JDA SOFTWARE GROUP INC - FORM 8-K - EX-99.1

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8-K - FORM 8-K - JDA SOFTWARE GROUP INC	p18965e8vk.htm

Exhibit 99.1


JDA Software Group, Inc.				Contact Information
NEWS RELEASE				at End of Release

JDA Software Announces Second Quarter 2011 Results
Strong Recurring Maintenance Revenue and Excellent Cash Flow Highlight the Quarter
Company Reiterates Confidence in the Mid-Point of its Full Year Outlook for 2011

Scottsdale, Ariz. — July 26, 2011 — JDA^®Software Group, Inc. (NASDAQ: JDAS), The Supply Chain Company^®, today announced financial results for the second quarter ended June 30, 2011. JDA reported second quarter revenue of $162.4 million, a 3 percent increase from $158.4 million of revenue reported in second quarter 2010. Adjusted EBITDA was $38.9 million in second quarter 2011 compared to $41.3 million in the second quarter of 2010. JDA also reported adjusted non-GAAP earnings per share for second quarter 2011 of $0.45, compared to $0.48 per share reported in second quarter 2010. Adjusted non-GAAP earnings exclude amortization of acquired software technology and intangibles, restructuring charges, stock-based compensation and costs related to the acquisition and transition of i2 Technologies, Inc. (i2). GAAP net income attributable to common shareholders for second quarter 2011 was $10.1 million or $0.24 per diluted share, compared to $7.9 million or $0.19 per share in second quarter 2010.

“Second quarter software sales did not meet our expectation, however, our outlook for the second half remains strong. In particular, we currently anticipate an unusually strong third quarter that is expected to be combined with a typically strong fourth quarter to deliver total license sales around the mid-point of our original full year outlook for 2011,” said JDA Software President and Chief Executive Officer Hamish Brewer. “We were pleased with the continued cash flow strength of the Company, as we generated over $35 million of operating cash flow in the quarter and our outlook across all revenue lines for the second half indicates solid organic growth.”

Software and Subscription

Software and subscription revenue was $30.8 million in the second quarter 2011 compared to $38.0 million in the second quarter 2010. The decrease was primarily due to lower sales in North America and Asia Pacific, partially offset by continued solid results from the EMEA region. Despite the revenue decline compared the prior year, the Company closed 67 software deals, including nine deals in excess of $1 million in the current quarter, compared to 54 deals, including six over $1 million in the year ago period. Additionally, the average sales price for the trailing 12 months ended June 30, 2011 increased to $645,000 from $608,000 for the trailing 12 months ended June 30, 2010.

JDA Software Announces Second Quarter 2011 Results
Page 2

Maintenance and Support Services

Maintenance revenue increased 9 percent to $66.1 million in the second quarter 2011 from $60.6 million in the second quarter 2010. This increase was due to a continued strong retention rate of 96.7 percent and the high level of attachment of maintenance contracts to new license deals.

Consulting Services

Consulting services revenue increased 10 percent to $65.5 million in the second quarter 2011 from $59.8 million in the second quarter 2010. This increase was primarily due to the implementation services work associated with larger software sales. Consulting services gross margins were 17 percent in second quarter 2011 compared to 24 percent in the second quarter 2010 due to a decline in utilization rates to 56 percent from 59 percent in the second quarter of 2010.

Other Financial Data

	•		Operating expenses as a percent of revenue continue to show a disciplined cost-management. Product development expenses as a percent of revenue remained constant at 12 percent in the second quarter 2011 compared to the second quarter 2010, reflecting a continued investment in our technology and solutions. Sales and marketing expenses as a percent of revenue increased slightly to 16 percent in the second quarter 2011 compared to 15 percent in the second quarter 2010, reflecting our current year investment in the sales organization. General and administrative expenses as a percent of revenue improved to 10 percent in the second quarter 2011 compared to 13 percent in the second quarter 2010, driven by cost containment and a reduction in legal costs.

