QRS Corporation Announces First Quarter Results

Achieves Positive EBITDA - Meets Prior Guidance



Apr 26, 2001, 01:00 ET from QRS Corporation

    RICHMOND, Calif., April 26 /PRNewswire/ -- QRS Corporation (Nasdaq: QRSI),
 announced today the results of its first quarter ended March 31, 2001.  The
 Company reported revenues of $35.8 million for the quarter ended
 March 31, 2001, compared to revenues of $34.0 million for the quarter ended
 December 31, 2000 and revenues of $35.1 million for the quarter ended
 March 31 last year.  Pro forma earnings for the quarter ended March 31, 2001,
 which exclude non-cash items, amortization of intangible assets
 (including goodwill), in-process research and development, depreciation and
 amortization of capitalized software development costs, interest and income
 taxes (EBITDA), was $534,000, or $0.03 per share, diluted, compared to a pro
 forma loss of $6.3 million, or $0.43 per share, diluted, for the quarter ended
 December 31, 2000, and pro forma earnings of $4.9 million, or $0.32 per share,
 diluted, for the quarter ended March 31, 2000.  In accordance with GAAP, net
 loss for the quarter ended March 31, 2001 was $8.8 million, or $0.58 per
 share, diluted, compared to net loss of $9.7 million, or $0.67 per share,
 diluted, for the quarter ended December 31, 2000 and net loss of
 $17.8 million, or $1.26 per share, diluted, for the quarter ended
 March 31, 2000.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000508/QRSLOGO )
     "We are pleased with our results for this first quarter of 2001 and feel
 they indicate that we are on the right track," stated John Simon, chief
 executive officer for QRS.  "Having reached a positive EBITDA as we indicated
 we would in our earlier guidance, our basic strategy is on target and we will
 continue to follow and refine upon that strategy as necessary to achieve the
 results that our stakeholders expect."
     "The actions that we have taken to return QRS to historical
 profitability -- including aggressive cost management, strengthened sales and
 marketing initiatives, collaborative business-building efforts with new
 partners and alliances, and a focus on completing a single, integrated supply
 chain management solution -- are now generating results that we believe are
 just the beginning of continued improvement in growth and profitability for
 QRS," continued Simon.
     In additional financial results, QRS achieved marked improvements in its
 gross margins of $14.6 million, up from $8 million in the prior quarter ending
 December 31, 2000, and representing an increase of $6.6 million, or 83%.
 Gross margin as a percentage of revenue was 41% in Q1 of 2001, up from 23% in
 Q4 of 2000.  QRS also made significant decreases to its general and
 administrative costs with a $1.3 million or 17% decrease in costs to
 $6 million from $7.3 million in the prior quarter ending December 31, 2000.
 As a percentage of revenue, general and administrative costs represented
 16.8% of revenues, as compared to 21.5% of revenues in the prior quarter
 ending December 31, 2000.  Cash remained at $27 million as receivables
 declined.
     Additional first quarter highlights for QRS included:
 
     -- A 221% increase in revenue growth for the Collaboration & Related
        Services business segment which includes software sales -- Key wins in
        the software business included an agreement with Dillard's to provide
        global sourcing and supply chain management for its private label
        business through the licensing of the Tradeweave sourcing solution;
        licensing of software to UK-based retailer Tibbett & Britten; and
        additional licensing up-grades for The Limited.
     -- Expansion of the vendor showroom offering available through Tradeweave
        Marketplace -- two active vendors and multiple retailers are actively
        participating in the Marketplace, making real-time, on-line trades of
        for resale merchandise over the system.
     -- Growth in strategic partnerships and alliances -- the launch of a
        strategic partnership with i2 Technologies provides buyers and sellers
        with comprehensive merchandising, planning, commerce and logistics
        solutions on a common platform, and an alliance with Advanstar
        Communications' MAGIC International enables an online marketplace for
        buyers and sellers in the fashion and apparel industry.
     -- Continued integration of QRS products and services -- in addition to
        the finalization of the rebranding of all products under the Tradeweave
        name, product offerings and supporting information are being integrated
        in the areas of Marketplace, Sourcing, Content and Assortment Planning.
     -- Completed renegotiation of the IBM networking contract.
 
