##### 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 September 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
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




---



##### 



FORM 10-Q
 TABLE OF CONTENTS
 Page No.PART I: INTERIM FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (unaudited)Condensed Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008
    
    
    3Condensed Consolidated Statements of Income for the Three and Nine Months Ended
September 30, 2009 and September 30, 2008
    
    
    4Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months
Ended September 30, 2009 and September 30, 2008
    
    
    5Condensed Consolidated Statements of Cash Flows for the Nine Months Ended 

September 30, 2009 and September 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
    
    
    39Item 4.
    
    Controls and Procedures
    
    
    40PART II: OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    41Item 1A.
    
    Risk Factors
    
    
    41Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    48Item 3.
    
    Defaults Upon Senior Securities
    
    
    49Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    49Item 5.
    
    Other Information
    
    
    49Item 6.
    
    Exhibits
    
    
    49Signatures
    
    
    50EX-10.1EX-10.2EX-10.4EX-10.5EX-31.1EX-31.2EX-32.1
  2




---



##### 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)
 September 30,
    
    
    December 31,2009
    
    
    2008ASSETSCurrent Assets:Cash and cash equivalents
    
    $
    85,477
    
    
    $
    32,696Accounts receivable, net
    
    
    60,236
    
    
    
    79,353Income tax receivable
    
    
    2,298
    
    
    
    316Deferred tax asset
    
    
    23,221
    
    
    
    22,919Prepaid expenses and other current assets
    
    
    18,292
    
    
    
    14,223Total current assets
    
    
    189,524
    
    
    
    149,507Non-Current Assets:Property and equipment, net
    
    
    41,608
    
    
    
    43,093Goodwill
    
    
    135,275
    
    
    
    135,275Other intangibles, net:Customer lists
    
    
    104,848
    
    
    
    121,719Acquired software technology
    
    
    21,206
    
    
    
    24,160Trademarks
    
    
    326
    
    
    
    1,335Deferred tax asset
    
    
    35,996
    
    
    
    44,815Other non-current assets
    
    
    7,272
    
    
    
    4,872Total non-current assets
    
    
    346,531
    
    
    
    375,269Total Assets
    
    $
    536,055
    
    
    $
    524,776LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable
    
    $
    8,574
    
    
    $
    3,273Accrued expenses and other liabilities
    
    
    39,381
    
    
    
    52,090Deferred revenue
    
    
    71,852
    
    
    
    62,005Total current liabilities
    
    
    119,807
    
    
    
    117,368Non-Current Liabilities:Accrued exit and disposal obligations
    
    
    7,269
    
    
    
    8,820Liability for uncertain tax positions
    
    
    7,447
    
    
    
    7,093Total non-current liabilities
    
    
    14,716
    
    
    
    15,913Total Liabilities
    
    
    134,523
    
    
    
    133,281Redeemable Preferred Stock
    
    
    
    
    
    
    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
36,269,083 and 32,458,396 shares, respectively
    
    
    363
    
    
    
    325Additional paid-in capital
    
    
    361,740
    
    
    
    305,564Deferred compensation
    
    
    (7,681
    )
    
    
    (2,915
    )Retained earnings
    
    
    65,517
    
    
    
    56,268Accumulated other comprehensive income (loss)
    
    
    3,589
    
    
    
    (2,017
    )Less treasury stock, at cost, 1,774,006 and 1,307,317 shares, respectively
    
    
    (21,996
    )
    
    
    (15,730
    )Total stockholders equity
    
    
    401,532
    
    
    
    341,495Total liabilities and stockholders equity
    
    $
    536,055
    
    
    $
    524,776
  3




---



##### Table of Contents



JDA SOFTWARE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except earnings per share data, unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008REVENUES:Software licenses
    
    $
    17,250
    
    
    $
    23,011
    
    
    $
    60,160
    
    
    $
    58,593Maintenance services
    
    
    45,010
    
    
    
    46,388
    
    
    
    132,378
    
    
    
    138,843Product revenues
    
    
    62,260
    
    
    
    69,399
    
    
    
    192,538
    
    
    
    197,436Consulting services
    
    
    30,852
    
    
    
    26,437
    
    
    
    78,965
    
    
    
    78,901Reimbursed expenses
    
    
    2,747
    
    
    
    2,610
    
    
    
    7,174
    
    
    
    7,780Service revenues
    
    
    33,599
    
    
    
    29,047
    
    
    
    86,139
    
    
    
    86,681Total revenues
    
    
    95,859
    
    
    
    98,446
    
    
    
    278,677
    
    
    
    284,117COST OF REVENUES:Cost of software licenses
    
    
    580
    
    
    
    613
    
    
    
    2,417
    
    
    
    2,009Amortization of acquired software technology
    
    
    966
    
    
    
    1,309
    
    
    
    2,954
    
    
    
    4,270Cost of maintenance services
    
    
    10,883
    
    
    
    11,513
    
    
    
    32,416
    
    
    
    34,145Cost of product revenues
    
    
    12,429
    
    
    
    13,435
    
    
    
    37,787
    
    
    
    40,424Cost of consulting services
    
    
    22,219
    
    
    
    20,315
    
    
    
    61,732
    
    
    
    61,084Reimbursed expenses
    
    
    2,747
    
    
    
    2,610
    
    
    
    7,174
    
    
    
    7,780Cost of service revenues
    
    
    24,966
    
    
    
    22,925
    
    
    
    68,906
    
    
    
    68,864Total cost of revenues
    
    
    37,395
    
    
    
    36,360
    
    
    
    106,693
    
    
    
    109,288GROSS PROFIT
    
    
    58,464
    
    
    
    62,086
    
    
    
    171,984
    
    
    
    174,829OPERATING EXPENSES:Product development
    
    
    12,495
    
    
    
    13,288
    
    
    
    37,732
    
    
    
    40,196Sales and marketing
    
    
    15,888
    
    
    
    15,899
    
    
    
    46,310
    
    
    
    47,738General and administrative
    
    
    12,305
    
    
    
    10,440
    
    
    
    35,001
    
    
    
    32,406Amortization of intangibles
    
    
    5,753
    
    
    
    6,075
    
    
    
    17,880
    
    
    
    18,227Restructuring charges and adjustments to acquisition-related reserves
    
    
    2,543
    
    
    
    399
    
    
    
    6,705
    
    
    
    3,954Total operating expenses
    
    
    48,984
    
    
    
    46,101
    
    
    
    143,628
    
    
    
