Attached files
file | filename |
---|---|
8-K - FORM 8-K - QAD INC | c06229e8vk.htm |
EX-99.2 - EXHIBIT 99.2 - QAD INC | c06229exv99w2.htm |
Exhibit 99.1
For more information, Contact: |
||
John Neale
|
Laurie Berman / Rob Whetstone | |
QAD Senior Vice President and Treasurer
|
PondelWilkinson Inc. | |
805.566.5117
|
310.279.5980 | |
investor@qad.com
|
investor@pondel.com |
QAD Announces Proposed Recapitalization Plan
Allows Company to Pursue Existing Strategy More Aggressively
Allows Company to Pursue Existing Strategy More Aggressively
SANTA BARBARA, Calif., September 22, 2010 QAD Inc. (NASDAQ: QADI), a global provider of
enterprise software and services, today announced that its Board of Directors has unanimously
adopted a recapitalization plan designed to increase financial flexibility for QAD and its
stockholders. The proposed recapitalization plan is subject to stockholder approval as well as the
receipt of customary regulatory approvals. Karl and Pamela Lopker, who own a majority of QADs
common stock, have notified QAD that they intend to vote their shares in favor of the
recapitalization.
The proposed recapitalization plan would establish two classes of common stock: Class A common
stock with 1/20th of one vote per share and Class B common stock with one vote per
share. As a result of the recapitalization plan, each ten whole shares of existing common stock
will become four Class A shares and one Class B share. To illustrate, a hypothetical QAD
stockholder who currently owns 1,000 shares of common stock, will own 400 Class A shares, each with
1/20th of one vote, and 100 Class B shares, each with one vote, after the
recapitalization.
Highlights of the Proposed Recapitalization Plan
| The proposed recapitalization plan allows QAD greater flexibility to issue Class A common stock in the future for corporate purposes, including financings, acquisitions or employee compensation, with limited dilution of existing stockholder voting rights. | ||
| Holders of Class A common stock will be entitled to receive a dividend equal to 120% of any dividend payable on Class B common stock, other than dividends declared for the purpose of distributing proceeds received by the Company from any transaction determined by the Board to be a material transaction not in the ordinary course of business, dividends effecting a spin-off of a subsidiary of the Company or dividends payable solely in the Companys capital stock. |
Karl Lopker, QADs chief executive officer stated, We are very pleased that the recapitalization
allows us to pursue our existing strategy more aggressively while maintaining continuity of
ownership which is important to our customers.
The recapitalization plan would be effected through the reclassification of each share of QADs
outstanding common stock into one-tenth of a new share of Class B common stock. QAD then would
issue a non-taxable stock dividend of four shares of Class A common stock on each share of Class B
common stock outstanding at the close of business on the effective date of the reclassification.
The proposed recapitalization plan would reduce the total number of shares of QAD stock outstanding
by approximately 50%, including a minimal reduction in the total number of shares outstanding as a
result of the payment of cash in lieu of issuing any fractional shares which would otherwise result
from the reclassification of the existing common stock to Class B common stock. Therefore, the
recapitalization plan is expected to have the same impact on earnings per share and market price
per share as a 2-to-1 reverse stock split. However, there can be no assurance that the market
prices of the two classes of stock after the recapitalization will rise in proportion to the reduction in the number of shares of
stock outstanding resulting from the recapitalization or as to the relative market prices of the
two classes of stock.
1
The proposed recapitalization plan would not affect the relative voting or equity interests of
existing stockholders because the reclassification of common stock and issuance of a stock dividend
will affect each stockholder in proportion to the number of shares currently owned.
It is anticipated that the Class A common stock and Class B common stock will trade on the Nasdaq
Global Select Market. Symbols will be assigned prior to the effective date of the
recapitalization.
QAD intends to seek stockholder approval of the proposed recapitalization plan at a special meeting
of the stockholders to be held during the fourth quarter of 2010. The recapitalization plan is
described in greater detail in the preliminary proxy statement that QAD will be filing with the
Securities and Exchange Commission today.
Additional information and where to find it
QAD has filed a preliminary proxy statement relating to the proposed recapitalization plan with the
SEC today and intends to file a definitive proxy statement and other relevant materials with the
SEC at a later date. The definitive proxy statement will be provided to the stockholders of QAD.
Before making any voting or investment decision with respect to the proposed recapitalization plan,
investors and stockholders of QAD are urged to read the proxy statement and the other relevant
materials because they will contain important information about the recapitalization plan. The
proxy statement, and any other documents filed by QAD with the SEC, may be obtained free of charge
at the SECs website at www.sec.gov, or by contacting QAD by email at investor@qad.com, by
phone at 805.566.5117, or by mail at QAD Inc., 100 Innovation Place, Santa Barbara, California
93108. In addition, the definitive proxy statement will be available in the Investor Relations
section of the QAD website at www.qad.com.
Participants in the solicitation
QAD and its directors and executive officers may be deemed to be participants in the solicitation
of proxies from QAD stockholders in connection with the proposed recapitalization plan. Information
about QADs directors and executive officers is set forth in QADs proxy statement on Schedule 14A
filed with the SEC on May 14, 2010 and QADs Annual Report on Form 10-K filed with the SEC on April
15, 2010. Additional information regarding the interests of participants in the solicitation of
proxies in connection with the proposed recapitalization plan will be included in the definitive
proxy statement that QAD intends to file with the SEC.
About QAD Inc.
QAD is a leading provider of enterprise applications for global manufacturing companies. QAD
applications 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 life science products use QAD applications in more than 90 countries and in as many
as 27 languages. For more information about QAD, telephone +1 805-566-6000, or visit the QAD
website at www.qad.com.
QAD is a registered trademark of QAD Inc. All other products or company names herein may be
trademarks of their respective owners.
2
Cautionary Note Regarding Forward-Looking Statements
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, the effect of the recapitalization plan on
the Companys stock price; evolving demand for the Companys software products and products that
operate with the Companys products; the Companys ability to sustain license and service demand;
the Companys ability to leverage changes in technology; the Companys ability to sustain customer
renewal rates at current levels; the publication of opinions by industry and financial analysts
about the Company, its products and technology; the reliability of estimates of transaction and
integration costs and benefits; the entry of new competitors or new offerings by existing
competitors and the associated announcement of new products and technological advances by them;
delays in localizing the Companys products for new or existing markets; the ability to recruit and
retain key personnel; delays in sales as a result of lengthy sales cycles; changes in operating
expenses, pricing, timing of new product releases, and the method of product distribution or
product mix; timely and effective integration of newly acquired businesses; general economic
conditions; exchange rate fluctuations, ability to achieve savings from cost cutting measures; and
the global political environment. In addition, revenue and earnings in the enterprise resource
planning (ERP) software industry 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. For a more detailed description of the risk factors
associated with the Company and the industries in which it operates, please refer to the Companys
Annual Report on Form 10-K for the fiscal year ended January 31, 2010 and the Companys other
filings with the SEC.
# # #
3