UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
__ For the transition period from ____________ to
Commission file number 0-21958
QRS CORPORATION
________________________________________________________________________________
(Exact name of registrant as specified in its charter)
DELAWARE 68-0102251
________________________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1400 MARINA WAY SOUTH, RICHMOND, CA 94804
________________________________________________________________________________
(Address of principal executive offices) (Zip code)
(510) 215-5000
________________________________________________________________________________
(Registrant's phone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. X YES NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Classes of Common Stock Outstanding at June 30, 1998
- ----------------------------- ----------------------------
Common Stock, $.001 par value 8,550,716
This document contains 11 pages.
The Exhibit listing appears on Page 10.
QRS CORPORATION
FORM 10-Q
INDEX
NUMBER PAGE
- ------ ----
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of June 30, 1998
and December 31, 1997 3
Consolidated Statements of Earnings for the Three and
Six Months Ended June 30, 1998 and 1997 4
Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 1998 and 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk 11
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 2. Changes in Securities and Use of Proceeds 12
Item 3. Defaults upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
A. Exhibits
B. Reports on Form 8-K
SIGNATURES 13
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
QRS CORPORATION
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
ASSETS
------
JUNE 30, DECEMBER 31,
1998 1997
-------- ------------
Current assets:
Cash and cash equivalents ........................ $36,911 $16,091
Marketable securities available-for-sale ......... 3,984 17,694
Accounts receivable - net of allowance for ....... 13,903 14,567
doubtful accounts of $1,073 in 1998 and $873
in 1997 ........................................
Deferred income tax assets ....................... 870 870
Prepaid expenses and other ....................... 1,151 1,260
------- -------
Total current assets ......................... 56,819 50,482
Property and equipment:
Furniture and fixtures ........................... 2,528 2,162
Equipment ........................................ 8,911 7,622
Leasehold improvements ........................... 1,892 1,800
------- -------
13,331 11,584
Less accumulated depreciation .................... 5,356 4,062
------- -------
Total ........................................ 7,975 7,522
Marketable securities available-for-sale .............. 2,498 1,000
Deferred income tax assets ............................ 73 2,576
Capitalized product development costs - net of
accumulated amortization of $3,099 and $2,818 in
1998 and 1997 ....................................... 3,248 2,245
Other assets .......................................... 243 177
------- -------
Total assets .......................................... $70,856 $64,002
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable ................................. $7,145 $3,733
Other accrued liabilities ........................ 2,028 2,711
Sublease loss reserve ............................ - 1,494
------- -------
Total current liabilities .................... 9,173 7,938
------- -------
Deferred rent and other ............................... 1,229 1,335
------- -------
Total liabilities ............................ 10,402 9,273
------- -------
Stockholders' equity:
Preferred stock - $.001 par value; 10,000,000 -
shares authorized; none issued and outstanding
Common stock - $.001 par value; 20,000,000
shares authorized; 8,550,716 shares
outstanding in 1998 and 8,531,366 shares in
1997 ........................................... 64,316 63,864
Treasury stock (26,800 shares in 1998 and 1,300
shares in 1997) ................................ (878) (35)
Unrealized gain (loss)on investments ............. 89 (9)
Accumulated deficit .............................. (3,073) (9,091)
------- -------
Total Stockholders' equity ................... 60,454 54,729
------- -------
Total liabilities and Stockholders' equity ............ $70,856 $64,002
------- -------
------- -------
See notes to Consolidated financial statements.
