Fiscal 2007 was a productive and successful year for QAD as we continued to pioneer the delivery of elegant yet powerful enterprise software solutions specifically tailored to the needs of global manufacturers. Our distinct focus on, and commitment to, six key vertical markets within the manufacturing sector has allowed us to build significant expertise in helping customers around the world understand, manage and respond to customer demand.

For more than a quarter century, in partnership with our customers, QAD has been at the forefront of providing the evolving manufacturing industry with innovative and flexible products and services that support their long-term growth and competitive advantage. Over that time, our ability to supply manufacturers, both large and small, with a robust and easy- to-use product suite and unmatched service capabilities, has helped QAD grow its installed base to 5,800 licensed sites, running our software in as many as 27 languages, across more than 90 countries on six continents.

Continuing Financial Progress
QAD’s strategy to broaden its product and service portfolio through a combination of strategic acquisitions and internal development helped the company achieve revenue of $235.6 million in fiscal 2007, a 4 percent improvement over fiscal 2006. License revenue contributed $54.4 million, or 23 percent, to the fiscal 2007 total, services revenue contributed $58.4 million, or 25 percent, and maintenance and other revenue contributed $122.8 million, or 52 percent.

We finished the year on a strong note, growing the contribution from license revenue to 30 percent of fiscal 2007 fourth quarter revenue, versus an average of 20 percent in each of the first three quarters of the fiscal year. License revenue also increased more than 10 percent in the last six months of fiscal 2007 when compared to the same six months in fiscal 2006. These improvements were driven by the significant progress our sales organization made in progressively enhancing our sales funnel throughout the year. Our sales funnel also benefited from our new .NET user interface, which provides a flexible and consistent user experience; acquisitions we completed during fiscal 2007; and an improved environment for Enterprise Resource Planning (ERP) spending. We plan to continue our focus on building a solid base of new customer prospects.