Scottsdale, Ariz. – July 25, 2005 – JDA® Software Group, Inc. today announced financial results for the second quarter ended June 30, 2005. JDA reported total revenues of $54.9 million and software revenues of $15.3 million for second quarter 2005, compared to total revenues of $54.1 million and software revenues of $14.1 million for second quarter 2004, and total revenues of $50.3 million and software revenues of $10.2 million for first quarter 2005.
JDA reported GAAP net income for the second quarter 2005 of $3.6 million, or $0.12 per share, as compared to GAAP net income of $604,000, or $0.02 per share in second quarter 2004. The Company reported adjusted non-GAAP earnings for second quarter 2005 of $0.17 per share, as compared to adjusted non-GAAP earnings per share of $0.04 for second quarter 2004. The non-GAAP earnings results exclude amortization of acquired software technology and intangibles, restructuring charges and adjustments to acquisition-related reserves, and net tax benefits resulting from revisions of tax estimates in prior years and certain foreign tax positions and contingencies, all of which are itemized in the attached schedule of non-GAAP measures of performance.
"At the start of the quarter we talked about having a robust pipeline of opportunities. I am pleased to report that we have been able to convert a number of them into new business with a 50% sequential increase in software license sales delivering solid earnings growth during second quarter 2005," commented Hamish Brewer, JDA Chief Executive Officer. "Of the 78 deals that we closed this past quarter, our wins included four deals over $1 million, 11 multi-product transactions and nine Portfolio Merchandise Operations transactions. With 78% of our software license sales coming from existing customers, our performance clearly proves the winning advantage that our large customer base and market leading product suite can deliver in this highly competitive environment."
"Additionally, I am delighted to report that demand generation for our new PortfolioEnabled® products is proceeding very well. We signed our first major, tier one customer for our new PortfolioEnabled advanced replenishment application, PRO, since its release during the first quarter of 2005 and now have established an impressive list of opportunities. These facts position us very well to achieve more significant growth over the next eighteen months," added Brewer.
Second 2005 Highlights
• Strong Acceptance of New Products on Microsoft .NET: JDA has enjoyed a strong reception for its first release of next generation JDA Portfolio® products. With another two deals closed this quarter for new PortfolioEnabled applications, JDA is now in various stages of implementation with six companies and partnering with Microsoft on joint activities. JDA attributes the strong interest of its product strategy to several factors, including the company’s unique ability to deliver high quality, industry-specific software functionality; visionary technologies and comprehensive services proven to transform how retailers and their suppliers operate, compete and grow.
• Regional Sales Activity: JDA’s Americas; Europe, Middle East and Africa (EMEA) and Asia Pacific regions achieved strong sequential increases of 48%, 15% and 198%, respectively, in software license activity during second quarter 2005. The Americas closed $9.5 million in software license deals in Q2’05, compared to $6.5 million in Q1’05 and $9.9 million in Q2’04. EMEA closed $3.4 million in software license deals in Q2’05, compared to $3.0 million in Q1’05 and $2.9 million in Q2’04. Asia Pacific closed $2.3 million in software license deals in Q2’05, compared to $782,000 in Q1’05 and $1.3 million in Q2’04.
• New Chief Operating Officer Added to Senior Management Team: JDA appointed Christopher J. Koziol to the newly created position of Chief Operating Officer. Koziol, a seasoned technology industry veteran, is the former president and COO of MicroAge, Inc., a Fortune 500 technology systems integrator and wholesaler to leading sales and services organizations.
• Supply Chain Leadership Recognized by Industry: For the fifth consecutive year JDA or its customers have been selected as outstanding examples of strategic thinking and supply chain leadership by the Voluntary Inter-industry Commerce Standards (VICS) Association. JDA won the 2005 VICS Award for Best Third Party Provider for enabling its customers to improve service levels, reduce inventory, increase sales and execute more efficient logistics. As a result of Q2’05 license activity, 275 trading partner pairs rely on JDA solutions to support over $4.5 billion in trade volume, up from more than 230 trading partner pairs in Q2’04.
• Strong Cash Position: JDA ended Q2’05 with $93.9 million in cash and marketable securities as compared to $97.1 million at December 31, 2004. JDA generated $1.7 million in cash flow during Q2’05 as compared to $8.2 million in Q2’04. DSOs were 66 days at the end of Q2’05, compared to 65 days at the end of Q1’05 and 61 days in Q2’04. During Q2’05 JDA also repurchased 590,500 shares of its common stock for $6.5 million.
SIX-MONTH 2005 RESULTS
For the six months ended June 30, 2005, total revenues were $105.1 million compared with $109.3 million for the same period in 2004. Software license revenues decreased 11% to $25.5 million for the first half of 2005, versus $28.7 million in the first half of 2004. JDA reported GAAP net income of $4.3 million or $0.15 per share, as compared to GAAP net income of $167,000 or $0.01 per share in the first half of 2004.
Adjusted non-GAAP earnings for the first half of 2005 were $0.25 per share, as compared to $.11 per share in the first half of 2004. The non-GAAP earnings results exclude amortization of acquired software technology and intangibles, restructuring charges and adjustments to acquisition-related reserves, and net tax benefits resulting from revisions of tax estimates in prior years and certain foreign tax positions and contingencies, all of which are itemized in the attached schedule of non-GAAP measures of performance.
Cash flow from operations was $7.5 million for the first half of 2005 as compared to $15.0 million for the first half of 2004.
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