    142,521OPERATING INCOME
    
    
    9,480
    
    
    
    15,985
    
    
    
    28,356
    
    
    
    32,308Interest expense and amortization of loan fees
    
    
    (346
    )
    
    
    (2,353
    )
    
    
    (971
    )
    
    
    (7,313
    )Interest income and other, net
    
    
    1,006
    
    
    
    51
    
    
    
    886
    
    
    
    2,127INCOME BEFORE INCOME TAXES
    
    
    10,140
    
    
    
    13,683
    
    
    
    28,271
    
    
    
    27,122Income tax provision
    
    
    3,877
    
    
    
    5,441
    
    
    
    10,429
    
    
    
    10,451NET INCOME
    
    $
    6,263
    
    
    $
    8,242
    
    
    $
    17,842
    
    
    $
    16,671Consideration paid in excess of carrying value on the
repurchase of redeemable preferred stock
    
    
    (8,593
    )
    
    
    
    
    
    
    (8,593
    )
    
    
    INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS
    
    $
    (2,330
    )
    
    $
    8,242
    
    
    $
    9,249
    
    
    $
    16,671EARNINGS (LOSS) PER SHARE APPLICABLE TO COMMON
SHAREHOLDERS:Basic earnings (loss) per share
    
    $
    (.07
    )
    
    $
    .24
    
    
    $
    .26
    
    
    $
    .49Diluted earnings (loss) per share
    
    $
    (.07
    )
    
    $
    .23
    
    
    $
    .26
    
    
    $
    .47SHARES USED TO COMPUTE EARNINGS (LOSS) PER SHARE:Basic earnings (loss) per share
    
    
    33,505
    
    
    
    34,528
    
    
    
    35,076
    
    
    
    34,223Diluted earnings (loss) per share
    
    
    33,505
    
    
    
    35,432
    
    
    
    35,329
    
    
    
    35,261
  4




---



##### Table of Contents



JDA SOFTWARE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands, unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008NET INCOME
    
    $
    6,263
    
    
    $
    8,242
    
    
    $
    17,842
    
    
    $
    16,671OTHER COMPREHENSIVE INCOME (LOSS):Foreign currency translation adjustment
    
    
    2,032
    
    
    
    (3,797
    )
    
    
    5,606
    
    
    
    (2,901
    )Change in fair value of interest rate swap
    
    
    
    
    
    
    329
    
    
    
    
    
    
    
    159Total other comprehensive income (loss)
    
    
    2,032
    
    
    
    (3,468
    )
    
    
    5,606
    
    
    
    (2,742
    )COMPREHENSIVE INCOME
    
    $
    8,295
    
    
    $
    4,774
    
    
    $
    23,448
    
    
    $
    13,929
  5




---



##### Table of Contents



JDA SOFTWARE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
 Nine MonthsEnded September 30,2009
    
    
    2008OPERATING ACTIVITIES:Net income
    
    $
    17,842
    
    
    $
    16,671Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    28,043
    
    
    
    29,909Provision for doubtful accounts
    
    
    900
    
    
    
    Amortization of loan origination fees
    
    
    
    
    
    
    713Excess tax benefits from stock-based compensation
    
    
    
    
    
    
    1,638Share-based compensation expense
    
    
    6,412
    
    
    
    3,135Net gain on disposal of property and equipment
    
    
    (55
    )
    
    
    Deferred income taxes
    
    
    8,517
    
    
    
    8,888Changes in assets and liabilities:Accounts receivable
    
    
    19,536
    
    
    
    11,611Income tax receivable
    
    
    (1,838
    )
    
    
    482Prepaid expenses and other assets
    
    
    (3,976
    )
    
    
    (424
    )Accounts payable
    
    
    5,685
    
    
    
    1,877Accrued expenses and other liabilities
    
    
    (11,478
    )
    
    
    (4,698
    )Income tax payable
    
    
    380
    
    
    
    (628
    )Deferred revenue
    
    
    10,560
    
    
    
    1,498Net cash provided by operating activities
    
    
    80,528
    
    
    
    70,672INVESTING ACTIVITIES:Payment of direct costs related to acquisitions
    
    
    (4,431
    )
    
    
    (5,434
    )Purchase of other property and equipment
    
    
    (5,541
    )
    
    
    (6,065
    )Proceeds from disposal of property and equipment
    
    
    62
    
    
    
    115Net cash used in investing activities
    
    
    (9,910
    )
    
    
    (11,384
    )FINANCING ACTIVITIES:Issuance of
common stock  equity plans
    
    
    14,524
    
    
    
    6,014Excess tax benefits from stock-based compensation
    
    
    
    
    
    
    (1,638
    )Purchase of treasury stock
    
    
    (6,266
    )
    
    
    (1,902
    )Redemption of redeemable preferred stock
    
    
    (28,068
    )
    
    
    Principal payments on term loan agreement
    
    
    
    
    
    
    (19,086
    )Loan origination fees
    
    
    
    
    
    
    (3,375
    )Net cash used in financing activities
    
    
    (19,810
    )
    
    
    (19,987
    )Effect of exchange rates on cash
    
    
    1,973
    
    
    
    (3,786
    )Net increase in cash and cash equivalents
    
    
    52,781
    
    
    
    35,515CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    32,696
    
    
    
    95,288CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    85,477
    
    
    $
    130,803
  6




---



##### Table of Contents



JDA SOFTWARE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
 Nine MonthsEnded September 30,2009
    
    
    2008SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:Cash paid for income taxes
    
    $
    3,262
    
    
    $
    3,141Cash paid for interest
    
    $
    304
    
    
    $
    6,803Cash received for income tax refunds
    
    $
    723
    
    
    $
    502SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITIES:Conversion of redeemable preferred stock to common stock
    
    $
    30,525
    
    
    $
    
  7




---



##### 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. Subsequent Events
  3. Derivative Instruments and Hedging Activities
   8




---



##### Table of Contents



4. Goodwill and Other Intangibles, Net
  September 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
    
    
    
    (78,535
    )
    
    
    183,383
    
    
    
    (61,664
    )Acquired software technology
    
    
    8 to 15 years
    
    
    
    65,847
    
    
    
    (44,641
    )
    
    
    65,847
    
    
    
    (41,687
    )Trademarks
    
    
    3 to 5 years
    
    
    
    5,191
    
    
    
    (4,865
    )
    
    
    5,191
    
    
    
    (3,856
    )254,421
    
    
    
    (128,041
    )
    
    
    254,421
    
    
    
