additional insight for investors into the operating results and business trends of the company.  A reconciliation of net income to non-GAAP net income is included in the schedules to the press release filed with this report.

Management also uses non-GAAP earnings per share, which is calculated as non-GAAP net income on a fully diluted per share basis.  Management uses non-GAAP earnings per share for the same reasons that it uses non-GAAP net income and believes that non-GAAP earnings per share may be useful to investors for the same purposes as non-GAAP net income.  The compensation committee has used non-GAAP earnings per share in evaluating the performance of management and in determining executive bonuses.  A reconciliation of non-GAAP earnings per share to GAAP earnings per share is included in schedules to the press release filed with this report.

Management also uses non-GAAP adjusted EBITDA as a non-GAAP performance measure.  Management regularly reviews non-GAAP adjusted EBITDA as it assesses its current and prospective operating results, and for assessing anticipated operating results for acquired businesses.  Management uses non-GAAP adjusted EBITDA (i) in its strategic planning for the company and its business segments and (ii) in evaluating the results of operations of the company.  The compensation committee has used non-GAAP adjusted EBITDA in evaluating the performance of management and in determining executive bonuses.  Management believes non-GAAP adjusted EBITDA is useful to management and may be useful to investors in evaluating the results of operations when comparing financial results for comparable periods for the following reasons:

• Certain of the adjusted items can fluctuate significantly from period-to-period due in part to the timing of completion of major acquisitions, the timing of major refinancings (whether or not related to those acquisitions) and similar events. Management believes the adjustments to net income to account for these types of significant corporate arrangements may be useful to investors in comparing the results of operations of the company without the effect of certain aspects of those corporate arrangements; and
• Certain of the adjusted items represent non-cash credits or charges to net income, which investors may find useful in excluding from operating results to evaluate comparable periods; and
• Mark-to-market adjustments represent non-cash credits or charges related to its convertible debt embedded option and interest rate floor options, adjusted to reflect realized cash gains.

Management recognizes that its use of non-GAAP adjusted EBITDA, as with any non-GAAP financial measure, has various limitations, including the fact that the adjusted items may be a normally recurring expense or may involve the actual use of cash.  Nonetheless, management believes that this non-GAAP adjusted EBITDA measure provides additional insight for investors into the operating results and business trends of the company.  A reconciliation of net income to non-GAAP adjusted EBITDA is included in a schedule to the press release filed with this report.

 The information in Item 2.02 of this report and in the exhibit attached hereto is not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 or 12(a)(2) of the Securities Act of 1933, as amended.  The information contained in this Item 2.02 and in the accompanying exhibit is not incorporated by reference into any filing with the SEC made by the registrant, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 5.02.     Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b)       On July 18, 2008, Doug Fleming, principal accounting officer, informed the company that he would resign effective August 8, 2008, to accept employment at another publicly traded company.  Mr. Fleming’s decision to resign as principal accounting officer is not the result of any disagreement with the company on any matter relating to the company’s operations, policies or practices.

Item 9.01.     Financial Statements and Exhibits.

(c)  Exhibits.

The following exhibit is filed as part of this report:

Exhibit No.	Description
99.1	Epiq Systems, Inc. Press Release issued July 22, 2008, reporting quarter ended June 30, 2008 financial results.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		EPIQ SYSTEMS, INC.
Date:	July 22, 2008
		By:	/s/ Tom W. Olofson
		Name:	Tom W. Olofson
		Title:	Chairman of the Board
			and Chief Executive Officer

EX-99.1

Exhibit 99.1

Epiq Systems, Inc. Announces Second Quarter 2008 Results - Reporting 49% Operating Revenue Growth

KANSAS CITY, Kan.--(BUSINESS WIRE)--Epiq Systems, Inc. (NASDAQ: EPIQ) today announced results of operations for the second quarter of 2008 with operating revenue (total revenue before operating revenue from reimbursed direct costs) of $56.9 million, up 49% compared to $38.2 million for the same period last year. June 30, 2008 year-to-date operating revenue was $100.8 million, up 38% compared to $73.3 million for the prior year.

