QAD Helps A.O. Smith Water Products Company Earn Corporate Award

QAD Enterprise Applications Implementation at Nanjing, China Plant Achieves Key Performance Objectives to Secure 2009 Values Recognition Award

QAD Inc. (NASDAQ:QADI) , a leading provider of enterprise software and services for global manufacturers, announced today that its recent deployment of QAD Enterprise Applications at the A.O. Smith Water Products Company (WPC) in Nanjing, China has helped the water heater manufacturer exceed its sales, inventory and operational improvements objectives during the last 12 months, winning the corporation's coveted 2009 Values Recognition Award. QAD also announced A.O. Smith WPC’s launch of Store Management, a QAD custom application to provide greater visibility to key operational and performance metrics of A.O. Smith's retail partner stores throughout China.

As a market leader, A.O. Smith is committed to improving product delivery accuracy as well as driving down costs. A.O. Smith WPC China recognized that its legacy systems were a deterrent to growth, being poorly integrated and excessively consuming staff resources with manual processes. The company realized the need for change in order to capitalize on China's booming residential and commercial demand.

QAD and A.O. Smith WPC formed a cross-functional project team and were able to go live at the Nanjing plant with QAD's Enterprise Applications in August 2009. The project included a complete set of documented standard business processes to support critical initiatives.

"In concert with the QAD Enterprise Applications implementation, we have been able to realize our resources' full potential and experience a significantly positive impact on our overall business," said Randy Bednar, Chief Information Officer for A.O. Smith.

Among its core issues, A.O. Smith WPC China needed to focus on reducing inventory through improvements in data accuracy and inventory turnover, while cutting inventory shortages and the number of man hours lost due to those shortages.

"With our QAD solution in place, we were able to establish data accuracy requirements and cycle counting processes that uniquely affected our outcomes," said Jim Hutzel, director of Logistics and Distribution for A.O. Smith WPC.

In the 12 months since deployment, A.O. Smith WPC China has documented positive results in several core areas. The company reported 21% inventory reduction, exceeding its pre-implementation goal; achieved 99.8% finished goods inventory accuracy; increased finished goods inventory turns from 10 to 24 times per year; and realized a dramatic reduction in inventory shortages, both in raw and finished goods. "Naturally, we're delighted with the results," expressed Anton Chilton, senior vice president of Strategic Accounts for QAD. "However, we're not resting on our laurels. As a global organization, A.O. Smith personifies the paradigm shifts occurring in manufacturing, such as developing products to meet domestic demand versus exporting. As A.O. Smith leads these changes, QAD will continue to engage them as partners to expand on this success, but more importantly, to help drive fundamental change and growth in the manufacturing sector overall."

About A. O. Smith Water Products Company China

A.O. Smith Water Products Company China, located in Nanjing, is a leading manufacturer of residential and commercial water heaters. It is a division of A.O. Smith Corporation, a diversified manufacturer with headquarters in Milwaukee, WI. The company makes commercial and residential water heating equipment under such brands as Cyclone, Genesis, and Vertex. It also makes solar panel water heaters under the Cirrex name. Products include commercial boilers, commercial natural gas water heaters, residential electric and natural gas water heaters, expansion tanks, and pump tanks. Products are sold through a network of wholesale distributors, as well as select retail chains.

About QAD

QAD is a leading provider of enterprise applications for global manufacturing companies specializing in automotive, consumer products, electronics, food and beverage, industrial and life science products. 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. For more information about QAD, telephone +1 805-566-6000, or visit the QAD web site 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.

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 license and service demand; the company's ability to leverage changes in technology; the company's 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 company's 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, the method of product distribution or product mix; timely and effective integration of newly acquired businesses; general economic conditions; exchange rate fluctuations; 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. Investors should not use any one quarter's results as a benchmark for future performance. 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 fiscal 2010 ended January 31, 2010.

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