QAD Reports Q1 Financial Results
Announcement posted by QAD 31 May 2001
Gross Margin Rises on Improved Product Mix; $7 Million in Positive Cash Flow from Operations Generated for the Quarter
QAD Inc. (Nasdaq: QADI) today reported revenue of $51.3 million and a net loss of $1.7 million, or $.05 per diluted share, for the first quarter of fiscal 2002 ended April 30, 2001, compared with revenue of $51.6 million and a net loss of $8.8 million, or $.26 per diluted share, in the first quarter of fiscal year 2001.
Gross margin was 56% in the first quarter of fiscal 2002, compared to 49% in the comparable prior year period. 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 previously announced cost containment and restructuring programs contributed significantly to the year-over-year improvement in financial performance, with operating expenses for the first quarter coming in 13% lower than year-ago levels.
"While QAD, along with other software vendors, has been affected by the current slowdown in corporate IT spending, we nevertheless achieved stable revenue in what is seasonally a soft quarter," said Karl Lopker, QAD's chief executive officer. "We were also pleased that we generated positive cash flow of approximately $7 million from operations in the quarter, reflecting the health and efficiency of our business model in such a challenging business environment.
"Though our near-term outlook remains cautious, we are enthusiastic about our longer-term prospects based on the company's product positioning and substantial installed base," said Lopker. "At last week's 10th annual Explore users' conference in San Antonio, we received positive feedback on all QAD applications: MFG/PRO eB, our enterprise product suite; QAD eQ, our private enterprise exchange product; and QAD Supply Visualization, our collaborative manufacturing product." Customers witnessed a live on-stage demonstration of QAD eQ 3.0, QAD Supply Visualization and MFG/PRO eB. The demonstration was conducted live over the Internet presenting how all the products fit together in a seamless environment to help manufacturing companies improve their productivity.
At Explore, the company also unveiled its private enterprise exchange strategy, which helps manufacturers quickly and efficiently drive collaborative commerce across the value chain. Leveraging its expertise in manufacturing software, QAD is enabling companies to quickly integrate their internal operations with those of suppliers, partners and customers to capitalize on new profit opportunities through exchanges. Private enterprise exchanges give manufacturers the ability to automate supply purchases and collaborate in real time with trusted suppliers without opening up sensitive information to unwanted eyes. While many exchange strategies focus on indirect procurement, QAD eQ acts as the order hub for Sell-Side, Buy-Side and Replenishment applications.
Other recent accomplishments include:
A $3.3 million combined license, support and services order from Schlumberger Limited and four orders in the range of $1 million to $2 million from other large multinational companies in the first quarter.
General release of QAD Supply Visualization.
General release of QAD eB Desktop, a new HTML user interface for MFG/PRO eB and MFG/PRO 9.0.
General release of QAD eQ 3.0.
About QAD QAD's global manufacturing expertise delivers value through collaborative commerce applications that empower enterprises to integrate diverse business processes and increase market share. Manufacturers of automotive, food and beverage, consumer, electronics, industrial, and medical products use QAD software at more than 5,100 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 enterprise resource planning industry, please refer to the company's Annual Report on Form 10-K for the fiscal year ended January 31, 2001.
For additional information, Contact:
Maureen Sullivan
QAD Public Relations
+1 805 566 6066
msq@qad.com Cheryl Slomann
QAD Investor Relations
+1 805 566 5139
investor@qad.com
ENDS
Gross margin was 56% in the first quarter of fiscal 2002, compared to 49% in the comparable prior year period. 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 previously announced cost containment and restructuring programs contributed significantly to the year-over-year improvement in financial performance, with operating expenses for the first quarter coming in 13% lower than year-ago levels.
"While QAD, along with other software vendors, has been affected by the current slowdown in corporate IT spending, we nevertheless achieved stable revenue in what is seasonally a soft quarter," said Karl Lopker, QAD's chief executive officer. "We were also pleased that we generated positive cash flow of approximately $7 million from operations in the quarter, reflecting the health and efficiency of our business model in such a challenging business environment.
"Though our near-term outlook remains cautious, we are enthusiastic about our longer-term prospects based on the company's product positioning and substantial installed base," said Lopker. "At last week's 10th annual Explore users' conference in San Antonio, we received positive feedback on all QAD applications: MFG/PRO eB, our enterprise product suite; QAD eQ, our private enterprise exchange product; and QAD Supply Visualization, our collaborative manufacturing product." Customers witnessed a live on-stage demonstration of QAD eQ 3.0, QAD Supply Visualization and MFG/PRO eB. The demonstration was conducted live over the Internet presenting how all the products fit together in a seamless environment to help manufacturing companies improve their productivity.
At Explore, the company also unveiled its private enterprise exchange strategy, which helps manufacturers quickly and efficiently drive collaborative commerce across the value chain. Leveraging its expertise in manufacturing software, QAD is enabling companies to quickly integrate their internal operations with those of suppliers, partners and customers to capitalize on new profit opportunities through exchanges. Private enterprise exchanges give manufacturers the ability to automate supply purchases and collaborate in real time with trusted suppliers without opening up sensitive information to unwanted eyes. While many exchange strategies focus on indirect procurement, QAD eQ acts as the order hub for Sell-Side, Buy-Side and Replenishment applications.
Other recent accomplishments include:
A $3.3 million combined license, support and services order from Schlumberger Limited and four orders in the range of $1 million to $2 million from other large multinational companies in the first quarter.
General release of QAD Supply Visualization.
General release of QAD eB Desktop, a new HTML user interface for MFG/PRO eB and MFG/PRO 9.0.
General release of QAD eQ 3.0.
About QAD QAD's global manufacturing expertise delivers value through collaborative commerce applications that empower enterprises to integrate diverse business processes and increase market share. Manufacturers of automotive, food and beverage, consumer, electronics, industrial, and medical products use QAD software at more than 5,100 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 enterprise resource planning industry, please refer to the company's Annual Report on Form 10-K for the fiscal year ended January 31, 2001.
For additional information, Contact:
Maureen Sullivan
QAD Public Relations
+1 805 566 6066
msq@qad.com Cheryl Slomann
QAD Investor Relations
+1 805 566 5139
investor@qad.com
ENDS