    (107,207
    )$
    389,696
    
    
    $
    (128,041
    )
    
    $
    389,696
    
    
    $
    (107,207
    )
 Retail, Manufacturing and Distribution, Services Industries.
   Year
    
    Amortization2009
    
    $
    6,7192010
    
    $
    26,2772011
    
    $
    25,9622012
    
    $
    25,5002013
    
    $
    24,810
 5. Acquisition of Equity Interest in European-based Strategix Enterprise Technology
  9




---



##### Table of Contents



6. Acquisition Reserves
  Impact of
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impact ofChanges in
    
    Balance
    
    
    
    
    
    
    
    
    
    Changes in
    
    BalanceInitial
    
    Adjustments
    
    Cash
    
    Exchange
    
    December 31,
    
    Adjustments
    
    Cash
    
    Exchange
    
    Sept 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
    
    
    $
    (2,220
    )
    
    $
    293
    
    
    $
    11,330Employee severance and
termination
benefits
    
    
    3,607
    
    
    
    (767
    )
    
    
    (2,465
    )
    
    
    107
    
    
    
    482
    
    
    
    
    
    
    
    (3
    )
    
    
    26
    
    
    
    505IT 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
    
    
    
    (2,223
    )
    
    
    319
    
    
    
    11,835Direct costs
    
    
    13,125
    
    
    
    6
    
    
    
    (13,104
    )
    
    
    
    
    
    
    27
    
    
    
    
    
    
    
    (26
    )
    
    
    
    
    
    
    1Total
    
    $
    47,394
    
    
    $
    (2,890
    )
    
    $
    (30,350
    )
    
    $
    (927
    )
    
    $
    13,227
    
    
    $
    539
    
    
    $
    (2,249
    )
    
    $
    319
    
    
    $
    11,836
  7. Restructuring Charges
 2009 Restructuring Charges
 CoE
 10




---



##### Table of Contents



2008
Restructuring Charges
 CoE
 Impact of
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impact ofChanges in
    
    Balance
    
    
    
    
    
    
    
    
    
    Changes in
    
    BalanceInitial
    
    Cash
    
    Exchange
    
    December 31,
    
    Adjustments
    
    Cash
    
    Exchange
    
    Sept  30,Description of charge
    
    Reserve
    
    Charges
    
    Rates
    
    2008
    
    to Reserves
    
    Charges
    
    Rates
    
    2009Termination benefits
    
    $
    7,891
    
    
    $
    (5,576
    )
    
    $
    (164
    )
    
    $
    2,151
    
    
    $
    (212
    )
    
    $
    (1,839
    )
    
    $
    (6
    )
    
    $
    94Office closures
    
    
    119
    
    
    
    (77
    )
    
    
    (6
    )
    
    
    36
    
    
    
    (16
    )
    
    
    (18
    )
    
    
    
    
    
    
    2Total
    
    $
    8,010
    
    
    $
    (5,653
    )
    
    $
    (170
    )
    
    $
    2,187
    
    
    $
    (228
    )
    
    $
    (1,857
    )
    
    $
    (6
    )
    
    $
    96
 8. Redeemable Preferred Stock
    9. Share-Based Compensation
  11




---



##### Table of Contents



2009 Performance Program
 2008 Performance Program
 2007 Performance Program
  12




---



##### Table of Contents



Equity Inducement Awards
 (i)
    
    100,000 shares of restricted stock with a grant date fair value of $1.8 million
were granted to Mr. Hathaway (50,000 shares) and Mr. Zintak (50,000 shares). The
restricted stock awards vest over a three-year period, with one-third vesting on the
first anniversary of their employment with the remainder vesting ratably over the
subsequent 24-month period. A deferred compensation charge of $1.8 million has been
recorded in the equity section of our balance sheet for the total grant date fair value
of the restricted stock. Stock-based compensation is being recorded on a graded vesting
basis over requisite service periods that run from their effective dates of employment
through June 2012. During third quarter 2009, we recorded $249,000 in stock-based
compensation related to these awards.(ii)
    
    55,000 performance share awards will be issued to Mr. Hathaway (25,000 shares up
to a maximum of 31,250 shares) and Mr. Zintak (30,000 shares up to a maximum of 37,500
shares) if we are able to achieve the adjusted EBITDA performance threshold goal defined
under the 2009 Performance Program. Under the terms of the grants, 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 the subsequent 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 run from their effective dates of
employment through January 2012. A deferred compensation charge of $1.1 million has
been recorded in the equity section of 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. Although all necessary service and performance conditions have not
been met through September 30, 2009, based on our results for the nine months ended
September 30, 2009 and the outlook for the remainder of the year, we have recorded
$543,000 in stock-based compensation related to these awards in third quarter 2009. We
currently expect to recognize approximately $724,000 of this award as stock-based
compensation in 2009.(iii)
    
    100,000 restricted stock units with a grant date fair value of $1.8 million were
granted to Mr. Hathaway (50,000 shares) and Mr. Zintak (50,000 shares) that will vest in
defined tranches if and when the Company achieves certain pre-defined performance
milestones. No deferred compensation charge has been recorded in the equity section of
our balance sheet, nor has any share-based compensation expense been recognized related
to these grants as management is unable to determine if it is probable the pre-defined
performance milestones will be attained.
 Employee Stock Purchase Plan st st
 10. Treasury Stock Repurchases
   13




---



##### Table of Contents



11. Income Taxes
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Income before income tax provision
    
    $
    10,140
    
    
    $
    13,683
    
    
    $
    28,271
    
    
    $
    27,122Income tax provision at federal statutory rate
    
    $
    3,549
    
    
    $
    4,789
    
    
    $
    9,895
    
    
    $
    9,493State income taxes
    
    
    306
    
    
    
    446
    
    
    
    831
    
    
    
    789Research and development credit
    
    
    (420
    )
    
    
    
    
    
    
    (809
    )
    
    
    Foreign tax rate differential
    
    
    (32
    )
    
    
    (6
    )
    
    
    (333
    )
    
    
    (291
    )Interest and penalties on uncertain tax positions
    
    
    118
    
    
    
    108
    
    
    
    354
    
    
    
    323Other, net
    
    
    356
    
    
    
    104
    
    
    
    491
    
    
    
