EX-99.1 2 p14756exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
     
JDA Software Group, Inc.
  JDA Investor Relations Contacts:
NEWS RELEASE
  David Alberty, JDA’s Group Vice President of
 
  Accounting, Finance and Treasury
 
  Tel: (480) 308-3000
 
   
 
  Lawrence Delaney, Jr., The Berlin Group
 
  Tel: 714-734-5000; larry@berlingroup.com
JDA Software Reports Solid First Quarter 2009 Results
Scottsdale, Ariz. – April 20, 2009 – JDA® Software Group, Inc. (NASDAQ: JDAS) today announced financial results for the first quarter ended March 31, 2009. JDA reported total revenues of $83.3 million and software revenues of $15.3 million for first quarter 2009, compared to total revenues of $93.9 million and software revenues of $20.0 million for first quarter 2008.
First Quarter 2009 Financial Summary
  §   Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) was $16.7 million in the first quarter 2009, compared to $21.9 million in first quarter 2008.
 
  §   Adjusted non-GAAP earnings for first quarter 2009 were $0.26 per share as compared to $0.33 per share in first quarter 2008, and exclude amortization of acquired software technology and intangibles, restructuring charges and stock-based compensation.
 
  §   The Company reported GAAP net income for first quarter 2009 of $2.6 million or $0.08 per share, compared to GAAP net income of $5.4 million or $0.15 per share in first quarter 2008.
 
  §   DSOs were 71 days at the end of first quarter 2009, compared to 79 days at the end of first quarter 2008.
 
  §   The Company reported cash flow from operations of $33.1 million in first quarter 2009 compared to cash flow of $23.1 million in first quarter 2008.
 
  §   The Company had cash and cash equivalents of $63.0 million at March 31, 2009, compared to $32.7 million at December 31, 2008, and no debt at either date.
 
  §   JDA repurchased 229,912 shares of its common stock for $2.5 million in first quarter 2009 at prices ranging from $10.34 to $11.0 per share. The shares were repurchased pursuant to a program approved by JDA’s Board to invest up to $30.0 million to repurchase shares of common stock in the open market or in private transactions at prevailing market prices during the 12-month period ending March 10, 2010.
     “We delivered a solid, profitable quarter with strong cash flows, which underscores the durable nature of our business model in these difficult times,” said JDA CEO Hamish Brewer. “Another important
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JDA Software Reports Solid First Quarter 2009 Results
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metric that highlights the strength of our value proposition is our annualized maintenance retention in first quarter 2009, which at 96.7% was only slightly lower than first quarter 2008 when we saw 97.3% retention.”
     “We see continuing evidence that the market is focused on IT solutions that can reliably reduce working capital, improve margins and minimize lost sales. This trend is good news for JDA as we are broadly recognized as the market leader proven to cost-efficiently deliver supply chain planning and optimization solutions that drive these results,” added Brewer.
First Quarter 2009 Software Highlights
  §   JDA closed a total of 46 new software deals during the quarter, including three contracts exceeding $1.0 million in first quarter 2009. Two of these deals were in the Americas region and one was in Europe.
 
  §   JDA’s Americas region closed $11.1 million in software license deals in the first quarter 2009, compared to $13.2 million in first quarter 2008. Software transactions with Americas customers included: Carlson Hotels Worldwide, Goya Foods Inc., Havi Global Solutions, Kirkland’s Inc., Metro Inc., Polo Ralph Lauren Corporation, RONA Inc. and Wawa Inc.
 
  §   Software sales in JDA’s Europe, Middle East and Africa (EMEA) region were $3.2 million in first quarter 2009, compared to $4.7 million in first quarter 2008. EMEA customers that signed license agreements in first quarter 2009 included: CASHBUILD, Rexel SA and TDG Ltd.
 
