8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 2, 2003

JDA Software Group, Inc.

(Exact name of registrant as specified in charter)

Delaware	0-27876	86-0787377
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

14400 N. 87th Street, Scottsdale, AZ	85260-3649
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (480) 308-3000

(Former name or former address, if changed since last report)

Item 7. Financial Statements and Exhibits.

(c) Exhibits.

Exhibit No.	Description
99.1	Press Release dated April 2, 2003
99.2	Press Release dated April 21, 2003
99.3	Transcript of First Quarter 2003 Earnings Release Conference Call

Item 9. Regulation FD Disclosure

On April 2, 2003, JDA Software Group, Inc. (“JDA”) announced certain of its preliminary financial results for the quarter ended March 31, 2003. The full text of the press release issued in connection with the announcement is attached as Exhibit No. 99.1 to this Current Report on Form 8-K.

On April 21, 2003, JDA announced its final financial results for the quarter ended March 31, 2003 by issuing a press release and on the same date held a related conference call to discuss these results. The full text of the press release issued in connection with the announcement and the related conference call transcript are attached as Exhibit Nos. 99.2 and 99.3, respectively, to this Current Report on Form 8-K. The April 2, 2003 press release and the conference call contain, and the April 21, 2003 press release may implicate, forward-looking statements regarding JDA and include cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.

In accordance with the procedural guidance in SEC Release No. 33-8216, the information in this Form 8-K and the Exhibits attached hereto is being furnished under “Item 9. Regulation FD Disclosure” rather than under “Item 12. Disclosure of Results of Operations and Financial Condition.” The information in this Form 8-K and the Exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Use Of Non-GAAP Financial Information

JDA provides a non-GAAP measure of earnings (loss) per share in its earnings releases. The presentation is intended to be a supplemental measure of performance and typically excludes non-cash charges such as amortization of intangibles, purchased in-process research and development, restructuring and other merger or reorganization related costs that impact the comparability of one quarter to another or the comparability of the Company’s performance to another company that is providing this type of supplemental information. It is not intended to replace or to be displayed more prominently than our GAAP measurement of earnings (loss) per share. We have provided clear, concise disclosure to enable investors to reconcile the non-GAAP measure of earnings (loss) per share to the measure of earnings (loss) per share calculated in accordance with GAAP.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		JDA Software Group, Inc.
Date:	April 24, 2003	By:	/s/ Kristen L. Magnuson Kristen L. Magnuson Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release dated April 2, 2003
99.2	Press Release dated April 21, 2003
99.3	Transcript of First Quarter 2003 Earnings Release Conference Call

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	EXHIBIT 99.1
JDA Software Group, Inc. NEWS RELEASE	JDA Investor Relations Contacts: Lawrence Delaney, Jr., The Berlin Group Tel: 714-734-5000; larry@berlingroup.com Kristen L. Magnuson, Executive Vice President & Chief Financial Officer, JDA Software Group, Inc. Tel: 480-308-3000

JDA Software Announces Expected First Quarter Results

     Scottsdale, Ariz. – April 2, 2003 – JDA® Software Group, Inc. (Nasdaq: JDAS) today announced preliminary financial results for the first quarter ended March 31, 2003. Based on unaudited results, JDA anticipates total revenues of approximately $41 million, and software revenues of approximately $7.7 million, compared to total revenues of $59.1 million and software revenues of $19.5 million, in first quarter 2002. The Company expects to report a GAAP net loss per share of approximately $0.08 to $0.09 for the first quarter 2003, compared to net income of $0.16 per share last year. These anticipated results are preliminary and based on partial information and management assumptions. The Company plans to announce its final results for the quarter on April 21, 2003, and will remain in a quiet period until then.

     The company stated that no large deals ($1 million or greater) were signed during the quarter due to growing uncertainty about global economic conditions and increased international tensions. Cash flow from operations remained positive during the quarter, and the company ended the quarter with approximately $105 million in cash and investments.

     “Our results were heavily impacted by two factors this quarter. First, weak economic conditions, including our customers’ own poor sales, have impacted spending. Every geographic region in which we operate experienced increased delays in spending decisions as a result of an apparent lock down on budgets. Second, the Customer Value Program impacted revenues, particularly services revenues, to a greater extent than anticipated because of the heavy involvement of our services personnel in the program’s rollout, and the reorganization of our sales organization,” commented Chief Executive Officer Jim Armstrong. “Although disruptive, the investment in our customer relations at a time like this will pay off in the short run in terms of improved cash collections, and in the long run in terms of growth as confidence returns.”

