JDA® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain Company®, today announced financial results for the fourth quarter ended December 31, 2011. JDA reported record fourth quarter revenue of $174.2 million, a 3 percent increase from $168.8 million of revenue reported in fourth quarter 2010. Adjusted EBITDA increased 7 percent to a record $51.8 million in fourth quarter 2011 compared to $48.5 million in the fourth quarter of 2010, generating an increase in adjusted EBITDA margin to 30 percent in the current quarter compared to 29 percent in the fourth quarter of 2010.

JDA also reported adjusted non-GAAP earnings per share for fourth quarter 2011 of $0.65, a 7 percent increase from $0.61 per share reported in fourth 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). Adjusted non-GAAP earnings for the fourth quarter also exclude a pre-tax charge of $35 million in 2011 and $14 million in 2010 associated with a litigation matter, which was resolved in November 2011. GAAP net loss attributable to common shareholders for fourth quarter 2011 was $1.4 million or ($0.03) per diluted share, compared to net income of $5.8 million or $0.14 per share in fourth quarter 2010.

"High single-digit revenue growth in all lines of business drove record earnings and cash flow for JDA in 2011," said JDA Software President and Chief Executive Officer Hamish Brewer. "With the backdrop of continued global economic uncertainty, increasing volatility in the global supply chain and changes in consumer spending habits, JDA could be very well placed in 2012 to support vital deployments of advanced technologies that have the potential to help our customers deal with these significant and continuing challenges."

Software and Subscription

Software and subscription revenue was $37.6 million in fourth quarter 2011 compared to $42.0 million in fourth quarter 2010. The decrease was primarily due to a 31 percent decline in the Americas region, partially offset by continued strength in the Europe, Middle East and Africa (EMEA) region, where fourth quarter 2011 sales increased 61 percent, and a 19 percent increase in the Asia-Pacific region. The Company closed eight deals in excess of $1 million in fourth quarter 2011, compared to 10 deals valued at more than $1 million in fourth quarter 2010. Additionally, the average sales price for the year ended December 31, 2011 increased to $821,000 from $601,000 for the year ended December 31, 2010.

Maintenance and Support Services

Maintenance revenue increased 5 percent to $67.4 million in fourth quarter 2011 from $64.4 million in fourth quarter 2010. This increase was due to a continued strong retention rate of 95 percent and the high level of attachment of maintenance contracts to new license deals.

Consulting Services

Consulting services revenue increased 11 percent to $69.1 million in fourth quarter 2011 compared to $62.4 million in fourth quarter 2010. The increase in the quarter was primarily due to continued growth in professional services revenue as well as growth in managed service revenue. Consulting services gross margins increased to 28 percent in fourth quarter 2011 from 18 percent in fourth quarter 2010 as a result of the increased revenues and improvements in both utilization and billable rates.

Other Financial Data

  • Operating expenses as a percent of revenue continue to reflect disciplined cost management. Product development expenses as a percent of revenue remained relatively constant at 10.6 percent in fourth quarter 2011 compared to 10.7 percent in fourth quarter 2010, reflecting the ongoing commitment to enhancing the Company's technology and solutions. Sales and marketing expenses as a percent of revenue increased to 15.5 percent in fourth quarter 2011 compared to 15.1 percent in fourth quarter 2010, reflecting the current year investment in the sales organization. General and administrative expenses as a percent of revenue increased slightly to 10.4 percent in fourth quarter 2011 from 10.2 percent in fourth quarter 2010.
  • The Company recorded a $35 million pre-tax charge in fourth quarter 2011 related to a litigation matter, for which it had previously accrued $19 million. The $54 million net payment was made in December 2011 for full and final resolution of this matter.
  • Cash flow provided by operations increased to $32.2 million in fourth quarter 2011, after adjusting for the $54 million litigation settlement, from $26.2 million in fourth quarter 2010 driven primarily by improvements in working capital.
  • Cash and cash equivalents, including restricted cash, increased $88.4 million to $294.9 million at December 31, 2011, from $206.5 million at December 31, 2010.

