##### Table of Contents



UNITED STATES
SECURITIES 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 March 31, 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
(State or other jurisdiction of 
incorporation or organization)
    
    86-0787377
(I.R.S. Employer
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
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



JDA SOFTWARE GROUP, INC.
 FORM 10-Q
 TABLE OF CONTENTS
 Page No.PART I: INTERIM FINANCIAL INFORMATIONItem 1. Financial Statements (unaudited)Condensed Consolidated Balance Sheets as of March 31, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Income for the Three Months Ended
March 31, 2009 and March 31, 2008
    
    
    4Condensed Consolidated Statements of Comprehensive Income for the Three
Months Ended March 31, 2009 and March 31, 2008
    
    
    5Condensed Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2009 and March 31, 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
    
    
    36Item 4. Controls and Procedures
    
    
    37PART II: OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    37Item 1A. Risk Factors
    
    
    37Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    45Item 3. Defaults Upon Senior Securities
    
    
    45Item 4. Submission of Matters to a Vote of Security Holders
    
    
    45Item 5. Other Information
    
    
    45Item 6. Exhibits
    
    
    45Signature
    
    
    46EX-31.1EX-31.2EX-32.1
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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)
 March 31,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    63,015
    
    
    $
    32,696Accounts receivable, net
    
    
    65,672
    
    
    
    79,353Income tax receivable
    
    
    1,159
    
    
    
    316Deferred tax asset
    
    
    22,893
    
    
    
    22,919Prepaid expenses and other current assets
    
    
    17,336
    
    
    
    14,223Total current assets
    
    
    170,075
    
    
    
    149,507Non-Current Assets:Property and equipment, net
    
    
    42,180
    
    
    
    43,093Goodwill
    
    
    135,275
    
    
    
    135,275Other Intangibles, net:Customer lists
    
    
    116,063
    
    
    
    121,719Acquired software technology
    
    
    23,152
    
    
    
    24,160Trademarks
    
    
    915
    
    
    
    1,335Deferred tax asset
    
    
    43,834
    
    
    
    44,815Other non-current assets
    
    
    4,702
    
    
    
    4,872Total non-current assets
    
    
    366,121
    
    
    
    375,269Total Assets
    
    $
    536,196
    
    
    $
    524,776LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    7,776
    
    
    $
    3,273Accrued expenses and other liabilities
    
    
    37,358
    
    
    
    52,090Deferred revenue
    
    
    81,779
    
    
    
    62,005Total current liabilities
    
    
    126,913
    
    
    
    117,368Non-Current Liabilities:Accrued exit and disposal obligations
    
    
    8,006
    
    
    
    8,820Liability for uncertain tax positions
    
    
    7,211
    
    
    
    7,093Total non-current liabilities
    
    
    15,217
    
    
    
    15,913Total Liabilities
    
    
    142,130
    
    
    
    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
32,914,668 and 32,458,396 shares, respectively
    
    
    329
    
    
    
    325Additional paid-in capital
    
    
    313,158
    
    
    
    305,564Deferred compensation
    
    
    (6,753
    )
    
    
    (2,915
    )Retained earnings
    
    
    58,912
    
    
    
    56,268Accumulated other comprehensive loss
    
    
    (2,631
    )
    
    
    (2,017
    )363,015
    
    
    
    357,225Less treasury stock, at cost, 1,599,308 and 1,307,317 shares, respectively
    
    
    (18,949
    )
    
    
    (15,730
    )Total stockholders equity
    
    
    344,066
    
    
    
    341,495Total liabilities and stockholders equity
    
    $
    536,196
    
    
    $
    524,776
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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 EndedMarch 31,2009
    
    
    2008REVENUES:Software licenses
    
    $
    15,325
    
    
    $
    20,036Maintenance services
    
    
    42,997
    
    
    
    45,812Product revenues
    
    
    58,322
    
    
    
    65,848Consulting services
    
    
    23,034
    
    
    
    25,824Reimbursed expenses
    
    
    1,977
    
    
    
    2,203Service revenues
    
    
    25,011
    
    
    
    28,027Total revenues
    
    
    83,333
    
    
    
    93,875COST OF REVENUES:Cost of software licenses
    
    
    602
    
    
    
    1,053Amortization of acquired software technology
    
    
    1,008
    
    
    
    1,501Cost of maintenance services
    
    
    10,549
    
    
    
    11,196Cost of product revenues
    
    
    12,159
    
    
    
    13,750Cost of consulting services
    
    
    19,382
    
    
    
    19,860Reimbursed expenses
    
    
    1,977
    
    
    
    2,203Cost of service revenues
    
    
    21,359
    
    
    
    22,063Total cost of revenues
    
    
    33,518
    
    
    
    35,813GROSS PROFIT
    
    
    49,815
    
    
    
    58,062OPERATING EXPENSES:Product development
    
    
    12,573
    
    
    
    13,676Sales and marketing
    
    
    14,252
    
    
    
    16,109General and administrative
    
    
    11,026
    
    
    
    11,588Amortization of intangibles
    
    
    6,076
    
    
    
    6,076Restructuring charges and adjustments to acquisition-related reserves
    
    
    1,430
    
    
    
    756Total operating expenses
    
    
    45,357
    
    
    
    48,205OPERATING INCOME
    
    
    4,458
    
    
    
    9,857Interest expense and amortization of loan fees
    
    
    (239
    )
    