	•		Cash flow provided by operations was $35.5 million in second quarter 2011 compared to use of cash flow from operations of $2.6 million in second quarter 2010 driven by the favorable change in working capital, primarily due to favorable movements in accounts receivable and deferred revenue.

	•		Cash and cash equivalents, including restricted cash, increased $135.2 million to $293.2 million at June 30, 2011, from $158.0 million at June 30, 2010. The Company’s cash position, net of debt, at June 30, 2011 was $20.3 million.

Second quarter 2011 Highlights

The following presents a high-level summary of JDA’s regional software sales performance:

•

JDA reported $20.8 million in software license and subscription revenues in its Americas region during second quarter 2011, compared to $27.1 million in second quarter 2010. Companies signing new software licenses in second quarter 2011 include: Butterball LLC, Constellation Brands, Inc., Coty Inc., General Atomics Aeronautical Systems, MC Sports, Por Distincion S.A. DE C.V., Price Chopper, P&G, Sodimac Chile S.A., TBB Global Logistics, and Time Warner Cable, Inc.

JDA Software Announces Second Quarter 2011 Results
Page 3

	•		Software license and subscription revenues in the Europe, Middle East and Africa (EMEA) region increased to $7.4 million in second quarter 2011 from $4.8 million in second quarter 2010. New software deals in the EMEA region include: Infineon Technologies Austria AG, Koninklijke Ahold NV, and Tata Steel in Europe.

	•		JDA’s Asia-Pacific region posted software license and subscription revenues of $2.6 million in second quarter 2011 compared to $6.1 million in second quarter 2010. Wins in this region include: Accordia Golf Co. Ltd., Coles Supermarkets, Test Rite Retail Co., Ltd. and Woolworths Limited.

Six Months Ended June 30, 2011 Results

	•		Revenue for the six months ended June 30, 2011 increased 12 percent to $326.0 million from $290.0 million for the six months ended June 30, 2010. Adjusted EBITDA increased to $76.7 million for the first six months of June 30, 2011 from $72.7 million in the first six months of 2010.

	•		Adjusted non-GAAP earnings per share for the six months ended June 30, 2011 was $0.91 compared to $0.87 per share for the six months ended June 30, 2010. Adjusted non-GAAP earnings exclude amortization of acquired software technology and intangibles, restructuring charges, stock-based compensation and costs related to the acquisition and transition of i2. Adjusted non-GAAP earnings for the six months ended June 30, 2011 also exclude a $37.5 million pre-tax credit associated with the favorable settlement of the patent infringement case against Oracle Corporation.

	•		The GAAP net income applicable to common shareholders for the six months ended June 30, 2011 was $55.6 million or $1.30 per share, compared to net income of $3.6 million or $0.09 per share for the six months ended June 30, 2010. Results for the six months ended June 30, 2011 include a $37.5 million pre-tax credit associated with the favorable settlement of the patent infringement case against Oracle Corporation. Results for six months ended June 30, 2010 include the completion of the acquisition of i2 as of January 28, 2010.

	•		Cash flow from operations was $94.2 million for the six months ended June 30, 2011 compared to cash flow from operations of $9.6 million for the six months ended June 30, 2010. The increase in operating cash flow in the current period was due to increased net income, partially due the $37.5 million settlement received from a patent litigation settlement, and improvements in the change in deferred revenue.

Conference Call Information

JDA Software Group, Inc. will host a conference call at 4:45 p.m. Eastern time today to discuss earnings results for its second quarter ended June 30, 2011. 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. Second quarter 2011 Earnings Conference

JDA Software Announces Second Quarter 2011 Results
Page 4

Call.” A live audio webcast of the conference call and detailed slide deck can be accessed by logging ontowww.jda.com in the Investor Relations section.

A replay of the conference call will begin on July 26, 2011 at 8:00 p.m. Eastern time and will end on August 26, 2011. To hear a replay of the call over the Internet, access JDA’s website at www.jda.com.

About JDA Software Group, Inc.

