QAD Reports Q3 Financial Results
Announcement posted by QAD 29 Nov 2001
License Revenue Grows Year over Year and Sequentially
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 third quarter of fiscal 2002 ended October 31, 2001. This compares with revenue of $50.0 million and a net loss of $10.2 million, or $.30 per diluted share, in the third quarter of fiscal year 2001.* License revenue in the third quarter totaled $14.4 million, a 3% increase over $14.1 million in the third quarter of fiscal 2001 and a 5% increase over $13.7 million in the second quarter of fiscal 2002.
The company generated cash flow from operations of approximately $1 million in the third quarter of fiscal year 2002, the fifth consecutive quarter of positive cash flow performance.
For the first nine months of fiscal year 2002, the company reported revenue of $150.5 million and a net loss of $6.3 million, or $.19 per diluted share, compared with revenue of $154.9 million and a net loss of $27.8 million, or $.83 per diluted share, for the first nine months of fiscal year 2001.*
Gross margin was 58% and 57% for the three and nine-month periods ended October 31, 2001, respectively, compared to 51% in both of the comparable prior year periods. This improvement was primarily due to a higher content of revenue from internally developed product, thereby reducing royalties payable to third parties. In addition, a lower proportion of revenue from services, which carries a lesser margin than license and maintenance revenue, contributed to this improvement.
The company's continued cost containment programs further contributed to the year-over-year improvement in bottom line performance, with operating expenses, excluding restructuring charges, for the third quarter and year-to-date periods coming in 2% and 9% lower than year-ago levels, respectively. The year ago quarter was the first period to significantly reflect the impact of the cost control measures.
"We are encouraged that the 13 month decline in U.S. industrial production has not affected QAD to the same extent as many other enterprise software companies also focused on the manufacturing industry," said Karl Lopker, chief executive officer of QAD. "Our installed base and new customers are recognizing the rapid return on investment and cost benefits associated with QAD's collaborative software for manufacturers. Our enterprise, private exchange and public exchange product lines have been well received both by customers and leading opinion-makers in the industry.
"Meanwhile, we continue to prudently manage our balance sheet and maintain our focus on a lean and efficient operating expense structure. Against the background of a demanding business environment, we have nearly tripled our net cash position over the last 12 months."
Other notable recent achievements include:
Release of QAD eQ 3.5, a private exchange solution, which includes enhancements to both Sell-side and Buy-side as well as the first commercial release of Replenishment. Replenishment significantly reduces supply chain costs and replenishment times by applying vendor managed inventory and Kanban processes between nodes of the supply chain.
Acceptance of QAD Supply Visualization, an Order Visibility Exchange (OVE) application that generates increased profit by reducing operating and inventory costs through real-time collaboration. Over 50 manufacturers and their suppliers are using this product, including GHSP, a manufacturer of mechanical and electro-mechanical assemblies for automakers such as Daimler-Chrysler, Ford, GM, Honda and Toyota. The application is accessed via the QAD MFGx.net public exchange for manufacturers.
Continued acceptance of QAD MFG/PRO as a best-in-class product for manufacturing with approximately 25% of license revenue coming from new clients.
Nine QAD orders over $500 thousand each in combined license, support and services billings, including an order worth over $2 million.
* For fiscal year 2002, excluding restructuring charges, the third quarter loss was $2.6 million, or $.08 per diluted share; the year-to-date loss was $6.6 million, or $.19 per diluted share. For fiscal year 2001, excluding restructuring charges and a valuation allowance on US deferred tax assets, the third quarter loss was $5.1 million, or $.15 per diluted share; the year-to-date loss was $19.5 million, or $.58 per diluted share.
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" is a trademark 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.
The company generated cash flow from operations of approximately $1 million in the third quarter of fiscal year 2002, the fifth consecutive quarter of positive cash flow performance.
For the first nine months of fiscal year 2002, the company reported revenue of $150.5 million and a net loss of $6.3 million, or $.19 per diluted share, compared with revenue of $154.9 million and a net loss of $27.8 million, or $.83 per diluted share, for the first nine months of fiscal year 2001.*
Gross margin was 58% and 57% for the three and nine-month periods ended October 31, 2001, respectively, compared to 51% in both of the comparable prior year periods. This improvement was primarily due to a higher content of revenue from internally developed product, thereby reducing royalties payable to third parties. In addition, a lower proportion of revenue from services, which carries a lesser margin than license and maintenance revenue, contributed to this improvement.
The company's continued cost containment programs further contributed to the year-over-year improvement in bottom line performance, with operating expenses, excluding restructuring charges, for the third quarter and year-to-date periods coming in 2% and 9% lower than year-ago levels, respectively. The year ago quarter was the first period to significantly reflect the impact of the cost control measures.
"We are encouraged that the 13 month decline in U.S. industrial production has not affected QAD to the same extent as many other enterprise software companies also focused on the manufacturing industry," said Karl Lopker, chief executive officer of QAD. "Our installed base and new customers are recognizing the rapid return on investment and cost benefits associated with QAD's collaborative software for manufacturers. Our enterprise, private exchange and public exchange product lines have been well received both by customers and leading opinion-makers in the industry.
"Meanwhile, we continue to prudently manage our balance sheet and maintain our focus on a lean and efficient operating expense structure. Against the background of a demanding business environment, we have nearly tripled our net cash position over the last 12 months."
Other notable recent achievements include:
Release of QAD eQ 3.5, a private exchange solution, which includes enhancements to both Sell-side and Buy-side as well as the first commercial release of Replenishment. Replenishment significantly reduces supply chain costs and replenishment times by applying vendor managed inventory and Kanban processes between nodes of the supply chain.
Acceptance of QAD Supply Visualization, an Order Visibility Exchange (OVE) application that generates increased profit by reducing operating and inventory costs through real-time collaboration. Over 50 manufacturers and their suppliers are using this product, including GHSP, a manufacturer of mechanical and electro-mechanical assemblies for automakers such as Daimler-Chrysler, Ford, GM, Honda and Toyota. The application is accessed via the QAD MFGx.net public exchange for manufacturers.
Continued acceptance of QAD MFG/PRO as a best-in-class product for manufacturing with approximately 25% of license revenue coming from new clients.
Nine QAD orders over $500 thousand each in combined license, support and services billings, including an order worth over $2 million.
* For fiscal year 2002, excluding restructuring charges, the third quarter loss was $2.6 million, or $.08 per diluted share; the year-to-date loss was $6.6 million, or $.19 per diluted share. For fiscal year 2001, excluding restructuring charges and a valuation allowance on US deferred tax assets, the third quarter loss was $5.1 million, or $.15 per diluted share; the year-to-date loss was $19.5 million, or $.58 per diluted share.
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" is a trademark 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.