Fourth Quarter 2011 Highlights

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

  • JDA reported $21.3 million in software license and subscription revenues in its Americas region during fourth quarter 2011, compared to $31.0 million in fourth quarter 2010. Companies signing new software licenses in fourth quarter 2011 include: Coca-Cola Bottling Co. Consolidated, Express, Inc., Team Foods Columbia S.A., Servicios Liverpool S.A. de C.V., and Polyone Corporation.
  • Software license and subscription revenues in the Europe, Middle East and Africa (EMEA) region increased 61 percent to $12.7 million in fourth quarter 2011 from $7.9 million in fourth quarter 2010. New software deals in the EMEA region include: Dimar SpA, Dohle Handelsgruppe Svc GmbH, Engen, Fromageries Bel, Gloria Jeans, Gruppo Concorde SpA, IKEA IT AB, Krones AG, Merck Serono S.A., Poundland Limited, Shoprite Checkers (PTY) Ltd., and Woolworths Pty Ltd.
  • JDA's Asia-Pacific region posted software license and subscription revenues of $3.6 million in fourth quarter 2011, a 19 percent increase, compared to $3.0 million in fourth quarter 2010. New software deals in the Asia-Pacific region include: JFE Steel Corporation and Super Retail Group Limited.

Full Year Ended December 31, 2011 Results

  • Revenue for the year ended December 31, 2011 increased 9 percent to $671.8 million from $617.2 million for the year ended December 31, 2010. The overall revenue increase was driven by an 8 percent increase in software and subscription revenue, an 8 percent increase in maintenance revenue, and a 10 percent increase in services revenue.
  • Adjusted EBITDA increased 12 percent to $179.6 million for the year ended December 31, 2011 from $160.9 million for the full year 2010. Adjusted EBITDA margins improved to 27 percent in 2011 from 26 percent in 2010.
  • Adjusted non-GAAP earnings per share for the year ended December 31, 2011 increased 13 percent to $2.20 compared to $1.95 per share for the year ended December 31, 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 year ended December 31, 2011 also exclude a $37.5 million pre-tax credit associated with the favorable settlement of the patent infringement case against Oracle Corporation, and a $35 million pre-tax charge in 2011 and a $14 million pre-tax charge in 2010 related to the settlement of a litigation matter brought against i2.
  • The GAAP net income applicable to common shareholders for the year ended December 31, 2011 was $71.0 million or $1.66 per share, compared to net income of $17.7 million or $0.42 per share for the year ended December 31, 2010. Results for the year ended December 31, 2010 include the completion of the acquisition of i2 as of January 28, 2010.
  • Cash flow from operations increased to $110.8 million for the year ended December 31, 2011 from $65.2 million for the year ended December 31, 2010. Adjusting for the $16.5 million net cash outflow from the litigation settlements in 2011, cash flow from operations was $127.3 million. The increase in operating cash flow in the current period was primarily due to higher earnings.

Securities and Exchange Commission Investigation

JDA has received notice from the U.S. Securities and Exchange Commission requesting information related to revenue recognition and other accounting and financial reporting matters for certain past fiscal years. JDA is actively cooperating with the SEC and is committed to addressing any questions the SEC may have.

Conference Call Information

JDA will host a conference call at 4:45 p.m. EST today to discuss earnings results for its fourth quarter ended December 31, 2011. To participate in the call, dial 1-877-941-1427 (United States) or 1-480-629-9664 (International) and ask the operator for the "JDA Software Group, Inc. Fourth Quarter 2011 Earnings Conference Call." A live audio webcast of the conference call and detailed slide deck can be accessed by logging onto www.jda.com in the Investor Relations section.