3
QRS CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ ------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
Revenues .................................. $20,830 $17,003 $40,864 $33,357
Cost of revenues .......................... 11,684 9,614 22,939 18,737
---------- ---------- ---------- ----------
Gross profit .............................. 9,146 7,389 17,925 14,620
Operating expenses:
Sales and marketing ................... 2,573 1,983 5,366 4,276
Product development ................... 950 1,210 1,890 2,211
General and administrative ............ 1,746 1,209 3,231 2,378
---------- ---------- ---------- ----------
Total operating expenses .......... 5,269 4,402 10,487 8,865
---------- ---------- ---------- ----------
Operating earnings ........................ 3,877 2,987 7,438 5,755
Interest income ........................... 556 504 1,099 945
---------- ---------- ---------- ----------
Earning from continuing operations before
income taxes.............................. 4,433 3,491 8,537 6,700
Income taxes .............................. 1,774 1,396 3,415 2,680
---------- ---------- ---------- ----------
Earnings from continuing operations after
income taxes.............................. 2,659 2,095 5,122 4,020
Discontinued operations:
Gain from sale of software and services.... - - 896 -
---------- ---------- ---------- ----------
Net earnings .............................. $2,659 $2,095 $6,018 $4,020
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Basic earnings per share:
Continuing operations ..................... $0.31 $0.25 $0.60 $0.48
Discontinued operations ................... - - $0.10 -
---------- ---------- ---------- ----------
Net earnings per share .................... $0.31 $0.25 $0.70 $0.48
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Shares used to compute basic earnings ..... 8,550,569 8,451,324 8,545,375 8,431,332
---------- ---------- ---------- ----------
Diluted earnings per share:
Continuing operations ..................... $0.30 $0.24 $0.58 $0.46
Discontinued operations ................... - - 0.10 -
---------- ---------- ---------- ----------
Net earnings per share .................... $0.30 $0.24 $0.68 $0.46
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Shares used to compute diluted earnings.... 8,892,844 8,717,184 8,904,451 8,684,423
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
4
QRS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(DOLLARS IN THOUSANDS)
(UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 30,
------------------------
1998 1997
-------- --------
Operating activities:
Net earnings ........................................................ $6,018 $4,020
Adjustment to reconcile net earnings to net cash provided by
operating activities:
Gain from sale of software and services business .................. (1,494) -
Depreciation and amortization ..................................... 1,575 657
Stock option compensation ......................................... - 18
Changes in:
Accounts receivable ............................................... 664 (2,090)
Prepaid expenses and other ........................................ 109 (679)
Deferred income tax assets ........................................ 2,708 2,680
Other assets ...................................................... (66) (142)
Accounts payable .................................................. 3,412 333
Deferred rent and other ........................................... (106) (362)
Other accrued liabilities ......................................... (683) (377)
------- -------
Net cash provided by operating activities ..................... 12,137 4,058
------- -------
Investing activities:
Sale (purchase) of marketable securities-available for sale (net).. 12,310 (4,586)
Purchase of property and equipment ................................ (1,747) (2,625)
Capitalization of product development costs ....................... (1,284) (218)
------- -------
Net cash provided by (used in) investing activities ............... 9,279 (7,429)
------- -------
Financing activities:
Exercise of stock options ......................................... 247 626
Exercise of stock warrant ......................................... - 13
Purchase of treasury stock ........................................ (843) (35)
------- -------
Net cash provided by (used in) financing activities ........... (596) 604
------- -------
Net increase (decrease) in cash and cash equivalents .................. 20,820 (2,767)
Cash and cash equivalents at beginning of period ...................... 16,091 16,022
------- -------
Cash and cash equivalents at end of period ............................ $36,911 $13,255
------- -------
------- -------
Other cash flow information:
Taxes paid during the period ........................................ $2,141 $537
------- -------
------- -------
Noncash financing activities:
Tax benefit from non-qualified stock options exercised .............. $205 $649
------- -------
------- -------
5
QRS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. GENERAL
Effective May 11, 1998, QuickResponse Services, Inc. changed its
corporate name to QRS Corporation (QRS or the Company).
The Company's product families are Catalog Services, Network Services,
Inventory Management Services (IMS), Logistics Management Services
(LMS), and Professional Services. The Company derives revenues from
five principal and related sources: monthly charges for accessing
Catalog Services, fees for utilization of network services including
the transmission of standard business documents over a network, IMS-related
fees based on negotiated monthly service charges, LMS fees, and consulting
fees. Network Services pricing is based primarily on the volume of
characters transmitted and the type of network access utilized, and
incorporates discounts based on volume.
The balance sheet as of June 30, 1998, the statements of earnings for
the three and six months ended June 30, 1998 and 1997, and the
statements of cash flows for the six months ended June 30, 1998 and
1997 have been prepared by the Company without audit. In the opinion
of management, all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position,
results of operations and cash flows at June 30, 1998 and for all
periods presented have been made. The balance sheet as of December 31,
1997 is derived from the Company's audited financial statements as of that
date.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been consolidated or omitted as permitted
by regulations of the Securities and Exchange Commission. It is
suggested that these interim consolidated financial statements be read
in conjunction with the annual audited financial statements and notes
thereto included in the Company's Form 10-K for the year ended
December 31, 1997.
The preparation of the Company's financial statements in conformity
with generally accepted accounting principles necessarily requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the balance sheet dates and the reported amounts of
revenues and expenses for the periods presented. Actual amounts may
differ from such estimates.