    137Income tax provision
    
    $
    3,877
    
    
    $
    5,441
    
    
    $
    10,429
    
    
    $
    10,451Effective tax rate
    
    
    38
    %
    
    
    40
    %
    
    
    37
    %
    
    
    39
    %
     14




---



##### Table of Contents



12. Earnings per Share
    15




---



##### Table of Contents



Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income
    
    $
    6,263
    
    
    $
    8,242
    
    
    $
    17,842
    
    
    $
    16,671Consideration paid in excess of carrying value of Series B

preferred stock
    
    
    (8,593
    )
    
    
    
    
    
    
    (8,593
    )
    
    
    Income (loss) applicable to common shareholders
    
    $
    (2,330
    )
    
    $
    8,242
    
    
    $
    9,249
    
    
    $
    16,671Allocation of undistributed earnings:Common stock
    
    $
    (2,330
    )
    
    $
    7,382
    
    
    $
    8,463
    
    
    $
    14,918Series B preferred stock
    
    
    
    
    
    
    860
    
    
    
    786
    
    
    
    1,753$
    (2,330
    )
    
    $
    8,242
    
    
    $
    9,249
    
    
    $
    16,671Weighted average shares:Common stock
    
    
    33,505
    
    
    
    30,924
    
    
    
    32,095
    
    
    
    30,619Series B preferred stock
    
    
    
    
    
    
    3,604
    
    
    
    2,981
    
    
    
    3,604Shares  Basic earnings per share
    
    
    33,505
    
    
    
    34,528
    
    
    
    35,076
    
    
    
    34,223Dilutive common stock equivalents
    
    
    
    
    
    
    904
    
    
    
    253
    
    
    
    1,038Shares  Diluted earnings per share
    
    
    33,505
    
    
    
    35,432
    
    
    
    35,329
    
    
    
    35,261Basic earnings (loss) per share applicable to:Common stock
    
    $
    (.07
    )
    
    $
    .24
    
    
    $
    .26
    
    
    $
    .49Series B preferred stock
    
    $
    
    
    
    $
    .24
    
    
    $
    .26
    
    
    $
    .49Diluted earnings (loss) per share applicable to common shareholders
    
    $
    (.07
    )
    
    $
    .23
    
    
    $
    .26
    
    
    $
    .47
 13. Business Segments and Geographic Data
  Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:Americas
    
    $
    67,059
    
    
    $
    68,616
    
    
    $
    193,440
    
    
    $
    191,421Europe
    
    
    20,601
    
    
    
    21,168
    
    
    
    57,440
    
    
    
    66,553Asia/Pacific
    
    
    8,199
    
    
    
    8,662
    
    
    
    27,797
    
    
    
    26,143Total revenues
    
    $
    95,859
    
    
    $
    98,446
    
    
    $
    278,677
    
    
    $
    284,117
 September 30,
    
    
    December 31,2009
    
    
    2008Identifiable assets:Americas
    
    $
    410,284
    
    
    $
    402,350EMEA
    
    
    83,671
    
    
    
    86,780Asia/Pacific
    
    
    42,100
    
    
    
    35,646Total identifiable assets
    
    $
    536,055
    
    
    $
    524,776
   16




---



##### Table of Contents




    
    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
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Revenues:Retail
    
    $
    54,863
    
    
    $
    53,378
    
    
    $
    151,562
    
    
    $
    150,398Manufacturing and Distribution
    
    
    33,745
    
    
    
    39,890
    
    
    
    103,430
    
    
    
    118,324Services Industries
    
    
    7,251
    
    
    
    5,178
    
    
    
    23,685
    
    
    
    15,395$
    95,859
    
    
    $
    98,446
    
    
    $
    278,677
    
    
    $
    284,117Operating income (loss):Retail
    
    $
    15,213
    
    
    $
    16,114
    
    
    $
    39,507
    
    
    $
    40,361Manufacturing and Distribution
    
    
    13,841
    
    
    
    16,317
    
    
    
    40,785
    
    
    
    44,984Services Industries
    
    
    1,027
    
    
    
    468
    
    
    
    7,650
    
    
    
    1,550Other (see below)
    
    
    (20,601
    )
    
    
    (16,914
    )
    
    
    (59,586
    )
    
    
    (54,587
    )$
    9,480
    
    
    $
    15,985
    
    
    $
    28,356
    
    
    $
    32,308Depreciation:Retail
    
    $
    1,233
    
    
    $
    1,096
    
    
    $
    3,394
    
    
    $
    3,363Manufacturing and Distribution
    
    
    665
    
    
    
    727
    
    
    
    2,034
    
    
    
    2,454Services Industries
    
    
    256
    
    
    
    184
    
    
    
    809
    
    
    
    524$
    2,154
    
    
    $
    2,007
    
    
    $
    6,237
    
    
    $
    6,341Other:General and administrative expenses
    
    $
    12,305
    
    
    $
    10,440
    
    
    $
    35,001
    
    
    $
    32,406Amortization of intangible assets
    
    
    5,753
    
    
    
    6,075
    
    
    
    17,880
    
    
    
    18,227Restructuring charge
    
    
    2,543
    
    
    
    399
    
    
    
    6,705
    
    
    
    3,954$
    20,601
    
    
    $
    16,914
    
    
    $
    59,586
    
    
    $
    54,587
 Retail Manufacturing and Distribution Services Industries
 
 Item 2:
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 Significant Trends and Developments in Our Business
  17




---



##### Table of Contents



Outlook and Guidance for Second Half 2009
 Guidance for Second Half 2009
    
    Third QuarterLow End
    
    High End
    
    2009 ResultsSoftware revenues
    
    $43 million
    
    $47 million
    
    $17 millionTotal revenues
    
    $195 million
    
    $202 million
    
    $96 million
     18




---



##### Table of Contents



CoE CoE
 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 CoE CoE CoE
 We Have Repurchased All Remaining Shares of Redeemable Preferred Stock.
  19




---



##### Table of Contents



We Will Continue to Actively Look for Strategic Acquisition Opportunities. Appointment of New Executive Officers
 Appointment of New Executive Officers. Services Industries
 (i)
    
    100,000 shares of restricted stock with a grant date fair value of $1.8 million
were granted to Mr. Hathaway (50,000 shares) and Mr. Zintak (50,000 shares). The
restricted stock awards vest over a three-year period, with one-third vesting on the
first anniversary of their employment with the remainder vesting ratably over the
subsequent 24-month period. A deferred compensation charge of $1.8 million has been
recorded in the equity section of our balance sheet for the total grant date fair value
of the restricted stock. Stock-based compensation is being recorded on a graded vesting
basis over requisite service periods that run from their effective dates of employment
through June 2012. During third quarter 2009, we recorded $249,000 in stock-based
compensation related to these awards.(ii)
    
