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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

For the fiscal year ended December 31, 2003

For the transition period from                     to                     

Commission file number 0-21958

QRS Corporation

(Exact name of registrant as specified in its charter)

1400 Marina Way South, Richmond, California 94804

(Address of principal executive offices, including zip code)

(510) 215-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

Preferred Stock Purchase Rights

(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.    x

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes  x    No  ¨

The aggregate market value of voting and non-voting common equity held by non-affiliates of the Registrant was approximately $49.6 million as of June 30, 2003, based upon the closing price on the Nasdaq National Market reported for such date. As of March 2, 2004, there were 15,928,263 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Proxy Statement for the 2004 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission are incorporated by reference into Part III of this Form 10-K.

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains statements which constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to a number of risks and uncertainties. All statements that are not historical facts are forward-looking statements, including statements regarding our business strategy, future operations, future financial position, estimated revenues or earnings (losses), projected costs, prospects, plans and objectives. These statements appear in a number of places and can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “estimates,” “will,” “should,” “plans” or “anticipates” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy.

Actual results may vary materially from those in the forward-looking statements as a result of various factors which are identified in “Item 1. Business” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this document. These factors include: general economic and business conditions; specific conditions in the retail industry; competition; changes in senior management; rapid technological change in our industry; dependence upon key customers and their trading partners; ability to introduce and market acceptance of new products and services; the ability to successfully integrate and manage acquired businesses and technologies; customers’ willingness to purchase products or services offered through or in conjunction with third parties; dependence upon IBM for electronic commerce service; dependence on third parties for licenses to technology that is integrated into certain products and services offered by us; and the ability to protect our proprietary technology and information. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements. All forward-looking statements speak only as of the date of this Annual Report on Form 10-K. Readers should not place undue reliance on these forward-looking statements and are cautioned that any such forward-looking statements are not guarantees of future performance. We assume no obligation to update any forward-looking statements.

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QRS CORPORATION

2003 FORM 10-K ANNUAL REPORT

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PART I

Item 1.  BUSINESS

General

QRS Corporation (“QRS,” the “Company,” “we” or “us”) is a technology company that serves the retail trading community with collaborative commerce solutions. We manage the flow of critical commerce information between companies and leverage our retail technology expertise to address fundamental industry challenges such as global data synchronization, compliance mandates, transaction outsourcing and product information management. Our solutions help customers expand into new markets and channels, improve operational efficiency and differentiate their brand. Currently we have more than 10,000 customers, as measured by the number of total, unique corporate customers that purchased or licensed our products and services during 2003. We offer solutions that help meet the diverse needs of members of the global retail trading community, regardless of company size, technology infrastructure or retail segment.

Our products and services help thousands of retailers, vendors, suppliers and brand manufacturers from a variety of retail segments, including general merchandise and apparel, consumer packaged goods, health and beauty, consumer electronics, hardlines, do-it-yourself, sporting goods and grocery. Our products and services are typically used with our customers’ enterprise information technology systems in order to deliver greater benefits and efficiencies to these customers. We market our products and services in three Solutions Groups: Software Applications, Trading Community Management and Global Services.

Our Software Applications automate and help optimize business processes between companies. Specifically, they support the following business functions: product information management and data synchronization; and collaborative product planning, design, production and shipment. Our Software Applications include both Enterprise Software Applications installed on customers’ computer systems and hosted applications installed on our computer systems.

Our Trading Community Management solutions allow retailers, vendors and their trading partners to exchange electronic business documents, such as purchase orders, invoices and advance ship notices. These electronic transactions are conducted over a proprietary value-added network (VAN) or over the Internet. The communication of these electronic business documents is typically used with the accounting and inventory systems of our customers and their trading partners. Our Trading Community Management solutions can reduce costs related to paper transactions, mail delays and manual data input errors for our customers.

Our Global Services include the collection, analysis and delivery of pricing, promotion and distribution information; software implementation and integration services; and technical support and training services for our various solutions.

In 2003, we experienced a decline in revenue from our traditional business, such as QRS Exchange^™ and QRS Catalogue^™, primarily due to continued competitive pricing pressures offset to some degree by increases in transaction volume in our Trading Community Management Solutions Group. This pricing pressure is continuing. Trading Community Management revenue was also impacted by a significant decline in leased lines and dial-up connectivity services due to technological obsolescence. To offset the decline in revenue from our traditional business, we reduced operating expenses and improved gross margin.

