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): January 23, 2006

JDA Software Group, Inc.

(Exact name of registrant as specified in its charter)

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

14400 North 87th Street
Scottsdale, Arizona
(Address of principal executive offices) 85260-3649
(Zip Code)

(480) 308-3000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Exhibit 99.1

Item 2.02. Results of Operations and Financial Condition.

     On January 23, 2006, JDA Software Group, Inc. (“JDA”) announced an update to its financial results for the quarter ended December 31, 2005 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 is attached as Exhibit No. 99.1 to this Current Report on Form 8-K. The press release and the conference call contain forward-looking statements regarding JDA and include cautionary statements identifying important factors that could cause actual results to differ materially from those anticipated.

     We reported that GAAP net income (loss) would be between $0.02 to ($0.04) per share for the quarter ended December 31, 2005. The projected range of GAAP net income (loss) includes an impairment charge of between $7.0 million and $9.7 million related to goodwill in our In-Store Systems business segment that will be recorded in fourth quarter 2005. For purposes of the financial statements and schedule of non-GAAP measures of performance provided with the press release, we have included an impairment charge of $8.35 million, which represents the mid-point of the estimated range of loss.

     Final determination of the impairment charge is subject to our financial reporting processes and procedures as well as testing by our outside auditors. We expect to issue an additional press release with a final reporting of GAAP net income once our processes are complete.

     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 adjusted operating income and earnings per share in the attached press release. The presentation is intended to be a supplemental measure of performance and typically excludes non-cash charges such as amortization of intangibles, and certain non-recurring charges that impact the comparability of one quarter to another, or the comparability of our performance to another company that is providing this type of supplemental information. The presentation is not intended to replace or to be displayed more prominently than our GAAP measurement of operating income and earnings per share. We have provided clear, concise disclosure to enable investors to reconcile the non-GAAP measures to the most directly comparable measure under GAAP.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

99.1 Press Release dated January 23, 2006.

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: January 23, 2006
	By:	/s/ Kristen L. Magnuson Kristen L. Magnuson
		Executive Vice President and
		Chief Financial Officer

EXHIBIT INDEX

EXHIBIT	DESCRIPTION
99.1	Press Release dated January 23, 2006.

EX-99.1

Exhibit 99.1

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

JDA Software Reports Updated Fourth Quarter, Year-End 2005 Results

Scottsdale, Ariz. – January 23, 2006 – JDA® Software Group, Inc. today reported updated financial results for the fourth quarter and year ended December 31, 2005. JDA reported total revenues of $55.1 million and software revenues of $15.6 million for fourth quarter 2005, compared to total revenues of $57.3 million and software revenues of $20.3 million for fourth quarter 2004.

     JDA reported adjusted non-GAAP earnings for fourth quarter 2005 of $0.15 per share, which excludes amortization of intangibles and acquired software technology, impairment losses, and net tax benefits, compared to adjusted non-GAAP earnings per share of $0.14 for fourth quarter 2004. Adjusted non-GAAP earnings for fourth quarter 2004 exclude amortization of intangibles and acquired software technology, and certain non-recurring restructuring charges and adjustments to acquisition reserves, an impairment loss and net tax benefits, all of which are itemized in the attached schedule of non-GAAP measures of performance. These results are consistent with the preliminary fourth quarter 2005 results announced on January 9, 2005. The Company reported that GAAP net income (loss) for fourth quarter 2005 would be between $0.02 to ($0.04) per share compared to GAAP net income of $0.01 per share in fourth quarter 2004. The Company’s projected range of GAAP net income (loss) includes an impairment charge of between $7.0 million and $9.7 million related to goodwill in the Company’s In-Store Systems business segment that will be recorded in fourth quarter 2005. For purposes of the attached financial statements and schedule of non-GAAP measures of performance, the Company has included an impairment charge of $8.35 million, which represents the mid-point of the estimated range of loss.

     Final determination of the impairment charge is subject to JDA’s financial reporting processes and procedures as well as testing by JDA’s outside auditors. The Company expects to issue an additional press release with a final reporting of GAAP net income once its processes are complete. The Company does not expect these processes will cause a delay in the timely filing of its Form 10-K for the fiscal year ended December 31, 2005.

     “We closed 100 software license deals in fourth quarter including three deals in excess of $1.0 million,” commented Hamish Brewer, JDA Chief Executive Officer. “As a result of this performance we remain confident that we can deliver earnings and revenue growth in 2006 and will be providing guidance for both during our earnings call today.”