    55,000 performance share awards will be issued to Mr. Hathaway (25,000 shares up
to a maximum of 31,250 shares) and Mr. Zintak (30,000 shares up to a maximum of 37,500
shares) if we are able to achieve the adjusted EBITDA performance threshold goal defined
under the 2009 Performance Program. Under the terms of the grants, 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 the subsequent 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 run from their effective dates of employment through
January 2012. A deferred compensation charge of $1.1 million has been recorded in the
equity section of 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. Although all necessary service and performance conditions have not been met
through September 30, 2009, based on our results for the nine months ended September
30, 2009 and the outlook for the remainder of the year, we have recorded $543,000 in
stock-based compensation related to these awards in third quarter 2009. We currently
expect to recognize approximately $724,000 of this award as stock-based compensation
in 2009.(iii)
    
    100,000 restricted stock units with a grant date fair value of $1.8 million were
granted to Mr. Hathaway (50,000 shares) and Mr. Zintak (50,000 shares) that will vest in
defined tranches if and when the Company achieves certain pre-defined performance
milestones. No deferred compensation charge has been recorded in the equity section of
our balance sheet, nor has any share-based compensation expense been recognized related
to these grants as management is unable to determine if it is probable the pre-defined
performance milestones will be attained.
 Separation Agreements with Former Executive Officers
 20




---



##### Table of Contents



Type
of Award
    
    Original Grant Date
    
    Kristen L. Magnuson
    
    Christopher J. Koziol(Resigned July 5, 2009)
    
    (Resigned August 3, 2009)Restricted Stock Units
    
    March 13, 2007
    
    
    6,805
    
    
    
    5,722Restricted Stock Units
    
    May 14, 2007
    
    
    903
    
    
    
    761Performance Shares
    
    February 7, 2008
    
    
    9,600
    
    
    
    7,856
 Share-Based Compensation Expense.
 Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Cost of maintenance services
    
    $
    206
    
    
    $
    49
    
    
    $
    474
    
    
    $
    205Cost of consulting services
    
    
    411
    
    
    
    48
    
    
    
    882
    
    
    
    303Product development
    
    
    234
    
    
    
    115
    
    
    
    594
    
    
    
    354Sales and marketing
    
    
    667
    
    
    
    307
    
    
    
    1,736
    
    
    
    810General and administrative
    
    
    1,327
    
    
    
    392
    
    
    
    2,726
    
    
    
    1,463Total stock-based compensation
    
    $
    2,845
    
    
    $
    911
    
    
    $
    6,412
    
    
    $
    3,135
 21




---



##### Table of Contents



Results of Operations
  Three Months
    
    Nine MonthsEnded Sept. 30,
    
    Ended Sept. 30,2009
    
    2008
    
    2009
    
    2008REVENUES:Software licenses
    
    
    18
    %
    
    
    23
    %
    
    
    22
    %
    
    
    20
    %Maintenance services
    
    
    47
    %
    
    
    47
    %
    
    
    47
    %
    
    
    49
    %Product revenues
    
    
    65
    %
    
    
    70
    %
    
    
    69
    %
    
    
    69
    %Consulting services
    
    
    32
    %
    
    
    27
    %
    
    
    28
    %
    
    
    28
    %Reimbursed expenses
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %Service revenues
    
    
    35
    %
    
    
    30
    %
    
    
    31
    %
    
    
    31
    %Total revenues
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %COST OF REVENUES:Cost of software licenses
    
    
    1
    %
    
    
    1
    %
    
    
    1
    %
    
    
    1
    %Amortization of acquired software technology
    
    
    1
    %
    
    
    1
    %
    
    
    1
    %
    
    
    1
    %Cost of maintenance services
    
    
    11
    %
    
    
    12
    %
    
    
    11
    %
    
    
    12
    %Cost of product revenues
    
    
    13
    %
    
    
    14
    %
    
    
    13
    %
    
    
    14
    %Cost of consulting services
    
    
    23
    %
    
    
    20
    %
    
    
    22
    %
    
    
    21
    %Reimbursed expenses
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %
    
    
    3
    %Cost of service revenues
    
    
    26
    %
    
    
    23
    %
    
    
    25
    %
    
    
    24
    %Total cost of revenues
    
    
    39
    %
    
    
    37
    %
    
    
    38
    %
    
    
    38
    %GROSS PROFIT
    
    
    61
    %
    
    
    63
    %
    
    
    62
    %
    
    
    62
    %OPERATING EXPENSES:Product development
    
    
    13
    %
    
    
    14
    %
    
    
    14
    %
    
    
    14
    %Sales and marketing
    
    
    16
    %
    
    
    16
    %
    
    
    17
    %
    
    
    17
    %General and administrative
    
    
    13
    %
    
    
    11
    %
    
    
    13
    %
    
    
    12
    %Amortization of intangibles
    
    
    6
    %
    
    
    6
    %
    
    
    6
    %
    
    
    6
    %Restructuring charges and adjustments to acquisition-related reserves
    
    
    3
    %
    
    
    
    %
    
    
    2
    %
    
    
    1
    %Total operating expenses
    
    
    51
    %
    
    
    47
    %
    
    
    52
    %
    
    
    50
    %OPERATING INCOME
    
    
    10
    %
    
    
    16
    %
    
    
    10
    %
    
    
    12
    %Interest expense and amortization of loan fees
    
    
    
    %
    
    
    (2
    %)
    
    
    
    %
    
    
    (3
    %)Interest income and other, net
    
    
    1
    %
    
    
    
    %
    
    
    
    %
    
    
    1
    %INCOME
BEFORE INCOME TAX PROVISION
    
    
    11
    %
    
    
    14
    %
    
    
    10
    %
    
    
    10
    %Income tax provision
    
    
    4
    %
    
    
    6
    %
    
    
    4
    %
    
    
    4
    %NET INCOME
    
    
    7
    %
    
    
    8
    %
    
    
    6
    %
    
    
    6
    %Gross margin on software licenses
    
    
    97
    %
    
    
    97
    %
    
    
    96
    %
    
    
    97
    %Gross margin on maintenance services
    
    
    76
    %
    
    
    75
    %
    
    
    76
    %
    
    
    75
    %Gross margin on product revenues
    
    
    80
    %
    
    
    81
    %
    
    
    80
    %
    
    
    80
    %Gross margin on service revenues
    
    
    26
    %
    
    
    21
    %
    
    
    20
    %
    
    
    21
    %
 22




---



##### Table of Contents



% Change
    
    
    
