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Exhibit 99.3

QAD Inc.

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION

QAD INC.

UNAUDITED PRO FORMA COMBINED CONDENSED

CONSOLIDATED FINANCIAL INFORMATTION

On November 12, 2002, QAD Inc. ("QAD") acquired the TRW Integrated Supply Chain Solutions ("TRW ISCS") business covering 10 European countries and North America from BDM International, Inc. (a wholly-owned subsidiary of TRW Inc.) and TRW Inc. Prior to the acquisition, TRW ISCS, a QAD alliance partner per an agreement with QAD, operated businesses that primarily focused on systems installation, integration and services in connection with the MFG/PRO software owned and licensed by QAD and other QAD-related goods and services.

        Under the terms of the Stock and Asset Purchase Agreement, QAD paid $1 million in cash and will incur transaction costs, including direct acquisition costs and costs to exit activities, of approximately $5 million. The transaction included the purchase of the stock of BDM UK Limited ("BDM UK") and its thirteen wholly-owned European subsidiaries, the acquisition of assets and assumption of certain liabilities of the businesses in Germany and North America, and TRW Systems' agreement not to compete for the next 3 years. QAD funded the purchase price received by BDM International, Inc. and TRW Inc. with cash generated from operating activities. Pursuant to the agreement, BDM UK became a wholly-owned subsidiary of QAD. The acquisition is accounted for as a business combination and, accordingly, the total purchase price is allocated to the acquired assets, including goodwill and other intangible assets and liabilities at their fair values as of November 12, 2002. QAD's consolidated statement of operations will not include revenue or expenses related to BDM UK prior to November 12, 2002.

        The unaudited pro forma combined condensed consolidated balance sheet as of October 31, 2002 gives effect to the acquisition as if it had occurred on October 31, 2002, combining the historical consolidated balance sheet of QAD as of October 31, 2002 and the historical consolidated balance sheet of BDM UK as of September 30, 2002. The assets, liabilities and results of operations of the acquired North American business have been deemed immaterial for purposes of the pro forma financial information and are not included herein. The German business acquired is included in the financial position and results of operations of BDM UK as it was a wholly-owned subsidiary of BDM UK prior to the acquisition. The assets and liabilities of the German business not acquired in the acquisition have been deemed immaterial for purposes of the pro forma financial information.

        The historical balance sheet and statement of operations of BDM UK were originally stated in the British Pound and were presented in accordance with accounting principles generally accepted in the United Kingdom. No differences arose between accounting principles generally accepted in the United Kingdom from those of the United States for the periods presented in these unaudited pro forma financial statements. For purposes of the unaudited pro forma combined condensed consolidated balance sheet and statement of operations, BDM UK amounts have been translated into the United States Dollar and reclassified to conform to QAD presentation.

        Pro forma financial statements require the presentation of income from continuing operations after income tax expense but before discontinued operations, extraordinary items, and cumulative effect of a change in accounting principle. Therefore, the cumulative effect change in accounting principle of $1.1 million related to goodwill impairment under SFAS 142 included in the historical statement of operations of QAD for the nine months ended October 31, 2002, has been omitted.

        The combining companies have different year-ends for reporting purposes. BDM UK maintained its accounting records on a calendar basis, ending on December 31, and QAD maintains its accounting records on a fiscal basis, ending on January 31. The unaudited pro forma combined condensed consolidated statements of operations for the twelve months ended January 31, 2002 and the nine months ended October 31, 2002, gives effect to the acquisition as if it had occurred on February 1, 2001, combining the historical consolidated statements of operations of QAD for the fiscal year ended January 31, 2002 and the nine months ended October 31, 2002, with the historical consolidated

statements of operations of BDM UK for the calendar year ended December 31, 2001 and the nine months ended September 30, 2002, respectively.