The challenge facing our business is to launch new products and services that can generate new revenue to offset the decline in revenue from our traditional business. We plan to continue to reduce costs in our traditional business while investing cash generated by our operations to develop and launch new products and services. Our growth strategy over the next few years is three-fold: 1) deepen our relationships within our traditional customer base, 2) expand our presence in new retail segments and 3) introduce new solutions that deliver value to our

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customers by helping them better differentiate their companies in the marketplace. We believe these new products and services will create long-term growth by serving our customer base of more than 10,000 retail industry companies. The first new product to be launched as part of this strategy is QRS IMPACT^™, our product information management solution, discussed below.

Industry

Generating more than $3 trillion annually in sales, retail is the second largest industry in the United States, as reported by the U.S. Census Bureau in April 2003. The retail industry supply chain process includes hundreds of collaborative steps among thousands of retailers, vendors, suppliers, brand manufacturers and other intermediaries to create, manufacture and move products from source to store. The retail industry is characterized by multiple product sourcing options, a wide array of products and multi-channel shopping venues that include retail stores, outlet malls, mail-order catalogues and Internet sites. Competition for retail customers and wholesale orders is intense. Industry participants must be able to meet consumer demand quickly, accurately and at the most competitive price.

In the mid-1980s, a cooperative industry effort to improve the electronic processing of data led to the creation of certain data format standards, including the adoption of electronic data interchange (EDI), uniform product code (UPC) and, in Europe and other international markets, the European article number (EAN) standards. More recently, the global trade item number (GTIN) has been established.

EDI is a standard data format for electronic data communication between businesses such as retailers and suppliers. Documents in EDI-standard format can be sent over a proprietary network (VAN) or over the Internet. The GTIN, UPC and EAN data formats allow for the consistent identification of merchandise throughout the supply chain process, from product design to the point of sale. The use of GTIN, UPC and EAN data greatly increases the efficiency with which retailers and manufacturers can mark, track and exchange detailed product information. As a result of these standards and technologies, retailers, vendors, suppliers and brand manufacturers have been able to reduce the cost of financial operations, mismatches between purchase orders and invoices, inaccurate product shipments and stock-outs. We remain focused on enabling retail industry participants to connect with each other and transact business through the use of these automated communications and product identification standards.

In recent years, retail companies have sought to differentiate themselves through innovative brand strategies and improved brand execution, which involves every business process associated with delivering products to market, from initial design through the delivery of a product to the consumer. Successful brand execution requires collaboration with partners and automation of mission-critical business processes and transactions across the supply chain. More and more software applications have been used by the retail industry to improve brand execution. Such software applications are generally focused on enabling real-time data sharing and collaboration across various supply chain activities, including product design, sourcing, demand forecasting, collaborative assortment planning, purchasing, logistics, distribution, promotions, pricing, sales analysis and replenishment.

QRS Mission and Strategy

Our mission is to enable retailers, vendors, suppliers and brand manufacturers and their business partners to connect, transact, collaborate and differentiate within their global trading community to significantly improve business performance and global brand execution. QRS focuses on meeting customers’ current and emerging collaborative commerce needs.

We believe that our customers’ competitive advantage is built on their ability to differentiate both their brand and their operational capabilities. To do this, they need to collaborate effectively with other members of their trading community. Internal optimization of a customer’s business is unlikely to be enough to differentiate itself in the current marketplace. To collaborate, trading partners must interact and transact business efficiently.

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Automation of transactions helps make collaboration effective and differentiation easier. To transact, companies must be connected or networked. We believe that we add value to our customers because we offer the products and services that companies need to connect, transact, collaborate and differentiate themselves, ultimately driving overall business performance improvement and improved brand equity as measured through customer awareness, image, preference and loyalty.

Today, QRS provides a suite of collaborative commerce solutions, including networking software and services, automated document exchange, product information management and data synchronization, product sourcing and store-level information gathering services to optimize critical business processes of the retailing industry.

Our growth strategy over the next few years is three-fold: 1) deepen our relationships with our traditional customer base, 2) expand our presence in new retail segments and 3) introduce new solutions that deliver value to our customers by helping them better differentiate their companies in the marketplace.

To support this growth strategy, we plan to invest in further development of new and existing services and supporting technologies.

Deepening Our Relationships Within Our Traditional Customer Base

Our products and services address critical business issues with solutions that quickly deliver benefits to our customers. We deepen our relationships within our traditional customer base in a number of ways, including expanding the number of products a current customer buys (cross-selling), gaining exclusivity with existing customers and enabling a greater number of our customers’ trading partners. In 2003, we continued to win business with our existing customers, including many leading companies in our traditional base of general merchandise and apparel customers.