    
    (2,494
    )Interest income and other, net
    
    
    (243
    )
    
    
    1,297INCOME BEFORE INCOME TAX PROVISION
    
    
    3,976
    
    
    
    8,660Income tax provision
    
    
    1,332
    
    
    
    3,304NET INCOME
    
    $
    2,644
    
    
    $
    5,356BASIC EARNINGS PER SHARE
    
    $
    .08
    
    
    $
    .16DILUTED EARNINGS PER SHARE
    
    $
    .08
    
    
    $
    .15SHARES USED TO COMPUTE:Basic earnings per share
    
    
    34,961
    
    
    
    33,924Diluted earnings per share
    
    
    35,075
    
    
    
    35,085
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##### Table of Contents



JDA SOFTWARE GROUP, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (in thousands, unaudited)
 Three Months EndedMarch 31,2009
    
    
    2008NET INCOME
    
    $
    2,644
    
    
    $
    5,356OTHER COMPREHENSIVE INCOME (LOSS):Change in fair value of interest rate swap
    
    
    
    
    
    
    (456
    )Foreign currency translation gain (loss)
    
    
    (614
    )
    
    
    1,385Total other comprehensive income
    
    
    (614
    )
    
    
    929COMPREHENSIVE INCOME
    
    $
    2,030
    
    
    $
    6,285
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JDA SOFTWARE GROUP, INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands, unaudited)
 Three MonthsEnded March 31,2009
    
    
    2008OPERATING ACTIVITIES:Net income
    
    $
    2,644
    
    
    $
    5,356Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    9,411
    
    
    
    10,055Amortization of loan origination fees
    
    
    
    
    
    
    164Excess tax benefits from share-based compensation
    
    
    
    
    
    
    (5
    )Share-based compensation expense
    
    
    1,410
    
    
    
    1,182Net gain on disposal of property and equipment
    
    
    (16
    )
    
    
    Deferred income taxes
    
    
    1,007
    
    
    
    (426
    )Changes in assets and liabilities, net of effects from business acquisition:Accounts receivable
    
    
    13,594
    
    
    
    (7,975
    )Income tax receivable
    
    
    (848
    )
    
    
    458Prepaid expenses and other current assets
    
    
    (2,964
    )
    
    
    (2,556
    )Accounts payable
    
    
    4,474
    
    
    
    1,403Accrued expenses and other liabilities
    
    
    (15,422
    )
    
    
    (5,653
    )Income tax payable
    
    
    117
    
    
    
    2,355Deferred revenue
    
    
    19,648
    
    
    
    18,741Net cash provided by operating activities
    
    
    33,055
    
    
    
    23,099INVESTING ACTIVITIES:Payment of direct costs related to acquisitions
    
    
    (817
    )
    
    
    (1,368
    )Purchase of other property and equipment
    
    
    (1,003
    )
    
    
    (2,169
    )Proceeds from disposal of property and equipment
    
    
    16
    
    
    
    69Net cash used in investing activities
    
    
    (1,804
    )
    
    
    (3,468
    )FINANCING ACTIVITIES:Issuance of common stock  equity plans
    
    
    2,506
    
    
    
    43Excess tax benefits from stock-based compensation
    
    
    
    
    
    
    5Purchase of treasury stock
    
    
    (3,219
    )
    
    
    (1,443
    )Principal payments on term loan agreement
    
    
    
    
    
    
    (5,649
    )Net cash used in financing activities
    
    
    (713
    )
    
    
    (7,044
    )Effect of exchange rates on cash
    
    
    (219
    )
    
    
    1,843Net increase in cash and cash equivalents
    
    
    30,319
    
    
    
    14,430CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    32,696
    
    
    
    95,288CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    63,015
    
    
    $
    109,718
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JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
 Three MonthsEnded March 31,2009
    
    
    2008SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for income taxes
    
    $
    1,096
    
    
    $
    761Cash paid for interest
    
    $
    43
    
    
    $
    2,051Cash received for income tax refunds
    
    $
    415
    
    
    $
    205
  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
    2. New Accounting Pronouncements
 Business
Combinations, Business Combinations
 3. Derivative Instruments and Hedging Activities
 Accounting for Derivative Instruments and Hedging Activities,
 8




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Disclosures About Derivative Instruments
and Hedging Activities  an amendment of FASB Statement No. 133 Disclosures About Fair Value of Financial Instruments,
  4. Goodwill and Other Intangibles, net
  March 31, 2009
    
    December 31, 2008GrossEstimated
    
    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
    
    
    
    (67,320
    )
    
    
    183,383
    
    
    
    (61,664
    )Acquired software technology
    
    
    5 to 15 years
    
    
    
    65,847
    
    
    
    (42,695
    )
    
    
    65,847
    
    
    
    (41,687
    )Trademarks
    
    
    3 to 5 years
    
    
    
    5,191
    
    
    
    (4,276
    )
    
    
    5,191
    
    
    
    (3,856
    )254,421
    
    
    
    (114,291
    )
    
    
    254,421
    
    
    
    (107,207
    )$
    389,696
    
    
    $
    (114,291
    )
    
    $
    389,696
    
    
    $
    (107,207
    )
 Retail, Manufacturing and
Distribution, Services Industries.
   Year
    
