QAD Introduces New Business Intelligence Solution.

Business Editors

CHARLOTTE, N.C.--(BUSINESS WIRE)--May 26, 2004

As representatives from many of the world's largest manufacturers convene for its annual user conference, QAD Inc. (Nasdaq:QADI), a leading provider of enterprise applications for global manufacturers, today announced immediate availability of QAD Business Intelligence (QAD BI), a new enterprise application that helps manufacturers gain insight into their business operations by leveraging the wealth of information collected within their QAD MFG/PRO system. Using QAD BI, manufacturers have the visibility required to anticipate and proactively respond to business trends, improve decision making and be more competitive.

QAD enterprise applications automate and streamline manufacturing operations from the production line to financials and supply chain interaction -- and collect extensive data related to these enterprise functions. In response to customers' need to understand enterprise performance, QAD BI allows global manufacturers to use data captured by QAD MFG/PRO to better align execution with business strategy across the organization for effective enterprise performance management, or EPM.

"QAD BI helps global manufacturers get a clear picture of every aspect of operations, from sales and service to vendor relations and inventory status, using complex data collected by core QAD applications," said Jim Kirkley, QAD chief technology officer. "The solution incorporates Cognos's industry-leading analytics and insight from QAD's long-time, exclusive focus on manufacturing, to provide visibility into trends that will help companies more quickly identify and implement standard best practices and processes -- and eliminate those that are ineffective."

To transform data into valuable insight, QAD BI comprises two primary components: a data transformer and pre-defined business models. The data transformer performs extraction, transformation and loading (ETL) functions on the raw data collected by QAD MFG/PRO, ensures its accuracy and consistency, and then aggregates this content in a separate, dedicated business intelligence data warehouse. The pre-defined business models incorporate 150 key performance indicators (KPIs) and provide a framework for mapping the collated data to a meaningful format. These business models include:

-- Inventory monitoring, for insight into current and historic

inventory trends;

-- Manufacturing performance, including statistics on work

orders, production costs, productivity and throughput;

-- Forecasting performance;

-- Sales analysis, including statistical trends in sales and

revenue margins;

-- Financial controls, encompassing gauges for profitability,

investments and the effectiveness of financial management;

-- Vendor rating intelligence, from patterns in purchase price

and cost, to materials delivery; and

-- Service performance insights, including service profitability

and trends in customer calls and contract selection.

Even customers running multiple versions of QAD MFG/PRO can use QAD BI to quickly assess sales performance, forecast production, rate vendors, gauge financial controls, monitor inventory, and measure service management performance as well as manufacturing performance. Cognos Powerplay PowerCubes(R) are built into QAD BI so that users can view analytics in their format of choice, using a Web browser or popular word-processing or spreadsheet tools.

"By making business-critical information relevant, actionable, and accessible within an organization, QAD and Cognos are helping manufacturing clients make better decisions that can lead to increased revenues, reduced costs, and renewed agility in the marketplace," said Ted Jandl, Cognos vice president of worldwide OEM partners. "Our partnership with QAD enables us to expand business value for our clients, and extend the reach of business intelligence solutions in the market. Through our work with manufacturing organizations, we continue to evolve and develop our industry-leading solutions to allow organizations to deliver products on-time and on budget, serve their customers better, and address the demands of the market."

Leveraging Compliance for Competitive Advantage

Legal and regulatory mandates such as the Sarbanes-Oxley Act of 2002 have created greater urgency for companies to better understand their operations. By integrating and analyzing data associated with -- and typically isolated by -- discrete areas of function such as production, customer relationship management, and financials, QAD BI helps global manufacturers extrapolate data to gain meaningful metrics on their business operations, Additionally, using QAD BI, companies can discover aspects of operations that may put them at risk of non-compliance, so that they can make systemic changes before there is a problem.

Pamela Lopker, QAD president and chairman of the board, said, "Our goal is to help global manufacturers more quickly determine when and how they can adjust their business operations to act on customer demands and shifting industry requirements. For more than two decades QAD has combined the best thinking in manufacturing theory and an understanding of real-world manufacturing conditions to provide solutions that help our customers remain competitive."

About QAD

QAD enterprise applications leverage advances in Internet and enabling technologies to provide critical functionality for managing manufacturing resources and operations within and beyond the enterprise, enabling global manufacturers to collaborate with their customers, suppliers and partners to make and deliver the right product, at the right cost and at the right time. Manufacturers of automotive, consumer products, electronics, food and beverage, industrial and medical products use QAD applications at approximately 5,200 licensed sites in more than 80 countries and in as many as 26 languages. For more information about QAD, telephone [phone], or visit the QAD Web site at: www.qad.com. To receive any of QAD's press releases via facsimile, contact [phone], or outside the U.S. contact [phone].

"QAD" and "MFG/PRO" are registered trademarks of QAD Inc. All other products or company names herein may be trademarks of their respective owners.

Note to Investors: This press release contains certain forward-looking statements made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. A number of risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements. These risks include, but are not limited to, evolving demand for the company's software products and products that operate with the company's products; the company's ability to sustain strong licensing demand; the ability to sustain customer renewal rates at current levels; the publication of opinions by industry analysts about the company, its products and technology; the reliability of estimates of transaction and integration costs and benefits; difficulties relating to integration of a new business; the entry of new competitors and their technological advances; delays in localizing the company's products for new markets; delays in sales as a result of lengthy sales cycles; changes in operating expenses, pricing, timing of new product releases, the method of product distribution or product mix; general economic conditions, exchange rate fluctuations and the global political environment. In addition, revenue and earnings in the enterprise resource planning (ERP), e-business and distributed order management software industries are subject to fluctuations. Software license revenue, in particular, is subject to variability with a significant proportion of revenue earned in the last month of each quarter. Given the high margins associated with license revenue, modest fluctuations can have a substantial impact on net income. Investors should not use any one quarter's results as a benchmark for future growth. For a more detailed description of the risk factors associated with the company and the industries in which it operates, please refer to the company's Annual Report on Form 10-K for the fiscal year ended January 31, 2004.