Net income for the second quarter of 2008 was $3.2 million, $0.08 per share, up 78% compared to $1.8 million, $0.06 per share, for the year ago quarter. June 30, 2008 year-to-date net income was $5.8 million, $0.15 per share, up 205% compared to $1.9 million, $0.06 per share, for the prior year.

Second quarter 2008 net cash provided by operating activities was $7.3 million, up 22% compared to $6.0 million for the year ago quarter. June 30, 2008 year-to-date net cash provided by operations was $15.1 million compared to $14.9 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 net income (net income adjusted for amortization of acquisition-related intangibles, share-based compensation, realized cash gains on financial instruments, non-cash mark-to-market adjustments, acquisition-related expenses, the effect of tax adjustments which are outside of the company’s anticipated effective tax rate, and capitalized loan fee amortization, all net of tax), and (ii) non-GAAP adjusted EBITDA (net income adjusted for interest/financing, taxes, depreciation, amortization, share-based compensation, realized cash gains on financial instruments, non-cash mark-to-market adjustments, and acquisition-related expenses). Reconciliation statements for non-GAAP financial measures are provided below.

Non-GAAP net income for the second quarter of 2008 was $5.9 million, $0.15 per share, up 40% compared to $4.2 million, $0.12 per share, for the year ago quarter. June 30, 2008 year-to-date non-GAAP net income was $11.3 million, $0.29 per share, up 47% compared to $7.7 million, $0.23 per share, for the prior year.

Second quarter 2008 non-GAAP adjusted EBITDA was $14.3 million, up 16% compared to $12.3 million for the year ago quarter. June 30, 2008 year-to-date non-GAAP adjusted EBITDA was $27.5 million, up 17% compared to $23.6 million for the prior year.

Operating revenue for the Electronic Discovery segment for the second quarter of 2008 was $16.3 million, up 34% compared to $12.2 million for the year ago quarter. June 30, 2008 year-to-date operating revenue was $29.5 million, up 32% compared to $22.3 million in the prior year. New client engagements combined with increased work for existing clients and continued expansion of the international business contributed to the increases in operating revenues. Second quarter 2008 Non-GAAP adjusted EBITDA for Electronic Discovery was $8.1 million, up 25% compared to $6.5 million for the year ago quarter. June 30, 2008 year-to-date non-GAAP adjusted EBITDA was $14.5 million, up 24% compared to $11.7 million in the prior year.

Operating revenue for the Bankruptcy segment for the second quarter of 2008 was $12.5 million, compared to $16.0 million for the year ago quarter. June 30, 2008 year-to-date operating revenue was $25.9 million, compared to $31.0 million in the prior year. Changes in revenue are related primarily to the application of Chapter 7 pricing formulas that reference short-term interest rates as well as fluctuations in Chapter 7 bankruptcy deposits due to prior periods with lower new case filing activity. Market share exhibited continuing strength and retention of existing clients remains extremely high. As reported by the Administrative Office of the U.S. Courts, bankruptcy filings increased 27% during the first 3 months of 2008 vs. the same period in 2007. Continued increases in bankruptcy filings and potential increases in short-term interest rates would have a positive effect on future bankruptcy revenue. Non-GAAP adjusted EBITDA was $6.1 million for the second quarter of 2008 and $9.4 million for the year ago quarter. June 30, 2008 year-to-date non-GAAP adjusted EBITDA was $16.9 million compared to $18.5 million in the prior year.