The results of operations for the periods ended June 30, 1998 and 1997
are not necessarily indicative of the operating results anticipated
for the full year.
Certain reclassifications have been made to the 1997 amounts to
conform to the 1998 presentation.
2. SUBLEASE LOSS RESERVES
During the quarter ended March 31, 1998, outstanding matters with
regard to the Uniquest bankruptcy were substantially resolved;
accordingly the Company recognized a gain on sale of software and
services business of $1,494,000 less applicable income taxes of
$598,000. The remaining sublease loss reserve of $480,000 at March 31,
1998 and $536,000 at December 31, 1997 representing the provisions
established for nonpayment by Uniquest of future sublease obligations
was reclassified to Deferred rent and other and will be amortized over
the remaining lease term through June 30, 2010.
6
3. SUBSEQUENT EVENT: ACQUISITION OF THE EDI CONNECTION
In July 1998, the Company acquired Mueller Associates, Inc., d.b.a.
The EDI Connection, an electronic commerce service bureau. The
acquisition will be accounted for as a purchase transaction. The total
purchase price consisted of $1,000,000 in cash and 15,000 shares of
QRS common stock.
4. STOCK OPTIONS
During the first six months of 1998, the Company granted options to
purchase 41,700 shares of common stock. Options to purchase 18,050
shares of common stock were exercised. Stockholders approved
additional allocations of 350,000 shares of common stock to the stock
option pool under the 1993 Stock Option/Issuance Plan in May 1998. At
June 30, 1998, 1,330,731 shares were subject to outstanding options,
of which 403,780 were exercisable. Options to purchase approximately
388,296 shares of common stock are available for future grant under
the Company's 1993 Stock Option/Stock Issuance Plan and the 1997
Special Non-Officer Stock Option Plan.
5. EARNINGS PER SHARE
The Company calculates basic earnings per share (EPS) and diluted EPS
in accordance with SFAS No. 128. Basic EPS is calculated by dividing
net earnings for the period by the weighted average common shares
outstanding for that period. Diluted EPS takes into account the effect
of dilutive instruments, such as stock options, and uses the average
share price for the period in determining the number of incremental
shares that are to be added to the weighted average number of shares
outstanding.
The following is a summary of the calculation of the number of shares
used in calculating basic and diluted EPS:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
1998 1997 1998 1997
--------- --------- --------- ---------
Shares used to compute basic EPS 8,550,569 8,451,324 8,545,375 8,431,332
Add: effect of dilutive securities 342,275 265,860 359,076 253,091
--------- --------- --------- ---------
Shares used to compute diluted EPS 8,892,844 8,717,184 8,904,451 8,684,423
--------- --------- --------- ---------
--------- --------- --------- ---------
6. COMPREHENSIVE INCOME
Effective January 1, 1998, QRS adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income." This
Statement requires that all items recognized under accounting
standards as components of comprehensive earnings be reported in an
annual financial statement that is displayed with the same prominence
as other annual financial statements. This Statement also requires
that an entity classify items of other comprehensive earnings by their
nature in an annual financial statement. For example, other
comprehensive earnings may include foreign currency translation
adjustments and unrealized gains and losses on marketable securities
classified as available-for-sale. Annual financial statements for
prior periods will be reclassified, as required. QRS' total comprehensive
earnings were as follows:
7
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ----------------
1998 1997 1998 1997
------ ------ ------ ------
Net earnings $2,659 $2,095 $6,018 $4,020
Other comprehensive gain (loss) 32 28 98 (7)
------ ------ ------ ------
Total comprehensive earnings $2,691 $2,123 $6,116 $4,013
------ ------ ------ ------
------ ------ ------ ------
7. TREASURY STOCK
On April 22, 1997, the Company announced that its Board of Directors
has authorized the repurchase from time to time of up to $5 million of
its Common Stock in both open market and block transactions. Shares
purchased under this program will be held in the corporate treasury
for future use including employee stock option grants and the employee
stock purchase plan. The Company may discontinue purchases of its
Common Stock at any time that management determines additional
purchases are not warranted. During the second quarter of 1998, the
Company repurchased a total of 25,500 shares of common stock for
$843,000. The Company has repurchased 26,800 shares since the inception
of the buyback program.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
THIS FORM 10-Q CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS
AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER
SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING
STATEMENTS AS A RESULT OF INTENSE COMPETITION IN THE ELECTRONIC
COMMERCE BUSINESS, THE COMPANY'S DEPENDENCE ON KEY RETAILERS, THE
COMPANY'S ABILITY TO SUCCESSFULLY INTRODUCE NEW PRODUCTS AND SERVICES,
THE COMPANY'S DEPENDENCE ON THE IBM GLOBAL NETWORK AND OTHER RISK
FACTORS SET FORTH IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED DECEMBER 31, 1997.