A replay of the conference call will begin on January 31, 2012 at approximately 7:45 p.m. EST and will end on February 29, 2012. 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 SOFTWARE GROUP, INC.
Q4 2011 FINANCIAL RESULTS
CONSOLIDATED STATEMENT OF OPERATIONS
($ in thousands, except per share data, unaudited)
 
Three Months Ended December 31,

 

2011    

% of
Revenues

     2010    

% of
Revenues

    

% Increase
(Decrease)

 
REVENUES:
Software licenses $ 33,410 19 % $ 36,681 22 % -9 %
Subscriptions and other recurring revenues 4,181 2 % 5,292 3 % -21 %
Maintenance services   67,443       39 %       64,401       38 % 5 %
Product revenues 105,034 60 % 106,374 63 % -1 %
 
Consulting services 62,973 36 % 56,213 33 % 12 %
Reimbursed expenses   6,167       4 %       6,175       4 % 0 %
Services revenue 69,140 40 % 62,388 37 % 11 %
                   
Total Revenues 174,174 100 % 168,762 100 % 3 %
 
COST OF REVENUES:
Cost of software licenses 1,019 1 % 1,236 1 % -18 %
Amortization of acquired software technology 1,702 1 % 1,835 1 % -7 %
Cost of maintenance services   13,568       8 %       13,351       8 % 2 %
Cost of product revenues 16,289 9 % 16,422 10 % -1 %
 
Cost of consulting services 43,383 25 % 44,839 27 % -3 %
Reimbursed expenses   6,167       4 %       6,175       4 % 0 %
Cost of service revenue 49,550 28 % 51,014 30 % -3 %
                   
Total Cost of Revenues 65,839 38 % 67,436 40 % -2 %
                   
GROSS PROFIT 108,335 62 % 101,326 60 % 7 %
 
OPERATING EXPENSES:
Product development 18,484 11 % 18,027 11 % 3 %
Sales and marketing 26,922 15 % 25,499 15 % 6 %
General and administrative 18,097 10 % 17,255 10 % 5 %
Amortization of intangibles 9,549 5 % 9,968 6 % -4 %
Restructuring charges 924 1 % 4,453 3 % -79 %
Acquisition-related costs - 0 % 34 0 % -100 %
Litigation provision and settlements, net 35,000 20 % 14,000 8 % 150 %
                   
Total Operating Expenses 108,976 63 % 89,236 53 % 22 %
                   
OPERATING (LOSS) INCOME (641 ) 0 % 12,090 7 % -105 %
Interest expense and amortization of loan fees 6,415 4 % 6,321 4 % 1 %
Interest income and other, net (1,155 ) -1 % (644 ) 0 % NM
                   
(LOSS) INCOME BEFORE INCOME TAXES (5,901 ) -3 % 6,413 4 % -192 %
Income tax (benefit) provision (4,471 ) -3 % 566 0 % -890 %
                   
NET (LOSS) INCOME $ (1,430 )     -1 %     $ 5,847       3 % -124 %
 
EARNINGS PER SHARE:
Basic $ (0.03 ) $ 0.14 -121 %
Diluted $ (0.03 ) $ 0.14 -121 %
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 42,644 41,868 2 %
Diluted 42,644 42,280 1 %
 
Note: Subtotals may not add due to rounding.
 
 
                     
JDA SOFTWARE GROUP, INC.
2011 FINANCIAL RESULTS
CONSOLIDATED STATEMENT OF OPERATIONS
($ in thousands, except per share data, unaudited)
 
Year Ended December 31,

 

2011    

% of
Revenues

    

2010 (1)

    

% of
Revenues

    

% Increase
(Decrease)

 
REVENUES:
Software licenses $ 124,944 19 % $ 109,546 18 % 14 %
Subscriptions and other recurring revenues 16,763 2 % 21,143 3 % -21 %
Maintenance services   266,572       40 %       246,241       40 % 8 %
Product revenues 408,279 61 % 376,930 61 % 8 %
 
Consulting services 240,042 36 % 220,417 36 % 9 %
Reimbursed expenses   23,432       3 %       19,862       3 % 18 %
Services revenue 263,474 39 % 240,279 39 % 10 %
                   
