##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended April 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
 For the transition period from  to
 Commission file number 0-22823
 QAD Inc.
  Delaware
    
    77-0105228(State or other jurisdiction of incorporation or
    
    (I.R.S. Employer Identification No.)organization)
 100 Innovation Place, Santa Barbara, California 93108
 (805) 566-6000
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



QAD INC.
INDEX
 PagePART I  FINANCIAL INFORMATIONITEM 1 Financial Statements (unaudited)
    
    
    1Condensed Consolidated Balance Sheets 
as of April 30, 2009 and January 31, 2009
    
    
    1Condensed Consolidated Statements of Operations
for the Three Months Ended April 30, 2009 and 2008
    
    
    2Condensed Consolidated Statements of Cash Flows 
for the Three Months Ended April 30, 2009 and 2008
    
    
    3Notes to Condensed Consolidated Financial
Statements
    
    
    4ITEM 2 Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    16ITEM 3 Quantitative and Qualitative Disclosures
About Market Risk
    
    
    26ITEM 4 Controls and Procedures
    
    
    27PART II  OTHER INFORMATIONITEM 1 Legal Proceedings
    
    
    28ITEM 1A Risk Factors
    
    
    28ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    28ITEM 3 Defaults Upon Senior Securities
    
    
    28ITEM 4 Submission of Matters to a Vote of Security Holders
    
    
    28ITEM 5 Other Information
    
    
    28ITEM 6 Exhibits
    
    
    28SIGNATURES
    
    
    29Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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##### Table of Contents



PART I
 
 ITEM 1  FINANCIAL STATEMENTS
 QAD INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share data)
 (unaudited)
 April 30,
    
    
    January 31,2009
    
    
    2009AssetsCurrent assets:Cash and equivalents
    
    $
    36,608
    
    
    $
    31,467Accounts receivable, net
    
    
    51,987
    
    
    
    70,954Other current assets
    
    
    19,396
    
    
    
    19,164Total current assets
    
    
    107,991
    
    
    
    121,585Property and equipment, net
    
    
    40,430
    
    
    
    41,438Capitalized software costs, net
    
    
    4,794
    
    
    
    5,699Goodwill
    
    
    6,254
    
    
    
    6,237Other assets, net
    
    
    18,659
    
    
    
    18,786Total assets
    
    $
    178,128
    
    
    $
    193,745Liabilities and stockholders equityCurrent liabilities:Current portion of long-term debt
    
    $
    271
    
    
    $
    266Accounts payable
    
    
    8,474
    
    
    
    12,494Deferred revenue
    
    
    79,001
    
    
    
    81,392Other current liabilities
    
    
    24,297
    
    
    
    31,081Total current liabilities
    
    
    112,043
    
    
    
    125,233Long-term debt
    
    
    16,643
    
    
    
    16,717Other liabilities
    
    
    4,050
    
    
    
    4,324Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value. Authorized 5,000,000
shares; none issued and outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value. Authorized 150,000,000
shares; issued 35,350,481 shares at both April 30, 2009 and
January 31, 2009
    
    
    35
    
    
    
    35Additional paid-in capital
    
    
    141,159
    
    
    
    139,930Treasury
stock, at cost (4,596,620 and 4,597,758 shares at April 30, 2009 and January 31, 2009, respectively)
    
    
    (36,605
    )
    
    
    (36,614
    )Accumulated deficit
    
    
    (51,770
    )
    
    
    (49,103
    )Accumulated other comprehensive loss
    
    
    (7,427
    )
    
    
    (6,777
    )Total stockholders equity
    
    
    45,392
    
    
    
    47,471Total liabilities and stockholders equity
    
    $
    178,128
    
    
    $
    193,745
   1




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QAD INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except per share data)
 (unaudited)
 Three Months EndedApril 30,2009
    
    
    2008Revenue:License fees
    
    $
    6,251
    
    
    $
    11,961Maintenance and other
    
    
    32,817
    
    
    
