RICHMOND, CA – October 29, 2003 – QRS Corporation (Nasdaq: QRSI) announced today its results for the third quarter ended September 30, 2003.

The Company reported third quarter revenues of $31.3 million, compared to $30.6 million for the second quarter 2003 and $33.5 million for the third quarter 2002. Looking ahead, the Company expects fourth quarter 2003 revenues to be roughly in-line with third quarter revenues.

Included in third quarter operating results was a $5.3 million restructuring charge, which resulted in a reported third quarter net loss of $3.5 million, or 22 cents per share. This compares to net income of $1.8 million, or 12 cents per share, diluted, for the second quarter 2003 and net income of $0.6 million, or 4 cents per share, diluted, for the third quarter 2002.

Excluding the $5.3 million restructuring charge, adjusted third quarter net income was $1.8 million, or 11 cents per share, diluted. This compares to adjusted second quarter 2003 net income of $1.3 million, or 8 cents per share, diluted, determined by excluding approximately $0.5 million of operating expense benefits, primarily caused by the favorable resolution of various tax-related matters.

"The third quarter was a strong one for QRS for many reasons," said Liz Fetter, President and CEO of QRS. "We increased revenues and improved earnings per share on an adjusted basis, continued to generate positive cash from operations, and expanded our relationships with existing customers while building our presence in new retail segments. We are executing on our plans for the Company as we invest in new products planned for introduction next year."

Gross margins for the third quarter were 50%, compared to 50% for the second quarter 2003 and 48% for the third quarter 2002. The Company continues to expect overall gross margins, as a percentage of revenues, in the upper-forties to 50% range for the fourth quarter 2003.

The $5.3 million restructuring charge recognized in the third quarter brought total operating expenses to $19.2 million, compared to $13.4 million for the second quarter 2003. Excluding this restructuring charge, adjusted third quarter operating expenses were $13.9 million, consistent with $13.9 million adjusted operating expenses for the second quarter 2003, determined by excluding approximately $0.5 million of operating expense benefits, primarily caused by the favorable resolution of various tax-related matters.

During the third quarter, the Company completed its comprehensive cost structure review with the goals of creating better alignment with its growth strategy and finding additional potential efficiencies. This review resulted in a total restructuring charge of $5.3 million during the third quarter consisting of several components. The Company centralized substantially all of its development team to its Richmond, California headquarters and streamlined other operations. These actions resulted in a restructuring charge of $1.8 million during the third quarter as well as trailing charges of less than $0.2 million over the next two quarters, somewhat offset by a $0.2 million third quarter reduction in a previous severance accrual. Beginning in the first quarter 2004, the savings from this restructuring are expected to be in the range of half a million dollars per quarter.

The Company also accelerated discussions with its landlord to renegotiate the terms of its lease on a vacated facility in the San Francisco Bay Area, driven by the difficult real estate market in that region. Recently, the Company reached an agreement in principle with the landlord to reduce both the term of the lease and its total cash commitments over the remaining life of the lease. The Company recorded a $3.7 million restructuring charge to cover all of its revised obligations related to this facility and committed to prepay a portion of the revised future rent obligation.

The cash and marketable securities balance at the end of the quarter was $37.0 million, up from $36.4 million at the end of the second quarter 2003. Cash flows from operations totaled $3.3 million for the quarter. The Company expects that cash flows from operations, excluding any lease pre-payments, will be sufficient to continue funding capital expenditures and its planned technology investments for the remainder of the year.

Recent QRS accomplishments include:

• Deepening Our Relationships Within General Merchandise and Apparel (GMA). In the third quarter, QRS signed an agreement with Saks Inc. to license QRS Sourcing™ software. The Company also signed contracts for its other collaborative commerce solutions with many leading general merchandise and apparel (GMA) companies including Ross Sportswear, Maidenform, Belk, Target, Gold Toe and General Sportswear.
• Expanding to New Retail Segments. QRS continued to win business with companies in retail segments adjacent to GMA. The Company's target retail segments outside of GMA include the consumer packaged goods, hardlines, do-it-yourself, sporting goods, consumer electronics and health and beauty segments. QRS signed contracts with leading companies in these segments, including: Staples, ConAgra, CVS, Duane Reade, Clarins Canada, TKO Sports Group and Hamilton Beach/Proctor-Silex.
• Enhancing the Product Portfolio. QRS delivered new releases of QRS Catalogue™ and QRS Web Forms™ to offer increased functionality and value to QRS' GMA customers as well as the Company's target retail adjacencies. At the same time, the Company is preparing to launch key new offerings in 2004: an enterprise solution for product information management, and an intelligent transaction management (ITM) platform on which new QRS collaborative solutions will be built. The ITM platform is being developed using a common set of components for rapid deployment in the marketplace. The first two ITM-based solutions will address transaction outsourcing and transaction lifecycle management.

Conference Call Information

In conjunction with the earnings release, the Company will hold a conference call at 2:00 p.m. PT (5:00 p.m. ET) on October 29, 2003. The conference call can be accessed via telephone at 877.580.9103 (toll-free) and 610.794.9303 (international) with passcode QRS and leader name Liz Fetter. The call will be webcast and can be accessed at www.qrs.com. Telephone replay will be available beginning October 29, 2003, after 4:00 p.m. PT (7:00 p.m. ET) at 888.567.0410 (toll-free) and 402.998.1782 (international). The replay of the webcast will also be available at www.qrs.com.

About QRS

QRS (Nasdaq: QRSI) is a leading provider of collaborative commerce solutions for the global retail trading community. We enable companies to communicate electronically with their global trading partners; conduct cross-company transactions; synchronize and manage product data; collaboratively source, merchandise and import goods; and automatically detect and resolve supply chain issues. More than 8,000* retailers, brand marketers, manufacturers, suppliers, wholesalers and distributors from a variety of retail segments – including Federated Department Stores Inc., Groupe Clarins USA, Jones Apparel Group Inc., The Kroger Company, Sears, Roebuck and Co., and Selfridges plc – use QRS solutions to significantly improve their overall business performance. Learn more about QRS at www.qrs.com.

*Based on total, unique QRS corporate customers that purchased or licensed QRS products and services between January and December 2002.