CONFERENCE CALL INFORMATION

     JDA plans to report its actual financial results for the first quarter 2003, on April 21, 2003 at 4:00 p.m. EST and hold its regularly scheduled conference call at approximately 4:45 pm EST. To participate in the call, dial 1-800-921-9431 (United States) or 1-973-935-8505 (International) and ask the operator for the “JDA First Quarter 2003 Earnings.” A replay of the conference call will begin April 21, 2003 at 9:00 pm EST and will end on May 5, 2003 at 12:00 am EST. Callers can hear the replay by dialing 1-877-519-4471 (United States) or 1-973-341-3080 (International) using Access 3822466.

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JDA Announces 1Q2003 Preliminary Earnings

ABOUT JDA SOFTWARE

     With more than 4,800 retail, manufacturing and wholesale clients in 60 countries, JDA Software Group, Inc. (Nasdaq:JDAS) is a global leader in delivering integrated software and professional services for the retail demand chain. By capitalizing on its market position and financial strength, JDA commits significant resources to advancing JDA Portfolio, its suite of merchandising, POS, analytic and collaborative solutions that improve revenues, efficiency and customer focus. Founded in 1985, JDA is headquartered in Scottsdale, Arizona and employs more than 1,200 associates operating from 31 offices in major cities throughout North America, South America, Europe, Asia and Australia. For more details, visit www.jda.com, call 1-800-479-RETAIL (7382) or email info@jda.com.

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     This press release contains forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation: (i) our disclosure of anticipated operating results for the first quarter of 2003, including total revenues, software revenues, net loss per share, and cash and cash flow; and (ii) our expectation that the CVP reorganization will result in short-term cash collections and long-term growth. The occurrence of future events may involve a number of risks and uncertainties, including, but not limited to: (a) our preliminary first quarter operating results may change once we complete our quarterly accounting; and (b) the CVP reorganization may not produce the short-term and long-term benefits that we expect, particularly if current weak economic conditions persist; and (c) other risks detailed from time to time in the “Risk Factors” section of our filings with the Securities and Exchange Commission. As a result of these and other risks, actual results may differ materially from those predicted. We undertake no obligation to update information in this release.

     “JDA” and “JDA Portfolio are trademarks or registered trademarks of JDA Software Group. Any trade, product or service name referenced in this document using the name “JDA” is a trademark and/or property of JDA Software Group. All other trade, product, or service names referenced in this release may be trademarks or registered trademarks of their respective holders’.

JDA Software Group, Inc.
14400 N. 87^th Street
Scottsdale, AZ 85260

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JDA Software Group, Inc.
NEWS RELEASE EXHIBIT 99.2
 
Investor Relations Contacts:
Lawrence Delaney, Jr., The Berlin Group
Tel: 714-734-5000; larry@berlingroup.com
 
Kris Magnuson, Exec. VP/CFO
JDA Software Group, Inc; Tel: 480-308-3000

JDA Software Announces First Quarter 2003 Results

Scottsdale, Ariz. – April 21, 2003 – JDA® Software Group, Inc. today announced financial results for the first quarter ended March 31, 2003. JDA reported first quarter 2003 revenues of $41.3 million and software revenues of $7.7 million, compared to total revenues of $59.1 million and software revenues of $19.5 million in first quarter 2002. The Company also reported a GAAP net loss of $2.2 million, or $0.08 per share in first quarter 2003, as compared to net income of $4.5 million, or $0.16 per share in first quarter 2002. These results are consistent with the preliminary first quarter 2003 results announced on April 2, 2003.

     The adjusted non-GAAP loss for first quarter 2003 was $0.02 per share, excluding amortization of intangibles ($1.8 million) and relocation costs to consolidate development and support activities ($682,000), compared with adjusted non-GAAP income of $0.20 per share in first quarter 2002, excluding amortization of intangibles ($1.8 million). Cash flow from operations on a per share basis increased by 12% to $0.18 per share in first quarter 2003 from $0.16 per share in first quarter 2002.

