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JDA Software Group Inc. Reports Operating Results (10-K)

March 01, 2011 | About:
10qk

10qk

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JDA Software Group Inc. (JDAS) filed Annual Report for the period ended 2010-12-31.

Jda Software Group Inc. has a market cap of $1.29 billion; its shares were traded at around $29.5 with a P/E ratio of 17.8 and P/S ratio of 2.1. Jda Software Group Inc. had an annual average earning growth of 15.1% over the past 10 years.Hedge Fund Gurus that owns JDAS: Richard Blum of Blum Capital Partners, Steven Cohen of SAC Capital Advisors, Louis Moore Bacon of Moore Capital Management, LP. Mutual Fund and Other Gurus that owns JDAS: Westport Asset Management, David Dreman of Dreman Value Management, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

The approximate aggregate market value of the registrants common stock held by non-affiliates of the registrant (based on the closing sales price of such stock as reported by the NASDAQ Stock Market) on June 30, 2010 was approximately $883 million. The number of shares of common stock, $0.01 par value per share, outstanding as of February 22, 2011 was 42,218,776.

Legal Proceedings (see Note 12Legal Proceedings to our Condensed Consolidated Financial Statements elsewhere in this Annual Report on Form 10-K, and is incorporated by reference herein). On December 2, 2010, we met with Dillards for a mediation session. During that mediation session, settlement offers were exchanged, but no agreement was reached. Therefore, on December 23, 2010 i2 Technologies, Inc. (i2), which was acquired by JDA Software Group, Inc. (the Company) on January 28, 2010, filed a Notice of Appeal to the Dallas Court of Appeals. We currently estimate the potential loss for this matter to range between $19 million (the highest settlement offer exchanged) and $237 million (representing a maximum award for lost profits, punitive damages and pre-judgment interest), plus post-judgment interest. The appeals process is not expected to be resolved prior to the end of 2011. There can be no assurance that it will be successful or that the litigation will be settled on terms acceptable to JDA. Management has determined that the best estimate of the potential outcome of this matter is $19.0 million, of which $5.0 million was recorded on the opening balance sheet of i2 following JDAs acquisition of i2 in January 2010 and $14.0 million was recorded in December 2010 in the Consolidated Statements of Income under the capital Litigation provision and in Consolidated Balance Sheets under the caption Accrued expenses and other liabilities.

As previously reported, on April 29, 2009, i2 filed a lawsuit against Oracle Corporation in the United States District Court for the Eastern District of Texas, alleging infringement of i2 patents related to supply chain management, available to promise software and other enterprise applications. On April 22, 2010, Oracle Corporation filed counterclaims against i2 and the Company (of which i2 is now a wholly-owned subsidiary), alleging infringement of certain Oracle Corporation patents. On February 25, 2011, the Company, i2 and Oracle Corporation entered into a settlement agreement (the Agreement). Under the Agreement, the parties entered into a cross-license arrangement and dismissed their respective litigation claims related to the patent infringement dispute with prejudice. In addition, the Company is entitled to receive a one-time cash payment of $35.0 million from Oracle Corporation, payable within seven days of the Agreement date, as well as a $2.5 million license and technical support credit from Oracle Corporation that must be used by the Company within two years. The Company intends to account for this settlement as a reduction of operating expenses in the first quarter of 2011 under the caption Litigation Settlement in the consolidated statement of income.

The SCM market is expected to grow by approximately 7% annually, from approximately $6.2 billion of revenues in 2009 to approximately $8.8 billion in 2014, according to Gartners December 2010 publication entitled Forecast: Enterprise Software Markets, Worldwide, 2009-2014, 4Q10 Update. The SCM software market is segmented into the following categories (sub-segment size in 2009 is noted in parentheses):

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