    Amortization2009
    
    $
    20,4702010
    
    $
    26,2772011
    
    $
    25,9622012
    
    $
    25,5002013
    
    $
    24,810
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Determination of the
Useful Life of Intangible Assets Goodwill and Other Intangible Assets (
 5. Acquisition Reserves
   Impact of
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impact ofChanges in
    
    Balance
    
    
    
    
    
    
    
    
    
    Changes in
    
    BalanceInitial
    
    Adjustments
    
    Cash
    
    Exchange
    
    December 31,
    
    Adjustments
    
    Cash
    
    Exchange
    
    March 31,Description of charge
    
    Reserve
    
    to Reserves
    
    Charges
    
    Rates
    
    2008
    
    to Reserves
    
    Charges
    
    Rates
    
    2009Restructuring
charges under 
EITF 95-3:Office closures, lease
terminations and sublease
costs
    
    $
    29,212
    
    
    
    
    
    
    $
    (2,351
    )
    
    $
    (13,109
    )
    
    $
    (1,034
    )
    
    $
    12,718
    
    
    $
    
    
    
    $
    (763
    )
    
    $
    (8
    )
    
    $
    11,947Employee severance and
termination benefits
    
    
    3,607
    
    
    
    
        
    
    (767
    )


    
    
    (2,465
    )
    
    
    107
    
    
    
    482
    
    
    
    
    
    
    
    
    
    
    
    (20
    )
    
    
    462IT 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
    
    
    
    
    
    
    
    (763
    )
    
    
    (28
    )
    
    
    12,409Direct
costs under 
SFAS No. 141


    13,125
    
    
    
    
    
    
    
    6
    
    
    
    (13,104
    )
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    (26
    )
    
    
    
    
    
    
    1Total
    
    $
    47,394
    
    
    
    

    
    
    $
    (2,890
    )
    
    $
    (30,350
    )
    
    $
    (927
    )
    
    $
    13,227
    
    
    $
    
    
    
    $
    (789
    )
    
    $
    (28
    )
    
    $
    12,410
 Recognition of Liabilities in Connection with a Purchase
Business Combination,
  10




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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
    
    March 31,Description of charge
    
    Reserve
    
    Charges
    
    Rates
    
    2008
    
    to Reserves
    
    Charges
    
    Rates
    
    2009Termination benefits
    
    $
    7,891
    
    
    $
    (5,576
    )
    
    $
    (164
    )
    
    $
    2,151
    
    
    $
    (33
    )
    
    $
    (1,524
    )
    
    $
    (36
    )
    
    $
    558Office closures
    
    
    119
    
    
    
    (77
    )
    
    
    (6
    )
    
    
    36
    
    
    
    (15
    )
    
    
    (15
    )
    
    
    
    
    
    
    6Total
    
    $
    8,010
    
    
    $
    (5,653
    )
    
    $
    (170
    )
    
    $
    2,187
    
    
    $
    (48
    )
    
    $
    (1,539
    )
    
    $
    (36
    )
    
    $
    564
 2007 Restructuring Charges
 JDA Enterprise Architecture
 Impact of
    
    
    
    
    
    
    
    
    
    Impact ofChanges in
    
    Balance
    
    
    
    
    
    Changes in
    
    BalanceInitial
    
    Cash
    
    Exchange
    
    December 31,
    
    Cash
    
    Exchange
    
    March 31,Description of charge
    
    Reserve
    
    Charges
    
    Rates
    
    2008
    
    Charges
    
    Rates
    
    2009Termination benefits
    
    $
    5,908
    
    
    $
    (5,775
    )
    
    $
    5
    
    
    $
    138
    
    
    $
    
    
    
    $
    (6
    )
    
    $
    132Office closures
    
    
    292
    
    
    
    (253
    )
    
    
    
    
    
    
    39
    
    
    
    (3
    )
    
    
    
    
    
    
    36Total
    
    $
    6,200
    
    
    $
    (6,028
    )
    
    $
    5
    
    
    $
    177
    
    
    $
    (3
    )
    
    $
    (6
    )
    
    $
    168
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##### Table of Contents



7. Share-Based Compensation
 Performance Share Awards.
  Restricted Stock Unit Awards.
 12




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##### Table of Contents



Employee Stock Purchase Plan
  8. Treasury Stock Repurchases
  9. Income Taxes
 Accounting for Income Taxes in Interim Periods  an interpretation of APB Opinion No. 28,
 Three Months EndedMarch 31,2009
    
    
    2008Income before income tax provision
    
    $
    3,976
    
    
    $
    8,660Income tax provision at federal statutory rate
    
    $
    1,392
    
    
    $
    3,031State income taxes
    
    
    98
    
    
    
    251Research and development credit
    
    
    (197
    )
    
    
    Foreign tax rate differential
    
    
    (164
    )
    
    
    (139
    )Interest and penalties on uncertain tax positions
    
    
    118
    
    
    
    108Other, net
    
    
    85
    
    
    
    53Income tax provision
    
    $
    1,332
    
    
    $
    3,304Effective tax rate
    
    
    34
    %
    
    
    38
    %
  13




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##### Table of Contents



Accounting for Uncertainty in Income Taxes  an
interpretation of FASB Statement No. 109
    10. Earnings per Share
 Participating Securities and
the Two-Class Method under FASB Statement No. 128, Earnings per Share
  14




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Three MonthsEnded March 31,2009
    
    
    2008Net income and undistributed earnings
    
    $
    2,644
    
    
    $
    5,356Allocation of undistributed earnings:Common Stock
    
    
    2,371
    
    
    