Total Revenues 671,753 100 % 617,209 100 % 9 %
 
COST OF REVENUES:
Cost of software licenses 4,158 1 % 4,256 1 % -2 %
Amortization of acquired software technology 7,095 1 % 7,047 1 % 1 %
Cost of maintenance services   55,930       8 %       52,543       9 % 6 %
Cost of product revenues 67,183 10 % 63,846 10 % 5 %
 
Cost of consulting services 182,381 27 % 169,826 28 % 7 %
Reimbursed expenses   23,432       3 %       19,862       3 % 18 %
Cost of service revenue 205,813 31 % 189,688 31 % 9 %
                   
Total Cost of Revenues 272,996 41 % 253,534 41 % 8 %
                   
GROSS PROFIT 398,757 59 % 363,675 59 % 10 %
 
OPERATING EXPENSES:
Product development 77,373 12 % 72,158 12 % 7 %
Sales and marketing 104,670 16 % 91,329 15 % 15 %
General and administrative 72,517 11 % 72,299 12 % 0 %
Amortization of intangibles 38,421 6 % 38,415 6 % 0 %
Restructuring charges 2,673 0 % 20,931 3 % -87 %
Acquisition-related costs - 0 % 8,115 1 % -100 %
Litigation provision and settlements, net (2,500 ) 0 % 14,000 2 % -118 %
                   
Total Operating Expenses 293,154 44 % 317,247 51 % -8 %
                   
OPERATING INCOME 105,603 16 % 46,428 8 % 127 %
Interest expense and amortization of loan fees 25,500 4 % 24,758 4 % 3 %
Interest income and other, net (3,827 ) -1 % (1,683 ) 0 % NM
                   
INCOME BEFORE INCOME TAXES 83,930 12 % 23,353 4 % 259 %
Income tax provision 12,910 2 % 5,635 1 % 129 %
                   
NET INCOME $ 71,020       11 %     $ 17,718       3 % 301 %
 
EARNINGS PER SHARE:
Basic $ 1.67 $ 0.43 288 %
Diluted $ 1.66 $ 0.42 295 %
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 42,412 41,173 3 %
Diluted 42,761 41,710 3 %
 

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

Note: Subtotals may not add due to rounding.
 
 
                             
JDA SOFTWARE GROUP, INC.
Q4 2011 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in thousands, except per share data, unaudited)
 
Three Months Ended December 31,    

% Increase
(Decrease)

2011
GAAP

     Adj.    

2011
Non-GAAP

    

2010
GAAP

     Adj.    

2010
Non-GAAP

     Non-GAAP
 
TOTAL COST OF REVENUES $ 65,839 $ (2,127 ) $ 63,712 $ 67,436 $ (2,300 ) $ 65,136 -2 %
Stock-based compensation:
Cost of maintenance services 13,568 (87 ) 13,481 13,351 (79 ) 13,272
Cost of consulting services 43,383 (338 ) 43,045 44,839 (386 ) 44,453
 
Amortization:
Amortization of acquired software technology 1,702 (1,702 ) - 1,835 (1,835 ) -
 
TOTAL OPERATING EXPENSES $ 108,976 $ (46,998 ) $ 61,978 $ 89,236 $ (30,650 ) $ 58,586 6 %
Stock-based compensation:
Product development 18,484 (259 ) 18,225 18,027 (439 ) 17,588
Sales and marketing 26,922 (193 ) 26,729 25,499 (336 ) 25,163
General and administrative 18,097 (1,073 ) 17,024 17,255 (1,420 ) 15,835
 
Amortization of intangibles 9,549 (9,549 ) - 9,968 (9,968 ) -
Restructuring charges 924 (924 ) - 4,453 (4,453 ) -
Acquisition-related costs - - - 34 (34 ) -
Litigation provision and settlements, net 35,000 (35,000 ) - 14,000 (14,000 ) -
 
OPERATING INCOME $ (641 ) $ 49,125 $ 48,484 $ 12,090 $ 32,950 $ 45,040 8 %
 
OPERATING MARGIN % 0 % 28 % 7 % 27 % 1 %
 
INCOME TAX EFFECTS (2) $ (4,471 ) $ 19,599 $ 15,128 $ 566 $ 13,211 $ 13,777 10 %
 
NET (LOSS) INCOME $ (1,430 ) $ 28,096 $ 5,847 $ 25,586 10 %
 
DILUTED (LOSS) EARNINGS PER SHARE $ (0.03 ) $ 0.65 $ 0.14 $ 0.61 7 %
 

DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING

 

42,644 253 42,897 42,280 42,280 1 %
                                             
                               

2011
Non-Adjusted

     Adj.    

