Published: March 11, 2010
QAD Announces Fiscal 2010 Fourth Quarter and Full Year Financial Results
SANTA BARBARA, Calif. - (BUSINESS WIRE) - QAD Inc. (Nasdaq:QADI), a global provider of enterprise software and
services, today reported financial results for the fiscal 2010 fourth
quarter and full year ended January 31, 2010.
Total revenue was $52.7 million for the fourth quarter of fiscal 2010,
compared with $58.6 million for the fourth quarter of fiscal 2009.
License revenue was $7.1 million, compared with $10.2 million for the
fiscal 2009 fourth quarter. As reported previously, the company's
financial results for the quarter were negatively impacted by
approximately $5 million related to a number of signed license
agreements for which revenue was deferred for accounting purposes.
Maintenance and other revenue was $32.4 million, versus $31.7 million
for the fourth quarter of fiscal 2009. Services revenue was $13.1
million, compared with $16.7 million for last fiscal year's fourth
quarter.
Net income for the fiscal 2010 fourth quarter was $0.7 million, or $0.02
per diluted share, compared with a net loss for the fourth quarter of
fiscal 2009 of $19.7 million, or $0.64 per share. Fiscal 2009 fourth
quarter net loss included a non-cash goodwill write-down of $14.4
million.
"Sales for the fourth quarter were generally in line with our plan, and
we were profitable for the quarter and the year despite the revenue
deferrals," said Karl Lopker, chief executive officer of QAD. "We
successfully navigated through a difficult economic environment by
improving receivables and generating significant cash flow, which
increased our cash balance by $13 million. At the same time, we advanced
our product line and partnered with our manufacturing customers to help
them deploy our solutions to capture growth opportunities and maximize
profitability."
Gross margin for the fourth quarter of fiscal 2010 was 60 percent,
compared with 52 percent for the fourth quarter of fiscal 2009,
primarily attributable to a decrease in services costs and changes in
the company's overall revenue mix.
Total operating expenses were $29.7 million, or 56 percent of total
revenue, for the fiscal 2010 fourth quarter. Total operating expenses
were $35.8 million, or 61 percent of total revenue, for the fourth
quarter of fiscal 2009, excluding the $14.4 million goodwill write-down.
Including the write-down, operating expenses for the 2009 fiscal fourth
quarter were $50.2 million.
Operating income for the fiscal 2010 fourth quarter was $1.9 million,
including $0.9 million in stock compensation expense. This compares with
an operating loss of $19.5 million, including $1.0 million in stock
compensation expense.
For the fiscal year ended January 31, 2010, total revenue was $215.2
million, versus $262.7 million for fiscal 2009.
Operating expenses for fiscal 2010 were $120.7 million, compared with
$150.6 million in fiscal 2009, excluding the $14.4 million goodwill
write-down.
Operating income for fiscal 2010 was $2.9 million, including $4.6
million in stock compensation expense. Fiscal 2009 operating loss was
$23.9 million, including $5.5 million in stock compensation expense. Net
income was $1.3 million, or $0.04 per diluted share, for fiscal 2010,
compared with a net loss of $23.7 million, or $0.77 per share, for
fiscal 2009.
Cash flow provided by operations was $2.1 million for the fourth quarter
of fiscal 2010, versus cash flow used in operations of $2.4 million for
the fourth quarter of fiscal 2009. For the full 2010 fiscal year, cash
flow provided by operations was $17.7 million, versus $7.3 million in
the prior fiscal year.
QAD's cash and equivalents balance at January 31, 2010 was $44.7
million, compared with $31.5 million at January 31, 2009. The increase
in cash and equivalents was primarily attributable to a significant
improvement in cash provided by operations, capital expenditure controls
and the finalization of acquisition-related payments in fiscal 2009.