  §   JDA’s Asia Pacific region posted software sales of $1.0 million in first quarter 2009, compared to $2.1 million in first quarter 2008. Wins in this region included: Duty Free Philippines, Nagatanien Co. Ltd., New City Commercial Corporation, Portland Group and Rose Pharmacy, Inc.
Conference Call Information
     JDA Software Group, Inc. will host a conference call at 4:45 p.m. (Eastern) today to discuss earnings results for its first quarter ended March 31, 2009. To participate in the call, dial 1-800-762-8779 (United States) or 1-480-248-5081 (International) and ask the operator for the “JDA Software Group, Inc. First Quarter 2009 Earnings Conference Call.” To participate in the webcast, visit the following Web page at the time of the conference call: http://viavid.net/dce.aspx?sid=00006068.
     A replay of the conference call will begin Monday, April 20, 2009 at 7:45 p.m. (Eastern) and will end on Wednesday, May 20, 2009 at 11:59 p.m. (Eastern). You can hear the replay by dialing 1-800-406-7325 (United States) or 1-303-590-3030 (International) using access 4038157.
About JDA Software Group, Inc.
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JDA Software Reports Solid First Quarter 2009 Results
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     JDA® Software Group, Inc. (NASDAQ: JDAS) is the world’s leading supply chain solutions provider, helping companies optimize operations and improve profitability. JDA drives business efficiency for its global customer base of more than 5,800 retailers, manufacturers, wholesaler-distributors and services industries companies through deep domain expertise and innovative solutions. JDA’s combination of unmatched services, together with its integrated yet modular solutions for merchandising, supply chain planning and execution and revenue management, leverage the strong heritage and knowledge capital of market leaders including Manugistics, E3, Intactix and Arthur. When supply chain results matter, companies turn to JDA. For more information about JDA, visit www.jda.com or contact us at info@jda.com or call +1.800.479.7382 / +1.480.308.3000.
“Safe Harbor” Statement under the U.S. Private Securities Litigation Reform Act of 1995
     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. Forward-looking statements are generally accompanied by words such as “will,” and “expect” and other words with forward-looking connotations. In this press release, such forward-looking statements include, without limitation, Mr. Brewer’s statements regarding the durable nature of our business model and evidence that our markets are continuing to focus on IT solutions such as ours. The occurrence of future events may involve a number of risks and uncertainties, including, but not limited to: (i) the possibility that the current economic downturn will persist and cause a decline in the demand for our solutions, thereby negatively impacting our financial results; and, (ii) other risks detailed from time to time in the “Risk Factors” section of our filings with the Securities and Exchange Commission. Additional information relating to the uncertainty affecting our business is contained in our filings with the SEC. As a result of these and other risks, actual results may differ materially from those predicted. JDA is not under any obligation to (and expressly disclaims any such obligation to) update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.
Use of Non-GAAP Financial Information
     This press release and the related conference call contain non-GAAP financial measures. In evaluating the Company’s performance, management uses certain non-GAAP financial measures to supplement consolidated financial statements prepared under GAAP. Management’s presentation of non-GAAP financial measures is intended to be supplemental in nature and should not be considered in isolation or as a substitute for the most directly comparable GAAP measures. 
Use and Economic Substance of Non-GAAP Financial Measures Used by JDA
     The Company uses non-GAAP measures of performance, including adjusted operating income, EBITDA (earnings before interest, taxes, depreciation and amortization) and earnings per share, in its public statements.  Management uses, and chooses to disclose, these non-GAAP financial measures because (i) such measures provide an additional analytical tool to clarify the Company’s results from operations and help the Company to identify underlying trends in its results of operations; (ii) the Company uses non-GAAP earnings measures, including EBITDA, as a measure of profitability because such measures help the Company compare its performance on a consistent basis across time periods; and (iii) these non-GAAP measures are employed by the Company’s management in its own evaluation of performance and are utilized in financial and operational decision making processes, such as budget planning and forecasting. The Company also internally uses adjusted EBITDA measures for determining (a) compliance with certain financial covenants in its credit agreement and (b) executive and employee compensation. Set forth below are additional reasons why specific items are excluded from the Company’s non-GAAP financial measures:   
  §   Amortization charges for acquired technology are excluded because they result from prior acquisitions, rather than ongoing operations, and absent additional acquisitions, are expected to decline over time. 
 
  §   Amortization charges for other intangibles are excluded because they are non-cash expenses, and while tangible and intangible assets support our business, we do not believe the related amortization costs are directly attributable to the operating performance of our business. 
 
  §   Restructuring charges and adjustments to acquisition-related reserves are significant non-routine expenses that cannot be predicted and typically relate to a change in our
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JDA Software Reports Solid First Quarter 2009 Results
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      business model or to a change in our estimate of the costs to complete a plan to exist an activity of an acquired company. The exclusion of these charges promotes period-to-period comparisons and transparency. Such charges are primarily related to severance costs and/or the disposition of excess facilities driven by the changes to our business model.
 
  §   Stock-based compensation is not an expense that typically requires or will require cash settlement by the Company.
     Material Limitations (and Compensation thereof) Associated with the Use of Non-GAAP Financial Measures
     Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for the Company’s GAAP results. In the future, the Company expects to continue reporting non-GAAP financial measures excluding items described above and the Company expects to continue to incur expenses similar to the non-GAAP adjustments described above. Accordingly, exclusion of these and other similar items in our non-GAAP presentation should not be construed as an inference that these costs are unusual, infrequent or non-recurring.
Some of the limitations in relying on non-GAAP financial measures are:
  §   Amortization of acquired technology and intangibles, though not directly affecting our current cash position, represent the loss in value as the technology in our industry evolves, is advanced or is replaced over time. The expense associated with this loss in value is not included in the non-GAAP net income presentation and therefore does not reflect the full economic effect of the ongoing cost of maintaining our current technological position in our competitive industry which is addressed through our research and development program.
 