Fourth Quarter 2005 Highlights

• Global Acceptance of New Products on Microsoft .NET: JDA signed four new agreements with customers this quarter for its next generation PortfolioEnabled® applications. Existing JDA customer, Vomar Voordeelmarkt BV, a Netherlands-based supermarket chain, signed for Portfolio

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	Replenishment Optimization by E3®. Other current JDA customers, including Hallmark Cards, Inc. and Brazin Limited of Australia are among the retailers to license Enterprise Planning by Arthur®.
•	Regional Sales Activity: Deal slippage caused all regions to fall short of expectations in fourth quarter 2005. JDA’s Americas region delivered $10.2 million or 66% of total software revenues for fourth quarter 2005 compared to $14.2 million or 82% of total software revenues in third quarter 2005. Europe and Asia Pacific generated software sales of $2.8 million and $2.5 million respectively, compared to $2.8 million and $345,000, respectively, in the third quarter of 2005.
•	Circuit City Stores, Inc, Michaels Stores, Inc. Sign Agreements: Among the deals that JDA signed in fourth quarter, its Americas region closed three significant contracts with existing JDA customers, including wins at Circuit City Stores, Retail Brand Alliance, Inc and Comercial ECCSA, S.A. (Ripley’s) of Chile. Several current JDA customers, including Michaels Stores, Inc., David’s Bridal, Food Lion, LLC and The Dannon Company Inc. also licensed either additional JDA Portfolio® products or expanded their current license agreements during fourth quarter 2005.
•	Continued Demand for Strategic Merchandise Management: JDA reported that 76% of its software license revenues came from retail enterprise systems, including Portfolio Strategic Merchandise Management™ applications; 20% were for collaborative solutions, including Portfolio Category Management™ applications and 4% of software revenues were for in-store systems, including Portfolio Workforce Management™. JDA continued to increase market share for its collaborative solutions with 296 trading partner pairs relying on JDA solutions to support over $4.9 billion in annual trading volume, up from 250 trading partner pairs in fourth quarter 2004.
•	Strong Cash Position: JDA ended 2005 with $111.5 million in cash and marketable securities as compared to $97.1 million at December 31, 2004. JDA generated $10.3 million in cash flow from operations during fourth quarter 2005, compared to $2.6 million in fourth quarter 2004 and $2.7 million in third quarter 2005. DSOs were 69 days at December 31, 2005, compared to 79 days at September 30, 2005 and 62 days at December 31, 2004. During the quarter JDA invested $952,000 in capital expenditures, primarily for ongoing IT projects. The company had $26.8 million in deferred revenue and no debt at December 31, 2005.

Fiscal Year 2005 Results

     For the twelve months ended December 31, 2005, total revenues were $215.8 million compared to $216.9 million for 2004. With $58.5 million in software license revenues and $86.4 million in maintenance revenues, product revenues for 2005 increased to $144.9 million compared to $139.5 million in 2004. Service revenues decreased to $70.9 million in 2005 from $77.4 million in 2004.

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     JDA reported adjusted non-GAAP earnings for 2005 of $0.58 per share compared to adjusted non-GAAP earnings of $0.30 per share for 2004. The non-GAAP earnings results exclude amortization of intangibles and acquired software technology, restructuring charges and adjustments to acquisition reserves, impairment losses and net tax benefits, all of which are itemized in the attached schedule of non-GAAP measures of performance. JDA reported that GAAP net income is expected to be between $0.24 and $0.30 per share for 2005, depending upon the final determination of the impairment charge related to our In-Store Systems business segment, compared to GAAP net income of $0.07 per share in 2004. As previously mentioned, for purposes of the attached financial statements and schedule of non-GAAP measures of performance the Company has included an impairment charge of $8.35 million, which represents the mid-point of the estimated range of loss.

     Cash flow from operations was $20.5 million for 2005 as compared to $24.8 million during 2004.

Conference Call Information

     JDA will host a conference call at 4:45 pm Eastern today to discuss fourth quarter earnings results. 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 Software Group, Inc. Fourth Quarter 2005 Earnings Release Conference Call.” A replay of the conference call will begin January 23, 2006 immediately following the call and will end on February 23, 2006 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 replay pin number: 6807303.

     To participate in a live Web cast of the call, visit JDA’s Investor Relations Web page at www.jda.com or the following web page: http://viavid.net/dce.aspx?sid=00002BF5 at the time of the conference call. An archived version of the Web cast will be accessible from the same link for one year from the conference date.

About JDA Software

     JDA® Software Group, Inc. (Nasdaq:JDAS) is the global leader in helping more than 4,900 retail, manufacturing and wholesale customers in 60 countries realize real demand chain results. By capitalizing on its market position and financial strength, JDA commits significant resources to advancing the JDA Portfolio^® suite of demand chain solutions. JDA Portfolio software enables high performance planning, promoting, flowing, pricing, managing and selling of finished goods from the supplier warehouse to the consumer. With offices in major cities around the world, JDA employs the industry’s most experienced demand chain experts to develop, deliver and support its solutions. For more information, visit jda.com, email info@jda.com or call 1-800-479-7382.

