Manufacturing ERP specialist QAD reported dismal first quarter results on Thursday, as gun-shy manufacturers bought fewer software licenses while awaiting an economic rebound.
Total revenue of $55.2 million in the first quarter, ended April 30, was 18% below the $66.8 million QAD reported in Q1 of fiscal 2009. The three lines of business that comprise that total — license, maintenance, and service revenue — all declined, with license sales plummeting 48% to $6.3 million. License revenue from the consumer product goods industry actually rose 20%, while automotive’s contribution fell 75%, officials said. All told, the poor performances contributed to a sharper net loss of $2.5 million, compared with a loss of $730,000 in the year-earlier period.
“Our first quarter results were generally in line with our expectations and reflect the restrained global economic environment and its direct impact on our customers,” said Karl Lopker, QAD’s CEO, in a statement. “While we cannot control the macro-issues affecting our business, we are taking decisive actions to ensure QAD’s long-term health and flexibility through initiatives that have resulted in a leaner cost base that is better aligned with current revenue levels.”
To his point, the company managed to contain costs in the period, cutting total operating expenses to $31.8 million from $37.8 million in the year-ago period. In particular, QAD excelled at shrinking its sales and marketing costs, which fell 24% to $13.9 million.