Qad (QADA) 8-K Qad Announces Fiscal 2008 Third Quarter Financial Results

Exhibit 99.1

For More Information, Contact:
Aileen Osborn QAD Vice President Finance 805.566.6077 investor@qad.com	Rob Whetstone PondelWilkinson Inc. 310.279.5980 investor@pondel.com

QAD ANNOUNCES FISCAL 2008 THIRD QUARTER FINANCIAL RESULTS

Company Reports Record Third Quarter Revenue

SANTA BARBARA, Calif. – November 20, 2007 –QAD Inc. (NASDAQ: QADI), a global provider of enterprise software and services, today reported financial results for the fiscal 2008 third quarter and nine-month period ended October 31, 2007.

Total revenue increased 16 percent to $66.6 million in the third quarter of fiscal 2008 from $57.3 million in the same period last year. License revenue for the fiscal 2008 third quarter was up 28 percent to $14.1 million, compared with $11.0 million for the fiscal 2007 third quarter. Maintenance and other revenue grew four percent to $32.3 million in the third quarter of fiscal 2008, versus $30.9 million in the third quarter of fiscal 2007. Services revenue increased 31 percent to $20.2 million in the third quarter of fiscal 2008, compared with $15.4 million in last year’s third quarter.

Net income for the fiscal 2008 third quarter was $1.5 million, or $0.05 per diluted share, including pre-tax stock compensation expense of $1.5 million, or $0.03 per diluted share net of tax. In the comparable period last year, net income was $0.9 million, or $0.03 per diluted share, including pre-tax stock compensation expense of $1.3 million, or $0.03 per diluted share net of tax.

“This quarter QAD posted the highest third quarter revenue in the company’s history, driven by strong year-over-year increases in license and services sales,” said Karl Lopker, chief executive officer of QAD. “The most recent release of QAD Enterprise Applications, QAD 2007.1, which includes extensions to both our product suite and services offerings, is being well received by the market. This, together with improved execution, is helping us serve the needs of global manufacturers and grow our business.”

Gross margin in the third quarter of fiscal 2008 was 58 percent, compared with 60 percent in the same period last year, primarily reflecting a change in revenue mix. Total operating expenses were $35.3 million in the fiscal 2008 third quarter, compared with $32.9 million in the comparable period last year. The increase in total operating expenses primarily reflects higher personnel costs.

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QAD Inc.
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For the fiscal 2008 nine-month period ended October 31, 2007, QAD reported revenue of $187.4 million or an increase of 11 percent versus $169.1 million for the comparable period last year. Net income for the first nine months of fiscal 2008 was $0.2 million, or $0.01 per diluted share, including pre-tax stock compensation expense of $4.5 million, or $0.09 per diluted share net of tax. This compares with net income of $3.5 million, or $0.10 per diluted share, including stock compensation expense of $3.9 million, or $0.08 per diluted share net of tax, in the first nine months of fiscal 2007.

QAD’s cash and equivalents balance at October 31, 2007, was $46.6 million, versus $56.8 million at January 31, 2007. Both periods included restricted cash of $2.6 million related to our acquisition of Precision Software. For the fiscal 2008 third quarter, cash flow provided by operations was $3.4 million, compared with $0.7 million for the fiscal 2007 third quarter. For the first nine months of fiscal 2008, cash flow provided by operations was $10.7 million, compared with $10.9 million in the first nine months of fiscal 2007.