    4,787Series B Preferred Stock
    
    
    273
    
    
    
    569$
    2,644
    
    
    $
    5,356Weighted Average Shares:Common Stock
    
    
    31,357
    
    
    
    30,320Series B Preferred Stock
    
    
    3,604
    
    
    
    3,604Shares  Basic earnings per share
    
    
    34,961
    
    
    
    33,924Dilutive common stock equivalents
    
    
    114
    
    
    
    1,161Shares  Diluted earnings per share
    
    
    35,075
    
    
    
    35,085Basic earnings per share applicable to common shareholders:Common Stock
    
    $
    .08
    
    
    $
    .16Series B Preferred Stock
    
    $
    .08
    
    
    $
    .16Diluted earnings per share applicable to common shareholders
    
    $
    .08
    
    
    $
    .15
 11. Business Segments and Geographic Data
  Three MonthsEnded March 31,2009
    
    
    2008Revenues:Americas
    
    $
    60,578
    
    
    $
    62,849Europe
    
    
    16,653
    
    
    
    22,424Asia/Pacific
    
    
    6,102
    
    
    
    8,602Total revenues
    
    $
    83,333
    
    
    $
    93,875
 15




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##### Table of Contents



March 31,
    
    
    December 31,2009
    
    
    2008Identifiable assets:Americas
    
    $
    406,970
    
    
    $
    402,350Europe
    
    
    93,593
    
    
    
    86,780Asia/Pacific
    
    
    35,633
    
    
    
    35,646Total identifiable assets
    
    $
    536,196
    
    
    $
    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 MonthsEnded March 31,2009
    
    
    2008Revenues:Retail
    
    $
    43,265
    
    
    $
    49,225Manufacturing and Distribution
    
    
    34,958
    
    
    
    39,573Services Industries
    
    
    5,110
    
    
    
    5,077$
    83,333
    
    
    $
    93,875Operating income:Retail
    
    $
    10,006
    
    
    $
    12,995Manufacturing and Distribution
    
    
    12,105
    
    
    
    14,669Services Industries
    
    
    879
    
    
    
    613Other (see below)
    
    
    (18,532
    )
    
    
    (18,420
    )$
    4,458
    
    
    $
    9,857Depreciation:Retail
    
    $
    1,045
    
    
    $
    1,120Manufacturing and Distribution
    
    
    742
    
    
    
    901Services Industries
    
    
    226
    
    
    
    116$
    2,013
    
    
    $
    2,137Other:General and administrative expenses
    
    $
    11,026
    
    
    $
    11,588Amortization of intangible assets
    
    
    6,076
    
    
    
    6,076Restructuring charges
    
    
    1,430
    
    
    
    756$
    18,532
    
    
    $
    18,420
 Retail Manufacturing and Distribution Services Industries
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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 Quarter 2009.
 Guidance for Second Quarter 2009Low End
    
    High EndSoftware revenues
    
    $17.0 million
    
    $22.0 millionTotal revenues
    
    $85.0 million
    
    $92.0 million
    ≥
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##### Table of Contents



CoE, We Will Continue to Focus on Fully
Leveraging Our Investment in the Center of Excellence CoE
 JDA Services, Managed Services Managed Services ≥ CoE
 We Will Continue to Focus on Fully Leveraging Our Investment in the Center of Excellence.
 18




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##### Table of Contents



CoE CoE
 CoE CoE CoE CoE CoE
 CoE
 Ø
    
    Accelerating the development of new solutions and innovations through expanded
R&D bandwidth;Ø
    
    Increasing the breadth and competitiveness of our consulting services through a
blended delivery offering that combines high value on-shore consulting expertise and
project management with lower cost off-shore resources;Ø
    
    Enhancing our customer support service through faster resolution of complex customer issues;Ø
    
    Accelerating the development of training content;Ø
    
    Reducing the total cost of ownership of our solutions;Ø
    
    Improving our competitiveness against service providers that already operate low
cost off-shore facilities, and against small, low-cost on-shore service providers;Ø
    
    Accelerating the development of common business processes between major departments within JDA;Ø
    
    Increasing our ability to take advantage of technology to optimize our internal operations; andØ
    
    Lowering our operating costs and improving our operating margins.
 CoE
 We Will Continue to Actively Look for Strategic Acquisition Opportunities in 2009.
 Share-Based Compensation Expense.
 19




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##### Table of Contents



Three MonthsEnded March 31,2009
    
    
    2008Cost of maintenance services
    
    $
    94
    
    
    $
    87Cost of consulting services
    
    
    211
    
    
    
    151Product development
    
    
    169
    
    
    
    134Sales and marketing
    
    
    381
    
    
    
    315General and administrative
    
    
    555
    
    
    
    495Total stock-based compensation
    
    $
    1,410
    
    
    $
    1,182
 Proposed Amendment to 2005 Performance Incentive Plan.
 Cash Incentive Bonus Plan.
 Treasury Stock Repurchase Program
 Resignation of Chief Financial Officer
 Unvested Shares toType of Award
    
    Original Grant Date
    
    Vest on April 14, 2009Restricted Stock Units
    
    March 13, 2007
    
    
    6,805Restricted Stock Units
    
    May 14, 2007
    
    
    903Performance Shares
    
    February 7, 2008
    
    
    9,600
  20




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##### Table of Contents



Results of Operations
  Three monthsEnded March 31,2009
    
    2008REVENUES:Software licenses
    
    
    18
    %
    
    
    21
    %Maintenance services
    
    
    52
    
    
    