        The unaudited pro forma combined condensed consolidated financial information has been prepared and should be read in conjunction with the historical consolidated financial statements and the related notes thereto of QAD, the "Management Discussion and Analysis of Financial Condition and Results of Operations," included in QAD's Annual Report on Form 10-K for the year ended January 31, 2002, QAD's Quarterly Report on Form 10-Q as of October 31, 2002 filed with the Securities and Exchange Commission, and the financial statements and related notes thereto of BDM UK for the calendar years ended December 31, 2001, 2000 and 1999 and the nine months ended September 30, 2002, included herein in this Amended Current Report on Form 8-K/A.

        The pro forma adjustments do not reflect any operating efficiencies and cost savings that may be achieved with respect to the combined entity. The pro forma adjustments do not include any adjustments to historical revenue for any future price changes nor any adjustments to selling, marketing or any other expenses for any future operating changes.

        The following unaudited pro forma combined condensed consolidated financial information has been prepared to give effect to the acquisition, accounted for using the purchase method of accounting. This financial information reflects certain assumptions and estimates deemed probable by management regarding the acquisition based upon the assets and liabilities acquired, including estimated involuntary termination costs and facility related costs. These estimates and assumptions are preliminary and have been made solely for purposes of developing this pro forma information. Unaudited pro forma combined condensed consolidated financial information is presented for illustrative purposes only and is not necessarily indicative of the results that actually would have been realized had the entities been a single entity during this period. Additionally, the future consolidated financial position and results of operations will differ, perhaps significantly, from the pro forma amounts reflected herein because of a variety of factors, including access to additional information, changes in values not currently identified and changes in operating results, which could result in adjustment to, among other items, identifiable assets and goodwill. The purchase price allocation is preliminary and a final determination of required purchase accounting adjustments will be made upon the completion of a final analysis of the total purchase cost and the fair value of the assets and liabilities assumed, including estimated involuntary employee termination costs and facility related costs.

QAD INC.

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET

(in thousands)

				Historical (in USD)
				QAD Inc. As of October 31, 2002			BDM UK As of September 30, 2002			Pro Forma
										Adjustments			Ref.	Combined
Assets
	Current assets:
		Cash and equivalents		$	48,139		$	1,773		$	(1,000	)	(b)	$	48,912
		Accounts receivable, net			38,400			14,602			(6,274	)	(e)		46,078
											(650	)	(h)
		Other current assets			13,771			2,071			(100	)	(g)		15,742
			Total current assets		100,310			18,446							110,732
Property and equipment, net					20,998			808			(808	)	(d)		20,998
Capitalized software development costs, net					2,422			—							2,422
Other assets, net					11,188			3,206			1,000		(b)		11,188
											4,650		(c)
											808		(d)
											398		(d)
											(3,206	)	(e)
											(3,456	)	(f)
											(2,600	)	(g)
											(800	)	(h)
			Total assets	$	134,918		$	22,460						$	145,340
Liabilities & Stockholders' equity
	Current liabilities:
		Current portion of long-term debt		$	1,743		$	—						$	1,743
		Accounts payable			7,513			68,372		$	(64,627	)	(e)		9,308
											(500	)	(g)
											(1,450	)	(h)
		Accrued expenses			26,624			4,946			4,650		(c)		34,020
											(2,200	)	(g)
		Deferred revenue and other			50,573			833							51,406
			Total current liabilities		86,453			74,151							96,477
Long-term debt					14,060										14,060
Other deferred liabilities					731										731
Minority interest					384										384
Stockholders' equity:
	Preferred stock				—			—
	Common stock				34			—							34
	Additional paid-in capital				115,589			1,219			55,147		(e)		115,589
											(56,366	)	(f)
	Accumulated deficit				(74,917	)		(52,910	)		398		(d)		(74,519	)
											52,910		(f)
	Accumulated other comprehensive loss				(7,416	)		—							(7,416	)
			Total stockholders' equity		33,290			(51,691	)						33,688
	Total liabilities & stockholders' equity			$	134,918		$	22,460						$	145,340

See accompanying Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Information.

QAD INC.