Expanding Our Presence In New Retail Segments

In 2003, we continued to win business in retail segments adjacent to our traditional market in general merchandise and apparel, such as consumer packaged goods, sporting goods, grocery, consumer electronics, hardlines, do-it-yourself, and health and beauty. These market segments have collaborative needs consistent with those of our traditional customers. To aid our expansion in new retail segments, we actively participate in and support industry initiatives and standards.

Introducing New Solutions That Deliver Value To Our Customers

Our product strategy includes enhancing our current product offerings and introducing new collaborative solutions and service offerings that can help our customers collaborate to improve the execution of their brand strategies. In 2003, we enhanced several of our existing products. In the Software Applications Solutions Group, we continued to make enhancements to QRS Catalogue^™. QRS Catalogue^™ was certified for the UCCnet Communications Solution using the EDI-over-the-Internet, or EDIINT AS2 protocol, during the third quarter 2003, meaning we are able to exchange messages with UCCnet’s data registry via an AS2 connection. QRS Catalogue^™ achieved full UCCnet Certification during the first quarter of 2004.

Within our Trading Community Management Solutions Group, we launched QRS Web Forms^™ 7.0 in the fourth quarter of 2003. QRS Web Forms^™ is an online application that manages data translation and trading partner compliance for small- and mid-sized suppliers.

In response to the movement by many large retailers and government agencies toward adoption of the EDIINT AS2 protocol, QRS also released an EDIINT gateway service offering in the fourth quarter of 2003, which allows current QRS Exchange^™ customers to use their existing EDI solution to meet customers’ EDIINT requirements.

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In addition to these product enhancements, we are developing and introducing new collaborative applications in order to generate future revenue growth. In January 2004, we launched QRS IMPACT^™, a product information management solution, at the National Retail Federation 2004 Convention, one of the retail industry’s largest trade shows. QRS IMPACT^™ is an enterprise software solution that offers a central repository for managing product information throughout its lifecycle. This includes aggregating product information from disparate sources, standardizing content, enforcing business rules and syndicating content to multiple sources both within a company and across channels.

QRS Solutions

We market our products and services in three Solutions Groups: Software Applications, Trading Community Management and Global Services. The following chart shows our current product set within each Solutions Group:

Software Applications

QRS Catalogue^™.    QRS Catalogue^™ is a leading retail industry product data synchronization application containing information on over 90 million products. It allows suppliers and brand manufacturers to share with retailers their latest product information, such as price, style, color, size, weight, unit of measure and over 450 additional product attributes. QRS Catalogue^™ offers a complete solution for item setup and synchronization, supporting the latest EAN.UCC global standards and initiatives. QRS Catalogue^™ features multiple access options, including an internet-based user interface, EDI, eXtensible Markup Language (XML) and real-time application integration. It also features extensive data synchronization that allows vendors to upload a single catalogue for all their trading partners while tailoring data visibility for each member of their trading community as needed.

QRS IMPACT^™.    QRS IMPACT^™ is a product information management solution designed specifically for retailers, vendors, suppliers and brand manufacturers. This enterprise software application provides quick, complete, accurate and relevant product information across departments, diverse channels and trading partners. By providing a single, global repository of product information within a company, QRS IMPACT^™ promotes the on-time, accurate and relevant flow of information across departments, diverse channels and trading partners. QRS IMPACT^™ works with QRS Catalogue^™ to offer the retail industry an end-to-end data synchronization solution built specifically for the North American retail industry.

QRS Sourcing^™.    Our sourcing software application is designed to enable customers to improve their collaborative sourcing and supply capabilities, financial order management and international logistics and customs management efforts.

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Trading Community Management

QRS Exchange^™.    QRS Exchange^™ is a suite of hosted and point-to-point electronic commerce solutions that help trading partners exchange information such as purchase orders, invoices and ship notices. Through electronic transactions, companies can reduce costs, respond quickly and optimize business operations. QRS Exchange^™ solutions maximize a company’s existing infrastructure through hosted networks and enterprise software solutions. Whatever the standard or protocol—EDI or XML; VAN or EDIINT via AS1/AS2; phone, fax, email, web—QRS Exchange^™ ensures companies can trade with companies of any size through one provider. We also provide trading community enablement services through which we plan, communicate and implement electronic commerce programs for large trading communities. Included within QRS Exchange^™ are the following products and services:

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Global Services

QRS Retail Intelligence Services^SM.    QRS Retail Intelligence Services^SM include competitive price audits, price scan verification and retail experience analysis. We collect store-level data and analyze the information in a market context to deliver fully customized, actionable intelligence for competitive differentiation in the marketplace. We can provide analysis based on national, multi-regional, metropolitan or customer-defined price zones.