Third Quarter Fiscal 2008 Highlights:

• QAD received orders from 19 customers representing more than $500,000 each in combined license, support and services billings, including four orders in excess of $1.0 million, one of which exceeded $2.0 million;

• QAD received license orders from global manufacturers across its six vertical markets, including Akebono Brake Industry, Ameri-Forge, Arthrex, Aspect Medical Systems, FN Manufacturing, FNH USA, Hamilton Pharmaceutical, Hormel Foods, Johnson Controls, PFD Food Services, Sun Power and Wielton;

• Under the existing stock repurchase program, QAD purchased approximately 226,000 shares of its common stock at an average price of $8.56 per share in the third quarter of fiscal 2008. Thus far in the 2008 fiscal year, QAD has purchased a total of 1.7 million shares at an average price of $8.24;

• The company released QAD Enterprise Applications 2007.1 (QAD 2007.1), both On Demand and On Premise, aimed at addressing the requirements of global manufacturers. QAD 2007.1 includes enhancements to the company’s core product suite, including QAD Transportation Management System, QAD Supply Visualization, QAD Business Intelligence, QAD .NET UI and QAD QXtend;

• QAD entered into a strategic alliance with Plante & Moran, PLLC, a certified public accounting and management consulting firm specializing in the automotive and medical device industries, to help expand the company’s reach into these industries in the U.S.;

• Independent research firm, Forrester Research, cited QAD as a leader in the Small & Medium Business edition of its Enterprise Applications Software Licensing and Pricing, Q4 2007 study. QAD was also named a Strong Performer in the large enterprise edition of the survey.

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QAD Inc.
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Business Outlook
QAD anticipates revenue between $255 million and $261 million and earnings in the range of $0.11 to $0.18 per diluted share for the full year ending January 31, 2008. This guidance includes an estimated charge for stock compensation expense of $0.12 per diluted share net of tax. QAD assumes an effective tax rate of 47 percent for fiscal 2008.

Investor Conference Call
QAD management will host an investor conference call today at 2:00 p.m. PT (5:00 p.m. ET) to review the company’s financial results and operations for the fiscal 2008 third quarter. The conference call will be webcast live and is accessible on the investor relations section of QAD’s Web site atwww.qad.com, where it will be available for approximately one year.

About QAD
QAD is a leading provider of enterprise applications for global manufacturing companies. QAD applications provide critical functionality for managing manufacturing resources and operations within and beyond the enterprise, enabling global manufacturers to collaborate with their customers, suppliers and partners to make and deliver the right product, at the right cost and at the right time. Manufacturers of automotive, consumer products, electronics, food and beverage, industrial and life science products use QAD applications at approximately 5,800 licensed sites in more than 90 countries and in as many as 27 languages. For more information about QAD, telephone +1-805-684-6614, or visit the QAD Web site at:www.qad.com.

QAD” 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 press 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, but are not limited to, evolving demand for the company’s software products and products that operate with the company’s products; the company’s ability to sustain license and service demand; the company’s ability to leverage changes in technology; the company’s ability to sustain customer renewal rates at current levels; the publication of opinions by industry and financial analysts about the company, its products and technology; the reliability of estimates of transaction and integration costs and benefits; the entry of new competitors or new offerings by existing competitors and the associated announcement of new products and technological advances by them; delays in localizing the company’s products for new or existing markets; the ability to recruit and retain key personnel; 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; timely and effective integration of newly acquired businesses; general economic conditions; exchange rate fluctuations; and, the global political environment. In addition, revenue and earnings in the enterprise resource planning (ERP) software industry are subject to fluctuations. Software license revenue, in particular, is subject to variability with a significant proportion of revenue earned in the last month of each quarter. Given the high margins associated with license revenue, modest fluctuations can have a substantial impact on net income. Investors should not use any one quarter’s results as a benchmark for future performance. For a more detailed description of the risk factors associated with the company and the industries in which it operates, please refer to the company’s Annual Report on Form 10-K for fiscal 2007 ended January 31, 2007.