JDA^® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain Company^®, is a leading global provider of innovative supply chain management, merchandising and pricing excellence solutions. JDA empowers more than 6,000 companies of all sizes to make optimal decisions that improve profitability and achieve real results in the discrete and process manufacturing, wholesale distribution, transportation, retail, and services industries. With an integrated solutions offering that spans the entire supply chain from materials to the consumer, JDA leverages the powerful heritage and knowledge capital of acquired market leaders including i2 Technologies^®, Manugistics^®, E3^®, Intactix^® and Arthur^®. JDA’s multiple service options, delivered via the JDA^® Private Cloud, provide customers with flexible configurations, rapid time-to-value, lower total cost of ownership and 24/7 functional and technical support and expertise. To learn more, visit www.jda.com or e-mail info@jda.com.

JDA Investor Relations Contact:
Mike Burnett, GVP, Treasury and Investor Relations
mike.burnett@jda.com
480-308-3392

JDA Corporate Communications Contact:
Beth Elkin, Sr. Director, Corporate Communications
beth.elkin@jda.com
469-357-4225

JDA Software Announces Second Quarter 2011 Results
Page 5

JDA SOFTWARE GROUP, INC.
Q2 2011 FINANCIAL RESULTS
CONSOLIDATED STATEMENT OF OPERATIONS
($ in thousands, except per share data, unaudited)


	Three Months Ended June 30,
				% of					% of			% Increase
	2011			Revenues			2010		Revenues			(Decrease)
REVENUES:
Software licenses	$	26,915			17	%	$	32,152		20	%		-16	%
Subscriptions and other recurring revenues		3,850			2	%		5,806		4	%		-34	%
Maintenance services		66,100			41	%		60,594		38	%		9	%

Product revenues		96,865			60	%		98,552		62	%		-2	%

Consulting services		59,033			36	%		55,255		35	%		7	%
Reimbursed expenses		6,512			4	%		4,566		3	%		43	%

Services revenue		65,545			40	%		59,821		38	%		10	%

Total Revenues		162,410			100	%		158,373		100	%		3	%

COST OF REVENUES:
Cost of software licenses		1,181			1	%		909		1	%		30	%
Amortization of acquired software technology		1,833			1	%		1,803		1	%		2	%
Cost of maintenance services		14,672			9	%		14,227		9	%		3	%

Cost of product revenues		17,686			11	%		16,939		11	%		4	%

Cost of consulting services		47,575			29	%		40,742		26	%		17	%
Reimbursed expenses		6,512			4	%		4,566		3	%		43	%

Cost of service revenue		54,087			33	%		45,308		29	%		19	%

Total Cost of Revenues		71,773			44	%		62,247		39	%		15	%


GROSS PROFIT		90,637			56	%		96,126		61	%		-6	%

OPERATING EXPENSES:
Product development		19,807			12	%		19,481		12	%		2	%
Sales and marketing		25,364			16	%		24,460		15	%		4	%
General and administrative		16,314			10	%		19,801		13	%		-18	%
Amortization of intangibles		9,592			6	%		9,915		6	%		-3	%
Restructuring charges		439			0	%		4,548		3	%		-90	%
Acquisition-related costs		—			0	%		865		1	%		-100	%
Litigation settlement		—			0	%		—		0	%	NM


Total Operating Expenses		71,516			44	%		79,070		50	%		-10	%

OPERATING INCOME		19,121			12	%		17,056		11	%		12	%
Interest expense and amortization of loan fees		6,439			4	%		6,182		4	%		4	%
Interest income and other, net		(881	)		-1	%		642		0	%		-237	%


INCOME BEFORE INCOME TAXES		13,563			8	%		10,232		6	%		33	%
Income tax provision		3,444			2	%		2,366		1	%		46	%


NET INCOME	$	10,119			6	%	$	7,866		5	%		29	%


EARNINGS PER SHARE:
Basic	$	0.24					$	0.19					27	%
Diluted	$	0.24					$	0.19					27	%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		42,354						41,672					2	%
Diluted		42,740						42,265					1	%

Note: Subtotals may not add due to rounding.