QRS Professional Services^SM.    QRS Professional Services^SM provide customers with a variety of consulting services. We believe that an important factor in the success of any collaborative process lies in the ability for customers and trading communities to have access to the enablement, integration and training required to better use their software applications. Our QRS Professional Services^SM group provides customers with comprehensive integration, training and support services.

QRS Product Support and Maintenance.    We offer product support and maintenance to all our customers at the time of product purchase. We offer support via phone, fax, email and an internet-based customer portal called QRS Customer Center. Customers can report problems or inquiries, Monday through Friday during business hours of 6 a.m. to 6 p.m. Pacific Time. We also provide 24X7 support for most customer production outage cases. We have a program to regularly contact customers to increase customer satisfaction and maximize trading partner sales opportunities. Other forms of customer support services include e-mail and internet-based support, documentation and product updates.

Customers

Our historical focus has been on providing products and services to the general merchandise and apparel segment of the retail industry. This remains QRS’ largest and most important segment within the retail industry. However, we have broadened our customer base across other segments of the retail industry. Through our QRS Retail Intelligence Services^SM we have penetrated the grocery and mass merchant segments. We also sell our Trading Community Management services in the grocery and mass merchant segments. Our other products are primarily sold in the general merchandise and apparel segment.

Revenue generated from customers in the United States amounted to $119.1 million, $131.4 million and $135.3 million, or 97%, 97% and 95% of total revenue during 2003, 2002 and 2001, respectively. International customers generated $4.2 million, $4.6 million and $7.8 million is revenue in 2003, 2002 and 2001, respectively.

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Our North American customers include:

Sales and Marketing

We sell our products and services to the global marketplace primarily through our direct field sales force and our telesales group. As of December 31, 2003, we had 64 sales people who are organized in six groups: strategic accounts, new market sales, inside sales, account management, sales operations and industry consulting.

When our sales include Trading Community Management or QRS Catalogue^™, they typically involve an initial focus on large retailers and large vendors with subsequent efforts to sell to their networks of trading partners.

When we sell Enterprise Software Applications, our license agreements are often an enterprise-wide decision and generally require us to provide a significant level of pre-sales education to prospective customers regarding the use and benefits of our products. The implementation involves a significant commitment of resources by prospective customers and commonly occurs in tandem with changes in customer business processes. In recent periods in particular, our sales of Enterprise Software Applications have been adversely affected by the retail industry’s economic difficulties as well as the slowdown in the software industry generally. Many potential customers of our Enterprise Software Applications have delayed or extended their purchasing decisions.

We have a comprehensive marketing program that includes public relations campaigns, media sponsorships, lead generation, partnership marketing programs, industry events including industry conventions, trade shows, user groups, analyst programs and speaking engagements.

Service and Product Development

In order to support our growth strategy, we plan to invest in the development and enhancement of new and existing services and supporting technologies. During 2004, we plan to continue developing our intelligent transaction management (ITM) platform which should help QRS more rapidly and efficiently deliver solutions that bring value to our customers. We intend to continue parallel development and enhancement efforts to our current products on their current technology platforms while building the new base platform. While our current plan is to perform these development efforts using internal resources, we are simultaneously evaluating opportunities to accelerate development, including through alliances, licensing and strategic acquisitions.

We continue to invest in our enterprise software applications, QRS IMPACT^™ and QRS Sourcing^™, to expand their functionality and flexibility.

Today, our QRS Catalogue^™ software application runs on computer systems contained in our data center facility in Richmond, California. The data center operates 24 hours a day, seven days a week. It is connected to

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our network provider through redundant circuits with multiple routings to maximize availability. The data center consists primarily of leased mainframe, client/server, disk storage, tape drive and other peripheral technology to provide online, batch and back-up operations. Customer and content data is backed up and shipped off-site daily. We have also contracted for an alternative operations facility in the event of physical disaster.

Service and product development expenses were $12.3 million, $14.5 million and $13.0 million for 2003, 2002 and 2001, respectively. These expenses exclude capitalized costs. Capitalized service and product development costs totaled $5.4 million, $1.4 million and $2.5 million in 2003, 2002 and 2001, respectively. In 2003, we also expensed $1.8 million of licensed technology used in our QRS IMPACT^™ product that was not yet technologically feasible. We will capitalize another $0.5 million payment to be made after the product reaches technological feasibility in the first quarter of 2004.