     "Our determination to provide comprehensive, high-value, solutions that
 meet the complete product life cycle needs of the retail community is
 resulting in new wins.  With our expansive products and services, customers
 are indeed viewing us as a full go-to-market solution," commented Simon.
 
     About QRS
     QRS is a leading worldwide provider of collaborative business-to-business
 e-commerce solutions for the retail industry.  The company delivers value to
 thousands of customers by providing tools that enable retailers, manufacturers
 and their business partners to source, track and deliver the right product to
 the right place while reducing costs and cycle times.  Through the QRS
 Tradeweave Retail Network, the company delivers an integrated suite of
 products and services for collaborative and effective supply chain management.
 For 13 years, QRS has been an innovator in the technological evolution of the
 retail industry and has helped its customers build profitable relationships
 with their supply chain partners.  For additional information visit
 www.qrs.com.
 
     Cautionary Language
     Statements contained in this press release that are not historical facts
 are forward-looking statements subject to risks and uncertainties as discussed
 more fully in QRS Corporation's filings with the SEC, including its most
 recent Form 10-K and Form 10-Q.
 
     NOTE:  QRS is a registered trademark and Tradeweave is a trademark of QRS
 Corporation.  All other trademarks belong to their respective owners.
 
 
                                QRS CORPORATION
                PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three Months Ended March 31, 2001 and 2000
               (In thousands, except share and per share amounts)
                                  (Unaudited)
 
                                                         Three Months Ended
                                                              March 31,
                                                        2001           2000
 
     Revenues                                         $35,766        $35,110
 
     Cost of revenue                                   21,232         19,031
 
     Gross profit                                      14,534         16,079
 
     Operating expenses:
       Sales and marketing                              8,347          6,914
       Product development                              3,267          1,959
       General and administrative                       6,016          4,579
       Amortization of intangible assets                7,199          3,657
       In-process research and development                 --         17,880
           Total operating expenses                    24,829         34,989
 
     Operating loss                                  (10,295)       (18,910)
 
     Interest income                                      370            397
 
     Loss from operations before
      income taxes and minority interest               (9,925)       (18,513)
 
     Income taxes (benefit)                           (1,170)          (539)
 
     Minority interest in subsidiary                       --          (195)
 
     Net loss                                         (8,755)       (17,779)
 
     EBITDA adjustments:
       Depreciation and amortization of
        capitalized product development costs           2,931          2,069
        Amortization of intangible assets               7,199          3,657
        In-process research and development                --         17,880
        Income tax benefit                            (1,170)          (539)
        Interest income                                 (370)          (397)
        Stock compensation                                699             --
 
            Total EBITDA adjustments                    9,289         22,670
 
     Pro forma net earnings (EBITDA)                     $534         $4,891
 
     Pro forma basic earnings per share                 $0.04          $0.35
 
       Shares used to compute pro forma
        basic earnings per share                   15,076,042     14,125,162
 
     Pro forma diluted earnings per share               $0.03          $0.32
 
       Shares used to compute pro forma
        diluted earnings per share per share       15,318,291     15,050,110
 
 
                                QRS CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three Months Ended March 31, 2001 and 2000
               (In thousands, except share and per share amounts)
                                  (Unaudited)
 
                                                         Three Months Ended
                                                             March 31,
                                                        2001           2000
 
     Revenues                                         $35,766        $35,110
 
     Cost of revenue                                   21,232         19,031
 
     Gross profit                                      14,534         16,079
 
     Operating expenses:
       Sales and marketing                              8,347          6,914
       Product development                              3,267          1,959
       General and administrative                       6,016          4,579
       Amortization of intangible assets                7,199          3,657
       In-process research and development                 --         17,880
           Total operating expenses                    24,829         34,989
 
