##### Table of Contents



UNITED STATESSECURITIES AND EXCHANGE COMMISSION
 Washington D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period from            to
 Commission File Number: 0-27876
 JDA SOFTWARE GROUP, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    86-0787377(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 14400 North 87 th Street
Scottsdale, Arizona 85260
(480) 308-3000
(Address and telephone number of principal executive offices)
 þ o
 o o
  Large accelerated filer o

    
    Accelerated filer þ
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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FORM 10-Q
 TABLE OF CONTENTS
 Page No.PART I: INTERIM FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Income for the Three and Six Months Ended
June 30, 2009 and June 30, 2008
    
    
    4Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months
Ended June 30, 2009 and June 30, 2008
    
    
    5Condensed Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 2009 and June 30, 2008
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    40Item 4. Controls and Procedures
    
    
    41PART II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    41Item 1A. Risk Factors
    
    
    41Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    49Item 3. Defaults Upon Senior Securities
    
    
    49Item 4. Submission of Matters to a Vote of Security Holders
    
    
    49Item 5. Other Information
    
    
    50Item 6. Exhibits
    
    
    51Signatures
    
    
    52EX-31.1EX-31.2EX-32.1
  2




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##### Table of Contents



Part I: FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 JDA SOFTWARE GROUP, INC.
  CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts, unaudited)
 June 30,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    92,675
    
    
    $
    32,696Accounts receivable, net
    
    
    62,748
    
    
    
    79,353Income tax receivable
    
    
    1,797
    
    
    
    316Deferred tax asset
    
    
    23,038
    
    
    
    22,919Prepaid expenses and other current assets
    
    
    20,906
    
    
    
    14,223Total current assets
    
    
    201,164
    
    
    
    149,507Non-Current Assets:Property and equipment, net
    
    
    41,971
    
    
    
    43,093Goodwill
    
    
    135,275
    
    
    
    135,275Other intangibles, net:Customer lists
    
    
    110,431
    
    
    
    121,719Acquired software technology
    
    
    22,172
    
    
    
    24,160Trademarks
    
    
    496
    
    
    
    1,335Deferred tax asset
    
    
    39,026
    
    
    
    44,815Other non-current assets
    
    
    5,295
    
    
    
    4,872Total non-current assets
    
    
    354,666
    
    
    
    375,269Total Assets
    
    $
    555,830
    
    
    $
    524,776LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    10,193
    
    
    $
    3,273Accrued expenses and other liabilities
    
    
    39,486
    
    
    
    52,090Deferred revenue
    
    
    79,557
    
    
    
    62,005Total current liabilities
    
    
    129,236
    
    
    
    117,368Non-Current Liabilities:Accrued exit and disposal obligations
    
    
    8,169
    
    
    
    8,820Liability for uncertain tax positions
    
    
    7,447
    
    
    
    7,093Total non-current liabilities
    
    
    15,616
    
    
    
    15,913Total Liabilities
    
    
    144,852
    
    
    
    133,281Redeemable Preferred Stock
    
    
    50,000
    
    
    
    50,000Stockholders Equity:Preferred stock, $.01 par value; authorized 2,000,000 shares; none
issued or outstanding
    
    
    
    
    
    
    Common stock, $.01 par value; authorized, 50,000,000 shares; issued
33,200,430 and 32,458,396 shares, respectively
    
    
    332
    
    
    
    325Additional paid-in capital
    
    
    317,519
    
    
    
    305,564Deferred compensation
    
    
    (6,648
    )
    
    
    (2,915
    )Retained earnings
    
    
    67,847
    
    
    
    56,268Accumulated other comprehensive income (loss)
    
    
    1,557
    
    
    
    (2,017
    )Less treasury stock, at cost, 1,656,209 and 1,307,317 shares, respectively
    
    
    (19,629
    )
    
    
    (15,730
    )Total stockholders equity
    
    
    360,978
    
    
    
    341,495Total liabilities and stockholders equity
    
    $
    555,830
    
    
    $
    524,776
  3




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##### Table of Contents



JDA SOFTWARE GROUP, INC.
  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except earnings per share data, unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008REVENUES:Software licenses
    
    $
    27,585
    
    
    $
    15,546
    
    
    $
    42,910
    
    
    $
    35,582Maintenance services
    
    
    44,371
    
    
    
    46,643
    
    
    
    87,368
    
    
    
    92,455Product revenues
    
    
    71,956
    
    
    
    62,189
    
    
    
    130,278
    
    
    
    128,037Consulting services
    
    
    25,079
    
    
    
    26,640
    
    
    
    48,113
    
    
    
    52,464Reimbursed expenses
    
    
    2,450
    
    
    
    2,967
    
    
    
    4,427
    
    
    
    5,170Service revenues
    
    
    27,529
    
    
    
    29,607
    
    
    
    52,540
    
    
    
    57,634Total revenues
    
    
    99,485
    
    
    
    91,796
    
    
    
    182,818
    
    
    
    185,671COST OF REVENUES:Cost of software licenses
    
    
    1,235
    
    
    
    343
    
    
    
    1,837
    
    
    
    1,396Amortization of acquired software technology
    
    
    980
    
    
    
    1,460
    
    
    
    1,988
    
    
    
    2,961Cost of maintenance services
    
    
    10,984
    
    
    
    11,436
    
    
    
    21,533
    
    
    
    22,632Cost of product revenues
    
    
    13,199
    
    
    
    13,239
    
    
    
    25,358
    
    
    
    26,989Cost of consulting services
    
    
    20,131
    
    
    
    20,909
    
    
    
    39,513
    
    
    
    40,769Reimbursed expenses
    
    
    2,450
    
    
    
    2,967
    
    
    
    4,427
    
    
    
    5,170Cost of service revenues
    
    
    22,581
    
    
    
    23,876
    
    
    
    43,940
    
    
    
    45,939Total cost of revenues
    
    
    35,780
    
    
    
    37,115
    
    
    
    69,298
    
    
    
    72,928GROSS PROFIT
    
    
    63,705
    
    
    
    54,681
    
    
    
    113,520
    
    
    
    112,743OPERATING EXPENSES:Product development
    
    
    12,664
    
    
    
    13,232
    
    
    
    25,237
    
    
    
    26,908Sales and marketing
    
    
    16,170
    
    
    
    15,730
    
    
    
    30,422
    
    
    
    31,839General and administrative
    
    
    11,670
    
    
    
    10,378
    
    
    
    22,696
    
    
    
    21,966Amortization of intangibles
    
    
    6,051
    
    
    
    6,076
    
    
    
    12,127
    
    
    
    12,152Restructuring charges and adjustments to acquisition-
related reserves
    
    
    2,732
    
    
    
    2,799
    
    
    
    4,162
    
    
    
    3,555Total operating expenses
    
    
    49,287
    
    
    
    48,215
    
    
    
    94,644
    
    
    
    96,420OPERATING INCOME
    
    
    14,418
    
    
    
    6,466
    
    
    
    18,876
    
    
    
    16,323Interest expense and amortization of loan fees
    
    
    (386
    )
    
    
    (2,466
    )
    
    
    (625
    )
    
    
    (4,960
    )Interest income and other, net
    
    
    123
    
    
    
    779
    
    
    
    (120
    )
    
    
    2,076INCOME BEFORE INCOME TAXES
    
    
    14,155
    
    
    
    4,779
    
    
    
    18,131
    
    
    
    13,439Income tax provision
    
    
    5,220
    
    
    
    1,706
    
    
    
    6,552
    
    
    
    5,010NET INCOME
    
    $
    8,935
    
    
    $
    3,073
    
    
    $
    11,579
    
    
    $
    8,429BASIC EARNINGS PER SHARE
    
    $
    .26
    
    
    $
    .09
    
    
    $
    .33
    
    
    $
    .25DILUTED EARNINGS PER SHARE
    
    $
    .25
    
    
    $
    .09
    
    
    $
    .33
    
    
    $
    .24SHARES USED TO COMPUTE:Basic earnings per share
    
    
    35,004
    
    
    
    34,214
    
    
    
    34,983
    
    
    
    34,069Diluted earnings per share
    
    
    35,232
    
    
    
    35,263
    
    
    
    35,154
    
    
    
    35,174
  4




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JDA SOFTWARE GROUP, INC.
  CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008NET INCOME
    
    $
    8,935
    
    
    $
    3,073
    
    
    $
    11,579
    
    
    $
    8,429OTHER COMPREHENSIVE INCOME (LOSS):Foreign currency translation adjustment
    
    
    4,188
    
    
    
    (489
    )
    
    
    3,574
    
    
    
    896Change in fair value of interest rate swap
    
    
    
    
    
    
    286
    
    
    
    
    
    
    
    (170
    )Total other comprehensive income (loss)
    
    
    4,188
    
    
    
    (203
    )
    
    
    3,574
    
    
    
    726COMPREHENSIVE INCOME
    
    $
    13,123
    
    
    $
    2,870
    
    
    $
    15,153
    
    
    $
    9,155
  5




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##### Table of Contents



JDA SOFTWARE GROUP, INC.
  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
 Six MonthsEnded June 30,2009
    
    
    2008OPERATING ACTIVITIES:Net income
    
    $
    11,579
    
    
    $
    8,429Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    18,842
    
    
    
    20,173Provision for doubtful accounts
    
    
    300
    
    
    
    Amortization of loan origination fees
    
    
    
    
    
    
    697Excess tax benefits from stock-based compensation
    
    
    
    
    
    
    1,638Share-based compensation expense
    
    
    3,567
    
    
    
    2,224Net gain on disposal of property and equipment
    
    
    (54
    )
    
    
    Deferred income taxes
    
    
    5,670
    
    
    
    2,600Changes in assets and liabilities:Accounts receivable
    
    
    16,820
    
    
    