JDA Software Announces Second Quarter 2011 Results
Page 6

JDA SOFTWARE GROUP, INC.
Q2 2011 FINANCIAL RESULTS
CONSOLIDATED STATEMENT OF OPERATIONS
($ in thousands, except per share data, unaudited)


	Six Months Ended June 30,
				% of						% of			% Increase
	2011			Revenues			2010⁽¹⁾			Revenues			(Decrease)
REVENUES:
Software licenses	$	58,395			18	%	$	56,589			20	%		3	%
Subscriptions and other recurring revenues		8,844			3	%		10,093			3	%		-12	%
Maintenance services		130,868			40	%		117,654			41	%		11	%

Product revenues		198,107			61	%		184,336			64	%		7	%

Consulting services		116,677			36	%		98,257			34	%		19	%
Reimbursed expenses		11,232			3	%		7,411			3	%		52	%

Services revenue		127,909			39	%		105,668			36	%		21	%

Total Revenues		326,016			100	%		290,004			100	%		12	%

COST OF REVENUES:
Cost of software licenses		2,130			1	%		1,917			1	%		11	%
Amortization of acquired software technology		3,667			1	%		3,379			1	%		9	%
Cost of maintenance services		28,658			9	%		26,260			9	%		9	%

Cost of product revenues		34,455			11	%		31,556			11	%		9	%

Cost of consulting services		94,178			29	%		76,011			26	%		24	%
Reimbursed expenses		11,231			3	%		7,411			3	%		52	%

Cost of service revenue		105,409			32	%		83,422			29	%		26	%

Total Cost of Revenues		139,864			43	%		114,978			40	%		22	%

GROSS PROFIT		186,152			57	%		175,026			60	%		6	%

OPERATING EXPENSES:
Product development		39,943			12	%		36,758			13	%		9	%
Sales and marketing		51,604			16	%		45,572			16	%		13	%
General and administrative		38,402			12	%		37,498			13	%		2	%
Amortization of intangibles		19,310			6	%		18,481			6	%		4	%
Restructuring charges		981			0	%		12,306			4	%		-92	%
Acquisition-related costs		—			0	%		7,608			3	%		-100	%
Litigation settlement		(37,500	)		-12%			—			0	%	NM

Total Operating Expenses		112,740			35	%		158,223			55	%		-29	%


OPERATING INCOME		73,412			23	%		16,803			6	%		337	%
Interest expense and amortization of loan fees		12,650			4	%		12,268			4	%		3	%
Interest income and other, net		(2,151	)		1	%		(481	)		0	%	NM


INCOME BEFORE INCOME TAXES		62,913			19	%		5,016			2	%		1154	%
Income tax provision		7,266			2	%		1,418			0	%		412	%

NET INCOME	$	55,647			17	%	$	3,598			1	%		1447	%


EARNINGS PER SHARE:
Basic	$	1.32					$	0.09						1383	%
Diluted	$	1.30					$	0.09						1391	%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		42,244						40,514						4	%
Diluted		42,674						41,151						4	%


⁽¹⁾		Includes results of i2 acquisition as of January 28, 2010.

Note: Subtotals may not add due to rounding.

JDA Software Announces Second Quarter 2011 Results
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JDA SOFTWARE GROUP, INC.
Q2 2011 FINANCIAL RESULTS

RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES ⁽¹⁾
($ in thousands, except per share data, unaudited)


																			% Increase
	Three Months Ended June 30,																		(Decrease)
	2011						2011			2010						2010
	GAAP			Adj.			Non-GAAP			GAAP			Adj.			Non-GAAP			Non-GAAP
TOTAL COST OF REVENUES	$	71,773		$	(2,526	)	$	69,247		$	62,247		$	(2,296	)	$	59,951			16	%
Stock-based compensation:
Cost of maintenance services		14,672			(174	)		14,498			14,227			(163	)		14,064
Cost of consulting services		47,575			(519	)		47,056			40,742			(330	)		40,412

