EX-99.1 2 p16119exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
         
      JDA Investor Relations Contacts:
      Pete Hathaway, JDA Software Group
      Executive Vice President
      and Chief Financial Officer
  JDA Software Group, Inc.
NEWS RELEASE
  Tel: (480) 308-3000

      Lawrence Delaney, Jr., The Berlin Group
 
      Tel: (714) 734-5000; larry@berlingroup.com
 
JDA Software Announces Third Quarter 2009 Results
And Reiterates Second Half Guidance
Scottsdale, Ariz. — October 19, 2009 — JDA® Software Group, Inc. (NASDAQ: JDAS) today announced financial results for the third quarter ended September 30, 2009. JDA reported total revenues of $95.9 million and software revenues of $17.3 million for third quarter 2009, compared to total revenues of $98.4 million and software revenues of $23.0 million for third quarter 2008. For the nine months ended September 30, 2009, JDA reported total revenues of $278.7 million and software revenues of $60.2 million, compared to total revenues of $284.1 million and software revenues of $58.6 million for the nine months ended September 30, 2008.
     “We guided to a sequentially lower third quarter software sales result, and the actual third quarter results closed in line with our expectations,” said JDA CEO Hamish Brewer. “We also guided to a strong software sales result in the fourth quarter and today we can reiterate our guidance for second half 2009, including projected software sales between $26 million to $30 million for fourth quarter 2009. Supported by the strong performance from consulting services, I am pleased with the overall EBITDA margin of 25% and the $20.0 million of cash flow generated from operations in third quarter 2009.”
Third Quarter 2009 Financial Summary
  §   Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $24.1 million in the third quarter 2009, compared to $27.0 million in third quarter 2008.
 
  §   Adjusted non-GAAP earnings for third quarter 2009 were $0.40 per share, compared to $0.42 per share in third quarter 2008, and exclude amortization of acquired software technology and intangibles, restructuring charges, stock-based compensation and bank charges on a credit facility commitment for a prior year terminated acquisition. Adjusted non-GAAP earnings for third quarter 2009 also exclude $8.6 million of cash consideration paid in excess of carrying value on the repurchase of redeemable preferred stock.
 
  §   GAAP income applicable to common shareholders for third quarter 2009 was a net loss of $2.3 million or ($0.07) per share, which includes $8.6 million of cash consideration paid in excess of carrying value on the repurchase of redeemable preferred stock, compared to GAAP income applicable to common shareholders of $8.2 million or $0.23 per share in third quarter 2008.
-more-

 


 

JDA Software Q3 2009 Earnings
Add
1
  §   Service revenues increased 16% to $33.6 million in third quarter 2009 compared to third quarter 2008, and service margins improved year-over-year from 21% in third quarter 2008 to 26% in third quarter 2009.
 
  §   Cash flow from operations was $20.0 million in third quarter 2009, compared to cash flow of $18.8 million in third quarter 2008.
 
  §   Cash and cash equivalents were $85.5 million at September 30, 2009, compared to $32.7 million at December 31, 2008, and there was no debt at the end of either period. During third quarter 2009, approximately $30.1 million in cash was used to repurchase redeemable preferred stock.
Third Quarter 2009 Highlights
    Regional Sales Performance: JDA closed a total of 57 new software deals during third quarter 2009, including one contract exceeding $1.0 million. The following presents a high level summary of regional performance:
  §   JDA closed $12.6 million in software deals in its Americas region during third quarter 2009, compared to $17.5 million in third quarter 2008. Customers that signed licenses included: The Sports Authority, Ripley’s Comercial ECCSA S.A. and Grupo Comercial Chedraui, S.A. de C.V.
 
  §   Software sales in JDA’s Europe, Middle East and Africa (EMEA) region were $4.1 million in third quarter 2009, compared to $3.5 million in third quarter 2008. New software deals in the EMEA region included: Co-operative Group Limited, Aspiag Service Italia, NorgesGruppen ASA and N.V. Trinfover S.A.
 