    5,033Income tax receivable
    
    
    (1,434
    )
    
    
    470Prepaid expenses and other current assets
    
    
    (6,882
    )
    
    
    (253
    )Accounts payable
    
    
    7,139
    
    
    
    (344
    )Accrued expenses and other liabilities
    
    
    (13,507
    )
    
    
    (4,101
    )Income tax payable
    
    
    365
    
    
    
    668Deferred revenue
    
    
    18,107
    
    
    
    14,677Net cash provided by operating activities
    
    
    60,512
    
    
    
    51,911INVESTING ACTIVITIES:Payment of direct costs related to acquisitions
    
    
    (1,489
    )
    
    
    (2,523
    )Purchase of other property and equipment
    
    
    (1,407
    )
    
    
    (4,497
    )Proceeds from disposal of property and equipment
    
    
    54
    
    
    
    69Net cash used in investing activities
    
    
    (2,842
    )
    
    
    (6,951
    )FINANCING ACTIVITIES:Issuance of common stock  equity plans
    
    
    4,642
    
    
    
    5,707Excess tax benefits from stock-based compensation
    
    
    
    
    
    
    (1,638
    )Purchase of treasury stock
    
    
    (3,899
    )
    
    
    (1,663
    )Principal payments on term loan agreement
    
    
    
    
    
    
    (18,649
    )Net cash provided by (used in) financing activities
    
    
    743
    
    
    
    (16,243
    )Effect of exchange rates on cash
    
    
    1,566
    
    
    
    534Net increase in cash and cash equivalents
    
    
    59,979
    
    
    
    29,251CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    32,696
    
    
    
    95,288CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    92,675
    
    
    $
    124,539
  6




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JDA SOFTWARE GROUP, INC.
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(in thousands, unaudited)
 Six MonthsEnded June 30,2009
    
    
    2008SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for income taxes
    
    $
    2,260
    
    
    $
    1,501Cash paid for interest
    
    $
    98
    
    
    $
    4,393Cash received for income tax refunds
    
    $
    722
    
    
    $
    469
  7




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##### Table of Contents



JDA SOFTWARE GROUP, INC.
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(in thousands, except percentages, shares, per share amounts, or as otherwise stated)
(unaudited)
 1. Basis of Presentation
    The FASB Accounting Standards Codification and the Hierarchy of
Generally Accepted Accounting Principlesa replacement of FASB Statement No. 162 . The Hierarchy of Generally Accepted Accounting Principles,
 2. Subsequent Events
  Acquisition of Equity Interest in European-based Strategix Enterprise Technology
  8




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Conversion of Redeemable Preferred Stock
   3. Derivative Instruments and Hedging Activities
   4. Goodwill and Other Intangibles, Net
  June 30, 2009Gross
    
    
    
    
    
    
    December 31, 2008Estimated
    
    
    Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedUseful Lives
    
    
    Amount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationGoodwill
    
    
    
    
    
    $
    135,275
    
    
    $
    
    
    
    $
    135,275
    
    
    $
    Other amortized intangible assets:Customer lists
    
    
    8 to 13 years
    
    
    
    183,383
    
    
    
    (72,952
    )
    
    
    183,383
    
    
    
    (61,664
    )Acquired software technology
    
    
    6 to 15 years
    
    
    
    65,847
    
    
    
    (43,675
    )
    
    
    65,847
    
    
    
    (41,687
    )Trademarks
    
    
    3 to 5 years
    
    
    
    5,191
    
    
    
    (4,695
    )
    
    
    5,191
    
    
    
    (3,856
    )254,421
    
    
    
    (121,322
    )
    
    
    254,421
    
    
    
    (107,207
    )$
    389,696
    
    
    $
    (121,322
    )
    
    $
    389,696
    
    
    $
    (107,207
    )
 9




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##### Table of Contents



Retail, Manufacturing and
Distribution, Services Industries.
   Year
    
    Amortization2009
    
    $
    13,4392010
    
    $
    26,2772011
    
    $
    25,9622012
    
    $
    25,5002013
    
    $
    24,810
 5. Acquisition Reserves
  10




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Impact of
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impact ofChanges in
    
    Balance
    
    
    
    
    
    
    
    
    
    Changes in
    
    BalanceInitial
    
    Adjustments
    
    Cash
    
    Exchange
    
    December 31,
    
    Adjustments
    
    Cash
    
    Exchange
    
    June 30,Description of charge
    
    Reserve
    
    to Reserves
    
    Charges
    
    Rates
    
    2008
    
    to Reserves
    
    Charges
    
    Rates
    
    2009Restructuring charges:Office closures, lease
terminations and sublease
costs
    
    $
    29,212
    
    
    $
    (2,351
    )
    
    $
    (13,109
    )
    
    $
    (1,034
    )
    
    $
    12,718
    
    
    $
    539
    
    
    $
    (1,460
    )
    
    $
    386
    
    
    $
    12,183Employee severance and
termination benefits
    
    
    3,607
    
    
    
    (767
    )
    
    
    (2,465
    )
    
    
    107
    
    
    
    482
    
    
    
    
    
    
    
    (3
    )
    
    
    7
    
    
    
    486IT projects, contract
termination penalties,
capital lease buyouts
and other costs to exit
activities of
Manugistics
    
    
    1,450
    
    
    
    222
    
    
    
    (1,672
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    34,269
    
    
    
    (2,896
    )
    
    
    (17,246
    )
    
    
    (927
    )
    
    
    13,200
    
    
    
    539
    
    
    
    (1,463
    )
    
    
    393
    
    
    
    12,669Direct costs
    
    
    13,125
    
    
    
    6
    
    
    
    (13,104
    )
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    (26
    )
    
    
    
    
    
    
    1Total
    
    $
    47,394
    
    
    $
    (2,890
    )
    
    $
    (30,350
    )
    
    $
    (927
    )
    
    $
    13,227
    
    
    $
    539
    
    
    $
    (1,489
    )
    
    $
    393
    
    
    $
    12,670
  6. Restructuring Charges
 2009 Restructuring Charges
 CoE
 2008 Restructuring Charges
 CoE
 Impact of
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impact ofChanges in
    
    Balance
    
    
    
    
    
    
    
    
    
    Changes in
    
    BalanceInitial
    
    Cash
    
    Exchange
    
    December 31,
    
    Adjustments
    
    Cash
    
    Exchange
    
    June 30,Description of charge
    
    Reserve
    
    Charges
    
    Rates
    
    2008
    
    to Reserves
    
    Charges
    
    Rates
    
    2009Termination benefits
    
    $
    7,891
    
    
    $
    (5,576
    )
    
    $
    (164
    )
    
    $
    2,151
    
    
    $
    (137
    )
    
    $
    (1,644
    )
    
    $
    (12
    )
    
    $
    358Office closures
    
    
    119
    
    
    
    (77
    )
    
    
    (6
    )
    
    
    36
    
    
    
    (15
    )
    
    
    (18
    )
    
    
    
    
    
    
    3Total
    
    $
    8,010
    
    
    $
    (5,653
    )
    
    $
    (170
    )
    
    $
    2,187
    
    
    $
    (152
    )
    
    $
    (1,662
    )
    
    $
    (12
    )
    
    $
    361
 2007 Restructuring Charges
 JDA Enterprise Architecture
 11




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##### Table of Contents



Impact of
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impact ofChanges in
    
    Balance
    
    
    
    
    
    
    
    
    
    Changes in
    
    BalanceInitial
    
    Cash
    
    Exchange
    
    December 31,
    
    Adjustments
    
    Cash
    
    Exchange
    
    March 31,Description of charge
    
    Reserve
    
    Charges
    
    Rates
    
    2008
    
    to Reserves
    
    Charges
    
    Rates
    
    2009Termination benefits
    
    $
    5,908
    
    
    $
    (5,775
    )
    
    $
    5
    
    
    $
    138
    
    
    $
    (61
    )
    
    $
    (74
    )
    
    $
    (3
    )
    
    $
    Office closures
    
    
    292
    
    
    
    (253
    )
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    36Total
    
    $
    6,200
    
    
    $
    (6,028
    )
    
    $
    5
    
    
    $
    177
    
    
    $
    (61
    )
    
    $
    (77
    )
    
    $
    (3
    )
    
    $
    36
 7. Share-Based Compensation
  Performance Share Awards.
  12




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##### Table of Contents



Restricted Stock Unit Awards.
  Employee Stock Purchase Plan
 8. Treasury Stock Repurchases
  9. Income Taxes
  13




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Income before income tax provision
    
    $
    14,155
    
    
    $
    4,779
    
    
    $
    18,131
    
    
    $
    13,439Income tax provision at federal statutory rate
    
    $
    4,954
    
    
    $
    1,673
    
    
    $
    6,346
    
    
    $
    4,704State income taxes
    
    
    427
    
    
    
    113
    
    
    
    525
    
    
    
    364Research and development credit
    
    
    (192
    )
    
    
    
    
    
    
    (389
    )
    
    
    Foreign tax rate differential
    
    
    (140
    )
    
    
    (210
    )
    
    
    (304
    )
    
    
    (349
    )Interest and penalties on uncertain tax positions
    
    
    118
    
    
    
    107
    
    
    
    236
    
    
    
    215Other, net
    
    
    53
    
    
    
    23
    
    
    
    138
    
    
    
    76Income tax provision
    
    $
    5,220
    
    
    $
    1,706
    
    
    $
    6,552
    
    
    $
    5,010Effective tax rate
    
    
    37
    %
    
    
    36
    %
    
    
    36
    %
    
    
    37
    %
       14




---



##### Table of Contents



10. Earnings per Share
   Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    8,935
    
    
    $
    3,073
    
    
    $
    11,579
    
    
    $
    8,429Less dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Undistributed earnings
    