    34,159Services
    
    
    15,930
    
    
    
    20,718Total revenue
    
    
    54,998
    
    
    
    66,838Costs and expenses:Cost of license fees
    
    
    1,769
    
    
    
    2,288Cost of maintenance, service and other revenue
    
    
    24,003
    
    
    
    27,689Sales and marketing
    
    
    13,889
    
    
    
    18,249Research and development
    
    
    10,326
    
    
    
    11,074General and administrative
    
    
    7,380
    
    
    
    8,323Amortization of intangibles from acquisitions
    
    
    173
    
    
    
    178Total costs and expenses
    
    
    57,540
    
    
    
    67,801Operating loss
    
    
    (2,542
    )
    
    
    (963
    )Other expense (income):Interest income
    
    
    (161
    )
    
    
    (385
    )Interest expense
    
    
    303
    
    
    
    316Other expense (income), net
    
    
    249
    
    
    
    342Total other expense (income)
    
    
    391
    
    
    
    273Loss before income taxes
    
    
    (2,933
    )
    
    
    (1,236
    )Income tax benefit
    
    
    (268
    )
    
    
    (506
    )Net loss
    
    $
    (2,665
    )
    
    $
    (730
    )Basic net loss per share
    
    $
    (0.09
    )
    
    $
    (0.02
    )Diluted net loss per share
    
    $
    (0.09
    )
    
    $
    (0.02
    )
   2




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QAD INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands)
 (unaudited)
 Three Months EndedApril 30,2009
    
    
    2008Cash flows from operating activities:Net loss
    
    $
    (2,665
    )
    
    $
    (730
    )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization
    
    
    2,754
    
    
    
    2,659Provision for (recovery of) doubtful accounts and sales adjustments
    
    
    652
    
    
    
    (159
    )Gain on disposal of property and equipment
    
    
    (6
    )
    
    
    3⁄4Stock compensation expense
    
    
    1,238
    
    
    
    1,604Other, net
    
    
    (112
    )
    
    
    (77
    )Changes in assets and liabilities, net of effects from acquisitions:Accounts receivable
    
    
    19,011
    
    
    
    25,206Other assets
    
    
    (907
    )
    
    
    (2,035
    )Accounts payable
    
    
    (2,562
    )
    
    
    (2,698
    )Deferred revenue
    
    
    (3,666
    )
    
    
    (8,660
    )Other liabilities
    
    
    (6,405
    )
    
    
    (7,300
    )Net cash provided by operating activities
    
    
    7,332
    
    
    
    7,810Cash flows from investing activities:Purchase of property and equipment
    
    
    (322
    )
    
    
    (1,579
    )Capitalized software costs
    
    
    (111
    )
    
    
    (326
    )Acquisition of businesses, net of cash acquired
    
    
    (12
    )
    
    
    (2,350
    )Proceeds from sale of property and equipment
    
    
    20
    
    
    
    Net cash used in investing activities
    
    
    (425
    )
    
    
    (4,255
    )Cash flows from financing activities:Repayments of debt
    
    
    (69
    )
    
    
    (71
    )Proceeds from issuance of common stock
    
    
    3⁄4
    
    
    
    232Changes in book overdraft
    
    
    (1,512
    )
    
    
    (856
    )Dividends paid
    
    
    (769
    )
    
    
    (769
    )Repurchase of common stock
    
    
    3⁄4
    
    
    
    (2,219
    )Net cash used in financing activities
    
    
    (2,350
    )
    
    
    (3,683
    )Effect of exchange rates on cash and equivalents
    
    
    584
    
    
    
    356Net increase in cash and equivalents
    
    
    5,141
    
    
    
    228Cash and equivalents at beginning of period
    
    
    31,467
    
    
    
    45,613Cash and equivalents at end of period
    
    $
    36,608
    
    
    $
    45,841
   3




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QAD INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (unaudited)
 1. BASIS OF PRESENTATION
  Reclassifications and Corrections of Previously Issued Financial Statements
   As Previously
    