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

			Historical (in USD)
			Nine Months Ended
									Pro Forma
			QAD Inc. October 31, 2002			BDM UK September 30, 2002
									Adjustments			Ref.	Combined
Revenue:
	License fees		$	37,194		$	1,060						$	38,254
	Maintenance and other			78,534			3,652		$	(242	)	(i)		81,944
	Services			22,408			14,368			(65	)	(i)		36,711
		Total revenue		138,136			19,080							156,909
Costs and expenses:
	Cost of license fees			6,171			627							6,798
	Other cost of revenue			47,116			16,307			(271	)	(i)		63,152
	Sales and marketing			45,808			1,775			(36	)	(i)		47,547
	Research and development			25,207			—							25,207
	General and administrative			15,910			4,465			(121	)	(j)		20,254
	Amortization of intangibles from acquisitions			840			—							840
	Impairment loss			151			—							151
	Restructuring			3,192			—							3,192
		Total costs and expenses		144,395			23,174							167,141
Operating loss				(6,259	)		(4,094	)						(10,232	)
Other (income) expense:
	Interest income			(599	)		(168	)						(767	)
	Interest expense			1,295			594							1,889
	Other (income) expense, net			416			—							416
		Total other (income) expense		1,112			426							1,538
Loss before income taxes				(7,371	)		(4,520	)						(11,770	)
	Income tax expense			900			112							1,012
Net income loss			$	(8,271	)	$	(4,632	)					$	(12,782	)
Basic and diluted net loss per share			$	(0.24	)	$	(0.13	)					$	(0.37	)
Basic and diluted weighted shares				34,403			34,403							34,403

See accompanying Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Information.

QAD INC.

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

			Historical (in USD)
			Twelve Months Ended
									Pro Forma
			QAD Inc. January 31, 2002			BDM UK December 31, 2001
									Adjustments			Ref.	Combined
Revenue:
	License fees		$	62,820		$	1,310		$	(39	)	(i)	$	64,091
	Maintenance and other			103,624			4,646			(684	)	(i)		107,586
	Services			39,341			24,394			(249	)	(i)		63,486
		Total revenue		205,785			30,350							235,163
Costs and expenses:
	Cost of license fees			12,396			538			(39	)	(i)		12,895
	Other cost of revenue			74,605			27,119			(346	)	(i)		101,378
	Sales and marketing			59,365			3,321			(587	)	(i)		62,099
	Research and development			31,672			—							31,672
	General and administrative			22,882			8,338			(162	)	(j)		31,058
	Amortization of intangibles from acquisitions			3,538			—							3,538
	Impairment loss			2,066			—							2,066
	Restructuring			93			—							93
		Total costs and expenses		206,617			39,316							244,799
Operating loss				(832	)		(8,966	)						(9,636	)
Other (income) expense:
	Interest income			(1,365	)		(288	)						(1,653	)
	Interest expense			2,359			1,179							3,538
	Other (income) expense, net			587			—							587
	Total other (income) expense			1,581			891							2,472
Loss before income taxes				(2,413	)		(9,857	)						(12,108	)
	Income tax expense			2,900			299							3,199
Net loss			$	(5,313	)	$	(10,156	)					$	(15,307	)
Basic and diluted net loss per share			$	(0.16	)	$	(0.30	)					$	(0.45	)
Basic and diluted weighted shares				34,055			34,055							34,055

See accompanying Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Information.

QAD INC.

UNAUDITED NOTES TO PRO FORMA COMBINED

CONDENSED CONSOLIDATED FINANCIAL INFORMATION

        The following pro forma adjustments have been reflected in the unaudited pro forma combined condensed consolidated balance sheet and statements of operations:

(a)

The calculation of the preliminary purchase price for the assets and liabilities acquired is presented below:

(in thousands):
Cash paid (see note b)		$	1,000
Acquisition related expenses (see note c)			4,650
Forgiveness of debt (see note g)			(2,600	)
	Total purchase price	$	3,050

Under Statement of Financial Accounting Standard No. 141, "Business Combinations," (SFAS 141) the total purchase price was allocated to the acquired assets and liabilities based on their estimated fair values. The total purchase price was allocated to tangible assets and liabilities, and identifiable intangible assets, including customer contracts, intellectual property and a non-compete agreement. No goodwill arose as a result of this acquisition. The excess fair value of net assets acquired over the purchase price paid served to reduce the value of fixed assets and other intangible assets acquired as discussed in (d) below.

