An EPD is an estimate of the genetic value that will be passed onto the progeny of that animal. Usually, the reason why producers are concerned about genetics is because they particularly like the performance of an animal and want to be able to repeat that performance in the flock.
Performance is a product of genetics and environment.
For example, if I measure gain from 50 to 100 days on a number of different lambs, even though the lambs were fed and treated the same they will not all gain the same amount - this is a genetic effect. If I take twins and feed one only hay and the other only creep, they will not gain the same amount - this is an environmental effect. Therefore, when you are buying an animal you want to know whether good performance is due to good management or good genetics. Heritability gives us an idea of how well a trait is passed on to progeny or how big of an effect genetics has on a trait. For example, reproductive traits are lowly heritable.