Operating revenue for the Settlement Administration segment for the second quarter of 2008 was $28.2 million compared to $9.9 million in the year ago quarter. June 30, 2008 year-to-date operating revenue was $45.5 million compared to $19.9 million in the prior year. Non-GAAP adjusted EBITDA was $6.1 million for the second quarter of 2008 compared to $1.4 million for the year ago quarter. June 30, 2008 year-to-date non-GAAP adjusted EBITDA was $6.8 million, compared to $3.0 million in the prior year. The increases in both operating revenue and non-GAAP adjusted EBITDA are related to new client activity. New client engagements under contract have been strong since the beginning of the year and contribute to the backlog that will be worked off in future periods.

Tom W. Olofson, chairman and CEO, and Christopher E. Olofson, president and COO of Epiq Systems stated, “We are pleased to report a very strong second quarter, and we remain on track to achieve our full year objectives. Major new client engagements contributed to operating results in every segment. Electronic discovery continues to exhibit strong growth, and we witnessed a record quarter for settlement administration. The reduced profit contribution from the bankruptcy segment is related primarily to Chapter 7 pricing tied to short-term interest rate changes. Market share remains very strong throughout bankruptcy, and we have the leading share of new corporate restructuring engagements for the year.”

Recent key events include:

• Epiq Systems ranks as a top five provider for both e-discovery processing and e-discovery review solutions on the 2008 Socha-Gelbmann Survey.
• We completed the UK acquisition of Pinpoint Global, Ltd., an emerging provider of proprietary electronic discovery and electronic disclosure solutions.
• 47 of the top 50 global law firms have active relationships with Epiq Systems.
• 2008 year-to-date corporate restructuring bankruptcy engagements increased by more than 145% compared to the same period last year.
• Total bankruptcy filings have increased for each of the past eight quarters. Over 900,000 bankruptcies were filed for the twelve month period ending March 31, 2008.
• The Federal Reserve reported that both corporate debt and consumer credit increased compared to the prior year, reaching $6.5 trillion and $2.6 trillion, respectively, as of March 31, 2008.

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 August 31, 2008 beginning approximately two hours after the call ends. To access the replay, call (800) 642-1687 and enter conference ID number 56037836.

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 or the effects of 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. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited)
	Three months ended				Six months ended
	June 30,				June 30,
	2008		2007		2008		2007
REVENUE:
Case management services	$ 35,928		$ 23,702		$ 64,724		$ 44,534
Case management bundled products and services	4,463		6,733		9,754		13,412
Document management services	16,546		7,736		26,360		15,321
Operating revenue before reimbursed direct costs	56,937		38,171		100,838		73,267
Operating revenue from reimbursed direct costs	7,905		6,035		13,014		12,068
Total Revenue	64,842		44,206		113,852		85,335
OPERATING EXPENSES:
Direct costs of services	24,438		10,415		43,264		20,746
Direct costs of services - bundled	908		898		1,855		1,784
Reimbursed direct costs	7,880		6,010		13,002		12,032
General and administrative	18,221		15,252		33,300		28,177
Depreciation and software and leasehold amortization	3,853		2,837		7,563		5,798
Amortization of identifiable intangible assets	2,325		2,352		4,603		4,876
Other operating expense (income)	859		-		(1,512	)	-
Total Operating Expenses	58,484		37,764		102,075		73,413
INCOME FROM OPERATIONS	6,358		6,442		11,777		11,922
EXPENSE (INCOME) RELATED TO FINANCING:
Interest income	(36	)	(25	)	(180	)	(32	)
Interest expense	441		3,345		932		8,447
Net Expenses Related To Financing	405		3,320		752		8,415
INCOME BEFORE INCOME TAXES	5,953		3,122		11,025		3,507
PROVISION FOR INCOME TAXES	2,799		1,328		5,214		1,563
NET INCOME	$ 3,154		$ 1,794		$ 5,811		$ 1,944
NET INCOME PER SHARE INFORMATION:
Net income per share – Diluted	$ 0.08		$ 0.06		$ 0.15		$ 0.06
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING – DILUTED	41,634		31,980		41,510		31,458

