Polytec Chooses QAD to Meet Fluctuations in OEM Customer Demand; QAD Global Enterprise Edition Chosen to Manage Production Planning and Reduce Stock by 25%

CARPINTERIA, Calif.--May 24, 2006--QAD Inc. , a leading provider of enterprise software applications for global manufacturers, today announced that Hereford-based UK automotive supplier Polytec Holden is deploying QAD Global Enterprise Edition, GXE, QAD's flagship software application. QAD was selected because of its proven ability to enable Polytec to meet the fluctuating demands of its OEM customer base and its additional tier-one customers, and to improve its administrative processes. Polytec's implementation of QAD began in February and is expected to be complete in October 2006.

Automotive original equipment manufacturers (OEMs) face ever-increasing consumer demand for customisation, putting pressure on automotive suppliers to respond quickly to OEMs without carrying high levels of inventory safety stock. This is even truer for Polytec, as they provide components for some of the more specialist, lower volume models, such as the Ford Focus ST and the Mercedes SLR McLaren.

This demand for customisation and the OEM drive to reduce carried inventory means that Polytec experiences constant fluctuations in OEM demand for components, with orders changing from day to day and often having short lead times to delivery. With more than 15 OEMs, this underlying fluctuation in demand is made even harder to manage by the different methods OEMs use to submit orders; some of Polytec's OEM customers transmit updated orders once a day by Electronic Data Interchange (EDI) and others updating once a week by fax. Polytec decided to replace its existing legacy Sage 500 system with QAD to enable it to cope with these fluctuations in customer demand, reduce stock and better meet all its customer needs, no matter how varied or unpredictable, their format or the frequency with which they are received.

Polytec Holden, part of the Austrian headquartered Polytec Group, employs 250 people in the UK. A manufacturer of automotive trim panels, such as bumpers and spoilers, Polytec counts leading names such as Volvo, Mercedes-Benz McLaren, Aston Martin, Jaguar, Bentley and Ford among its OEM customers. The automotive supplier anticipates the QAD GXE solution will improve its customer delivery times, help the business achieve its objective of reducing inventory by 25% over the next year, improve cost control and improve the overall manufacturing process so that the company can better meet existing customers' demands and ready itself to enter new market areas.

"This implementation is the most important project we have undertaken in the past five years, so competition to find the right partner was extremely intense," emphasises Mike Collinson, commercial director at Polytec. "When we identified the need for a world class resource planning system to help us better meet customer demand, we drew up an extensive shortlist of suppliers including Sage, QAD, SAP, Infor, Axapta and IFS. We went through a rigorous process and chose QAD because of its pedigree in the automotive arena and because QAD's solution is a well proven product with very strong core manufacturing capabilities."

With different departments at Polytec traditionally using spreadsheets for storing and sharing information, duplication and inaccuracy of data was becoming increasingly common across the company. Polytec will utilize QAD GXE to handle all core business processes, including finance, purchasing, production management, planning, engineering process, quality and shop floor data capture, within a common database. This will ensure accurate data is available and can be shared across different departments.

Jean Claude Walravens, vice president of QAD EMEA, comments: "With eight senior staff on the implementation taskforce, Polytec is committed to this project at the highest level. In selecting QAD, Polytec has not just purchased a solution with world-class functionality, it has also brought on board the expertise of QAD's consultants, who understand the automotive market and are providing Polytec's senior taskforce with best practice consulting and the right training to support the implementation. We intend to work extremely closely with Polytec between now and October to ensure the implementation is a success, enabling Polytec to rise to the challenge of planning its production in an environment of constantly changing customer demands and needs."

About Polytec

www.polytec-group.com

About QAD

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 at approximately 5,500 licensed sites in more than 90 countries and in as many as 27 languages. For more information about QAD, telephone +1 805 684 6614, 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; 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 2006 ended January 31, 2006.