JDA Software Announces Record Quarterly Revenues

Scottsdale, Arizona – January 25, 2010 – JDA® Software Group, Inc. (NASDAQ: JDAS) today announced financial results for the fourth quarter and year ended December 31, 2009. JDA reported record total revenues of $107.1 million and adjusted EBITDA of $27.3 million in fourth quarter 2009, compared to total revenues of $106.2 million and adjusted EBITDA of $28.0 million in fourth quarter 2008. JDA reported software revenues of $28.6 million for fourth quarter 2009, compared to $34.3 million in fourth quarter 2008, which included an $11.5 million software deal as reported last year. JDA also reported adjusted non-GAAP earnings for fourth quarter 2009 of $0.43 per share, compared to $0.43 per share in fourth quarter 2008. GAAP income applicable to common shareholders for fourth quarter 2009 was $8.5 million or $0.24 per share, compared to a GAAP net loss of $13.5 million or $0.44 per share in fourth quarter 2008.

“During fourth quarter 2009 we achieved record results with 10 software deals in excess of $1.0 million, the best quarter of the year for our Americas and EMEA regions and the highest quarterly revenues in our history,” said JDA CEO Hamish Brewer. “While several competitors stumbled last year, we maintained a strong financial position and enjoyed great momentum with companies of all sizes choosing our proven supply chain solutions. With the industry experiencing a solid holiday period, we look forward to carrying that momentum into 2010.”   

JDA is on track to finalize the i2 acquisition on January 28, 2010. The Company has scheduled an analyst conference call on February 16, 2010 at 11:00 a.m. Eastern time to discuss its 2010 outlook, which JDA expects to make public on the morning of February 16 and post on www.jda.com after releasing to the wire services.

Fourth Quarter 2009 Financial Summary

• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $27.3 million in the fourth quarter 2009, compared to $28.0 million in fourth quarter 2008.
• Adjusted non-GAAP earnings per share for fourth quarter 2009 were $0.43 using 35.0 million fully diluted shares, compared to $0.43 per share in fourth quarter 2008, using 31.1 million fully diluted shares. Adjusted non-GAAP earnings exclude amortization of acquired software technology and intangibles, restructuring charges, stock-based compensation, costs related to the pending acquisition of i2, as well as the costs of the abandoned acquisition in 2008. 
• GAAP income applicable to common shareholders for fourth quarter 2009 was $8.5 million or $0.24 per share, compared to a GAAP net loss of $13.5 million or $0.44 per share in fourth quarter 2008. The net loss for 2008 includes a pre-tax charge of $29.7 million related to an abandoned acquisition.
• DSO was 58 days at the end of fourth quarter 2009, compared to 67 days at the end of fourth quarter 2008.
• Cash flow from operations was $16.0 million in fourth quarter 2009, compared to adjusted non-GAAP cash flow from operations of $2.6 million in fourth quarter 2008, which excludes $26.1 million of costs related to the abandoned acquisition in fourth quarter 2008.
• During fourth quarter 2009 we issued $275 million of 5-year 8 percent senior notes.  The net proceeds were placed in escrow and will be used to fund a portion of the cash merger consideration of the pending acquisition of i2.  
• Cash and cash equivalents were $76.0 million at December 31, 2009, after transferring $17.1 million to restricted cash in connection with the pending acquisition of i2, compared to $32.7 million at December 31, 2008.

Fourth Quarter 2009 Highlights

“The strength of our software sales was evident across the board as we achieved sequential revenue growth in each of our geographic regions, while closing 69 new deals in the quarter,” commented Brewer.