EPIQ SYSTEMS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)
	June 30,	December 31,
	2008	2007
ASSETS
ASSETS:
Cash and cash equivalents	$ 11,229	$ 13,415
Trade accounts receivable, net	50,483	33,925
Property and equipment, net	37,452	32,403
Goodwill	264,330	260,684
Other intangibles, net	31,935	34,310
Other	18,111	18,057
Total Assets	$ 413,540	$ 392,794
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Accounts payable	$ 18,854	$ 7,401
Indebtedness	58,282	61,592
Other liabilities	43,874	40,119
STOCKHOLDERS’ EQUITY	292,530	283,682
Total Liabilities and Stockholders’ Equity	$ 413,540	$ 392,794

EPIQ SYSTEMS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
	Three months ended				Six months ended
	June 30,				June 30,
	2008		2007		2008		2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 3,154		$ 1,794		$ 5,811		$ 1,944
Non-cash adjustments to net income:
Depreciation and amortization	6,178		5,189		12,166		10,674
Other, net	252		1,403		1,477		2,869
Changes in operating assets and liabilities, net	(2,269	)	(2,387	)	(4,321	)	(624	)
Net cash provided by operating activities	7,315		5,999		15,133		14,863
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash acquired from (paid for) business combinations, net	(4,712	)	-		(4,712	)	-
Property and equipment, software, other	(4,110	)	(3,846	)	(11,441	)	(7,062	)
Net cash used in investing activities	(8,822	)	(3,846	)	(16,153	)	(7,062	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net payments on indebtedness	(2,016	)	(9,320	)	(2,622	)	(17,932	)
Net proceeds from issuance of stock	980		5,606		1,429		8,192
Other	(12	)	404		27		441
Net cash used in financing activities	(1,048	)	(3,310	)	(1,166	)	(9,299	)
NET DECREASE IN CASH
AND CASH EQUIVALENTS	$ (2,555	)	$ (1,157	)	$ (2,186	)	$ (1,498	)

EPIQ SYSTEMS, INC. RECONCILIATION OF NET INCOME TO NON-GAAP ADJUSTED EBITDA (In thousands) (Unaudited)
	Three months ended		Six months ended
	June 30,	June 30,	June 30,	June 30,
	2008	2007	2008	2007
NET INCOME	$ 3,154	$ 1,794	$ 5,811	$ 1,944
Acquisition related expenses	859	-	859	-
Depreciation and amortization	6,178	5,189	12,166	10,674
Share-based compensation	872	703	1,396	1,014
Expenses related to financing, net	405	3,320	752	8,415
Realized gain on interest rate floors	-	-	1,273	-
Provision for income taxes	2,799	1,328	5,214	1,563
	11,113	10,540	21,660	21,666
NON-GAAP ADJUSTED EBITDA	$ 14,267	$ 12,334	$ 27,471	$ 23,610

EPIQ SYSTEMS, INC. BANKRUPTCY SEGMENT RECONCILIATION OF SEGMENT PERFORMANCE MEASURE TO NON-GAAP ADJUSTED EBITDA (In thousands) (Unaudited)
	Three months ended		Six months ended
	June 30,	June 30,	June 30,	June 30,
	2008	2007	2008	2007
SEGMENT PERFORMANCE MEASURE	$ 6,141	$ 9,400	$ 13,439	$ 18,513
Realized gain on interest rate floors	-	-	3,465	-
NON-GAAP ADJUSTED EBITDA	$ 6,141	$ 9,400	$ 16,904	$ 18,513

EPIQ SYSTEMS, INC. RECONCILIATION OF NET INCOME TO NON-GAAP NET INCOME (In thousands) (Unaudited)
	Three months ended				Six months ended
	June 30,		June 30,		June 30,		June 30,
	2008		2007		2008		2007
NET INCOME	$ 3,154		$ 1,794		$ 5,811		$ 1,944
Plus (net of tax):
Amortization of acquisition intangibles	1,407		1,423		2,785		2,950
Share-based compensation	546		444		891		665
Acquisition related expense	520		-		520		-
Effective tax rate	418		(2	)	804		65
Loan fee amortization	80		216		160		454
Mark-to-market adjustments	(244	)	314		(487	)	1,609
Realized gain on interest rate floors	-		-		770		-
	2,727		2,395		5,443		5,743
NON-GAAP NET INCOME	$ 5,881		$ 4,189		$ 11,254		$ 7,687