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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 the continued uncertainty of expected financial results for the fourth quarter of 2005, the expected timing for completion of analysis of the impairment charge related to our In-

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Store Systems business segment and the reporting of final fourth quarter results, and Mr. Brewer’s statements regarding the overall outlook for the Company’s business in 2006 and the prospects for earnings expansion in 2006. Future events may involve risks and uncertainties, including, but not limited to: (i) the possibility that our final results for the fourth quarter may differ from our preliminary results reported in this press release, particularly since neither we nor our auditors have completed our review of our fourth quarter results; (ii) uncertainties inherent in predicting closure of delayed business and future earnings results future in volatile markets and industries such as our own; and (iii) 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,” “JDA Portfolio” and “PortfolioEnabled” 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.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)

	December 31			December 31,
	2005			2004
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	71,035		$	61,344
Marketable securities		40,472			35,778
Total cash and marketable securities		111,507			97,122
Accounts receivable, net		42,415			39,524
Deferred tax asset		4,361			3,578
Prepaid expenses and other current assets		8,142			8,242
Promissory note receivable		1,213			2,736
Total current assets		167,638			151,202
Property and Equipment, net		42,825			48,324
Goodwill		61,894			69,901
Other Intangibles, net
Customer lists		24,775			28,347
Acquired software technology		15,739			20,749
Trademarks		2,391			2,591
		42,905			51,687
Deferred Tax Asset		16,181			11,453
Total assets	$	331,443		$	332,567
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	1,768		$	3,104
Accrued expenses and other liabilities		18,677			24,645
Income tax payable		1,386			215
Deferred revenue		26,775			28,418
Total current liabilities		48,606			56,382
Stockholders’ Equity:
Preferred stock, $.01 par value; authorized 2,000,000 shares; none issued or outstanding		—			—
Common stock, $.01 par value; authorized, 50,000,000 shares; issued 30,222,983 and 29,596,697 shares, respectively		302			296
Additional paid-in capital		257,936			248,633
Deferred compensation		(845	)		—
Retained earnings		39,843			32,012
Accumulated other comprehensive loss		(1,188	)		(204	)
		296,048			280,737
Less treasury stock, at cost, 1,162,202 and 414,702 shares, respectively		(13,211	)		(4,552	)
Total stockholders’ equity		282,837			276,185
Total liabilities and stockholders’ equity	$	331,443		$	332,567

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

	Three Months Ended						Year Ended
	December 31,						December 31,
	2005			2004			2005			2004
REVENUES:
Software licenses	$	15,573		$	20,302		$	58,508		$	59,211
Maintenance services		22,100			20,897			86,417			80,240
Product revenues		37,673			41,199			144,925			139,451
Consulting services		15,633			14,573			64,901			71,251
Reimbursed expenses		1,790			1,527			5,997			6,172
Service revenues		17,423			16,100			70,898			77,423
Total revenues		55,096			57,299			215,823			216,874
COST OF REVENUES:
Cost of software licenses		214			689			1,638			2,191
Amortization of acquired software technology		1,255			1,299			5,009			5,158
Cost of maintenance services		5,658			5,259			22,700			19,975
Cost of product revenues		7,127			7,247			29,347			27,324
Cost of consulting services		12,450			12,446			50,882			53,229
Reimbursed expenses		1,790			1,527			5,997			6,172
Cost of service revenues		14,240			13,973			56,879			59,401
Total cost of revenues		21,367			21,220			86,226			86,725
GROSS PROFIT		33,729			36,079			129,597			130,149
OPERATING EXPENSES:
Product development		11,148			13,059			44,351			52,800
Sales and marketing		10,830			12,438			40,386			45,608
General and administrative		7,333			6,171			27,071			24,922
Amortization of intangibles		978			849			3,572			3,388
Restructuring charge and adjustments to acquisition reserves		—			3,281			2,439			6,105
Loss on impairment of goodwill		8,350			—			8,350			—
Loss on impairment of trademark		200			1,100			200			1,100
Total operating expenses		38,839			36,898			126,369			133,923
OPERATING INCOME (LOSS)		(5,110	)		(819	)		3,228			(3,774	)
Net gain on acquisition breakup fee		—			—			—			1,200
Other income, net		812			559			2,636			2,130
INCOME (LOSS) BEFORE INCOME TAXES		(4,298	)		(260	)		5,864			(444	)
Income tax benefit		(4,094	)		(453	)		(1,967	)		(2,453	)
NET INCOME (LOSS)	$	(204	)	$	193		$	7,831		$	2,009
BASIC EARNINGS (LOSS) PER SHARE	$	(.01	)	$	.01		$	.27		$	.07
DILUTED EARNINGS (LOSS) PER SHARE	$	(.01	)	$	.01		$	.27		$	.07
SHARES USED TO COMPUTE:
Basic earnings (loss) per share		28,853			29,135			28,825			29,072
Diluted earnings (loss) per share		28,853			29,515			29,290			29,494

