QAD buoyant on improving fortunes

Mid market manufacturing packaged ERP and supply chain software developer QAD is coming back into the limelight, with both profitability and analyst recognition. QAD UK managing director David Moody says the firm is performing “at the high end of our forecast”, with maintenance, new license (in particular add-on modules and upgrades) and service revenues all holding up well. He attributes what looks like somewhat rare success partially to the firm’s acquisition of former integration partner TRW Integrated Supply Chain Solutions (TRW ISCS), giving it greatly increased strength in terms of corporate level consulting and implementation services. That cost $1 million in cash plus transaction and integration costs of around $4 to $5 million – and at time of acquisition, QAD was looking for $13—15 million additional revenue as a result. It also gave QAD TRW’s AIM Warehousing product that integrates with its Mfg/Pro ERP. He also cites the last few months’ focus on QAD’s existing manufacturing customers and their partner organisations and sites, as well as its acknowledged key vertical industry sectors – with what he describes as “better execution”. The TRW ISCS connection is certainly important; there’s little doubt that it’s been instrumental in delivering what Moody describes as two very big wins in Europe. For the future, he sees corporate QAD still selling and implementing direct to manufacturers around or above the $250 million turnover, with the SME sector below that serviced by partners, like Minerva, part of Azur, in the UK. That’s never a perfect split, and Moody says partners have to be grown up about it: “If we compete with Minerva it’s because our customers demand it.” He accepts that the last two years have been “a little difficult”, with 15% job cuts, but says the company is now lean and he’s confident that for QAD at least, the downturn is over.