Amortization:
Amortization of acquired software technology		1,833			(1,833	)		—			1,803			(1,803	)		—

TOTAL OPERATING EXPENSES	$	71,516		$	(13,820	)	$	57,696		$	79,070		$	(18,850	)	$	60,220			-4	%
Stock-based compensation:
Product development		19,807			(544	)		19,263			19,481			(173	)		19,308
Sales and marketing		25,364			(1,419	)		23,945			24,460			(884	)		23,576
General and administrative		16,314			(1,826	)		14,488			19,801			(1,742	)		18,059

Amortization of intangibles		9,592			(9,592	)		—			9,915			(9,915	)		—
Restructuring charges		439			(439	)		—			4,548			(4,548	)		—
Acquisition-related costs		—			—			—			865			(865	)		—
Non-recurring transition costs to integrate acquisition		—			—			—			723			(723	)		—

OPERATING INCOME	$	19,121		$	16,346		$	35,467		$	17,056		$	21,146		$	38,202			-7	%

OPERATING MARGIN %		12	%					22	%		11	%					24	%		-2	%

INCOME TAX EFFECTS ⁽²⁾	$	3,444		$	7,024		$	10,468		$	2,366		$	8,616		$	10,982			-5	%

NET INCOME	$	10,119					$	19,441		$	7,866					$	20,396			-5	%

DILUTED EARNINGS PER SHARE	$	0.24					$	0.45		$	0.19					$	0.48			-6	%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		42,740						42,740			42,265						42,265			1	%


	2011						2011			2010					2010
	Non-Adjusted			Adj.			Adjusted			Non-Adjusted			Adj.		Adjusted
Net income	$	10,119								$	7,866
Income tax provision		3,444									2,366
Interest expense and amortization of loan fees		6,439									6,182
Amortization of acquired software technology		1,833									1,803
Amortization of intangibles		9,592									9,915
Depreciation		3,406									3,144

EBITDA	$	34,833								$	31,276
Restructuring charges				$	439								$	4,548
Stock-based compensation					4,482									3,292
Acquisition-related costs					—									865
Interest income and other, net					(881	)								642
Non-recurring transition costs to integrate acquisition					—									723
EBITDA	$	34,833		$	4,040		$	38,873		$	31,276		$	10,070	$	41,346		-6	%
EBITDA MARGIN %		21	%					24	%		20	%				26	%


(1)		This presentation includes Non-GAAP 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.

(2)		Non-GAAP income tax effect calculated by using the Federal statutory rate of 35%.

JDA Software Announces Second Quarter 2011 Results
Page 8

JDA SOFTWARE GROUP, INC.
Q2 2011 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES ⁽¹⁾
($ in thousands, except per share data, unaudited)


	Six Months Ended June 30,																		%Increase
	2011						2011			2010⁽²⁾						2010			(Decrease)
	GAAP			Adj.			Non-GAAP			GAAP			Adj.			Non-GAAP			Non-GAAP

TOTAL COST OF REVENUES	$	139,864		$	(5,191	)	$	134,673		$	114,978		$	(4,434	)	$	110,544			22	%
Stock-based compensation:
Cost of maintenance services		28,658			(341	)		28,317			26,260			(277	)		25,983
Cost of consulting services		94,178			(1,183	)		92,995			76,011			(778	)		75,233

Amortization:
Amortization of acquired software technology		3,667			(3,667	)		—			3,379			(3,379	)		—

TOTAL OPERATING EXPENSES	$	112,740		$	8,678		$	121,418		$	158,223		$	(45,349	)	$	112,874			8	%
Stock-based compensation:
Product development		39,943			(1,236	)		38,707			36,758			(506	)		36,252
Sales and marketing		51,604			(2,860	)		48,744			45,572			(1,750	)		43,822
General and administrative		38,402			(4,435	)		33,967			37,498			(3,258	)		34,240