     Operating loss                                  (10,295)       (18,910)
 
     Interest income                                      370            397
 
     Loss from operations before
      income taxes and minority interest               (9,925)       (18,513)
 
     Income taxes (benefit)                           (1,170)          (539)
 
     Minority interest in subsidiary                       --          (195)
 
     Net loss                                        $(8,755)      $(17,779)
 
     Basic loss per share                             $(0.58)        $(1.26)
 
       Shares used to compute basic loss
        per share                                  15,076,042     14,125,162
 
     Diluted loss per share (A)                       $(0.58)        $(1.26)
 
        Shares used to compute diluted loss
         per share (A)                             15,076,042     14,125,162
 
     (A) Diluted loss per share for the three months ended March 31, 2001 and
         2000 was the same as basic loss per share for the three months ended
         March 31, 2001 and 2000 because the potential common shares
         outstanding during the periods are antidilutive.
 
 
                                  QRS CORPORATION
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                               (Dollars in thousands)
                                    (Unaudited)
 
 
                                ASSETS
                                                     March 31,    December 31,
                                                        2001            2000
     Current assets:
         Cash and cash equivalents                    $27,040        $15,372
         Marketable securities-available for sale          --         10,090
         Accounts receivable-net of allowance for
          doubtful accounts of $2,003 at
          March 31, 2001 and $2,072
          at December 31, 2000                         25,863         27,292
         Deferred income tax assets                     1,666          1,666
         Prepaid expenses and other                     2,659          2,959
         Income taxes receivable                        3,228          3,228
 
             Total current assets                      60,456         60,607
 
     Property and equipment:
         Furniture and fixtures                         4,905          3,836
         Equipment                                     23,477         23,849
         Leasehold improvements                         5,889          5,648
                                                       34,271         33,333
         Accumulated depreciation and amortization   (12,676)       (10,960)
 
             Total                                     21,595         22,373
 
     Marketable securities - available for sale            --          2,171
     Capitalized product development costs
      - net of accumulated amortization of $9,571 at
      March 31, 2001 and $8,515 at December 31, 2000    8,725          9,021
     Intangible assets - net of accumulated
      amortization of $34,443 at March 31, 2001 and
      $27,244 at December 31, 2000                    152,239        150,452
     Other assets                                       2,456          3,496
 
         Total                                       $245,471       $248,120
 
                        LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
          Accounts payable                             $8,653         $7,823
          Accrued incentives                              886          1,481
          Accrued vacation                              2,282          2,259
          Deferred acquisition payments                 2,500          3,600
          Accrued transaction costs                     1,310          1,700
          Deferred revenue                              2,584          3,138
          Other accrued liabilities                     5,811          4,710
              Total current liabilities                24,026         24,711
 
     Deferred income taxes                              7,534          7,678
     Deferred acquisition payments                      2,500          2,500
     Deferred rent and other                            2,171          2,141
         Total liabilities                             36,231         37,030
 
 
     Stockholders' equity:
         Preferred stock - $.001 par value;
          10,000,000 shares authorized; none
          issued and outstanding                           --             --
         Common stock - $.001 par value;
          60,000,000 shares authorized; 15,625,724
          shares issued and 15,400,399 shares
          outstanding at March 31, 2001; and
          15,281,111 shares issued and 14,663,015
          shares outstanding at December 31, 2000     250,809        240,968
         Deferred compensation                        (2,830)             --
         Treasury stock; 225,325 shares at
          March 31, 2001 and December 31, 2000        (5,530)        (5,530)
         Accumulated other comprehensive gain-
          unrealized gain on investments                   18            124
         Accumulated deficit                         (33,227)       (24,472)
             Total Stockholders' equity               209,240        211,090
 