    $
    8,935
    
    
    $
    3,073
    
    
    $
    11,579
    
    
    $
    8,429Allocation of undistributed earnings:Common Stock
    
    $
    8,015
    
    
    $
    2,749
    
    
    $
    10,387
    
    
    $
    7,536Series B Preferred Stock
    
    
    920
    
    
    
    324
    
    
    
    1,192
    
    
    
    893$
    8,935
    
    
    $
    3,073
    
    
    $
    11,579
    
    
    $
    8,429Weighted average shares:Common Stock
    
    
    31,400
    
    
    
    30,610
    
    
    
    31,379
    
    
    
    30,465Series B Preferred Stock
    
    
    3,604
    
    
    
    3,604
    
    
    
    3,604
    
    
    
    3,604Shares  Basic earnings per share
    
    
    35,004
    
    
    
    34,214
    
    
    
    34,983
    
    
    
    34,069Dilutive common stock equivalents
    
    
    228
    
    
    
    1,049
    
    
    
    171
    
    
    
    1,105Shares  Diluted earnings per share
    
    
    35,232
    
    
    
    35,263
    
    
    
    35,154
    
    
    
    35,174Basic earnings per share applicable to:Common Stock
    
    $
    .26
    
    
    $
    .09
    
    
    $
    .33
    
    
    $
    .25Series B Preferred Stock
    
    $
    .26
    
    
    $
    .09
    
    
    $
    .33
    
    
    $
    .25Diluted earnings per share applicable to common shareholders
    
    $
    .25
    
    
    $
    .09
    
    
    $
    .33
    
    
    $
    .24
 11. Business Segments and Geographic Data
  15




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##### Table of Contents



Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:Americas
    
    $
    65,803
    
    
    $
    59,956
    
    
    $
    126,381
    
    
    $
    122,805EMEA
    
    
    20,186
    
    
    
    22,961
    
    
    
    36,839
    
    
    
    45,385Asia/Pacific
    
    
    13,496
    
    
    
    8,879
    
    
    
    19,598
    
    
    
    17,481Total revenues
    
    $
    99,485
    
    
    $
    91,796
    
    
    $
    182,818
    
    
    $
    185,671
 June 30,
    
    
    December 31,2009
    
    
    2008Identifiable assets:Americas
    
    $
    428,830
    
    
    $
    402,350EMEA
    
    
    88,917
    
    
    
    86,780Asia/Pacific
    
    
    38,083
    
    
    
    35,646Total identifiable assets
    
    $
    555,830
    
    
    $
    524,776
   
    
    Retail.This reportable business segment includes all revenues related to applications and
services sold to retail customers.
    
    Manufacturing and Distribution. This reportable business segment includes all revenues
related to applications and services sold to manufacturing and distribution companies,
including process manufacturers, consumer goods manufacturers, life sciences companies, high
tech organizations, oil and gas companies, automotive producers and other discrete
manufacturers involved with government, aerospace and defense contracts.
    
    Services Industries.This reportable business segment includes all revenues related to
applications and services sold to customers in service industries such as travel,
transportation, hospitality, media and telecommunications. The Services Industriessegment is
centrally managed by a team that has global responsibilities for this market.
  Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:Retail
    
    $
    52,327
    
    
    $
    47,795
    
    
    $
    96,699
    
    
    $
    97,020Manufacturing and Distribution
    
    
    35,834
    
    
    
    38,861
    
    
    
    69,685
    
    
    
    78,434Services Industries
    
    
    11,324
    
    
    
    5,140
    
    
    
    16,434
    
    
    
    10,217$
    99,485
    
    
    $
    91,796
    
    
    $
    182,818
    
    
    $
    185,671Operating income:Retail
    
    $
    14,480
    
    
    $
    11,252
    
    
    $
    24,294
    
    
    $
    24,247Manufacturing and Distribution
    
    
    14,647
    
    
    
    13,998
    
    
    
    26,944
    
    
    
    28,667Services Industries
    
    
    5,744
    
    
    
    469
    
    
    
    6,623
    
    
    
    1,082Other (see below)
    
    
    (20,453
    )
    
    
    (19,253
    )
    
    
    (38,985
    )
    
    
    (37,673
    )$
    14,418
    
    
    $
    6,466
    
    
    $
    18,876
    
    
    $
    16,323Depreciation:Retail
    
    $
    1,059
    
    
    $
    1,147
    
    
    $
    2,104
    
    
    $
    2,267Manufacturing and Distribution
    
    
    684
    
    
    
    826
    
    
    
    1,426
    
    
    
    1,727Services Industries
    
    
    327
    
    
    
    224
    
    
    
    553
    
    
    
    340$
    2,070
    
    
    $
    2,197
    
    
    $
    4,083
    
    
    $
    4,334Other:General and administrative expenses
    
    $
    11,670
    
    
    $
    10,378
    
    
    $
    22,696
    
    
    $
    21,966Amortization of intangible assets
    
    
    6,051
    
    
    
    6,076
    
    
    
    12,127
    
    
    
    12,152Restructuring charge
    
    
    2,732
    
    
    
    2,799
    
    
    
    4,162
    
    
    
    3,555$
    20,453
    
    
    $
    19,253
    
    
    $
    38,985
    
    
    $
    37,673
 Retail Manufacturing and Distribution Services Industries
 16




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##### Table of Contents



Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations
 Significant Trends and Developments in Our Business
  Outlook and Guidance for Second Half 2009.
 Guidance for Second Half 2009Low End
    
    High EndSoftware revenues
    
    $43 million
    
    $47 millionTotal revenues
    
    $195 million
    
    $202 million
     17




---



##### Table of Contents



CoE CoE CoE We
Will Continue to Focus on Fully Leveraging Our Investment in the Center of Excellence
 We Have Announced a New Growth and Investment Strategy in China.
 We Have Acquired an Equity Interest in Our Leading European Reseller.
 We Will Continue to Focus on Fully Leveraging Our Investment in the Center of Excellence. CoE CoE CoE
 18




---



##### Table of Contents



CoE
 We Will Continue to Actively Look for Strategic Acquisition Opportunities in 2009.
 Share-Based Compensation Expense.
 Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Cost of maintenance services
    
    $
    174
    
    
    $
    69
    
    
    $
    268
    
    
    $
    156Cost of consulting services
    
    
    260
    
    
    
    104
    
    
    
    471
    
    
    
    255Product development
    
    
    191
    
    
    
    105
    
    
    
    360
    
    
    
    239Sales and marketing
    
    
    688
    
    
    
    188
    
    
    
    1,069
    
    
    
    503General and administrative
    
    
    844
    
    
    
    576
    
    
    
    1,399
    
    
    
    1,071Total stock-based compensation
    
    $
    2,157
    
    
    $
    1,042
    
    
    $
    3,567
    
    
    $
    2,224
  Cash Incentive Bonus Plan.
 Treasury Stock Repurchase Program
 Appointment of New Executive Vice President and Chief Financial Officer.
 Cash Incentive Bonus Plan).
 (i)
    
    50,000 restricted stock units of the Company (each such unit representing the
right to receive upon settlement thereof one share of the Companys common stock), of
which one-third will vest on the first anniversary of Mr. Hathaways employment with the
remainder vesting ratably thereafter over 24 months;
 19




---



##### Table of Contents



(ii)
    
    50,000 restricted stock units of the Company (each such unit representing the
right to receive upon settlement thereof one share of the Companys common stock), which
will, in general, vest ratably if and when the Company achieves certain pre-defined
EBITDA milestones; and
 (iii)
    
    a performance share award with respect to the Companys common stock providing
for the issuance of 25,000 shares of common stock (up to a maximum of 31,250 shares of
common stock) in settlement thereof upon the achievement of the Companys 2009 annual
EBITDA target, as previously established by the Companys Board of Directors.
 Appointment of New Executive Vice President, Sales and Marketing. Services Industries
 Cash Incentive Bonus Plan).
 (i)
    
    50,000 restricted stock units of the Company (each such unit representing the
right to receive upon settlement thereof one share of the Companys common stock), of
which one-third will vest on the first anniversary of Mr. Zintaks employment with the
remainder vesting ratably thereafter over 24 months;(ii)
    
    50,000 restricted stock units of the Company (each such unit representing the
right to receive upon settlement thereof one share of the Companys common stock), which
vest in tranches 45 days following the attainment of certain pre-defined performance
milestones that will be determined within 90 days of the effective date of employment; and(iii)
    
    a performance share award with respect to the Companys common stock providing
for the issuance of 30,000 shares of common stock (up to a maximum of 37,500 shares of
common stock) in settlement thereof upon the achievement of the Companys 2009 annual
EBITDA target, as previously established by the Companys Board of Directors.
  Separation Agreement with Kristen L. Magnuson
 20




---



##### Table of Contents



Shares and AwardsType of Award
    
    Original Grant Date
    

Vesting on April 14, 2009Restricted Stock Units
    
    March 13, 2007
    
    
    6,805Restricted Stock Units
    
    May 14, 2007
    
    
    903Performance Shares
    
    February 7, 2008
    
    
    9,600
  Separation
Agreement with Christopher J. Koziol
 Shares and AwardsType of Award
    
    Original Grant Date
    

Vesting on August 3, 2009Restricted Stock Units
    
    March 13, 2007
    
    
    5,722Restricted Stock Units
    
    May 14, 2007
    
    
    761Performance Shares
    
    February 7, 2008
    
    
    7,856
 21




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##### Table of Contents



Results of Operations
  Three Months
    
    Six MonthsEnded June 30,
    
    Ended June 30,2009
    
    2008
    
    2009
    
    2008REVENUES:Software licenses
    
    
    28
    %
    
    
    17
    %
    
    
    23
    %
    
    
    19
    %Maintenance services
    
    
    44
    %
    
    
    51
    %
    
    
    48
    %
    
    
    50
    %Product revenues
    
    
    72
    %
    
    
    68
    %
    
    
    71
    %
    
    
    69
    %Consulting services
    
    
    25
    %
    
    
    29
    %
    
    
    26
    %
    
    
    28
    %Reimbursed expenses
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %Service revenues
    