Fourth Quarter Fiscal 2010 Highlights:
-
Received orders from 26 customers representing more than $500,000 each
in combined license, support and services billings, including nine
orders in excess of $1.0 million and three in excess of $2.0 million;
-
Received license orders from companies across QAD's six vertical
markets including, among others:
AB S.A., Beaphar B.V., The Boler
Company, Crane Co., Essex Group Limited, ev3 Inc., PANalytical B.V.,
Schlumberger Limited and Watts Industries;
-
Announced support for the latest version of the automotive industry's
Materials Management Operations Guideline/Logistics Evaluation
(MMOG/LE). QAD participated with a variety of North American and
European automotive trade groups to provide a set of best practices
for automotive suppliers, which are reflected in the updated
guidelines.
Business Outlook
For the first quarter of fiscal 2011, the company currently expects
revenue of approximately $54.0 million and fully diluted earnings per
share of approximately $0.03, assuming a tax rate of 30 percent. Given
the continued uncertainty surrounding the global economic recovery, the
company is not issuing full year guidance.
Investor Conference Call
QAD will host an investor conference call today at 2:00 p.m. PT (5.00
p.m. ET) to discuss the company's financial results and operations for
the fiscal 2010 fourth quarter and full year. The call will be
accessible through a live webcast at QAD's web site at www.qad.com.
The webcast will be archived and available for approximately one year.
Interested parties may participate in the call by dialing 800-230-1059.
A replay of this call will be accessible through March 18 by dialing
800-475-6701, access code 128545.
About QAD
QAD is a leading provider of enterprise applications for global
manufacturing companies specializing in automotive, consumer products,
electronics, food and beverage, industrial and life science products.
QAD applications provide critical functionality for managing
manufacturing resources and operations within and beyond the enterprise,
enabling global manufacturers to collaborate with their customers,
suppliers and partners to make and deliver the right product, at the
right cost and at the right time. For more information about QAD,
telephone +1 805-566-6000, or visit the QAD web site at www.qad.com.
"QAD" is a registered trademark 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 company's ability
to sustain license and service demand; the company's ability to leverage
changes in technology; the company's ability to sustain customer renewal
rates at current levels; the publication of opinions by industry and
financial analysts about the company, its products and technology; the
reliability of estimates of transaction and integration costs and
benefits; the entry of new competitors or new offerings by existing
competitors and the associated announcement of new products and
technological advances by them; delays in localizing the company's
products for new or existing markets; the ability to recruit and retain
key personnel; 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; timely and effective
integration of newly acquired businesses; general economic conditions;
exchange rate fluctuations; and, the global political environment. In
addition, revenue and earnings in the enterprise resource planning (ERP)
software industry are subject to fluctuations. Software license revenue,
in particular, is subject to variability with a significant proportion
of revenue earned in the last month of each quarter. Given the high
margins associated with license revenue, modest fluctuations can have a
substantial impact on net income. Investors should not use any one
quarter's results as a benchmark for future performance. 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 fiscal 2009 ended January 31, 2009.
|
|
|
|
|
|
|
|
|
QAD Inc.
