QAD Increases Fourth Quarter Fiscal Year 2001 Revenue and Earnings Estimates

Business Wire, Feb 20, 2001

Business Editors

CARPINTERIA, Calif.--(BUSINESS WIRE)--Feb. 20, 2001

QAD (Nasdaq:QADI), an e-business innovator for manufacturers, distributors and exchanges, announced today that it is raising its fourth quarter, fiscal year 2001 revenue and earnings estimates.

QAD now estimates revenue to range between $58 million and $59 million for the quarter ending Jan. 31, 2001, versus the previous estimate of $54 million to $57 million. This estimate compares to third quarter FY 2001 revenue of $50.0 million and fourth quarter FY 2000 revenue of $70.9 million, which included $12 million in license revenue from one customer.

QAD also announced that it expects to be profitable for this quarter. Previous estimates were a range of a slight profit to a slight loss. Prior year fourth quarter diluted earnings per share were 6 cents.

"Our positive results this past quarter are due to the firming of the ERP market, the shipment and successful pilot of the QAD eQ Sell Side solution and the refocused efforts of our staff on growth and profitability after a series of cost reducing actions in the third quarter," said Karl Lopker, CEO of QAD.

"While we are concerned about the effect of the slowdown in manufacturing and related capital expenditures, we are encouraged by our customers' renewed focus on enterprise and supply chain systems from vendors they know and trust. Moreover, we have seen improvements in our gross margins compared to the prior year due to a higher percentage of internally developed software in our revenue mix."

The QAD earnings announcement for the fourth quarter and FY 2001 will occur on March 13, 2001, after close of market. At that time, guidance will also be provided for the first quarter of FY 2002.

About QAD

QAD is a leading innovator of e-business solutions for manufacturing, distribution and exchanges. QAD applications are used at more than 5,000 licensed sites in 86 countries. Available in as many as 26 languages, QAD software serves the following industries: automotive, consumer products, electronics, food and beverage, industrial, and medical products.

For more information about QAD, telephone 805/684-6614, or visit the QAD Web site at http://www.qad.com. To receive any of QAD's news releases via facsimile, contact 800/356-0747, or outside the United States contact 213/253-5647.

QAD is a trademark and MFG/PRO 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 news 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 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 e-business and enterprise resource planning (ERP) 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, refer to the company's Annual Report or Form 10-K for the fiscal year ended Jan. 31, 2000.