     “Our retail customers and their suppliers are being directly impacted by uncertain macro economic conditions. As a result, our software licenses declined compared to first quarter 2002,” commented Jim Armstrong, CEO. “This decrease in revenues was offset in part by the cost savings we realized from the reorganization of the Company in fourth quarter 2002 to re-align our cost structure and implement the Customer Value Program.”

     “Because JDA remains financially strong, we can continue our significant investments in our customer relations program, our associates’ professional growth and our product development, which will position our Company for returned growth when the market improves,” added Armstrong.

FIRST QUARTER 2003 HIGHLIGHTS

• Customer Value Program Advancements: JDA made a substantial investment in its educational center, the Business Management Institute, during the first quarter by expanding professional growth opportunities for its associates. More than 480 associates attended a two and one-half day Portfolio Framework class, offered in 13 offices around the world, to gain a business level understanding of JDA’s comprehensive products and integrated processes that will facilitate improved utilization. Plus 32 customer-facing teams established their charters detailing goals and metrics related to increasing customer value. Over 68% of our direct global sales associates also participated in an intensive two and one-half day sales training course.

• Release of Portfolio 2003.5: The Company launched JDA Portfolio 2003.5, the second major synchronized release of its comprehensive collection of products, in first quarter. Portfolio 2003.5

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delivered expanded integration with JDA’s acquired and internally developed applications as well as with third party software including PkMS^®, Manhattan Associates’ (Nasdaq: MANH) leading supply chain execution solution. JDA also made significant progress with its .Net migration.

     JDA ended the first quarter 2003 with $105.7 million in cash and marketable securities versus $101.9 million at December 31, 2002. The Company generated $5.1 million in cash flow from operations in first quarter 2003 compared to $4.7 million in first quarter 2002. DSOs were 81 days at March 31, 2003 compared to 96 days at March 31, 2002.

CONFERENCE CALL INFORMATION

     JDA will hold a conference call to discuss fourth quarter results on April 21, 2003 at 4:45 pm EDT. To participate in the call, dial 1-800-921-9431 (United States) or 1-973-935-8505 (International) and ask the operator for the “JDA First Quarter 2003 Earnings.” A replay of the conference call will begin April 21, 2003 at 9:00 pm EDT and will end on May 5, 2003 at 12:00 am EDT. Callers can hear the replay by dialing 1-877-519-4471 (United States) or 1-973-341-3080 (International) using Access 3822466.

     To participate in a Web cast of the call visit www.vcall.com/EventPage.asp?ID=82954.

ABOUT JDA SOFTWARE

     With more than 4,800 retail, wholesale and manufacturing clients in 60 countries, JDA Software Group, Inc. (Nasdaq:JDAS) is the global leader in delivering integrated software and professional services for the retail demand chain. By capitalizing on its market position and financial strength, JDA commits significant resources to advancing JDA Portfolio, its suite of merchandising, POS, analytic and collaborative solutions that improve revenues, efficiency and customer focus. Founded in 1985, JDA is headquartered in Scottsdale, Arizona and employs more than 1,200 associates operating from 31 offices in major cities throughout North America, South America, Europe, Asia and Australia. For more details, visit www.jda.com, call 1-800-479-7382 or email info@jda.com.

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We do not believe this press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Nevertheless, some statements, such as Mr. Armstrong’s statement that because JDA remains financially strong, the Company can continue its significant investments in customer relations programs, associates’ professional growth and product development, which will position the Company for returned growth when the market improves, could be seen to have forward-looking implications. The occurrence of future events may involve a number of risks and uncertainties, including, but not limited to: the risk to our operating results of ongoing uncertain economic conditions and the inherent unpredictability on a quarterly basis of retailers’ demands for our products and services; the risk that the CVP initiative will not result in expected benefits, and could result in disruptions to our development, implementation and sales activities due to our reduction in force; and other risks detailed from time to time in the “Risk Factors” section of our filings with the Securities and Exchange Commission. As a result of these and other risks, actual results

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JDA Software Announces First Quarter 2003 Results
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may differ materially from those predicted. We undertake no obligation to update information in this release.

“JDA” and “JDA Portfolio are trademarks or registered trademarks of JDA Software Group. Any trade, product or service name referenced in this document using the name “JDA” is a trademark and/or property of JDA Software Group. All other trade, product, or service names referenced in this release may be trademarks or registered trademarks of their respective holders’.