    
    
    
    
    
    
    
    % ChangeThree Months Ended September 30,
    
    
    Nine Months Ended September 30,2009
    
    
    2009 to 2008
    
    
    2008
    
    
    2009
    
    
    2009 to 2008
    
    
    2008Revenues:Software licenses
    
    $
    17,250
    
    
    
    (25
    %)
    
    $
    23,011
    
    
    $
    60,160
    
    
    
    3
    %
    
    $
    58,593Maintenance
    
    
    45,010
    
    
    
    (3
    %)
    
    
    46,388
    
    
    
    132,378
    
    
    
    (5
    %)
    
    
    138,843Product revenues
    
    
    62,260
    
    
    
    (10
    %)
    
    
    69,399
    
    
    
    192,538
    
    
    
    2
    %
    
    
    197,436Service revenues
    
    
    33,599
    
    
    
    16
    %
    
    
    29,047
    
    
    
    86,139
    
    
    
    (1
    %)
    
    
    86,681Total revenues
    
    
    95,859
    
    
    
    (3
    %)
    
    
    98,446
    
    
    
    278,677
    
    
    
    (2
    %)
    
    
    284,117Cost of Revenues:Software licenses
    
    
    580
    
    
    
    (5
    %)
    
    
    613
    
    
    
    2,417
    
    
    
    20
    %
    
    
    2,009Amortization of acquired software technology
    
    
    966
    
    
    
    (26
    %)
    
    
    1,309
    
    
    
    2,954
    
    
    
    (31
    %)
    
    
    4,270Maintenance services
    
    
    10,883
    
    
    
    (5
    %)
    
    
    11,513
    
    
    
    32,416
    
    
    
    (5
    %)
    
    
    34,145Product revenues
    
    
    12,429
    
    
    
    (7
    %)
    
    
    13,435
    
    
    
    37,787
    
    
    
    (6
    %)
    
    
    40,424Service revenues
    
    
    24,966
    
    
    
    9
    %
    
    
    22,925
    
    
    
    68,906
    
    
    
    
    %
    
    
    68,864Total cost of revenues
    
    
    37,395
    
    
    
    3
    %
    
    
    36,360
    
    
    
    106,693
    
    
    
    (2
    %)
    
    
    109,288Gross Profit
    
    
    58,464
    
    
    
    (6
    %)
    
    
    62,086
    
    
    
    171,984
    
    
    
    (2
    %)
    
    
    174,829Operating Expenses:Product development
    
    
    12,495
    
    
    
    (6
    %)
    
    
    13,288
    
    
    
    37,732
    
    
    
    (6
    %)
    
    
    40,196Sales and marketing
    
    
    15,888
    
    
    
    
    %
    
    
    15,899
    
    
    
    46,310
    
    
    
    (3
    %)
    
    
    47,738General and administrative
    
    
    12,305
    
    
    
    18
    %
    
    
    10,440
    
    
    
    35,001
    
    
    
    8
    %
    
    
    32,40640,688
    
    
    
    3
    %
    
    
    39,627
    
    
    
    119,043
    
    
    
    (1
    %)
    
    
    120,340Amortization of intangibles
    
    
    5,753
    
    
    
    (5
    %)
    
    
    6,075
    
    
    
    17,880
    
    
    
    (2
    %)
    
    
    18,227Restructuring charge and adjustments to
acquisition-related reserves
    
    
    2,543
    
    
    
    537
    %
    
    
    399
    
    
    
    6,705
    
    
    
    70
    %
    
    
    3,954Operating Income
    
    $
    9,480
    
    
    
    (41
    %)
    
    $
    15,985
    
    
    $
    28,356
    
    
    
    (12
    %)
    
    $
    32,308Cost of Revenues as a % of related revenues:Software licenses
    
    
    3
    %
    
    
    
    
    
    
    3
    %
    
    
    4
    %
    
    
    
    
    
    
    3
    %Maintenance services
    
    
    24
    %
    
    
    
    
    
    
    25
    %
    
    
    24
    %
    
    
    
    
    
    
    25
    %Product revenues
    
    
    20
    %
    
    
    
    
    
    
    19
    %
    
    
    20
    %
    
    
    
    
    
    
    20
    %Service revenues
    
    
    74
    %
    
    
    
    
    
    
    79
    %
    
    
    80
    %
    
    
    
    
    
    
    79
    %Product
Development as a % of product revenues
    
    
    20
    %
    
    
    
    
    
    
    19
    %
    
    
    20
    %
    
    
    
    
    
    
    20
    %
 23




---



##### Table of Contents



Manufacturing &Retail
    
    Distribution
    
    Services IndustriesSept. 30, 2009 vs. 2008
    
    Sept. 30, 2009 vs. 2008
    
    Sept. 30, 2009 vs. 2008Quarter
    
    Nine Months
    
    Quarter
    
    Nine Months
    
    Quarter
    
    Nine MonthsSoftware licenses
    
    
    (22
    %)
    
    
    (7
    %)
    
    
    (34
    %)
    
    
    (10
    %)
    
    
    (15
    %)
    
    
    123
    %Maintenance services
    
    
    1
    %
    
    
    (1
    %)
    
    
    (9
    %)
    
    
    (9
    %)
    
    
    40
    %
    
    
    13
    %Product revenues
    
    
    (8
    %)
    
    
    (3
    %)
    
    
    (14
    %)
    
    
    (9
    %)
    
    
    12
    %
    
    
    76
    %Service revenues
    
    
    26
    %
    
    
    8
    %
    
    
    (19
    %)
    
    
    (22
    %)
    
    
    62
    %
    
    
    28
    %Total revenues
    
    
    3
    %
    
    
    1
    %
    
    
    (15
    %)
    
    
    (13
    %)
    
    
    40
    %
    
    
    54
    %Product development
    
    
    (3
    %)
    
    
    2
    %
    
    
    (5
    %)
    
    
    (9
    %)
    
    
    (30
    %)
    
    
    (36
    %)Sales and marketing
    
    
    8
    %
    
    
    (1
    %)
    
    
    (27
    %)
    
    
    (17
    %)
    
    
    53
    %
    
    
    48
    %Operating income
    
    
    (6
    %)
    
    
    (2
    %)
    
    
    (15
    %)
    
    
    (9
    %)
    
