JDAS ($16-$21*New Yearly High) P/E 60 Beats and Exceeds Analyst Est.
Thursday July 19, 4:04 pm Eastern Time
Press Release
JDA Generates Record Revenues and Exceeds Analyst Estimates
EPS $0.17, Excluding Amortization of Intangibles
SCOTTSDALE, Ariz.--(BUSINESS WIRE)--July 19, 2001--JDA Software Group Inc. (Nasdaq: JDAS - news) Thursday announced financial results for the second quarter and six months ended June 30, 2001.
Reporting record revenues of $49.1 million, JDA exceeded second quarter 2000 revenues of $46.1 million by 6 percent and first quarter 2001 revenues by 3 percent. Software revenues were $16.7 million, a sequential increase of 7 percent over the $15.6 million reported in first quarter 2001.
Exceeding First Call consensus estimates of $.11 per share, the company reported net income of $3.0 million, or $0.12 per share in second quarter 2001, a sequential increase of 40 percent over the $2.2 million reported in first quarter 2001.
Excluding amortization of intangibles, purchased in-process research and development, and restructuring, asset disposition and other charges, earnings for second quarter 2001 were $.17 per share, compared to $.16 per share in first quarter 2001.
``We are pleased to report another quarter of record breaking revenues as a result of a strong resurgence in client/server host system sales along with the highest reported consulting and maintenance revenues in JDA's history,'' commented JDA Chief Executive Officer Jim Armstrong.
``With several key strategic competitive wins under our belt, we continue to believe that our sales pipeline for the second half of the year will enable us to achieve our forecasted software license revenue of $65 million to $70 million for fiscal 2001.''
``In addition to dedicating $7.8 million research and development dollars to enhance our existing products and launch new applications, we're aggressively pursuing other options to broaden our offerings for our global clients that will create new revenue streams for us within the retail and CPG markets,'' added Armstrong.
The company's consulting services revenues of $23.2 million and maintenance revenues of $9.1 million each represented an 18 percent increase over second quarter 2000. These results boosted gross profit by $1.9 million, or 7 percent, to $29.0 million from the $27.1 million achieved in second quarter 2000.
Six Month 2001 Results
For the six months ended June 30, 2001, revenues were $96.5 million, an increase of 13 percent over the $85.3 million reported for the comparable period of 2000, and product revenues increased 7 percent to $50.4 million from $47.0 million. Software license revenues for the first half of 2001 were $32.3 million as compared to $34.1 million in the first half of 2000.
The drop in software license revenues results from a 22 percent decrease in international sales during the first half of 2001, primarily in Asia Pacific which recorded an unusually large Japanese sales in first quarter 2000, offset in part by a 10 percent increase in U.S. sales in the first half of 2001.
Consulting service revenues for the first half of 2001 were $46.2 million, a 21 percent increase over the $38.3 million reported in 2000. Maintenance services revenues in the first half of 2001 increased by 40 percent to $18.1 million. Net income for the six months ended June 30, 2001, excluding amortization of intangibles and other charges, was $8.0 million, or $.32 per share, as compared to $8.4 million, or $.33 per share in the first half of 2000.
Second Quarter Highlights
Sales: Over 75 percent of the company's second quarter 2001 sales were to new customers. The strongest performing markets were Latin America, Northern Europe and Southern Europe which were up over second quarter 2000 and sequentially from first quarter 2001. These increases were offset by declines in Asia Pacific and Canada, and in the United States where sales declined 19 percent from the record sales reported in second quarter 2000. On a product line basis, Retail Enterprise Systems and Collaborative Solutions were up over second quarter 2000. However, the In-Store Systems business segment declined 82 percent from second quarter 2000. We believe this segment has been the most impacted by the current economic slow down due to the heavy infrastructure investment that generally accompanies the implementation of new store systems.
Acquisition: JDA advanced its product expansion strategy with the cash purchase during the quarter of the NeoVista data mining products from Accrue Software Inc. on June 27, 2001. NeoVista's leading edge Decision Series data mining engine serves as the foundation for JDA Intellect, the company's new market-ready business intelligence applications. As a result of the acquisition, the company expects to accelerate delivery of future Intellect modules. We expect the acquisition to be neutral to earnings in the second half of 2001 and solidly accretive in future years.