    
    28
    %
    
    
    32
    %
    
    
    29
    %
    
    
    31
    %Total revenues
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %COST OF REVENUES:Cost of software licenses
    
    
    1
    %
    
    
    
    %
    
    
    1
    %
    
    
    1
    %Amortization of acquired software technology
    
    
    1
    %
    
    
    2
    %
    
    
    1
    %
    
    
    2
    %Cost of maintenance services
    
    
    11
    %
    
    
    12
    %
    
    
    12
    %
    
    
    12
    %Cost of product revenues
    
    
    13
    %
    
    
    14
    %
    
    
    14
    %
    
    
    15
    %Cost of consulting services
    
    
    20
    %
    
    
    23
    %
    
    
    22
    %
    
    
    22
    %Reimbursed expenses
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %Cost of service revenues
    
    
    23
    %
    
    
    26
    %
    
    
    24
    %
    
    
    25
    %Total cost of revenues
    
    
    36
    %
    
    
    41
    %
    
    
    38
    %
    
    
    40
    %GROSS PROFIT
    
    
    64
    %
    
    
    59
    %
    
    
    62
    %
    
    
    60
    %OPERATING EXPENSES:Product development
    
    
    13
    %
    
    
    14
    %
    
    
    14
    %
    
    
    14
    %Sales and marketing
    
    
    16
    %
    
    
    17
    %
    
    
    17
    %
    
    
    17
    %General and administrative
    
    
    12
    %
    
    
    11
    %
    
    
    12
    %
    
    
    12
    %Amortization of intangibles
    
    
    6
    %
    
    
    7
    %
    
    
    7
    %
    
    
    6
    %Restructuring charges and adjustments to acquisition-related reserves
    
    
    3
    %
    
    
    3
    %
    
    
    2
    %
    
    
    2
    %Total operating expenses
    
    
    50
    %
    
    
    52
    %
    
    
    52
    %
    
    
    51
    %OPERATING INCOME
    
    
    14
    %
    
    
    7
    %
    
    
    10
    %
    
    
    9
    %Interest expense and amortization of loan fees
    
    
    
    %
    
    
    (3
    %)
    
    
    
    %
    
    
    (3
    %)Interest income and other, net
    
    
    
    %
    
    
    1
    %
    
    
    
    %
    
    
    1
    %INCOME BEFORE INCOME TAX PROVISON
    
    
    14
    %
    
    
    5
    %
    
    
    10
    %
    
    
    7
    %Income tax provision
    
    
    5
    %
    
    
    2
    %
    
    
    4
    %
    
    
    3
    %NET INCOME
    
    
    9
    %
    
    
    3
    %
    
    
    6
    %
    
    
    4
    %Gross margin on software licenses
    
    
    96
    %
    
    
    98
    %
    
    
    96
    %
    
    
    96
    %Gross margin on maintenance services
    
    
    75
    %
    
    
    75
    %
    
    
    75
    %
    
    
    75
    %Gross margin on product revenues
    
    
    82
    %
    
    
    79
    %
    
    
    81
    %
    
    
    79
    %Gross margin on service revenues
    
    
    18
    %
    
    
    19
    %
    
    
    16
    %
    
    
    20
    %
 22




---



##### Table of Contents



% Change
    
    
    % ChangeThree Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2009 to 2008
    
    
    2008
    
    
    2009
    
    
    2009 to 2008
    
    
    2008Revenues:Software licenses
    
    $
    27,585
    
    
    
    77
    %
    
    $
    15,546
    
    
    $
    42,910
    
    
    
    21
    %
    
    $
    35,582Maintenance
    
    
    44,371
    
    
    
    (5
    %)
    
    
    46,643
    
    
    
    87,368
    
    
    
    (6
    %)
    
    
    92,455Product revenues
    
    
    71,956
    
    
    
    16
    %
    
    
    62,189
    
    
    
    130,278
    
    
    
    2
    %
    
    
    128,037Service revenues
    
    
    27,529
    
    
    
    (7
    %)
    
    
    29,607
    
    
    
    52,540
    
    
    
    (9
    %)
    
    
    57,634Total revenues
    
    
    99,485
    
    
    
    8
    %
    
    
    91,796
    
    
    
    182,818
    
    
    
    (2
    %)
    
    
    185,671Cost of Revenues:Software licenses
    
    
    1,235
    
    
    
    260
    %
    
    
    343
    
    
    
    1,837
    
    
    
    32
    %
    
    
    1,396Amortization of acquired software technology
    
    
    980
    
    
    
    (33
    %)
    
    
    1,460
    
    
    
    1,988
    
    
    
    (33
    %)
    
    
    2,961Maintenance services
    
    
    10,984
    
    
    
    (4
    %)
    
    
    11,436
    
    
    
    21,533
    
    
    
    (5
    %)
    
    
    22,632Product revenues
    
    
    13,199
    
    
    
    (
    %)
    
    
    13,239
    
    
    
    25,358
    
    
    
    (6
    %)
    
    
    26,989Service revenues
    
    
    22,581
    
    
    
    (5
    %)
    
    
    23,876
    
    
    
    43,940
    
    
    
    (4
    %)
    
    
    45,939Total cost of revenues
    
    
    35,780
    
    
    
    (4
    %)
    
    
    37,115
    
    
    
    69,298
    
    
    
    (5
    %)
    
    
    72,928Gross Profit
    
    
    63,705
    
    
    
    17
    %
    
    
    54,681
    
    
    
    113,520
    
    
    
    1
    %
    
    
    112,743Operating Expenses:Product development
    
    
    12,664
    
    
    
    (4
    %)
    
    
    13,232
    
    
    
    25,237
    
    
    
    (6
    %)
    
    
    26,908Sales and marketing
    
    
    16,170
    
    
    
    3
    %
    
    
    15,730
    
    
    
    30,422
    
    
    
    (4
    %)
    
    
    31,839General and administrative
    
    
    11,670
    
    
    
    12
    %
    
    
    10,378
    
    
    
    22,696
    
    
    
    3
    %
    
    
    21,96640,504
    
    
    
    3
    %
    
    
    39,340
    
    
    
    78,355
    
    
    
    (3
    %)
    
    
    80,713Amortization of intangibles
    
    
    6,051
    
    
    
    
    %
    
    
    6,076
    
    
    
    12,127
    
    
    
    
    %
    
    
    12,152Restructuring charge and adjustments to
acquisition-related reserves
    
    
    2,732
    
    
    
    (2
    %)
    
    
    2,799
    
    
    
    4,162
    
    
    
    17
    %
    
    
    3,555Operating Income
    
    $
    14,418
    
    
    
    123
    %
    
    $
    6,466
    
    
    $
    18,876
    
    
    
    16
    %
    
    $
    16,323Cost of Revenues as a % of related revenues:Software licenses
    
    
    4
    %
    
    
    
    
    
    
    2
    %
    
    
    4
    %
    
    
    
    
    
    
    4
    %Maintenance services
    
    
    25
    %
    
    
    
    
    
    
    25
    %
    
    
    25
    %
    
    
    
    
    
    
    25
    %Product revenues
    
    
    18
    %
    
    
    
    
    
    
    21
    %
    
    
    19
    %
    
    
    
    
    
    
    21
    %Service revenues
    
    
    82
    %
    
    
    
    
    
    
    81
    %
    
    
    84
    %
    
    
    
    
    
    
    80
    %Product Development as a % of product revenues
    
    
    18
    %
    
    
    
    
    
    
    21
    %
    
    
    19
    %
    
    
    
    
    
    
    21
    %
 23




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##### Table of Contents



Manufacturing &Retail
    
    Distribution
    
    Services IndustriesJune 30, 2009 vs. 2008
    
    June 30, 2009 vs. 2008
    
    June 30, 2009 vs. 2008Quarter
    
    Six Months
    
    Quarter
    
    Six Months
    
    Quarter
    
    Six MonthsSoftware licenses
    
    
    45
    %
    
    
    4
    %
    
    
    37
    %
    
    
    4
    %
    
    
    375
    %
    
    
    168
    %Maintenance services
    
    
    (1
    %)
    
    
    (2
    %)
    
    
    (9
    %)
    
    
    (9
    %)
    
    
    (2
    %)
    
    
    
    %Product revenues
    
    
    13
    %
    
    
    
    %
    
    
    (1
    %)
    
    
    (7
    %)
    
    
    216
    %
    
    
    101
    %Service revenues
    
    
    3
    %
    
    
    (2
    %)
    
    
    (26
    %)
    
    
    (24
    %)
    
    
    2
    %
    
    
    6
    %Total revenues
    
    
    9
    %
    
    
    
    %
    
    
    (8
    %)
    
    
    (11
    %)
    
    
    120
    %
    
    
    61
    %Product development
    
    
    8
    %
    
    
    4
    %
    
    
    (11
    %)
    
    
    (11
    %)
    
    
    (40
    %)
    
    
    (39
    %)Sales and marketing
    
    
    5
    %
    
    
    (6
    %)
    
    
    (13
    %)
    
    
    (12
    %)
    
    
    54
    %
    
    
    45
    %Operating income
    
    
    29
    %
    
    
    
    %
    
    
    5
    %
    
    
    (6
    %)
    
