Net Loss Doesn't Prevent JDA's Record Q4, Year

Published: February 2, 2009

by Dan Burger

JDA Software handed in a fourth quarter financial report showing a loss, but more importantly managed to ring up a gain in total revenue, which resulted in a record-breaking quarter and record-breaking year for the Scottsdale, Arizona, company with a substantial IBM i customer base. Fourth quarter revenue was bolstered by a 53 percent gain in software license sales.

JDA's fourth quarter ended December 31, 2008, and for that time frame the company reported total revenues of $106.2 million and software revenues of $34.3 million, compared to total revenues of $98.5 million and software revenues of $22.4 million for fourth quarter 2007.

For the year, JDA reported total revenues of $390.3 million and software revenues of $92.9 million, which surpasses total revenues of $373.6 million and software revenues of $73.6 million for the twelve months ended December 31, 2007. Software license revenue for 2008 increased 26 percent, thanks in no small part to that 53 percent leap in the final quarter.

Highlights for JSA, which sells merchandising, supply chain management, and revenue management software, during its final quarter of 2008 included seven software contracts exceeding $1 million (the largest was an $11.5 million transaction) and a total of 70 new software deals.

Scoring big was JDA's Americas region, which closed $27.4 million in software license deals in the fourth quarter 2008. This compares with $12 million in fourth quarter 2007. Meanwhile, JDA's Europe, Middle East and Africa (EMEA) region couldn't match the performance of a year ago as software sales slipped to $5.6 million in fourth quarter 2008. In the fourth quarter of 2007, EMEA had sales of $7.5 million. The Asia/Pacific region also performed weakly as software sales were only $1.3 million in fourth quarter 2008, compared to $2.9 million a year earlier.

The negative cash flow resulted from operations of $23.6 million in fourth quarter 2008. The company coaxed a positive cash flow from operation of $18.8 million in third quarter 2008 and $16 million in fourth quarter 2007. However, last quarter was burdened with $29.7 million in costs related to the terminated acquisition of i2 Technologies, $3.6 million of which were accrued but not paid as of December 31, 2008.

JDA, which acquired Manugistics in 2006 in a move to gain expertise in supply chain operations for process manufacturers, was hungry for i2 Technologies so it could acquire similar technology and skills that are pertinent to discrete manufacturers.

Excluding these one-time charges related to the lost opportunity to buy i2, JDA generated $2.6 million of adjusted cash flow from operations in fourth quarter 2008.

Product accomplishments from the fourth quarter included new supply chain software for sales and operations planning and more than two dozen enhancements to the company's supply chain planning and execution optimization products.

Looking ahead three months, the annual JDA user conference, FOCUS, is scheduled for between April 26 and 29 in Washington, D.C.

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