    
    Effect of
    
    
    AsReported
    
    
    Adjustment
    
    
    Adjusted(in thousands, except per share data)Statement of Operations for the year ended January 31, 2009:Maintenance and other revenue
    
    
    133,717
    
    
    
    (637
    )
    
    
    133,080Services revenue
    
    
    83,050
    
    
    
    (60
    )
    
    
    82,990Total revenue
    
    
    263,440
    
    
    
    (697
    )
    
    
    262,743Operating loss
    
    
    (23,166
    )
    
    
    (697
    )
    
    
    (23,863
    )Loss before income taxes
    
    
    (22,734
    )
    
    
    (697
    )
    
    
    (23,431
    )Income tax expense
    
    
    361
    
    
    
    (72
    )
    
    
    289Net loss
    
    
    (23,095
    )
    
    
    (625
    )
    
    
    (23,720
    )Per common share:Basic net loss per share
    
    
    (0.75
    )
    
    
    (0.02
    )
    
    
    (0.77
    )Diluted net loss per share
    
    
    (0.75
    )
    
    
    (0.02
    )
    
    
    (0.77
    )Balance Sheet as of January 31, 2009:Other current assets
    
    
    19,092
    
    
    
    72
    
    
    
    19,164Total current assets
    
    
    121,513
    
    
    
    72
    
    
    
    121,585Total assets
    
    
    193,673
    
    
    
    72
    
    
    
    193,745Deferred revenue
    
    
    80,695
    
    
    
    697
    
    
    
    81,392Total current liabilities
    
    
    124,536
    
    
    
    697
    
    
    
    125,233Accumulated deficit
    
    
    (48,478
    )
    
    
    (625
    )
    
    
    (49,103
    )Total stockholders equity
    
    
    48,096
    
    
    
    (625
    )
    
    
    47,471Total liabilities and stockholders equity
    
    
    193,673
    
    
    
    72
    
    
    
    193,745
  4




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2. RECENT ACCOUNTING PRONOUNCEMENTS
      5




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QAD INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 3. COMPUTATION OF NET LOSS PER SHARE
  Three Months EndedApril 30,2009
    
    
    2008(in thousands, except per share data)Net loss
    
    $
    (2,665
    )
    
    $
    (730
    )Weighted average shares of common
stock outstanding  basic
    
    
    30,753
    
    
    
    30,678Weighted average shares of common
stock equivalents issued using the
treasury stock method
    
    
    3⁄4
    
    
    
    Weighted average shares of common
stock and common stock equivalents
outstanding  diluted
    
    
    30,753
    
    
    
    30,678Basic net loss per share
    
    $
    (0.09
    )
    
    $
    (0.02
    )Diluted net loss per share
    
    $
    (0.09
    )
    
    $
    (0.02
    )
  4. COMPREHENSIVE LOSS
  Three Months EndedApril 30,2009
    
    
    2008(in thousands)Net loss
    
    $
    (2,665
    )
    
    $
    (730
    )Foreign currency translation adjustments
    
    
    (650
    )
    
    
    317Comprehensive loss
    
    $
    (3,315
    )
    
    $
    (413
    )
  6




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QAD INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
 5. FAIR VALUE MEASUREMENTS
  Fair value measurement at reporting date usingQuoted Prices inActive Markets for
    
    
    Significant Other
    
    
    SignificantIdentical Assets
    
    
    Observable Inputs
    
    
    Unobservable InputsDescription
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalMoney market mutual funds
    
    $
    23,539
    
    
    $
    
    
    
    $
    
    
    
    $
    23,539Total
    
    $
    23,539
    
    
    $
    
    
    
    $
    
    
    
    $
    23,539
  6. CAPITALIZED SOFTWARE COSTS
  April 30,
    
    
    January 31,2009
    
    
    2009(in thousands)Capitalized software costs:Acquired software technology
    
    $
    8,726
    
    
    $
    8,594Capitalized software development costs
    
    
    3,913
    
    
    
