Delaware
|
0-22823
|
77-0105228
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification Number)
|
100 Innovation Place, Santa Barbara, California
|
93108
|
(Address of principal executive offices)
|
(Zip code)
|
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
d) | Exhibits. |
Exhibit No.
|
Description
|
|
|
||
Press Release, dated as of November 24, 2015, entitled “QAD Reports Fiscal 2016 Third Quarter and Year-to-Date Financial Results”
|
QAD Inc. | |||
Date: November 24, 2015
|
By:
|
/s/ Daniel Lender
|
|
Daniel Lender
|
|||
Chief Financial Officer
|
Kara Bellamy
|
Laurie Berman | Matt Sheldon
|
|
Chief Accounting Officer
|
PondelWilkinson Inc.
|
|
805.566.6100
|
310.279.5980
|
|
investor@qad.com
|
pwinvestor@pondel.com
|
· | Subscription revenue of $9.7 million, up from $7.7 million. Subscription revenue increased approximately 30 percent in constant currency. Currency had an approximate $300,000 negative impact on subscription revenue. |
· | License revenue of $6.4 million, compared with $8.6 million. Currency had an approximate $500,000 negative impact on license revenue. |
· | Professional services revenue of $18.6 million, versus $22.6 million. Currency had an approximate $1.7 million negative impact on professional services revenue. |
· | Maintenance and other revenue of $33.4 million, compared with $35.0 million. Currency had an approximate $2.4 million negative impact on maintenance and other revenue. |
· | GAAP net income of $2.6 million, or $0.14 per diluted Class A share and $0.12 per diluted Class B share, compared with $5.1 million, or $0.31 per diluted Class A share and $0.27 per diluted Class B share. Diluted weighted average Class A shares outstanding increased 21 percent year-over-year. |
· | Non-GAAP net income (defined as GAAP net income before stock-based compensation expense, amortization of purchased intangible assets, the change in fair value of the interest rate swap and certain income tax adjustments) of $4.4 million, or $0.24 per diluted Class A share and $0.20 per diluted Class B share, compared with $6.4 million, or $0.40 per diluted Class A share and $0.34 per diluted Class B share. |
· | Received orders from 14 customers representing more than $500,000 each in combined license, maintenance, subscription and professional services billings, including two orders in excess of $1.0 million; |
· | Received license or cloud orders from companies across QAD’s six vertical markets, including: Acclarent Inc., a division of Johnson & Johnson, CoorsTek, Inc., Denso Corporation, Electrium Sales Limited, a division of Siemens AG, Elizabeth Arden Inc., Johnson Controls, Lear Corporation, Saint-Gobain SA, Samvardhana Motherson, Theranos, Inc., TRW Automotive, Vulcan Group, Wander AG, a division of Associated British Foods, and Yanfeng Visteon; |
· | Launched several new innovations for QAD Cloud ERP and QAD Enterprise Applications 2015, including a more effective User Experience and internationalization enhancements; |
· | Expanded Dell Boomi partnership to enhance QAD’s cloud implementations; |
· | Celebrated DynaSys’ 30th anniversary of demand and supply chain planning; and |