|
|
Condensed Consolidated Statements of Operations
|
|
(In thousands, except per share data)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
January 31,
|
|
|
Twelve Months Ended
January 31,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
2010
|
|
|
2009
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
License fees
|
|
|
$
|
7,134
|
|
|
|
$
|
10,225
|
|
|
|
$
|
28,452
|
|
|
|
$
|
46,673
|
|
|
Maintenance and other
|
|
|
|
32,410
|
|
|
|
|
31,739
|
|
|
|
|
131,142
|
|
|
|
|
133,080
|
|
|
Services
|
|
|
|
13,139
|
|
|
|
|
16,661
|
|
|
|
|
55,637
|
|
|
|
|
82,990
|
|
|
Total revenue
|
|
|
|
52,683
|
|
|
|
|
58,625
|
|
|
|
|
215,231
|
|
|
|
|
262,743
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of license fees
|
|
|
|
1,590
|
|
|
|
|
2,278
|
|
|
|
|
6,941
|
|
|
|
|
9,752
|
|
|
Cost of maintenance, service and other revenue
|
|
|
|
19,507
|
|
|
|
|
25,619
|
|
|
|
|
84,686
|
|
|
|
|
111,819
|
|
|
Total cost of revenue
|
|
|
|
21,097
|
|
|
|
|
27,897
|
|
|
|
|
91,627
|
|
|
|
|
121,571
|
|
|
Gross profit
|
|
|
|
31,586
|
|
|
|
|
30,728
|
|
|
|
|
123,604
|
|
|
|
|
141,172
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
13,248
|
|
|
|
|
17,087
|
|
|
|
|
51,979
|
|
|
|
|
73,025
|
|
|
Research and development
|
|
|
|
8,954
|
|
|
|
|
9,942
|
|
|
|
|
37,303
|
|
|
|
|
43,107
|
|
|
General and administrative
|
|
|
|
7,477
|
|
|
|
|
8,583
|
|
|
|
|
30,969
|
|
|
|
|
33,763
|
|
|
Amortization of intangibles from acquisitions
|
|
|
|
14
|
|
|
|
|
175
|
|
|
|
|
482
|
|
|
|
|
734
|
|
|
Goodwill impairment loss
|
|
|
|
-
|
|
|
|
|
14,406
|
|
|
|
|
-
|
|
|
|
|
14,406
|
|
|
Total operating expenses
|
|
|
|
29,693
|
|
|
|
|
50,193
|
|
|
|
|
120,733
|
|
|
|
|
165,035
|
|
|
Operating income (loss)
|
|
|
|
1,893
|
|
|
|
|
(19,465
|
)
|
|
|
|
2,871
|
|
|
|
|
(23,863
|
)
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
(130
|
)
|
|
|
|
(220
|
)
|
|
|
|
(570
|
)
|
|
|
|
(1,433
|
)
|
|
Interest expense
|
|
|
|
325
|
|
|
|
|
297
|
|
|
|
|
1,273
|
|
|
|
|
1,245
|
|
|
Other (income) expense, net
|
|
|
|
320
|
|
|
|
|
(700
|
)
|
|
|
|
(289
|
)
|
|
|
|
(244
|
)
|
|
Total other (income) expense
|
|
|
|
515
|
|
|
|
|
(623
|
)
|
|
|
|
414
|
|
|
|
|
(432
|
)
|
|
Income (loss) before income taxes
|
|
|
|
1,378
|
|
|
|
|
(18,842
|
)
|
|
|
|
2,457
|
|
|
|
|
(23,431
|
)
|
|
Income tax expense
|
|
|
|
693
|
|
|
|
|
894
|
|
|
|
|
1,108
|
|
|
|
|
289
|
|
|
Net income (loss)
|
|
|
$
|
685
|
|
|
|
$
|
(19,736
|
)
|
|
|
$
|
1,349
|
|
|
|
$
|
(23,720
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share
|
|
|
$
|
0.02
|
|
|
|
$
|
(0.64
|
)
|
|
|
$
|
0.04
|
|
|
|
$
|
(0.77
|
)
|
|
Diluted net income (loss) per share
|
|
|
$
|
0.02
|
|
|
|
$
|
(0.64
|
)
|
|
|
$
|
0.04
|
|
|
|
$
|
(0.77
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted shares
|
|
|
|
31,290
|
|
|
|
|
30,731
|
|
|
|
|
31,017
|
|
|
|
|
30,675
|
|
|
Diluted weighted shares
|
|
|
|
32,953
|
|
|
|
|
30,731
|
|
|
|
|
32,267
|
|
|
|
|
30,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QAD Inc.