    3,80812,639
    
    
    
    12,402Less accumulated amortization
    
    
    (7,845
    )
    
    
    (6,703
    )Capitalized software costs, net
    
    $
    4,794
    
    
    $
    5,699
    7




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QAD INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
 7. GOODWILL AND INTANGIBLE ASSETS
 Goodwill
  North
    
    
    Asia
    
    
    LatinAmerica
    
    
    Pacific
    
    
    America
    
    
    Total(in thousands)Balances, January 31, 2009
    
    $
    4,734
    
    
    $
    887
    
    
    $
    616
    
    
    $
    6,237Impact of foreign currency translation
    
    
    3⁄4
    
    
    
    (8
    )
    
    
    25
    
    
    
    17Balances, April 30, 2009
    
    $
    4,734
    
    
    $
    879
    
    
    $
    641
    
    
    $
    6,254
  Intangible Assets
 April 30,
    
    
    January 31,2009
    
    
    2009(in thousands)Amortizable intangible assets:Customer relationships
    
    $
    1,558
    
    
    $
    1,534Trade name
    
    
    518
    
    
    
    501Covenant not to compete
    
    
    138
    
    
    
    1352,214
    
    
    
    2,170Less accumulated amortization
    
    
    (1,849
    )
    
    
    (1,638
    )Amortizable intangible assets, net
    
    $
    365
    
    
    $
    532
   8




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QAD INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
 8. DEBT
 April 30,
    
    
    January 31,2009
    
    
    2009(in thousands)Total debt:Notes payable
    
    $
    16,914
    
    
    $
    16,983Less current maturities
    
    
    (271
    )
    
    
    (266
    )Long-term debt
    
    $
    16,643
    
    
    $
    16,717
 Notes Payable
  Credit Facility
      9




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QAD INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
 9. INCOME TAXES
     10. STOCK-BASED COMPENSATION
   Three Months EndedApril 30,2009
    
    
    2008(in thousands)Stock-based compensation expense:Cost of maintenance, service and other revenue
    
    $
    256
    
    
    $
    293Sales and marketing
    
    
    217
    
    
    
    387Research and development
    
    
    193
    
    
    
    244General and administrative
    
    
    572
    
    
    
    680Total stock-based compensation expense
    
    $
    1,238
    
    
    $
    1,604
   10




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QAD INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
 10. STOCK-BASED COMPENSATION (Continued)
  Three Months EndedApril 30,2009
    
    
    2008Expected life in years (1)
    
    
    5.25
    
    
    
    5.25Risk free interest rate (2)
    
    
    1.88
    %
    
    
    3.10
    %Volatility (3)
    
    
    57
    %
    
    
    51
    %Dividend rate (4)
    
    
    3.91
    %
    
    
    1.23
    %
 
 (1)
    
    The expected life of SARs granted under the stock plans is based on historical
exercise patterns, which the Company believes are representative of future behavior.(2)
    
    The risk-free interest rate is based on the U.S. Treasury yield for a term
consistent with the expected life of SARs in effect at the time of grant.(3)
    
    The Company estimates the volatility of its common stock at the date of grant based
on the historical volatility of the Companys common stock, which it believes is
representative of the expected volatility over the expected life of SARs.(4)
    
    The Company expects to continue paying quarterly dividends at the same rate as it
has over the last year.  Weighted
    
    
    WeightedAverage
    
    
    AverageExercise
    
    
    RemainingOptions/
    
    
    Price per
    
    
    Contractual
    
    
    AggregateSARs
    
    
    Share
    
    
    Term
    
    
    Intrinsic Value(in thousands)
    
    
    
    
    
    (years)
    
    
    (in thousands)Outstanding at January 31, 2009
    
    
    5,967
    
    
    $
    7.99
    
    
    
    4.9
    
    
    $
    22Granted
    
    
    48
    
    
    