· | Subsequent to the end of the quarter, held its annual EMEA customer conference and solutions expo. |
· | Total revenue of approximately $279 million, including approximately $38 million of subscription revenue. |
· | Stock compensation expense of approximately $7.6 million. |
· | GAAP earnings per share of approximately $0.36 per diluted Class A share and $0.30 per diluted Class B share. |
· | Non-GAAP earnings per share of approximately $0.68 per diluted Class A share and $0.57 per diluted Class B share. |
When:
|
Tuesday, November 24, 2015
|
Time:
|
2:00 p.m. PT (5:00 p.m. ET)
|
Phone:
|
800-230-1059 (domestic); 612-234-9960 (international)
|
Replay:
|
Accessible through midnight December 2, 2015
|
Webcast:
|
Accessible at www.qad.com; archive available for approximately one year
|
· | Non-GAAP adjusted EBITDA - EBITDA is GAAP net income before net interest expense, income tax expense, depreciation and amortization. Non-GAAP adjusted EBITDA is EBITDA less stock-based compensation expense and the change in the fair value of the interest rate swap. |
· | Non-GAAP adjusted EBITDA margins - Calculated by dividing non-GAAP adjusted EBITDA by total revenue. |
· | Non-GAAP net income - GAAP net income before stock-based compensation expense, amortization of purchased intangible assets, the change in fair value of the interest rate swap and certain income tax adjustments. |
· | Non-GAAP earnings per diluted share - Non-GAAP net income allocated to Class A and Class B shares divided by the weighted average diluted shares outstanding of each class. |
Three Months Ended
October 31,
|
Nine Months Ended
October 31,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Revenue:
|
||||||||||||||||
License fees
|
$
|
6,350
|
$
|
8,616
|
$
|
21,761
|
$
|
24,231
|
||||||||
Subscription fees
|
9,659
|
7,710
|
28,223
|
20,344
|
||||||||||||
Maintenance and other
|
33,395
|
35,029
|
100,611
|
107,225
|
||||||||||||
Professional services
|
18,633
|
22,649
|
57,998
|
63,739
|
||||||||||||
Total revenue
|
68,037
|
74,004
|
208,593
|
215,539
|
||||||||||||
Cost of revenue:
|
||||||||||||||||
License
|
827
|
1,217
|
2,728
|
3,270
|
||||||||||||
Subscription
|
5,134
|
4,134
|
15,360
|
12,132
|
||||||||||||
Maintenance and other
|
7,924
|
7,921
|
23,608
|
24,344
|
||||||||||||
Professional services
|
17,120
|
19,799
|
54,035
|
57,975
|
||||||||||||
Total cost of revenue
|
31,005
|
33,071
|
95,731
|
97,721
|
||||||||||||
Gross profit
|
37,032
|
40,933
|
112,862
|
117,818
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
15,531
|
16,421
|
49,658
|
50,319
|
||||||||||||
Research and development
|
10,193
|
10,152
|
31,440
|
32,249
|
||||||||||||
General and administrative
|
7,676
|
8,295
|
24,719
|
26,464
|
||||||||||||
Amortization of intangibles from acquisitions
|
165
|
176
|
495
|
535
|
||||||||||||
Total operating expenses
|
33,565
|
35,044
|
106,312
|
109,567
|
||||||||||||
Operating income
|
3,467
|
5,889
|
6,550
|
8,251
|
||||||||||||
Other (income) expense:
|
||||||||||||||||
Interest income
|
(80
|
)
|
(56
|
)
|
(224
|
)
|
(169
|
)
|
||||||||
Interest expense
|
171
|
185
|
544
|
598
|
||||||||||||
Other (income) expense, net