    49Product revenues
    
    
    70
    
    
    
    70Consulting services
    
    
    28
    
    
    
    28Reimbursed expenses
    
    
    2
    
    
    
    2Service revenues
    
    
    30
    
    
    
    30Total revenues
    
    
    100
    
    
    
    100COST OF REVENUES:Cost of software licenses
    
    
    1
    
    
    
    1Amortization of acquired software technology
    
    
    1
    
    
    
    2Cost of maintenance services
    
    
    13
    
    
    
    12Cost of product revenues
    
    
    15
    
    
    
    15Cost of consulting services
    
    
    23
    
    
    
    21Reimbursed expenses
    
    
    2
    
    
    
    2Cost of service revenues
    
    
    25
    
    
    
    23Total cost of revenues
    
    
    40
    
    
    
    38GROSS PROFIT
    
    
    60
    
    
    
    62OPERATING EXPENSES:Product development
    
    
    15
    
    
    
    15Sales and marketing
    
    
    17
    
    
    
    17General and administrative
    
    
    13
    
    
    
    12Amortization of intangibles
    
    
    7
    
    
    
    6Restructuring charges and adjustments to acquisition-related reserves
    
    
    2
    
    
    
    1Total operating expenses
    
    
    54
    
    
    
    51OPERATING INCOME
    
    
    6
    
    
    
    11Interest expense and amortization of loan fees
    
    
    
    
    
    
    (3
    )Other income and other, net
    
    
    
    
    
    
    1INCOME
BEFORE INCOME TAX PROVISON
    
    
    5
    
    
    
    9Income tax provision
    
    
    2
    
    
    
    3NET INCOME
    
    
    3
    %
    
    
    6
    %Gross margin on software licenses
    
    
    96
    %
    
    
    95
    %Gross margin on maintenance services
    
    
    75
    %
    
    
    76
    %Gross margin on product revenues
    
    
    79
    %
    
    
    79
    %Gross margin on service revenues
    
    
    15
    %
    
    
    21
    %
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##### Table of Contents



% ChangeThree Months ended March 31,2009
    
    
    2008 to 2009
    
    
    2008Revenues:Software licenses
    
    $
    15,325
    
    
    
    (24
    )%
    
    $
    20,036Maintenance
    
    
    42,997
    
    
    
    (6
    )%
    
    
    45,812Product revenues
    
    
    58,322
    
    
    
    (11
    )%
    
    
    65,848Service revenues
    
    
    25,011
    
    
    
    (11
    )%
    
    
    28,027Total revenues
    
    
    83,333
    
    
    
    (11
    )%
    
    
    93,875Cost of Revenues:Software licenses
    
    
    602
    
    
    
    (43
    )%
    
    
    1,053Amortization of acquired software technology
    
    
    1,008
    
    
    
    (33
    )%
    
    
    1,501Maintenance services
    
    
    10,549
    
    
    
    (6
    )%
    
    
    11,196Product revenues
    
    
    12,159
    
    
    
    (12
    )%
    
    
    13,750Service revenues
    
    
    21,359
    
    
    
    (3
    )%
    
    
    22,063Total cost of revenues
    
    
    33,518
    
    
    
    (6
    )%
    
    
    35,813Gross Profit
    
    
    49,815
    
    
    
    (14
    )%
    
    
    58,062Operating Expenses:Product development
    
    
    12,573
    
    
    
    (8
    )%
    
    
    13,676Sales and marketing
    
    
    14,252
    
    
    
    (12
    )%
    
    
    16,109General and administrative
    
    
    11,026
    
    
    
    (5
    )%
    
    
    11,58837,851
    
    
    
    (9
    )%
    
    
    41,373Amortization of intangibles
    
    
    6,076
    
    
    
    
    %
    
    
    6,076Restructuring charge
    
    
    1,430
    
    
    
    89
    %
    
    
    756Operating income
    
    $
    4,458
    
    
    
    (55
    %)
    
    $
    9,857Cost of Revenues as a % of related revenues:Software licenses
    
    
    4
    %
    
    
    
    
    
    
    5
    %Maintenance services
    
    
    25
    %
    
    
    
    
    
    
    24
    %Product revenues
    
    
    21
    %
    
    
    
    
    
    
    21
    %Service revenues
    
    
    85
    %
    
    
    
    
    
    
    79
    %Product development as a % of product revenues
    
    
    22
    %
    
    
    
    
    
    
    21
    %
 22




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##### Table of Contents



Business Segments
 Manufacturing
    
    ServicesRetail
    
    & Distribution
    
    Industries2009 vs 2008
    
    2009 vs 2008
    
    2009 vs 2008Software licenses
    
    
    (28
    )%
    
    
    (20
    )%
    
    
    (11
    )%Maintenance services
    
    
    (3
    )%
    
    
    (10
    )%
    
    
    2
    %Product revenues
    
    
    (12
    )%
    
    
    (12
    )%
    
    
    (6
    )%Service revenues
    
    
    (13
    )%
    
    
    (12
    )%
    
    
    11
    %Total revenues
    
    
    (12
    )%
    
    
    (12
    )%
    
    
    1
    %Product development
    
    
    (2
    )%
    
    
    (9
    )%
    
    
    (37
    )%Sales and marketing
    
    
    (17
    )%
    
    
    (12
    )%
    
    
    35
    %Operating income
    
    
    (23
    )%
    
    
    (17
    )%
    
    
    43
    %
 Manufacturing
    
    ServicesRetail
    
    & Distribution
    
    Industries2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008Contribution to total revenues
    