    2.48Exercised
    
    
    3⁄4
    
    
    
    3⁄4Expired
    
    
    (234
    )
    
    
    8.03Forfeited
    
    
    (142
    )
    
    
    7.98Outstanding at April 30, 2009
    
    
    5,639
    
    
    $
    7.94
    
    
    
    4.9
    
    
    $
    33Vested and expected to vest at
April 30, 2009 (1)
    
    
    5,409
    
    
    $
    7.96
    
    
    
    4.8
    
    
    $
    31Vested and exercisable at April 30, 2009
    
    
    3,214
    
    
    $
    8.19
    
    
    
    3.9
    
    
    $
    24
 
 (1)
    
    The expected-to-vest options and SARs are the result of
applying the pre-vesting forfeiture rate assumptions to
total outstanding equity awards.   11




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QAD INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
 10. STOCK-BASED COMPENSATION (Continued)
    WeightedAverageGrant DateRSUs
    
    
    Fair Value(in thousands)Restricted stock at January 31, 2009
    
    
    747
    
    
    $
    6.39Granted
    
    
    60
    
    
    
    2.49Vested (1)
    
    
    (1
    )
    
    
    7.58Forfeited
    
    
    3⁄4
    
    
    
    3⁄4Restricted stock at April 30, 2009
    
    
    806
    
    
    $
    6.09Restricted
stock expected to vest as of April 30, 2009 (2)
    
    
    733
    
    
    $
    6.70
 
 (1)
    
    The number of RSUs vested includes shares withheld on behalf
of employees to satisfy statutory tax withholding
requirements.(2)
    
    RSUs expected to vest are net of estimated future forfeitures.  11. STOCKHOLDERS EQUITY
 Cash or Stock Dividend
  12. COMMITMENTS AND CONTINGENCIES
 Indemnifications
   12




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QAD INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
 12. COMMITMENTS AND CONTINGENCIES (Continued)
  Legal Actions
  13. BUSINESS SEGMENT INFORMATION
     13




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QAD INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
 13. BUSINESS SEGMENT INFORMATION (Continued)
 Three Months EndedApril 30,2009
    
    
    2008(in thousands)Revenue:North America (1)
    
    $
    24,468
    
    
    $
    28,302EMEA
    
    
    16,792
    
    
    
    21,355Asia Pacific
    
    
    10,040
    
    
    
    12,133Latin America
    
    
    3,698
    
    
    
    5,048$
    54,998
    
    
    $
    66,838Operating income (loss):North America
    
    $
    2,844
    
    
    $
    3,146EMEA
    
    
    (388
    )
    
    
    (285
    )Asia Pacific
    
    
    683
    
    
    
    1,052Latin America
    
    
    121
    
    
    
    243Corporate
    
    
    (5,802
    )
    
    
    (5,119
    )$
    (2,542
    )
    
    $
    (963
    )
 April 30,
    
    
    January 31,2009
    
    
    2009(in thousands)Property and equipment, net:North America
    
    $
    33,621
    
    
    $
    34,580EMEA
    
    
    4,714
    
    
    
    4,731Asia Pacific
    
    
    1,617
    
    
    
    1,704Latin America
    
    
    478
    
    
    
    423$
    40,430
    
    
    $
    41,438
 
 (1)
    
    Sales into Canada accounted for 4% and 3% of North America total revenue for the
three months ended April 30, 2009 and 2008, respectively.  14




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QAD INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(unaudited)
 14. RESTRUCTURING CHARGES
 Q4 Fiscal 2009 Restructuring Plan
  Three Months EndedApril 30,2009(in thousands)Cost of maintenance, services and other revenue
    
    $
    412Sales and marketing
    
    
    290Research and development
    
    
    86General and administrative
    
    
    31Total
Restructuring Charges
    
    $
    819
  Restructuring Accruals
   Three Months EndedApril 30,2009(in thousands)Balance as of January 31, 2009
    