2011
Adjusted

    

2010
Non-Adjusted

     Adj.    

2010
Adjusted

 
Net (loss) income $ (1,430 ) $ 5,847
Income tax (benefit) provision (4,471 ) 566
Interest expense and amortization of loan fees 6,415 6,321
Amortization of acquired software technology 1,702 1,835
Amortization of intangibles 9,549 9,968
Depreciation   3,325     3,414  
 
EBITDA $ 15,090 $ 27,951
 
Restructuring charges $ 924 $ 4,453
Stock-based compensation 1,950 2,660
Acquisition-related costs - 34
Interest income and other, net (1,155 ) (644 )
Non-recurring transition costs to integrate acquisition - -
Litigation provision and settlements, net   35,000     14,000  
 
EBITDA $ 15,090 $ 36,719 $ 51,809 $ 27,951 $ 20,503 $ 48,454 7 %
 
EBITDA MARGIN % 9 % 30 % 17 % 29 %
 
 
(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 GROUP, INC.
2011 FINANCIAL RESULTS
RECONCILIATION OF SELECTED GAAP MEASURES TO NON-GAAP MEASURES (1)
($ in thousands, except per share data, unaudited)
 
Year Ended December 31,    

% Increase
(Decrease)

2011
GAAP

     Adj.    

2011
Non-GAAP

    

2010 (2)
GAAP

     Adj.    

2010
Non-GAAP

     Non-GAAP
 
TOTAL COST OF REVENUES $ 272,996 $ (9,737 ) $ 263,259 $ 253,534 $ (9,094 ) $ 244,440 8 %
Stock-based compensation:
Cost of maintenance services 55,930 (596 ) 55,334 52,543 (482 ) 52,061
Cost of consulting services 182,381 (2,046 ) 180,335 169,826 (1,565 ) 168,261
 
Amortization:
Amortization of acquired software technology 7,095 (7,095 ) - 7,047 (7,047 ) -
 
TOTAL OPERATING EXPENSES $ 293,154 $ (50,975 ) $ 242,179 $ 317,247 $ (92,546 ) $ 224,701 8 %
Stock-based compensation:
Product development 77,373 (1,932 ) 75,441 72,158 (1,149 ) 71,009
Sales and marketing 104,670 (3,664 ) 101,006 91,329 (2,628 ) 88,701
General and administrative 72,517 (6,785 ) 65,732 72,299 (5,670 ) 66,629
 
Amortization of intangibles 38,421 (38,421 ) - 38,415 (38,415 ) -
Restructuring charges 2,673 (2,673 ) - 20,931 (20,931 ) -
Acquisition-related costs - - - 8,115 (8,115 ) -
Non-recurring transition costs to integrate acquisition - - - 1,638 (1,638 ) -
Litigation provision and settlements, net (2,500 ) 2,500 - 14,000 (14,000 ) -
 
OPERATING INCOME $ 105,603 $ 60,712 $ 166,315 $ 46,428 $ 101,640 $ 148,068 12 %
 
OPERATING MARGIN % 16 % 25 % 8 % 24 % 1 %
 
INCOME TAX EFFECTS (3) $ 12,910 $ 37,715 $ 50,625 $ 5,635 $ 38,113 $ 43,748 16 %
 
NET INCOME $ 71,020 $ 94,017 $ 17,718 $ 81,245 16 %
 
DILUTED EARNINGS PER SHARE $ 1.66 $ 2.20 $ 0.42 $ 1.95 13 %
 
DILUTED WEIGHTED AVERAGE COMMON

SHARES OUTSTANDING

 42,761 42,761 41,710 41,710 3 %
 
                               

2011
Non-Adjusted

     Adj.    