    
    1,125
    %
    
    
    512
    %
 Contribution to Total RevenuesRetail
    
    Manufacturing & Distribution
    
    Services IndustriesQuarter
    
    Six Months
    
    Quarter
    
    Six Months
    
    Quarter
    
    Six Months2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    200853%
    
    
    52
    %
    
    
    53
    %
    
    
    52
    %
    
    
    36
    %
    
    
    42
    %
    
    
    38
    %
    
    
    42
    %
    
    
    11
    %
    
    
    6
    %
    
    
    9
    %
    
    
    6
    %
 The Americas
    
    EMEA
    
    Asia/PacificJune 30, 2009 vs. 2008
    
    June 30, 2009 vs. 2008
    
    June 30, 2009 vs. 2008Quarter
    
    Six Months
    
    Quarter
    
    Six Months
    
    Quarter
    
    Six MonthsSoftware licenses
    
    
    61
    %
    
    
    15
    %
    
    
    4
    %
    
    
    (14
    %)
    
    
    355
    %
    
    
    138
    %Maintenance services
    
    
    (1
    %)
    
    
    (1
    %)
    
    
    (14
    %)
    
    
    (15
    %)
    
    
    (7
    %)
    
    
    (8
    %)Product revenues
    
    
    13
    %
    
    
    3
    %
    
    
    (9
    %)
    
    
    (15
    %)
    
    
    113
    %
    
    
    44
    %Service revenues
    
    
    3
    %
    
    
    3
    %
    
    
    (21
    %)
    
    
    (31
    %)
    
    
    (45
    %)
    
    
    (42
    %)Total revenues
    
    
    10
    %
    
    
    3
    %
    
    
    (12
    %)
    
    
    (19
    %)
    
    
    52
    %
    
    
    12
    %
 Contribution to Total RevenuesThe Americas
    
    EMEA
    
    Asia/PacificQuarter
    
    Six Months
    
    Quarter
    
    Six Months
    
    Quarter
    
    Six Months2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    200866%
    
    
    65
    %
    
    
    69
    %
    
    
    66
    %
    
    
    20
    %
    
    
    25
    %
    
    
    20
    %
    
    
    24
    %
    
    
    14
    %
    
    
    10
    %
    
    
    11
    %
    
    
    10
    %
 Three Months Ended June 30, 2009 Compared to Three Months Ended June 30, 2008
 Software License Revenues
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Software License Results by Region
 Three Months Ended June 30,Region
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeAmericas
    
    $
    14,357
    
    
    $
    8,941
    
    
    $
    5,416
    
    
    
    61
    %EMEA
    
    
    5,012
    
    
    
    4,798
    
    
    
    214
    
    
    
    4
    %Asia/Pacific
    
    
    8,216
    
    
    
    1,807
    
    
    
    6,409
    
    
    
    355
    %Total
    
    $
    27,585
    
    
    $
    15,546
    
    
    $
    12,039
    
    
    
    77
    %
    Software License Results by Reportable Business Segment.
 Retail.
 Manufacturing & Distribution.
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Services Industries.
 Maintenance Services
  Service Revenues
 CoE CoE CoE
  Cost of Product Revenues
 Cost of Software Licenses.
 Amortization of Acquired Software Technology
 Cost of Maintenance Services. CoE CoE
 Cost of Service Revenues
 CoE,
 26




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CoE CoE
 Gross Profit
   CoE
 Operating Expenses
 CoE
 Product Development. CoE CoE
 Sales and Marketing.
 General and Administrative.
 27




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CoE CoE
 Restructuring Charges and Adjustments to Acquisition-Related Reserves. CoE
 CoE
 Operating Income
  Retail
 Manufacturing and Distribution
 Services Industries
  Other Income (Expense)
 Interest Expense and Amortization of Loan Fees.
 Interest Income and Other, Net.
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Income Tax Provision
  Three Months EndedJune 30,2009
    
    
    2008Income before income tax provision
    
    $
    14,155
    
    
    $
    4,779Income tax provision at federal statutory rate
    
    $
    4,954
    
    
    $
    1,673State income taxes
    
    
    427
    
    
    
    113Research and development credit
    
    
    (192
    )
    
    
    Foreign tax rate differential
    
    
    (140
    )
    
    
    (210
    )Interest and penalties on uncertain tax positions
    
    
    118
    
    
    
    107Other, net
    
    
    53
    
    
    
    23Income tax provision
    
    $
    5,220
    
    
    $
    1,706Effective tax rate
    
    
    37
    %
    
    
    36
    %
   Six Months Ended June 30, 2009 Compared to Six Months Ended June 30, 2008
 Software Revenues
 Software License Results by Region
 Six      Months Ended June 30,Region
    
    2009
    
    
    2008
    
    
    $Change
    
    
    % ChangeAmericas
    
    $
    25,462
    
    
    $
    22,182
    
    
    $
    3,280
    
    
    
    15
    %EMEA
    
    
    8,182
    
    
    
    9,509
    
    
    
    (1,327
    )
    
    
    (14
    %)Asia/Pacific
    
    
    9,266
    
    
    
    3,891
    
    
    
    5,375
    
    
    
    138
    %Total
    
    $
    42,910
    
    
    $
    35,582
    
    
    $
    7,328
    
    
    
    21
    %
    29




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Software License Results by Reportable Business Segment.
 Retail.
 Manufacturing & Distribution.
 Services Industries.
 Maintenance Services
  Service Revenues
   Cost of Product Revenues
 Cost of Software Licenses.
 Amortization of Acquired Software Technology
 Cost of Maintenance Services. CoE
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Cost of Service Revenues
 CoE, CoE
 Gross Profit
    Operating Expenses
 CoE,
 Product Development. CoE
 Sales and Marketing.
 General and Administrative.
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Restructuring Charges and Adjustments to Acquisition-Related Reserves. CoE
 CoE
 Operating Income
  Retail
 Manufacturing and Distribution
 Services Industries
  Other Income (Expense)
 Interest Expense and Amortization of Loan Fees.
 Interest Income and Other, Net.
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Income Tax Provision
  Six Months EndedJune 30,2009
    
    
    2008Income before income tax provision
    
    $
    18,131
    
    
    $
    13,439Income tax provision at federal statutory rate
    
    $
    6,346
    
    
    $
    4,704State income taxes
    
    
    525
    
    
    
    364Research and development credit
    
    
    (389
    )
    
    
    Foreign tax rate differential
    
    
    (304
    )
    
    
    (349
    )Interest and penalties on uncertain tax positions
    
    
    236
    
    
    
    215Other, net
    
    
    138
    
    
    
    76Income tax provision
    
    $
    6,552
    
    
    $
    5,010Effective tax rate
    
    
    36
    %
    
    
    37
    %
   Liquidity and Capital Resources
   Operating activities
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Investing activities
 Financing activities
 Changes in the currency exchange rates of our foreign operations
 Treasury Stock Repurchases.
  Contractual Obligations CoE
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Critical Accounting Policies
  
    Revenue recognition. Our revenue recognition policy is significant because our revenue
is a key component of our results of operations. In addition, our revenue recognition
determines the timing of certain expenses such as commissions and royalties. We follow
specific and detailed guidelines in measuring revenue; however, certain judgments affect
the application of our revenue policy.
 We license software primarily under non-cancelable agreements and provide related services,
including consulting, training and customer support. Software license revenue is generally
recognized using the residual method when:
 Ø
    
    Persuasive evidence of an arrangement exists and a license agreement has been signed;Ø
    
    Delivery, which is typically FOB shipping point, is complete;Ø
    
    Fees are fixed and determinable and there are no uncertainties surrounding product acceptance;Ø
    
    Collection is considered probable; andØ
    
    Vendor-specific evidence of fair value (VSOE) exists for all undelivered elements.
 Our customer arrangements typically contain multiple elements that include software, options
for future purchases of software products not previously licensed to the customer,
maintenance, consulting and training services. The fees from these arrangements are
allocated to the various elements based on VSOE. Under the residual method, if an arrangement
contains an undelivered element, the VSOE of the undelivered element is deferred and the
revenue recognized once the element is delivered. If we are unable to determine VSOE for any
undelivered element included in an arrangement, we will defer revenue recognition until all
elements have been delivered. In addition, if a software license contains milestones,
customer acceptance criteria or a cancellation right, the software revenue is recognized upon
the achievement of the milestone or upon the earlier of customer acceptance or the expiration
of the acceptance period or cancellation right. For arrangements that provide for significant
services or custom development that are essential to the softwares functionality, the
software license revenue and contracted services are recognized under the percentage of
completion method. We measure progress-to-completion on arrangements involving significant
services or custom development that are essential to the softwares functionality using input
measures, primarily labor hours, which relate hours incurred to date to total estimated hours
at completion. We continually update and revise our estimates of input measures. If our
estimates indicate that a loss will be incurred, the entire loss is recognized in that
period.
 Maintenance services are separately priced and stated in our arrangements. Maintenance
services typically include on-line support, access to our Solution Centers via telephone and
web interfaces, comprehensive error diagnosis and correction, and the right to receive
unspecified upgrades and enhancements, when and if we make them generally available.
Maintenance services are generally billed on a monthly basis and recorded as revenue in the
applicable month, or billed on an annual basis with the revenue initially deferred and
recognized ratably over the maintenance period. VSOE for maintenance services is the price
customers will be required to pay when it is sold separately, which is typically the renewal
rate.
 Consulting and training services are separately priced and stated in our arrangements, are
generally available from a number of suppliers, and are generally not essential to the
functionality of our software products. Consulting services include project management,
system planning, design and implementation, customer configurations, and training. These
services are generally billed bi-weekly on an hourly basis or pursuant to the terms of a
fixed price contract. Consulting services revenue billed on an hourly basis is recognized as
the work is performed. Under fixed price service contracts and milestone-based arrangements
that include services that are not essential to the functionality of our software products,
consulting services revenue is recognized using the proportional performance method. We
measure progress-to-completion under the proportional performance method by using input
measures, primarily labor hours, which relate hours incurred to date to total
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estimated hours
at completion. We continually update and revise our estimates of input measures. If our
estimates indicate that a loss will be incurred, the entire loss is recognized in that
period. Training revenues are included in consulting revenues
in the Companys consolidated statements of income and are recognized once the training
services are provided. VSOE for consulting and training services is based upon the hourly or
per class rates charged when those services are sold separately. We offer hosting services
on certain of our software products under arrangements in which the end users do not take
possession of the software. Revenues from hosting services are included in consulting
revenues, billed monthly and recognized as the services are provided. Revenues from our
hardware reseller business are also included in consulting revenues, reported net (i.e., the
amount billed to a customer less the amount paid to the supplier) and recognized upon
shipment of the hardware.
 Customers are reviewed for creditworthiness before we enter into a new arrangement that
provides for software and/or a service element. We do not sell or ship our software, nor
recognize any license revenue, unless we believe that collection is probable. Payments for
our software licenses are typically due within twelve months from the date of delivery.
Although infrequent, where software license agreements call for payment terms of twelve
months or more from the date of delivery, revenue is recognized as payments become due and
all other conditions for revenue recognition have been satisfied.
 
