JDA Shakes Off the Bad Economy, Sets Sales Record in Q3
November 3, 2008 Timothy Prickett Morgan
An economy never goes to zero, never anywhere close to that, and in hard times, some companies, for whatever reason, do better than others. While plenty of public companies are taking it on the chin financially these days thanks to the economic meltdown, JDA Software does not appear to be one of them.
For the third quarter ended September 30, JDA reported $98.4 million, up 5.1 percent, with software license sales of $23 million within that total figure, up a stunning 48.4 percent. For the nine months of 2008, JDA has $284.1 million in sales, up 3.3 percent, with software license sales of $58.6 million, up 14.5 percent.
“Despite the current economic climate, we ended the third quarter with record software revenues and EBITDA,” explained Hamish Brewer, JDA’s chief executive officer in a statement accompanying the financial results. “Furthermore, this was the second quarter in 2008 that we achieved record software license revenues, illustrating the strength of our value proposition and a healthy pipeline. More than ever, leading companies are looking to JDA for innovative supply chain solutions that help them reduce their overall costs, increase efficiency and turn their supply chains into a source of competitive advantage.”
Here’s another interesting statistic for the quarter. JDA had cash and equivalents of $130.8 million and $80.5 million of debt as of the end of September, and then on October 1, it paid off its remaining debts.
JDA is, you will remember, in the process of closing its $346 million acquisition of supply chain software specialist i2 Technologies, which it announced in August. In May 2006, JDA bought another biggie in the supply chain area, Manugistics, for $211 million, allowing it to marry its expertise in retailing with Manugistics’ expertise in supply chain management. The combination of the two is why JDA’s sales have been more regular–and growing–in the past couple of years. In the past, publicly traded JDA has seen its sales and profits go up and down based on how strong or weak retailers are at any given time.
But with the combination of retailing and supply chain software, JDA can attack three different parts of retailing, offering its customers the chance of optimizing retail or their supply chain operations, depending on which is weaker, as well as the chains of their respective suppliers. Manugistics had supply chain expertise aimed mostly at process manufacturers, while i2 has focused mainly on discrete manufacturers. The combination of the three companies gives JDA 38,500 customers, an annual revenue stream (looking backward) of about $635 million, and an operating profit of about $150 million.