The collaborative commerce provider hits its fourth consecutive quarter of profitability
RICHMOND, Calif.—July 30—QRS Corporation (Nasdaq: QRSI) announced yesterday its results for the second quarter ended June 30, 2003.
The Company reported its fourth consecutive quarter of profitability with second quarter net income of $1.8 million, or $0.12 per share, diluted, compared to net income of $0.8 million, or $0.05 per share, diluted, for the first quarter 2003 and to a net loss of $2.4 million, or $0.15 per share, for the second quarter 2002.
"We are pleased to have significantly improved our bottom line results this quarter, particularly given the ongoing challenges in the external environment. In fact, we believe we have stabilized revenues, and we expect to see revenues increase slightly in the third quarter," said Liz Fetter, President and CEO of QRS. "We are investing for growth while exercising strong operational discipline and managing our costs in line with our revenue stream. These efforts will better position the Company for a strong future."
The Company reported revenues for the second quarter of $30.6 million, compared to $30.8 million for the first quarter 2003 and $35.1 million for the second quarter 2002. Gross margins for the second quarter were 50%, compared to 49% for the first quarter 2003 and 45% for the second quarter 2002. The Company expects overall gross margins, as a percentage of revenues, to remain in the upper-forties to 50% range this year.
The Company reduced operating expenses for the quarter to $13.4 million, down 7% from the $14.4 million for the first quarter 2003 and down 27% from the $18.2 million for the second quarter 2002. Operating expenses were net of $0.5 million in operating expense benefits, primarily related to the favorable resolution of various tax-related matters and other items. Earnings excluding these benefits would have been $0.08 per share, diluted.
In order to further improve operating performance and continue aligning resources with its growth strategy, the Company is currently conducting a comprehensive review of its cost structure. The Company anticipates that on completion of this review, it will likely recognize a restructuring charge in the third quarter of up to $2 million. The Company expects that the cost savings resulting from these actions will help the Company achieve its goal of double digit operating margins in 2004.
The cash and marketable securities balance at the end of the quarter was $36.4 million, compared to $35.6 million at the end of the first quarter 2003. Cash flows from operations totaled $3.3 million for the quarter. The Company will fund capital expenditures and its planned technology investment for the remainder of the year largely from cash flows from operations. Days sales outstanding were 46 days at the end of the second quarter, compared to 43 days at the end of the first quarter 2003 and 50 days at the end of the second quarter 2002.