  §   JDA’s Asia Pacific region posted software sales of $542,000 in third quarter 2009, compared to $2.0 million in third quarter 2008. Wins in this region included: CitiMart Philippines and Shanxi Meetall United Supermarket Co. Ltd.
    Positioned for Growth and Scale: JDA announced changes to its senior management team during the quarter, including Pete Hathaway who joined JDA as Executive Vice President and Chief Financial Officer, and Jason Zintak who assumed the role of Executive Vice President of Sales and Marketing. Mr. Hathaway and Mr. Zintak are seasoned executives who have the talent, experience and leadership abilities to support JDA’s long-term growth plans.
 
    China Growth Strategy Underway: Just one quarter after announcing an initiative to drive growth in China through a combination of organic expansion and a wider partner network, JDA has secured its first major win with Shanxi Meetall. This promising start to JDA’s program of growth

 


 

JDA Software Q3 2009 Earnings
Add
2
      supports the belief that the Chinese market is now ready and willing to buy advanced planning and optimization solutions.
Nine Month 2009 Results
    Adjusted EBITDA increased to $69.5 million for the nine months ended September 30, 2009, compared to $69.3 million for the nine months ended September 30, 2008.
 
    Adjusted non-GAAP earnings for the nine months ended September 30, 2009 were $1.24 per share, compared to adjusted non-GAAP earnings per share of $1.04 for the nine months ended September 30, 2008, and exclude amortization of acquired software technology and intangibles, restructuring charges, stock-based compensation and banking charges on a credit facility commitment for a prior year terminated acquisition. Adjusted non-GAAP earnings for the nine months ended September 30, 2009 also exclude $8.6 million of cash consideration paid in excess of carrying value on the repurchase of redeemable preferred stock.
 
    GAAP income applicable to common shareholders for the nine months ended September 30, 2009 was $9.2 million or $0.26 per share, which includes $8.6 million of cash consideration paid in excess of carrying value on the repurchase of redeemable preferred stock, compared to GAAP income applicable to common shareholders of $16.7 million or $0.47 per share in the nine months ended September 30, 2008.
 
    Cash flow from operations in the first nine months of 2009 was $80.5 million, compared to $70.7 million for the nine months ended September 30, 2008.
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 third quarter ended September 30, 2009. To participate in the call, dial 1-877-941-2068 (United States) or 1-480-629-9712 (International) and ask the operator for the “JDA Software Group, Inc. Third 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=00006AB3.
          A replay of the conference call will begin Monday, October 19, 2009 at 7:45 p.m. (Eastern) and will end on Thursday, November 19, 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 4164779.

 


 

JDA Software Q3 2009 Earnings
Add
3
About JDA Software Group, Inc.
          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 statement that the Company is reiterating its guidance for second half 2009 including projected software sales between $26 million to $30 million for fourth quarter 2009. 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.

 


 

JDA Software Q3 2009 Earnings
Add
4
  §   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 business model or to a change in our estimate of the costs to complete a plan to exit 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.
 
  §   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.

 


 

JDA Software Q3 2009 Earnings
Add
5
JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts, unaudited)
                 
    September 30,     December 31,  
    2009     2008  
ASSETS
               
 
               
Current Assets:
               
Cash and cash equivalents
  $ 85,477     $ 32,696  
Accounts receivable, net
    60,236       79,353  
Income tax receivable
    2,298       316  
Deferred tax asset
    23,221       22,919  
Prepaid expenses and other current assets
    18,292       14,223  
 
           
Total current assets
    189,524       149,507  
 
           
 
               
Non-Current Assets:
               
Property and equipment, net
    41,608       43,093  
Goodwill
    135,275       135,275  
Other Intangibles, net:
               
Customer lists
    104,848       121,719  
Acquired software technology
    21,206       24,160  
Trademarks
    326       1,335  
Deferred tax asset
    35,996       44,815  
Other non-current assets
    7,272       4,872  
 
           
Total non-current assets
    346,531       375,269  
 
           
 
               
Total Assets
  $ 536,055     $ 524,776  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current Liabilities:
               
Accounts payable
  $ 8,574     $ 3,273  
Accrued expenses and other liabilities
    39,381       52,090  
Deferred revenue
    71,852       62,005  
 
           
Total current liabilities
    119,807       117,368  
 
           
 
               
Non-Current Liabilities:
               
Accrued exit and disposal obligations
    7,269       8,820  
Liability for uncertain tax positions
    7,447       7,093  
 