– Financial Tables Follow –

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QAD Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)

	Three Months Ended						Nine Months Ended
	October 31,						October 31,
	2007			2006			2007			2006
Revenue:
License fees	$	14,074		$	10,974		$	39,082		$	34,736
Maintenance and other		32,287			30,949			95,090			91,847
Services		20,247			15,401			53,277			42,515
Total revenue		66,608			57,324			187,449			169,098
Cost of revenue:
Cost of license fees		2,294			1,852			6,217			5,367
Cost of maintenance, service and other revenue		25,820			21,311			73,531			62,346
Total cost of revenue		28,114			23,163			79,748			67,713
Gross profit		38,494			34,161			107,701			101,385
Operating expenses:
Sales and marketing		17,167			15,566			51,154			47,114
Research and development		9,986			9,835			30,375			30,092
General and administrative		8,017			7,389			24,726			21,138
Amortization of intangibles from acquisitions		168			107			576			148
Total operating expenses		35,338			32,897			106,831			98,492
Operating income		3,156			1,264			870			2,893
Other (income) expense:
Interest income		(550	)		(617	)		(1,713	)		(2,008	)
Interest expense		325			320			1,025			859
Other (income) expense, net		506			99			431			(1,533	)
Total other (income) expense		281			(198	)		(257	)		(2,682	)
Income before income taxes		2,875			1,462			1,127			5,575
Income tax expense		1,359			515			959			2,099
Net income	$	1,516		$	947		$	168		$	3,476
Basic net income per share	$	0.05		$	0.03		$	0.01		$	0.11
Diluted net income per share	$	0.05		$	0.03		$	0.01		$	0.10
Basic weighted shares		31,210			32,238			31,829			32,465
Diluted weighted shares		32,023			32,911			32,537			33,192

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QAD Inc.
Condensed Consolidated Balance Sheets
(In thousands)
(unaudited)

	October 31,			January 31,
	2007			2007
Assets
Current assets:
Cash and equivalents	$	44,035		$	54,192
Restricted cash		2,612			2,612
Accounts receivable, net		51,089			68,806
Other current assets		17,196			16,352
Total current assets		114,932			141,962
Property and equipment, net		42,819			42,396
Capitalized software costs, net		9,214			9,631
Goodwill		21,291			18,834
Other assets, net		14,671			14,194
Total assets	$	202,927		$	227,017
Liabilities and stockholders’ equity
Current liabilities:
Current portion of long-term debt	$	279		$	272
Accounts payable and other current liabilities		45,566			49,613
Deferred revenue		64,915			77,075
Total current liabilities		110,760			126,960
Long-term debt		17,060			17,271
Other liabilities		3,264			5,428
Stockholders’ equity:
Common stock		35			35
Additional paid-in capital		133,109			128,757
Treasury stock		(32,270	)		(22,870	)
Accumulated deficit		(24,871	)		(21,216	)
Accumulated other comprehensive loss		(4,160	)		(7,348	)
Total stockholders’ equity		71,843			77,358
Total liabilities and stockholders’ equity	$	202,927		$	227,017

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QAD Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)

	Nine Months Ended
	October 31,
	2007			2006
Net cash provided by operating activities	$	10,707		$	10,943
Cash flows from investing activities:
Purchase of property and equipment		(3,969	)		(3,714	)
Restricted cash		—			(2,612	)
Capitalized software costs		(984	)		(1,044	)
Acquisitions of businesses, net of cash acquired		(3,940	)		(6,973	)
Proceeds from sale of intangible assets		—			906
Proceeds from sale of property and equipment		100			177
Net cash used in investing activities		(8,793	)		(13,260	)
Cash flows from financing activities:
Repayments of debt		(209	)		(244	)
Proceeds from issuance of common stock		2,579			1,384
Changes in cash overdraft		(1,359	)		950
Repurchase of common stock		(14,218	)		(5,567	)
Minority shareholder payment		—			(389	)
Dividends paid		(2,406	)		(2,441	)
Net cash used in financing activities		(15,613	)		(6,307	)
Effect of exchange rates on cash and equivalents		3,542			(979	)
Net (decrease) increase in cash and equivalents		(10,157	)		(9,603	)
Cash and equivalents at beginning of period		54,192			59,971
Cash and equivalents at end of period	$	44,035		$	50,368

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