    
    Accounts Receivable.Consistent with industry practice and to be competitive in the
software marketplace, we typically provide payment terms on most software license sales.
Software licenses are generally due within twelve months from the date of delivery.
Customers are reviewed for creditworthiness before we enter into a new arrangement that
provides for software and/or a service element. We do not sell or ship our software, nor
recognize any revenue unless we believe that collection is probable. For those customers
who are not credit worthy, we require prepayment of the software license fee or a letter of
credit before we will ship our software. We have a history of collecting software payments
when they come due without providing refunds or concessions. Consulting services are
generally billed bi-weekly and maintenance services are billed annually or monthly. For
those customers who are significantly delinquent or whose credit deteriorates, we typically
put the account on hold and do not recognize any further services revenue, and may as
appropriate withdraw support and/or our implementation staff until the situation has been
resolved.
 We do not have significant billing or collection problems. We review each past due account
and provide specific reserves based upon the information we gather from various sources
including our customers, subsequent cash receipts, consulting services project teams, members
of each regions management, and credit rating services such as Dun and Bradstreet. Although
infrequent and unpredictable, from time to time certain of our customers have filed
bankruptcy, and we have been required to refund the pre-petition amounts collected and settle
for less than the face value of their remaining receivable pursuant to a bankruptcy court
order. In these situations, as soon as it becomes probable that the net realizable value of
the receivable is impaired, we provide reserves on the receivable. In addition, we monitor
economic conditions in the various geographic regions in which we operate to determine if
general reserves or adjustments to our credit policy in a region are appropriate for
deteriorating conditions that may impact the net realizable value of our receivables.
 
    
    Business Combinations. All business combinations during the three years ended December
31, 2008 were accounted for using the purchase method of accounting. Under the purchase
method of accounting, the purchase price of each acquired company was allocated to the
acquired assets and liabilities based on their fair values. There was no in-process
research and development (IPR&D) recorded on any of our business combinations during the
three years ended December 31, 2008. IPR&D consists of products or technologies in the
development stage for which technological feasibility has not been established and which we
believe have no alternative use.
 Effective January 1, 2009, all future business combinations will be accounted for at fair
value under the acquisition method of accounting. Under the acquisition method of
accounting, (i) acquisition-related costs, except for those costs incurred to issue debt or
equity securities, will be expensed in the period incurred; (ii) non-controlling interests
will be valued at fair value at the acquisition date; (iii) IPR&D will be recorded at fair
value as an indefinite-lived intangible asset at the acquisition date; (iv) restructuring
costs associated with a business combination will be expensed subsequent to the acquisition
date; and (v) changes in deferred tax asset valuation allowances and income tax
uncertainties after the acquisition date will be recognized through income tax expense or
directly in contributed capital, including any adjustments made to valuation allowances on
deferred taxes and acquired tax contingencies associated with acquisitions that closed prior
January 1, 2009. There were no business combinations in first half 2009.
 
    
    Goodwill and Intangible Assets. Our business combinations have typically resulted in
goodwill and other intangible assets, which affect the amount of future period amortization
expense and potential impairment charges we may incur. The determination of the value of
such intangible assets and the annual impairment tests that we perform require management
to
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make estimates of future revenues, customer retention rates and other assumptions that
affect our consolidated financial
statements.
 Goodwill is tested annually for impairment, or more frequently if events or changes in
business circumstances indicate the asset might be impaired, by comparing a weighted average
of the fair value of future cash flows under the Discounted Cash Flow Method of the Income
Approach and the Guideline Company Method to the carrying value of the goodwill allocated
to our reporting units. We found no indication of impairment of our goodwill balances during
the six months ended June 30, 2009 with respect to the goodwill allocated to our Retail,
Manufacturing and Distributionand Services Industriesreportable business segments and,
absent future indicators of impairment, the next annual impairment test will be performed in
fourth quarter 2009.
 Customer lists are amortized on a straight-line basis over estimated useful lives ranging
from 8 years to 13 years. The values allocated to customer list intangibles are based on the
projected economic life of each acquired customer base, using historical turnover rates and
discussions with the management of the acquired companies. We estimate the economic lives of
these assets using the historical life experiences of the acquired companies as well as our
historical experience with similar customer accounts for products that we have developed
internally. We review customer attrition rates for each significant acquired customer group
on annual basis, or more frequently if events or circumstances change, to ensure the rate of
attrition is not increasing and if revisions to the estimated economic lives are required.
 Acquired software technology is capitalized if the related software product under development
has reached technological feasibility or if there are alternative future uses for the
purchased software. Amortization of software technology is reported in the consolidated
statements of income in cost of revenues under the caption Amortization of acquired software
technology. Software technology is amortized on a product-by-product basis with the
amortization recorded for each product being the greater of the amount computed using (a) the
ratio that current gross revenues for a product bear to the total of current and anticipated
future revenue for that product, or (b) the straight-line method over the remaining estimated
economic life of the product including the period being reported on. The estimated economic
lives of our acquired software technology range from 6 years to 15 years.
 Trademarks have been acquired primarily in the acquisitions of Manugistics Group, Inc. and E3
Corporation. These trademarks are being amortized on a straight-line basis over estimated
remaining useful lives of three and five years, respectively.
 
    
    Product Development.The costs to develop new software products and enhancements to
existing software products are expensed as incurred until technological feasibility has
been established. We consider technological feasibility to have occurred when all planning,
designing, coding and testing have been completed according to design specifications. Once
technological feasibility is established, any additional costs would be capitalized. We
believe our current process for developing software is essentially completed concurrent
with the establishment of technological feasibility, and accordingly, no costs have been
capitalized.
 
    
    Income Taxes. Deferred tax assets and liabilities are recorded for the estimated future
tax effects of temporary differences between the tax basis of assets and liabilities and
amounts reported in the consolidated balance sheets, as well as operating loss and tax
credit carry-forwards. We follow specific and detailed guidelines regarding the
recoverability of any tax assets recorded on the balance sheet and provide valuation
allowances when recovery of deferred tax assets is not considered likely.
 We exercise significant judgment in determining our income tax provision due to transactions,
credits and calculations where the ultimate tax determination is uncertain. Uncertainties
arise as a consequence of the actual source of taxable income between domestic and foreign
locations, the outcome of tax audits and the ultimate utilization of tax credits. Although
we believe our estimates are reasonable, the final tax determination could differ from our
recorded income tax provision and accruals. In such case, we would adjust the income tax
provision in the period in which the facts that give rise to the revision become known.
These adjustments could have a material impact on our income tax provision and our net income
for that period.
 As of June 30, 2009 approximately $11 million of unrecognized tax benefits, substantially all
of which relates to uncertain tax positions associated with the acquisition of Manugistics,
would impact our effective tax rate if recognized. Recognition of these uncertain tax
positions will be treated as a component of income tax expense rather than as a reduction of
goodwill. During the first half 2009, there were no significant changes in our unrecognized
tax benefits. It is reasonably possible that approximately $800,000 of unrecognized tax
benefits will be recognized within the next twelve months. We have placed a
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valuation allowance against the Arizona research and development credit as we do not expect
to be able to utilize it prior to its expiration.
 We treat interest and penalties related to uncertain tax positions as a component of income
tax expense. We have accrued interest and penalties related to uncertain tax positions of
$383,000 and $348,000 in first half 2009 and 2008, respectively. As of June 30, 2009 and
December 31, 2008 there are approximately $3.0 million and $2.6 million, respectively of
interest and penalties accruals related to uncertain tax positions that are reflected in the
consolidated balance sheets under the caption Liability for uncertain tax positions. To
the extent interest and penalties are not assessed with respect to the uncertain tax
positions, the accrued amounts for interest and penalties will be reduced and reflected as a
reduction of the overall tax provision.
 