Amortization of intangibles		19,310			(19,310	)		—			18,481			(18,481	)		—
Restructuring charges		981			(981	)		—			12,306			(12,306	)		—
Acquisition-related costs		—			—			—			7,608			(7,608	)		—
Non-recurring transition costs to integrate acquisition		—			—			—			1,440			(1,440	)		—
Litigation settlement		(37,500	)		37,500			—			—			—			—

OPERATING INCOME	$	73,412		$	(3,487	)	$	69,925		$	16,803		$	49,783		$	66,586			5	%

OPERATING MARGIN %		23	%					21	%		6	%					23	%		-2	%

INCOME TAX EFFECTS ⁽³⁾	$	7,266		$	13,533		$	20,799		$	1,418		$	17,762		$	19,180			8	%

NET INCOME	$	55,647					$	38,627		$	3,598					$	35,619			8	%

DILUTED EARNINGS PER SHARE	$	1.30					$	0.91		$	0.09					$	0.87			5	%

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		42,674						42,674			41,151			—			41,151			4	%


	2011						2011			2010						2010
	Non-Adjusted			Adj.			Adjusted			Non-Adjusted			Adj.			Adjusted

Net income	$	55,647								$	3,598
Income tax provision		7,266									1,418
Interest expense and amortization of loan fees		12,650									12,268
Amortization of acquired software technology		3,667									3,379
Amortization of intangibles		19,310									18,481
Depreciation		6,770									6,150


EBITDA	$	105,310								$	45,294

Restructuring charges				$	981								$	12,306
Stock-based compensation					10,055									6,569
Acquisition-related costs					—									7,608
Interest income and other, net					(2,151	)								(481	)
Non-recurring transition costs to integrate acquisition					—									1,440
Litigation settlement					(37,500	)								—


EBITDA	$	105,310		$	(28,615	)	$	76,695		$	45,294		$	27,442		$	72,736		5	%

EBITDA MARGIN %		32	%					24	%		16	%					25	%


⁽¹⁾		This presentation includes Non-GAAP 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.

⁽²⁾		Includes results of i2 acquisition as of January 28, 2010.

⁽³⁾		Non-GAAP income tax effect calculated by using the Federal statutory rate of 35%.

JDA Software Announces Second Quarter 2011 Results
Page 9

JDA SOFTWARE GROUP, INC.
Q2 2011 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, unaudited)


	June 30,			December 31,
	2011			2010
ASSETS

Current Assets:
Cash and cash equivalents	$	256,101		$	171,618
Restricted cash		37,111			34,855
Accounts receivable, net		127,510			102,118
Deferred tax assets—current portion		43,027			43,753
Prepaid expenses and other current assets		36,403			27,723

Total Current Assets		500,152			380,067

Non-Current Assets:
Property and equipment, net		45,548			47,447
Goodwill		226,863			226,863
Other intangibles, net		164,421			187,398
Deferred tax assets—long-term portion		251,732			255,386
Other non-current assets		18,601			16,367

Total Non-Current Assets		707,165			733,461


TOTAL ASSETS	$	1,207,317		$	1,113,528


LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:
Accounts payable	$	8,992		$	21,092
Accrued expenses and other liabilities		83,661			83,938
Income taxes payable		—			318
Deferred revenue—current portion		132,292			88,055

Total Current Liabilities		224,945			193,403

Non-Current Liabilities:
Long-term debt		272,946			272,695
Accrued exit and disposal obligations		4,721			7,360
Liability for uncertain tax positions		6,147			6,873
Deferred revenue—long-term portion		6,161			9,090

Total Non-Current Liabilities		289,975			296,018


TOTAL LIABILITIES	$	514,920		$	489,421


Stockholders’ Equity:
Common stock		446			439
Additional paid-in capital		564,393			550,177
Retained earnings		147,379			91,732
Accumulated other comprehensive income		11,927			8,980
Treasury stock		(31,748	)		(27,221	)

Total Stockholders’ Equity		692,397			624,107


TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,207,317		$	1,113,528

JDA Software Announces Second Quarter 2011 Results
Page 10

JDA SOFTWARE GROUP, INC.
Q2 2011 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
($ in thousands, unaudited)


