QRS Corporation Returns to Profitability in Third Quarter 2002

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RICHMOND, Calif., Oct. 30 -- QRS Corporation (Nasdaq: QRSI), a leading provider of collaborative commerce solutions for the extended supply chain, announced today that it has returned to profitability within the time frame targeted by the Company`s management.

The Company reported revenues of $33.5 million for the quarter ended September 30, 2002, compared to revenues of $35.1 million for the quarter ended June 30, 2002 and $35.8 million for the quarter ended September 30, 2001.

Net income for the quarter ended September 30, 2002 was $0.6 million, or 4 cents per share diluted, compared with a net loss of $2.4 million, or 15 cents per share diluted, for the quarter ended June 30, 2002, and a net loss of $15.2 million, or 98 cents per share diluted, for the quarter ended September 30, 2001.

The Company also reported a gross margin of 48% for the quarter ended September 30, 2002. This gross margin compares to a gross margin of 45% for the quarter ended June 30, 2002, and a gross margin of 36% for the quarter ended September 30, 2001.

Operating expenses for the quarter ended September 30, 2002 fell to $15.6 million, compared to $18.2 million for the quarter ended June 30, 2002, and $33.9 million for the quarter ended September 30, 2001. Cash and marketable securities decreased by $2.3 million during the quarter ended September 30, 2002 to $37.4 million due to several expected one-time payments.

"We are very pleased to have delivered profitability in the third quarter and to have achieved our fourth quarter gross margin goal of 48% ahead of schedule, despite a challenging economic environment," said Liz Fetter, president and CEO of QRS. "We accomplished these results thanks to demand for our collaborative commerce solutions and continued execution of our focused cost management plans. We will continue to demonstrate operational discipline as we pursue our plans for future growth."

Revenues from Software Applications, which include both enterprise and hosted applications, were $8.6 million for the quarter ended September 30, 2002, compared with $9.3 million for the quarter ended June 30, 2002, and $9.0 million for the quarter ended September 30, 2001. Third quarter Software Application results reflected the impact of the anticipated business consolidation within the May Company. Revenues for Trading Community Management were $18.8 million for the quarter ended September 30, 2002, compared to $18.3 million for the quarter ended June 30, 2002, and $20.0 million for the quarter ended September 30, 2001. Revenues for Global Services were $6.1 million for the quarter ended September 30, 2002, compared to $7.5 million for the quarter ended June 30, 2002, and $6.9 million for the quarter ended September 30, 2001.

Third quarter highlights for QRS include:
-- Profitability achieved. QRS attained its goal of returning to profitability in the second half of the year. The Company achieved profitability through continued demand for the Company`s solutions, as well as significant improvements to the Company`s overall cost structure.
-- Customer wins and renewals. During the quarter ended September 30, 2002, QRS secured wins and agreement extensions with more than 90 retailers and vendors across multiple retail verticals, including Meijer, J & J Foods, Conair Corporation, OshKosh B`Gosh, Longs Drugs, Guess?, Inc., Schnuck Markets, Block Sportswear and Stride Rite.
-- Geographic expansion. QRS initiated the rollout of QRS Catalogue(TM) to the European supplier and manufacturer community in September with the launch of a trading community program that will ultimately reach the more than 2,500 trading partners of Selfridges plc, one of the top department store groups in Europe. Earlier this month, at a conference hosted by QRS and Selfridges, more than 100 representatives from leading European suppliers and retailers learned how Selfridges will be electronically synchronizing product content using QRS Catalogue to increase revenue and decrease costs across their entire supply chain.

The Company expects to maintain profitability and the current gross margin level in the fourth quarter. Revenues for the full year 2002 are expected to be approximately 5% below 2001 revenues. The Company expects to end 2002 with cash balances in line with where it began the year.

Conference Call Information
In conjunction with the earnings release, the Company will hold a conference call at 2:00 p.m. PST (5:00 p.m. EST) Wednesday, October 30, 2002. For those who wish to participate, the conference call can be accessed via telephone at 1-877-580-9103 with pass code QRS. The call also will be Web-cast and can be accessed at www.qrs.com.

Telephone replay will be available beginning Wednesday, October 30, 2002, 7:00 p.m. EST at 1-800-685-1820 (toll-free) and 402-998-1697 (international). The replay of the Web cast will also remain available at www.qrs.com.

About QRS
QRS Corporation has been building, automating and managing retail trading relationships through innovative software applications and services since 1988.

Today, QRS is an established leader in providing collaborative commerce solutions for the extended supply chain. QRS offers scalable trading community connectivity; product content management; real-time, synchronized transaction delivery; and Web-enabled sourcing and procurement. QRS solutions are used by more than 8,000 retail industry customers* representing the world`s top retailers, vendors and manufacturers, including Federated Department Stores Inc., Selfridges plc, Sears, Roebuck and Co., LVMH LLC, Group Clarins USA and Jones Apparel Group Inc. With QRS collaborative commerce solutions, retail industry customers can transform their extended supply chain in response to marketplace dynamics, drive process efficiency and achieve superior profit. Learn more about QRS Corporation at www.qrs.com.

*Based on total, unique QRS corporate customers that purchased or licensed QRS products and services between April 2001 and May 2002.

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 Corporation that involve risks and uncertainties, including statements about future profitability, revenue, gross margins, and cash and marketable securities positions. 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 Corporation 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 factors that could cause actual results to differ from those contained in the forward-looking statements, including risks associated with general economic conditions; specific conditions in the retail industry; competition; changes in our senior management; rapid technological change in our 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.

NOTE: QRS, the QRS logo, QRS Catalogue, QRS Exchange, QRS Compliance Link, QRS Managed EC, QRS Merchandising, QRS Retail Intelligence Services, QRS Showroom and QRS Sourcing are trademarks or registered trademarks of QRS Corporation in the United States and other countries. Trademarks of third parties are owned by their respective owners.