2011
Adjusted

    

2010
Non-Adjusted

     Adj.    

2010
Adjusted

 
Net income $ 71,020 $ 17,718
Income tax provision 12,910 5,635
Interest expense and amortization of loan fees 25,500 24,758
Amortization of acquired software technology 7,095 7,047
Amortization of intangibles 38,421 38,415
Depreciation   13,322     12,783  
 
EBITDA $ 168,268 $ 106,356
 
Restructuring charges $ 2,673 $ 20,931
Stock-based compensation 15,023 11,494
Acquisition-related costs - 8,115
Interest income and other, net (3,827 ) (1,683 )
Non-recurring transition costs to integrate acquisition - 1,638
Litigation provision and settlements, net   (2,500 )   14,000  
 
EBITDA $ 168,268 $ 11,369 $ 179,637 $ 106,356 $ 54,495 $ 160,851 12 %
 
EBITDA MARGIN % 25 % 27 % 17 % 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) 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 GROUP, INC.
2011 FINANCIAL RESULTS
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, unaudited)
 

December 31,
2011

      

December 31,
2010

 
ASSETS
 
Current Assets:
Cash and cash equivalents $ 285,512 $ 171,618
Restricted cash 9,385 34,855
Accounts receivable, net 114,778 102,118
Deferred tax assets--current portion 27,637 43,753
Prepaid expenses and other current assets   22,948           27,723  
Total Current Assets 460,260 380,067
 
Non-Current Assets:
Property and equipment, net 51,710 47,447
Goodwill 226,863 226,863
Other intangibles, net 141,882 187,398
Deferred tax assets--long-term portion 263,014 255,386
Other non-current assets   20,564           16,367  
Total Non-Current Assets 704,033 733,461
         
TOTAL ASSETS $ 1,164,293         $ 1,113,528  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Current Liabilities:
Accounts payable $ 7,987 $ 21,092
Accrued expenses and other liabilities 67,221 84,256
Deferred revenue--current portion   102,880           88,055  
Total Current Liabilities 178,088 193,403
 
Non-Current Liabilities:
Long-term debt 273,210 272,695
Accrued exit and disposal obligations 3,926 7,360
Liability for uncertain tax positions 4,098 6,873
Deferred revenue--long-term portion 3,073 9,090
Other non-current liabilities   674           -  
Total Non-Current Liabilities 284,981 296,018
         
TOTAL LIABILITIES $ 463,069         $ 489,421  
 
Stockholders' Equity:
Common stock 449 439
Additional paid-in capital 573,819 550,177
Retained earnings 162,752 91,732
Accumulated other comprehensive income (2,830 ) 8,980
Treasury stock   (32,966 )         (27,221 )
Total Stockholders' Equity 701,224 624,107
         
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,164,293         $ 1,113,528  
 
 
           
JDA SOFTWARE GROUP, INC.
2011 FINANCIAL RESULTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
($ in thousands, unaudited)
                 
Year Ended December 31,
2011       2010
 
Cash Flows From Operating Activities:
 
Net income $ 71,020 $ 17,718
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 58,838 58,246
Provision for doubtful accounts - 1,000
Amortization of loan fees 2,351 1,970
Net loss (gain) on disposal of property and equipment 105 (9 )
Stock-based compensation 15,023 11,494
Deferred income taxes 8,487 (1,949 )
Changes in assets and liabilities, net of effects from business acquisition:
Accounts receivable (13,652 ) (2,613 )
Prepaid expenses and other assets (675 ) (5,138 )
Accounts payable (14,132 ) 11,397
Accrued expenses and other liabilities (24,664 ) (4,622 )
Deferred revenue   8,118           (22,322 )
Net cash provided by operating activities $ 110,819         $ 65,172  
 
Cash Flow From Investing Activities:
 