Alliances: JDA launched its hardware reselling strategy to pursue viable new revenue opportunities. Its first agreement enables JDA to resell Symbol Technologies' market-leading hand-held computers to retail and consumer packaged goods companies, resulting in a convenient, one-stop procurement of complete mobile commerce solutions.
Users Conference: Despite a slowing economy forcing many companies to tighten their travel budgets, JDA attracted over 1,200 attendees from a record 340 companies to Las Vegas, for its 11th Annual Users Conference, the world's largest vendor-sponsored retail technology users conference and vendor exposition. This event enabled the company to promote its expansion strategy for the JDA Portfolio and created strong back-selling opportunities expected to pay-off in future quarters.
With $16.4 million in positive cash flow from operations in the first half of 2001 and zero debt, JDA continues to be in excellent financial condition. JDA ended the quarter with $82.5 million in cash and marketable securities. In addition, JDA had $14.7 million in deferred revenues, a 14 percent increase over the $12.9 million reported at Dec. 31, 2000.
Net DSOs were at 96 days, which is flat sequentially and compared to second quarter 2000.
Conference Call Information
The company will hold its regularly scheduled conference call today at 4:45 p.m. Eastern. To participate in the call, dial 800/553-0288 (United States) or 612/288-0337 (International) and ask the operator for the ``JDA Second Quarter Earnings Release.''
A replay of the conference call will begin July 19, 2001 7:30 p.m. Eastern Standard Time and will end on Aug. 2, 2001 at 11:59 p.m. Eastern Standard Time. You can hear the replay by dialing 800/475-6701 (United States) or 320/365-3844 (International) using Access Code 594221.
Additionally, interested parties can hear the conference call over the Internet through Vcall. To listen, callers must log onto the Vcall web site, vcall.com, on July 19, 2001 by 3:45 p.m. Eastern to register, download and install any necessary audio software.
For those who cannot listen to the live broadcast, a replay will be available on Vcall shortly after the call and a transcript will be posted to Vcall's web site 24 to 48 hours after the call.
About JDA Software Group Inc.
With more than 1,000 retail and 2,500 manufacturing clients, JDA Software Group Inc. is the global leader in providing integrated software and professional services that address real-world issues to help multi-channel companies manage their mission critical operations.
By capitalizing on its market position and financial strength, JDA commits significant resources in furthering its next generation of retail intelligent solutions that exploit the power of the Internet to meet emerging business needs.
Founded in 1985, JDA is headquartered in Scottsdale and employs approximately 1,100 associates operating from 32 offices in major cities throughout North America, South America, Europe, Asia and Australia. For more information, visit JDA at jda.com.
This press release contains forward-looking statements that are made in reliance upon the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements include: Armstrong's statements about a resurgence in client/server host system demand, our strong sales pipeline for the second half of 2001, and our aggressive pursuit of expansion of our offerings to create new revenue streams; our belief that the NeoVista acquisition will accelerate the delivery of future JDA Intellect modules and that the acquisition will be neutral to earnings in the second half of 2001 and solidly accretive in future years; our efforts to gain hardware revenue through our new alliance with Symbol Technologies; and our expectation that our Annual Users Conference generated strong back-selling opportunities for us in future quarters.
Future events may involve risks and uncertainties, including, but not limited to, uncertainties related to: market demand for particular technologies, such as client/server host systems, being an accurate predictor of market demand for such technologies in future quarters, particularly in difficult economic conditions; the unpredictability of using a sales pipeline to accurately predict future sales, particularly in difficult economic conditions; our ability to successfully identify, negotiate, close, integrate and make profitable acquisitions in a timely manner to expand our solutions to create new revenue; our ability to successfully integrate the newly acquired NeoVista intellectual property and newly hired Accrue employees to accelerate the delivery of future JDA Intellect modules to create a profitable business model for JDA Intellect; our ability to successfully develop and manage in a profitable manner a new business of re-selling hardware, particularly since this business is very different from our core software and services business; the unpredictability of using interest at a users conference to accurately predict future sales, particularly in difficult economic conditions; and other risks detailed from time to time in the ``Risk Factors'' section of our filings with the Securities and Exchange Commission.
