QAD Reports Q2 Financial Results
Announcement posted by QAD 24 Aug 2001
$9.5 Million in Positive Cash Flow from Operations Generated on $49.6 Million in Revenue
QAD Inc. (Nasdaq: QADI) today reported revenue of $49.6 million and a net loss of $2.3 million, or $.07 per diluted share, for the second quarter ended July 31, 2001. This compares with revenue of $53.2 million and a net loss of $8.8 million, or $.26 per diluted share, in the second quarter of fiscal year 2001. Excluding a $3.2 million valuation allowance on US deferred tax assets, the net loss for the second quarter of fiscal year 2001 was $5.7 million, or $0.17 per diluted share.
For the first six months of fiscal year 2002, the company reported revenue of $100.9 million and a net loss of $4.0 million, or $.12 per diluted share, compared with revenue of $104.8 million and a net loss of $17.6 million, or $.53 per diluted share, for the first six months of fiscal year 2001. Excluding the valuation allowance on US deferred tax assets, the net loss for the first six months of fiscal year 2001 was $14.4 million, or $0.43 per diluted share.
Gross margin was 56% for both the three and six months ended July 31, 2001 compared to 54% and 52% in the comparable prior year periods, respectively. This improvement was primarily due to a more favorable mix of revenue from internally developed product, thereby reducing royalties payable to third parties. In addition, the company's continued cost containment programs contributed significantly to the year-over-year improvement in bottom line performance, with operating expenses for the second quarter and year-to-date periods coming in 10% and 12% lower than year-ago levels, respectively.
"In such a challenging economic environment, we were pleased to produce vastly improved bottom line results compared with one year ago, and to generate nearly $10 million in cash flow from operations," said Karl Lopker, chief executive officer of QAD. "Our top line revenue growth continues to be affected by the worldwide slowdown in corporate IT spendingespecially in our core customer base of manufacturersbut we believe that QAD's collaborative manufacturing solutions put us in an excellent position to resume growth when the manufacturing economy recovers. In the meantime, we will continue to carefully manage our cost structure in line with current conditions."
Notable achievements in the quarter included:
The shipment of QAD eQ 3.0, which adds significant enhancements to sell-side and represents the first release of QAD eQ buy-side designed for direct material purchasing.
An order for QAD eQ from Arrow International, Inc., a manufacturer of critical and cardiac care products. One of the functions that QAD eQ will facilitate for Arrow is to receive orders from their customers through the Global Health Exchange (GHX)a major exchange allowing hospitals to place orders with multiple manufacturers. A consortium of approximately 60 medical product companies, many of which are QAD customers, funds the GHX.
A multi-million dollar order for license, support and services from St. Gobain, a multi-national plastics company, and three orders in the range of $1 million to $2 million from other large multi-national companies.
Expansion of membership and worldwide acceptance of MFGx.net, QAD's manufacturing exchange. In Q2, support for twelve languages was added to the exchange.
Continued focus on collaborative manufacturing functionality in MFG/PRO, with emphasis on the needs of manufacturing outsourcers and subcontractors. MFG/PRO now provides the ability to effectively handle customer owned goods in allocations, packing, shipping, inventory and financial transactions.
The appointment of Tom Mackey as vice president, Americas to lead the expansion of QAD's collaborative commerce application sales in the Americas. Mackey is a software industry veteran with 28 years of experience helping business-to-business software companies hone their sales organizations for top performance.
About QAD
QAD's global manufacturing expertise delivers value through collaborative commerce applications that empower enterprises to integrate diverse business processes and increase profitability. Manufacturers of automotive, food and beverage, consumer, electronics, industrial, and medical products use QAD software at more than 5,200 licensed sites in more than 80 countries and in as many as 26 languages. For more information about QAD, telephone +1 805 684 6614, or visit the QAD web site at http://www.qad.com. To receive any of QAD's press releases via facsimile, contact +1 800 356 0747, or outside the U.S. contact +1 213 253 5647.
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"QAD eQ" and "QAD Storefront" are trademarks, and "QAD" and "MFG/PRO" are registered trademarks of QAD Inc. "MFGx.net" and "Supply Visualization" are service marks of QAD Inc. All other products or company names herein may be trademarks of their respective owners.
Note to Investors: This press release contains certain forward-looking statements made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. A number of risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements. These risks include, but are not limited to, evolving demand for the company's software products and products that operate with the company's products, the publication of opinions by industry analysts about the company, its products and technology, the entry of new competitors and their technological advances, delays in localizing the company's products for new markets, delays in sales as a result of lengthy sales cycles; changes in operating expenses, pricing, timing of new product releases, the method of product distribution or product mix; and general economic factors. In addition, revenue and earnings in the enterprise resource planning (ERP), e-business and collaborative commerce software industries are subject to fluctuations and the growth rates recently experienced by the company do not necessarily represent future operating results. Investors should not use any one quarter's results as a benchmark for future growth. For a more detailed description of the risk factors associated with the company and the industries in which it operates, please refer to the company's Annual Report on Form 10-K for the fiscal year ended January 31, 2001.