  §   The Company may engage in acquisition transactions in the future. In addition, we incur other restructuring charges from time to time when necessary to adjust our business model. Restructuring related charges may therefore continue to be incurred and should not be viewed as non-recurring.
 
  §   Stock-based compensation is an important component of our incentive compensation arrangements and will be reflected as expenses in our GAAP results for the foreseeable future under Statement of Financial Accounting Standards No. 123R, Share-Based Payment.
 
  §   Other companies, including other companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting their usefulness as a comparative measure.
     We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP financial measures only supplementally. We also provide reconciliations of each non-GAAP financial measure to our most directly comparable GAAP measure, and we encourage investors to review carefully those reconciliations.   
Usefulness of Non-GAAP Financial Measures to Investors 
     The Company believes that the presentation of these non-GAAP financial measures is warranted for several reasons. First, such non-GAAP financial measures provide investors and management an additional analytical tool for understanding the Company’s financial performance by excluding the impact of items which may obscure trends in the core operating performance of the business. Second, since the Company has historically reported non-GAAP results to the investment community, the Company believes the inclusion of non-GAAP numbers provides consistency and enhances investors’ ability to compare the Company’s performance across financial reporting periods.
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JDA SOFTWARE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts, unaudited)
                 
    March 31,     December 31,  
    2009     2008  
ASSETS
               
Current Assets:
               
Cash and cash equivalents
  $ 63,015     $ 32,696  
Accounts receivable, net
    65,672       79,353  
Income tax receivable
    1,159       316  
Deferred tax asset
    22,893       22,919  
Prepaid expenses and other current assets
    17,336       14,223  
 
           
Total current assets
    170,075       149,507  
 
           
 
               
Non-Current Assets:
               
Property and equipment, net
    42,180       43,093  
Goodwill
    135,275       135,275  
Other Intangibles, net:
               
Customer lists
    116,063       121,719  
Acquired software technology
    23,152       24,160  
Trademarks
    915       1,335  
Deferred tax asset
    43,834       44,815  
Other non-current assets
    4,702       4,872  
 
           
Total non-current assets
    366,121       375,269  
 
           
 
               
Total Assets
  $ 536,196     $ 524,776  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current Liabilities:
               
Accounts payable
  $ 7,776     $ 3,273  
Accrued expenses and other liabilities
    37,358       52,090  
Deferred revenue
    81,779       62,005  
 
           
Total current liabilities
    126,913       117,368  
 
           
 
               
Non-Current Liabilities:
               
Accrued exit and disposal obligations
    8,006       8,820  
Liability for uncertain tax positions
    7,211       7,093  
 
           
Total non-current liabilities
    15,217       15,913  
 
           
 
               
Total Liabilities
    142,130       133,281  
 
           
 
               
Redeemable Preferred Stock
    50,000       50,000  
 
               
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 32,914,668 and 32,458,396 shares, respectively
    329       325  
Additional paid-in capital
    313,158       305,564  
Deferred compensation
    (6,753 )     (2,915 )
Retained earnings
    58,912       56,268  
Accumulated other comprehensive loss
    (2,631 )     (2,017 )
 
           
 
    363,015       357,225  
Less treasury stock, at cost, 1,599,308 and 1,307,317 shares, respectively
    (18,949 )     (15,730 )
 
           
Total stockholders’ equity
    344,066       341,495  
 
           
Total liabilities and stockholders’ equity
  $ 536,196     $ 524,776  
 
           
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JDA Software Reports Solid First Quarter 2009 Results
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JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except earnings per share data, unaudited)
                 
    Three Months Ended  
    March 31,  
    2009     2008  
REVENUES:
               
Software licenses
  $ 15,325     $ 20,036  
Maintenance services
    42,997       45,812  
 
           
Product revenues
    58,322       65,848  
 
               
Consulting services
    23,034       25,824  
Reimbursed expenses
    1,977       2,203  
 
           
Service revenues
    25,011       28,027  
 
               
Total revenues
    83,333       93,875  
 
           
 
               
COST OF REVENUES:
               
Cost of software licenses
    602       1,053  
Amortization of acquired software technology
    1,008       1,501  
Cost of maintenance services
    10,549       11,196  
 
           
Cost of product revenues
    12,159       13,750  
 
Cost of consulting services
    19,382       19,860  
Reimbursed expenses
    1,977       2,203  
 
