Company Maintains Revenues, Narrows Loss and Improves Gross Margins
Richmond, Calif. — April 25, 2002 — QRS Corporation (Nasdaq: QRSI), a market leader in supply chain technology for the retail industry, announced today the results of its first quarter ended March 31, 2002. The Company reported revenues of $35.5 million for the quarter ended March 31, 2002, compared to revenues of $34.6 for the quarter ended December 31, 2001. Net loss for the quarter ended March 31, 2002 was ($3.2 million), or ($0.20) per share, diluted, compared with a net loss of ($141.2 million), or ($9.08) per share, diluted, for the quarter ended December 31, 2001.
Revenues for the first quarter 2002 compared year over year to $35.9 million for the quarter ended March 31, 2001. Net loss for the first quarter 2002 compared year over year to a net loss of ($8.8 million), or ($0.58) per share, diluted, for the quarter ended March 31, 2001. The net loss for the fourth quarter of 2001 included restructuring expenses and impairment losses, including the $4.7 million recognized in cost of revenues, totaling $128.8 million; the net loss for the quarter ended March 31, 2001 included restructuring expenses of $2.3 million.
"With both new business and customer renewals reflecting market demand for our supply chain solutions, we are pleased we maintained steady revenues and achieved improvements in operating performance in the first quarter, despite difficult general economic conditions," said Liz Fetter, president and CEO of QRS. "QRS` refocused product strategy is in place and our flagship product, QRS Catalogue, along with QRS Exchange, continue to be a strong source of revenue for the Company."
The Company reported a significant improvement in gross margins. For the quarter ended March 31, 2002, gross margins were 45%. This is an increase from 39% in the quarter ended December 31, 2001, before recognition of impairment losses charged to cost of revenues of $4.7 million that reduced reported gross margins to 25%. The improvement also reflects a return to the gross margin percentage that the Company achieved in the quarter ended March 31, 2001.
Cash and marketable securities ended the first quarter at $38.7 million. The Company entered into an OEM agreement with IBM under which it acquired licenses for the IBM CrossWorlds technology. Under this agreement, the Company incurred a debt obligation of $2.1 million to be repaid over a 24-month period.
QRS accomplishments in 2002 to date include:
Customer wins in new retail sectors. QRS reported wins that extend its traditional footprint, including deals with Kroger Co., H.E. Butt Grocery Co., Fleming Cos., Sears, Roebuck and Co. and Ace Hardware Corp.
Strategic partnerships and alliances. Through an OEM agreement with IBM, QRS will incorporate IBM CrossWorlds business process integration technology into its product line to accelerate the implementation time for QRS solutions, and thereby improve customers` return on investment. IBM CrossWorlds technology will allow QRS applications to interact with other leading enterprise systems, including those from Oracle Corp., SAP AG and i2 Technologies Inc.
Appointment of new worldwide sales executive. The Company named Joseph Dugan as senior vice president, global sales.
Adoption of corporate governance initiative. The Company`s Board of Directors adopted a plan to provide for an orderly transition to a Board comprised of a majority of independent directors. Patrick Jones also joined the Board and its Audit Committee.
Launching of customer service and satisfaction programs. The Company instituted customer service initiatives tailored to the specific needs of customers and improved training programs for the sales teams.
"We ended the quarter with a strong focus on sales execution, customer satisfaction and strategic product expansion. I am pleased with the real progress we have made and the solid results we achieved," said Fetter. "There is a large and growing market opportunity for QRS and we are poised to capture that opportunity by leveraging our unique advantages: our market-leading products, our blue-chip customer base, our proven business with scale and our world-class team."
Conference Call Information
An earnings announcement conference call is scheduled for 2:00 p.m. PDT (5:00 p.m. EDT) on Thursday, April 25, 2002. The toll-free number for those who would like to participate is 1-877-580-9103 with pass code QRS.
The call also will be Web-cast and can be accessed at www.qrs.com.
Replay will be available from Thursday, April 25, 7:00 p.m. EDT until Friday, May 3, 5:00 p.m. EDT at 1-888-568-0028. The replay of the Web cast will also remain available at www.qrs.com through May 3.
About QRS
QRS (Nasdaq: QRSI) is a market leader in supply chain technology for the retail industry. Since 1988, QRS has led the way in building collaborative commerce relationships through its software applications, trading community management tools and global services. QRS` full suite of proven, scalable technology solutions enable our customers to streamline their supply chain processes and collaborate in real-time with their trading partners to help achieve superior profit, maximum efficiency and competitive advantage. Learn more about QRS Corporation at www.qrs.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This release contains forward-looking statements regarding future events and the future financial performance of QRS that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results. Readers are referred to the documents filed by QRS with the SEC, specifically the most recent reports on Form 10-K, 8-K, and 10-Q, each as it may be amended from time to time, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including risks associated with general economic and political conditions, including further disruptions; specific conditions in the retail industry; competition; increased length of sales cycles for our sourcing solutions products; reductions in information technology spending in the retail industry; dependence upon key customers and their trading partners; ability to introduce and market acceptance of new products and services; the ability to successfully integrate and manage acquired businesses and technologies; and dependence upon IBM for e-commerce services, among others. QRS assumes no obligation to update the forward-looking information contained in this news release.
The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in QRS` most recent reports on Form 10-K and Form 10-Q, each as it may be amended from time to time. QRS` results of operations for the three months ended March 31, 2002 are not necessarily indicative of QRS` operating results for any future periods.
QRS is a registered trademark of QRS Corporation. All other trademarks belong to their respective owners.
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