         Total                                       $245,471       $248,120
 
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SOURCE QRS Corporation
    RICHMOND, Calif., April 26 /PRNewswire/ -- QRS Corporation (Nasdaq: QRSI),
 announced today the results of its first quarter ended March 31, 2001.  The
 Company reported revenues of $35.8 million for the quarter ended
 March 31, 2001, compared to revenues of $34.0 million for the quarter ended
 December 31, 2000 and revenues of $35.1 million for the quarter ended
 March 31 last year.  Pro forma earnings for the quarter ended March 31, 2001,
 which exclude non-cash items, amortization of intangible assets
 (including goodwill), in-process research and development, depreciation and
 amortization of capitalized software development costs, interest and income
 taxes (EBITDA), was $534,000, or $0.03 per share, diluted, compared to a pro
 forma loss of $6.3 million, or $0.43 per share, diluted, for the quarter ended
 December 31, 2000, and pro forma earnings of $4.9 million, or $0.32 per share,
 diluted, for the quarter ended March 31, 2000.  In accordance with GAAP, net
 loss for the quarter ended March 31, 2001 was $8.8 million, or $0.58 per
 share, diluted, compared to net loss of $9.7 million, or $0.67 per share,
 diluted, for the quarter ended December 31, 2000 and net loss of
 $17.8 million, or $1.26 per share, diluted, for the quarter ended
 March 31, 2000.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/20000508/QRSLOGO )
     "We are pleased with our results for this first quarter of 2001 and feel
 they indicate that we are on the right track," stated John Simon, chief
 executive officer for QRS.  "Having reached a positive EBITDA as we indicated
 we would in our earlier guidance, our basic strategy is on target and we will
 continue to follow and refine upon that strategy as necessary to achieve the
 results that our stakeholders expect."
     "The actions that we have taken to return QRS to historical
 profitability -- including aggressive cost management, strengthened sales and
 marketing initiatives, collaborative business-building efforts with new
 partners and alliances, and a focus on completing a single, integrated supply
 chain management solution -- are now generating results that we believe are
 just the beginning of continued improvement in growth and profitability for
 QRS," continued Simon.
     In additional financial results, QRS achieved marked improvements in its
 gross margins of $14.6 million, up from $8 million in the prior quarter ending
 December 31, 2000, and representing an increase of $6.6 million, or 83%.
 Gross margin as a percentage of revenue was 41% in Q1 of 2001, up from 23% in
 Q4 of 2000.  QRS also made significant decreases to its general and
 administrative costs with a $1.3 million or 17% decrease in costs to
 $6 million from $7.3 million in the prior quarter ending December 31, 2000.
 As a percentage of revenue, general and administrative costs represented
 16.8% of revenues, as compared to 21.5% of revenues in the prior quarter
 ending December 31, 2000.  Cash remained at $27 million as receivables
 declined.
     Additional first quarter highlights for QRS included:
 
     -- A 221% increase in revenue growth for the Collaboration & Related
        Services business segment which includes software sales -- Key wins in
        the software business included an agreement with Dillard's to provide
        global sourcing and supply chain management for its private label
        business through the licensing of the Tradeweave sourcing solution;
        licensing of software to UK-based retailer Tibbett & Britten; and
        additional licensing up-grades for The Limited.
     -- Expansion of the vendor showroom offering available through Tradeweave
        Marketplace -- two active vendors and multiple retailers are actively
        participating in the Marketplace, making real-time, on-line trades of
        for resale merchandise over the system.
     -- Growth in strategic partnerships and alliances -- the launch of a
        strategic partnership with i2 Technologies provides buyers and sellers
        with comprehensive merchandising, planning, commerce and logistics
        solutions on a common platform, and an alliance with Advanstar
        Communications' MAGIC International enables an online marketplace for
        buyers and sellers in the fashion and apparel industry.
     -- Continued integration of QRS products and services -- in addition to
        the finalization of the rebranding of all products under the Tradeweave
        name, product offerings and supporting information are being integrated
        in the areas of Marketplace, Sourcing, Content and Assortment Planning.
     -- Completed renegotiation of the IBM networking contract.
 