|
61
|
(164
|
)
|
(471
|
)
|
(56
|
)
|
|||||||||
Total other (income) expense, net
|
152
|
(35
|
)
|
(151
|
)
|
373
|
||||||||||
Income before income taxes
|
3,315
|
5,924
|
6,701
|
7,878
|
||||||||||||
Income tax expense
|
729
|
834
|
1,935
|
1,879
|
||||||||||||
Net income
|
$
|
2,586
|
$
|
5,090
|
$
|
4,766
|
$
|
5,999
|
||||||||
Diluted net income per share
|
||||||||||||||||
Class A
|
$
|
0.14
|
$
|
0.31
|
$
|
0.25
|
$
|
0.37
|
||||||||
Class B
|
$
|
0.12
|
$
|
0.27
|
$
|
0.21
|
$
|
0.31
|
||||||||
Diluted Weighted Shares
|
||||||||||||||||
Class A
|
16,308
|
13,487
|
16,208
|
13,474
|
||||||||||||
Class B
|
3,286
|
3,265
|
3,283
|
3,270
|
October 31,
2015
|
January 31,
2015
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and equivalents
|
$
|
126,621
|
$
|
120,526
|
||||
Accounts receivable, net
|
41,233
|
78,887
|
||||||
Deferred tax assets, net
|
8,597
|
9,313
|
||||||
Other current assets
|
13,162
|
14,799
|
||||||
Total current assets
|
189,613
|
223,525
|
||||||
Property and equipment, net
|
32,646
|
33,154
|
||||||
Capitalized software costs, net
|
1,733
|
2,485
|
||||||
Goodwill
|
10,706
|
10,911
|
||||||
Long-term deferred tax assets, net
|
10,515
|
9,680
|
||||||
Other assets, net
|
2,953
|
3,614
|
||||||
Total assets
|
$
|
248,166
|
$
|
283,369
|
||||
Liabilities and stockholders' equity
|
||||||||
Current liabilities:
|
||||||||
Current portion of long-term debt
|
$
|
417
|
$
|
406
|
||||
Accounts payable and other current liabilities
|
35,504
|
48,637
|
||||||
Deferred revenue
|
69,616
|
102,721
|
||||||
Total current liabilities
|
105,537
|
151,764
|
||||||
Long-term debt
|
14,364
|
14,680
|
||||||
Other liabilities
|
4,455
|
5,219
|
||||||
Stockholders' equity:
|
||||||||
Common stock
|
21
|
20
|
||||||
Additional paid-in capital
|
193,836
|
185,546
|
||||||
Treasury stock
|
(18,816
|
)
|
(22,977
|
)
|
||||
Accumulated deficit
|
(42,675
|
)
|
(43,465
|
)
|
||||
Accumulated other comprehensive loss
|
(8,556
|
)
|
(7,418
|
)
|
||||
Total stockholders' equity
|
123,810
|
111,706
|
||||||
Total liabilities and stockholders' equity
|
$
|
248,166
|
$
|
283,369
|
Nine Months Ended
October 31,
|
||||||||
2015
|
2014
|
|||||||
Net cash provided by operating activities
|
$
|
9,235
|
$
|
5,031
|
||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(2,641
|
)
|
(3,337
|
)
|
||||
Capitalized software costs
|
(70
|
)
|
(115
|
)
|
||||
Net cash used in investing activities
|
(2,711
|
)
|
(3,452
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Repayments of debt
|
(305
|
)
|
(291
|
)
|
||||
Tax payments, net of proceeds, related to stock awards
|
(2,419
|
)
|
(2,354
|
)
|
||||
Excess tax benefits from share-based payment arrangements
|
930
|
-
|
||||||
Payment of contingent liability associated with acquisitions
|
(750
|
)
|
(471
|
)
|
||||
Cash dividends paid
|
(3,922
|
)
|
(3,334
|
)
|
||||
Proceeds from issuance of common stock, net of issuance costs
|
8,365
|
-
|
||||||
Net cash provided by (used in) financing activities
|
1,899
|
(6,450
|
)
|
|||||
Effect of exchange rates on cash and equivalents
|
(2,328
|
)
|
298
|
|||||
Net increase (decrease) in cash and equivalents
|
6,095
|
(4,573