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JDA SOFTWARE GROUP, INC.
NON-GAAP MEASURES OF PERFORMANCE
(in thousands, except share data, unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2005			2004			2005			2004
NON-GAAP OPERATING INCOME
Operating income (loss) (GAAP BASIS)	$	(5,110	)	$	(819	)	$	3,228		$	(3,774	)
Adjustments for non-GAAP measures of performance:
Add back amortization of acquired software technology		1,255			1,299			5,009			5,158
Add back amortization of intangibles		978			849			3,572			3,388
Add back restructuring charge and adjustments to acquisition reserves		—			3,281			2,439			6,105
Add back loss on impairment of goodwill		8,350			—			8,350			—
Add back loss on impairment of trademark		200			1,100			200			1,100
Add back stock-based compensation expense – restricted stock units.		275			—			351			—
Adjusted non-GAAP operating income	$	5,948		$	5,710		$	23,149		$	11,977
NON-GAAP OPERATING INCOME, as a percentage of revenue
Operating income (loss) (GAAP BASIS)		(9	%)		(1	%)		1	%		(2	%)
Adjustments for non-GAAP measures of performance:
Amortization of acquired software technology		2	%		2	%		3	%		2	%
Amortization of intangibles		2	%		1	%		2	%		2	%
Restructuring charge and adjustments to acquisition reserves		—			6	%		1	%		3	%
Loss on impairment of goodwill		15	%		—			4	%
Loss on impairment of trademark		—			2	%		—			1	%
Stock-based compensation expense – restricted stock units		1	%		—			—			—
Adjusted non-GAAP operating income		11	%		10	%		11	%		6	%
NON-GAAP EARNINGS PER SHARE
Diluted earnings (loss) per share (GAAP BASIS)	$	(.01	)	$	.01		$	.27		$	.07
Adjustments for non-GAAP measures of performance, net of tax: (1)
Add back amortization of acquired software technology		.03			.03			.12			.11
Add back amortization of intangibles		.02			.02			.08			.08
Add back restructuring charge and adjustments to acquisition reserves		—			.07			.06			.14
Add back loss on impairment of goodwill		.18			—			.18
Add back loss on impairment of trademark		.01			.02			—			.02
Deduct net gain on acquisition break-up fee		—			—			—			(.03	)
Deduct gain on sale of securities		—			—			—			(.01	)
Extra-territorial income deduction for tax years 2002 thru 2004		(.08	)		—			(.08	)		—
Other net tax benefits resulting from revisions of tax estimates in prior years and certain foreign tax positions and contingencies		—			(.01	)		(.05	)		(.08	)
Adjusted non-GAAP diluted earnings per share	$	.15		$	.14		$	.58		$	.30

(1) Effective annual tax rates have been used to calculate the quarterly impact of the adjustments for non-GAAP measures of performance in the three months ended December 31, 2005 and 2004. The only exception is the estimated impairment charge for goodwill in our In-Store Systems business segment which has been tax effected at the Company’s ending deferred rate of 36.05%.

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Add x JDAS 4Q05 Earnings

CASH FLOW INFORMATION
Net cash provided by operating activities	$	10,281		$	2,552		$	20,536		$	24,845
Net cash used in investing activities:
Purchase of corporate office facility	$	—		$	—		$	—		$	(23,767	)
Purchase of Timera Texas, Inc.		—			—			—			(13,574	)
Net (purchase) maturity of marketable securities		(5,106	)		415			(4,673	)		1,475
Purchase of other property and equipment		(952	)		(3,375	)		(4,860	)		(12,067	)
Acquisition break-up fee		—			—			—			3,750
Other, net		20			(198	)		1,505			70
	$	(6,038	)	$	(3,158	)	$	(8,028	)	$	(44,113	)
Net cash provided by (used in) financing activities:
Purchase of treasury stock	$	—		$	—		$	(8,659	)	$	—
Issuance of common stock – stock option plans		5,772			1,215			7,258			1,793
Other, net		—			(10	)		(13	)		(70	)
	$	5,772		$	1,205		$	(1,414	)	$	1,723