     "Our determination to provide comprehensive, high-value, solutions that
 meet the complete product life cycle needs of the retail community is
 resulting in new wins.  With our expansive products and services, customers
 are indeed viewing us as a full go-to-market solution," commented Simon.
 
     About QRS
     QRS is a leading worldwide provider of collaborative business-to-business
 e-commerce solutions for the retail industry.  The company delivers value to
 thousands of customers by providing tools that enable retailers, manufacturers
 and their business partners to source, track and deliver the right product to
 the right place while reducing costs and cycle times.  Through the QRS
 Tradeweave Retail Network, the company delivers an integrated suite of
 products and services for collaborative and effective supply chain management.
 For 13 years, QRS has been an innovator in the technological evolution of the
 retail industry and has helped its customers build profitable relationships
 with their supply chain partners.  For additional information visit
 www.qrs.com.
 
     Cautionary Language
     Statements contained in this press release that are not historical facts
 are forward-looking statements subject to risks and uncertainties as discussed
 more fully in QRS Corporation's filings with the SEC, including its most
 recent Form 10-K and Form 10-Q.
 
     NOTE:  QRS is a registered trademark and Tradeweave is a trademark of QRS
 Corporation.  All other trademarks belong to their respective owners.
 
 
                                QRS CORPORATION
                PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three Months Ended March 31, 2001 and 2000
               (In thousands, except share and per share amounts)
                                  (Unaudited)
 
                                                         Three Months Ended
                                                              March 31,
                                                        2001           2000
 
     Revenues                                         $35,766        $35,110
 
     Cost of revenue                                   21,232         19,031
 
     Gross profit                                      14,534         16,079
 
     Operating expenses:
       Sales and marketing                              8,347          6,914
       Product development                              3,267          1,959
       General and administrative                       6,016          4,579
       Amortization of intangible assets                7,199          3,657
       In-process research and development                 --         17,880
           Total operating expenses                    24,829         34,989
 
     Operating loss                                  (10,295)       (18,910)
 
     Interest income                                      370            397
 
     Loss from operations before
      income taxes and minority interest               (9,925)       (18,513)
 
     Income taxes (benefit)                           (1,170)          (539)
 
     Minority interest in subsidiary                       --          (195)
 
     Net loss                                         (8,755)       (17,779)
 
     EBITDA adjustments:
       Depreciation and amortization of
        capitalized product development costs           2,931          2,069
        Amortization of intangible assets               7,199          3,657
        In-process research and development                --         17,880
        Income tax benefit                            (1,170)          (539)
        Interest income                                 (370)          (397)
        Stock compensation                                699             --
 
            Total EBITDA adjustments                    9,289         22,670
 
     Pro forma net earnings (EBITDA)                     $534         $4,891
 
     Pro forma basic earnings per share                 $0.04          $0.35
 
       Shares used to compute pro forma
        basic earnings per share                   15,076,042     14,125,162
 
     Pro forma diluted earnings per share               $0.03          $0.32
 
       Shares used to compute pro forma
        diluted earnings per share per share       15,318,291     15,050,110
 
 
                                QRS CORPORATION
                     CONSOLIDATED STATEMENTS OF OPERATIONS
               For the Three Months Ended March 31, 2001 and 2000
               (In thousands, except share and per share amounts)
                                  (Unaudited)
 
                                                         Three Months Ended
                                                             March 31,
                                                        2001           2000
 
     Revenues                                         $35,766        $35,110
 
     Cost of revenue                                   21,232         19,031
 
     Gross profit                                      14,534         16,079
 
     Operating expenses:
       Sales and marketing                              8,347          6,914
       Product development                              3,267          1,959
       General and administrative                       6,016          4,579
       Amortization of intangible assets                7,199          3,657
       In-process research and development                 --         17,880
           Total operating expenses                    24,829         34,989
 
     Operating loss                                  (10,295)       (18,910)
 