           
Total non-current liabilities
    14,716       15,913  
 
           
 
               
Total Liabilities
    134,523       133,281  
 
           
 
               
Redeemable Preferred Stock
          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 36,269,083 and 32,458,396 shares, respectively
    363       325  
Additional paid-in capital
    361,740       305,564  
Deferred compensation
    (7,681 )     (2,915 )
Retained earnings
    65,517       56,268  
Accumulated other comprehensive income (loss)
    3,589       (2,017 )
Less treasury stock, at cost, 1,774,006 and 1,307,317 shares, respectively
    (21,996 )     (15,730 )
 
           
Total stockholders’ equity
    401,532       341,495  
 
           
Total liabilities and stockholders’ equity
  $ 536,055     $ 524,776  
 
           

 


 

JDA Software Q3 2009 Earnings
Add
6
JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except earnings per share data, unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
REVENUES:
                               
Software licenses
  $ 17,250     $ 23,011     $ 60,160     $ 58,593  
Maintenance services
    45,010       46,388       132,378       138,843  
 
                       
Product revenues
    62,260       69,399       192,538       197,436  
 
                               
Consulting services
    30,852       26,437       78,965       78,901  
Reimbursed expenses
    2,747       2,610       7,174       7,780  
 
                       
Service revenues
    33,599       29,047       86,139       86,681  
 
                               
Total revenues
    95,859       98,446       278,677       284,117  
 
                       
 
                               
COST OF REVENUES:
                               
Cost of software licenses
    580       613       2,417       2,009  
Amortization of acquired software technology
    966       1,309       2,954       4,270  
Cost of maintenance services
    10,883       11,513       32,416       34,145  
 
                       
Cost of product revenues
    12,429       13,435       37,787       40,424  
 
                               
Cost of consulting services
    22,219       20,315       61,732       61,084  
Reimbursed expenses
    2,747       2,610       7,174       7,780  
 
                       
Cost of service revenues
    24,966       22,925       68,906       68,864  
 
                               
Total cost of revenues
    37,395       36,360       106,693       109,288  
 
                       
 
                               
GROSS PROFIT
    58,464       62,086       171,984       174,829  
 
                               
OPERATING EXPENSES:
                               
Product development
    12,495       13,288       37,732       40,196  
Sales and marketing
    15,888       15,899       46,310       47,738  
General and administrative
    12,305       10,440       35,001       32,406  
Amortization of intangibles
    5,753       6,075       17,880       18,227  
Restructuring charges and adjustments to acquisition- related reserves
    2,543       399       6,705       3,954  
 
                       
Total operating expenses
    48,984       46,101       143,628       142,521  
 
                       
 
                               
OPERATING INCOME
    9,480       15,985       28,356       32,308  
 
                               
Interest expense and amortization of loan fees
    (346 )     (2,353 )     (971 )     (7,313 )
Interest income and other, net
    1,006       51       886       2,127  
 
                       
 
                               
INCOME BEFORE INCOME TAXES
    10,140       13,683       28,271       27,122  
Income tax provision
    3,877       5,441       10,429       10,451  
 
                       
 
                               
NET INCOME
  $ 6,263     $ 8,242     $ 17,842     $ 16,671  
Consideration paid in excess of carrying value on the repurchase of redeemable preferred stock
    (8,593 )           (8,593 )      
 
                       
 
                               
INCOME APPLICABLE TO COMMON SHAREHOLDERS
  $ (2,330 )   $ 8,242     $ 9,249     $ 16,671  
 
                       
 
                               
EARNINGS PER SHARE APPLICABLE TO COMMON SHAREHOLDERS:
                               
Basic earnings per share
  $ (.07 )   $ .24     $ .26     $ .49  
 
                       
Diluted earnings per share
  $ (.07 )   $ .23     $ .26     $ .47  
 
                       
 
                               
SHARES USED TO COMPUTE EARNINGS PER SHARE:
                               
Basic earnings per share
    33,505       34,528       35,076       34,223  
 
                       
Diluted earnings per share
    33,505       35,432       35,329       35,261  
 
                       

 


 