EPIQ SYSTEMS, INC. RECONCILIATION OF EPS TO NON-GAAP EPS (Unaudited)
	Three months ended			Six months ended
	June 30,		June 30,	June 30,		June 30,
	2008		2007	2008		2007
EPS (on a diluted basis)	$ 0.08		$ 0.06	$ 0.15		$ 0.06
Plus (net of tax):
Amortization of acquisition intangibles	0.04		0.03	0.08		0.09
Share-based compensation	0.02		0.01	0.02		0.02
Acquisition related expense	0.01		-	0.01		-
Effective tax rate	0.01		-	0.02		-
Loan fee amortization	-		0.01	-		0.01
Mark-to-market adjustments	(0.01	)	0.01	(0.01	)	0.05
Realized gain on interest rate floors	-		-	0.02		-
	0.07		0.06	0.14		0.17
NON-GAAP EPS (on a diluted basis)	$ 0.15		$ 0.12	$ 0.29		$ 0.23

EPIQ SYSTEMS, INC. OPERATING REVENUE (In thousands) (Unaudited)
	Three months ended		Six months ended
	June 30,	June 30,	June 30,	June 30,
	2008	2007	2008	2007
Electronic Discovery	$ 16,278	$ 12,224	$ 29,516	$ 22,336
Bankruptcy	12,498	16,004	$ 25,862	$ 31,047
Settlement Administration	28,161	9,943	45,460	19,884
OPERATING REVENUE BEFORE REIMBURSED DIRECT COSTS	$ 56,937	$ 38,171	$ 100,838	$ 73,267

EPIQ SYSTEMS, INC. NON-GAAP ADJUSTED EBITDA (In thousands) (Unaudited)
	Three months ended				Six months ended
	June 30,		June 30,		June 30,		June 30,
	2008		2007		2008		2007
Electronic Discovery	$ 8,064		$ 6,454		$ 14,459		$ 11,665
Bankruptcy	6,141		9,400		$ 16,904		$ 18,513
Settlement Administration	6,050		1,425		$ 6,759		$ 3,034
Unallocated	(5,988	)	(4,945	)	(10,651	)	(9,602	)
TOTAL NON-GAAP ADJUSTED EBITDA	$ 14,267		$ 12,334		$ 27,471		$ 23,610

EPIQ SYSTEMS, INC. EPS CALCULATION (In thousands, except per share data) (Unaudited)
	Three months ended		Six months ended
	June 30,	June 30,	June 30,	June 30,
	2008	2007a	2008	2007a
NET INCOME	$ 3,154	$ 1,794	$ 5,811	$ 1,944
Interest expense adjustment for convertible debt	301	-	603	-
ADJUSTED FOR DILUTED CALCULATION	$ 3,455	$ 1,794	$ 6,414	$ 1,944
DILUTED WEIGHTED AVERAGE SHARES	35,424	29,848	35,357	29,559
Adjustment to reflect stock options	1,924	2,132	1,867	1,899
Adjustment to reflect convertible debt shares	4,286	-	4,286	-
ADJUSTED FOR DILUTED CALCULATION	41,634	31,980	41,510	31,458
NET INCOME PER SHARE - DILUTED	$ 0.08	$ 0.06	$ 0.15	$ 0.06
a Convertible debt is antidilutive and therefore excluded from EPS calculation.

CONTACT:
Epiq Systems, Inc.
Lew P. Schroeber, 913-621-9500
ir@epiqsystems.com