     Interest income                                      370            397
 
     Loss from operations before
      income taxes and minority interest               (9,925)       (18,513)
 
     Income taxes (benefit)                           (1,170)          (539)
 
     Minority interest in subsidiary                       --          (195)
 
     Net loss                                        $(8,755)      $(17,779)
 
     Basic loss per share                             $(0.58)        $(1.26)
 
       Shares used to compute basic loss
        per share                                  15,076,042     14,125,162
 
     Diluted loss per share (A)                       $(0.58)        $(1.26)
 
        Shares used to compute diluted loss
         per share (A)                             15,076,042     14,125,162
 
     (A) Diluted loss per share for the three months ended March 31, 2001 and
         2000 was the same as basic loss per share for the three months ended
         March 31, 2001 and 2000 because the potential common shares
         outstanding during the periods are antidilutive.
 
 
                                  QRS CORPORATION
                       CONDENSED CONSOLIDATED BALANCE SHEETS
                               (Dollars in thousands)
                                    (Unaudited)
 
 
                                ASSETS
                                                     March 31,    December 31,
                                                        2001            2000
     Current assets:
         Cash and cash equivalents                    $27,040        $15,372
         Marketable securities-available for sale          --         10,090
         Accounts receivable-net of allowance for
          doubtful accounts of $2,003 at
          March 31, 2001 and $2,072
          at December 31, 2000                         25,863         27,292
         Deferred income tax assets                     1,666          1,666
         Prepaid expenses and other                     2,659          2,959
         Income taxes receivable                        3,228          3,228
 
             Total current assets                      60,456         60,607
 
     Property and equipment:
         Furniture and fixtures                         4,905          3,836
         Equipment                                     23,477         23,849
         Leasehold improvements                         5,889          5,648
                                                       34,271         33,333
         Accumulated depreciation and amortization   (12,676)       (10,960)
 
             Total                                     21,595         22,373
 
     Marketable securities - available for sale            --          2,171
     Capitalized product development costs
      - net of accumulated amortization of $9,571 at
      March 31, 2001 and $8,515 at December 31, 2000    8,725          9,021
     Intangible assets - net of accumulated
      amortization of $34,443 at March 31, 2001 and
      $27,244 at December 31, 2000                    152,239        150,452
     Other assets                                       2,456          3,496
 
         Total                                       $245,471       $248,120
 
                        LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
          Accounts payable                             $8,653         $7,823
          Accrued incentives                              886          1,481
          Accrued vacation                              2,282          2,259
          Deferred acquisition payments                 2,500          3,600
          Accrued transaction costs                     1,310          1,700
          Deferred revenue                              2,584          3,138
          Other accrued liabilities                     5,811          4,710
              Total current liabilities                24,026         24,711
 
     Deferred income taxes                              7,534          7,678
     Deferred acquisition payments                      2,500          2,500
     Deferred rent and other                            2,171          2,141
         Total liabilities                             36,231         37,030
 
 
     Stockholders' equity:
         Preferred stock - $.001 par value;
          10,000,000 shares authorized; none
          issued and outstanding                           --             --
         Common stock - $.001 par value;
          60,000,000 shares authorized; 15,625,724
          shares issued and 15,400,399 shares
          outstanding at March 31, 2001; and
          15,281,111 shares issued and 14,663,015
          shares outstanding at December 31, 2000     250,809        240,968
         Deferred compensation                        (2,830)             --
         Treasury stock; 225,325 shares at
          March 31, 2001 and December 31, 2000        (5,530)        (5,530)
         Accumulated other comprehensive gain-
          unrealized gain on investments                   18            124
         Accumulated deficit                         (33,227)       (24,472)
             Total Stockholders' equity               209,240        211,090
 
         Total                                       $245,471       $248,120
 
                      MAKE YOUR OPINION COUNT - Click Here
                http://tbutton.prnewswire.com/prn/11690X11663334
 
 SOURCE  QRS Corporation