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JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(unaudited)

			March 31,		December 31,
			2003		2002
CASH AND INVESTMENTS			$	105,748	$	101,855
ACCOUNTS RECEIVABLE, net				36,984		47,077
OTHER CURRENT ASSETS				28,164		25,517
PROPERTY AND EQUIPMENT, net				21,778		21,337
GOODWILL AND OTHER INTANGIBLES, net				114,655		116,436
PROMISSORY NOTE RECEIVABLE				2,976		3,017
		Total assets	$	310,305	$	315,239
DEFERRED REVENUE			$	29,773	$	23,331
OTHER CURRENT LIABILITIES				21,427		29,977
DEFERRED TAX LIABILITY				4,180		5,165
STOCKHOLDERS’ EQUITY				254,925		256,766
	Total liabilities and stockholders’ equity		$	310,305	$	315,239

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JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands, except share data, unaudited)

			Three Months
			Ended March 31,
			2003			2002
REVENUES:
	Software licenses		$	7,703		$	19,533
	Maintenance			16,444			13,016
		Product revenues		24,147			32,549
	Consulting services			15,601			24,571
	Reimbursed expenses			1,507			2,030
		Services revenues		17,108			26,601
		Total revenues		41,255			59,150
COST OF REVENUES:
	Cost of software licenses, excluding amortization of acquired software technology			241			411
	Cost of maintenance			3,916			3,398
		Cost of product revenues		4,157			3,809
	Cost of consulting services			14,060			17,830
	Reimbursed expenses			1,507			2,030
		Cost of services revenues		15,567			19,860
		Total cost of revenues		19,724			23,669
GROSS PROFIT				21,531			35,481
OPERATING EXPENSES:
	Product development			10,180			10,401
	Sales and marketing			7,567			9,390
	General and administrative			5,309			7,477
		Total operating expenses		23,056			27,268
INCOME (LOSS) FROM OPERATIONS, excluding amortization of intangibles and relocation costs to consolidate development and support activities				(1,525	)		8,213
	Amortization of intangibles, including acquired software technology			1,781			1,751
	Relocation costs to consolidate development and support activities			682			—
OPERATING INCOME (LOSS)				(3,988	)		6,462
	Other income, net			545			581
INCOME (LOSS) BEFORE INCOME TAXES				(3,443	)		7,043
	Income tax (benefit) provision			(1,205	)		2,498
NET INCOME (LOSS)			$	(2,238	)	$	4,545
BASIC EARNINGS (LOSS) PER SHARE			$	(.08	)	$	.17
DILUTED EARNINGS (LOSS) PER SHARE			$	(.08	)	$	.16
SHARES USED TO COMPUTE PER SHARE AMOUNTS:
Basic				28,452			27,383
Diluted				28,452			28,983

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JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands, except share data, unaudited)

		Three Months
		Ended March 31,
		2003			2002
NON-GAAP MEASURES OF PERFORMANCE:
NON-GAAP EARNINGS (LOSS) PER SHARE:
DILUTED EARNINGS (LOSS) PER SHARE (GAAP BASIS)		$	(.08	)	$	.16
Adjustments for other non-GAAP measures of performance, net of tax:
	Add back amortization of intangibles	$	.04		$	.04
	Add back relocation costs to consolidate development and support activities	$	.02			—
Adjusted non-GAAP earnings (loss) per share		$	(.02	)	$	.20
CASH FLOW PER SHARE FROM OPERATIONS		$	.18		$	.16

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EXHIBIT 99.3

JDA Software Group, Inc.
First Quarter 2003 Earnings Release Conference Call
April 21, 2003 1:45 PM PDST

Jim Armstrong: I’m Jim Armstrong, the Company founder and CEO and with me here today are Hamish Brewer, our President, and Kris Magnuson, Executive Vice President & Chief Financial Officer. Earlier today we announced our final results for the quarter, which were pretty much in line with what we had announced on April 2^nd. I will ask Kris to go through the numbers then Hamish and I will both have some comments on the details of the quarter

Kris Magnuson: Before I begin, let me remind everyone that the following discussion will include forward-looking statements, including in our discussion regarding the outlook for 2003. Our actual results might differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward statements can be found in our form 10-K for the year ended December 31, 2002.