Regional Sales Performance

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

• JDA closed $19.1 million in software deals in its Americas region during fourth quarter 2009, compared to $12.6 million in third quarter 2009 and $27.4 million in fourth quarter 2008, which included one software transaction of $11.5 million. Customers that signed licenses included: Guitar Center, Inc., Hibbett Sports, Inc., The Dress Barn, Inc., Revlon Consumer Products Corporation, Schwan’s Shared Services, LLC and Grupo Empressarial SJ SA de CV.
• Software sales in JDA’s Europe, Middle East and Africa (EMEA) region were $6.4 million in fourth quarter 2009, compared to $4.1 million in third quarter 2009 and $5.6 million in fourth quarter 2008. New software deals in the EMEA region included: Merck Serono S.A., KITS France, Marks & Spencer plc, PEP, Al Othaim Commercial Company, Massdiscounters t/a Game and Dion Wired.
• JDA’s Asia Pacific region posted software sales of $3.1 million in fourth quarter 2009, compared to $542,000 in third quarter 2009 and $1.3 million in fourth quarter 2008. Wins in this region included: Parle Products Pvt Ltd., SM Retail (Shoemart Philippines), Target Australia Pty Ltd. and Nestlé Philippines, Inc.
• Record Attendance at JDA EMEA User Conference: JDA enjoyed the largest attendance ever at its JDAConnect 2009 conference. This record participation was unexpected with the tight expense controls that are in place across the board. The conference was held on October 21-22 in London and brought together members of the JDA customer community, primarily based in its EMEA region.

Fiscal 2009 Results

• Total revenues of $385.8 million and software revenues of $88.8 million for the 12 months ended December 31, 2009, compared to total revenues of $390.3 million and software revenues of $92.9 million for the 12 months ended December 31, 2008.
• Adjusted EBITDA was $96.8 million for the 12 months ended December 31, 2009, compared to $97.4 million for the 12 months ended December 31, 2008.
• Adjusted non-GAAP earnings for the 12 months ended December 31, 2009 were $1.56 per share, compared to adjusted non-GAAP earnings per share of $1.47 for the 12 months ended December 31, 2008, and exclude amortization of acquired software technology and intangibles, restructuring charges, stock-based compensation, costs related to the pending acquisition of i2, as well as the costs of the abandoned acquisition of i2 in 2008. 
• GAAP income applicable to common shareholders for the 12 months ended December 31, 2009 was $17.7 million or $0.50 per share, as compared to GAAP income applicable to common shareholders of $3.1 million or $0.09 per share in the 12 months ended December 31, 2008.
• Cash flow from operations in the 12 months ended December 31, 2009 was $96.5 million, compared to adjusted non-GAAP cash flow from operations of $73.9 million in the 12 months ended December 31, 2008, which excludes $26.8 million of costs related to the abandoned i2 acquisition in fourth quarter 2008.

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 fourth quarter and year ended December 31, 2009. To participate in the call, dial 1-877-941-2069 (United States) or 1-480-629-9713 (International) and ask the operator for the "JDA Software Group, Inc. Fourth Quarter 2009 Earnings Conference Call." A live audio webcast of the conference call can be accessed by logging onto www.jda.com in the Investor Relations section.

A replay of the conference call will begin on January 25, 2010 at 8:00 p.m. Eastern time and will end on February 25, 2010. To hear a replay of the call over the Internet, access JDA’s Web site at www.jda.com.

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 nearly 6,000 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.

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JDA Investor Relations Contacts:
Pete Hathaway, Executive Vice President/Chief Financial Officer
480-308-3000

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

 
“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 will maintain a strong financial position and carry the momentum of its 2009 operating performance into 2010, and our belief that we are on target to finalize the i2 acquisition on January 28, 2010. 

These statements reflect management’s current beliefs, assumptions and expectations and are subject to a number of factors that may cause actual results to differ materially. These factors include but are not limited to: the unprecedented volatility in the global economy; the risk that the future business operations of i2 will not be successful; the risk that we will not realize all of the anticipated benefits from our acquisition of i2; the risk that customer retention and revenue expansion goals for the i2 transaction will not be met and that disruptions from the i2 transaction will harm relationships with customers, employees and suppliers; the risk that we will not successfully raise adequate financing for the intended structure; the risk that if our intended financing structure is not successful that our alternative financing structure will not be successful; the risk that unexpected costs will be incurred; the outcome of litigation and regulatory proceedings to which we may be a party; actions of competitors; changes and developments affecting our industry; quarterly or cyclical variations in financial results; development of new products and services; interest rates and cost of borrowing; our ability to protect our intellectual property rights; our ability to maintain and improve cost efficiency of operations, including savings from restructuring actions; changes in foreign currency exchange rates; changes in economic conditions, political conditions, trade protection measures, licensing requirements and tax matters in the foreign countries in which we do business; reliance on third parties for manufacturing of products and provision of services; and other factors that are set forth in the “Risk Factors” section and other sections of our 2009 Annual Report on Form 10-K and i2’s 2009 Annual Report on Form 10-K filed with the Securities and Exchange Commission. Neither JDA nor i2 assumes any obligation to update any forward-looking statements as a result of new information or future events or developments, except as required by law.