    
    119
    %
    
    
    394
    %
 Contribution to Total RevenuesRetail
    
    Manufacturing & Distribution
    
    Services IndustriesQuarter
    
    Nine Months
    
    Quarter
    
    Nine Months
    
    Quarter
    
    Nine Months2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    200857
    %
    
    
    54
    %
    
    
    54
    %
    
    
    53
    %
    
    
    35
    %
    
    
    41
    %
    
    
    37
    %
    
    
    42
    %
    
    
    8
    %
    
    
    5
    %
    
    
    9
    %
    
    
    5
    %
 The Americas
    
    EMEA
    
    Asia/PacificSept. 30, 2009 vs. 2008
    
    Sept. 30, 2009 vs. 2008
    
    Sept. 30, 2009 vs. 2008Quarter
    
    Nine Months
    
    Quarter
    
    Nine Months
    
    Quarter
    
    Nine MonthsSoftware licenses
    
    
    (28
    %)
    
    
    (4
    %)
    
    
    16
    %
    
    
    (6
    %)
    
    
    (73
    %)
    
    
    67
    %Maintenance services
    
    
    (3
    %)
    
    
    (2
    %)
    
    
    (4
    %)
    
    
    (11
    %)
    
    
    (2
    %)
    
    
    (6
    %)Product revenues
    
    
    (12
    %)
    
    
    (3
    %)
    
    
    1
    %
    
    
    (10
    %)
    
    
    (27
    %)
    
    
    19
    %Service revenues
    
    
    20
    %
    
    
    9
    %
    
    
    (12
    %)
    
    
    (25
    %)
    
    
    37
    %
    
    
    (17
    %)Total revenues
    
    
    (2
    %)
    
    
    1
    %
    
    
    (3
    %)
    
    
    (14
    %)
    
    
    (5
    %)
    
    
    6
    %
 Contribution to Total RevenuesThe Americas
    
    EMEA
    
    Asia/PacificQuarter
    
    Nine Months
    
    Quarter
    
    Nine Months
    
    Quarter
    
    Nine Months2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    2008
    
    2009
    
    200870
    %
    
    
    70
    %
    
    
    69
    %
    
    
    67
    %
    
    
    21
    %
    
    
    21
    %
    
    
    21
    %
    
    
    24
    %
    
    
    9
    %
    
    
    9
    %
    
    
    10
    %
    
    
    9
    %
 Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008
 Software License Revenues
  24




---



##### Table of Contents



Software License Results by Region
 Three Months Ended September 30,Region
    
    2009
    
    
    2008
    
    
    $ Change
    
    
    % ChangeAmericas
    
    $
    12,624
    
    
    $
    17,503
    
    
    $
    (4,879
    )
    
    
    (28
    %)EMEA
    
    
    4,084
    
    
    
    3,516
    
    
    
    568
    
    
    
    16
    %Asia/Pacific
    
    
    542
    
    
    
    1,992
    
    
    
    (1,450
    )
    
    
    (73
    %)Total
    
    $
    17,250
    
    
    $
    23,011
    
    
    $
    (5,761
    )
    
    
    (25
    %)
    Software License Results by Reportable Business Segment.
 Retail.
 Manufacturing & Distribution.
 Services Industries.
 Maintenance Services
  25




---



##### Table of Contents



Service Revenues
 Services Industries CoE 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 CoE
 Gross Profit
   26




---



##### Table of Contents



Operating Expenses
 CoE
 Product Development. CoE CoE
 Sales and Marketing.
 General and Administrative. CoE CoE
 Restructuring Charges and Adjustments to Acquisition-Related Reserves. CoE
 CoE
 27




---



##### 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
  Three Months EndedSeptember 30,2009
    
    
    2008Income before income tax provision
    
    $
    10,140
    
    
    $
    13,683Income tax provision at federal statutory rate
    
    $
    3,549
    
    
    $
    4,789State income taxes
    
    
    306
    
    
    
    446Research and development credit
    
    
    (420
    )
    
    
    Foreign tax rate differential
    
    
    (32
    )
    
    
    (6
    )Interest and penalties on uncertain tax positions
    
    
    118
    
    
    
    108Other, net
    
    
    356
    
    
    
    104Income tax provision
    
    $
    3,877
    
    
    $
    5,441Effective tax rate
    
    
    38
    %
    
    
    40
    %
 28




---



##### Table of Contents



Consideration Paid in Excess of Carrying Value on the Repurchase of Redeemable Preferred Stock
  Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008
 Software Revenues
 Software License Results by Region
 Nine      Months Ended September 30,Region
    
    2009
    
    
    2008
    
    
    $Change
    
    
    % ChangeAmericas
    
    $
    38,086
    
    
    $
    39,685
    
    
    $
    (1,599
    )
    
    
    (4
    %)EMEA
    
    
    12,266
    
    
    
    13,025
    
    
    
    (759
    )
    
    
    (6
    %)Asia/Pacific
    
    
    9,808
    
    
    
    5,883
    
    
    
    3,925
    
    
    
    67
    %Total
    
    $
    60,160
    
    
    $
    58,593
    
    
    $
    1,567
    
    
    
    3
    %
    Software License Results by Reportable Business Segment.
 Retail.
 29




---



##### Table of Contents



Manufacturing & Distribution.
 Services Industries.
 Maintenance Services
  Service Revenues
 Services Industries
  Cost of Product Revenues
 Cost of Software Licenses.
 Amortization of Acquired Software Technology
 Cost of Maintenance Services. CoE
 30




---



##### Table of Contents



Cost of Service Revenues
 CoE, CoE
 Gross Profit
    Operating Expenses
 CoE,
 Product Development. CoE
 Sales and Marketing.
 General and Administrative.
 31




---



##### Table of Contents



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.
 32




---



##### Table of Contents



Income Tax Provision
  Nine Months EndedSeptember 30,2009
    
    
    2008Income before income tax provision
    
    $
    28,271
    
    
    $
    27,122Income tax provision at federal statutory rate
    
    $
    9,895
    
    
    $
    9,493State income taxes
    
    
    831
    
    
    
    789Research and development credit
    
    
    (809
    )
    
    
    Foreign tax rate differential
    
    
    (333
    )
    
    
    (291
    )Interest and penalties on uncertain tax positions
    
    
    354
    
    
    
    323Other, net
    
    
    491
    
    
    
    137Income tax provision
    
    $
    10,429
    
    
    $
    10,451Effective tax rate
    
    
    37
    %
    
    
    39
    %
   Consideration Paid in Excess of Carrying Value on the Repurchase of Redeemable Preferred Stock
  Liquidity and Capital Resources
   33




---



##### Table of Contents



Operating activities
 Investing activities
 Financing activities
 Changes in the currency exchange rates of our foreign operations
 Treasury Stock Repurchases.
  34




---



##### Table of Contents



Contractual Obligations CoE
   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
 35




---



##### Table of Contents



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 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
 36




---



##### Table of Contents



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 the nine months ended September 30,
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 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 nine months ended September 30, 2009 with respect to the
goodwill allocated to our Retail, Manufacturing and Distributionand Services Industries
reportable 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 8 years to 15 years.Trademarks are being amortized on a straight-line basis over estimated remaining useful lives
ranging from three and five years.
    
