QAD stock dips one day after 4Q earnings report

By BY RAY ESTRADA - MARCH 13, 2010

After reporting Thursday that fourth-quarter total revenue was $52.7 million for fiscal 2010, compared to $58.6 million for the fourth quarter of fiscal 2009, shares of South Coast-based QAD Inc. sunk yesterday.

The business software maker’s stock dipped 20 cents, or 3.7 percent, to $5.30 in Friday afternoon trading.

After the market closed the day before, QAD reported fourth-quarter net income of $685,000, or 2 cents per share, for the quarter that ended Jan. 31. In the same quarter a year ago, the firm had a loss of $19.7 million, or 64 cents per share,. Part of that increase came because of a $14.4 million charge the company took to account for the declining value of its assets.

“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, QAD chief executive officer. “We successfully navigated through a difficult economic environment by improving receivables and generating significant cash flow, which increased our cash balance by $13 million.”

Even though total operating expenses declined almost 41 percent to $29.7 million, QAD sales fell 10 percent to $52.7 million.

Company officials said fourth quarter highlights included:

- receiving 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;

- receiving license orders from companies across QAD’s six vertical markets including, AB S.A., Beaphar B.V., The Boler Co., Crane Co., Essex Group Limited, ev3 Inc., PANalytical B.V., Schlumberger Limited and Watts Industries;

- announcing support for the latest version of the automotive industry’s materials management operations guideline and logistics evaluation. QAD participated with a variety of North American and European automotive trade groups to provide a set of practices for automotive suppliers.

QAD license revenue came to $7.1 million, compared with $10.2 million for the fiscal 2009 fourth quarter. The company’s financial results for the quarter were hurt by about $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, compared to $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, company officials said.

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.

For the fiscal year ended Jan. 31, 2010, total revenue was $215.2 million, compared to $262.7 million for fiscal 2009.

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