This communication is being made in respect of the proposed transaction involving JDA and i2. In connection with the proposed transaction, JDA has filed with the Securities and Exchange Commission a Registration Statement on Form S-4 containing a Proxy Statement of i2 and a Prospectus of JDA, and each of JDA and i2 have filed, and plan to file, with the Securities and Exchange Commission other documents regarding the proposed transaction. The definitive Proxy Statement/Prospectus has been mailed to stockholders of i2. INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of the Registration Statement and the Proxy Statement/Prospectus and other documents filed with the Securities and Exchange Commission by JDA and i2 through the website maintained by the Securities and Exchange Commission at www.sec.gov. In addition, investors and security holders may obtain free copies of the Registration Statement and Proxy Statement/Prospectus and other documents filed with the Securities and Exchange Commission from JDA by directing a request to JDA Software Group, Inc., 14400 North 87th Street, Scottsdale, Arizona 85260, Attention: Investor Relations (telephone: (480) 308-3000) or going to JDA’s corporate website at www.jda.com, or from i2 by directing a request to i2 Technologies, Inc., One i2 Place, 11701 Luna Road, Dallas, Texas 75234, Attention: Investor Relations (telephone (469) 357-1000) or going to i2’s corporate website at www.i2.com.

JDA, i2, and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding JDA’s directors and executive officers is set forth in JDA’s proxy statement for its 2009 Annual Meeting of Stockholders, which was filed with the Securities and Exchange Commission on April 7, 2009, and Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2009. Information regarding i2’s directors and executive officers is set forth in i2’s proxy statement for its 2009 Annual Meeting of Stockholders, which was filed with the Securities and Exchange Commission on April 28, 2009, and Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 12, 2009. Additional information regarding the interests of such potential participants is included in the Proxy Statement/Prospectus and the other relevant documents filed with the Securities and Exchange Commission.

Use of Non-GAAP Financial Information

This press release and the related conference call contain non-GAAP financial measures. In evaluating the Company’s performance, management uses certain non-GAAP financial measures to supplement consolidated financial statements prepared under GAAP. Management’s presentation of non-GAAP financial measures is intended to be supplemental in nature and should not be considered in isolation or as a substitute for the most directly comparable GAAP measures. 

Use and Economic Substance of Non-GAAP Financial Measures Used by JDA

The Company uses non-GAAP measures of performance, including adjusted operating income, EBITDA (earnings before interest, taxes, depreciation and amortization) and earnings per share, in its public statements.  Management uses, and chooses to disclose, these non-GAAP financial measures because (i) such measures provide an additional analytical tool to clarify the Company’s results from operations and help the Company to identify underlying trends in its results of operations; (ii) the Company uses non-GAAP earnings measures, including EBITDA, as a measure of profitability because such measures help the Company compare its performance on a consistent basis across time periods; and (iii) these non-GAAP measures are employed by the Company’s management in its own evaluation of performance and are utilized in financial and operational decision making processes, such as budget planning and forecasting. The Company also internally uses adjusted EBITDA measures for determining (a) compliance with certain financial covenants in its credit agreement and (b) executive and employee compensation. Set forth below are additional reasons why specific items are excluded from the Company’s non-GAAP financial measures:  

• Amortization charges for acquired technology are excluded because they result from prior acquisitions, rather than ongoing operations, and absent additional acquisitions, are expected to decline over time.
• Amortization charges for other intangibles are excluded because they are non-cash expenses, and while tangible and intangible assets support our business, we do not believe the related amortization costs are directly attributable to the operating performance of our business. 
• Restructuring charges 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.
• The direct costs associated with the pending acquisition of i2 and the abandoned acquisition of i2 in 2008 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. 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.