    
    Stock-Based Compensation. We have a 2005 Incentive Plan that initially provided for the issuance of up to 1,847,000 shares of common stock
to employees, consultants and directors under stock purchase rights, stock bonuses,
restricted stock, restricted stock units, performance awards, performance units and
deferred compensation awards. Our stockholders subsequently approved an
amendment on May 11, 2009 to increase by 2,000,000 shares the maximum number of shares of
common stock that may be issued under the 2005 Incentive Plan. With this amendment, the
number of authorized shares under the 2005 Performance Incentive Plan increased from
1,847,000 to 3,847,000. The 2005 Incentive Plan contains certain restrictions that limit
the number of shares that may be issued and the amount of cash awarded under each type of
award, including a limitation that awards granted in any given year can represent no more
than two percent (2%) of the total number of shares of common stock outstanding as of the
last day of the preceding fiscal year. Awards granted under the 2005 Incentive Plan are in
such form as the Compensation Committee shall from time to time establish and the awards
may or may not be subject to vesting conditions based on the satisfaction of service
requirements or other conditions, restrictions or performance criteria including the
Companys achievement of annual operating goals. Restricted stock and restricted stock
units may also be granted under the 2005 Incentive Plan as a component of an incentive
package offered to new employees or to existing employees based on performance or in
connection with a promotion, and will generally vest over a three-year period, commencing
at the date of grant. We measure the fair value of awards under the 2005 Incentive Plan
based on the market price of the underlying common stock as of the date of grant. The fair
value of each award is amortized over its applicable vesting period using graded vesting
and reflected in the consolidated statements of income under the captions Cost of
maintenance services, Cost of consulting services, Product development, Sales and
marketing, and General and administrative.
 Performance Share Awards.The Board approved a stock-based incentive program for 2008 (2008
Performance Program) that provided for the issuance of contingently issuable performance
share awards under the 2005 Incentive Plan to executive officers and certain other members of
our management team if we were able to achieve a defined performance threshold goal in 2008.
The performance threshold goal was defined as $95 million of adjusted EBITDA (earnings before
interest, taxes, depreciation and amortization), which excludes certain non-routine items.
Under the terms of the 2008 Performance Program, a partial pro-rata issuance of performance
share awards would be made if we achieved a minimum adjusted EBITDA performance threshold.
The Companys actual 2008 adjusted EBITDA performance, which exceeded the defined performance
threshold goal of $95 million, was confirmed by the Board in January 2009 and qualified
participants to receive approximately 106% of their target awards. In total, 222,838
performance share awards were issued in January 2009 with a grant date fair value of $3.9
million that is being recognized as stock-based compensation over requisite service periods
that run from the date of board approval of the 2008 Performance Program through January
2011. The performance share awards vested 50% upon the date of issuance with the remaining
50% vesting ratably over the subsequent 24-month period. A deferred compensation charge of
$3.9 million was recorded in the equity section of our balance sheet during 2008, with a
related increase to additional paid-in capital, for the total grant date fair value of the
awards. We recognized $2.6 million in share-based compensation expense related to these
performance share awards in 2008, including $1.2 million in the six months ended June 30,
2008, plus an additional $294,000 in the six months ended June 30, 2009.
 The Board approved a stock-based incentive program for 2009 (2009 Performance Program). The
2009 Performance Program provides for the issuance of up to 596,000 contingently issuable
performance share awards under the 2005 Incentive Plan to executive officers and certain
other members of our management team if we are able to achieve a defined adjusted EBITDA
performance threshold goal in 2009. Under the terms of the 2009 Performance Program, a
partial pro-rata issuance of performance share awards will be made if we achieve a minimum
adjusted EBITDA performance threshold. The performance share awards, if any, will be issued
after the confirmation of our 2009 financial results in January 2010 and will vest 50% upon
the date of issuance with the remaining 50% vesting ratably over a 24-month period. The
Companys performance against the defined performance threshold goal is being evaluated on a
quarterly basis throughout 2009 and share-based compensation recognized over the requisite
service periods that generally run from January 13, 2009 (the date of
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board approval of the
2009
Performance Program) through January 2012. A deferred compensation charge of $6.8 million
has been recorded in the equity section our balance sheet, with a related increase to
additional paid-in capital, for the total grant date fair value of the current estimated
awards to be issued under the 2009 Performance Program. Although all necessary service and
performance conditions have not been met through June 30, 2009, based on our first half 2009
results and the outlook for the remainder of the year, we have recorded $2.3 million in
stock-based compensation related to these awards in the six months ended June 30, 2009,
including $1.5 million in second quarter 2009. We currently expect to recognize
approximately $4.6 million of this award as stock-based compensation in 2009.
 Restricted Stock Unit Awards.The Board approved a special Manugistics Incentive Plan for
2007 (2007 Integration Program). The 2007 Integration Program provided for the issuance of
contingently issuable restricted stock units under the 2005 Incentive Plan to executive
officers and certain other members of our management team if we were able to successfully
integrate the Manugistics acquisition and achieve a defined performance threshold goal in
2007. The performance threshold goal was defined as $85 million of adjusted EBITDA. Under the
terms of the 2007 Integration Program, a partial pro-rata issuance of restricted stock units
would be made if we achieved a minimum adjusted EBITDA performance threshold. The Board
approved additional contingently issuable restricted stock units under the 2007 Integration
Program for executive officers and new participants in 2007. The Companys actual 2007
adjusted EBITDA performance was confirmed by the Board in January 2008 and qualified
participants for a pro-rata issuance equal to 99.25% of their target awards. In total,
502,935 restricted stock units were issued in January 2008 with a grant date fair value of
$8.1 million. The restricted stock units vested 50% upon the date of issuance with the
remaining 50% vesting ratably over the subsequent 24-month period. Through June 30, 2009,
approximately 33,000 of the restricted stock units granted under the 2007 Integration Program
have been subsequently forfeited. We recognized $1.1 million in share-based compensation
expense related to these performance share awards in 2008, including $591,000 in the six
months ended June 30, 2008, plus an additional $484,000 in six months ended June 30, 2009.
 Stock Option Plans. We maintained various stock option plans through May 2005 (Prior
Plans). The Prior Plans provided for the issuance of shares of common stock to employees,
consultants and directors under incentive and non-statutory stock option grants. Stock
option grants under the Prior Plans were made at a price not less than the fair market value
of the common stock at the date of grant, generally vested over a three to four-year period
commencing at the date of grant and expire in ten years. Stock options are no longer used
for share-based compensation and no grants have been made under the Prior Plans since 2004.
With the adoption of the 2005 Incentive Plan, we terminated all Prior Plans except for those
provisions necessary to administer the outstanding options, all of which are fully vested. As
of June 30, 2009, we had approximately 2.0 million vested stock options outstanding with
exercise prices ranging from $8.56 to $27.50 per share.
 Employee Stock Purchase Plan. An Employee Stock Purchase Plan (2008 Purchase Plan) was
adopted by the Board and approved by stockholders in May 2008. The 2008 Purchase Plan has an
initial reserve of 1,500,000 shares and provides eligible employees with the ability to defer
up to 10% of their earnings for the purchase of our common stock on a semi-annual basis at
85% of the fair market value on the last day of each six-month offering period. The initial
six-month offering period began August 1, 2008. The 2008 Purchase Plan is considered
compensatory and, as a result, stock-based compensation will be recognized on the last day of
each six-month offering period in an amount equal to the difference between the fair value of
the stock on the date of purchase and the discounted purchase price. A total of 100,290
shares of common stock were purchased on February 1, 2009 at a price of $9.52. We recognized
$169,000 in share-based compensation expense in connection with these purchases which is
reflected in the consolidated statements of income under the captions Cost of maintenance
services, Cost of consulting services, Product development, Sales and marketing, and
General and administrative.
 
    
    Derivative Instruments and Hedging Activities. We use derivative financial
instruments, primarily forward exchange contracts, to manage a majority of the foreign
currency exchange exposure associated with net short-term foreign currency denominated
assets and liabilities that exist as part of our ongoing business operations that are
denominated in a currency other than the functional currency of the subsidiary. The
exposures relate primarily to the gain or loss recognized in earnings from the settlement
of current foreign denominated assets and liabilities. We do not enter into derivative
financial instruments for trading or speculative purposes. The forward exchange contracts
generally have maturities of less than 90 days and are not designated as hedging
instruments. Forward exchange contracts are marked-to-market at the end of each reporting
period, with gains and losses recognized in other income offset by the gains or losses
resulting from the settlement of the underlying foreign currency denominated assets and
liabilities.
 At June 30, 2009, we had forward exchange contracts with a notional value of $37.5 million
and an associated net forward contract receivable of $3.2 million. At December 31, 2008, we
had forward exchange contracts with a notional value of
 39




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$33.5 million and an associated net
forward contract liability of $14,000. The forward contract receivables or liabilities are
included in the condensed consolidated balance sheet under the captions, Prepaid expenses
and other current assets or Accrued expenses and other liabilities as appropriate. The
notional value represents the amount of foreign currencies to be purchased or sold at
maturity and does not represent our exposure on these contracts. We recorded a net foreign
currency exchange contract loss of $216,000 in the six months ended June 30, 2009 and a net
foreign currency exchange contract gain of $686,000 in the six months ended June 30, 2008,
which are included in the condensed consolidated statements of income under the caption
Interest Income and other, net.
 