For the first six months of fiscal year 2002, the company reported revenue of $100.9 million and a net loss of $4.0 million, or $.12 per diluted share, compared with revenue of $104.8 million and a net loss of $17.6 million, or $.53 per diluted share, for the first six months of fiscal year 2001. Excluding the valuation allowance on US deferred tax assets, the net loss for the first six months of fiscal year 2001 was $14.4 million, or $0.43 per diluted share.
Gross margin was 56% for both the three and six months ended July 31, 2001 compared to 54% and 52% in the comparable prior year periods, respectively. This improvement was primarily due to a more favorable mix of revenue from internally developed product, thereby reducing royalties payable to third parties. In addition, the company's continued cost containment programs contributed significantly to the year-over-year improvement in bottom line performance, with operating expenses for the second quarter and year-to-date periods coming in 10% and 12% lower than year-ago levels, respectively.
"In such a challenging economic environment, we were pleased to produce vastly improved bottom line results compared with one year ago, and to generate nearly $10 million in cash flow from operations," said Karl Lopker, chief executive officer of QAD. "Our top line revenue growth continues to be affected by the worldwide slowdown in corporate IT spendingespecially in our core customer base of manufacturersbut we believe that QAD's collaborative manufacturing solutions put us in an excellent position to resume growth when the manufacturing economy recovers. In the meantime, we will continue to carefully manage our cost structure in line with current conditions."
Notable achievements in the quarter included:
The shipment of QAD eQ 3.0, which adds significant enhancements to sell-side and represents the first release of QAD eQ buy-side designed for direct material purchasing.
An order for QAD eQ from Arrow International, Inc., a manufacturer of critical and cardiac care products. One of the functions that QAD eQ will facilitate for Arrow is to receive orders from their customers through the Global Health Exchange (GHX)a major exchange allowing hospitals to place orders with multiple manufacturers. A consortium of approximately 60 medical product companies, many of which are QAD customers, funds the GHX.
A multi-million dollar order for license, support and services from St. Gobain, a multi-national plastics company, and three orders in the range of $1 million to $2 million from other large multi-national companies.
Expansion of membership and worldwide acceptance of MFGx.net, QAD's manufacturing exchange. In Q2, support for twelve languages was added to the exchange.
Continued focus on collaborative manufacturing functionality in MFG/PRO, with emphasis on the needs of manufacturing outsourcers and subcontractors. MFG/PRO now provides the ability to effectively handle customer owned goods in allocations, packing, shipping, inventory and financial transactions.
The appointment of Tom Mackey as vice president, Americas to lead the expansion of QAD's collaborative commerce application sales in the Americas. Mackey is a software industry veteran with 28 years of experience helping business-to-business software companies hone their sales organizations for top performance.
About QAD
QAD's global manufacturing expertise delivers value through collaborative commerce applications that empower enterprises to integrate diverse business processes and increase profitability. Manufacturers of automotive, food and beverage, consumer, electronics, industrial, and medical products use QAD software at more than 5,200 licensed sites in more than 80 countries and in as many as 26 languages. For more information about QAD, telephone +1 805 684 6614, or visit the QAD web site at http://www.qad.com. To receive any of QAD's press releases via facsimile, contact +1 800 356 0747, or outside the U.S. contact +1 213 253 5647.
###
"QAD eQ" and "QAD Storefront" are trademarks, and "QAD" and "MFG/PRO" are registered trademarks of QAD Inc. "MFGx.net" and "Supply Visualization" are service marks of QAD Inc. All other products or company names herein may be trademarks of their respective owners.
Note to Investors: This press release contains certain forward-looking statements made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. A number of risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements. These risks include, but are not limited to, evolving demand for the company's software products and products that operate with the company's products, the publication of opinions by industry analysts about the company, its products and technology, the entry of new competitors and their technological advances, delays in localizing the company's products for new markets, delays in sales as a result of lengthy sales cycles; changes in operating expenses, pricing, timing of new product releases, the method of product distribution or product mix; and general economic factors. In addition, revenue and earnings in the enterprise resource planning (ERP), e-business and collaborative commerce software industries are subject to fluctuations and the growth rates recently experienced by the company do not necessarily represent future operating results. Investors should not use any one quarter's results as a benchmark for future growth. For a more detailed description of the risk factors associated with the company and the industries in which it operates, please refer to the company's Annual Report on Form 10-K for the fiscal year ended January 31, 2001.