Competition

Competition in the market for the provision of our products and services has become more intense in recent years, particularly in light of the entry of new technology platforms and software alternatives. In our traditional connectivity and network services market served by our Trading Community Management Solutions Group, we compete with a number of traditional VAN providers such as Inovis; Sterling Commerce, a division of SBC Communications; and GXS. In addition to the traditional VAN competitors, we also compete with IP-based network providers, such as ICC, and software providers, such as bTrade and IPNet Solutions. In the market for catalogue solutions served by our QRS Catalogue^™, we face competition from traditional providers such as SPS Commerce and GXS. We also face competition from recent entrants such as UCCnet (which already provides a catalogue solution to Home Depot, Wal-Mart and other large retailers) and other industry consortia such as Transora and WWRE. Another competitive threat to our catalogue solutions and QRS IMPACT^™ appears to be from behind-the-firewall software providers (e.g., Trigo and Velosel) that can handle content management and maintain item information.

We believe the primary competitive factors in the retail market for these services and solutions include the breadth and quality of offered services; price; the size and nature of any existing customer base; customer service and support; the focus on, presence in and knowledge of the retail industry; the ability to offer product, merchandise and other related content; and the capacity to enable relationships among trading partners.

While we plan to continue to develop solutions for the Internet, we expect the majority of our Trading Community Management revenue in the foreseeable future to come from our traditional VAN-based services. However, we believe the future success of our services may depend, in part, on our ability to continue developing products and services for the Internet. The increased commercial use of the Internet could require substantial modification and customization of our services and products and the introduction of additional services and products.

The in-store intelligence market is highly fragmented, with many local and regional players offering similar, labor-based solutions. QRS Retail Intelligence Services^SM competes with these local and regional providers, brokers and Mosaic Group Inc., another national provider. In addition, we may encounter competition from the internal field intelligence departments of companies. We believe competition in this market is based primarily on breadth of services, price, service levels, accuracy and ability to serve a customers’ entire geographic footprint.

The service bureau market is highly fragmented. QRS Managed EC^™ competes with many small companies offering fax/e-mail/EDI conversion and with SPS Commerce. We believe competition in this market is based on price, customer service and the retailers who are supported by the service bureau.

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IBM Relationship

Since 1988, QRS has been a reseller of the IBM value-added network that acts as the communication network for some of our QRS Exchange^™ products and services such as Data Exchange, QRS Web Forms^™ and QRS Managed EC^™. Our agreement with IBM includes the purchase of a specified minimum amount of network services at agreed prices. The July 2002 agreement with IBM extended our relationship through June 2005, while simultaneously improving our cost structure when compared with the previous agreement. While we purchase network connectivity and electronic commerce-related services from IBM, a portion of the purchased connectivity services is provided by AT&T, which purchased IBM’s Global Network and corporate networking business in April 1999. IBM resells the AT&T Global Network to us.

We do not develop, maintain or operate the IBM VAN.

Proprietary Rights

We seek to develop and maintain the proprietary aspect of our technologies, software applications, product information database, know-how, processes, company and product identifiers, documents and information in order to enhance our ability to compete and to maintain and grow revenue. The unauthorized use, copying, resale or other misappropriation of our technologies, software applications, database, know-how, processes, identifiers, documents or information could enable third parties to compete with us or to benefit from our technology without paying for it or could otherwise harm our business.

We rely on a combination of copyright, trade secret, trademark, service mark and other intellectual property laws, confidentiality procedures and contractual provisions to protect our proprietary rights as appropriate or available in each case. To date, no patents have been issued to us. Effective proprietary rights protection may be unavailable or limited in certain countries. We typically license our proprietary products and services under agreements that impose restrictions on the licensee’s ability to use the products and services and do not permit the resale, sublicense, or other transfer of the product or service. Also, our agreements with customers and third parties typically restrict access to our source code. Finally, we seek to avoid disclosure of our intellectual property and confidential or proprietary information by requiring employees and independent consultants to execute non-use and non-disclosure agreements with us and by restricting access to our source code.

Employees

At December 31, 2003, we had 499 full-time employees including:

In addition, at December 31, 2003, we employed 5 part-time employees. We also use contractors from time to time as our business requires.

Our employees are not covered by a collective bargaining agreement. We have never experienced an employment-related work stoppage, and we consider our employee relations to be good.