Consistent with our pre-announcement on April 2, 2002, we reported software license revenues of $7.7 million, total revenues of $41.3 million and a GAAP loss of $2.2 million or $0.08 per share. Excluding amortization of intangibles ($1.8 million) and relocation charges to consolidate our development and support activities in Scottsdale ($681,000), we reported an adjusted non-GAAP quarterly loss of $637,000 or $0.02 per share.

Total revenues declined by $12 million sequentially and we incurred an adjusted non-GAAP operating loss of $1.5 million in Q1’03 compared to an adjusted non-GAAP operating profit of $4.5 million in Q4’02. The decline in revenues in Q1 was mitigated by the cost reductions put into effect through the CVP reorganization in November 2002 and lower incentive comp. Q4’02 included full incentive compensation of $5.2 million compared to $1.1 million in Q1’03 due to the significant revenue shortage versus our internal targets.

Total revenues decreased in Q1 compared to Q4 due to decreases in software licenses and service revenues of 57% and 13%, respectively. Maintenance revenues increased 5% to $16.4 million due to increases in the install base.

Software license sales declined during the quarter due to a significant fall off in closure rates during the second half of March. Both Europe and the Americas were off significantly compared to Q4 and Q1 in the prior year. Resistance to signing up for large capital commitments appeared to increase and we closed no large deals ($1 million of greater) during the quarter compared to four and three in Q1 and Q4 of 2002, respectively.

Overall, we signed 30 non-Intactix deals in Q1’03 compared to 53 in Q4’02. Our ASP was $262,000 and 68% of our software sales for the quarter was from our install base.

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Service revenues decreased 13% or $2.5 million compared to Q4’02. CSG utilization dropped to 26% in January in part due to the team meetings and education programs conducted to roll-out the CVP program to our implementation forces. February was slightly better and we exited March with utilization back in the low 40’s. Service margins were 9% in Q1 compared to 10% in Q4 ’02 due to the low utilization.

Total operating costs decreased $3.5 million or 13% sequentially in the first quarter due primarily to the reductions in headcount that we put in place in November 2002. We ended the quarter with 1220 employees compared to 1235 at the end of Q4 and to an average headcount of 1314 during Q4 2002. Overall, our program to achieve $10 million to $12 million of savings in infrastructure costs in 2003 has been effective. We believe this will allow us to get back to acceptable levels of profitability during these tough economic times.

We incurred $681,000 in relocation costs to consolidate our development and support activities at our corporate HQ in Scottsdale. In the last 2 quarters we have relocated 31 people. We expect to relocate 25 more in the next 3 to 6 months and have put 38 people on temporary retention programs to complete our transition. We expect to incur another $900,000 to $1.1 million in relocation costs over the next 2 quarters.

Cash flow was one positive metric for the quarter. We ended the quarter with nearly $106 million in cash and marketable securities compared to $102 million at the end of last quarter. During the quarter, we spent $3.2 million cash on capex (primarily computer equipment and software) and bought 75,000 shares of JDA stock in the open market for $757,000. The exercise of stock options and employee stock purchase plan purchases by employees provided $2.3 million in cash flow to the company during the first quarter.

Strong A/R collections and an increase in deferred revenue more than offset the cash outflow from the reductions in accrued incentive comp and increases in prepaid insurance and other current assets that we typically experience in the first quarter and we generated $5.1 million positive cash flow from operations during the first quarter.

Our DSOs were 81 days, compared to 79 at the end of last quarter, and 96 at the end of Q1 last year. A/R collection continues to be an area of focus for the company during these tentative economic times, keeping our net DSOs down below 90 days.

Now I’ll turn the floor back over to Jim.

Jim Armstrong: As you can see from the results, this was a very disappointing quarter financially. There were a number of situations that impacted us. First, weak economic conditions, including our own customers’ poor sales, continue to impact decisions on expenditures, especially large capital outlays. This was consistent across all of our product lines as well as all of our geographies. Secondly, our Customer Value Program, as anticipated, has had an impact on our revenues, especially our consulting services revenues, as the entire organization became involved in the rollout of the program across

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the company. This reorganization has also caused some disruption in our Sales force. We believe that, for the most part, this negative impact is behind us, and that the resultant improvements in our organizational structure will have a positive impact on the relationships we have with our clients going forward. Some evidence of early success with the program is that we have had very strong cash collections in spite of weak sales. Thirdly, we normally close a large percentage of our software licenses in the last few weeks of the quarter, which as you know, coincided with the outbreak of war, which was certainly not helpful to our close rates.