    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
 37




---



##### Table of Contents



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 September 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 nine months ended September 30, 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. As of December 31, 2008, we had approximately $5.5 million and $7.8 million of
federal and state research and development tax credit carryforwards, respectively, that
expire at various dates through 2028. 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.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
$354,000 and $323,000 in the nine months ended September 30, 2009, respectively. As of
September 30, 2009 and December 31, 2008 there are approximately $3.1 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. Our 2005 Performance Incentive Plan, as amended (2005
Incentive Plan) provides for the issuance of up to 3,847,000 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. 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.Annual stock-based incentive programs have been approved for 2007, 2008 and 2009
(Performance Programs). The Performance Programs provide for contingently issuable
performance share awards or restricted stock units under the 2005 Incentive Plan to executive
officers and certain other members of our management team upon achievement of defined
performance threshold goals. The defined performance threshold goal for each year has been
an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) targets,
which excludes certain non-routine items. The awards vest 50%
 38




---



##### Table of Contents



upon the date the Board
approves the achievement of the annual performance threshold goal with the remaining 50%
vesting ratably over the subsequent 24-month period. A summary of the annual Performance
Programs is as follows:Equity Inducement Awards. During third quarter 2009, we announced the appointment of Pete
Hathaway to the position of Executive Vice President and Chief Financial Officer and Jason
Zintak to the newly-created position of Executive Vice President, Sales and Marketing. In
order to induce Mr. Hathaway and Mr. Zintak to accept employment, the Compensation Committee
granted certain equity awards outside of the terms of the 2005 Incentive Plan and pursuant to
NASDAQ Marketplace Rule 5635(c)(4) (see Appointment of New Executive Officersunder
Significant Trends and Developments in Our Business).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 September 30, 2009, we had approximately 1.3 million vested stock options outstanding with
exercise prices ranging from $10.33 to $27.50 per share.Employee Stock Purchase Plan. Our employee stock purchase plan (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 that
begin on February 1st and August 1st of each year. 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 155,888 shares of common stock were purchased under the 2008 Purchase Plan
in the nine months ended September 30, 2009 at prices ranging from $9.52 to $17.52. We have
recognized $342,000 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, using quoted prices for similar assets or liabilities in active markets, 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 September 30, 2009, we had forward exchange contracts with a notional value of $40.7
million and an associated net forward contract receivable of $577,000. 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. 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 net foreign currency exchange contract gains of
$609,000 and $78,000 in the nine months ended September 30, 2009 and 2008, respectively,
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
  39




---



##### Table of Contents



Foreign currency exchange rates
    Interest rates
 
 Item 4:
    
    Controls and Procedures
 Disclosure Controls and Procedures
 40




---



##### Table of Contents



Changes in Internal Control Over Financial Reporting.
  
 PART II. OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  
 Item 1A.
    
    Risk Factors
  Risks Related To Our Business
 We may misjudge when software sales will be realized
  41




---



##### Table of Contents



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




---



##### Table of Contents



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;
    
    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
 43




---



##### Table of Contents



JDA Reporting JDA Analytics Transportation and Network Optimization Portfolio Merchandise Management Merchandise Performance Analysis
 We may face difficulties in our highly competitive markets
 .
   CoE CoE CoE
 44




---



##### Table of Contents



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 CoE CoE 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
  45




---



##### Table of Contents



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;
    
    We and the target company may be subject to litigation challenging the adequacy of
the acquisition consideration, which may cause additional transaction delays and costs;
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
  Government contracts are subject to unique costs, terms, regulations, claims and penalties
  46




---



##### Table of Contents



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;
    
    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;
 47




---



##### Table of Contents




    
    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
 .
 
 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
    
    ProgramsJuly 1-31, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    27,126,842August 1-31, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    27,126,842September 1-30, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    27,126,842Total
    
    
    
    
    
    $
    
    
    
    
    
 
 (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. 48




---



##### Table of Contents



Item 3.
    
    Defaults Upon Senior Securities Not applicable
 
 Item 4.
    
    Submission of Matters to a Vote of Security Holders Not applicable
 
 Item 5.
    
    Other Information Not applicable
 
 Item 6.
    
    Exhibits See Exhibits Index
 49




---



##### Table of Contents



JDA SOFTWARE GROUP, INC.
 
 SIGNATURES
  JDA SOFTWARE GROUP, INC.Dated: November 3, 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) 50




---



##### Table of Contents



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, 2006.10.1
(1)(2)
    
    
    
    
    Executive Employment Agreement between Pete Hathaway and JDA
Software Group, Inc. dated July 20, 2009.10.2
(1)(2)
    
    
    
    
    Executive Employment Agreement between Jason B. Zintak and
JDA Software Group, Inc. dated August 18, 2009.10.3******
    
    
    
    
    Stock Purchase Agreement between JDA Software Group, Inc.
and Thoma Bravo Inc. dated September 8, 2009.10.4
    
    
    
    
    Separation Agreement between JDA Software Group, Inc. and
Kristen L. Magnuson dated April 6, 2009.10.5
    
    
    
    
    Separation Agreement between JDA Software Group, Inc. and
Christopher J. Koziol dated August 3, 2009.4.1*
    
    
    
    
    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.
 
 (1)
    
    Management contracts or compensatory plans or arrangements covering executive officers
or directors of the Company.(2)
    
    Certain confidential information contained in this exhibit was omitted by means of
redacting a portion of the text and replacing it with an
asterisk. This exhibit has been filed separately with the Secretary of the Securities and
Exchange Commission without the redaction pursuant to a Confidential Treatment Request under Rule 24b-2 of the Securities Exchange Act of
1934.*
    
    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.******
    
    Incorporated by reference to the Companys Current Report on Form 8-K dated and filed on
September 9, 2009. 51