GENERAL
QRS Corporation's (the Company's) product families are Catalog
Services, Network Services, Inventory Management Services (IMS),
Logistics Management Services (LMS), and Professional Services. The
Company derives revenues from five principal and related sources:
charges for accessing Catalog Services, fees for utilization of
network services including the transmission of standard business
documents over a network, IMS fees, LMS fees, and consulting fees.
Network Services pricing is based primarily on the volume of
characters transmitted and the type of network access utilized.
Network Services pricing also incorporates discounts based on volume.
RESULTS OF OPERATIONS
The Company's revenues increased by 23% to $20.8 million for the
second quarter of 1998, from $17.0 million for the second quarter of
1997. The Company's revenues increased by 23% to $40.9 million during
the first six months of 1998 from $33.4 million for the same period of
1997. These increases were primarily attributable to four factors.
First, the number of customers increased from 225 retailers and 5,453
vendors and carriers as of June 30, 1997 to 226 retailers and 6,105
vendors and carriers as of June 30, 1998. Second, the number of
catalog trading partnerships increased as a result of the increase in
the number of customers and their trading links with each other.
Third, customers increased the number, type and size of transactions
transmitted over the network, as well as the utilization of Catalog
Services. Fourth, the Company expanded its product offerings in the
IMS and Professional Services product families.
Cost of sales consists primarily of the cost of purchasing network
services and the cost of the Company's data center and technical
customer support services. Cost of sales increased by 22% to
$11.7 million for the second quarter of 1998, from $9.6 million for the
second quarter of 1997. Cost of sales increased by 22% to $22.9 million
for the first six months of 1998, from $18.7 million for the first six
months of 1997. The increase was principally due to increases in purchased
network services, reflecting growth in Network Services, purchased under a
long-term contract, discounted based upon a multi-year volume commitment,
and an expanded customer support group reflecting growth in customers and
products. The gross profit margin was 44% for the second quarter of 1998
compared to 43% for the second quarter of 1997. Improved pricing on
purchased network services was offset by increased sales of certain lower
margin network services, price competitiveness, and volume discounts earned
by larger customers.
Sales and marketing expenses consist primarily of personnel and
related costs in the Company's sales and marketing organizations, as
well as the costs of various marketing programs. Sales and marketing
expenses increased 30% to $2.6 million for the second quarter of 1998,
from $2.0 million for the second quarter of 1997. Sales and marketing
expenses increased 25% to $5.4 million for the first six months of
1998, from $4.3 million for the first six months of 1997. This increase
reflects the Company's expansion of its retailer and
9
vendor-specific coverage and growth in its Program Sales and Enablement
organization, the group responsible for rapidly enabling trading partners
for key hub customers.
Product development expenses consist primarily of personnel and
equipment costs related to research, development and implementation of
new services and enhancement of existing services. Product development
expenses decreased by 21% to $950,000 for the second quarter of 1998,
from $1.2 million for the second quarter of 1997. Product development
expenses decreased by 15% to $1.9 million for the first six months of
1998, from $2.2 million for the first six months of 1997. The Company
capitalized product development costs of $625,000 and $92,000 for the
second quarters of 1998 and 1997, respectively. The Company
capitalized product development costs of $1,284,000 and $218,000 for
the first six months of 1998 and 1997, respectively. The increase in
capitalized product development costs in 1998 is due to increased
product development on products which had reached technological
feasibility.
General and administrative expenses consist primarily of the personnel
and related costs of the Company's finance and administrative
organizations, as well as professional fees and other costs. General
and administrative expenses increased 44% to $1.7 million for the
second quarter of 1998, compared to $1.2 million for the second
quarter of 1998. General and administrative expenses increased 36% to
$3.2 million for the first six months of 1998, compared to $2.4 million
for the first six months of 1997. This increase was primarily due to
increased headcount to support a larger organization.
Interest income consists primarily of interest earned on cash, cash
equivalents and investment securities. Interest income increased to
$556,000 for the second quarter of 1998, compared to $504,000 for the
second quarter of 1997, as a result of higher investment balances.
Interest income increased to $1.1 million for the first six months of
1998, compared to $945,000 for the first six months of 1997.