	Six Months Ended June 30,
	2011			2010
Cash Flows From Operating Activities:
Net income	$	55,647		$	3,598
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		29,746			28,010
Provision for doubtful accounts		—			500
Amortization of loan fees		1,108			922
Net loss (gain) on disposal of property and equipment		20			(9	)
Stock-based compensation		10,055			6,569
Deferred income taxes		4,379			(304	)
Changes in assets and liabilities, net of effects from business acquisition:
Accounts receivable		(24,890	)		(14,856	)
Income tax receivable		(766	)		2,031
Prepaid expenses and other assets		(9,095	)		(13,911	)
Accounts payable		(11,861	)		3,634
Accrued expenses and other liabilities		(1,284	)		(14,075	)
Income tax payable		(1,023	)		(3,737	)
Deferred revenue		42,124			11,196

Net cash provided by operating activities	$	94,160		$	9,568


Cash Flow From Investing Activities:
Change in restricted cash		(2,256	)		276,095
Purchase of i2 Technologies, Inc.		—			(213,427	)
Payment of direct costs related to acquisitions		(1,703	)		(1,639	)
Purchase of property and equipment		(4,815	)		(6,397	)
Proceeds from disposal of property and equipment		50			349

Net cash (used in) provided by investing activities	$	(8,724	)	$	54,981


Cash Flow From Financing Activities:
Issuance of common stock—equity plans		3,498			11,610
Purchase of treasury stock and other, net		(4,527	)		(3,758	)
Conversion of warrants		671			—
Debt issuance costs		(1,701	)		—

Net cash (used in) provided by financing activities	$	(2,059	)	$	7,852


Effect of exchange rates on cash and cash equivalents		1,106			(2,196	)

Net increase in cash and cash equivalents	$	84,483		$	70,205

Cash and Cash Equivalents, Beginning of Period	$	171,618		$	75,974

Cash and Cash Equivalents, End of Period	$	256,101		$	146,179

JDA Software Announces Second Quarter 2011 Results
Page 11

JDA SOFTWARE GROUP, INC.
Q2 2011 FINANCIAL RESULTS
SUPPLEMENTAL DATA
($ in thousands, unaudited)


	2010⁽¹⁾															2011
	Q1			Q2			Q3			Q4			TOTAL			Q1			Q2

REVENUES:
Software licenses	$	24,437		$	32,152		$	16,276		$	36,681		$	109,546		$	31,480		$	26,915
Subscriptions and other recurring revenues		4,287			5,806			5,758			5,292			21,143			4,994			3,850
Maintenance services		57,060			60,594			64,186			64,401			246,241			64,768			66,100

Product revenues		85,784			98,552			86,220			106,374			376,930			101,242			96,865

Consulting services		43,003			55,255			65,947			56,213			220,418			57,644			59,033
Reimbursed expenses		2,844			4,566			6,276			6,175			19,861			4,720			6,512

Services revenue		45,847			59,821			72,223			62,388			240,279			62,364			65,545

Total Revenues	$	131,631		$	158,373		$	158,443		$	168,762		$	617,209		$	163,606		$	162,410


AS REPORTED REVENUE GROWTH RATES:
Software licenses		70	%		21	%		0	%		33	%		29	%		29	%		-16	%
Subscriptions and other recurring revenues		343	%		483	%		543	%		422	%		446	%		16	%		-34	%
Maintenance services		33	%		37	%		43	%		37	%		37	%		14	%		9	%
Product revenues		47	%		37	%		38	%		41	%		41	%		18	%		-2	%

Consulting services		87	%		120	%		114	%		96	%		105	%		34	%		7	%
Reimbursed expenses		44	%		86	%		128	%		114	%		97	%		66	%		43	%
Services revenue		83	%		117	%		115	%		98	%		104	%		36	%		10	%
Total Revenues		58	%		59	%		65	%		58	%		60	%		24	%		3	%