    $
    2,872Employee severance pay and related costs
    
    
    819Cash paid
    
    
    (2,788
    )Balance as of April 30, 2009
    
    $
    903
 Q2 Fiscal 2010 Restructuring Plan
    15




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ITEM 2 
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 FORWARD-LOOKING STATEMENTS
  INTRODUCTION
  OVERVIEW
      16




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CRITICAL ACCOUNTING POLICIES
  Revenue Recognition
      17




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Accounts Receivable Allowances
  18




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Goodwill and Intangible Assets
    Capitalized Software Development Costs.
  19




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Valuation of Deferred Tax Assets and Tax Contingency Reserves
   Stock-based Compensation Expense
    20




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RESULTS OF OPERATIONS
  Three Months EndedApril 30,2009
    
    
    2008Revenue:License fees
    
    
    11
    %
    
    
    18
    %Maintenance and other
    
    
    60
    
    
    
    51Services
    
    
    29
    
    
    
    31Total revenue
    
    
    100
    
    
    
    100Costs and expenses:Cost of license fees
    
    
    3
    
    
    
    3Cost of maintenance, service and other revenue
    
    
    44
    
    
    
    42Sales and marketing
    
    
    25
    
    
    
    27Research and development
    
    
    19
    
    
    
    17General and administrative
    
    
    13
    
    
    
    12Amortization of intangibles from acquisitions
    
    
    
    
    
    
    Total costs and expenses
    
    
    104
    
    
    
    101Operating loss
    
    
    (4
    )
    
    
    (1
    )Other expense (income)
    
    
    1
    
    
    
    1Loss before income taxes
    
    
    (5
    )
    
    
    (2
    )Income tax benefit
    
    
    3⁄4
    
    
    
    (1
    )Net loss
    
    
    (5
    )%
    
    
    (1
    )%
 Comparison of revenues
 Total Revenue
 License Revenue .
  21




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Maintenance and Other Revenue
  Services Revenue.
 Comparison of costs and expenses
Restructuring
 Three Months EndedApril 30,2009(in thousands)Restructuring Charges:Cost of maintenance, services and other revenue
    
    $
    412Sales and marketing
    
    
    290Research and development
    
    
    86General and administrative
    
    
    31Total
Restructuring Charges
    
    $
    819
 Q4 fiscal 2009 restructuring plan
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Restructuring Accruals
   Three Months EndedApril 30,2009(in thousands)Balance as of January 31, 2009
    
    $
    2,872Employee severance pay and related costs
    
    
    819Cash paid
    
    
    (2,788
    )Balance as of April 30, 2009
    
    $
    903
 Q2 fiscal 2010 restructuring plan
   Total Cost of Revenue.
 Sales and Marketing.
 Research and Development.
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General and Administrative.
 Amortization of Intangibles from Acquisitions.
 Other Expense (Income).
 Income Tax Benefit.
 LIQUIDITY AND CAPITAL RESOURCES
      24




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billed
 earned
   CONTRACTUAL OBLIGATIONS
 Credit Facility
    25




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Notes Payable
  
 ITEM 3  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Foreign Exchange
  Interest Rates.
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ITEM 4  CONTROLS AND PROCEDURES
 Evaluation of disclosure controls and procedures.
 Changes in internal control over financial reporting.
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PART II
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 Exhibits31.1
    
    
    Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    
    Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 200232.1
    
    
    Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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QAD Inc.
(Registrant)Date: June 10, 2009
    By:
    /s/ DANIEL LENDERDaniel LenderExecutive Vice President, Chief Financial Officer
(on behalf of the Registrant)By:
    /s/ KARA BELLAMYKara BellamySenior Vice President, Corporate Controller
(Chief Accounting Officer)  29




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Exhibit No.
    
    Description31.1
    
    
    Certification by the Chief Executive Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 200231.2
    
    
    Certification by the Chief Financial Officer pursuant to Rule 13a-14(a) of the
Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 200232.1
    
    
    Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    
    Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
  30