|
)
|
|||||
Cash and equivalents at beginning of period
|
120,526
|
75,984
|
||||||
Cash and equivalents at end of period
|
$
|
126,621
|
$
|
71,411
|
Three Months Ended
October 31, |
Nine Months Ended
October 31, |
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
Total revenue
|
$
|
68,037
|
$
|
74,004
|
$
|
208,593
|
$
|
215,539
|
||||||||
Net income
|
2,586
|
5,090
|
4,766
|
5,999
|
||||||||||||
Add back:
|
||||||||||||||||
Net interest expense
|
91
|
129
|
320
|
429
|
||||||||||||
Depreciation
|
980
|
958
|
2,953
|
2,809
|
||||||||||||
Amortization
|
455
|
483
|
1,363
|
1,467
|
||||||||||||
Income taxes
|
729
|
834
|
1,935
|
1,879
|
||||||||||||
EBITDA
|
$
|
4,841
|
$
|
7,494
|
$
|
11,337
|
$
|
12,583
|
||||||||
Add back:
|
||||||||||||||||
Non-cash stock-based compensation
|
1,881
|
1,209
|
5,618
|
3,794
|
||||||||||||
Change in fair value of interest rate swap
|
187
|
214
|
(164
|
)
|
321
|
|||||||||||
Adjusted EBITDA
|
$
|
6,909
|
$
|
8,917
|
$
|
16,791
|
$
|
16,698
|
||||||||
Adjusted EBITDA margin
|
10
|
%
|
12
|
%
|
8
|
%
|
8
|
%
|
||||||||
Non-GAAP net income reconciliation
|
||||||||||||||||
Net income
|
$
|
2,586
|
$
|
5,090
|
$
|
4,766
|
$
|
5,999
|
||||||||
Add back:
|
||||||||||||||||
Non-cash stock-based compensation
|
1,881
|
1,209
|
5,618
|
3,794
|
||||||||||||
Amortization of purchased intangible assets
|
345
|
374
|
1,034
|
1,130
|
||||||||||||
Change in fair value of interest rate swap
|
187
|
214
|
(164
|
)
|
321
|
|||||||||||
Income tax adjustments
|
(603
|
)
|
(449
|
)
|
(1,622
|
)
|
(1,311
|
)
|
||||||||
Non-GAAP net income
|
$
|
4,396
|
$
|
6,438
|
$
|
9,632
|
$
|
9,933
|
||||||||
Non-GAAP earnings per diluted Class A share reconciliation
|
||||||||||||||||
Earnings per diluted Class A share
|
$
|
0.14
|
$
|
0.31
|
$
|
0.25
|
$
|
0.37
|
||||||||
Add back:
|
||||||||||||||||
Non-cash stock-based compensation
|
0.10
|
0.08
|
0.30
|
0.23
|
||||||||||||
Amortization of purchased intangible assets
|
0.02
|
0.03
|
0.05
|
0.07
|
||||||||||||
Change in fair value of interest rate swap
|
0.01
|
0.01
|
(0.01
|
)
|
0.02
|
|||||||||||
Income tax adjustments
|
(0.03
|
)
|
(0.03
|
)
|
(0.08
|
)
|
(0.08
|
)
|
||||||||
Non-GAAP earnings per diluted Class A share
|
$
|
0.24
|
$
|
0.40
|
$
|
0.51
|
$
|
0.61
|
||||||||
Shares used in computing earnings per diluted Class A share
|
16,308
|
13,487
|
16,208
|
13,474
|
||||||||||||
Non-GAAP earnings per diluted Class B share reconciliation
|
||||||||||||||||
Earnings per diluted Class B share
|
$
|
0.12
|
$
|
0.27
|
$
|
0.21
|
$
|
0.31
|
||||||||
Add back:
|
||||||||||||||||
Non-cash stock-based compensation
|
0.08
|
0.06
|
0.25
|
0.20
|
||||||||||||
Amortization of purchased intangible assets
|
0.02
|
0.02
|
0.05
|
0.06
|
||||||||||||
Change in fair value of interest rate swap
|
0.01
|
0.01
|
(0.01
|
)
|
0.02
|
|||||||||||
Income tax adjustments
|
(0.03
|
)
|
(0.02
|
)
|
(0.07
|
)
|
(0.07
|
)
|
||||||||
Non-GAAP earnings per diluted Class B share
|
$
|
0.20
|
$
|
0.34
|
$
|
0.43
|
$
|
0.52
|
||||||||
Shares used in computing earnings per diluted Class B share
|
3,286
|
3,265
|
3,283
|
3,270
|
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