While we are still early into our second quarter to provide any outlook, and keeping in mind that it is our practice to avoid quantifying that outlook, we can say that we are confident that some of the conditions that impacted our results in the first quarter should not have the same impact in the second. We have had a number of successful competitive wins where our products have been selected for implementation, but the business was not closed in time for the end of the last quarter. We can’t quantify it beyond that, but we believe that our software licenses should rebound this quarter.

In spite of the gloomy economy, we are very pleased with the registration, to date, for our 13^th annual Users Group Convention, Focus 2003, which will be held in Orlando May 4-7. With just under two weeks to go, our registrations are already at last years levels, which, given the economy, we are very pleased with.

I will now turn it over to Hamish to provide his views on the quarter.

Hamish Brewer: Thanks Jim. I’d like to address two questions with regard to our performance:

• What is causing the poor performance and

• What is the outlook

With regard to the first question, it is our belief that the results we saw in the first quarter are primarily attributable to the economy and secondarily attributable to the disruption created by our Customer Value Program reorganization.

First of all I’d like to address the internal disruption caused by the Customer Value Program, or CVP.

We implemented most of the changes initially planned under CVP at the beginning of January this year. Specifically, we have realigned our sales and services associates into one group called the Customer Solutions Group and changed their compensation plans to ensure that all of our associates in this group are measured and rewarded based upon common goals. In parallel with this reorganization, we have substantially increased our investment in training for our people in order to drive up our cross-selling and back-selling revenues. We trained more than 480 people in the first quarter and this training has reduced available billable time and has impacted services revenues.

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These changes, combined with on-going soft demand for large transaction system projects have driven utilization in our consulting business to historically low levels. The services utilization rates increased each month during the first quarter, and this trend reflects the gradual elimination of the disruption of CVP, however, the lack of large transaction system projects continues to depress overall services revenues.

So to summarize, we think that we have the worst of the CVP disruption behind us, but we do not expect to get to historical utilization rates within the Customer Solutions Group until the second half of this year at the earliest, and even then, this improvement will depend upon improved software performance.

With regard to software performance, I’d like to further discuss the economic issues. Poor performance in the retail industry has led to substantially increased scrutiny regarding expenditure on technology, in particular, longer term or infrastructure projects have been negatively impacted. This environment is making decision making highly susceptible to deferrals and deferrals remain our most significant license revenue issue today – primarily caused, as I said, by economic factors.

I can support this position with some data. In the last four quarters, JDA has closed 15 merchandising systems deals, 8 planning deals, 28 replenishment deals and 12 point of sale deals – so that’s a total of 63 major pieces of business and these numbers do not include the hundreds of smaller deals and upgrades that we closed and, in addition, they do not consider space management – which provided over 158 new customers to JDA over the same period.

While, of course, we have lost some deals to competitors, their win rates remain at a fraction of JDA’s. Retek continues to be our only significant competitor. Over the same time period as we won 15 merchandising deals, we lost 7 to Retek.

So our products are clearly competitive, we are delivering more deals than any of our competitors, and yet our results are down – this is why we can only conclude that we have been, and continue to be, subject to an overall downturn which is creating lumpy license sales performance; good in the fourth quarter of 2002 and bad in the first quarter this year.

That brings me onto the outlook. As Jim said, we do not anticipate that the low software performance of the first quarter will be repeated in the second quarter. We have won a number of deals against Retek and other competitors which did not close during the first quarter, but which we fully expect to close during this and the coming quarters – however, getting back to the economic issue, due diligence is at an all-time high and our new customers are dotting every "i" and crossing every "t" before actually signing on the dotted line. We are seeing the same due diligence being applied to our competitors and historically this has been a problem for them – so we look forward to the final outcome of some of the decisions that have gone in their favor so far.

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Overall, our pipeline of deals has the same profile as the past few quarters, i.e. largely populated with short term quick win projects and heavily focused on the traditional ROI strong-holds of planning, forecasting and replenishment. In addition, we are seeing some upturn regarding POS systems, although the uncertainty in the market regarding the next generation products is delaying decisions. We expect to release the first generally available version of our Portfolio POS product during this second quarter and that should start to pave the way for unlocking some decision processes.

With that summary, I’d like to hand back to Jim.

Jim Armstrong: Thank you, Hamish. And I’d now like to ask the operator to open it up for questions.

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