           
Cost of service revenues
    21,359       22,063  
 
               
Total cost of revenues
    33,518       35,813  
 
           
 
               
GROSS PROFIT
    49,815       58,062  
 
               
OPERATING EXPENSES:
               
 
Product development
    12,573       13,676  
Sales and marketing
    14,252       16,109  
General and administrative
    11,026       11,588  
Amortization of intangibles
    6,076       6,076  
Restructuring charges and adjustments to acquisition-related reserves
    1,430       756  
 
           
Total operating expenses
    45,357       48,205  
 
           
 
               
OPERATING INCOME
    4,458       9,857  
 
Interest expense and amortization of loan fees
    (239 )     (2,494 )
Interest income and other, net
    (243 )     1,297  
 
           
INCOME BEFORE INCOME TAX PROVISION
    3,976       8,660  
 
               
Income tax provision
    1,332       3,304  
 
           
 
               
NET INCOME
  $ 2,644     $ 5,356  
 
           
 
               
BASIC EARNINGS PER SHARE
  $ .08     $ .16  
 
           
DILUTED EARNINGS PER SHARE
  $ .08     $ .15  
 
           
 
               
SHARES USED TO COMPUTE:
               
Basic earnings per share
    34,961       33,924  
 
           
Diluted earnings per share
    35,075       35,085  
 
           
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JDA SOFTWARE GROUP, INC.
NON-GAAP MEASURES OF PERFORMANCE
(in thousands, except share data, unaudited)
                 
    Three Months Ended  
    March 31,  
    2009     2008  
NON-GAAP OPERATING INCOME AND ADJUSTED EBITDA
               
 
               
Operating income (GAAP BASIS)
  $ 4,458     $ 9,857  
 
               
Adjustments for non-GAAP measures of performance:
               
 
               
Add back amortization of acquired software technology
    1,008       1,501  
Add back amortization of intangibles
    6,076       6,076  
Add back restructuring charges and adjustments to acquisition reserves
    1,430       756  
Add back stock-based compensation
    1,410       1,182  
 
           
 
               
Adjusted non-GAAP operating income
    14,382       19,372  
 
               
Add back depreciation
    2,327       2,478  
 
           
 
               
Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization)
  $ 16,709     $ 21,850  
 
           
 
               
NON-GAAP OPERATING INCOME AND AJDUSTED EBITDA, as a percentage of revenue
               
 
               
Operating income (GAAP BASIS)
    5 %     10 %
 
               
Adjustments for non-GAAP measures of performance:
               
 
               
Amortization of acquired software technology
    1 %     2 %
Amortization of intangibles
    7 %     6 %
Restructuring charges and adjustments to acquisition reserves
    2 %     1 %
Stock-based compensation
    2 %     1 %
 
               
Adjusted non-GAAP operating income
    17 %     20 %
 
               
Depreciation
    3 %     3 %
 
               
Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization)
    20 %     23 %
 
               
NON-GAAP EARNINGS PER SHARE
               
 
               
Income before income tax provision
  $ 3,976     $ 8,660  
 
               
Amortization of acquired software technology
    1,008       1,501  
Amortization of intangibles
    6,076       6,076  
Restructuring charges and adjustments to acquisition reserves
    1,430       756  
Stock-based compensation
    1,410       1,182  
 
           
Adjusted income before income taxes
    13,900       18,175  
 
               
Adjusted income tax expense
    4,865       6,543  
 
           
Adjusted net income
  $ 9,035     $ 11,632  
 
           
Adjusted non-GAAP diluted earnings per share
  $ 0.26     $ 0.33  
 
           
Shares used to compute non-GAAP diluted earnings per share
    35,075       35,085  
 
           
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JDA Software Reports Solid First Quarter 2009 Results
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    Three Months Ended  
    March 31,  
    2009     2008  
 
               
CASH FLOW INFORMATION
               
 
               
Net cash provided by operating activities
  $ 33,055     $ 23,099  
 
           
 
               
Net cash used in investing activities:
               
 
               
Payment of direct costs related to acquisitions
  $ (817 )   $ (1,368 )
Purchase of property and equipment
    (1,003 )     (2,169 )
Proceeds from disposal of property and equipment
    16       69  
 
           
 
  $ (1,804 )   $ (3,468 )
 
           
 
               
Net cash provided by financing activities:
               
 
               
Issuance of common stock under equity plans
  $ 2,506     $ 43  
Principal payments on term loan agreement
          (5,649 )
Purchase of treasury stock
    (3,219 )     (1,443 )
Other, net
          5  
 
           
 
  $ (713 )   $ (7,044 )
 
           
JDA Software Group, Inc.
14400 N. 87th Street
Scottsdale, AZ 85260
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