    
    52
    %
    
    
    52
    %
    
    
    42
    %
    
    
    42
    %
    
    
    6
    %
    
    
    6
    %
 Geographical Regions
 The Americas
    
    Europe
    
    Asia/Pacific2009 vs 2008
    
    2009 vs 2008
    
    2009 vs 2008Software licenses
    
    
    (16
    )%
    
    
    (33
    )%
    
    
    (50
    )%Maintenance services
    
    
    (2
    )%
    
    
    (15
    )%
    
    
    (9
    )%Product revenues
    
    
    (6
    )%
    
    
    (20
    )%
    
    
    (24
    )%Service revenues
    
    
    3
    %
    
    
    (41
    )%
    
    
    (39
    )%Total revenues
    
    
    (4
    )%
    
    
    (26
    )%
    
    
    (29
    )%
 The Americas
    
    Europe
    
    Asia/Pacific2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008Contribution to total revenues
    
    
    73
    %
    
    
    67
    %
    
    
    20
    %
    
    
    24
    %
    
    
    7
    %
    
    
    9
    %
 Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008
 Software Licenses
  23




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Software License Results by Region
 Three Months Ended March 31,Region
    
    2009
    
    2008
    

$ Change
    
    % ChangeAmericas
    
    $
    11,105
    
    
    $
    13,241
    
    
    $
    (2,136
    )
    
    
    (16
    )%Europe
    
    
    3,170
    
    
    
    4,711
    
    
    
    (1,541
    )
    
    
    (33
    )%Asia/Pacific
    
    
    1,050
    
    
    
    2,084
    
    
    
    (1,034
    )
    
    
    (50
    )%Total
    
    $
    15,325
    
    
    $
    20,036
    
    
    $
    (4,711
    )
    
    
    (24
    )%
    Software License Results by Reportable Business Segment.
 Retail.
 Manufacturing & Distribution.
 Services Industries.
 24




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##### Table of Contents



Maintenance Services
  Service Revenues
   Cost of Product Revenues
 Cost of Software Licenses.
 Amortization of Acquired Software Technology
 Cost of Maintenance Services. CoE CoE
 Cost of Service Revenues
 CoE CoE CoE
 Gross Profit
  25




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##### Table of Contents



CoE
 Operating Expenses
 CoE,
 Product Development. CoE CoE
 Sales and Marketing.
 General and Administrative. CoE
 Restructuring Charges and Adjustments to Acquisition-Related Reserves. CoE
 26




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##### Table of Contents



Operating Income
  Retail
 Manufacturing and Distribution
 Services Industries
  Other Income (Expense)
 Interest Expense and Amortization of Loan Fees.
 Interest Income and Other, Net.
 Income Tax Provision
 Accounting for Income Taxes in Interim Periods  an interpretation of APB Opinion No. 28,
 27




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##### Table of Contents



Three Months EndedMarch 31,2009
    
    
    2008Income before income tax provision
    
    $
    3,976
    
    
    $
    8,660Income tax provision at federal statutory rate
    
    $
    1,392
    
    
    $
    3,031State income taxes
    
    
    98
    
    
    
    251Research and development credit
    
    
    (197
    )
    
    
    Foreign tax rate differential
    
    
    (164
    )
    
    
    (139
    )Interest and penalties on uncertain tax positions
    
    
    118
    
    
    
    108Other, net
    
    
    85
    
    
    
    53Income tax provision
    
    $
    1,332
    
    
    $
    3,304Effective tax rate
    
    
    34
    %
    
    
    38
    %
   Liquidity and Capital Resources
   Operating activities
 Investing activities
 Financing activities
 28




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##### Table of Contents



Changes in the currency exchange rates of our foreign operations Accounting for Derivative
Instruments and Hedging Activities
 Treasury Stock Repurchases.
  Contractual Obligations
   29




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##### Table of Contents



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. We recognize revenue in accordance with
Statement of Position 97-2 (SOP 97-2), Software Revenue Recognition, as amended and
interpreted by Statement of Position 98-9, Modification of SOP 97-2, Software Revenue
Recognition, with respect to certain transactions, as well as Technical Practice Aids issued
from time to time by the American Institute of Certified Public Accountants, Accounting
Research Bulletin No. 45, Long-Term Construction-Type Contracts (ARB No. 45),Statement
of Position 81-1, Accounting for Performance of Construction-Type and Certain
Production-Type Contracts (SOP 81-1)and Staff Accounting Bulletin No. 104, Revenue
Recognition, that provides further interpretive guidance for public companies on the
recognition, presentation and disclosure of revenue in financial statements.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.
    30