SOFTWARE LICENSE AND SUBSCRIPTION REVENUES:
Americas	$	18,917		$	27,080		$	16,590		$	31,026		$	93,613		$	21,104		$	20,786
ASPAC		4,404			6,105			2,039			3,046			15,594			2,758			2,577
EMEA		5,403			4,773			3,405			7,901			21,482			12,612			7,402

Total Software Revenues	$	28,724		$	37,958		$	22,034		$	41,973		$	130,689		$	36,474		$	30,765


New sales	$	8,415		$	8,080		$	2,603		$	8,042		$	27,140		$	4,819		$	9,537
Install-base sales		20,309			29,878			19,431			33,931			103,549			31,665			21,228

Total Software Revenues	$	28,724		$	37,958		$	22,034		$	41,973		$	130,689		$	36,484		$	30,765


As % of Total
New sales		29	%		21	%		12	%		19	%		21	%		13	%		31	%
Install-base sales		71	%		79	%		88	%		81	%		79	%		87	%		69	%

Total Software Revenues		100	%		100	%		100	%		100	%		100	%		100	%		100	%


GROSS PROFIT MARGINS BY LINE OF BUSINESS ⁽²⁾
Software		91.0	%		92.9	%		86.7	%		92.7	%		91.4	%		92.4	%		90.2	%
Maintenance		78.9	%		76.5	%		79.9	%		79.3	%		78.7	%		78.4	%		77.8	%
Services		16.9	%		24.3	%		23.5	%		18.2	%		21.1	%		17.7	%		17.5	%
Overall Gross Profit Margin		59.9	%		60.7	%		55.1	%		60.0	%		58.9	%		58.4	%		55.8	%

MISCELLANEOUS
Average sales price (ASP) ⁽³⁾	$	618		$	608		$	573		$	601					$	720		$	645
Multiple product deals ⁽³⁾		21			18			17			19						21			24
Large deal count (greater than $1M) ⁽³⁾		24			25			25			25						23			26
Quota carrying sales representatives		96			92			98			92						106			111
Maintenance Retention		98.3	%		97.3	%		95.9	%		95.6	%					98.5	%		96.7	%


FREE CASH FLOW ⁽⁴⁾
GAAP Operating Cash Flow	$	12,195		$	(2,627	)	$	29,425		$	26,179		$	65,172		$	58,683		$	35,477
Capital Expenditures		(533	)		(5,864	)		(8,388	)		(2,081	)		(16,866	)		(2,997	)		(1,819	)

Free Cash Flow ⁽⁵⁾	$	11,662		$	(8,491	)	$	21,037		$	24,098		$	48,306		$	55,686		$	33,658


% Growth over prior year		-64	%		-131	%		32	%		68	%		-46	%		368	%		368	%


⁽¹⁾		Includes results of i2 acquisition as of January 28, 2010.

⁽²⁾		Gross Profit Margins are calculated using line of business Revenue, less line of business Cost of Revenue, divided by line of business Revenue.

⁽³⁾		Trailing twelve months

⁽⁴⁾		This presentation includes Non-GAAP 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.

⁽⁵⁾		Q1 2011 results Include $35.0 million of cash received from the settlement with Oracle Corporation.

JDA Software Announces Second Quarter 2011 Results
Page 12

“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 we currently anticipate unusually strong third quarter software sales, and believe we will be around the midpoint of our range for full year 2011 software sales. The occurrence of future events may involve a number of risks and uncertainties, including, but not limited to, the risk that for numerous reasons we may not convert our strong software pipeline into closed license transactions in the second half of 2011, which would prevent us from achieving our 2011 goals, and 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 net 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 software 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 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.

•

Acquisition-related costs associated with the acquisition of i2, the settlement offer related to inherited i2 litigation and the non-recurring transition costs to integrate the acquisition are significant non-routine expenses. Exclusion of these costs promotes period-to-period comparisons and transparency as we do not believe these costs are directly attributable to the operating performance of our business.

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.

JDA Software Announces Second Quarter 2011 Results
Page 13

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 Group, Inc.
14400 N. 87^th Street
Scottsdale, Ariz. 85260

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