Change in restricted cash 25,470 253,020
Purchase of i2 Technologies, Inc. - (213,427 )
Payment of direct costs related to acquisitions (3,475 ) (3,625 )
Purchase of property and equipment (18,764 ) (16,866 )
Proceeds from disposal of property and equipment   642           634  
Net cash provided by investing activities $ 3,873         $ 19,736  
 
Cash Flow From Financing Activities:
Issuance of common stock--equity plans 7,958 15,370
Purchase of treasury stock and other, net (5,745 ) (5,127 )
Conversion of warrants 671 -
Debt issuance costs   (1,727 )         -  
Net cash provided by financing activities $ 1,157         $ 10,243  
 
Effect of exchange rates on cash and cash equivalents   (1,955 )         493  
Net increase in cash and cash equivalents $ 113,894         $ 95,644  
Cash and Cash Equivalents, Beginning of Period $ 171,618         $ 75,974  
Cash and Cash Equivalents, End of Period $ 285,512         $ 171,618  
 
 
                                           
JDA SOFTWARE GROUP, INC.
Q4 2011 FINANCIAL RESULTS
SUPPLEMENTAL DATA
($ in thousands, unaudited)
 

2010 (1)

      

2011

        Q1     Q2     Q3     Q4     TOTAL       Q1     Q2     Q3     Q4     TOTAL
 
REVENUES:
Software licenses $ 24,437 $ 32,152 $ 16,276 $ 36,681 $ 109,546 $ 31,480 $ 26,915 $ 33,139 $ 33,410 $ 124,944
Subscriptions and other recurring revenues 4,287 5,806 5,758 5,292 21,143 4,994 3,850 3,738 4,181 16,763
Maintenance services   57,060         60,594         64,186         64,401         246,241           64,768         66,100         68,261         67,443         266,572  
Product revenues 85,784 98,552 86,220 106,374 376,930 101,242 96,865 105,138 105,034 408,279
 
Consulting services 43,003 55,255 65,947 56,213 220,418 57,644 59,033 60,392 62,973 240,042
Reimbursed expenses   2,844         4,566         6,276         6,175         19,861           4,720         6,512         6,033         6,167         23,432  
Services revenue   45,847         59,821         72,223         62,388         240,279           62,364         65,545         66,425         69,140         263,474  
Total Revenues $ 131,631       $ 158,373       $ 158,443       $ 168,762       $ 617,209         $ 163,606       $ 162,410       $ 171,563       $ 174,174       $ 671,753  
 
AS REPORTED REVENUE GROWTH RATES:
Software licenses 70 % 21 % 0 % 33 % 29 % 29 % -16 % 104 % -9 % 14 %
Subscriptions and other recurring revenues 343 % 483 % 543 % 422 % 446 % 16 % -34 % -35 % -21 % -21 %
Maintenance services 33 % 37 % 43 % 37 % 37 % 14 % 9 % 6 % 5 % 8 %
Product revenues 47 % 37 % 38 % 41 % 41 % 18 % -2 % 22 % -1 % 8 %
 
Consulting services 87 % 120 % 114 % 96 % 105 % 34 % 7 % -8 % 12 % 9 %
Reimbursed expenses 44 % 86 % 128 % 114 % 97 % 66 % 43 % -4 % 0 % 18 %
Services revenue 83 % 117 % 115 % 98 % 104 % 36 % 10 % -8 % 11 % 10 %
Total Revenues 58 % 59 % 65 % 58 % 60 % 24 % 3 % 8 % 3 % 9 %
 
 
SOFTWARE LICENSE AND SUBSCRIPTION REVENUES:
Americas $ 18,917 $ 27,080 $ 16,590 $ 31,026 $ 93,613 $ 21,104 $ 20,786 $ 27,440 $ 21,282 $ 90,612
EMEA 5,403 4,773 3,405 7,901 21,482 12,612 7,402 7,907 12,694 40,615
ASPAC   4,404         6,105         2,039         3,046         15,594           2,758         2,577         1,530         3,615         10,480  
Total Software Revenues $ 28,724       $ 37,958       $ 22,034       $ 41,973       $ 130,689         $ 36,474       $ 30,765       $ 36,877       $ 37,591       $ 141,707  
 