As a result of these and other risks, actual results may differ materially from those predicted. We undertake no obligation to update information in this release.
JDA is a registered trademark with the United States Patent and Trademark Office. JDA Portfolio is a trademark of JDA Software Group Inc. All other company, product or services names referenced in this release may be registered trademarks or trademarks of their respective owners.
JDA Software Group Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share amounts)
(unaudited)
June 30, Dec. 31,
2001 2000
Cash and Investments $ 82,532 $ 76,594
Accounts Receivable, net 52,463 54,431
Other Current Assets 12,579 13,934
Property and Equipment, net 21,187 22,320
Goodwill and Other Intangibles, net 51,619 48,293
Promissory Note Receivable 3,500 --
Deferred Tax Asset 3,603 2,900
Total assets $227,483 $218,472
Current Liabilities $ 34,518 $ 32,207
Stockholders' Equity: 192,965 186,265
Total liabilities and
stockholders' equity $227,483 $218,472
JDA Software Group Inc.
Condensed Consolidated Statements of Income
(in thousands, except share data, unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
2001 2000 2001 2000
Revenues:
Software licenses $ 16,714 $ 18,630 $ 32,277 $ 34,132
Maintenance 9,135 7,770 18,084 12,913
Product revenues 25,849 26,400 50,361 47,045
Consulting services 23,201 19,703 46,166 38,258
Total revenues 49,050 46,103 96,527 85,303
Cost of Revenues:
Cost of software
licenses 739 807 1,405 1,698
Cost of maintenance 2,514 2,088 4,821 3,862
Cost of product
revenues 3,253 2,895 6,226 5,560
Cost of consulting
services 16,834 16,090 34,258 31,635
Total cost of
revenues 20,087 18,985 40,484 37,195
Gross Profit 28,963 27,118 56,043 48,108
Operating Expenses:
Product development 7,801 7,019 15,658 13,174
Sales and marketing 9,321 7,442 17,586 13,904
General and
administrative 6,038 5,309 11,727 9,318
Total operating
expenses 23,160 19,770 44,971 36,396
Income From Operations,
excluding amortization
of intangibles,
purchased in-process
research and
development, and
restructuring and asset
disposition charge 5,803 7,348 11,072 11,712
Amortization of
intangibles 1,830 1,917 3,646 3,009
Purchased in-process
research and
development -- 200 161 200
Restructuring, asset
disposition and other
charges -- -- 749 828
Operating Income (Loss) 3,973 5,231 6,516 7,675
Other income, net 824 935 1,686 2,127
Income Before Income
Taxes 4,797 6,166 8,202 9,802
Provision for income
taxes 1,775 2,405 3,026 3,823
Net Income $ 3,022 $ 3,761 $ 5,176 $ 5,979
Earnings Before Interest,
Taxes, Depreciation and
Amortization $ 7,734 $ 9,199 $ 14,077 $ 14,630
Net Income Per Common
Share:
Basic --
Excluding amortization
of intangibles,
purchased in-process
research and
development, and
restructuring, asset
disposition and other
charges $ .17 $ .21 $ .33 $ .35
Amortization of
intangibles,
purchased in-process
research
and development, and
restructuring, asset
disposition and other
charges (.05) (.05) (.12) (.10)
Net income per share $ .12 $ .16 $ .21 $ .25
Diluted --
Excluding amortization
of intangibles,
purchased in-process
research and
development, and
restructuring, asset
disposition and other
charges $ .17 $ .20 $ .32 $ .33
Amortization of
intangibles, purchased
in-process research
and development, and
restructuring, asset
disposition and other
charges (.05) (.05) (.12) (.10)
Net income per share $ .12 $ .15 $ .21 $ .24
Shares Used to Compute
Per Share Amounts:
Basic 24,688 24,218 24,614 24,148
Diluted 25,100 25,448 24,884 25,379
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Contact:
The Berlin Group (JDA Investor Relations)
Lawrence Delaney Jr., 310/577-5282
Email: larry@berlingroup.com |