As a result of the foregoing, earnings from continuing operations
before income taxes increased 27% to $4.4 million for the second
quarter of 1998, compared to $3.5 million for the second quarter of
1997. Earnings from continuing operations before income taxes
increased 27% to $8.5 million for the first six months of 1998,
compared to $6.7 million for the first six months of 1997.
Income taxes were $1.8 million and $1.4 million for the second
quarters of 1998 and 1997, respectively. Income taxes were $3.4 million
and $2.7 million for the first six months of 1998 and 1997, respectively.
The 1998 and 1997 income tax rates of 40% approximate the combined
effective federal and state income tax rates.
In the first quarter of 1998, the Company reported a $1.5 million gain
on sale of software and services business, net of applicable income
taxes of $598,000, related to the substantial resolution of the
bankruptcy proceedings of the purchaser.
As a result of the foregoing, net earnings increased 27% to $2.7 million
for the second quarter of 1998, compared to $2.1 million for the second
quarter of 1997. Net earnings increased 50% to $6.0 million for the first
six months of 1998, compared to $4.0 million for the first six months of
1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital increased from $42.3 million at December 31,
1997 to $47.6 million at June 30, 1998 primarily due to positive cash flow
from operations. Deferred income tax assets decreased as the Company
continued to use tax Net Operating Losses (NOLs) to defer the Company's
cash requirements for tax payments. The Company expects to have utilized
all such NOLs during 1998, and expects an increase in the use of cash for
payment of taxes thereafter. Cash, cash equivalents and marketable
securities increased from $34.8
10
million at December 31, 1997 to $43.4 million at June 30, 1998. Total
assets increased from $64.0 million at December 31, 1997 to $70.9 million
at June 30, 1998, while total liabilities increased from $9.3 million at
December 31, 1997 to $10.4 million at June 30, 1998.
The increase of $8.6 million in cash, cash equivalents and marketable
securities from December 31, 1997 to June 30, 1998 resulted primarily
from positive cash flow from operations, including the timing of
certain large payments to vendors.
On April 22, 1997, the Company announced that its Board of Directors
has authorized the repurchase from time to time of up to $5 million of
its Common Stock in both open market and block transactions. Shares
purchased under this program will be held in the corporate treasury
for future use including employee stock option grants and the employee
stock purchase plan. The Company may discontinue purchases of its
Common Stock at any time that management determines additional
purchases are not warranted. During the second quarter of 1998, the
Company repurchased a total of 25,500 shares of common stock for
$843,000.
In July 1998, the Company utilized $1,000,000 in cash to acquire
Mueller Associates, Inc., d.b.a. The EDI Connection.
Management believes that the cash resources available at June 30,
1998, and cash anticipated to be generated from future operations will
be sufficient for the Company to meet its working capital needs,
capital expenditures and Common Stock repurchases for the next year.
The Company has not paid any cash dividends to date and does not
intend to pay cash dividends with respect to common stock in the
foreseeable future.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable
11
II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's annual meeting of stockholders was held on May 5,1998.
The following actions were taken at this meeting:
------------------------------------------------------------------
Broker
Affirmative votes Negative votes Votes withheld Non-votes
------------------------------------------------------------------
a. Election of Directors:
John P. Dougall 7,717,321 37,050
------------------------------------------------------------------
Philip Schlein 7,717,321 37,050
------------------------------------------------------------------
John S. Simon 7,717,465 36,906
------------------------------------------------------------------
b. Change Company's name from
QuickResponse Services, Inc.
to QRS Corporation 7,749,337 3,834 1,200 -
------------------------------------------------------------------
c. Increase number of shares of
Common Stock authorized for
issuance under 1993 Stock
Option/Stock Issuance Plan by
350,000 3,993,935 3,138,392 9,500 612,544
------------------------------------------------------------------
d. Ratification of Deloitte &
Touche LLP as independent 7,726,015 556 1,050 -
auditors
------------------------------------------------------------------
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
27.1 Financial Data Schedule
B. REPORTS ON FORM 8-K
None
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized and in the capacity indicated.
QRS CORPORATION
-----------------------------------------
(Registrant)
\s\ John S. Simon
-----------------------------------------
August 7, 1998 John S. Simon
Chief Executive Officer
\s\ Shawn M. O'Connor
-----------------------------------------
August 7, 1998 Shawn M. O'Connor
President, Chief Operating Officer, Chief
Financial Officer, and Secretary
(Principal Financial Officer)
13