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Executive Officers and Key Employees of the Registrant

The executive officers and key employees of the Company and their positions as of March 15, 2004 are as follows:

Elizabeth A. Fetter has served as President, Chief Executive Officer and a Director of QRS since October 2001. Prior to joining QRS, Ms. Fetter served as President, Chief Executive Officer and a Director of NorthPoint Communications, Inc., a DSL broadband services provider, from March 2000 to April 2001, after serving as a Director since January 2000 and as the company’s President and Chief Operating Officer from March 1999 to March 2000. NorthPoint Communications filed for Chapter XI bankruptcy protection in January 2001 and subsequently sold the majority of its assets to AT&T in early 2001. From January 1998 until joining NorthPoint, Ms. Fetter was Vice President and General Manager of the Consumer Services Group at U S WEST, an integrated wireline, wireless and data services provider. Ms. Fetter serves on the Board of Directors of Berbee, a provider of electronic commerce, infrastructure, and networking solutions, and Symmetricom, Inc., a manufacturer of high-speed data, timing and frequency products. Ms. Fetter holds a B.A., High Honors, in communications from Pennsylvania Sate University, and an M.S. in industrial administration and public policy, Highest Honors, from Carnegie Mellon University.

David B. Cooper, Jr. has served as Senior Vice President and Chief Financial Officer since November 2003. Prior to joining QRS, Mr. Cooper served as Chief Financial Officer of AvantGo, Inc., a publicly-traded software and mobile data integration company, from August 2000 to February 2003. Prior to that, he was Chief Financial Officer at PowerBar, Inc. from August 1998 to May 2000. Over the course of his career, Mr. Cooper has held finance leadership positions with Edison Brothers Stores, Inc., Del Monte Fresh Produce Company, Dole Food Company, Inc., Castle & Cooke Homes, Inc. and Felxi-Van Corporation. Mr. Cooper holds a B.A. in Economics from Yale University and an M.B.A. in Finance with Honors from New York University.

Ray Rike has served as Senior Vice President of Worldwide Sales and Field Operations since September 2003 after joining QRS as Vice President, North America Sales in December 2002. Before joining QRS, Mr. Rike was a Principal at CrossCommerce Consulting from May 2001 to November 2002. Previously, Mr. Rike served as the President and Chief Executive Officer of ECtone, Inc. from September 2000 to May 2001. Mr. Rike also served as the Global Vice President, Sales and Business Development at MarketFirst Software, Inc. from January 1998 to September 2000. Mr. Rike earned his B.S. from Ohio State University.

James G. Rowley has served as Senior Vice President, Engineering and Chief Technology Officer since May 2002. Prior to joining QRS, Mr. Rowley served from February 1998 to December 2001 as the Chief Technology Officer and Senior Vice President, Engineering of CrossWorlds Software. Prior to that, he served as the Vice President of Applications Engineering for Scopus Technology from March 1997 to February 1998. Mr. Rowley earned a B.S. and M.B.A. at New York University.

Renee d’Ouville Cullinan has served as Vice President of Product Strategy since January 2003. Before joining QRS, Ms. Cullinan served as Senior Director of Product Management for Vicinity Corporation from June 2002 to December 2003 when it was acquired by Microsoft Corporation. Prior to that, Ms. Cullinan worked for Trigo Technologies, Exemplary Software and MarketFirst Software in senior marketing management positions from January 1998 to June 2002. Ms. Cullinan earned a B.S. in biochemistry from the University of California at Davis.

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Available Information

QRS maintains a website at http://www.qrs.com. In the Investor Relations section at http://www.qrs.com/financial/index.asp, QRS posts its annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports, free of charge and as soon as reasonably practicable after they are filed with, or furnished to, the SEC. In the Corporate Governance area of the Investor Relations section at http://www.qrs.com/governance/index.asp, QRS posts its corporate governance policies, financial officer code of ethics, charters of the committees of its Board of Directors and general code of conduct and ethics.

Item 2.   PROPERTIES

As of December 31, 2003, we leased the following properties:

Of the 253,000 total square feet of office space, approximately 125,000 square feet remain vacant as of December 31, 2003 and are not used in our current operations. As further discussed in Note 7 to the Consolidated Financial Statements, we recorded restructuring expense during the years ended December 31, 2001 and 2003 pertaining to the vacated facility in Richmond, California near our corporate headquarters. Additionally, we recorded restructuring expense during the year ended December 31, 2003 related to the closure of our Wakefield, Massachusetts facility. We continue to monitor and evaluate our facility requirements and total square feet under lease.

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