|
|
Condensed Consolidated Balance Sheets
|
|
(In thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January 31,
|
|
|
January 31,
|
|
|
|
|
2010
|
|
|
2009
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
$
|
44,678
|
|
|
|
$
|
31,467
|
|
|
Accounts receivable, net
|
|
|
|
61,089
|
|
|
|
|
70,954
|
|
|
Other current assets
|
|
|
|
17,228
|
|
|
|
|
19,164
|
|
|
Total current assets
|
|
|
|
122,995
|
|
|
|
|
121,585
|
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
|
37,219
|
|
|
|
|
41,438
|
|
|
Capitalized software costs, net
|
|
|
|
2,446
|
|
|
|
|
5,699
|
|
|
Goodwill
|
|
|
|
6,348
|
|
|
|
|
6,237
|
|
|
Other assets, net
|
|
|
|
22,166
|
|
|
|
|
18,786
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
$
|
191,174
|
|
|
|
$
|
193,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
|
$
|
285
|
|
|
|
$
|
266
|
|
|
Accounts payable and other current liabilities
|
|
|
|
32,787
|
|
|
|
|
43,575
|
|
|
Deferred revenue
|
|
|
|
85,745
|
|
|
|
|
81,392
|
|
|
Total current liabilities
|
|
|
|
118,817
|
|
|
|
|
125,233
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
16,443
|
|
|
|
|
16,717
|
|
|
Other liabilities
|
|
|
|
6,363
|
|
|
|
|
4,324
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
35
|
|
|
|
|
35
|
|
|
Additional paid-in capital
|
|
|
|
143,121
|
|
|
|
|
139,930
|
|
|
Treasury stock
|
|
|
|
(32,275
|
)
|
|
|
|
(36,614
|
)
|
|
Accumulated deficit
|
|
|
|
(52,480
|
)
|
|
|
|
(49,103
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
(8,850
|
)
|
|
|
|
(6,777
|
)
|
|
Total stockholders' equity
|
|
|
|
49,551
|
|
|
|
|
47,471
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
|
$
|
191,174
|
|
|
|
$
|
193,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QAD Inc.
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(In thousands)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
|
|
|
|
|
January 31,
|
|
|
|
|
2010
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
$
|
17,694
|
|
|
|
$
|
7,253
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment
|
|
|
|
(963
|
)
|
|
|
|
(6,338
|
)
|
|
Capitalized software costs
|
|
|
|
(426
|
)
|
|
|
|
(894
|
)
|
|
Acquisitions of businesses, net of cash acquired
|
|
|
|
(14
|
)
|
|
|
|
(7,059
|
)
|
|
Proceeds from sale of marketable securities
|
|
|
|
-
|
|
|
|
|
275
|
|
|
Proceeds from sale of property and equipment
|
|
|
|
46
|
|
|
|
|
-
|
|
|
Net cash used in investing activities
|
|
|
|
(1,357
|
)
|
|
|
|
(14,016
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Repayments of debt
|
|
|
|
(255
|
)
|
|
|
|
(288
|
)
|
|
Net proceeds from issuance of common stock
|
|
|
|
97
|
|
|
|
|
583
|
|
|
Changes in book overdraft
|
|
|
|
(2,476
|
)
|
|
|
|
468
|
|
|
Excess tax benefits from stock awards
|
|
|
|
-
|
|
|
|
|
75
|
|
|
Repurchase of common stock
|
|
|
|
-
|
|
|
|
|
(2,219
|
)
|
|
Dividends paid
|
|
|
|
(1,873
|
)
|
|
|
|
(3,067
|
)
|
|
Net cash used in financing activities
|
|
|
|
(4,507
|
)
|
|
|
|
(4,448
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rates on cash and equivalents
|
|
|
|
1,381
|
|
|
|
|
(2,935
|
)
|
|
Net increase (decrease) in cash and equivalents
|
|
|
|
13,211
|
|
|
|
|
(14,146
|
)
|
|
Cash and equivalents at beginning of period
|
|
|
|
31,467
|
|
|
|
|
45,613
|
|
|
Cash and equivalents at end of period
|
|
|
$
|
44,678
|
|
|
|
$
|
31,467
|
|
QAD Inc.
John Neale
Senior Vice President and Treasurer
805-566-5117
investor@qad.com
or
PondelWilkinson
Inc.
Laurie Berman/Rob Whetstone
310-279-5980
investor@pondel.com
Copyright © 2012, Business Wire, Inc., All rights reserved. Copyright © 2012, NewsBlaze, Daily News
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