(b)

Represents $1.0 million cash consideration paid to finance the acquisition.

(c)

Represents the accrual for direct acquisition costs related to transaction fees, legal fees and accounting fees ($0.8 million), and involuntary employee termination costs ($1.9 million) and facility related costs ($2.0 million).

(d)

Allocation of the preliminary purchase price and adjustments to fair market value.

The allocation of the preliminary purchase price to the net assets acquired as of November 12, 2002 is presented below:

(in thousands):
Assets:
	Fair value of acquired assets	$	11,521
Liabilities:
	Fair value of assumed liabilities		(8,073	)
Extraordinary Gain:
	Excess of fair value of net assets acquired over purchase price paid after pro rata reduction of non-financial assets		(398	)
	Total purchase price	$	3,050

Specifically identified intangible assets include customer contracts, intellectual property acquired and a non-compete agreement with the seller. These intangible assets are included in "Other assets, net" on the accompanying pro form balance sheet. Intellectual property is comprised of certain software developed by TRW ISCS that is complimentary to MFG/PRO, such as AIM Warehousing.

In valuing the intangible assets, an income-based approach was determined to best quantify the economic benefits and risks. The economic benefits were quantified using projections of net cash flows and the risks by applying an appropriate discount rate. The estimated fair value assigned to customer contracts, intellectual property and the non-compete agreement was $0.3 million, $0.2 million and $0.1 million, respectively.

In accordance with SFAS 141, the excess fair value of net assets acquired over the purchase price paid ($1.8 million) was allocated pro rata to certain non-financial assets. This pro rata allocation served to eliminate the assigned estimated values of intangible assets ($0.6 million) and property and equipment ($0.8 million). The additional excess fair value of net assets acquired over the purchase price paid ($0.4 million) is treated as an extraordinary gain during the period of acquisition. Accordingly, this gain is reflected as an increase to retained earnings on the accompanying pro forma balance sheet.

No deferred tax adjustment was made related to the TRW ISCS acquisition since QAD provided a valuation allowance to fully offset its deferred tax assets as of October 31, 2002. The valuation allowance was recorded after considering a number of factors, including the company's cumulative operating losses in fiscal 2000, 2001, and 2002. Based upon the weight of both positive and negative evidence regarding the recoverability of deferred tax assets, QAD concluded that a valuation allowance was required to fully offset the net deferred tax assets, as it is more likely than not that the deferred tax assets will not be realized.

(e)

In accordance with the acquisition agreement, immediately prior to the consummation of the acquisition, BDM International Inc., the parent company of BDM UK, re-capitalized BDM UK to enable BDM UK and its subsidiaries to settle certain debts prior to consummation of the acquisition.

(f)

Represents the elimination of BDM UK historical equity, including re-capitalization in (e) above.

(g)

In accordance with the acquisition agreement, these amounts represent the forgiveness of amounts receivable and payable to TRW ISCS that arose prior to consummation of the acquisition. This forgiveness was consideration in determining the purchase price as detailed in note (a).

(h)

In accordance with the acquisition agreement, these amounts represent the forgiveness of amounts receivable and payable to QAD that arose prior to consummation of the acquisition. Accordingly, these receivable ($0.7 million) and payable ($1.5 million) balances were assigned no fair value.

(i)

Represents the elimination of intercompany revenue and profit between QAD and BDM UK prior to the acquisition.

(j)

Represents the decrease in depreciation expense due to the pro rata allocation of the excess fair value of net assets acquired over the purchase price paid as discussed in note (d) above. Depreciation was calculated on a straight-line basis over a period of five years.

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QAD Inc. UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
QAD INC. UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATTION
QAD INC. UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED BALANCE SHEET (in thousands)
QAD INC. UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except per share data)
QAD INC. UNAUDITED NOTES TO PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL INFORMATION