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##### Table of Contents



Reporting Revenue Gross as a Principal versus Net as an Agent
  
    
    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 in accordance with the
requirements of paragraph 8 in SOP 97-2,, as amended. 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. We have applied Statement of Financial Accounting Standards No.
141, Business Combinations (SFAS No. 141) to all of our business combinations during
the three years ended December 31, 2008. SFAS No. 141 (i) required the purchase method of
accounting on all business combinations; (ii) provided guidance on the initial recognition
and measurement of goodwill arising from business combinations and (iii) identified the
types of acquired intangible assets that are to be recognized and reported separate from
goodwill. The total purchase price of each acquired company was allocated to the acquired
assets and liabilities based on their fair values. In business combinations accounted for
using the purchase method of accounting, the amount of purchase price allocated to
in-process research and development (IPR&D) is expensed at the date of acquisition in
accordance with FASB Interpretation No. 4, Applicability of FASB Statement No. 2 to
Business Combinations Accounted for by the Purchase Method, an Interpretation of SFAS No.
2. 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. There was no IPR&D recorded on any of our business combinations during the three
years ended December 31, 2008.
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We adopted Statement of Financial Accounting Standards No. 141 (revised 2007), Business
Combinations (SFAS No. 141(R)) effective January 1, 2009. SFAS No 141(R), which replaces
SFAS No. 141, retains the underlying concepts of SFAS No. 141 that require all business
combinations to be accounted for at fair value under the acquisition method of accounting,
however, SFAS No. 141(R) significantly changes certain aspects of the prior guidance as
follows: (i) acquisition-related costs, except for those costs incurred to issue debt or
equity securities, will no longer be capitalized and must be expensed in the period incurred;
(ii) non-controlling interests will be valued at fair value at the acquisition date; (iii)
in-process research and development 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 no longer be capitalized and must 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 no longer be recorded as an adjustment of
goodwill, but will instead be recognized through income tax expense or directly in
contributed capital. SFAS 141(R) is effective for all business combinations having an
acquisition date on or after the beginning of the first annual period subsequent to December
15, 2008, with the exception of the accounting for valuation allowances on deferred taxes and
acquired tax contingencies. SFAS 141(R) amends SFAS 109 such that adjustments made to
valuation allowances on deferred taxes and acquired tax contingencies associated with
acquisitions that closed prior to the effective date of SFAS 141(R) would also apply the
provisions of SFAS 141(R). The adoption of SFAS No. 141(R) did not have a material impact on
our first quarter 2009 financial statements.
    
    Goodwill and Intangible Assets. Our business combinations typically result 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 required by Statement of Financial
Accounting Standard No. 142, Goodwill and Other Intangible Assets (SFAS No. 142),
requires management to 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 three months ended March 31, 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 as a cost of product
revenues in accordance with Financial Accounting Standards No. 86, Accounting for the Costs
of Computer Software to be Sold, Leased, or Otherwise Marketed (SFAS No. 86). 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 (E3). The Manugistics and E3 trademarks are being amortized on a straight-line
basis over estimated remaining useful lives of 3 years.We adopted Financial Accounting Standards Board Staff Position, 142-3, Determination of the
Useful Life of Intangible Assets (FSP No. 142-3) effective January 1, 2009. FSP No. 142-3
amends the factors that should be considered in developing renewal or extension assumptions
used to determine the useful life of a recognized intangible asset under SFAS No. 142 to
allow an entity to consider its own historical experience in renewing or extending similar
arrangements, adjusted for the entity-specific factors described in SFAS No. 142. In the
absence of that experience, an entity shall consider the assumptions that market participants
would use about renewal or extension (consistent with the highest and best use of the
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##### Table of Contents



asset by market participants). The adoption of FSP No. 142-3 did not have a material impact
on our financial statements.
    