New sales $ 8,415 $ 8,080 $ 2,603 $ 8,042 $ 27,140 $ 4,819 $ 9,537 $ 7,744 $ 7,518 $ 29,619
Install-base sales   20,309         29,878         19,431         33,931         103,549           31,655         21,228         29,133         30,073         112,088  
Total Software Revenues $ 28,724       $ 37,958       $ 22,034       $ 41,973       $ 130,689         $ 36,474       $ 30,765       $ 36,877       $ 37,591       $ 141,707  
 
As % of Total
New sales 29 % 21 % 12 % 19 % 21 % 13 % 31 % 21 % 20 % 21 %
Install-base sales   71 %       79 %       88 %       81 %       79 %         87 %       69 %       79 %       80 %       79 %
Total Software Revenues 100 % 100 % 100 % 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 % 92.6 % 92.8 % 92.1 %
Maintenance 78.9 % 76.5 % 79.9 % 79.3 % 78.7 % 78.4 % 77.8 % 79.9 % 79.9 % 79.0 %
Services 16.9 % 24.3 % 23.5 % 18.2 % 21.1 % 17.7 % 17.5 % 23.4 % 28.3 % 21.9 %
Overall Gross Profit Margin 59.9 % 60.7 % 55.1 % 60.0 % 58.9 % 58.4 % 55.8 % 60.8 % 62.2 % 59.4 %
 
MISCELLANEOUS
Average sales price (ASP) (3) - TTM $ 618 $ 608 $ 573 $ 601 $ 720 $ 645 $ 786 $ 821
Multiple product deals (3) - TTM 21 18 17 19 21 24 24 21
Large deal count (greater than $1M) (3) - TTM 24 25 25 25 23 26 34 32
Quota carrying sales representatives 96 92 98 92 106 111 104 107
Maintenance Retention 98.3 % 97.3 % 95.9 % 95.6 % 98.5 % 96.7 % 95.7 % 95.5 %
 
 
FREE CASH FLOW (4)
GAAP Operating Cash Flow $ 12,195 $ (2,627 ) $ 29,425 $ 26,179 $ 65,172 $ 58,683 $ 35,477 $ 38,460 $ (21,801 ) $ 110,819
Capital Expenditures   (533 )       (5,864 )       (8,388 )       (2,081 )       (16,866 )         (2,997 )       (1,819 )       (2,809 )       (11,139 )       (18,764 )
Free Cash Flow (5) $ 11,662       $ (8,491 )     $ 21,037       $ 24,098       $ 48,306         $ 55,686       $ 33,658       $ 35,651       $ (32,940 )     $ 92,055  
 
% Growth over prior year -64 % -131 % 32 % 68 % -46 % 378 % 496 % 69 % -237 % 91 %
 
Free Cash Flow $ 11,662 $ (8,491 ) $ 21,037 $ 24,098 $ 48,306 $ 55,686 $ 33,658 $ 35,651 $ (32,940 ) $ 92,055
Litigation settlements   -         -         -         -         -           (37,500 )       -         -         54,000         16,500  
Adjusted Free Cash Flow $ 11,662       $ (8,491 )     $ 21,037       $ 24,098       $ 48,306         $ 18,186       $ 33,658       $ 35,651       $ 21,060       $ 108,555  
 
% Growth over prior year -64 % -131 % 32 % 68 % -46 % 56 % 496 % 69 % -13 % 125 %
 
 
(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 $37.5 million from the settlement with Oracle Corporation. Q4 2011 includes $54.0 million, net cash paid for the settlement with Dillard's.

 
 

"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. The occurrence of future events may involve a number of risks and uncertainties, including, but not limited to, 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.

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. Third, 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.
Investor Relations Contact:
Mike Burnett, 480-308-3392
GVP, Treasury and Investor Relations
mike.burnett@jda.com
Corporate Communications Contact:
Beth Elkin, 469-357-4225
Sr. Director, Corporate Communications
beth.elkin@jda.com