 Item 3: Quantitative and Qualitative Disclosures about Market Risk
  Foreign currency exchange rates
    Interest rates
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Item 4: Controls and Procedures
 Disclosure Controls and Procedures
 Changes in Internal Control Over Financial Reporting.
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  41




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Risks Related To Our Business
 We may misjudge when software sales will be realized
  Economic, political and market conditions can adversely affect our revenue results and
profitability
  We may not receive significant revenues from our current research and development efforts
  We may face liability if our products are defective or if we make errors implementing our products
  42




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We may have difficulty implementing our solutions
   We may have difficulty developing our new Managed Services offering
 Managed Services
 We may not be able to protect our intellectual property
  Third parties may claim we infringe their intellectual property rights
  
    
    be time-consuming, costly and/or result in litigation;
    
    divert managements time and attention from developing our business;
 43




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
    
    require us to pay monetary damages or involve settlement payments, either of which
could be significant;
 
    
    require us to enter into royalty and licensing agreements that we would not normally
find acceptable;
 
    
    require us to stop selling or to redesign certain of our products; or
 
    
    require us to satisfy indemnification obligations to our customers.
  If we lose access to critical third-party software or technology, our costs could increase and the
introduction of new products and product enhancements could be delayed, potentially hurting our
competitive position
 JDA Enterprise Architecture JDA Reporting JDA Analytics Transportation and Logistics Management Portfolio Merchandise Management Merchandise Performance Analysis
 We may face difficulties in our highly competitive markets
 .
   CoE
 44




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CoE
 There are many risks associated with international operations
  
    
    Currency fluctuations, which could significantly increase with our continuing expansion
of the CoEin India;
 
    
    Higher operating costs due to local laws or regulations;
 
    
    Lower consulting margins;
 
    
    Competing against low-cost service providers;
 
    
    Unexpected changes in employment and other regulatory requirements;
 
    
    Tariffs and other trade barriers;
 
    
    Costs and risks of localizing products for foreign countries;
 
    
    Longer accounts receivable payment cycles in certain countries;
 
    
    Potentially negative tax consequences;
 
    
    Difficulties in staffing and managing geographically disparate operations;
 
    
    Greater difficulty in safeguarding intellectual property, licensing and other trade
restrictions;
 
    
    Ability to negotiate and have enforced favorable contract provisions;
 
    
    Repatriation of earnings;
 
    
    The burdens of complying with a wide variety of foreign laws;
 
    
    Anti-American sentiment due to military conflicts and other American policies that may
be unpopular in certain regions;
 
    
    The challenges of finding qualified management for our international operations;
 
    
    General economic conditions in international markets; and
 
    
    Developing and deploying the skills required to service our broad set of product
offerings across the markets we serve.
 CoE
 We may experience expansion delays or difficulties with our CoE in India
 CoE CoE CoE CoE. CoE CoE CoE
 45




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
    
    Unexpected increases in labor costs in India;
 
    
    Terrorist activities in the region;
 
    
    Inability to hire or retain sufficient personnel with the necessary skill sets to
meet our needs;
 
    
    Economic, security and political conditions in India;
 
    
    Inadequate facilities or communications infrastructure; and
 
    
    Local law or regulatory issues.
 We are dependent on key personnel
  We may have difficulty integrating acquisitions
  
    
    If we incur significant debt to finance an acquisition and our combined business does
not perform as expected, we may have difficulty complying with debt covenants;
 
    
    If we use our stock to make an acquisition, it will dilute existing shareholders;
 
    
    We may have difficulty assimilating the operations and personnel of the acquired
company;
 
    
    The challenge to integrate new products and technologies into our sales and marketing
process;
 
    
    We may have difficulty effectively integrating the acquired technologies or products
with our current products and technologies, particularly where such products reside on
different technology platforms, or overlap with our products;
 
    
    Our ongoing business may be disrupted by transition and integration issues;
 
    
    The costs and complexity of integrating the internal IT infrastructure may be greater
than expected and require capital investments;
 
    
    We may not be able to retain key technical and managerial personnel from the acquired
business;
 
    
    We may be unable to achieve the financial and strategic goals for the acquired and
combined businesses;
 
    
    We may have difficulty in maintaining controls, procedures and policies during the
transition and integration;
 
    
    Our relationships with partner companies or third-party providers of technology or
products could be adversely affected;
 
    
    Our relationships with employees and customers could be impaired;
 
    
    Our due diligence process may fail to identify significant issues with product
quality, product architecture, legal or tax contingencies, customer obligations and
product development, among other things;
 
    
    As successor we may be subject to certain liabilities of our acquisition targets; and
 
    
    We may be required to sustain significant exit or impairment charges if products
acquired in business combinations are unsuccessful.
 We may have difficulty completing acquisitions due to adverse conditions in the credit markets
  46




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Government contracts are subject to unique costs, terms, regulations, claims and penalties
  Risks Related To Our Industry
 It may be difficult to identify, adopt and develop product architecture that is compatible with
emerging industry standards
 JDA Enterprise Architecture
  We may be impacted by shifts in the consumer products supply chain
  Risks Related To Our Stock
 Our quarterly operating results may fluctuate significantly, which could adversely affect the price
of our stock
  
    
    The difficulty of predicting demand for our software products and services, including
the size and timing of individual contracts and our ability to recognize revenue with
respect to contracts signed in a given quarter, particularly with respect to our larger
customers;
 47




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
    
    Changes in the length and complexity of our sales cycle, including changes in the
contract approval process at our customers and potential customers that now require a
formal proposal process, a longer decision making period and additional layers of
customer approval, often including authorization of the transaction by senior
executives, boards of directors and significant equity investors;
 
    
    Competitive pricing pressures and competitive success or failure on significant
transactions;
 
    
    Customer order deferrals resulting from the anticipation of new products, economic
uncertainty, disappointing operating results by the customer, management changes,
corporate reorganizations or otherwise;
 
    
    The timing of new software product and technology introductions and enhancements to
our software products or those of our competitors, and market acceptance of our new
software products and technology;
 
    
    Lack of desired features and functionality in our individual products or our suite of
products;
 
    
    Changes in the number, size or timing of new and renewal maintenance contracts or
cancellations;
 
    
    Unplanned changes in our operating expenses;
 
    
    Changes in the mix of domestic and international revenues, or expansion or
contraction of international operations;
 
    
    Our ability to complete fixed price consulting contracts within budget;
 
    
    Foreign currency exchange rate fluctuations;
 
    
    Lower-than-anticipated utilization in our consulting services group as a result of
increased competition, reduced levels of software sales, reduced implementation times
for our products, changes in the mix of demand for our software products, mergers and
consolidations within our customer base, or other reasons; and
 
    
    Our limited ability to reduce costs in the short term to compensate for any
unanticipated shortfall in product or services revenue.
  
    
    Loss on impairment of goodwill and/or other intangible assets due to economic
conditions or an extended decline in the market price of our stock below book value;
 
    
    Changes in the useful lives or the amortization of identifiable intangible assets;
 
    
    Accrual of newly identified pre-merger contingent liabilities, in which case the
related charges could be required to be included in earnings in the period in which the
accrual is determined to the extent it is identified subsequent to the finalization of
the purchase price allocation;
 
    
    Charges to income to eliminate certain JDA pre-merger activities that duplicate those
of the acquired company or to reduce our cost structure; and
 
    
    Changes in deferred tax assets and valuation allowances.
  Anti-takeover provisions in our organizational documents and Delaware law could prevent or delay a
change in control
 .
  48




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Our convertible preferred stock may adversely impact JDA and our common stockholders or have a
material adverse affect on our financial condition and results of operations.
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
 Issuer Purchases of Equity Securities:
  Approximate DollarTotal Number of
    
    Value of SharesShares Purchased
    
    That May Yet Beas Part of Publicly
    
    Purchased UnderTotal Number of
    
    Average Price
    
    Announced Plans
    
    the Plans orPeriod (1)
    
    Shares Purchased
    
    Paid per Share
    
    or Programs
    
    ProgramsApril 1-30, 2009
    
    
    35,803
    
    
    $
    10.94
    
    
    
    35,803
    
    
    $
    27,126,842May 1-31, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    27,126,842June 1-30, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    27,126,842Total
    
    
    35,803
    
    
    $
    10.94
    
    
    
    35,803
 
 (1)
    
    On March 5, 2009, the Board adopted a program to repurchase up to $30 million of our common
stock in the open market or in private transactions at prevailing market prices during the 12-month
period ending March 10, 2010. 
 Item 3.
    
    Defaults Upon Senior Securities Not applicable
 
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
 th
 Proposal No. 1.
 Proposal No. 2.
 Proposal No. 3.
 49




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Item 5.
    
    Other Information
 Jason B. Zintak
        50




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Christopher J. Koziol
  Shares and AwardsType of Award
    
    Original Grant Date
    

Vesting on August 3, 2009Restricted Stock Units
    
    March 13, 2007
    
    
    5,722Restricted Stock Units
    
    May 14, 2007
    
    
    761Performance Shares
    
    February 7, 2008
    
    
    7,856
 
 Item 6.
    
    Exhibits See Exhibits Index
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JDA SOFTWARE GROUP, INC.
  SIGNATURES
  JDA SOFTWARE GROUP, INC.Dated: August 7, 2009
    By:
    /s/ Hamish N. BrewerHamish N. BrewerPresident and Chief Executive Officer
(Principal Executive Officer)By:
    /s/ Peter S. HathawayPeter S. HathawayExecutive Vice President and Chief Financial Officer(Principal Financial and Accounting Officer) 52




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EXHIBIT INDEX
 Exhibit #
    
    Description of Document3.1***
    
    
    
    Third Restated Certificate of Incorporation of the Company
together with Certificate of Amendment dated July 23, 2002.3.2**
    
    
    
    First Amended and Restated Bylaws of JDA Software Group, Inc.3.3****
    
    
    
    Certificate of Designation of rights, preferences,
privileges and restrictions of Series B Convertible Preferred
Stock of JDA Software Group, Inc filed with the Secretary of
State of the State of Delaware on July 5, 2006.3.4*****
    
    
    
    Certificate of Correction filed to correct a certain error
in the Certificate of Designation of rights, preferences,
privileges and restrictions of Series B Convertible Preferred
Stock of JDA Software Group, Inc. filed with the Secretary of
State of the State of Delaware on July 5, 2006.4.1*
    
    
    
    Specimen Common Stock Certificate of JDA Software Group, Inc.31.1
    
    
    
    Rule 13a-14(a) Certification of Chief Executive Officer.31.2
    
    
    
    Rule 13a-14(a) Certification of Chief Financial Officer.32.1
    
    
    
    Certification of Chief Executive Officer and Chief Financial
Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference to the Companys Registration Statement on Form S-1 (File
No. 333-748), declared effective on March 14, 1996.**
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1998, as filed on August 14, 1998.***
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2002, as filed on November 12, 2002.****
    
    Incorporated by reference to the Companys Current Report on Form 8-K dated July 5, 2006,
as filed on July 7, 2006.*****
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 2006, as filed on November 9, 2006. 53