    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 in accordance with Statement of Financial Accounting Standards No. 86,
Accounting for Costs of Computer Software to be Sold, Leased or Otherwise Marketed. 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. We account for income taxes in accordance with Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes (SFAS No. 109). Under SFAS
No. 109, 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 March 31, 2009 approximately $10.9 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. SFAS No. 141(R)requires that
recognition of these uncertain tax positions be treated as a component of income tax expense
rather than as a reduction of goodwill as was the case under SFAS No. 141. During first
quarter 2009, there were no significant changes in our unrecognized tax benefits. It is
reasonably possible that approximately $700,000 of unrecognized tax benefits will be
recognized within the next twelve months. We have placed a valuation allowance against the
Arizona research and development credit as we do not expect to be able to utilize it prior to
its expiration.The FIN 48 adjustments on January 1, 2007 include an accrual of approximately $1.3 million
for interest and penalties. We have treated all subsequent accruals of interest and penalties
related to uncertain tax positions as a component of income tax expense, including accruals
of 118,000 in first quarter 2009 and 108,000 in first quarter 2008. As of March 31, 2009 and
December 31, 2008 there are approximately $2.7 million and $2.6 million, respectively of
interest and penalties accruals related to uncertain tax positions which 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 account for stock-based compensation in accordance with
Statement of Financial Accounting Standard No. 123(R), Share Based Payment (SFAS No.
123(R)).We have a 2005 Performance Incentive Plan (2005 Incentive Plan) that provides 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. With the adoption of
the 2005 Incentive Plan, we terminated all prior stock option plans except for those
provisions necessary to administer the outstanding options. Stock options are no longer used
for share-based compensation. 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
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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 awards are amortized over their applicable vesting
period using graded vesting.On February 5, 2009, the Board approved an amendment to our 2005 Performance Incentive Plan
(2005 Performance Incentive Plan) to increase the number of shares of common stock issuable
under the plan from 1,847,000 to 3,847,000 shares of common stock. We are asking for
shareholder approval of this amendment and the additional 2,000,000 shares at our 2009 Annual
Meeting of Stockholders scheduled to be held on May 11, 2009.Performance Share Awards.The Board approved a stock-based incentive program in 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. The performance share awards vested 50% upon the date of issuance with the remaining
50% vesting ratably over the subsequent 24-month period. The Companys performance against
the defined performance threshold goal was evaluated on a quarterly basis throughout 2008 and
stock-based compensation recognized over requisite service periods that run from the date of
board approval of the 2008 Performance Program through January 2011. 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 $703,000 in first quarter 2008, plus an
additional $148,000 in first quarter 2009. These charges are 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.In January 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
593,659 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
will be evaluated on a quarterly basis throughout 2009 and share-based compensation
recognized over the requisite service periods that run from January 13, 2009 (the date of
board approval of the 2009 Performance Program) through January 2012 pursuant to the guidance
in SFAS No. 123 (R). A deferred compensation charge of $4.8 million was recorded in the
equity section our balance sheet in first quarter 2009, 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 March 31, 2009, based on first quarter 2009 results and
the outlook for the remainder of 2009, management has determined that it is probable the
Company will exceed its minimum adjusted EBITDA performance threshold. As a result, we
recorded $755,000 in stock-based compensation expense related to these awards in first
quarter 2009 on a graded vesting basis. This charge 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.Restricted Stock Unit Awards.In August 2006, the Board approved a special Manugistics
Incentive Plan (Integration Plan). The Integration Plan 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 Integration Plan, 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 Integration Plan 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
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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 March 31,
2009, approximately 33,000 of the restricted stock units granted under the Integration Plan
have been subsequently forfeited. We recognized $1.1 million in share-based compensation
expense related to these performance share awards in 2008, including $332,000 in first
quarter 2008, plus an additional $237,000 in first quarter 2009. These charges are 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.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. No grants have been made under the
Prior Plans since 2004 and 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 March 31, 2009, we had approximately 2.1 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 plan is considered compensatory under
SFAS No. 123(R) 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 and we
recognized $169,000 in share-based compensation expense in connection with such purchases.
This charge 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 account for derivative financial
instruments in accordance with Financial Accounting Standard No. 133, Accounting for
Derivative Instruments and Hedging Activities, as amended (SFAS No. 133). 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 which 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 under SFAS No. 133. The 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.We adopted Financial Accounting Standard No. 161, Disclosures About Derivative Instruments
and Hedging Activities  an amendment of FASB Statement No. 133(SFAS No. 161) effective
January 1, 2009. SFAS No. 161 requires expanded qualitative, quantitative and credit-risk
disclosures about an entitys derivative instruments and hedging activities, but does not
change the scope or the accounting requirements of SFAS No. 133.. SFAS No. 161 also amends
SFAS No. 107, Disclosures About Fair Value of Financial Instruments,to clarify that
derivative instruments are subject to concentration-of-credit-risk disclosures.At March 31, 2009, we had forward exchange contracts with a notional value of $34.4 million
and an associated net forward contract receivable of $110,000. At December 31, 2008, we had
forward exchange contracts with a notional value of $33.5 million and an associated net
forward contract liability of $14,000. These derivatives are not designated as hedging
instruments under SFAS No. 133. 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 foreign currency exchange
contract loss of $318,000 in first quarter
2009 and a foreign currency exchange contract gain of $498,000 in first quarter 2008 which
are included in condensed consolidated statements of income under the caption Interest
income and other, net.
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Item 3: Quantitative and Qualitative Disclosures about Market Risk
  Foreign currency exchange rates
    Interest rates
 36




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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
  37




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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
  38




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We may have difficulty implementing our solutions
 Merchandise Operations Systems,
Store Systems, Demand Management, Replenishment & Fulfillment Revenue Management
  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;
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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
 .
   40




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CoE 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 the war with Iraq, 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
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CoE
 
    
    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;
    
    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
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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;
    
    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;
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
    
    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
 .
  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.
  44




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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Issuer Purchases of Equity Securities:
  Approximate DollarTotal Number of Shares
    
    
    Value of Shares ThatPurchased as Part of
    
    
    May Yet Be PurchasedTotal Number of Shares
    
    
    Average Price Paid per
    
    
    Publicly Announced
    
    
    Under the Plans orPeriod (1)
    
    
    Purchased
    
    
    Share
    
    
    Plans or Programs
    
    
    ProgramsJanuary 1-31, 2009
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    February 1-28, 2009
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    March 1-31, 2009
    
    
    
    229,912
    
    
    $
    10.79
    
    
    
    229,912
    
    
    $
    27,520,113Total
    
    
    
    229,912
    
    
    $
    10.79
    
    
    
    229,912
    
    
    $
    27,520,113
 
 (1)
    
    On March 5, 2009, the Board adopted a program to repurchase up to $30.0 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
 
 Item 4. Submission of Matters to a Vote of Security Holders 
 
 Item 5. Other Information
 
 Item 6. Exhibits
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JDA SOFTWARE GROUP, INC.
 
 SIGNATURE
  JDA SOFTWARE GROUP, INC.Dated: May 8, 2009
    By:
    /s/ Hamish N. BrewerHamish N. BrewerPresident and Chief Executive Officer

(Principal Executive Officer)By:
    /s/ David AlbertyDavid AlbertyGroup Vice President of Accounting, Finance and Treasury

(Acting Principal Financial and Accounting Officer) 46




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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. 47