JDA Software Q3 2009 Earnings
Add
7
JDA SOFTWARE GROUP, INC.
NON-GAAP MEASURES OF PERFORMANCE
(in thousands, except share data, unaudited)
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
NON-GAAP OPERATING INCOME AND ADJUSTED EBITDA
                               
 
                               
Operating income (GAAP BASIS)
  $ 9,480     $ 15,985     $ 28,356     $ 32,308  
 
                               
Adjustments for non-GAAP measures of performance:
                               
 
                               
Add back amortization of acquired software technology
    966       1,309       2,954       4,270  
Add back amortization of intangibles
    5,753       6,075       17,880       18,227  
Add back restructuring charges
    2,543       399       6,705       3,954  
Add back stock-based compensation
    2,845        911       6,412       3,135  
 
                       
 
                               
Adjusted non-GAAP operating income
    21,587       24,679       62,307       61,894  
 
Add back depreciation
    2,482       2,352       7,209       7,412  
 
                       
 
                               
Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization)
  $ 24,069     $ 27,031     $ 69,516     $ 69,306  
 
                       
 
                               
NON-GAAP OPERATING INCOME AND ADJUSTED EBITDA, as a percentage of revenue
                               
 
                               
Operating income (GAAP BASIS)
    10 %     16 %     10 %     12 %
 
                               
Adjustments for non-GAAP measures of performance:
                               
 
                               
Amortization of acquired software technology
    1 %     2 %     1 %     2 %
Amortization of intangibles
    6 %     6 %     6 %     6 %
Restructuring charges
    3 %     %     3 %     1 %
Stock-based compensation
    3 %     1 %     2 %     1 %
 
                               
Adjusted non-GAAP operating income
    23 %     25 %     22 %     22 %
 
Depreciation
    2 %     2 %     3 %     2 %
 
                               
Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization)
    25 %     27 %     25 %     24 %
 
                               
NON-GAAP EARNINGS PER SHARE
                               
 
                               
Income before income taxes
  $ 10,140     $ 13,683     $ 28,271     $ 27,122  
 
                               
Add back amortization of acquired software technology
    966       1,309       2,954       4,270  
Add back amortization of intangibles
    5,753       6,075       17,880       18,227  
Add back restructuring charges
    2,543       399       6,705       3,954  
Add back stock-based compensation
    2,845       911       6,412       3,135  
Add back bank charges on credit facility commitment
           637              637  
 
                       
 
                               
Adjusted income before income taxes
    22,247       23,014       62,222       57,345  
 
                               
Adjusted income tax expense
    8,009       8,285       22,261       20,644  
 
                       
Adjusted net income
  $ 14,238     $ 14,729     $ 39,961     $ 36,701  
 
                       
Adjusted non-GAAP diluted earnings per share
  $ 0.40     $ 0.42     $ 1.24     $ 1.04  
 
                       
Shares used to compute non-GAAP diluted earnings per share
    35,678       35,432       32,348       35,261  
 
                       

 


 

JDA Software Q3 2009 Earnings
Add
8
                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2009     2008     2009     2008  
CASH FLOW INFORMATION
                               
 
                               
Net cash provided by operating activities
  $ 20,019     $ 18,761     $ 80,528     $ 70,672  
 
                               
Net cash used in investing activities:
                               
Payment of direct costs related to acquisitions
  $ (2,945 )   $ (2,911 )   $ (4,431 )   $ (5,434 )
Purchase of other property and equipment
    (4,134 )     (1,568 )     (5,541 )     (6,065 )
Proceeds from disposal of property and equipment
    8       46       62       115  
 
                       
 
  $ (7,071 )   $ (4,433 )   $ (9,910 )   $ (11,384 )
 
                       
 
                               
Net cash provided by financing activities:
                               
Issuance of common stock under equity plans
  $ 9,882     $ 307     $ 14,524     $ 6,014  
Redemption of Series B convertible preferred stock
    (28,068 )           (28,068 )      
Purchase of treasury stock
    (2,367 )     (239 )     (6,266 )     (1,902 )
Principal payments on term-loan agreement
          (437 )           (19,086 )
Loan origination fees
          (3,375 )           (3,375 )
Other, net
                      (1,638 )
 
                       
 
  $ (20,553 )   $ (3,744 )   $ (19,810 )   $ (19,987 )